First Interstate BancSystem
FIBK
#3951
Rank
S$4.21 B
Marketcap
S$44.20
Share price
-1.20%
Change (1 day)
12.29%
Change (1 year)
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<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

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<TR><TD colspan="9"><A HREF="#000">PART I</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;1. Business</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">Item&nbsp;2. Properties</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">Item&nbsp;3. Legal Proceedings</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">Item&nbsp;4. Submission of Matters to a Vote of Security Holders</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PART II</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">Item&nbsp;5. Market for Registrant&#146;s Common Equity and Related Stockholder Matters</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">Item&nbsp;6. Selected Consolidated Financial Data</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">Item&nbsp;7a. Quantitative and Qualitative Disclosures About Market Risk</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">Item&nbsp;8. Financial Statements and Supplementary Data</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">Item&nbsp;9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">PART III</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">Item&nbsp;10. Directors and Executive Officers of Registrant</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">Item&nbsp;11. Executive Compensation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">Item&nbsp;13. Certain Relationships and Related Transactions</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">PART IV</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">Item&nbsp;14. Exhibits, Financial Statement Schedules and Reports on Form&nbsp;8-K</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#019">(a)&nbsp;Audited Consolidated Financial Statements</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">(b)&nbsp;Reports on Form&nbsp;8-K</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">(c)&nbsp;Exhibits</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#022">(d)&nbsp;Financial Statements Schedules</A></TD></TR>
<TR><TD colspan="9"><A HREF="#023">SIGNATURES</A></TD></TR>
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<P align="center"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington D.C. 20549<BR>
FORM 10-K</B>

<P align="center"><B>Annual Report Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of<BR>
1934.<BR>
For the fiscal year ended December&nbsp;31, 1999</B>

<P align="center"><B>Commission File Number: 33-64304</B>

<P align="center"><B>FIRST INTERSTATE BANCSYSTEM, INC.<BR>
(Exact name of registrant as specified in its charter)</B>

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<TD align="center" valign="top"><FONT size="2"><B>Montana</B><BR>
(State or other jurisdiction of incorporation or organization)</FONT></TD>
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<TD align="center" valign="top"><FONT size="2">
<B>81-0331430</B><BR>
(IRS Employer Identification No.)</FONT></TD>
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<TD align="center" valign="top"><FONT size="2"><B>401 North 31st Street<BR>
Billings, Montana</B><BR>
(Address of principal executive offices)</FONT></TD>
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<B>59116</B><BR>
(Zip Code)</FONT></TD>
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<P align="center"><B>(406)&nbsp;255-5390<BR>
(Registrant&#146;s telephone number, including area code)</B>

<P align="left">Securities registered pursuant to Section&nbsp;12(b) of the Act: None

<P align="left">Securities registered pursuant to Section&nbsp;12(g) of the Act: None

<P>Indicate by check mark whether the registrant:&nbsp;(1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports), and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days.<BR>
[X] Yes [ ] No

<P>Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405
of Regulation&nbsp;S-K is not contained herein, and will not be contained, to the
best of the registrant&#146;s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form&nbsp;10-K or any
amendment to this Form&nbsp;10-K. [X]

<P>The aggregate market value (appraised minority value) of the common stock of
the registrant held by non-affiliates of the registrant as of February&nbsp;29, 2000
was $40.00.

<P>The number of shares outstanding of the registrant&#146;s common stock as of
February&nbsp;29, 2000 was 7,960,392.

<P align="center"><B>Documents Incorporated by Reference</B>

<P>Portions of the 1999 definitive Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held April&nbsp;27, 2000 are incorporated by reference
into Part III of this Form&nbsp;10-K.

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<P align="center"><B>PART I</B>

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<P align="center"><B>Item&nbsp;1. Business</B>

<P align="left"><B>The Company</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First Interstate BancSystem, Inc. (&#147;FIBS&#148; and collectively with its
subsidiaries, the &#147;Company&#148;) is a bank holding company. FIBS was incorporated
in 1971 and is headquartered in Billings, Montana.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIBS operates two wholly-owned bank subsidiaries (collectively, the
&#147;Banks&#148; and individually a &#147;Bank&#148;) with 42 banking offices in 27 Montana and
Wyoming communities. FIB Capital Trust (&#147;FIB Capital&#148;) and Commerce Financial,
Inc. (&#147;CFI&#148;) are wholly-owned non-bank subsidiaries of FIBS. At December&nbsp;31,
1999, the Company had assets of $2.6&nbsp;billion, deposits of $2.1&nbsp;billion and
total stockholders&#146; equity of $177&nbsp;million, making it the largest independent
banking organization headquartered in Montana or Wyoming.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company, through the Banks, delivers a comprehensive range of consumer
and commercial banking services to individual and business customers. These
services primarily include acceptance of checking, savings and time deposits;
cash management; fee-based trust and brokerage services; extensions of
commercial, consumer, real estate and agricultural credit; safe deposit box
rental; night depository services and wire transfers. Trust services offered
to individuals, non-profit organizations and corporate clients include
corporate pension plans, individual retirement plans, 401(k) plans and cash
management. Brokerage services are provided through third party
broker-dealers. There are currently nine registered brokerage representatives
serving 21 communities within the Company&#146;s market areas.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, the Company performs data processing services for the Banks
and 39 non-affiliated financial institutions in Montana, Wyoming, Idaho,
Washington, Oregon and Colorado. The Company also provides processing support
for over 1,270 ATM locations in 27 states.

<P align="left"><B>Acquisitions</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of the Company&#146;s growth in recent years has resulted from
acquisitions of other banks. In October&nbsp;1996, the Company acquired First
Interstate Bank of Montana, N.A. and First Interstate Bank of Wyoming, N.A.,
which collectively included six banking offices (the &#147;FIBNA Banks&#148;). In
December&nbsp;1996, the Company acquired Mountain Bank of Whitefish (&#147;FIB
Whitefish&#148;), which included two banking offices. Immediately prior to the
acquisitions, the FIBNA Banks had assets of $553&nbsp;million and deposits of $424
million, and FIB Whitefish had assets of $67&nbsp;million and deposits of $54
million. Prior to the acquisition, the FIBNA Banks were operated as branch
locations without independent administrative support, data processing and other
required services. In connection with the acquisition, the Company increased
its staffing at both the holding company and banking office levels to provide
the administrative, data processing and other operational support to facilitate
integration and operation of such banking offices.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;1999, the Company acquired two banking offices of First National
Bank of Montana (collectively &#147;FNM Banks&#148;) and in July&nbsp;1999, the Company
acquired Security State Bank Shares (&#147;SSBS&#148;), which included three banking
offices. Immediately prior to the acquisitions, the FNM Banks had loans of $1
million and deposits of $4&nbsp;million, and SSBS had loans of $35&nbsp;million and
deposits of $56&nbsp;million.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information regarding acquisitions, see &#147;Notes to
Consolidated Financial Statements &#151; Acquisitions and Expansion&#148; included in
Part IV, Item&nbsp;14.

<P align="left"><B>Community Banking Philosophy</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The banking industry is undergoing change with respect to regulatory
matters, consolidation, consumer needs and economic and market conditions. The
Company believes that it can best address this changing environment through its
&#147;Strategic Vision.&#148; The Company&#146;s Strategic Vision emphasizes providing its
customers full service commercial and consumer banking at a local level using a
personalized service approach, while serving and strengthening the communities
in which the Banks are located through community service activities.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company grants significant flexibility to the banking offices in
delivering and pricing products at the local level in response to market
considerations and customer needs. This flexibility enables the banking offices
to remain competitive and enhances the relationships between the banking
offices and the customers they serve. The Company also emphasizes
accountability, however, by establishing performance and incentive standards
for the Banks which are tied to net income at the individual branch and market
level. The Company believes that this combination of flexibility and
accountability allows the banking offices to provide a high level of
personalized service to customers while remaining attentive to financial
performance.

<P align="left"><B>Growth Strategy</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s growth strategy includes growing internally and expanding
into new and complementary markets when appropriate opportunities arise. The
Company believes it has in place an infrastructure that will allow for growth
and yield economies of scale on a going forward basis. The Company has received
regulatory approval to open four new banking offices in Montana and Wyoming and
intends to continue to expand its presence in the Montana and Wyoming markets.

<P align="left"><B>The Banks</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First Interstate Bank in Montana (&#147;FIB Montana&#148;), a Montana chartered bank
organized in 1916, has 29 banking offices in 19 Montana communities. As of
December&nbsp;31, 1999, FIB Montana held assets and deposits totaling $1.7&nbsp;billion
and $1.3&nbsp;billion, respectively. FIB Montana is the largest independent bank
headquartered in Montana. FIB Montana&#146;s main office is located in Billings,
Montana. First Interstate Bank in Wyoming (&#147;FIB Wyoming&#148;), a Wyoming chartered
bank organized in 1893, has 13 banking offices in eight Wyoming communities.
As of December&nbsp;31, 1999, FIB Wyoming held assets and deposits totaling $904
million and $785&nbsp;million, respectively. FIB Wyoming&#146;s main office is located in
Sheridan, Wyoming.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s banking offices are located in communities of approximately
5,000 to 70,000 people, but serve larger market areas due to the limited number
of financial institutions in other nearby communities. The Company believes
that the communities served provide a stable core deposit and funding base, as
well as economic diversification across a number of industries, including
agriculture, energy, mining, timber processing, tourism, government services,
education and medical services.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s banking offices operate with significant flexibility and are
responsible for day-to-day operations, the pricing of loans and deposits,
lending decisions and community relations. FIBS also emphasizes
accountability, however, by establishing performance and incentive standards
for the Banks which are tied to net income at the individual branch and market
level. FIBS provides general oversight and centralized services for the Banks
to enable them to serve their markets more effectively. These services include
data services, credit administration, finance and accounting, human asset
management and other support services.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Data Services.&nbsp;</I>FIBS provides data services to the Banks including general
ledger maintenance, investment securities management, loan and deposit
processing, wide-area network management and e-mail services. These services
are performed through the use of computer hardware which the Company owns and
maintains and software which it licenses. The Banks&#146; customers also benefit
from the ATM network serviced by the Company.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Credit Administration.&nbsp;</I>FIBS monitors the lending activities of the Banks
to maximize the quality and mix of loans, evaluate the risk inherent in each
Bank&#146;s loan portfolio and recommend general loan loss reserve percentages and
specific reserve allocations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Finance and Accounting.&nbsp;</I>FIBS provides financial and accounting services
for the Banks, including internal and external reporting, asset/liability
management, investment portfolio analysis and capital management.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Human Asset Management.&nbsp;</I>Through its human asset management group, FIBS
provides the Banks with incentive and employee benefit administration and
compensation, training, employee recruitment and hiring services.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Support Services.&nbsp;</I>FIBS provides the Banks with legal and compliance
services, internal auditing services, marketing services, sales services,
general administration, planning coordination and various other support
services.

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<P align="left"><B>Lending Activities</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIBS has comprehensive credit policies establishing system-wide
underwriting and documentation standards to assist Bank management in the
lending process and limit risk to the Company. The credit policies establish
lending authorities based on the experience level and authority of the lending
officer, the type of loan and the type of collateral. The policies also
establish thresholds at which loan requests must be approved by a Bank
committee and/or by FIBS.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Banks offer short and long-term commercial, consumer, real estate,
agricultural and other loans to individuals and small to medium sized
businesses in each of their market areas. While each loan must meet minimum
underwriting standards established in the Company&#146;s credit policies, lending
officers are granted certain levels of flexibility in approving and pricing
loans to assure that the banking offices are responsive to competitive issues
and community needs in each market area.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Real Estate Loans.&nbsp;</I>The Banks provide interim and permanent financing for
both single-family and multi-unit properties, medium term loans for commercial,
agricultural and industrial property and/or buildings, and equity lines of
credit secured by real estate. The Banks originate variable and fixed rate real
estate mortgages, generally in accordance with the guidelines of the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation.
Loans originated in accordance with these guidelines are sold in the secondary
market. Real estate loans are typically secured by first liens on the financed
property and generally mature in less than 15&nbsp;years.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Consumer Loans.&nbsp;</I>The Banks&#146; consumer loans include personal loans and
equity lines of credit. Personal loans are generally secured by automobiles,
boats and other types of personal property and are made on an installment
basis. Equity lines of credit are generally floating rate, reviewed annually
and secured by personal property. Over two-thirds of the Company&#146;s consumer
loans are indirect dealer paper which is created when the Company advances
money to dealers of consumer products who in turn lend money to consumers
purchasing automobiles, boats and other consumer goods.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Commercial Loans.&nbsp;</I>The Banks provide a mix of variable and fixed rate
commercial loans. The loans are typically made to small and medium sized
manufacturing, wholesale, retail and service businesses for working capital
needs and business expansions. Commercial loans generally include lines of
credit and loans with maturities of five years or less. The loans are generally
made with the business operations as the primary source of repayment, but also
include collateralization by inventory, accounts receivable, equipment and/or
personal guarantees.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Agricultural Loans.&nbsp;</I>The Banks&#146; agricultural loans generally consist of
short and medium-term loans and lines of credit that are generally used to for
crops, livestock, equipment and general operating purposes. Agricultural loans
are generally secured by assets such as livestock or equipment and are repaid
from the operations of the farm or ranch. Agricultural loans generally have
maturities of five years or less, with operating lines for one production
season.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information about the Company&#146;s loan portfolio, see Part
II, Item&nbsp;7, &#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations &#151; Financial Condition &#151; Loans.&#148;

<P align="left"><B>Funding Sources</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Banks offer traditional depository products including checking,
savings and time deposits. Additional funding sources include federal funds
purchased for one day periods, repurchase agreements with primarily commercial
depositors and short-term borrowings from the Federal Home Loan Bank of
Seattle. Deposits at the Banks are insured by the Federal Deposit Insurance
Corporation (&#147;FDIC&#148;) up to statutory limits. As of December&nbsp;31, 1999,
approximately 36.2%, 26.1% and 37.7% of the Company&#146;s deposits consisted of
demand, savings and time deposits, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under repurchase agreements, the Company sells investment securities held
by the Company to a customer under an agreement to repurchase the investment
security at a specified time or on demand. The Company does not transfer the
investment securities on its financial statements or otherwise. As of December
31, 1999, all outstanding repurchase agreements were due in one day.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information on the Banks&#146; funding sources, see Part II,
Item&nbsp;7, &#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations &#151; Financial Condition &#151; Deposits&#148; and Part II, Item&nbsp;7,
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations &#151; Financial Condition &#151; Other Borrowed Funds.&#148;

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<P align="left"><B>Competition</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The banking and financial services business in both Montana and Wyoming is
highly competitive. The Banks compete for loans, deposits and financial
services customers with other commercial banks, savings and loan associations,
securities and brokerage companies, mortgage companies, insurance companies,
finance companies, money market funds, credit unions and other nonbank
financial service providers. The Company competes in its markets on the basis
of its Strategic Vision philosophy, timely and responsive customer service and
general market presence. Several of the Company&#146;s competitors are much larger
in total assets and capitalization, have greater access to capital markets and
offer a broader array of financial services than the Banks. Moreover, the
Riegal-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
&#147;Banking and Branching Act&#148;) creates the potential for increased competition in
the Banks&#146; markets, particularly from larger, multi-state banks. See
&#147;Regulation and Supervision.&#148; The Company competes with several large,
multi-state banks as well as numerous smaller community banks. Principal
competitors include Wells Fargo &#38; Company, U.S. Bancorp and Community First
Bankshares, Inc. With respect to total deposits, the Company believes it ranks
first in market share to all other competitors in Montana and second in
Wyoming. See &#147;Risk Factors &#151; Competition.&#148;

<P align="left"><B>Employees</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, the Company employed 1,267 full-time equivalent
employees. None of the Company&#146;s employees are covered by a collective
bargaining agreement. The Company considers its employee relations to be good.

<P align="left"><B>Regulation and Supervision</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank holding companies and commercial banks are subject to extensive
regulation under both federal and state law. Set forth below is a summary
description of certain laws which relate to the regulation of FIBS and the
Banks. The description does not purport to be complete and is qualified in its
entirety by reference to the applicable laws and regulations.

<P align="left"><I>First Interstate BancSystem, Inc.</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a bank holding company, FIBS is subject to regulation under the Bank
Holding Company Act of 1956, as amended (the &#147;BHCA&#148;), and to supervision and
regulation by the Federal Reserve.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Reserve may require that FIBS terminate an activity or
terminate control of a subsidiary if the Federal Reserve believes such activity
or control constitutes a significant risk to the financial safety, soundness or
stability of any of the Banks or is in violation of the BHCA. Under certain
circumstances, FIBS must file written notice and obtain approval from the
Federal Reserve prior to purchasing or redeeming its equity securities.
Further, FIBS is required by the Federal Reserve to maintain certain levels of
capital. See &#147;Capital Standards&#148; herein.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIBS is required to obtain the prior approval of the Federal Reserve for
the acquisition of 5% or more of the outstanding shares of any class of voting
securities or substantially all of the assets of any bank or bank holding
company. Prior approval of the Federal Reserve is also required for the merger
or consolidation of FIBS and another bank holding company.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIBS is prohibited by the BHCA, except in certain statutorily prescribed
instances, from acquiring direct or indirect ownership or control of 5% or more
of the outstanding voting shares of any company that is not a bank or bank
holding company and from engaging directly or indirectly in activities other
than those of banking, managing or controlling banks or furnishing services to
its subsidiaries. Further, under the Gramm-Leach-Bliley Act of 1999 (the
&#147;Gramm Act&#148;), FIBS may engage in additional business activities previously not
allowed to bank holding companies, including certain securities and insurance
activities. Prior to engaging in such activities FIBS must, among other
things, register with the Federal Reserve as a financial holding company under
the Gramm Act. FIBS&#146;s ability to register as a financial holding company is
subject to certain requirements, including the financial and other condition of
the Banks and FIBS. At December&nbsp;31, 1999, FIBS met each requirement to
register as a financial holding company. FIBS is not required to register as a
financial holding company in order to continue to conduct its business as
currently conducted.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Federal Reserve regulations, a bank holding company is required to
serve as a source of financial and managerial strength to its subsidiary banks
and may not conduct its operations in an unsafe or unsound manner. In addition,
it is the Federal Reserve&#146;s policy that in serving as a source of strength to
its subsidiary banks, a bank holding company should stand ready to use
available resources to provide adequate capital funds to its subsidiary banks
during periods of financial stress or adversity and should maintain the
financial flexibility and capital-raising capacity to obtain additional

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<P>resources for assisting its subsidiary banks. A bank holding company&#146;s failure
to meet its obligations to serve as a source of strength to its subsidiary
banks will generally be considered by the Federal Reserve to be an unsafe and
unsound banking practice or a violation of the Federal Reserve&#146;s regulations or
both.

<P align="left"><I>The Banks</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIB Montana is subject to the supervision of and regular examination by
the Federal Reserve and the State of Montana. FIB Wyoming is subject to the
supervision of and regular examination by the FDIC and the State of Wyoming.
If any of the foregoing regulatory agencies determine that the financial
condition, capital resources, asset quality, earning prospects, management,
liquidity or other aspects of a bank&#146;s operations are unsatisfactory or that a
bank or its management is violating or has violated any law or regulation,
various remedies are available to such agencies. These remedies include the
power to enjoin &#147;unsafe or unsound&#148; practices, to require affirmative action to
correct any conditions resulting from any violation or practice, to issue an
administrative order that can be judicially enforced, to direct an increase in
capital, to restrict the growth of a bank, to assess civil monetary penalties,
to remove officers and directors and to terminate a bank&#146;s deposit insurance,
which would result in a revocation of a bank&#146;s charter. The Banks have not
been the subjects of any such actions by their respective regulatory agencies.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The FDIC insures the deposits of the Banks in the manner and to the extent
provided by law. For this protection, the Banks pay a semiannual statutory
assessment. See &#147;Premiums for Deposit Insurance&#148; herein.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various requirements and restrictions under the laws of the states of
Montana and Wyoming and the United States affect the operations of the Banks.
State and federal statutes and regulations relate to many aspects of the Banks&#146;
operations, including levels of capital, reserves against deposits, interest
rates payable on deposits, loans, investments, mergers and acquisitions,
borrowings, dividends, locations of banking offices and capital requirements.

<P align="left"><I>Restrictions on Transfers of Funds to FIBS and the
Banks</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A large portion of FIBS&#146;s revenues are, and will continue to be, dividends
paid by the Banks. The Banks are limited, under both state and federal law, in
the amount of dividends that may be paid from time to time. In general, each
Bank is limited, without the prior consent of its state and federal banking
regulators, to paying dividends which do not exceed the current year net
profits together with retained earnings from the two preceding calendar years.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A state or federal banking regulator may impose, by regulatory order or
agreement of the Banks, specific regulatory dividend limitations or
prohibitions in certain circumstances. Those circumstances include failure to
maintain required regulatory capital levels, pursuant to a prompt corrective
action or capital restoration plan, deterioration in Bank assets or other
circumstances under which the banking regulator may determine that payment of
dividends may constitute an unsafe or unsound banking practice. Neither of the
Banks is subject to a specific regulatory dividend limitation other than the
general limitations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to regulatory dividend limitations, the Bank dividends are, in
certain circumstances, limited by covenants in FIBS&#146;s debt instruments.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial transactions between the Banks and FIBS are also limited under
applicable state and federal law and regulations. The Banks may not lend funds
to, or otherwise extend credit to or for the benefit of, FIBS or FIBS
affiliates, except on specified types and amounts of collateral and other
terms.

<P align="left"><I>Common Liability</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under federal law, a depository institution insured by the FDIC can be
held liable for any loss incurred by, or reasonably expected to be incurred by,
the FDIC in connection with the default of a commonly controlled FDIC-insured
depository institution or any assistance provided by the FDIC to a commonly
controlled FDIC-insured institution in danger of default. These provisions can
have the effect of making one bank responsible for FDIC-insured losses at
another bank.

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<P align="left"><I>Effect of Government Policies and Legislation</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Banking is a business that depends on interest rate differentials. In
general, the difference between the interest rate paid by the Banks on their
deposits and borrowings and the interest rate received by the Banks on loans
extended to their customers and on investment securities comprises a major
portion of the Banks&#146; earnings. These rates are highly sensitive to many
factors that are beyond the control of the Banks. Accordingly, the earnings and
potential growth of the Banks are subject to the influence of domestic and
foreign economic conditions, including inflation, recession and unemployment.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The commercial banking business is not only affected by general economic
conditions but is also influenced by the monetary and fiscal policies of the
federal government and the policies of regulatory agencies, particularly the
Federal Reserve. The Federal Reserve implements national monetary policies
(with objectives such as curbing inflation and combating recession) by its
open-market operations in United States government securities, by adjusting the
required level of reserves for financial institutions subject to the Federal
Reserve&#146;s reserve requirements and by varying the discount rates applicable to
borrowings by depository institutions. The actions of the Federal Reserve in
these areas influence the growth of bank loans, investments and deposits and
also affect interest rates charged on loans and paid on deposits. The nature
and impact of any future changes in monetary policies cannot be predicted.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, legislation is enacted which has the effect of
increasing the cost of doing business, limiting or expanding permissible
activities or affecting the competitive balance between banks and other
financial service providers. Proposals to change the laws and regulations
governing the operations and taxation of banks, bank holding companies and
other financial service providers are frequently made in Congress, in the
Montana and Wyoming legislatures and before various bank regulatory and other
professional agencies. The likelihood of any major legislative changes and the
impact such changes might have on FIBS or the Banks are impossible to predict.

<P align="left"><I>Capital Standards</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal Reserve and the FDIC have adopted risk-based minimum capital
ratio guidelines intended to provide a measure of capital that reflects the
degree of risk associated with a banking organization&#146;s operations. Risk-based
capital ratios are obtained by dividing qualifying capital by total
risk-adjusted assets. The regulators measure risk-adjusted assets, which
include off-balance sheet items, against both Tier 1 capital and total
qualifying capital (the sum of Tier 1 capital and limited amounts of Tier 2
capital). The federal banking agencies require a minimum ratio of qualifying
total capital to risk-adjusted assets of 8% and a minimum ratio of Tier 1
capital to risk-adjusted assets of 4%. At December&nbsp;31, 1999, FIBS and the
Banks exceed all applicable minimum capital ratios.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the risked-based guidelines, federal banking regulators
require banking organizations to maintain a minimum amount of Tier 1 capital to
total assets, referred to as the &#147;leverage ratio.&#148; For a banking organization
rated in the highest of the five categories used by regulators to rate banking
organizations, the minimum leverage ratio of Tier 1 capital to total assets
must be at least 5%. In addition to the uniform risk-based capital guidelines
and leverage ratios that apply across the industry, the regulators have the
discretion to set individual minimum capital requirements for specific
institutions at rates significantly above the minimum guidelines and ratios.
At December&nbsp;31, 1999, FIBS and the Banks are rated &#147;well capitalized&#148; under
applicable regulatory definitions.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The federal banking agencies have adopted a joint agency policy statement
to provide guidance on managing interest rate risk. These agencies indicated
that the adequacy and effectiveness of a bank&#146;s interest rate risk management
process and the level of its interest rate exposures are critical factors in
the agencies&#146; evaluation of the bank&#146;s capital adequacy. A bank with material
weaknesses in its risk management process or high levels of exposure relative
to its capital will be directed by the agencies to take corrective action. Such
actions may include recommendations or directions to raise additional capital,
strengthen management expertise, improve management information and measurement
systems, reduce levels of exposure, or some combination thereof depending upon
the individual institution&#146;s circumstances. This policy statement augments
regulations adopted by the federal banking agencies.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information concerning the capital ratios of FIBS, see Part II, Item
7, &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations &#151; Financial Condition &#151; Capital Resources.&#148;

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<P align="left"><I>Safety and Soundness Standards</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The federal banking agencies have adopted guidelines establishing
standards for safety and soundness, as required by the Federal Deposit
Insurance Corporation Improvement Act (&#147;FDICIA&#148;). These standards are designed
to identify potential safety and soundness concerns and ensure that action is
taken to address those concerns before they pose a risk to the deposit
insurance funds. If a federal banking agency determines that an institution
fails to meet any of these standards, the agency may require the institution to
submit an acceptable plan to achieve compliance with the standard. If the
institution fails to submit an acceptable plan within the time allowed by the
agency or fails in any material respect to implement an accepted plan, the
agency must, by order, require the institution to correct the deficiency.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The federal banking agencies have also promulgated safety and soundness
regulations and accompanying interagency compliance guidelines on asset quality
and earnings standards. These guidelines provide standards for establishing and
maintaining a system to identify problem assets and prevent those assets from
deteriorating. These guidelines also set forth standards for evaluating and
monitoring earnings and for ensuring that earnings are sufficient for the
maintenance of adequate capital and reserves. If an institution fails to comply
with a safety and soundness standard, the appropriate federal banking agency
may require the institution to submit a compliance plan. Failure to submit a
compliance plan or to implement an accepted plan may result in enforcement
action.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The federal banking agencies have issued an interagency policy statement
on the allowance for loan losses (&#147;ALL&#148;) which, among other things, established
certain benchmark ratios of loan loss reserves to classified assets. This
amount is neither a &#147;floor&#148; nor a &#147;safe harbor&#148; level for an institution&#146;s ALL.

<P align="left"><I>Premiums for Deposit Insurance</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits in the Banks are insured by the FDIC in accordance with the
Federal Deposit Insurance Act (the &#147;FDIA&#148;). Insurance premiums are assessed
semiannually by the FDIC at a level sufficient to maintain the insurance
reserves required under the FDIA and relevant regulations. The FDIC&#146;s
insurance premium rate for the first semiannual assessment in 2000 ranges
between zero and 27 cents per $100 of deposits.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The insurance premium charged to a bank is determined based upon risk
assessment criteria, including relevant capital levels, results of bank
examinations by state and federal regulators, and other information. The Banks
currently are assessed the most favorable deposit insurance premiums under the
risk-based premium system. Changes in the financial or other condition of the
Banks may result in changes to the insurance premiums paid by the Banks.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the insurance premium, the FDIC is authorized to collect
funds from FDIC-insured institutions sufficient to pay interest on Financing
Corporation (&#147;FICO&#148;) bonds. FICO bonds were issued in connection with the
Federal Savings and Loan Insurance Corporation refinancing in the late 1980s.
The FICO bond assessments are adjusted quarterly by the FDIC and are not based
upon risk assessment of insured institutions. On and after January&nbsp;1, 2000,
the FDIC is required by federal statute to impose the FICO assessment at the
same rate on all FDIC insured deposits. Effective for the first quarter of
2000 the FICO assessment on the Banks is an annualized 0.0212% of deposits, an
increase from an annualized 0.0184% in the fourth quarter of 1999.

<P align="left"><I>Community Reinvestment Act and Fair Lending Developments</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Banks are subject to certain fair lending requirements and reporting
obligations involving home mortgage lending operations and Community
Reinvestment Act (&#147;CRA&#148;) activities. The CRA generally requires the federal
banking agencies to evaluate the record of a financial institution in meeting
the credit needs of its local communities, including low and moderate income
neighborhoods. In addition to substantial penalties and corrective measures
that may be required for a violation of certain fair lending laws, the federal
banking agencies may take compliance with such laws and CRA into account when
regulating and supervising other activities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with its assessment of CRA performance, the appropriate bank
regulatory agency assigns a rating of &#147;outstanding,&#148; &#147;satisfactory,&#148; &#147;needs to
improve&#148; or &#147;substantial noncompliance.&#148; Based on the most recent examinations,
FIB Montana received an &#147;outstanding&#148; rating and FIB Wyoming was rated
&#147;satisfactory.&#148;

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<P align="left"><I>Potential Enforcement Actions</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial banking organizations, such as the Banks and their
institution-affiliated parties, which includes FIBS, may be subject to
potential enforcement actions by the Federal Reserve and the FDIC for unsafe or
unsound practices in conducting their businesses or for violations of any law,
rule, regulation or any condition imposed in writing by the agency or any
written agreement with the agency. Neither FIBS nor the Banks has been subject
to any such enforcement actions.

<P align="left"><B>Non-Bank Subsidiary</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1997, the Company formed FIB Capital, a statutory business trust
incorporated under Delaware law, for the exclusive purpose of issuing $40
million of mandatorily redeemable trust preferred securities (&#147;trust preferred
securities&#148;) and using the proceeds to purchase junior subordinated debentures
(&#147;subordinated debentures&#148;) issued by FIBS. See also &#147;Notes to Consolidated
Financial Statements &#151; Mandatorily Redeemable Preferred Securities of
Subsidiary Trust&#148; of the financial statements included in Part IV, Item&nbsp;14.

<P align="left"><B>Trademark License Agreement</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is the licensee under a trademark license agreement granting
it an exclusive, nontransferable license to use the &#147;First Interstate&#148; name and
logo in the states of Montana and Wyoming with additional rights in selected
other states.

<P align="left"><B>Risk Factors</B>

<P align="left"><I>Asset Quality</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant source of risk for the Company arises from the possibility
that losses will be sustained by the Banks because borrowers, guarantors and
related parties may fail to perform in accordance with the terms of their
loans. The Company has adopted underwriting and credit monitoring procedures
and credit policies, including the establishment and review of the ALL, that
management believes are appropriate to mitigate this risk by assessing the
likelihood of nonperformance, monitoring loan performance and diversifying the
Company&#146;s credit portfolio. Such policies and procedures, however, may not
prevent unexpected losses that could have a material adverse effect on the
Company&#146;s business, financial condition and results of operations. See
&#147;Business &#151; Lending Activities.&#148;

<P align="left"><I>Interest Rate Risk</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Banking companies&#146; earnings depend largely on the relationship between the
yield on earning assets, primarily loans and investments, and the cost of
funds, primarily deposits and borrowings. This relationship, known as the
interest rate spread, is subject to fluctuation and is affected by economic and
competitive factors which influence interest rates, the volume and mix of
interest earning assets and interest bearing liabilities and the level of
non-performing assets. Fluctuations in interest rates affect the demand of
customers for the Company&#146;s products and services. The Company is subject to
interest rate risk to the degree that its interest bearing liabilities reprice
or mature more slowly or more rapidly or on a different basis than its interest
earning assets. Significant fluctuations in interest rates could have a
material adverse effect on the Company&#146;s business, financial condition, results
of operations or liquidity.

<P align="left"><I>Economic Conditions; Limited Geographic Diversification</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s operations are located in Montana and Wyoming. As a result
of the geographic concentration of its operations, the Company&#146;s results depend
largely upon economic conditions in these areas. A deterioration in economic
conditions in the Company&#146;s market areas could adversely impact the quality of
the Company&#146;s loan portfolio and the demand for its products and services, and
accordingly, could have a material adverse effect on the Company&#146;s business,
financial condition, results of operations or liquidity.

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<P align="left"><I>Ability of the Company to Execute Its Business Strategy</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial performance and profitability of the Company will depend on
its ability to execute its business strategy and manage its possible future
growth. Although the Company believes that it has substantially integrated the
recently acquired banks into the Company&#146;s operations, there can be no
assurance that unforeseen issues relating to the assimilation or prior
operations of these banks, including the emergence of any material undisclosed
liabilities, will not materially adversely affect the Company. In addition,
any future acquisitions or other possible future growth may present operating
and other problems that could have a material adverse effect on the Company&#146;s
business, financial condition, results of operations or liquidity. The
Company&#146;s financial performance will also depend on the Company&#146;s ability to
maintain profitable operations through implementation of its Strategic Vision.
Moreover, the Company&#146;s future performance is subject to a number of factors
beyond its control, including pending and future federal and state banking
legislation, regulatory changes, unforeseen litigation outcomes, inflation,
lending and deposit rate changes, interest rate fluctuations, increased
competition and economic conditions. Accordingly, there can be no assurance
that the Company will be able to continue the growth or maintain the level of
profitability it has recently experienced.

<P align="left"><I>Dependence on Key Personnel</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s success depends to a significant extent on the management
skills of its existing executive officers and directors, many of whom have held
officer and director positions with the Company for many years. The loss or
unavailability of any of its key executives, including Homer A. Scott, Jr.,
Chairman of the Board, Thomas W. Scott, Chief Executive Officer, Lyle R.
Knight, President and Chief Operating Officer, or Terrill R. Moore, Senior Vice
President, Chief Financial Officer and Secretary, could have a material adverse
effect on the Company&#146;s business, financial condition, results of operations or
liquidity. See Part III, Item&nbsp;10, &#147;Directors and Executive Officers of
Registrant.&#148;

<P align="left"><I>Competition</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The banking and financial services business in both Montana and Wyoming is
highly competitive. The increasingly competitive environment is a result
primarily of changes in regulation and legislation, changes in technology and
product delivery systems and the accelerating pace of consolidation among
financial services providers. The Banks compete for loans, deposits and
financial services customers with other commercial banks, savings and loan
associations, securities and brokerage companies, mortgage companies, insurance
companies, finance companies, money market funds, credit unions and other
nonbank financial services providers. Several of these competitors are much
larger in total assets and capitalization, have greater access to capital
markets and offer a broader array of financial services than the Banks.
Moreover, the Banking and Branching Act has increased competition in the Banks&#146;
markets, particularly from larger, multi-state banks. There can be no assurance
that the Company will be able to compete effectively in its markets.
Furthermore, developments increasing the nature or level of competition could
have a material adverse effect on the Company&#146;s business, financial condition,
results of operations or liquidity. See &#147;Business &#151; Competition&#148; and &#147;Business
- - Regulation and Supervision.&#148;

<P align="left"><I>Government Regulation and Monetary Policy</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the banking industry are subject to extensive regulation
and supervision under federal and state laws and regulations. The restrictions
imposed by such laws and regulations limit the manner in which the Company
conducts its banking business, undertakes new investments and activities and
obtains financing. This regulation is designed primarily for the protection of
the deposit insurance funds and consumers and not to benefit holders of the
Company&#146;s securities. Financial institution regulation has been the subject of
significant legislation in recent years and may be the subject of further
significant legislation in the future, none of which is in the control of the
Company. Significant new laws or changes in, or repeals of, existing laws could
have a material adverse effect on the Company&#146;s business, financial condition,
results of operations or liquidity. Further, federal monetary policy,
particularly as implemented through the Federal Reserve System, significantly
affects credit conditions for the Company, and any unfavorable change in these
conditions could have a material adverse effect on the Company&#146;s business,
financial condition, results of operations or liquidity. See
&#147;Business-Regulation and Supervision.&#148;


<P align="center">10

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<P><I>Control by Affiliates</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The directors and executive officers of the Company beneficially own
approximately 63.49% of the outstanding common stock of the Company. Many of
these directors and executive officers are members of the Scott family, which
collectively owns approximately 81.45% of the outstanding common stock. By
virtue of such ownership, these affiliates are able to control the election of
directors and the determination of the Company&#146;s business, including
transactions involving any merger, share exchange, sale of assets outside the
ordinary course of business and dissolution.

<P><I>Lack of Trading Market; Market Prices</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The common stock of FIBS is not actively traded, and there is no
established trading market for the stock. There is only one class of common
stock, with 91.95% of the shares subject to contractual transfer restrictions
set forth in shareholder agreements and 8.05% without such restrictions. FIBS
has the right of first refusal to purchase the restricted stock at the minority
appraised value per share based upon the most recent quarterly appraisal
available to FIBS. All stock not subject to such restrictions may be sold at a
price per share that is acceptable to the shareholder. FIBS has no obligation
to purchase unrestricted stock, but has historically purchased such stock in
order to reduce the amount of its stock not subject to transfer restrictions.
During 1999, 20,908 shares of its unrestricted stock were repurchased by the
Company from participants in the Savings and Profit Sharing Plan for Employees
of First Interstate BancSystem, Inc. (&#147;Savings Plan&#148;). All shares were
repurchased at the most recent minority appraised value at the repurchase date.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The appraised minority value of the FIBS common stock represents the
estimated fair market valuation of a minority block of such stock, taking into
account adjustments for the lack of marketability of the stock and other
factors. This value does not represent an actual trading price between a
willing buyer and seller of the FIBS common stock in an informed, arm&#146;s-length
transaction. As such, the appraised minority value is only an estimate as of a
specific date, and there can be no assurance that such appraisal is an
indication of the actual value holders of the FIBS common stock may realize
with respect to shares held by them. Moreover, the estimated fair market value
of the FIBS common stock may be materially different at any date other than the
valuation dates.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIBS has no obligation, by contract, policy or otherwise to purchase stock
from any shareholder desiring to sell, or to create any market for the stock.
Historically, it has been the practice of FIBS to repurchase common stock to
maintain a shareholder base with restrictions on sale or transfer of the stock.
In the last three calendar years (1997-1999), FIBS has repurchased a total of
293,545 shares of common stock, 257,827 of which were restricted by the
shareholder agreements. FIBS repurchased the stock at the price determined in
accordance with the shareholder agreements. FIBS has no present intention to
change its historical practice for stock repurchases, but no assurances can be
provided that FIBS will not change or end its practice of repurchasing stock.
Furthermore, FIBS repurchases of stock are subject to corporate law and
regulatory restrictions which could prevent stock repurchases. See also Part
II, Item&nbsp;5, &#147;Market for Registrant&#146;s Common Equity and Related Stockholder
Matters.&#148;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is a limited public market for the trust preferred securities.
Future trading prices of the trust preferred securities depend on many factors
including, among other things, prevailing interest rates, the operating results
and financial condition of the Company and the market for similar securities.
As a result of the existence of FIBS&#146;s right to defer interest payments on or,
subject to prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve, shorten the
stated maturity of the subordinated debentures, the market price of the trust
preferred securities may be more volatile than the market prices of
subordinated debentures that are not subject to such optional deferrals or
reduction in maturity. There can be no assurance as to the market prices for
the trust preferred securities or the subordinated debentures that may be
distributed in exchange for the trust preferred securities if the Company
exercises its right to dissolve FIB Capital.

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<P><I>Forward-Looking Statements</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements contained in this document including, without
limitation, statements containing the words &#147;believes,&#148; &#147;anticipates,&#148;
&#147;expects,&#148; and words of similar import, constitute &#147;forward-looking statements&#148;
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general
economic and business conditions in those areas in which the Company operates;
demographic changes; competition; fluctuations in interest rates; changes in
business strategy or development plans; changes in governmental regulation;
credit quality; the availability of capital to fund the expected expansion of
the Company&#146;s business; and other factors referenced in this document,
including, without limitation, information under the captions &#147;Risk Factors&#148;
and Part II, Item&nbsp;7, &#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.&#148; Given these uncertainties, shareholders,
trust security holders and prospective investors are cautioned not to place
undue reliance on such forward-looking statements. The Company disclaims any
obligation to update any such factors or to publicly announce the results of
any revisions to any of the forward-looking statements contained herein to
reflect future events or developments.

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<P align="center"><B>Item&nbsp;2. Properties</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is the anchor tenant in a commercial building in which the
Company&#146;s principal executive offices are located in Billings, Montana. The
building is owned by a joint venture partnership in which FIB Montana is one of
the two partners, owning a 50% interest in the partnership. As of December&nbsp;31,
1999, the Company leases approximately 67,190 square feet of space for
operations in the building. The Company also leases space for operations and
eleven branch facilities in thirteen buildings. All other branches are located
in Company-owned facilities.

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<P align="center"><B>Item&nbsp;3. Legal Proceedings</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the normal course of business, the Company is named or threatened to be
named as a defendant in various lawsuits. In the opinion of management,
following consultation with legal counsel, the pending lawsuits are without
merit or, in the event the plaintiff prevails, the ultimate liability or
disposition thereof will not have a material adverse effect on the Company&#146;s
business, financial condition, results of operations or liquidity.

<!-- link1 "Item&nbsp;4. Submission of Matters to a Vote of Security Holders" -->
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<P align="center"><B>Item&nbsp;4. Submission of Matters to a Vote of Security Holders</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.

<!-- link1 "PART II" -->
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<P align="center"><B>PART II</B>

<!-- link1 "Item&nbsp;5. Market for Registrant&#146;s Common Equity and Related Stockholder Matters" -->
<A name="006"></A>
<P align="center"><B>Item&nbsp;5. Market for Registrant&#146;s Common Equity and Related Stockholder Matters</B>

<P align="left"><B>Description of FIBS Capital Stock</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized capital stock of FIBS consists of 20,000,000 shares of
common stock without par value, of which 7,993,250 shares were outstanding as
of December&nbsp;31, 1999, and 100,000 shares of preferred stock without par value,
none of which were outstanding as of December&nbsp;31, 1999.

<P><I>Common Stock</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each share of the common stock is entitled to one vote in the election of
directors and in all other matters submitted to a vote of stockholders.
Accordingly, holders of a majority of the shares of common stock entitled to
vote in any election of directors may elect all of the directors standing for
election if they choose to do so, subject to the rights of the holders of the
preferred stock. Voting for directors is noncumulative.

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the preferential rights of any preferred stock that may at the
time be outstanding, each share of common stock has an equal and ratable right
to receive dividends when, if and as declared by the Board of Directors out of
assets legally available therefor. In the event of a liquidation, dissolution
or winding up of the Company, the holders of common stock will be entitled to
share equally and ratably in the assets available for distribution after
payments to creditors and to the holders of any preferred stock that may at the
time be outstanding. Holders of common stock have no conversion rights or
preemptive or other rights to subscribe for any additional shares of common
stock or for other securities. All outstanding common stock is fully paid and
non-assessable.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The common stock of FIBS is not actively traded, and there is no
established trading market for the stock. There is only one class of common
stock, with 91.95% of the shares subject to contractual transfer restrictions
set forth in shareholder agreements and 8.05% held by 16 shareholders without
such restrictions, including the Company&#146;s 401(k) plan which holds 76.3% of the
unrestricted shares. See also Part I, Item&nbsp;1, &#147;Risk Factors &#150; Lack of Trading
Market; Market Prices.&#148;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quarter-end minority appraisal values for the past two years, determined
by Alex Sheshunoff &#38; Co. Investment Banking are as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="73%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="11%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Appraised</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Valuation As Of</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Minority Value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="2">December&nbsp;31, 1997</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
$29.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
32.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">June&nbsp;30, 1998</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
35.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">September&nbsp;30, 1998</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
33.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
37.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">March&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
39.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">June&nbsp;30, 1999</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
40.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">September&nbsp;30, 1999</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
40.00</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">
40.00</FONT></TD>
<TD valign="top"></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 1999, options for 322,300 shares of the FIBS common
stock were outstanding at various exercise prices, ranging from $6.02 to
$40.00. The aggregate cash proceeds to be received by FIBS upon exercise of
all options outstanding at December&nbsp;31, 1999 would be $7.3&nbsp;million, or a
weighted average exercise price of $22.64 per share.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The book value per share of FIBS common stock as of December&nbsp;31, 1999 was
$22.12. The appraised minority value as of December&nbsp;31, 1999 was $40.00. See
also Part I, Item&nbsp;1, &#147;Risk Factors &#150; Lack of Trading Market; Market Prices.&#148;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Resale of FIBS stock may be restricted pursuant to the Securities Act of
1933 and applicable state securities laws. In addition, most shares of FIBS
stock are subject to one of three shareholder&#146;s agreements:

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&#149;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Members of the Scott family, as majority shareholders of
FIBS, are subject to a shareholder&#146;s agreement (&#147;Scott
Agreement&#148;). The Scott family, under the Scott Agreement, has
agreed to limit the transfer of shares owned by members of the
Scott family to family members or charities, or with FIBS&#146;s
approval, to the Company&#146;s officers, directors, advisory
directors, or to the Company&#146;s Savings Plan.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&#149;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Charities that receive gifts of FIBS common stock from
shareholders subject to an existing shareholder&#146;s agreement are
subject to a shareholder&#146;s agreement (&#147;Charity Shareholder&#146;s
Agreement&#148;), which gives the Company the right to repurchase the
stock in any of the following events: 1) the charity&#146;s intention
to sell the stock, 2) transfer of the stock by operation of law,
and 3) at any other time as determined by the Company.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&#149;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Shareholders of the Company who are not Scott family
members or charities, with the exception of 16 shareholders who
own an aggregate of 643,779 shares of unrestricted stock, are
subject to a shareholder&#146;s agreement (&#147;Shareholder&#146;s Agreement&#148;).
The Shareholder&#146;s Agreement grants FIBS the option to purchase the
stock in any of the following events: 1) the shareholder&#146;s
intention to sell the stock, 2) the shareholder&#146;s death, 3)
transfer of the stock by operation of law, 4) termination of the
shareholder&#146;s status as a director, officer or employee of the
Company, and 5) total disability of the shareholder. Stock</TD>
</TR>
</TABLE>
<P align="center">13
<!-- PAGEBREAK -->
<P><HR noshade><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">subject to the Shareholder&#146;s Agreement may not be sold or transferred
by the shareholder without triggering FIBS&#146;s option to acquire the
stock in accordance with the terms of the Shareholder&#146;s Agreement.
In addition, the Shareholder&#146;s Agreement allows FIBS to repurchase
any of the FIBS stock acquired by the shareholder after January&nbsp;1,
1994 if FIBS determines that the number of shares owned by the
shareholder is excessive in view of a number of factors including but
not limited to (a)&nbsp;the relative contribution of the shareholder to
the economic performance of the Company, (b)&nbsp;the effort being put
forth by the shareholder and (c)&nbsp;the level of responsibility of the
shareholder.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of FIBS common stock made through the Company&#146;s Savings Plan are
not restricted by the Shareholder&#146;s Agreement, due to requirements of Employee
Retirement Income Security Act (&#147;ERISA&#148;) and the Internal Revenue Code.
However, since the Savings Plan does not allow distributions &#147;in kind,&#148; any
distributions from an employee&#146;s account in the Savings Plan will allow, and
may require, the Trust Department of FIB Montana (the &#147;Plan Trustee&#148;), to sell
the FIBS stock. While FIBS has no obligation to repurchase the stock, it is
possible that FIBS will repurchase FIBS stock sold by the Savings Plan. Any
such repurchases would be upon terms set by the Plan Trustee and accepted by
FIBS.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are 486 record shareholders of FIBS as of December&nbsp;31, 1999,
including the Company&#146;s Savings Plan as trustee for 491,387 shares held on
behalf of 778 individual participants in the plan. 236 individuals in the
Savings Plan also own shares of FIBS stock outside of the Plan. The Plan
Trustee votes the shares based on the instructions of each participant. In the
event the participant does not provide the Plan Trustee with instructions, the
Plan Trustee votes those shares in accordance with voting instructions received
from a majority of the participants in the Plan.

<P><I>Dividends</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is the policy of FIBS to pay a dividend to all common shareholders
quarterly. Dividends are declared and paid in the month following the calendar
quarter and the amount has historically been determined based upon a percentage
of net income for the calendar quarter immediately preceding the dividend
payment date. Effective with the dividend paid in January&nbsp;1996, the dividend
has been 30% of quarterly net income. The Board of Directors of FIBS has no
current intention to change its dividend policy, but no assurance can be given
that the Board may not, in the future, change or eliminate the payment of
dividends.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historical quarterly dividends for 1998 and 1999 are as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="36%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="23%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>Month</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>Declared</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total Cash</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Quarter</B></FONT></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>and Paid</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Per Share</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Dividend</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="2">1st quarter 1998</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
April&nbsp;1998
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"><FONT size="2">$</FONT></TD>
<TD align="right" valign="top"><FONT size="2">.23
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"><FONT size="2">$</FONT></TD>
<TD align="right" valign="top"><FONT size="2">1,843,844</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">2nd quarter 1998</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
July&nbsp;1998
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.23
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1,848,623</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3rd quarter 1998</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
October&nbsp;1998
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.26
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2,093,395</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4th quarter 1998</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
January&nbsp;1999
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.24
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">1,917,327</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">1st quarter 1999</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
April&nbsp;1999
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.27
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2,149,368</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">2nd quarter 1999</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
July&nbsp;1999
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.28
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2,223,894</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3rd quarter 1999</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
October&nbsp;1999
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.28
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2,240,818</FONT></TD>
<TD valign="top"></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4th quarter 1999</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
January&nbsp;2000
</FONT></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">.26
</FONT></TD>
<TD valign="top"></TD>
<TD></TD>
<TD nowrap align="right" valign="top"></TD>
<TD align="right" valign="top"><FONT size="2">2,073,423</FONT></TD>
<TD valign="top"></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The difference in quarterly dividends is reflective of the actual
quarterly net income.

<P><I>Dividend Restrictions</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of restrictions on the payment of dividends, see
&#147;Regulation and Supervision &#150; Restrictions on Transfers of Funds to FIBS and
the Banks.&#148;

<P align="center">14
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P><I>Preferred Stock</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized capital stock of FIBS includes 100,000 shares of preferred
stock. The FIBS Board of Directors is authorized, without approval of the
holders of common stock, to provide for the issuance of preferred stock from
time to time in one or more series in such number and with such designations,
preferences, powers and other special rights as may be stated in the resolution
or resolutions providing for such preferred stock. FIBS Board of Directors may
cause FIBS to issue preferred stock with voting, conversion and other rights
that could adversely affect the holders of the common stock or make it more
difficult to effect a change of control of the Company.

<P><I>Sales of Unregistered Securities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, the Company issued 2,400 unregistered shares of its common
stock to one individual exercising stock options. The weighted average
exercise price for these stock options was $12.37 per share. These sales were
made pursuant to the exemption from registration under Section&nbsp;4(2) of the
Securities Act of 1933. For additional information regarding stock options,
see &#147;Notes to Consolidated Financial Statements &#151; Employee Benefit Plans&#148;
included in Part IV, Item&nbsp;14.

<!-- link1 "Item&nbsp;6. Selected Consolidated Financial Data" -->
<A name="007"></A>
<P align="center"><B>Item&nbsp;6. Selected Consolidated Financial Data</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following selected consolidated financial data with respect to the
Company&#146;s consolidated financial position as of December&nbsp;31, 1999 and 1998 and
its results of operations for the fiscal years ended December&nbsp;31, 1999, 1998
and 1997, has been derived from the consolidated financial statements of the
Company included in Part IV, Item&nbsp;14. This data should be read in conjunction
with Part II, Item&nbsp;7, &#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; and such consolidated financial
statements, including the notes thereto.

<P align="left"><B>Five Year Summary</B>

<P><I>(Dollars in thousands except share and per share data)</I>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="41%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Years ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(6)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Operating Data:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">188,081</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">179,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">165,808</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,925</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">98,970</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">83,178</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">81,652</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,663</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,019</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,946</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">104,903</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">97,762</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,145</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,906</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">57,024</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Provision for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,240</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,844</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,629</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>


<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net interest income after provision for
loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,340</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,905</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">64,062</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,395</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Noninterest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,957</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,919</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,570</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,141</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,350</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Noninterest expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,835</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">82,283</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,890</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,609</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">46,564</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Income before income taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,462</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,228</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,585</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">34,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,181</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Income tax expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,216</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,730</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,351</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,844</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,243</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,337</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net income applicable to common stock</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,401</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,818</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,337</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Basic earnings per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.07</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.65</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.22</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Diluted earnings per common share(1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.05</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.21</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Dividends per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.07</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.94</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.98</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.78</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.48</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Weighted average common shares<BR>
&nbsp;&nbsp;&nbsp;&nbsp;outstanding &#151; diluted</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,111,316</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,087,809</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,987,921</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,881,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,843,644</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">15
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>Five Year Summary (continued)</B>

<P><I>(Dollars in thousands except per share data)</I>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="42%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Years ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(6)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Operating Ratios:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Return on average assets</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.15</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.41</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.39</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Return on average common stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.21</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16.62</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18.12</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.84</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16.98</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Average stockholders&#146; equity to average assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.70</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.65</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.08</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.20</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net interest margin</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.71</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.76</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.00</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.15</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.19</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net interest spread</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.13</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.08</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.32</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.47</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.45</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common stock dividend payout ratio(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.38</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32.13</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21.72</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Ratio of earnings to fixed charges(3):</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Excluding interest on deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.97x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.95x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.94x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.74x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.50x</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Including interest on deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.54x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.50x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.55x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.68x</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.66x</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Balance Sheet Data at Year End:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Total assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,610,266</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,478,833</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,234,764</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,063,837</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,351,215</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,484,459</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,470,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,375,479</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">870,378</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Allowance for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,171</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Investment securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">590,509</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">678,678</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">425,603</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">403,571</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">258,737</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,118,183</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,041,932</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,805,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,679,424</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,099,069</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,591</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,071</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,494</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,394</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,288</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,526</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">64,667</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,867</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,531</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">145,667</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">146,061</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">109,366</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Asset Quality Ratios at Year End:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Nonperforming assets to total loans
and other real estate owned (&#147;OREO&#148;)(4)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.89</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.29</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.15</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.97</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Allowance for loan losses to total loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.72</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.94</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.92</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.02</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.74</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Allowance for loan losses to
nonperforming loans(5)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">94.84</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">159.63</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">181.99</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">185.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">213.74</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net charge-offs to average loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.27</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.24</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.27</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.13</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Regulatory Capital Ratios at Year End:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Tier 1 risk-based capital</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">9.80</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.89</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.35</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.40</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Total risk-based capital</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.87</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.30</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.19</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.98</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.65</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Leverage ratio</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.27</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.94</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.28</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.28</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Diluted earnings per common share represent the amount of earnings
available to each share of common stock outstanding during the period
and to each share that would have been outstanding assuming the issuance
of common shares for all dilutive potential common shares outstanding
during the period.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Dividends per common share divided by basic earnings per common
share.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(3)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">For purposes of computing the ratio of earnings to fixed charges,
earnings represents income before income taxes and fixed charges. Fixed
charges represent interest expense and preferred stock dividends, which
dividends commenced in October&nbsp;1996 and concluded in October&nbsp;1997.
Deposits include interest bearing deposits and repurchase agreements.
Without including preferred stock dividends in fixed charges and
excluding interest on deposits, the ratio of earnings to fixed charges
for the years ended December&nbsp;31, 1997 and 1996 were 5.87x and 9.91x,
respectively. Without including preferred stock dividends in fixed
charges and including interest on deposits, the ratio of earnings to
fixed charges for the years ended December&nbsp;31, 1997 and 1996 were 1.57x
and 1.68x, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(4)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">For purposes of computing the ratio of non-performing assets to total
loans and OREO, non-performing assets include non-accrual loans, loans
past due 90&nbsp;days or more and still accruing interest, restructured loans
and OREO.</TD>
</TR>
</TABLE>
<P align="center">16
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(5)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">For purposes of computing the ratio of allowance for loan losses to
non-performing loans, non-performing loans include non-accrual loans,
loans past due 90&nbsp;days or more and still accruing interest and
restructured loans.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(6)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Significant changes from 1995 to 1996 are primarily attributable to
bank acquisitions in 1996. For additional information regarding bank
acquisitions, see Item&nbsp;1, &#147;Business &#150; Acquisitions.&#148;</TD>
</TR>
</TABLE>

<!-- link1 "Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations" -->
<A name="008"></A>
<P align="center"><B>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and<BR>
Results of Operations</B>

<P align="left"><B>Overview</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion and analysis is intended to provide greater
details of the results of operations and financial condition of the Company.
The following discussion should be read in conjunction with the information
under Part II, Item&nbsp;6, &#147;Selected Consolidated Financial Data&#148; and the Company&#146;s
consolidated financial statements, including the notes thereto, and other
financial data appearing elsewhere in this document. Certain statements
included in the following discussion constitute &#147;forward-looking statements&#148;
which involve various risks and uncertainties. The Company&#146;s actual results
may differ significantly from those anticipated in such forward-looking
statements. Factors that might cause such a difference include, without
limitation, the ability of the Company to execute its business strategy,
interest rate risk, economic conditions, government regulation, competition and
asset quality. For additional information concerning these and other factors,
see Part I, Item&nbsp;1, &#147;Business &#151; Risk Factors.&#148;

<P align="left"><B>Results of Operations</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increases in the Company&#146;s earnings during recent years have been effected
through a successful combination of acquisitions and internal growth. The
internal growth experienced by the Company is reflected by an increased volume
of customer loans and deposits, without giving effect to acquisitions. The
Company&#146;s internal growth has largely been accomplished through its effective
offering and promotion of competitively priced products and services. Net
income increased 14.1% to $29.2&nbsp;million, or $3.61 per diluted common share, in
1999 from $25.6&nbsp;million, or $3.17 per diluted common share, in 1998 primarily
due to internal growth in loans. Net income was flat in 1998 as compared to
1997 primarily due to narrowing interest margins as a result of high deposit
growth combined with low loan growth.

<P><I>Net Interest Income</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income, the largest source of the Company&#146;s operating income,
is derived from interest, dividends and fees received on interest earning
assets, less interest expense incurred on interest bearing liabilities.
Interest earning assets primarily include loans and investment securities.
Interest bearing liabilities primarily include deposits and various forms of
indebtedness.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents, for the periods indicated, condensed average
balance sheet information for the Company, together with interest income and
yields earned on average interest earning assets, and interest expense and
rates paid on average interest bearing liabilities. Average balances are
averaged daily balances.

<P align="left"><B>Average Balance Sheets, Yields And Rates</B>


<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="35%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="23"><FONT size="2"><B>Years Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="23"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Interest earning assets:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Loans(1)(2)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,598,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">149,105</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">9.33</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,469,741</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">143,435</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">9.76</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">U.S. and agency securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">464,954</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,777</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.97</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">416,965</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.00</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,854</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,304</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">64,351</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,457</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.37</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">102,828</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,458</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.28</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">71,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,610</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.48</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Tax exempt securities(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,755</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,250</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.22</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43,578</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,290</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.55</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest bearing deposits
in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,071</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">353</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.99</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,992</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">997</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.25</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total interest earning assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,271,056</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">190,247</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.38</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,084,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">180,795</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.67</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>


<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Noninterest earning assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">266,511</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">236,075</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>


<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,537,567</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,320,872</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="left">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="50%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Years Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Interest earning assets:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Loans(1)(2)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,441,800</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,299</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">9.73</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">U.S. and agency securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">345,771</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,481</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.92</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">39,936</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,210</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.53</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,302</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,467</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.30</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Tax exempt securities(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,253</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,737</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.17</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest bearing deposits
in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,491</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">448</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.98</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total interest earning assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,879,553</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">166,642</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.87</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Noninterest earning assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">235,941</FONT></TD>
<TD></TD>


</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,115,494</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P align="center">17
<!-- PAGEBREAK -->
<P><HR noshade><P>


<P align="left"><B>Average Balance Sheets, Yields And Rates (continued)</B>


<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="50%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="23"><FONT size="2"><B>Years Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="23"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="28"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest bearing liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Demand deposits</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">346,711</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,084</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.75</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">320,088</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,673</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">2.08</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Savings deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">539,513</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,482</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">464,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,077</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.89</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">785,307</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,959</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.34</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">754,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43,498</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.76</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Borrowings(3)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">221,037</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,998</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.52</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,550</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.37</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,556</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,126</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.66</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,085</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,327</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.29</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,529</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.82</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.82</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total interest bearing liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,957,124</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">83,178</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,780,150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">81,652</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.59</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Noninterest bearing deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">387,969</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">360,628</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other noninterest bearing
liabilities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,533</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,832</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">169,941</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">154,262</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total liabilities and
stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,537,567</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,320,872</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net FTE interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">107,069</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">99,143</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Less FTE adjustments(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,166</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,381</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net interest income per consolidated
statements of income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">104,903</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">97,762</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Interest rate spread</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.13</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.08</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net yield on interest earning assets(4)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.71</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.76</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="69%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>Years Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Interest</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="28"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest bearing liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Demand deposits</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">304,511</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,369</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">2.09</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Savings deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">417,352</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,021</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.84</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">626,925</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">35,739</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.70</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Borrowings(3)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">184,605</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,846</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.79</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,197</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,165</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.19</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,808</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">523</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.00</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total interest bearing liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,595,398</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,663</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.55</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Noninterest bearing deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">345,372</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other noninterest bearing
liabilities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,994</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">151,730</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total liabilities and
stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,115,494</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net FTE interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">93,979</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Less FTE adjustments(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(834</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net interest income per consolidated
statements of income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">93,145</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Interest rate spread</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.32</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net yield on interest earning assets(4)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">5.00</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Average loan balances include nonaccrual loans. Loan fees included
in interest income were $8.7&nbsp;million, $8.1&nbsp;million and $6.1&nbsp;million for
the years ended December&nbsp;31, 1999, 1998 and 1997, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Interest income and average rates for tax exempt loans and securities
are presented on a fully-taxable equivalent (FTE)&nbsp;basis.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(3)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes interest on Federal funds purchased, securities sold under
repurchase agreements and other borrowed funds. Excludes long-term
debt.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(4)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Net yield on interest earning assets during the period equals (i)&nbsp;the
difference between interest income on interest earning assets and the
interest expense on interest bearing liabilities and trust preferred
securities, divided by (ii)&nbsp;average interest earning assets for the
period.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income on fully-taxable equivalent basis (&#147;FTE&#148;) increased
8.0% to $107.1&nbsp;million in 1999 compared to $99.1&nbsp;million in 1998. This
increase is primarily due to internal growth in interest earning assets,
principally commercial real estate and indirect consumer loans. The net yield
on earning assets decreased 5 basis points to 4.71% in 1999 from 4.76% in 1998
due primarily to continued competitive pressure.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net FTE interest income increased 5.5% to $99.1&nbsp;million in 1998 from $94.0
million in 1997 due to internal growth. The net yield on interest earning
assets of 4.76% in 1998 decreased 24 basis points from 5.00% in 1997 due to
shifts in the mix of earning assets from higher yielding loans to investment
securities which typically produce a lower yield.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer loan fees, included in net interest income, increased 7.4% to
$8.7&nbsp;million in 1999 from $8.1&nbsp;million in 1998. Increases in consumer,
commercial and credit card loan fees were partially offset by decreases in real
estate loan fees. Loan fees increased 32.8% to $8.1&nbsp;million in 1998 from $6.1
million in 1997. The most significant increases from 1997 to 1998 were in real
estate loan fees.

<P align="center">18
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The most significant impact on the Company&#146;s net interest income between
periods is derived from the interaction of changes in the volume of and rates
earned or paid on interest earning assets and interest bearing liabilities. The
volume of loans, investment securities and other interest earning assets,
compared to the volume of interest bearing deposits and indebtedness, combined
with the spread, produces changes in the net interest income between periods.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth, for the periods indicated, a summary of the
changes in interest income and interest expense resulting from estimated
changes in average asset and liability balances (volume)&nbsp;and estimated changes
in average interest rates (rate). Changes which are not due solely to volume or
rate have been allocated to these categories based on the respective percent
changes in average volume and average rate as they compare to each other.

<P align="left"><B>Analysis Of Interest Changes Due To Volume And Rates</B>

<P><I>(Dollars in thousands)</I>


<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="40%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Year ended</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>compared with</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>compared with</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>favorable (unfavorable)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>favorable (unfavorable)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Volume</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Volume</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest earning assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Loans(1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">12,575</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,905</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,670</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,727</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">409</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,136</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">U.S. and agency securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,878</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,771</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,270</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">255</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,525</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,122</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(31</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,153</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,312</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(65</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,247</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,051</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(203</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,848</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,101</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">42</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,143</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Tax exempt securities(1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,203</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(243</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,960</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,685</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(132</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,553</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest bearing deposits
in banks</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(626</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(18</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(644</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">604</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(55</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">549</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total change</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,959</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,507</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,452</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,699</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">454</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,153</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest bearing liabilities and
trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Demand deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">555</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,144</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(589</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">325</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(21</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">304</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Savings deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,918</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,513</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,405</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">220</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,056</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,763</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,302</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,539</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,366</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">393</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,759</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Borrowings(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,112</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">336</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,448</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(519</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(777</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,296</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(292</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">91</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(201</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,329</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(509</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,838</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,015</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,004</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total change</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,056</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,530</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,526</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,694</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(705</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,989</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Increase (decrease)&nbsp;in FTE net
interest income (1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9,903</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,977</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,926</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,005</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,159</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,164</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="left">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="57%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Year ended</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1997</B></FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>compared with</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>December 31, 1996</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="11"><FONT size="2"><B>favorable (unfavorable)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="11"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Volume</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Rate</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Net</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest earning assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Loans(1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,541</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,281</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,260</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">U.S. and agency securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,010</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">520</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,530</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">801</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">868</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">90</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(15</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">75</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Tax exempt securities(1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">162</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Interest bearing deposits
in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total change</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">48,674</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(707</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,967</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Interest bearing liabilities and
trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Demand deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,974</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(94</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,880</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Savings deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,466</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">250</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,716</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,247</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">164</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,411</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Borrowings(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,802</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,977</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,981</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">156</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,137</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">523</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">523</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total change</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,993</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">651</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,644</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Increase (decrease)&nbsp;in FTE net
interest income (1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,681</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,358</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,323</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Interest income and average rates for tax exempt loans and securities
are presented on a fully-taxable equivalent (FTE)&nbsp;basis.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes interest on Federal funds purchased, securities sold under
repurchase agreements and other borrowed funds.</TD>
</TR>
</TABLE>
<P><I>Provision for Loan Losses</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provision for loan losses creates an allowance for future loan losses.
The loan loss provision for each year is dependent on many factors, including
loan growth, net charge-offs, changes in the composition of the loan portfolio,
delinquencies, management&#146;s assessment of the quality of the loan portfolio,
the value of the underlying collateral on problem loans and the general
economic conditions in the Company&#146;s markets. The Company performs a quarterly
assessment of the risks inherent in its loan portfolio, as well as a detailed
review of each asset determined to have identified weaknesses. Based on this
analysis, which includes reviewing historical loss trends, current economic
conditions, industry concentrations and specific reviews of assets classified
with identified weaknesses, the Company makes provisions for potential loan
losses. Specific allocations are made for loans where the probability of a loss
can be defined and reasonably determined, while the balance of the provisions
for loan losses are based on historical data, delinquency trends, economic
conditions in the Company&#146;s markets and industry averages. Annual fluctuations
in the provision for loan losses result from management&#146;s assessment of the
adequacy of the allowance for loan losses. Ultimate loan losses may vary from
current estimates. The provision for loan losses decreased $600,000 in 1999 to
$3.6&nbsp;million from $4.2&nbsp;million in 1998 and 1997.

<P align="center">19
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<P align="left"><I>Noninterest Income</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal sources of noninterest income include service charges on
deposit accounts, data services revenues, income from fiduciary activities,
comprised principally of fees earned on trust assets, and other service
charges, commissions and fees. Noninterest income increased 10.4% to $33.0
million in 1999 from $29.9&nbsp;million in 1998 with all principal categories,
increasing from the prior year. Noninterest income increased 8.3% to $29.9
million in 1998 from $27.6&nbsp;million in 1997. Increases in noninterest income
from 1998 to 1999 and from 1997 to 1998 were a function of changes in each of
the principal categories, as discussed below.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service charges on deposit accounts increased 9.6% to $11.4&nbsp;million in
1999 from $10.4&nbsp;million in 1998 and 5.1% to $10.4&nbsp;million in 1998 from $9.9
million in 1997. These increases occurred primarily in overdraft fees.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exclusive of a non-recurring termination fee of $354,000 received in 1998,
data services revenues for 1999 of $8.3&nbsp;million increased 7.8% from $7.7
million in 1998 and 4.1% to $7.7&nbsp;million in 1998 from $7.4&nbsp;million in 1997.
These increases are primarily due to a greater number of customers using the
Company&#146;s ATM network and a corresponding increase in transaction volumes. The
Company&#146;s ATM network expanded from 477 locations at year end 1996 to 630
locations at year end 1997, 986 locations at year end 1998, and to 1,270
locations at year end 1999. There were no increases in basic charges for data
services in 1999, 1998 or 1997.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues from fiduciary activities increased 12.5% to $4.5&nbsp;million in 1999
from $4.0&nbsp;million in 1998 and 8.1% to $4.0&nbsp;million in 1998 from $3.7&nbsp;million in
1997. These increases are due to increases in the value of assets under trust
management combined with growth in customer assets under trust management and
an increase in fees charged for trust services.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other service charges, commissions and fees increased 14.0% to $5.7
million in 1999 from $5.0&nbsp;million in 1998. This increase is primarily
attributable to loan servicing income resulting from new originations
subsequently sold with servicing retained and the acquisition of a servicing
portfolio totaling approximately $165.8&nbsp;million at its acquisition date in
January&nbsp;1999. Other service charges, commissions and fees increased 2.0% to
$5.0&nbsp;million in 1998 from $4.9&nbsp;million in 1997.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OREO gains are included net of provisions for OREO losses and losses on
sales of OREO. Variations in net OREO income during the periods resulted
principally from fluctuations in such gains and losses. OREO income is
anticipated to decline as the number and value of OREO properties decrease.
OREO income is directly related to prevailing economic conditions, and such
income could decrease significantly should an unfavorable shift occur in the
economic conditions of the Company&#146;s markets.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income increased 28.6% to $2.7&nbsp;million in 1999 from $2.1&nbsp;million in
1998 and 75.0% to $2.1&nbsp;million in 1998 from $1.2&nbsp;million in 1997. These
increases are primarily due to brokerage service fees. Brokerage service fees
were $1.0&nbsp;million, $581,000 and $0 in 1999, 1998 and 1997, respectively. The
Company began expanding the range and scope of brokerage services offered
through its banking offices in December&nbsp;1997 and currently employs nine
registered brokerage representatives. The remaining increase from 1997 to 1998
was attributable to increases in foreign exchange fees.

<P><I>Noninterest Expense</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest expense increased 7.9% to $88.8&nbsp;million in 1999 from $82.3
million in 1998 and 9.9% to $82.3&nbsp;million in 1998 from $74.9&nbsp;million in 1997.
Significant components of these increases are discussed below.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries, wages and employee benefits expense increased 6.6% to $45.5
million in 1999 from $42.7&nbsp;million in 1998 due primarily to inflationary wage
increases and the additional staffing requirements of new banking offices
opened or acquired during 1999. Increases in salaries, wages and employee
benefits expense of 13.9% to $42.7&nbsp;million in 1998 from $37.5&nbsp;million in 1997
were principally due to inflationary wage increase, additional staffing
requirements of new banking offices opened in late 1997 and 1998 and the
addition of personnel providing support for the growing data services division.
Given the Company&#146;s present growth strategy, employee and related compensation
expenses are expected to continue to increase.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Occupancy expense increased 10.9% to $7.1&nbsp;million in 1999 from $6.4
million in 1998 and 4.9% to $6.4&nbsp;million in 1998 from $6.1&nbsp;million in 1997.
These increases are primarily due to additional rent and depreciation expenses
associated with internal growth, bank acquisitions and the remodeling of
existing facilities. Given the Company&#146;s present growth strategy, occupancy
expense is expected to continue to rise.


<P align="center">20

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<!-- TOC -->
<!-- /TOC -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furniture and equipment expenses increased 20.0% to $10.2
million in 1999 from $8.5&nbsp;million in 1998. Approximately 30% of this increase
is due to additional depreciation expense associated with a reduction in the
estimated useful life of a main frame computer. The remaining increase is
primarily due to depreciation expense associated with the Company&#146;s continuing
investment in technology and costs associated with new banking offices opened
or acquired in 1999. Increases in furniture and equipment expenses of 10.4% to
$8.5&nbsp;million in 1998 from $7.7&nbsp;million in 1997 primarily resulted from higher
depreciation, maintenance and other costs associated with the expansion of the
Company&#146;s ATM network, the upgrade and addition of data servicing equipment and
the addition of new banking offices in late 1997 and 1998. Given the Company&#146;s
present growth strategy, furniture and equipment costs are expected to continue
to increase.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses primarily include advertising and public relations costs;
legal, audit and other professional fees; office supply, postage, freight and
telephone expenses; and mortgage servicing intangible amortization. Other
expenses increased 5.0% to $23.0&nbsp;million in 1999 from $21.9&nbsp;million in 1998.
Approximately 50% of this increase is directly attributable to new banking
offices opened or acquired during 1999. The remaining increase is primarily
attributable to mortgage servicing intangible amortization expense of $343,000
related to growth in the loan servicing portfolio as discussed above and
expense of $359,000 related to the donation of land. Other expense increased
5.3% to $21.9&nbsp;million in 1998 from $20.8&nbsp;million in 1997 due primarily to
increases in professional fees resulting from Company-wide sales and service
training and employee development activities conducted during 1998.

<P><I>Income Tax Expense</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s effective federal tax rate was 31.3%, 32.5% and 33.3% for
the years ended December&nbsp;31, 1999, 1998 and 1997, respectively. The lower
effective rate in 1999 is principally due to increases in tax-exempt interest
income. State income tax applies only to pretax earnings of entities operating
within Montana. The Company&#146;s effective state tax rate was 4.3%, 5.3% and 4.5%
for years ended December&nbsp;31, 1999, 1998 and 1997, respectively. Pretax
earnings subject to Montana state income tax were approximately 53%, 57% and
57% of consolidated pretax earnings in 1999, 1998 and 1997, respectively.

<P><B>Financial Condition</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets increased 5.3% to $2,610&nbsp;million as of December&nbsp;31, 1999 from
$2,479&nbsp;million as of December&nbsp;31, 1998 due primarily to the banking offices
acquired in 1999 and internal growth in loans funded by decreases in investment
securities, increases in other borrowings and acquired customer deposits.
Total assets increased 10.9% to $2,479&nbsp;million as of December&nbsp;31, 1998 from
$2,235&nbsp;million as of December&nbsp;31, 1997. This increase was due principally to
increases in investment securities funded through internally generated deposit
growth.

<P><I>Loans</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans increased 16.1% to $1,723&nbsp;million as of December&nbsp;31, 1999 from
$1,484&nbsp;million as of December&nbsp;31, 1998. All major categories of loans
increased from December&nbsp;31, 1998 with the most significant growth occurring in
commercial real estate and indirect consumer loans. Management attributes this
growth in part to expansion of its market presence through acquisitions, new
branch openings and marketing activities, and to a renewed focus on
opportunities in the indirect lending area.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 1998, total loans increased 1.0% to $1,484&nbsp;million from
$1,470&nbsp;million as of December&nbsp;31, 1997. Growth in commercial loans was
partially offset by decreases in real estate, agriculture and consumer loans.
Management attributed the decline in growth rate to competitive loan pricing by
competitors.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s loan portfolio consists of a mix of commercial, consumer,
real estate, agricultural and other loans, including fixed and variable rate
loans. Fluctuations in the loan portfolio are directly related to the economies
of the communities served by the Company. Thus, the Company&#146;s borrowers could
be adversely impacted by a downturn in these sectors of the economy which could
have a material adverse effect on the borrowers&#146; abilities to repay their
loans.
<P align="center">21
<!-- PAGEBREAK -->
<P><HR noshade><P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables present the composition of the Company&#146;s loan
portfolio as of the dates indicated:

<P align="left"><B>Loans Outstanding</B>


<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="22%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="23"><FONT size="2"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="23"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Loans</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Real estate(1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">806,320</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">46.8</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">681,670</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">45.9</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">683,212</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">46.5</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">463,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,197</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">412,231</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">311,040</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">261,513</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.8</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,887</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,707</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">107,649</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.3</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,969</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,845</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,809</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.4</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,484,459</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,470,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Less allowance for
loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,693,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,455,656</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,442,234</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Ratio of allowance
to total loans</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.72</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.94</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.92</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="left">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="30%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="15"><FONT size="2"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="15"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(2)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>Loans</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Real estate(1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">600,007</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">43.6</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">384,349</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">44.2</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">410,258</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">247,665</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28.5</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">272,888</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">166,602</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19.1</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">90,883</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,001</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,443</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,761</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.2</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,375,479</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">870,378</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Less allowance for
loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,171</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,347,682</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">855,207</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Ratio of allowance
to total loans</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">2.02</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.74</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes consumer, commercial and agricultural loans secured by
real estate as follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="27%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">117,881</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">102,622</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,510</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,607</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,046</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">435,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">351,229</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">264,842</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">198,570</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">145,380</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">87,711</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,459</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,397</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">52,689</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">43,826</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Significant changes from 1995 to 1996 are primarily
attributable to bank acquisitions in 1996. For additional
information regarding bank acquisitions, see Item&nbsp;1, &#147;Business &#150;
Acquisitions.&#148;</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the maturity distribution of the Company&#146;s
loan portfolio and the sensitivity of the loans to changes in interest rates as
of December&nbsp;31, 1999:

<P align="left"><B>Maturities And Interest Rate Sensitivities</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="48%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Within</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>One Year to</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>After</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>One Year</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Five Years</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Five Years</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Real estate</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">250,933</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">357,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">198,025</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">806,320</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">189,404</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">261,148</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,862</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">463,414</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">200,972</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">121,945</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,454</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,371</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Agriculture</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">84,542</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,855</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,490</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,887</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Other loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,969</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,969</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">727,820</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">760,310</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">234,831</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Loans at fixed interest rates</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">389,515</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">615,640</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,569</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,122,724</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Loans at variable interest rates</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">315,451</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">144,670</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">117,262</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">577,383</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Nonaccrual loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,854</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,854</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">727,820</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">760,310</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">234,831</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information concerning the Company&#146;s loan portfolio and its
credit administration policies, see Part I, Item&nbsp;1, &#147;Business-Lending
Activities.&#148;

<P align="center">22
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P><I>Investment Securities</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s investment portfolio is managed to attempt to obtain the
highest yield while meeting the Company&#146;s risk tolerance and liquidity needs
and to satisfy pledging requirements for deposits of state and political
subdivisions and securities sold under repurchase agreements. The portfolio is
comprised of U.S. Treasury securities, U.S. government agency securities, tax
exempt securities, corporate securities, other mortgage-backed securities and
other equity securities. Federal funds sold are additional investments which
are classified as cash equivalents rather than as investment securities.
Investment securities classified as available-for-sale are recorded at fair
market value, while investment securities classified as held-to-maturity are
recorded at cost. Unrealized gains or losses, net of the deferred tax effect,
on available-for-sale securities are reported as increases or decreases in
stockholders&#146; equity.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment securities decreased 13.0% to $591&nbsp;million as of December&nbsp;31,
1999 from $679&nbsp;million as of December&nbsp;31, 1998. Proceeds from maturities,
sales and principal payments were reinvested or used to fund increases in
loans. Investment securities increased 59.5% to $679&nbsp;million as of December
31, 1998 from $426&nbsp;million as of December&nbsp;31, 1997 as a result of growth in
funding sources exceeding loan growth. The majority of this increase occurred
in U.S. Government agencies, tax exempt securities and other mortgage-backed
securities and resulted in a moderate increase in the duration of the
portfolio.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the book value, percentage of total
investment securities and average yield for the Company&#146;s investment securities
as of December&nbsp;31, 1999.

<P align="left"><B>Securities Maturities and Yield</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="71%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% of Total</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Book</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Investment</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Securities</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Yield(1)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>U.S. Treasury securities</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing within one year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">36,511</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">6.2</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">5.99</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in one to five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">84,669</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.16</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(129</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">121,051</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.11</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>U.S. Government agency securities</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing within one year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,312</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.95</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in one to five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">171,431</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.86</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,509</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172,234</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.87</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Tax exempt securities</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing within one year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,251</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.10</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in one to five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,160</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.07</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in five to ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">48,986</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.96</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing after ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,350</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.22</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">76,835</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.18</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Corporate securities</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing within one year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,513</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.72</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in one to five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,065</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.05</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">30,564</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.91</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">23
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>Securities Maturities and Yield (continued)</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="68%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% of Total</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Book</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Investment</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Securities</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Yield(1)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Other mortgage-backed securities</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing within one year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">47,566</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.35</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in one to five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,269</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.30</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing in five to ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,919</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.16</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maturing after ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,144</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.35</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,185</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">177,713</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">30.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.29</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Equity securities with no stated maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,985</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Mark-to-market adjustments on securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,112</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.0</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">590,509</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">6.22</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Average yields have been calculated on a fully-taxable basis.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The maturities noted above reflect $103,658 of investment securities at
their final maturities although they have call provisions within the next year.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 1998, the Company had U.S. Treasury securities, U.S.
Government agency securities, tax exempt securities, corporate securities,
other mortgage-backed securities and equity securities with book values of
$163,842, $157,566, $68,414, $64,673, $213,190 and $10,993, respectively. As
of December&nbsp;31, 1997, the Company had U.S. Treasury securities, U.S. Government
agency securities, tax exempt securities, corporate securities, other
mortgage-backed securities and equity securities with book values of $245,891,
$84,213, $25,439, $10,596, $50,069 and $9,395, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information concerning investment securities, see &#147;Notes to
Consolidated Financial Statements &#150; Investment Securities&#148; included in Part IV,
Item&nbsp;14.

<P><I>Deposits</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company emphasizes developing total client relationships with its
customers in order to increase its core deposit base, which is the Company&#146;s
primary funding source. The Company&#146;s deposits consist primarily of interest
bearing demand, saving, IRA and time deposit accounts. For additional
information concerning the Company&#146;s deposits, including its use of repurchase
agreements, as discussed below, see Part I, Item&nbsp;1, &#147;Business &#150; Funding
Sources.&#148;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits increased 3.7% to $2,118&nbsp;million as of December&nbsp;31, 1999, as
compared to $2,042&nbsp;million as of December&nbsp;31, 1998 and 13.1% to $2,042&nbsp;million
as of December&nbsp;31, 1998 compared to $1,805&nbsp;million as of December&nbsp;31, 1997.
The increase from 1998 to 1999 was primarily due to bank acquisitions. The
increase from 1997 to 1998 resulted from internal growth. For additional
information concerning customer deposits as of December&nbsp;31, 1999 and 1998, see
&#147;Notes to Consolidated Financial Statements &#151; Deposits&#148; included in Part IV,
Item&nbsp;14.

<P><I>Other Borrowed Funds</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to deposits, the Company also uses short-term borrowings from
the Federal Home Loan Bank of Seattle, repurchase agreements with commercial
depositors and, on a seasonal basis, Federal funds purchased.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other borrowed funds increased 320.0% to $42&nbsp;million as of December&nbsp;31,
1999 from $10&nbsp;million as of December&nbsp;31, 1998 primarily due to a $30&nbsp;million,
90&nbsp;day note payable to the Federal Home Loan Bank of Seattle. This advance was
obtained to mitigate possible liquidity risks associated with Year 2000
including withdrawals of depositor funds, failure of third parties with which
the Company has financial relationships or the collapse of capital markets.
The advance matured and was repaid on January&nbsp;18, 2000.
<P align="center">24
<!-- PAGEBREAK -->
<P><HR noshade><P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information regarding federal funds
purchased and repurchase agreements as of the dates indicated:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="59%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>As of and for the years ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>(Dollars in thousands)</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Federal funds purchased:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Balance at period end</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,025</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Average balance</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,405</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,321</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,651</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maximum amount outstanding at any month-end</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">69,260</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,340</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">83,185</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Average interest rate:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">During the year</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">5.06</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.99</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.46</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">At period end</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.74</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.12</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.95</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Securities sold under repurchase agreements:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Balance at period end</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,350</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Average balance</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,974</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">162,583</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">141,825</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Maximum amount outstanding at any month-end</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">209,464</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,350</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Average interest rate:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">During the year</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.29</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.32</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.69</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">At period end</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.80</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.94</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.61</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information on other borrowed funds as of December&nbsp;31, 1999
and 1998, see &#147;Notes to Consolidated Financial Statements &#150; Long-Term Debt and
Other Borrowed Funds&#148; included in Part IV, Item&nbsp;14.

<P><I>Non-Performing Assets</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-performing assets include loans past due 90&nbsp;days or more and still
accruing interest, non-accrual loans, restructured loans and OREO. Management
generally places loans on non-accrual when they become 90&nbsp;days past due, unless
they are well secured and in the process of collection. When a loan is placed
on non-accrual status, any interest previously accrued but not collected is
reversed from income. Approximately $1,424,000, $1,062,000, $763,000, $405,000
and $318,000 of gross interest income would have been accrued if all loans on
non-accrual had been current in accordance with their original terms for the
years ended December&nbsp;31, 1999, 1998, 1997, 1996 and 1995, respectively.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructured loans are those where the Company has granted a concession on
the interest paid or original repayment terms due to financial difficulties of
the borrower.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OREO consists of real property acquired through foreclosure on the related
collateral underlying defaulted loans. The Company records OREO at the lower
of carrying value or fair value less estimated costs to sell. Estimated losses
that result from the ongoing periodic valuation of these properties are charged
to earnings with a provision for losses on foreclosed property in the period in
which they are identified.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding non-performing assets
as of the dates indicated:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="53%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>As of December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(1)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>(Dollars in thousands)</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Non-performing loans:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Nonaccrual loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">22,854</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,699</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,681</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,632</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Accruing loans past due 90&nbsp;days or more</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,695</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,039</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,883</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,432</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,711</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Restructured loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,660</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,306</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">928</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,763</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,755</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total non-performing loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,209</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,044</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,492</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,017</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,098</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">OREO</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,445</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,113</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,546</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,349</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total non-performing assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">32,654</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,157</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,854</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,447</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Non-performing assets to total loans and OREO</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.89</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.29</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.15</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.20</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.97</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Significant changes from 1995 to 1996 are primarily
attributable to bank acquisitions in 1996. For additional
information regarding bank acquisitions, see Item&nbsp;1, &#147;Business &#150;
Acquisitions.&#148;</TD>
</TR>
</TABLE>
<P align="center">25
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-performing loans increased 73.0% to $31&nbsp;million as of December&nbsp;31,
1999 as compared to $18&nbsp;million as of December&nbsp;31, 1998 principally due to one
commercial loan of $10&nbsp;million placed on non-accrual in 1999 and continued
slight deterioration in the agricultural market sector. Non-performing loans
increased 16.5% to $18&nbsp;million as of December&nbsp;31, 1998 as compared to $15
million as of December&nbsp;31, 1997 due to slight deteriorations in the
agricultural and consumer market sectors.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the non-performing loans included in the table above,
management has identified potential problem loans of approximately $38&nbsp;million
as of December&nbsp;31, 1999. Potential problem loans are defined as performing
loans for which management has serious doubts as to the ability of the
borrowers to comply with the present loan repayment terms and which may result
in future non-performing loans. At December&nbsp;31, 1999, approximately $12
million has been provided for these loans in the allowance for loan losses.
Potential problem loans increased 18.8% to $38&nbsp;million as of December&nbsp;31, 1999
from $32&nbsp;million at December&nbsp;31, 1998 due primarily to downgrading the loans of
one commercial real estate borrower. Potential problem loans increased 6.7% to
$32&nbsp;million at December&nbsp;31, 1998 from $30&nbsp;million at December&nbsp;31, 1997 due
primarily to increases in loan volume combined with a slight deterioration in
the credit quality of consumer loans.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that the Company has identified all of its
potential problem loans. Furthermore, management cannot predict the extent to
which economic conditions in the Company&#146;s market areas may worsen or the full
impact such conditions may have on the Company&#146;s loan portfolio. Accordingly,
there can be no assurances that other loans will not become 90&nbsp;days or more
past due, be placed on non-accrual or become restructured loans or OREO in the
future.

<P><I>Allowance for Loan Losses</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The allowance for loan losses is established through a provision for loan
losses based on management&#146;s evaluation of risk inherent in its loan portfolio
and economic conditions in the Company&#146;s market areas. See &#147;Provision for Loan
Losses&#148; herein. The allowance is increased by provisions charged against
earnings and reduced by net loan charge-offs. Loans are charged-off when
management determines that collection has become unlikely. Consumer loans are
generally charged off when they become 120&nbsp;days past due. Other loans, or
portions thereof, are charged off when they become 180&nbsp;days past due unless
they are well-secured and in the process of collection. Recoveries are
generally recorded only when cash payments are received.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning the Company&#146;s
allowance for loan losses as of the dates and for the years indicated.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="50%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>As of and for the years ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(1)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2"><I>(Dollars in thousands)</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Balance at the beginning of period</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,171</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,726</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Allowance of acquired banking offices</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,574</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,553</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">917</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Charge-offs:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Real estate</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">278</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">370</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">141</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,192</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,988</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,607</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,384</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,679</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,753</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,920</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,132</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,127</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">393</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">386</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">349</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">71</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">220</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total charge-offs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,609</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,627</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,951</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,758</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,117</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Recoveries:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Real estate</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">213</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">119</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,429</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,500</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,816</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">974</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">557</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,464</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,315</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">732</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">850</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">252</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">324</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">52</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">300</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">154</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total recoveries</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,080</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,094</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,987</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,016</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">26
<!-- PAGEBREAK -->
<P><HR noshade><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="40%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>As of and for the years ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1996(1)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2"><I>(Dollars in thousands)</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net charge-offs</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,341</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,547</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,857</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,771</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,101</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Provision for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,240</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,844</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,629</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance at end of period</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,171</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Period end loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,484,459</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,470,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,375,479</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">870,378</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Average loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,598,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,469,741</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,441,800</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,014,901</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">837,288</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net charge-offs to average loans</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.27</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.24</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.27</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.17</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">0.13</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Allowance to period end loans</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.72</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.94</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.92</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">2.02</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">1.74</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Significant changes from 1995 to 1996 are primarily
attributable to bank acquisitions in 1996. For additional
information regarding bank acquisitions, see Item&nbsp;1, &#147;Business &#150;
Acquisitions.&#148;</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management considers changes in the size and character of the loan
portfolio, changes in non-performing and past due loans, historical loan loss
experience, and the existing and prospective economic conditions when
determining the adequacy of the allowance for loan losses. Although management
believes that the allowance for loan losses is adequate to provide for both
potential losses and estimated inherent losses in the portfolio, future
provisions will be subject to continuing evaluations of the inherent risk in
the portfolio. If the economy declines or asset quality deteriorates, material
additional provisions could be required.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides a summary of the allocation of the allowance
for loan losses for specific loan categories as of the dates indicated. The
allocations presented should not be interpreted as an indication that charges
to the allowance for loan losses will be incurred in these amounts or
proportions, or that the portion of the allowance allocated to each loan
category represents the total amount available for future losses that may occur
within these categories. The unallocated portion of the allowance for loan
losses and the total allowance is applicable to the entire loan portfolio.

<P align="left"><B>Allocation of the Allowance for Loan Losses</B>


<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="19%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>As of December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% Of</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% Of</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% Of</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loan</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loan</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loan</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Category</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Category</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Category</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Allocated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to Total</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Allocated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to Total</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Allocated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Reserves</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loans</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Reserves</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loans</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Reserves</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loans</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Real estate</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">8,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">46.8</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,443</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">45.9</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,579</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">46.5</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,460</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,874</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,409</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,655</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,748</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,047</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.8</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,214</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,942</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,515</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.3</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.4</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Unallocated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,992</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">NA</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,767</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">NA</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,601</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">NA</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Totals</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="left">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="27%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" colspan="2"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>As of December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1996(1)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1995</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% Of</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>% Of</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loan</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loan</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Category</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Category</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Allocated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to Total</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Allocated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Reserves</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loans</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Reserves</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Loans</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Real estate</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,495</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">43.6</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">789</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">44.2</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Consumer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,901</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,792</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28.5</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,040</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,086</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19.1</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,757</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,320</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.2</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">0.2</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Unallocated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,597</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">NA</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">NA</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Totals</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">15,171</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">100.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Significant changes from 1995 to 1996 are primarily
attributable to bank acquisitions in 1996. For additional
information regarding bank acquisitions, see Item&nbsp;1, &#147;Business &#150;
Acquisitions.&#148;</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allocated reserves as presented above for 1998 and prior years have been
restated to give effect to allocation of the allowance for loan losses to
probable credit losses inherent in the loan portfolio as of the dates indicated
as well as to specifically identified loans. Allocated reserves as presented
above for 1997 and prior years have not been restated to reflect the
reclassifications of loans secured by real estate included in other categories
of loans in those years (e.g., agricultural, commercial and consumer).
Comparable data for allocated reserves was not readily available for 1997 and
prior years to give effect to the reclassification of real estate loans and
recreation of such information was not deemed practical. Management does not
believe that the impact on trends presented without such reclassification is
significant.

<P align="center">27
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<P><HR noshade><P>



<P><I>Liquidity and Cash Flow</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The objective of liquidity management is to maintain the Company&#146;s ability
to meet the day-to-day cash flow requirements of its customers who either wish
to withdraw funds or require funds to meet their credit needs. The Company
manages its liquidity position to meet the needs of its customers, while
maintaining an appropriate balance between assets and liabilities to meet the
return on investment objectives of its stockholders. The Company monitors the
sources and uses of funds on a daily basis to maintain an acceptable liquidity
position, principally through deposit receipts and check payments; loan
originations, extensions and repayments; and management of investment
securities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s current liquidity position is also supported by the
management of its investment portfolio, which provides a structured flow of
maturing and reinvestable funds that could be converted to cash, should the
need arise. Maturing balances in the Company&#146;s loan portfolio also provide
options for cash flow management. The ability to redeploy these funds is an
important source of immediate to long-term liquidity. Additional sources of
liquidity include customer deposits, Federal funds lines, borrowings and access
to capital markets.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities, primarily net income, totaled
$38&nbsp;million for 1999, $39&nbsp;million in 1998 and $44&nbsp;million in 1997. Net cash
used for investing activities totaled $128&nbsp;million in 1999, $277&nbsp;million in
1998 and $128&nbsp;million in 1997. Investing activities principally include
investment security transactions and net extensions of credit to customers.
Net cash provided by financing activities, primarily generated through
increases in customer deposits, borrowing advances or issuance of securities or
stock, totaled $48&nbsp;million in 1999, $214&nbsp;million in 1998 and $140&nbsp;million in
1997. For additional information concerning cash flows, see the &#147;Consolidated
Statement of Cash Flows&#148; included in Part IV, Item&nbsp;14.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a holding company, FIBS is a corporation separate and apart from the
Banks, and therefore, provides for its own liquidity. Substantially all of
FIBS&#146;s revenues are obtained from management fees, dividends declared and paid
by the Banks and net revenues generated through data services. As of December
31, 1999, the Banks had approximately $21.3&nbsp;million available to be paid as
dividends to FIBS. There are statutory and regulatory provisions that could
limit the ability of the Banks to pay dividends to FIBS. See Part I, Item&nbsp;1,
&#147;Business-Regulation and Supervision.&#148; Management of FIBS believes that such
restrictions will not have an impact on the ability of FIBS to meet its ongoing
cash obligations.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with acquisitions in 1996, the Company issued subordinated
notes and shares of noncumulative perpetual preferred stock. The subordinated
notes are held by an institutional investor, bear interest at 7.5% per annum,
are unsecured and mature in increasing annual payments during the period from
October&nbsp;2002 to October&nbsp;2006. For additional information concerning the
revolving term loan and the subordinated notes, see &#147;Notes to Consolidated
Financial Statements &#151; Long Term Debt and Other Borrowed Funds&#148; included in
Part IV, Item&nbsp;14.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The noncumulative perpetual preferred stock was redeemed on November&nbsp;7,
1997 with a portion of the proceeds from issuance of trust preferred securities
by FIB Capital. The trust preferred securities are unsecured, bear interest at
a rate of 8.625%, and mature on December&nbsp;1, 2027. Interest distributions are
payable quarterly, however, the Company may defer interest payments at any time
for a period not exceeding 20 consecutive quarters. The trust preferred
securities may be redeemed prior to maturity at the Company&#146;s option on or
after December&nbsp;1, 2002 or at any time in the event of unfavorable changes in
tax laws or regulations in an amount equal to their liquidation amount plus
accumulated and unpaid distributions to the date of redemption. The Company
has guaranteed the payment of distributions and payments for redemption or
liquidation of the trust preferred securities to the extent of funds held by
FIB Capital. The remaining proceeds from the issuance of trust preferred
securities were used to reduce the Company&#146;s revolving term loan. For
additional information concerning the trust preferred securities see &#147;Notes to
Consolidated Financial Statements &#151; Mandatorily Redeemable Preferred Securities
of Subsidiary Trust&#148; included in Part IV, Item&nbsp;14.

<P><I>Capital Resources</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders&#146; equity increased 7.9% to $177&nbsp;million as of December&nbsp;31,
1999 from $164&nbsp;million as of December&nbsp;31, 1998 and 12.3% to $164&nbsp;million as of
December&nbsp;31, 1998 from $146&nbsp;million as of December&nbsp;31, 1997 primarily due to
increases in retained earnings. Stockholders&#146; equity is influenced primarily
by earnings, dividends and, to a lesser extent, sales and redemptions of common
stock involving employees of the Company and changes in the unrealized holding
gains or losses, net of taxes, on available-for-sale investment securities.
For the years ended December&nbsp;31, 1999, 1998 and 1997, the Company paid
aggregate cash dividends to stockholders of $9&nbsp;million, $8&nbsp;million and $9
million, respectively.
<P align="center">28
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<P><HR noshade><P>


<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to FDICIA, the Federal Reserve and the FDIC have adopted
regulations setting forth a five-tier system for measuring the capital adequacy
of the financial institutions they supervise. At December&nbsp;31, 1999, each of
the Banks had levels of capital which met or exceeded the well-capitalized
guidelines. For additional information concerning the capital levels of the
Company, see &#147;Notes to Consolidated Financial Statements &#151; Regulatory Matters&#148;
contained in Part IV, Item&nbsp;14.

<P><I>Interest Rate Risk Management</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s primary earnings source is the net interest margin, which is
affected by changes in the level of interest rates, the relationship between
rates, the impact of interest rate fluctuations on asset prepayments and the
mix of interest bearing assets and liabilities.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ability to optimize the net interest margin is largely dependent upon
the achievement of an interest rate spread which can be managed during periods
of fluctuating interest rates. Interest sensitivity is a measure of the extent
to which net interest income will be affected by market interest rates over a
period of time. Interest rate sensitivity is related to the difference between
amounts of interest earning assets and interest bearing liabilities which
either reprice or mature within a given period of time. The difference is
known as interest rate sensitivity gap. The following table shows interest
rate sensitivity gaps for different intervals as of December&nbsp;31, 1999:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="52%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Three</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Three</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>One</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Months</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Months</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Year to</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>After</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>or Less</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>to One Year</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Five Years</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Five Years</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Interest earning assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Loans(1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">561,338</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">293,921</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">705,515</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">139,333</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,700,107</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Investment securities(2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">76,568</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">134,613</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">276,853</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">102,475</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">590,509</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Interest bearing deposits in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,948</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,948</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,415</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,415</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total interest earning assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">653,269</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">428,534</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">982,368</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">241,808</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,305,979</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>Interest bearing liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Interest bearing demand accounts(3)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">27,583</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">82,748</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">257,439</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">367,770</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Savings deposits(3)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,517</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">124,552</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">387,495</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">553,564</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Time deposits, $100 or more</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,145</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">77,697</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,633</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">203,475</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Other time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">147,596</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">225,022</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">221,916</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">449</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">594,983</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">191</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">196</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,344</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,663</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,394</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Total interest bearing liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">517,831</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">510,215</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">934,827</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,112</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,013,985</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Rate gap</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">135,438</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(81,681</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,541</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">190,696</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">291,994</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Cumulative rate gap</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,438</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,757</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,298</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">291,994</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Cumulative rate gap as a percentage of
total interest earning assets</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">5.87</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">2.33</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">4.39</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">12.66</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Assumptions used:</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Does not include nonaccrual loans of $22,854.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Adjusted to reflect: (a)&nbsp;expected shorter maturities based upon
the Company&#146;s historical experience of early prepayments of
principal, and (b)&nbsp;the redemption of callable securities on their
next call date. At December&nbsp;31, 1999, the Company had securities
callable within one year with amortized costs of $103,658 that based
on market rates as of December&nbsp;31, 1999 are not expected to be
redeemed until maturity, which is principally in the one to five year
category.</TD>
</TR>
</TABLE>
<P align="center">29
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<P><HR noshade><P>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(3)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Historical analysis shows that these deposit categories, while
technically subject to immediate withdrawal, actually display
sensitivity characteristics that generally fall within one and five
years. The allocation presented is based on that historical
analysis.</TD>
</TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As noted in footnote 3 above, interest bearing demand accounts and savings
deposits are allocated based on historical analysis of their interest
sensitivity characteristics although they are technically subject to immediate
withdrawal. If these deposits were included in the three month or less
category, the above table would reflect a negative three month gap of $717
million, a negative cumulative one year gap of $591&nbsp;million and a positive
cumulative one to five year gap of $101&nbsp;million.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The balance sheet structure is primarily short-term in nature with most
assets and liabilities repricing or maturing in less than five years.
Management monitors the sensitivity of net interest margin by utilizing income
simulation models and traditional gap analysis. The income simulation model
involves a degree of estimation based on certain assumptions management
believes to be reasonable including estimated cash flows, prepayments,
repricing characteristics, actual maturities, deposit growth and retention, and
the relative sensitivity of assets and liabilities to change in market interest
rates. The relative sensitivity is important to consider since the Company&#146;s
deposit base is not subject to the same degree of interest sensitivity as its
assets. The Company attempts to maintain a mix of interest earning assets and
deposits such that no more than 5% of the net interest margin will be at risk
should interest rates vary one percent over a one year period. However, there
can be no assurance as to the actual effect changes in interest rates will have
on the Company&#146;s net interest margin.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 1999, the Company&#146;s one year cumulative asset sensitive
gap totaled $54&nbsp;million representing 2.3% of total interest earning assets.
This position gradually changed from year end 1998 when the Company&#146;s gap
position was liability sensitive by $184&nbsp;million or 8.4% of total interest
earning assets. These measurements display a balance sheet profile which shows
that rising rates would cause a small compression on interest margins. In
evaluating exposure to interest rate risk, management does not view the gap
amounts in the preceding table as presenting an unusually high risk potential.
However, no assurances can be given that the Company is not at risk in the
event of rate increases or decreases.

<P><I>Year 2000</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company experienced no internal or external information or
non-information technology system failures related to the change in the
century. Costs of approximately $300,000 associated with the Company&#146;s Year
2000 preparedness were expensed as they were incurred. Management is not aware
of any contingencies related to Year 2000 that would have a material adverse
effect on the Company&#146;s consolidated financial condition, results of operations
or liquidity.

<P><I>Recent Accounting Pronouncements</I>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;1998, the Financial Accounting Standards Board (the &#147;FASB&#148;) issued
Statement of Financial Accounting Standard (&#147;SFAS&#148;) No.&nbsp;133, &#147;Accounting for
Derivative Instruments and Hedging Activities.&#148; This statement establishes
accounting and reporting standards for derivative instruments including certain
derivative instruments embedded in other contracts and for hedging activities.
In June&nbsp;1999, FASB issued SFAS No.&nbsp;137, &#147;Accounting for Derivative Instruments
and Hedging Activities Deferral of Effective Date of FASB Statement No.&nbsp;133 -
an amendment of FASB Statement No.&nbsp;133,&#148; deferring the effective date of SFAS
No.&nbsp;133 to all fiscal quarters or fiscal years beginning after June&nbsp;15, 2000.
Management expects that adoption will not have a material effect on the
consolidated financial statements, results of operations or liquidity of the
Company. As of December&nbsp;31, 1999, the Company was not engaged in hedging
activities nor did it hold any derivative instruments which will require
adjustments to carrying values under SFAS No.&nbsp;133.

<!-- link1 "Item&nbsp;7a. Quantitative and Qualitative Disclosures About Market Risk" -->
<A name="009"></A>
<P align="center"><B>Item&nbsp;7a. Quantitative and Qualitative Disclosures About Market Risk</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s primary market risk exposure is interest rate risk. The business
of the Company and the composition of its balance sheet consists of investments
in interest earning assets (primarily loans and investment securities) which
are primarily funded by interest bearing liabilities (deposits and
indebtedness). Such financial instruments have varying levels of sensitivity
to changes in market interest rates. Interest rate risk results when, due to
different maturity dates and repricing intervals, interest rate indices for
interest earning assets decrease relative to interest bearing liabilities,
thereby creating a risk of decreased net earnings and cash flow.


<P align="center">30

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<P><HR noshade><P>

<!-- TOC -->
<!-- /TOC -->
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables provide information about the Company&#146;s
market sensitive financial instruments, categorized by maturity and the
instruments&#146; fair values at December&nbsp;31, 1999 and 1998. The table constitutes
a &#147;forward-looking statement.&#148; For a description of the Company&#146;s policies
with respect to managing risks associated with changing interest rates, see
Part I, Item&nbsp;7, &#147;Management&#146;s Discussion and Analysis of Financial Condition
and Results of Operation-Financial Condition-Interest Rate Risk Management.&#148;

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Company characterizes some of its interest-sensitive assets
as securities available-for-sale, such securities are not purchased with a view
to sell in the near term. Rather, such securities may be sold in response to
or in anticipation of changes in interest rates and resulting prepayment risk.
Thus, all interest-sensitive assets described below are non-trading. See
&#147;Notes to Consolidated Financial Statements-Summary of Significant Accounting
Policies&#148; included in Part IV, Item&nbsp;14.


<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="53%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>December 31, 1999 Expected Maturity/Principal Repayment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2002</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2003</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2004</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash and short-term investments</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">162,306</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">781,501</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">297,498</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">208,351</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">134,173</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">116,361</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">143,515</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">65,496</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">58,195</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,247</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,988</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">54,613</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,328</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37,610</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,639</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,606</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest-sensitive assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,141,935</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">418,322</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">304,156</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">175,059</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">132,955</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Total deposits excluding time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">686,205</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,754</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">135,754</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">362,012</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">535,141</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">211,319</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,833</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,064</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,952</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,781</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,339</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,063</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,787</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Total interest-sensitive liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,454,097</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">348,854</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">167,926</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">380,911</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,851</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="70%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31, 1999 Expected Maturity/Principal Repayment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Thereafter</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash and short-term investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">162,306</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">148,951</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,686,835</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44,612</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66,832</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,628</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest-sensitive assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">260,395</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,432,822</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Total deposits excluding time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,319,725</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">335</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">796,528</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,568</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,490</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Total interest-sensitive liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,503</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,412,142</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">


<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="53%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="19"><FONT size="2"><B>December 31, 1998 Expected Maturity/Principal Repayment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="19"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2002</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2003</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>2004</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash and short-term investments</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">715,319</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">248,998</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">175,107</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">75,906</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">116,157</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,449</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,030</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">54,483</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,612</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">112,113</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">42,987</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,051</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,760</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,788</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest-sensitive assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,147,608</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">352,434</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">272,188</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">207,243</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">99,306</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Total deposits excluding time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">634,966</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">131,914</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">131,914</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">351,772</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">577,002</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">136,309</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">55,688</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,539</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,588</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,111</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,707</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,538</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,094</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,881</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Total interest-sensitive liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,399,175</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">269,930</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">189,140</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">368,405</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,469</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">
<P align="right">[Additional columns below]
<P>[Continued from above table, first column(s) repeated]


<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="left">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="70%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>December 31, 1998 Expected Maturity/Principal Repayment</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>(Dollars in thousands)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Thereafter</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive assets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash and short-term investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,462,336</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,662</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,393</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">302,723</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest-sensitive assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">269,692</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,348,471</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Interest-sensitive liabilities and trust preferred securities:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Total deposits excluding time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,250,566</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">335</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">793,461</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,642</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,973</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Total interest-sensitive liabilities
and trust preferred securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">54,577</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,296,696</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
<BR clear="all">

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prepayment projections of net loans are based on experience and do not
take into account any allowance for loan losses. The expected maturities of
securities are based upon contractual maturities adjusted for projected
prepayments of principal and assumes no reinvestment of proceeds. The actual
maturities of these instruments could vary substantially if future prepayments
differ from the Company&#146;s historical experience. All other financial
instruments are stated at contractual maturities.

<P align="center">31
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fair value of loans and deposits in relation to their respective book
values reacted inversely in 1999 from 1998 due to rising market interest rates.

<!-- link1 "Item&nbsp;8. Financial Statements and Supplementary Data" -->
<A name="010"></A>
<P align="center"><B>Item&nbsp;8. Financial Statements and Supplementary Data</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following Consolidated Financial Statements of FIBS and subsidiaries
are contained elsewhere herein [see Item&nbsp;14(a)1]:


<P>Report of KPMG LLP, Independent Auditors<BR>
Consolidated Balance Sheets &#151; December&nbsp;31, 1999 and 1998<BR>
Consolidated Statements of Income &#151; Years Ended December&nbsp;31, 1999, 1998 and 1997<BR>
Consolidated Statements of Stockholders&#146; Equity and Comprehensive Income &#151; Years Ended<BR>
December&nbsp;31, 1999, 1998 and 1997<BR>
Consolidated Statements of Cash Flows &#151; Years Ended December&nbsp;31, 1999, 1998 and 1997<BR>
Notes to Consolidated Financial Statements


<!-- link1 "Item&nbsp;9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure" -->
<A name="011"></A>
<P align="center"><B>Item&nbsp;9. Changes in and Disagreements with Accountants on Accounting and<BR>
Financial Disclosure</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have been no changes in or disagreements with accountants on
accounting and financial disclosure.

<!-- link1 "PART III" -->
<A name="012"></A>
<P align="center"><B>PART III</B>

<!-- link1 "Item&nbsp;10. Directors and Executive Officers of Registrant" -->
<A name="013"></A>
<P align="center"><B>Item&nbsp;10. Directors and Executive Officers of Registrant</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning &#147;Directors and Executive Officers of Registrant&#148; is
set forth under the heading &#147;Directors and Executive Officers&#148; in the Company&#146;s
1999 definitive Proxy Statement for the Annual Meeting of Shareholders
scheduled to be held April&nbsp;27, 2000 (the &#147;Proxy Statement&#148;) and is incorporated
herein by reference.

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning &#147;Compliance With Section&nbsp;16(a) of the Securities
and Exchange Act of 1934&#148; is set forth under the heading &#147;Compliance With
Section&nbsp;16(a) of the Securities and Exchange Act of 1934&#148; (the &#147;Exchange Act&#148;)
in the Company&#146;s Proxy Statement and is herein incorporated by reference.

<!-- link1 "Item&nbsp;11. Executive Compensation" -->
<A name="014"></A>
<P align="center"><B>Item&nbsp;11. Executive Compensation</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning &#147;Executive Compensation&#148; is set forth under the
heading &#147;Director and Executive Compensation&#148; in the Company&#146;s Proxy Statement
and is herein incorporated by reference.

<!-- link1 "Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management" -->
<A name="015"></A>
<P align="center"><B>Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning &#147;Security Ownership of Certain Beneficial Owners
and Management&#148; is set forth under the heading &#147;Security Ownership of Principal
Shareholders and Management&#148; in the Company&#146;s Proxy Statement and is herein
incorporated by reference.

<!-- link1 "Item&nbsp;13. Certain Relationships and Related Transactions" -->
<A name="016"></A>
<P align="center"><B>Item&nbsp;13. Certain Relationships and Related Transactions</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning &#147;Certain Relationships and Related Transactions&#148; is
set forth under the heading &#147;Certain Relationships and Related Transactions&#148; in
the Company&#146;s Proxy Statement and is herein incorporated by reference.

<!-- link1 "PART IV" -->
<A name="017"></A>
<P align="center"><B>PART IV</B>

<!-- link1 "Item&nbsp;14. Exhibits, Financial Statement Schedules and Reports on Form&nbsp;8-K" -->
<A name="018"></A>
<P align="center"><B>Item&nbsp;14. Exhibits, Financial Statement Schedules and Reports on Form&nbsp;8-K</B>

<!-- link2 "(a)&nbsp;Audited Consolidated Financial Statements" -->
<A name="019"></A>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;1. Following are the Company&#146;s audited consolidated financial statements.

<P align="center">32
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="right"><B>INDEPENDENT AUDITORS&#146; REPORT</B>

<HR size="1">






<P align="left"><B>[KPMG LLP LOGO]</B>


<P>The Board of Directors and Stockholders<BR>
First Interstate BancSystem, Inc.:


<P>We have audited the accompanying consolidated balance sheets of First
Interstate BancSystem, Inc. and subsidiaries as of December&nbsp;31, 1999 and 1998,
and the related consolidated statements of income, stockholders&#146; equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended December&nbsp;31, 1999. These consolidated financial statements are
the responsibility of the Company&#146;s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

<P>We conducted our audits in accordance with generally accepted auditing
standards. 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.

<P>In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of First Interstate
BancSystem, Inc. and subsidiaries as of December&nbsp;31, 1999 and 1998, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December&nbsp;31, 1999 in conformity with generally accepted
accounting principles.


<P>/s/ KPMG LLP



<P>Billings, Montana<BR>
February&nbsp;4, 2000





<P align="center">33
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>CONSOLIDATED BALANCE SHEETS</B>


<P><I>(In thousands, except share and per share data)</I>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="66%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Assets</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash and due from banks</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">146,943</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">154,527</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,415</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,930</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest bearing deposits in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,948</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,562</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,393</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246,456</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">299,285</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total investment securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">590,509</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">678,678</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,484,459</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Less allowance for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,693,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,455,656</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Premises and equipment, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,106</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">63,382</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Accrued interest receivable</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,506</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,433</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Goodwill and core deposit intangible, net of accumulated
amortization of $13,714 in 1999 and $10,950 in 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,374</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,337</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other real estate owned, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,445</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,113</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Deferred tax asset</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,674</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,498</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,984</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,717</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,610,266</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,478,833</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Liabilities and Stockholders&#146; Equity</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Deposits:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Noninterest bearing</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">398,391</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">390,998</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Interest bearing</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,719,792</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,650,934</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,118,183</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,041,932</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Securities sold under repurchase agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Accrued interest payable</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,331</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,364</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Accounts payable and accrued expenses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,723</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,622</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,394</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,288</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total liabilities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,393,430</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,275,302</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Mandatorily redeemable preferred securities of subsidiary trust</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Stockholders&#146; equity:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Nonvoting noncumulative 8.53% preferred stock without par value;
authorized 100,000 shares, no shares issued or outstanding as of
December&nbsp;31, 1999 and 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Common stock without par value; authorized 20,000,000 shares;
issued and outstanding 7,993,250 shares and 7,988,573 shares
as of December&nbsp;31, 1999 and 1998, respectively</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,788</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,001</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Retained earnings</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172,078</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">151,362</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Accumulated other comprehensive income (loss), net</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,030</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,168</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,531</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,610,266</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,478,833</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Book value per common share</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">22.12</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20.47</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P><I>See accompanying notes to consolidated financial statements.</I>





<P align="center">34
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>CONSOLIDATED STATEMENTS OF INCOME</B>


<P><I>(In thousands, except share and per share data)</I>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="62%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2">Interest income:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest and fees on loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">148,827</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">143,236</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140,083</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest and dividends on investment securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Taxable</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">34,242</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,616</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,958</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Exempt from Federal taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,355</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,108</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,109</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on deposits in banks</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">353</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">997</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">448</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on Federal funds sold</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,304</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,457</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,210</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,081</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">179,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">165,808</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Interest expense:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,525</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">68,248</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">58,129</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,639</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,499</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on securities sold under repurchase agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,035</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,023</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,474</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,324</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">461</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">873</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,126</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,327</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,165</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest on mandatorily redeemable preferred securities
of subsidiary trust</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,529</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">523</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total interest expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">83,178</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">81,652</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">72,663</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">104,903</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">97,762</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,145</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Provision for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,240</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net interest income after provision for loan losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,340</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">93,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,905</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Noninterest income:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Income from fiduciary activities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,495</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,720</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Service charges on deposit accounts</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,373</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,379</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Data services</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,274</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,081</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,380</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other service charges, commissions and fees</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,684</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,951</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,879</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment securities gains, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">282</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">89</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other real estate income, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">366</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">89</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">465</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,746</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,131</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,182</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total noninterest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,957</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,919</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,570</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Noninterest expense:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Salaries, wages and employee benefits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,529</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">42,731</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37,545</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Occupancy, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,085</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,418</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,077</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Furniture and equipment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,218</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,524</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,721</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">FDIC insurance</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">233</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">215</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">206</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Goodwill and core deposit intangible amortization expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,764</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,464</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,585</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other expenses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,931</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,756</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total noninterest expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,835</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">82,283</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,890</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Income before income taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,462</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,228</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,585</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Income tax expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,216</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,730</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Net income applicable to common stockholders</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,401</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Basic earnings per common share</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">3.67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.07</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Diluted earnings per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.05</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P><I>See accompanying notes to consolidated financial statements.</I>




<P align="center">35
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<P><HR noshade><P>

<!-- TOC -->
<!-- /TOC -->
<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY AND COMPREHENSIVE INCOME</B>


<P><I>(In thousands, except share and per share data)</I>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="50%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Accumulated other</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Preferred</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Common</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Retained</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>comprehensive</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>stockholders'</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>stock</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>stock</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>earnings</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>income (loss)</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>equity</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance at December&nbsp;31, 1996</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">20,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,941</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">116,613</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">507</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">146,061</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Comprehensive income:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized gains on available-for-sale investment
securities, net of reclassification adjustment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">393</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">393</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total comprehensive income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,248</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Preferred stock retirement:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">20,000 shares retired</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(20,000</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(20,000</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Common stock transactions:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">60,169 shares retired</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,322</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,871</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">177,896 shares issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,871</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,322</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Cash dividends declared:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common ($0.98 per share)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,737</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,737</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Preferred (8.53%)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,454</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,454</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance at December&nbsp;31, 1997</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,490</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,277</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">145,667</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Comprehensive income:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized gains on available-for-sale investment
securities, net of reclassification adjustment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,268</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total comprehensive income</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,904</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Common stock transactions:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">115,361 shares retired</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,830</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,830</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">73,135 shares issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,341</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,341</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Cash dividends declared:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common ($0.94 per share)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,551</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,551</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance at December&nbsp;31, 1998</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,001</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">151,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,168</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,531</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Comprehensive income:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized losses on available-for-sale investment
securities, net of reclassification adjustment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,198</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,198</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total comprehensive income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,048</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Common stock transactions:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">118,015 shares retired</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,472</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,472</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">122,692 shares issued</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,075</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,075</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Other common stock transactions:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Conversion of stock appreciation rights to stock
options (see note 12)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,184</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,184</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Cash dividends declared:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Common ($1.07 per share)</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,530</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,530</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Balance at December&nbsp;31, 1999</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2"></FONT></TD>
<TD align="right"><FONT size="2">10,788</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172,078</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,030</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,836</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P><I>See accompanying notes to consolidated financial statements.</I>



<P align="center">36

<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B>


<P><I>(Dollars in thousands)</I>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="66%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from operating activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Adjustments to reconcile net income to net cash provided by operating activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Provisions for loan and other real estate losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,583</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,215</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,236</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Depreciation and amortization</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,025</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,270</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,549</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Donation of land</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">359</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Net premium amortization (discount accretion) on investment securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">453</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">286</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,049</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Net gain on sale of investments</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(19</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(282</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(89</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Gain on sale of other real estate owned</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(446</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(248</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(595</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Loss (gain)&nbsp;on sale of premises and equipment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">346</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Provision for deferred income taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">216</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(326</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,306</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Increase in accrued interest receivable</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,068</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(387</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,473</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Decrease (increase)&nbsp;in other assets</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,476</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,340</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,198</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Increase (decrease)&nbsp;in accrued interest payable</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(62</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,058</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,402</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Increase (decrease)&nbsp;in accounts payable and accrued expenses</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,782</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,329</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,742</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net cash provided by operating activities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">38,044</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">38,557</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44,461</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from investing activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Purchases of investment securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Held-to-maturity</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(72,390</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(163,430</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(412,855</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Available-for-sale</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(38,747</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(388,698</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(133,043</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Proceeds from maturities and paydowns of investment securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">129,667</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,048</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">456,069</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">64,838</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">166,326</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">38,401</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Proceeds from sales of available-for-sale investment securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,483</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">33,718</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">31,208</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Extensions of credit to customers, net of repayments</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(210,899</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(21,947</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(101,673</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Recoveries on loans charged-off</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,080</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,094</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Proceeds from sale of other real estate owned</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,708</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,727</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,130</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Acquisitions of banking offices, net of cash and cash equivalents acquired</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,424</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,726</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Capital distribution from (contribution to) joint ventures</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">325</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">321</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(275</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Capital expenditures, net of sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(17,782</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,568</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,880</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net cash used in investing activities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(128,105</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(277,423</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(127,550</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash flows from financing activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net increase in deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,670</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">236,926</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">125,582</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net increase (decrease)&nbsp;in federal funds purchased and repurchase agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,656</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,107</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">37,788</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net increase (decrease)&nbsp;in other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,047</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,763</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,480</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Borrowings of long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,750</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Repayment of long-term debt</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,720</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,609</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(38,891</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Proceeds of issuance of mandatorily redeemable preferred securities of subsidiary trust</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net decrease (increase)&nbsp;in debt issuance costs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">95</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(40</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,323</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Proceeds from issuance of common stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,075</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,341</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,871</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Payments to retire common stock</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,472</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,830</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,322</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Payments to retire preferred stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(20,000</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Dividends paid on common stock</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,530</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,551</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,737</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Dividends paid on preferred stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#150;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,454</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Net cash provided by financing activities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">48,348</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">213,738</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">139,784</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Net increase (decrease)&nbsp;in cash and cash equivalents</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(41,713</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(25,128</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,695</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash and cash equivalents at beginning of year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">229,147</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172,452</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Cash and cash equivalents at end of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">162,306</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">229,147</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Supplemental disclosure of cash flow information:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash paid during the year for interest</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">83,211</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">79,594</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,484</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash paid during the year for taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,761</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,865</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,830</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P><I>See accompanying notes to consolidated financial statements.</I>



<P align="center">37
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<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P><I>(Dollars in thousands, except share and per share data)</I>


<P align="left"><B>(1)&nbsp;SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Organization</B>. The Company, through the branch offices of its banking
subsidiaries, provides a full range of banking services to individual and
corporate customers throughout the states of Montana and Wyoming. The
Company is subject to competition from other financial institutions and
financial service providers, and is also subject to the regulations of
various government agencies and undergoes periodic examinations by those
regulatory authorities.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">The following is a summary of significant accounting policies utilized by
the Company:</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Principles of Consolidation</B>. The consolidated financial statements include
the accounts of First Interstate BancSystem, Inc. (Parent Company) and its
operating subsidiaries: First Interstate Bank in Montana (&#147;FIB Montana&#148;),
First Interstate Bank in Wyoming (&#147;FIB Wyoming&#148;), Commerce Financial, Inc.
and FIB Capital Trust. All material intercompany transactions have been
eliminated in consolidation.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Basis of Presentation</B>. The financial statements have been prepared in
conformity with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as
of the date of the balance sheet and revenues and expenses for the period.
Actual results could differ significantly from those estimates.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">Material estimates that are particularly susceptible to significant change
in the near-term relate to the determination of the allowance for loan
losses and the valuation of real estate acquired in connection with
foreclosures or in satisfaction of loans. Management relies on market
evaluations and historical experience in determining the adequacy of the
allowance for loan losses. Independent appraisals are obtained for
significant properties in the process of foreclosure. Management believes
that the allowances for losses on loans and real estate owned are adequate.
In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the allowances for losses on loans
and real estate owned. While management uses available information to
recognize losses on loans and real estate owned, future additions to the
allowances may be necessary based on changes in economic conditions which
may affect the borrowers&#146; ability to pay or regulatory requirements.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">In addition to purchasing and selling Federal funds for their own account,
the Company purchases and sells Federal funds as an agent. These and other
assets held in an agency or fiduciary capacity are not assets of the
Company and, accordingly, are not included in the accompanying consolidated
financial statements.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Cash and Cash Equivalents</B>. For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due from banks, federal
funds sold for one day periods, and interest bearing deposits in banks with
original maturities of less than three months.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">At December&nbsp;31, 1999 the Company was required to have aggregate reserves,
exclusive of cash on hand, with the Federal Reserve Bank of approximately
$5,482. Also, approximately $25,000 of additional compensating balance was
maintained with the Federal Reserve Bank to mitigate the payment of service
charges for check clearing services.</TD>
</TR>
</TABLE>
<P align="center">38
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<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P><I>(Dollars in thousands, except share and per share data)</I>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Investment Securities</B>. Debt securities that the Company has the positive
intent and ability to hold to maturity are classified as held-to-maturity
and carried at amortized cost. Debt securities that may be sold in
response to or in anticipation of changes in interest rates and resulting
prepayment risk, or other factors, and any marketable equity securities,
are classified as available-for-sale and carried at fair value. The
unrealized gains and losses on these securities are reported, net of
applicable taxes, as a separate component of stockholders&#146; equity. Debt
and equity securities that are purchased and held principally for the
purpose of selling them in the near term are classified as trading account
assets and reported at fair value. The Company did not carry any trading
account assets during 1999, 1998 or 1997. Management determines the
appropriate classification of securities at the time of purchase and at
each reporting date management reassesses the appropriateness of the
classification.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for accretion of discounts to maturity,
amortization of premiums over the estimated average life of the security,
or in the case of callable securities, through the first call date. Such
amortization and accretion is included in interest income with interest and
dividends. Realized gains and losses, and declines in value judged to be
other-than-temporary, are included in investment securities gains (losses).
The cost of securities sold is based on the specific identification
method.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Loans</B>. Loans are reported at the principal amount outstanding. Interest
is calculated by using the simple interest method on the daily balance of
the principal amount outstanding.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">Loans on which the accrual of interest has been discontinued are designated
as nonaccrual loans. Accrual of interest on loans is discontinued either
when reasonable doubt exists as to the full, timely collection of interest
or principal or when a loan becomes contractually past due by ninety days
or more with respect to interest or principal unless such past due loan is
well secured and in the process of collection. When a loan is placed on
nonaccrual status, interest previously accrued but not collected is
reversed against current period interest income. Interest accruals are
resumed on such loans only when they are brought fully current with respect
to interest and principal and when, in the judgement of management, the
loans are estimated to be fully collectible as to both principal and
interest.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">Renegotiated loans are those loans on which concessions in terms have been
granted because of a borrower&#146;s financial difficulty.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%">Significant loan origination fees and prepaid interest, net of related
costs, are recognized over the expected lives of the related loans as an
adjustment of yield. Origination fees on loans sold to the secondary
market are recognized when the loan is sold. The amortization of deferred
loan fees and costs and the accretion of unearned discounts on
non-performing loans is discontinued during periods of non-performance.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="3%">&nbsp;</TD>
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="93%"><B>Allowance for Loan Losses</B>. The allowance for loan losses is established
through a provision for loan losses which is charged to expense. Loans are
charged against the allowance for loan losses when management believes that
the collectibility of the principal is unlikely or, with respect to
consumer installment loans, according to an established delinquency
schedule. The allowance balance is an amount that management believes will
be adequate to absorb losses inherent in existing loans, leases and
commitments to extend credit, based on evaluations of the collectibility
and prior loss experience of loans, leases and commitments to extend
credit. The evaluations take into consideration such factors as changes in
the nature and volume of the portfolio, overall portfolio quality, loan
concentrations, specific problem loans, leases and commitments, and current
and anticipated economic conditions that affect the borrowers&#146; ability to
pay.</TD>
</TR>
</TABLE>

<P align="center">39
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<!-- TOC -->
<!-- /TOC -->
<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD>The Company also establishes a reserve for losses on specific loans which
are deemed to be impaired. Groups of small balance homogeneous basis loans
(generally consumer loans) are evaluated for impairment collectively. A
loan is considered impaired when, based upon current information and
events, it is probable that the Company will be unable to collect, on a
timely basis, all principal and interest according to the contractual terms
of the loan&#146;s original agreement. The amount of the impairment is measured
using cash flows discounted at the loan&#146;s effective interest rate, except
when it is determined that the primary source of repayment for the loan is
the operation or liquidation of the underlying collateral. In such cases,
the current value of the collateral, reduced by anticipated selling costs,
is used to measure impairment instead of discounted cash flows. The
Company&#146;s impaired loans are those non-consumer loans which are non-accrual
or a troubled debt restructuring. Interest income is recognized on
impaired loans only to the extent that cash payments are received.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD><B>Goodwill</B>. Goodwill consists of the excess purchase price over the fair
value of identifiable net assets from acquisitions (&#147;excess purchase
price&#148;) and the intangible value of depositor relationships resulting from
deposit liabilities assumed in acquisitions (&#147;core deposit intangibles&#148;).
Excess purchase price is being amortized using the straight-line method
over periods of primarily 15 to 25&nbsp;years. Core deposit intangibles are
amortized using an accelerated method based on an estimated runoff of the
related deposits, over an original period not exceeding 10&nbsp;years.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD><B>Premises and Equipment</B>. Buildings, furniture and equipment are stated at
cost less accumulated depreciation. Depreciation is provided over
estimated useful lives of 5 to 50&nbsp;years for buildings and improvements and
3 to 15&nbsp;years for furniture and equipment using straight-line methods.
Leasehold improvements are amortized using straight-line methods over the
shorter of the estimated useful lives of the improvements or the terms of
the related leases. Depreciation expense was $8,261 in 1999, $6,692 in
1998 and $5,964 in 1997.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD><B>Long-Lived Assets. </B>Long-lived assets, including enterprise goodwill and
certain identifiable intangibles (e.g. premises, excess purchase price,
core deposit intangibles), are reviewed for impairment whenever events or
changes in circumstances indicate the carrying amount of an asset may not
be recoverable. An asset is deemed impaired if the sum of the expected
future cash flows is less than the carrying amount of the asset. The
amount of the impairment loss, if any, is based on the asset&#146;s fair value,
which may be estimated by discounting the expected future cash flows.
There were no impairment losses recognized during 1999, 1998 or 1998.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD><B>Other Real Estate Owned</B>. Real estate acquired in satisfaction of loans is
carried at the lower of the recorded investment in the property at the date
of foreclosure or its current fair value less selling cost (&#147;Net Realizable
Value&#148;). The value of the underlying loan is written down to the fair
market value of the real estate acquired by a charge to the allowance for
loan losses, if necessary, at the date of foreclosure. A provision to the
real estate owned valuation allowance is charged against other real estate
expense for any current or subsequent write-downs to Net Realizable Value.
Operating expenses of such properties, net of related income, and gains on
sales are included in other real estate income, net.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>&nbsp;</TD>
<TD><B>Transfers and Servicing of Financial Assets and Extinguishments of Liabilities</B>.
Effective January&nbsp;1, 1997 the Company recognizes as assets the rights to
service mortgage loans for others, whether acquired through purchases or loan
originations. Servicing rights of $2,546 and $1,099 were capitalized in 1999
and 1998, respectively. Originated servicing rights are initially recorded at
fair value based on comparable market quotes and are amortized in proportion to
and over the period of estimated net servicing income. Amortization expense of
$660, $317 and $285 was recognized in 1999, 1998 and 1997, respectively.
Servicing rights are evaluated for impairment by stratifying the servicing
assets based on risk characteristics including loan type, note rate and loan
term. There were no impairment losses recognized in 1999, 1998 or 1997.
Carrying value approximates market value at December&nbsp;31, 1999. Total servicing
rights, net of accumulated amortization, were $3,673 and $1,787 at December&nbsp;31,
1999 and 1998, respectively. Servicing rights are included in other assets on
the accompanying balance sheet.</TD>
</TR>
</TABLE>

<P align="center">40

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<!-- TOC -->
<!-- /TOC -->
<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Mortgage loans serviced for others are not included in the
accompanying financial statements. The unpaid balances of these loans were
approximately $476,479 and $286,384 at December&nbsp;31, 1999 and 1998,
respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Income from Fiduciary Activities</B>. Consistent with industry practice,
income for trust services is recognized on the basis of cash received.
However, use of this method in lieu of accrual basis accounting does not
materially affect reported earnings.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Income Taxes</B>. The Parent Company and its subsidiaries have elected to be
included in a consolidated Federal income tax return. For state income tax
purposes, the combined taxable income of the Parent Company and its
subsidiaries is apportioned between the states in which operations take
place. Federal and state income taxes attributable to the subsidiaries,
computed on a separate return basis, are paid to or received from the
Parent Company.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Deferred tax assets and liabilities are reflected at currently enacted
income tax rates applicable to the period in which the deferred tax assets
or liabilities are expected to be realized or settled. As changes in tax
laws or rates are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Per Share Data</B>. Basic earnings per common share is calculated by dividing
net income less preferred stock dividends by the weighted average number of
common shares outstanding during the period. Diluted earnings per common
share is calculated by dividing net income less preferred stock dividends
by the weighted average number of common shares and potential common stock
outstanding during the period. Book value per common share is calculated
by dividing total stockholders&#146; equity by the number of common shares
outstanding at the end of the year.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Stock-Based Compensation. </B>The Company measures compensation cost for
stock-based employee compensation plans based on the intrinsic value of the
award. Intrinsic value is the excess of the appraised value of the
underlying stock at the date of grant over the amount an employee must pay
to acquire the stock.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Reclassifications. </B>Certain reclassifications have been made to the 1998
and 1997 amounts to conform to the 1999 presentation.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(2)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>REGULATORY MATTERS</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company is subject to the regulatory capital requirements administered
by the Federal Reserve Bank. Failure to meet minimum capital requirements
can initiate certain mandatory and possible additional discretionary
actions by regulators that, if undertaken, could have a direct material
effect on the Company&#146;s financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Company must meet specific capital guidelines that involve quantitative
measures of the Company&#146;s assets, liabilities and certain off-balance-sheet
items as calculated under regulatory accounting practices. Capital amounts
and classification are also subject to qualitative judgments by the
regulators about components, risk weightings and other factors.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios of total and
Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average
assets, as defined in the regulations. As of December&nbsp;31, 1999, the
Company exceeded all capital adequacy requirements to which is was subject.</TD>
</TR>
</TABLE>
<P align="center">41
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">As of December&nbsp;31, 1999, the most recent notification from the Federal
Reserve Bank categorized the Company and the Banks as well capitalized
under the regulatory framework for prompt corrective action. To be
categorized as well capitalized the Company must maintain minimum total
risk-based, Tier 1 risk-based, and leverage ratios as set forth in the
table. There are no conditions or events since that notification that
management believes have changed the institution&#146;s category.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company&#146;s actual capital amounts and ratios and selected minimum
regulatory thresholds as of December&nbsp;31, 1999 and 1998 are presented in the following
table:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="33%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Adequately</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Well</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Actual</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Capitalized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Capitalized</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Ratio</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Ratio</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Ratio</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>As of December&nbsp;31, 1999:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Total risk-based capital:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">230,177</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">11.9</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">155,194</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">193,992</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">149,184</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101,354</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">126,693</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">77,406</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.6</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,352</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">66,690</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Tier 1 risk-based capital:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">190,125</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">77,597</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">116,395</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,291</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,677</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">76,016</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">69,002</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,676</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,014</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Leverage capital ratio:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">190,125</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.3</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">104,542</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">130,678</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">133,291</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">68,440</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">85,551</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">69,002</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">35,872</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44,839</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2"><I>As of December&nbsp;31, 1998:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Total risk-based capital:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">213,734</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">12.3</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">139,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">73,781</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">136,558</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">90,665</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">113,331</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70,046</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11.7</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,762</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">59,702</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Tier 1 risk-based capital:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">171,846</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9.9</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">69,512</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">104,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">122,316</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45,333</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,999</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62,492</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10.5</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,881</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">35,821</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Leverage capital ratio:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Consolidated</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">171,846</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.1</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">96,766</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,958</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">122,316</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.8</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62,956</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">78,695</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62,492</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7.4</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">33,599</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4.0</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,999</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.0</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left"><B>(3)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>INVESTMENT SECURITIES</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The amortized cost and approximate market values of investment securities
are summarized as follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="54%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Available-for-Sale</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31, 1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>gains</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>losses</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">U.S. Treasury securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2"><B>$</B></FONT></TD>
<TD align="right"><FONT size="2"><B> </B>47,080</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(133</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">46,951</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Obligations of U.S. Government agencies</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">155,604</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,509</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">151,095</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">States, county and municipal securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,454</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">96</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,542</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Corporate securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,220</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(14</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,206</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other mortgage-backed securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">129,332</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">101</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,286</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">124,147</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,985</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">127</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,112</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2"><B>$</B></FONT></TD>
<TD align="right"><FONT size="2"><B> </B>353,675</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">328</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,950</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">42
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="54%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Held-to-Maturity</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31, 1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>gains</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>losses</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">U.S. Treasury securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2"><B>$</B></FONT></TD>
<TD align="right"><FONT size="2">74,100</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">81</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(66</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,115</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Obligations of U.S. Government agencies</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,139</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(597</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,542</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">States, county and municipal securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">71,293</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">42</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,525</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">68,810</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Corporate securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,358</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(448</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,910</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other mortgage-backed securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">53,566</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,315</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,251</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">246,456</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">123</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,951</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,628</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Gross gains of $20 and gross losses of $1 were realized on the sale of
available-for-sale securities in 1999.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Other securities available-for-sale include restricted equity stocks of the
Federal Reserve Bank (&#147;FRB&#148;) and the Federal Home Loan Bank (&#147;FHLB&#148;)
carried at amortized costs of $3,152 and $8,522, respectively, at December
31, 1999.</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="56%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Available-for-Sale</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31, 1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>gains</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>losses</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">U.S. Treasury securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2"></FONT></TD>
<TD align="right"><FONT size="2">48,623</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,937</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">50,560</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Obligations of U.S. Government agencies</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">141,505</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,376</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(252</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">142,629</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">States, county and municipal securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,638</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">291</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,929</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Corporate securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,326</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,370</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other mortgage-backed securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,966</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">557</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(611</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,912</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,819</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">174</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,993</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">375,877</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,379</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(863</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,393</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="56%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Held-to-Maturity</B></FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Gross</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>unrealized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31, 1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>gains</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>losses</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">U.S. Treasury securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">113,282</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,569</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">115,851</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Obligations of U.S. Government agencies</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,937</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,999</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">States, county and municipal securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">61,485</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,070</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(87</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62,468</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Corporate securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,303</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">319</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(125</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">60,497</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other mortgage-backed securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,278</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(384</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">48,908</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">299,285</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,034</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(596</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">302,723</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Gross gains of $284 and gross losses of $2 were realized on the sale of
available-for-sale securities in 1998. Gross gains of $89 and no gross
losses were realized on the sale of available-for-sale securities in 1997.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Other securities available-for-sale include restricted equity stocks of the
FRB and the FHLB carried at amortized costs of $3,062 and $7,447,
respectively, at December&nbsp;31, 1998.</TD>
</TR>
</TABLE>
<P align="center">43
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Maturities of investment securities at December&nbsp;31, 1999 are shown below.
Maturities of mortgage-backed securities have been adjusted to reflect
shorter maturities based upon estimated prepayments of principal.</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="48%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31,1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Available-for-Sale</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>Held-to-Maturity</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amortized</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>cost</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>market value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Within one year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">50,977</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,613</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">49,176</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">48,312</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">After one but within five years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">259,330</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">252,122</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">123,264</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">120,530</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">After five years but within ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,916</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,998</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,989</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">54,595</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">After ten years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,467</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,208</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,027</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,191</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">341,690</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">331,941</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246,456</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,628</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,985</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12,112</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">353,675</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246,456</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,628</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">At December&nbsp;31, 1999, the Company had investment securities callable within
one year with amortized costs and estimated market values of $103,658 and
$100,404, respectively. These investment securities are primarily
classified as available-for-sale and are primarily included in the after
one but within five years category in the table above.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Maturities of securities do not reflect rate repricing opportunities
present in adjustable rate mortgage-backed and corporate securities. At
December&nbsp;31, 1999 and 1998, $6,776 and $8,652, respectively, of variable
rate securities are included in investment securities.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">There are no significant concentrations of investments at December&nbsp;31, 1999
(greater than 10&nbsp;percent of stockholders&#146; equity) in any individual
security issuer, except for U.S. Government or agency-backed securities.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Investment securities with amortized cost of $429,058 and $419,349 at
December&nbsp;31, 1999 and 1998, respectively, were pledged to secure public
deposits, securities sold under repurchase agreements and for other
purposes required or permitted by law. The approximate market value of
securities pledged at December&nbsp;31, 1999 and 1998 was $420,323 and $424,372,
respectively. All securities sold under repurchase agreements are with
customers and generally mature on the next banking day. The Company
retains possession of the underlying securities sold under repurchase
agreements.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>(4)&nbsp;LOANS</B></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Major categories and balances of loans included in the loan portfolios are
as follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="62%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Real estate (1)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">806,320</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">681,670</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Consumer (2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">463,414</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,197</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Commercial</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">311,040</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Agricultural</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,887</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,707</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Other loans, including overdrafts</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,969</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,845</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Total loans</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,722,961</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,484,459</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>

<HR size="2" width="10%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes residential, agricultural, commercial, consumer,
construction and other loans secured by real estate of $103,079,
$87,711, $435,006, $117,881, $48,669 and $13,974, respectively, as
of December&nbsp;31, 1999 and $95,975, $60,459, $351,229, $102,622,
$52,762 and $18,623, respectively, as of December&nbsp;31, 1998.</TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Includes indirect loans of $318,711 and $252,458 at December
31, 1999 and 1998, respectively.</TD>
</TR>
</TABLE>
<P align="center">44
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">At December&nbsp;31, 1999, the Company had no concentrations of loans which
exceeded 10% of total loans other than the categories disclosed above. The
Company has no loans or loan commitments to highly leveraged companies.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Nonaccrual loans amounted to $22,854 and $10,699 at December&nbsp;31, 1999 and
1998, respectively. If interest on nonaccrual loans had been accrued, such
income would have approximated $1,424 and $1,062, respectively. Loans
contractually past due ninety days or more aggregating $4,695 on December
31, 1999 and $4,039 on December&nbsp;31, 1998 were on accrual status. Such
loans are deemed adequately secured and in the process of collection.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Impaired loans at December&nbsp;31, 1999 and 1998 are $24,187 and $11,285,
respectively. Included in impaired loans at December&nbsp;31, 1999 and 1998 are
$4,331 and $2,648, respectively, of loans which have an impairment
allowance of $2,997 and $903, respectively, included in the Company&#146;s
allowance for loan losses. The average recorded investment in impaired
loans for the years ended December&nbsp;31, 1999, 1998 and 1997 was
approximately $17,494, $10,652 and $7,943, respectively. If interest on
impaired loans had been accrued, the amount of interest income on impaired
loans during 1999, 1998 and 1997 would have been approximately $1,536, $984
and $740, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Also included in impaired loans at December&nbsp;31, 1999 and 1998 are loans
with a carrying value of $3,660 and $3,306, respectively, the terms of
which have been modified in troubled debt restructurings. Restructured
debt includes nonaccrual loans of $1,539 and $1,710 at December&nbsp;31, 1999
and 1998, respectively. The interest income recognized on restructured
loans approximated $192, $109 and $122 during the years ended December&nbsp;31,
1999, 1998 and 1997, respectively. At December&nbsp;31, 1999, there were no
material commitments to lend additional funds to borrowers whose existing
loans have been restructured or are classified as nonaccrual.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Most of the Company&#146;s business activity is with customers within the states
of Montana and Wyoming. Loans where the customers or related collateral
are out of the Company&#146;s trade area are not significant and management&#146;s
anticipated credit losses arising from these transactions compare favorably
with the Company&#146;s credit loss experience on its loan portfolio as a whole.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Certain executive officers and directors of the Company and certain
corporations and individuals related to such persons, incurred indebtedness
in the form of loans, as customers, of $13,873 at December&nbsp;31, 1999 and
$12,025 at December&nbsp;31, 1998. During 1999, new loans and advances on
existing loans of $27,275 were funded and repayments totaled $25,427.
These loans were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable risk
of collectibility.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(5)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>ALLOWANCE FOR LOAN LOSSES</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">A summary of changes in the allowance for loan losses follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="67%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Year ending December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Balance at beginning of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,797</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Allowance of acquired banking offices</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,574</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Provision charged to operating expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,563</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,170</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,240</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Less loans charged-off</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,609</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,627</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,951</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Add back recoveries of loans previously charged-off</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,080</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,094</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance at end of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,599</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,803</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,180</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">45
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left"><B>(6)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>PREMISES AND EQUIPMENT</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Premises and equipment and related accumulated depreciation are as follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="66%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Land</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9,540</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,480</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Buildings and improvements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">62,706</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">56,484</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Furniture and equipment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">34,757</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,181</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">107,003</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">91,145</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Less accumulated depreciation</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">32,897</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,763</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Premises and equipment, net</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">74,106</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">63,382</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Parent Company and a branch office lease premises from an affiliated
partnership (see note 13).</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(7)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>OTHER REAL ESTATE OWNED</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Other real estate owned (OREO)&nbsp;consists of the following:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="71%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">OREO</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,465</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,590</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Less allowance for OREO losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">477</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,445</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,113</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">A summary of changes in the allowance for OREO losses follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="69%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Year ending December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Balance at beginning of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">477</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">462</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">511</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Provision (reversal)&nbsp;during the year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Property writedowns</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(477</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(30</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(45</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Balance at end of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">20</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">477</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">462</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left"><B>(8)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>CASH SURRENDER VALUE OF LIFE INSURANCE</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company maintains key-executive life insurance policies on certain
principal shareholders. Under these policies, the Company receives the
cash surrender value if the policy is terminated, or receives all benefits
payable upon the death of the insured. The aggregate face amount of the
key-executive insurance was $7,000 at December&nbsp;31, 1999 and 1998. Cash
surrender values are recorded net of outstanding policy loans, since the
Company has no current plans for repayment. Outstanding policy loans at
December&nbsp;31, 1999 and 1998 are $2,733 and $2,713, respectively. The net
cash surrender value of key-executive insurance policies included in other
assets is $558 and $440 at December&nbsp;31, 1999 and 1998, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company has also obtained insurance policies covering certain other key
officers. The net cash surrender value of these policies is $2,140 and
$1,832 at December&nbsp;31, 1999 and 1998, respectively, and is included in
other assets. Upon retirement, the officers have the option of entering
into split-dollar contracts with the Company which provide continuing
post-employment insurance coverage for a specified death benefit amount.
The Company accrues the earned portion of the post-employment benefit
through the specified vesting date.</TD>
</TR>
</TABLE>
<P align="center">46
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P align="left"><B>(9)&nbsp;DEPOSITS</B>

<P align="left">Deposits are summarized as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="51%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Noninterest bearing demand</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">398,391</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">390,998</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Interest bearing:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Demand</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">367,770</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">354,986</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Savings</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">553,564</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">504,582</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time, $100 and over</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">203,475</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">220,109</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time, other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">594,983</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">571,257</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total interest bearing</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,719,792</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,650,934</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,118,183</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,041,932</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Maturities of time deposits at December&nbsp;31, 1999 are as follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="32%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="13%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="13%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="11%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="11%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Time, $100<BR>and Over</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total Time</B></FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
</TR>


<TR valign="bottom">
<TD><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">147,842</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">520,460</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">47,334</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">221,554</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,069</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,817</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,813</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,218</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,417</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,960</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Thereafter</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">449</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">203,475</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">798,458</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Interest expense on time deposits of $100 or more was $11,087, $11,466 and
$7,778 for the years ended December&nbsp;31, 1999, 1998 and 1997, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(10)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>INCOME TAXES</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Income tax expense (benefit)&nbsp;consists of the following:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="26%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="8%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Current:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">14,020</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,716</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,006</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">State</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,980</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,202</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,030</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,918</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17,036</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Deferred:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">231</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(315</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,140</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">State</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(15</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(166</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">216</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(326</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,306</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">16,216</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,730</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">47
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Total income tax expense differs from the amount computed by applying the Federal income tax rate of 35&nbsp;percent in 1999, 1998 and 1997 to income before
income taxes as a result of the following:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="66%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Tax expense at the statutory tax rate</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">15,912</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,430</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,555</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Increase (decrease)&nbsp;in tax resulting from:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Tax-exempt income</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,212</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(881</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(520</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">State income tax, net of Federal income tax benefit</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,277</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,430</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,211</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Amortization of nondeductible Goodwill</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">310</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">312</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">311</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other, net</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(71</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">301</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">16,216</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,730</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The tax effects of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to
significant portions of the net deferred tax asset relate to the following:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="71%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="4"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2">Deferred tax assets:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Loans, principally due to allowance for loan losses</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">10,368</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,666</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other real estate owned, principally due to differences in bases</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">278</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Employee benefits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">993</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,700</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment securities, unrealized losses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,592</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">430</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">530</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Deferred tax assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,661</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,940</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2">Deferred tax liabilities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Fixed assets, principally differences in bases and depreciation</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(601</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,269</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment in joint venture partnership, principally due to
differences in depreciation of partnership assets</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(913</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(899</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Prepaid amounts</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(342</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(278</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment securities, principally differences in bases</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,058</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(810</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Investment securities, unrealized gains</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,348</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Goodwill and core deposit intangibles</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,137</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,716</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Mortgage servicing rights</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(760</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(176</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(122</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Deferred tax liabilities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,987</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,442</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Net deferred tax asset</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">9,674</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,498</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the existence of, or generation of, taxable income
in the periods which those temporary differences are deductible.
Management considers the scheduled reversal of deferred tax liabilities,
taxes paid in carryback years, projected future taxable income, and tax
planning strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over
the periods which the deferred tax assets are deductible, at December&nbsp;31,
1999 management continues to believe it is more likely than not that the
Company will realize the benefits of these deductible differences.</TD>
</TR>
</TABLE>
<P align="center">48
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company had current income taxes receivable of $994 and $1,233 at
December&nbsp;31, 1999 and 1998, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(11)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>LONG-TERM DEBT AND OTHER BORROWED FUNDS</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">A summary of long-term debt follows:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="77%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Parent Company:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">7.50% subordinated notes, unsecured, interest payable semi-annually,
due in increasing annual principal payments beginning
October&nbsp;1, 2002 in the amount of $3,400 with final maturity
on October&nbsp;1, 2006</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">20,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,000</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Various unsecured notes payable to former stockholders at various
rates of 6.21% to 7.14% due in annual principal installments
aggregating $84 in 2000 and $57 through January&nbsp;2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">141</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">461</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Subsidiaries:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Various notes payable to FHLB, interest due monthly at various
rates and maturities (weighted average rate of 6.43% at
December&nbsp;31, 1999)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,906</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,827</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">10% note payable on repossessed property due in annual installments
of $41 maturing January&nbsp;15, 2007</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">347</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD align="right"><FONT size="2"><B>$</FONT></TD>
<TD align="right"><FONT size="2"><B> </B>23,394</FONT></TD>
<TD><FONT size="2"><B></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,288</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Maturities of long-term debt at December&nbsp;31, 1999 follow:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">387</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">360</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,705</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,988</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,290</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Thereafter</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">10,664</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">23,394</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">In connection with its borrowings, the Company has agreed to certain
restrictions dealing with, among other things, minimum capital ratios, the
sale or issuance of capital stock and the maximum amount of dividends.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The notes payable to the FHLB are secured by FHLB stock, unencumbered
residential real estate mortgages and certain mortgage-backed securities.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company also has an unsecured revolving term loan with its primary
lender. There were no amounts outstanding at December&nbsp;31, 1999 and 1998.
The available borrowing amount at December&nbsp;31, 1999 was $10&nbsp;million.
The revolving facility requires an annual commitment fee of 0.10% on the
unadvanced amount and an annual commitment fee of 0.05% on the total
amount of the commitment. The Company may elect at various dates either
prime or a Eurodollar rate which varies depending on the Company&#146;s
capital ratios.</TD>
</TR>
</TABLE>
<P align="center">9
<!-- PAGEBREAK -->
<P><HR noshade><P>




<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The following is a summary of other borrowed funds, all of which mature
within one year:</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="83%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Interest bearing demand notes issued to the United States Treasury,
secured by investment securities (4.54% weighted average rate at
December&nbsp;31, 1999)</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">11,725</FONT></TD>
<TD><FONT size="2"></FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">5.86% note payable to the FHLB due January&nbsp;18, 2000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">30,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">5.00% note payable due January&nbsp;6, 2000</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">150</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR noshade size="4"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR noshade size="4"></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">The Company has Federal funds lines of credit with third parties amounting
to $120&nbsp;million, subject to funds availability. These lines are subject to
cancellation without notice. The Company has lines of credit and
unadvanced, irrevocable letters of credit with the FHLB of approximately
$265&nbsp;million and $29&nbsp;million, respectively. There were no borrowings on
these lines of credit during the years ended December&nbsp;31, 1999, 1998 and
1997.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>(12)</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>EMPLOYEE BENEFIT PLANS</B></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Profit Sharing Plan. </B>The Company has a noncontributory profit sharing
plan. To be eligible for the profit sharing plan, an employee must
complete one year of employment and 1,000 hours or more of service.
Quarterly contributions are determined by the Company&#146;s Board of Directors,
but are not to exceed, on an individual basis, the lesser of 25% of
compensation or $30. Contributions to this plan were $1,150, $1,032 and
$1,022 in 1999, 1998 and 1997, respectively.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Savings Plan. </B>In addition, the Company has a contributory employee savings
plan. Eligibility requirements for this plan are the same as those for the
profit sharing plan as discussed in the preceding paragraph. Employee
participation in the plan is at the option of the employee. The Company
contributes $1.25 for each $1.00 of employee contributions up to 4% of the
participating employee&#146;s compensation. The recorded expense related to
this plan was $1,321 in 1999, $1,164 in 1998 and $1,030 in 1997.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left"><B>&nbsp;</B></TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%"><B>Stock Option Plan. </B>The Company has a Nonqualified Stock Option and Stock
Appreciation Rights Plan (&#147;Stock Option Plan&#148;) for senior officers of the
Company. All options and stock appreciation rights (&#147;SARs&#148;) granted have
an exercise price of book value of the Company prior to 1993 and appraised
value thereafter. Each option granted under the Stock Option Plan can be
immediately exercised for periods of seven or ten years from the date of
grant. The stock issued in conjunction with the exercise of options is
subject to a shareholder agreement (see note 15).</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">During 1998, the Company determined that future grants of stock options
would no longer include stock appreciation rights. Grantees with
outstanding SARs were given an election to convert the SARs to stock
options with similar terms in a one-for-one exchange. In January&nbsp;1999,
106,300 SARs were exchanged for stock options resulting in a reduction of
accrued expenses and an increase in stockholders&#146; equity of $1,184. The
consolidated expense related to the SARs was $1,280 in 1998 and $514 in
1997. Subsequent to the SAR conversion no further expense was recorded.</TD>
</TR>
</TABLE>

<P align="center">50

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<!-- /TOC -->
<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
(Dollars in thousands, except share and per share data)

<P>Information with respect to the Company&#146;s stock options and SARs are as
follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="39%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>SARs</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>SARs</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>SARs</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Outstanding, beginning of year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">169,280</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">115,140</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">123,204</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">91,452</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">115,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">78,320</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Granted</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">90,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">51,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,700</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,600</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,600</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Exercised</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(43,980</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,840</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,624</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,012</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12,232</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(6,468</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Conversion of SARs to options</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">106,300</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(106,300</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Outstanding, end of year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">322,300</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">169,280</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">115,140</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">123,204</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">91,452</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>Information with respect to the weighted-average stock option exercise
prices are as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="55%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Granted during year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">33.14</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">28.25</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">20.05</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Exercised during year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.01</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.83</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">SARs converted during year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Outstanding, end of year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22.64</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">17.69</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">12.73</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>Stratification and additional detail regarding the exercisable options
outstanding at December&nbsp;31, 1999 are as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="25%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="7%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>Exercise</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Weighted-average</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Weighted-average</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" colspan="2"><FONT size="2"><B>price range</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>outstanding</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>remaining life</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>exercise price</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD align="left" colspan="2"><FONT size="2">&nbsp;&nbsp;$6.02-$11.40</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">44,900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2.36 years</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">8.98</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">$12.40-$20.05</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">114,400</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5.74 years</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16.94</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">$24.74-$32.00</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,800</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8.16 years</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27.17</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">$33.00-$40.00</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">88,200</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6.08 years</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">33.14</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P>The Company does not recognize compensation expense for the options
granted to employees where the exercise price is equal to appraised value
at the date of grant. Had compensation expense been determined based on
an estimate of fair value of the option at the date of grant, the
Company&#146;s pro forma net income and earnings per common share would be
estimated as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="80%" align="center">
<TR valign="bottom">
<TD width="69%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Net income as reported</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Pro forma net income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,058</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,537</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,826</FONT></TD>
<TD></TD>

</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Net income applicable to common stock as reported</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,401</FONT></TD>
<TD><p><br><br></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Pro forma net income applicable to common stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">29,058</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,537</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,372</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Basic earnings per common share as reported</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.07</FONT></TD>
<TD><p><br><br></TD>

</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Pro forma basic earnings per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.65</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.18</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.07</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Diluted earnings per common share as reported</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.05</FONT></TD>
<TD><p><br><br></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Pro forma diluted earnings per common share</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.58</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.16</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.05</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P align="center">51
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>The fair value of the options was estimated at the grant date using a
Black-Scholes option pricing model. Option valuation models require the
input of highly subjective assumptions. Because the Company&#146;s common
stock and stock options have characteristics significantly different from
listed securities and traded options, and because changes in the
subjective input assumptions can materially affect the fair value
estimate, in management&#146;s opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its stock options.
The weighted average fair values of options granted during 1999, 1998 and
1997 were $3.41, $3.16 and $2.47, respectively.

<P>The following weighted-average assumptions were used in the valuation
model: risk-free interest rates of 4.82%, 5.62% and 6.58% in 1999, 1998
and 1997, respectively; dividend yield of 2.90%, 3.45% and 4.03% in 1999,
1998 and 1997, respectively; and expected life of options of 7&nbsp;years in
1999 and 1998 and 10&nbsp;years in 1997. The effect of stock price volatility
was not considered in the valuation model. For purposes of the pro forma
presentation, the estimated fair value of the options is expensed in the
year granted as all options are fully vested upon grant.

<P align="left"><B>(13)&nbsp;COMMITMENTS AND CONTINGENCIES</B>

<P>In the normal course of business, the Company is involved in various
claims and litigation. In the opinion of management, following
consultation with legal counsel, the ultimate liability or disposition
thereof will not have a material adverse effect on the consolidated
financial condition, results of operations or liquidity.

<P>The Parent Company and the Billings office of FIB Montana are the anchor
tenants in a building owned by a partnership in which FIB Montana is one
of the two partners, and has a 50% partnership interest. The investment
in the partnership is accounted for using the equity method. At December
31, 1999 the partnership has indebtedness of $9,441 which has full
recourse to the partners. Total rents, including maintenance, paid to the
partnership were $1,445 in 1999, $1,360 in 1998 and $1,244 in 1997.

<P>The Company also leases certain premises and equipment from third parties
under operating leases. Total rental expense to third parties was $1,691
in 1999, $1,351 in 1998 and $1,204 in 1997.

<P>The total future minimum rental commitments required under operating
leases that have initial or remaining noncancelable lease terms in excess
of one year at December&nbsp;31, 1999 are as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="51%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Third</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>parties</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Partnership</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">For the year ending December&nbsp;31:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2000</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,333</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,012</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,345</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2001</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,301</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,013</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,314</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2002</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,226</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,014</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,240</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2003</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,141</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,006</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,147</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">2004</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">942</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">983</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,925</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">Thereafter</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,790</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">791</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,581</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">8,733</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,819</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">14,552</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>(14)&nbsp;FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK</B>

<P>The Company is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend
credit and standby letters of credit. These instruments involve, to
varying degrees, elements of credit and interest rate risk in excess of
amounts recorded in the consolidated balance sheet.


<P align="center">52
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>Standby letters of credit and financial guarantees written are
conditional commitments issued by the Company to guarantee the
performance of a customer to a third party. Most commitments extend less
than two years. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to
customers. The Company holds various collateral supporting those
commitments for which collateral is deemed necessary.

<P>Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the commitment
contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements.
The Company evaluates each customer&#146;s creditworthiness on a case-by-case
basis. The amount of collateral obtained is based on management&#146;s credit
evaluation of the customer. Collateral held varies but may include
accounts receivable, inventory, property, plant and equipment, and
income-producing commercial properties.

<P>The Company&#146;s exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend
credit and standby letters of credit is represented by the contractual
amount of those instruments. Generally, all standby letters of credit and
commitments to extend credit are subject to annual renewal. At December
31, 1999 and 1998, stand-by letters of credit in the amount of $27,126
and $27,324, respectively, were outstanding. Commitments to extend credit
to existing and new borrowers approximated $413,957 at December&nbsp;31, 1999,
which includes $60,093 on unused credit card lines and $100,800 with
commitment maturities beyond one year. Commitments to extend credit to
existing and new borrowers approximated $313,126 at December&nbsp;31, 1998,
which includes $33,133 on unused credit card lines and $36,766 with
commitment maturities beyond one year.

<P align="left"><B>(15) CAPITAL STOCK</B>

<P>On September&nbsp;26, 1996, the Company issued 20,000 shares of no par
noncumulative perpetual preferred stock at a price of $1,000 per share.
The holders of Preferred Stock were entitled to receive dividends in cash
at the rate of $85.30 per share. On November&nbsp;7, 1997, the Preferred Stock
was redeemed at a price of $1,000 per share plus accrued but unpaid
dividends of $178. In conjunction with the redemption the Company
recorded a $500 prepayment penalty.

<P>At December&nbsp;31, 1999, 91.95% of the common stock held by stockholders are
subject to stockholder&#146;s agreements (Agreements). Under the Agreements,
the Company has a right of first refusal to repurchase shares from the
stockholder at minority interest appraised value in the event of a
proposed sale of shares to a third party, death, disability or
termination of employment. Additionally, shares purchased by officers,
directors and employees after 1993 are also subject to repurchase at the
Company&#146;s discretion.

<P align="left"><B>(16) MANDATORILY REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY TRUST</B>

<P>On October&nbsp;1, 1997, the Company established FIB Capital Trust (&#147;Trust&#148;),
a wholly-owned statutory business trust. The Trust was created for the
exclusive purpose of issuing 30-year capital trust preferred securities
(&#147;Trust Preferred Securities&#148;) in the aggregate amount of $40,000 and
using the proceeds to purchase junior subordinated debentures
(&#147;Subordinated Debentures&#148;) issued by the parent company. The sole assets
of the Trust are the Subordinated Debentures.

<P>The Trust Preferred Securities bear a cumulative fixed interest rate of
8.625% and mature on December&nbsp;1, 2027. Interest distributions are payable
quarterly. The Trust Preferred Securities are subject to mandatory
redemption upon repayment of the Subordinated Debentures at their stated
maturity date or their earlier redemption in an amount equal to their
liquidation amount plus accumulated and unpaid distributions to the date
of redemption. The Company guaranteed the payment of distributions and
payments for redemption or liquidation of the Trust


<P align="center">53
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P>Preferred Securities to the extent of funds held by the Trust. The
obligations of the Company under the Subordinated Debentures together
with the guarantee and other back-up obligations, in the aggregate,
constitute a full and unconditional guarantee by the Company of the
obligations of the Trust under the Trust Preferred Securities.

<P>The Subordinated Debentures are unsecured, bear interest at a rate of
8.625% per annum and mature on December&nbsp;1, 2027. Interest is payable
quarterly. The Company may defer the payment of interest at any time from
time to time for a period not exceeding 20 consecutive quarters provided
that deferral period does not extend past the stated maturity. During any
such deferral period, distributions on the Trust Preferred Securities
will also be deferred and the Company&#146;s ability to pay dividends on its
common shares will be restricted.

<P>Subject to approval by the Federal Reserve Bank, the Trust Preferred
Securities may be redeemed prior to maturity at the Company&#146;s option on
or after December&nbsp;1, 2002. The Trust Preferred Securities may also be
redeemed at any time in whole (but not in part) in the event of
unfavorable changes in laws or regulations that result in (1)&nbsp;FIB Capital
becoming subject to federal income tax on income received on the
Subordinated Debentures, (2)&nbsp;interest payable by FIBS on the Subordinated
Debentures becoming non-deductible for federal tax purposes, (3)&nbsp;the
requirement for FIB Capital to register under the Investment Company Act
of 1940, as amended, or (4)&nbsp;loss of the ability to treat the Trust
Preferred Securities as &#147;Tier 1 capital&#148; under the Federal Reserve
capital adequacy guidelines.

<P>The Trust Preferred Securities qualify as Tier 1 capital under regulatory
definitions. Issuance costs consisting primarily of underwriting
discounts and professional fees of $40 and $2,323 were capitalized in
1998 and 1997, respectively, and are being amortized through maturity to
interest expense using the straight-line method.

<P align="left"><B>(17)&nbsp;CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)</B>

<P>Following is condensed financial information of First Interstate
BancSystem, Inc.:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="58%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT" colspan="4"><FONT size="2"><B>December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2"><I>Condensed balance sheets:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Cash and cash equivalents</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,979</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,618</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Investment in subsidiaries, at equity:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Montana</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">150,227</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">139,875</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">FIB Wyoming</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">77,020</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">74,571</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Non-bank subsidiary &#151; Commerce Financial, Inc.</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">920</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">518</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Non-bank subsidiary &#151; FIB Capital Trust</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,237</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,237</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Total investment in subsidiaries</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">229,404</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">216,201</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Goodwill, net of accumulated amortization</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,757</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,047</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Property and equipment</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,476</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Other assets</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,927</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,443</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">244,543</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">232,310</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Other liabilities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">5,575</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,081</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Subordinated debentures &#151; FIB Capital Trust</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,237</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,237</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,895</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">20,461</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,707</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">68,779</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Stockholders&#146; equity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">176,836</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163,531</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">244,543</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">232,310</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">54
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="58%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT" colspan="4"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Condensed statements of income:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Dividends from subsidiary banks</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">23,857</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,207</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,857</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other interest income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">172</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">140</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">70</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other income, primarily management fees
from subsidiaries</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,436</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,528</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,345</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total income</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">27,465</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">26,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">28,272</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Salaries and benefits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,462</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,239</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,262</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Interest expense</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,605</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,709</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,861</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Other operating expenses, net</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,891</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,869</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,406</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Total expenses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,958</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">13,817</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">11,529</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Data services income, net of direct operating expenses</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,317</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,905</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,411</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Earnings before income tax benefit</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">16,824</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">15,963</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,154</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Income tax benefit</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,474</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,627</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,401</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Income before undistributed earnings of subsidiaries</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,298</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,590</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">21,555</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Undistributed earnings of subsidiaries</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,948</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,046</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,300</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="4"><FONT size="2"><I>Condensed statements of cash flows:</I></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash flows from operating activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Adjustments to reconcile net income to cash
provided by operating activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Undistributed earnings of subsidiaries</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,948</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,046</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,300</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Depreciation and amortization</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">297</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">389</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">303</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Provision for deferred income taxes</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">325</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">45</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(532</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><FONT size="2">Other, net</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(946</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">332</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,119</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net cash provided by operating activities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">18,974</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">19,356</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">22,445</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Cash flows from investing activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Net decrease in advances to non-bank subsidiary</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">475</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">163</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">96</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Purchase of investments</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(79</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(293</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Purchases of property and equipment, net of sales</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(380</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Capitalization of subsidiary</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,237</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD colspan="2"><FONT size="2">Acquisitions of banking offices, net of
cash acquired</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11,455</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"><FONT size="2">Net cash provided by (used in) investing activities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(11,360</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">84</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,428</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="3"></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">55
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="58%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT" colspan="2"><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Cash flows from financing activities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Borrowings of long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">5,527</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,371</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">46,987</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Repayments of long-term debt</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(5,853</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,321</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(38,736</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Debt issuance costs</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(40</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(2,323</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Dividends paid on common stock</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(8,530</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,551</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(7,737</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Payments to retire common stock</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(4,472</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(3,830</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,322</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Payments to retire preferred stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(20,000</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Issuance of common stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">4,075</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,341</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,871</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Dividends paid on preferred stock</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,454</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net cash used in financing activities</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(9,253</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(16,030</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(20,714</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Net change in cash and cash equivalents</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,639</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,410</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">303</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Cash and cash equivalents, beginning of year</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,618</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,208</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,905</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Cash and cash equivalents, end of year</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">4,979</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">6,618</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3,208</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P><I>Noncash Investing and Financing Activities &#151;</I> During 1999, the Company
increased its net investment in aircraft, recorded related debt of $761,
and transferred the gross investment of $1,102 to property and equipment.

<P align="left"><B>(18)&nbsp;DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS</B>

<P>Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial
instrument. These estimates do not reflect any premium or discount that
could result from offering for sale at one time the entire holdings of a
particular instrument. Because no market exists for a significant portion
of the financial instruments, fair value estimates are based on judgments
regarding comparable market interest rates, future expected loss
experience, current economic conditions, risk characteristics of various
financial instruments, and other factors. These estimates are subjective
in nature and involve uncertainties and matters of significant judgment
and therefore cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.

<P>For financial instruments bearing a variable interest rate, it is
presumed that recorded book values are reasonable estimates of fair
value. The methods and significant assumptions used to estimate fair
values for the various financial instruments are set forth below.

<P><B>Financial Assets.</B>&nbsp;Due to the liquid and/or short-term nature of
cash, cash equivalents and interest bearing deposits in bank,
carrying value of these instruments approximates market value. Fair
values of investment securities are based on quoted market prices or
dealer quotes. If a quoted market price is not available, fair value
is estimated using quoted market prices for similar securities. Fair
value of fixed rate loans is calculated by discounting scheduled
cash flows adjusted for prepayment estimates using discount rates
based on secondary market sources, if available, or based on
estimated market discount rates that reflect the credit and interest
rate risk inherent in the loan category. The fair value of
adjustable rate loans approximates the carrying value of these
instruments due to the frequent repricing, provided there have been
no changes in credit quality since origination.


<P align="center">56
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P><B>Financial Liabilities and Trust Securities.</B>&nbsp;The fair value of demand
deposits, savings accounts, federal funds purchased and securities
sold under repurchase agreements is the amount payable on demand at
the reporting date. The fair value of fixed-maturity certificates of
deposit is estimated using external market rates currently offered
for deposits with similar remaining maturities. The carrying value of
the interest bearing demand notes to the United States Treasury is
deemed an approximation of fair value due to the frequent repayment
and repricing at market rates. The revolving term loan bears interest
at a floating market rate and, as such, the carrying amount is deemed
to reflect fair value. The fair value of the subordinated notes and
notes payable to the FHLB were estimated by discounting future cash
flows using current rates for advances with similar characteristics.
Fair value of the Trust Preferred Securities is based on quoted
market price.

<P><B>Commitments to Extend Credit and Standby Letters of Credit.</B> It is not
practicable to estimate the fair value of commitments to extend
credit because information necessary to support fair value
estimations is not readily available and amounts would not be
expected to be significant.

<P>A summary of the estimated fair values of financial instruments
follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="40%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
<TD></TD>
<TD colspan="7"><HR size="1"></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Carrying</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Carrying</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Estimated</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT" colspan="2"><FONT size="2"><B>As of December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Fair Value</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>Fair Value</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="2"><FONT size="2">Financial assets:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Cash and short-term investments</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">162,306</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">162,306</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">204,019</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Securities available-for-sale</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">344,053</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,393</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">379,393</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Securities held-to-maturity</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">246,456</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">239,628</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">299,285</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">302,723</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Net loans</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,693,362</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,686,835</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,455,656</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,462,336</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total financial assets</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,446,177</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,432,822</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,338,353</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,348,471</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Financial liabilities and trust
preferred securities:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Total deposits, excluding time
deposits</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">1,319,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,319,725</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,250,566</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,250,566</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Time deposits</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">798,458</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">796,528</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">791,366</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">793,461</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Federal funds purchased</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">900</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,675</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Securities sold under repurchase
agreements</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">188,024</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">173,593</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Other borrowed funds</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,875</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">9,828</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Long-term debt</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,394</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">23,490</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,288</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,973</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD><FONT size="2">Trust Preferred Securities</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">40,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,600</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="2"><FONT size="2">Total financial liabilities and
trust preferred securities</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">2,412,376</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,412,142</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,291,316</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">2,296,696</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>(19)&nbsp;EARNINGS PER SHARE</B>

<P>The following table sets forth the computation of basic and diluted
earnings per share:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="66%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT"><FONT size="2"><B>For the year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Net income</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,855</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Less preferred stock dividends</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">&#151;</FONT></TD>
<TD></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(1,454</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Net income applicable to common stockholders -
basic and diluted</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">29,246</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">25,636</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">24,401</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="center">57
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
(Dollars in thousands, except share and per share data)</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%" align="center">
<TR valign="bottom">
<TD width="53%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="6%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="4%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT"><FONT size="2"><B>For the year ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">Average outstanding shares &#151; basic</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,967,953</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,020,221</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,946,092</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD><FONT size="2">Add: effect of dilutive stock options</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">143,363</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">67,588</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">41,829</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Average outstanding shares &#151; diluted</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,111,316</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">8,087,809</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">7,987,921</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Basic earnings per share</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">3.67</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.20</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.07</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD><FONT size="2">Diluted earnings per share</FONT></TD>
<TD></TD>
<TD align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">3.61</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.17</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">3.05</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><B>(20)&nbsp;ACQUISITIONS AND EXPANSION</B>

<P><B>Mountain Financial.</B>&nbsp;On February&nbsp;5, 1997, FIB Montana purchased the assets
of Mountain Financial, a loan production office in Eureka, Montana.
Mountain Financial subsequently became a branch of FIB Montana.

<P><B>First National Bank of Montana, Helena and Belgrade Branches.</B> On May&nbsp;7,
1999, FIB Montana acquired the net assets of the Helena and Belgrade
branches of First National Bank of Montana (the &#147;Acquired Branches&#148;). At
the acquisition date, the Acquired Branches had loans of approximately $1
million and deposits of approximately $4&nbsp;million, in aggregate. The
transaction was accounted for as a purchase and, accordingly, the
consolidated statement of income for the year ended December&nbsp;31, 1999
includes the results of operations of the Acquired Branches since the
date of purchase. Goodwill resulting from the acquisition of
approximately $236 is being amortized over 15&nbsp;years.

<P><B>Security State Bank Shares.</B>&nbsp;On July&nbsp;9, 1999, the Company acquired all of
the outstanding ownership of Security State Bank Shares (SSBS)&nbsp;and its
bank subsidiary, Security State Bank and Trust Company (SSB&#38;T). The total
cash purchase price paid at closing was $11.9&nbsp;million. The purchase was
funded through available cash on hand and a $2.5&nbsp;million advance on the
Company&#146;s revolving term note. At the acquisition date, SSBS had $21.3
million of cash and cash equivalents, gross loans of approximately $35
million and deposits of approximately $56&nbsp;million. The transaction was
accounted for as a purchase and, accordingly, the consolidated statement
of income for the year ended December&nbsp;31, 1999 includes SSBS&#146; results of
operations since the date of purchase. SSBS was subsequently dissolved
and SSB&#38;T was merged with FIB Montana. The premium paid and estimated
fair value adjustments have been pushed down to the acquired entities.
The preliminary allocation of purchase price is subject to change as fair
value estimates are finalized. The premium paid over the historical
carrying value was $4,130 which has currently been allocated to core
deposit intangible of $1,743, goodwill of $3,821 and an increase in the
valuation allowance for loans of $750.

<P align="left"><B>(21)&nbsp;COMPREHENSIVE INCOME &#151; RECLASSIFICATION ADJUSTMENTS</B>

<P>The reconciliation of unrealized holding gains (losses)&nbsp;arising during
the period to the net change in unrealized gain (loss)&nbsp;for the year ended
December&nbsp;31, 1999 is as follows:

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%" align="center">
<TR valign="bottom">
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="72%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="LEFT" colspan="3"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
<TD></TD>
<TD nowrap align="center" colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
<TD></TD>
<TD colspan="3"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD colspan="3"><FONT size="2">Disclosure of reclassification amount:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Unrealized and realized holding gains (losses)&nbsp;arising during the
period, net of income tax expense (benefit)&nbsp;of $(4,933),</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD><FONT size="2">$884 and $286 in 1999, 1998 and 1997, respectively</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(8,186</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,440</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">447</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD colspan="2"><FONT size="2">Less reclassification adjustment for gains included in net income,
net of income tax of $7, $110 and $35 in 1999, 1998 and 1997,
respectively</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(12</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(172</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD nowrap align="right"></TD>
<TD align="right"><FONT size="2">(54</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="1"></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD colspan="3"><FONT size="2">Net unrealized gain (loss)&nbsp;on available-for-sale investment securities</FONT></TD>
<TD></TD>
<TD nowrap align="right"><FONT size="2">$</FONT></TD>
<TD align="right"><FONT size="2">(8,198</FONT></TD>
<TD nowrap><FONT size="2">)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">1,268</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right"><FONT size="2">393</FONT></TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD><HR size="4" noshade></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>

<P align="center">58
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<P><HR noshade><P>



<P align="left"><B>FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES</B>

<P align="left"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS &#151;CONCLUDED</B><BR>
<I>(Dollars in thousands, except share and per share data)</I>

<P align="left"><B>(22)&nbsp;NONCASH INVESTING AND FINANCING ACTIVITIES</B>

<P>The Company transferred loans of $524, $1,275 and $1,347 to other real
estate owned in 1999, 1998 and 1997, respectively.

<P>During 1999, the Company transferred other assets of $342 to premises and
equipment.

<P>During 1999, the Company transferred $695 of deferred tax assets and
$1,879 of accrued liabilities for stock appreciation rights to equity.

<P>In conjunction with acquisitions during 1999, the Company received assets
with fair value of $76.6&nbsp;million and assumed liabilities of $64.7
million.

<P align="left"><B>(23)&nbsp;SEGMENT REPORTING</B>

<P>The Company currently operates in one significant business segment -
community banking. Management evaluates the Company&#146;s performance and
allocates resources to this segment based on consolidated performance
measurements consistent with those of the consolidated financial
statements. Revenue and contribution margins of the investment services
and data services businesses are not material. The Company does not fully
allocate assets or costs to these businesses.

<P align="center">59
<!-- PAGEBREAK -->
<P><HR noshade><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">2. Financial statement schedules</TD>
</TR>
</TABLE>
<P>All other schedules to the consolidated financial statements of
the Registrant are omitted since the required information is
either not applicable, deemed immaterial, or is shown in the
respective financial statements or in notes thereto.

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(a)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">3. Exhibits</TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="14%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="81%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.1(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Restated Articles of Incorporation dated February&nbsp;27,
1986</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.2(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated September&nbsp;26, 1996</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.3(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated September&nbsp;26, 1996</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.4(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated October&nbsp;7, 1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.5(3)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Bylaws of First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.6</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amendment to Bylaws of First Interstate BancSystem,
Inc. dated March&nbsp;18, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.1(4)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Specimen of common stock certificate of First
Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.2(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Stockholder&#146;s Agreement for non-Scott family members</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.3(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Junior Subordinated Indenture dated November&nbsp;7, 1997
entered into between First Interstate and Wilmington
Trust Company, as Indenture Trustee</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.4(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Certificate of Trust of FIB Capital Trust dated as of
October&nbsp;1, 1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.5(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trust Agreement of FIB Capital dated as of October&nbsp;1,
1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.6(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amended and Restated Trust Agreement of FIB Capital
Trust</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.7(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trust Preferred Certificate of FIB Capital Trust
(included as an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.8(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Common Securities Certificate of FIB Capital Trust
(included as an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.9(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Guarantee Agreement between First Interstate
BancSystem, Inc. and Wilmington Trust Company</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.10(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Agreement as to Expenses and Liabilities (included as
an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.1(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Loan Agreement dated October&nbsp;1, 1996, between First
Interstate BancSystem, Inc., as borrower, and First
Security Bank, N.A., Colorado National Bank, N.A. and
Wells Fargo Bank, N.A.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.2</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Amendment to Loan Agreement between First
Interstate BancSystem, Inc., as borrower, and First
Security Bank, N.A. dated August&nbsp;20, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.3(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Note Purchase Agreement dated August&nbsp;30, 1996,
between First Interstate BancSystem, Inc. and the
Montana Board of Investments</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.4(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Lease Agreement Between Billings 401 Joint Venture
and First Interstate Bank Montana and addendum
thereto</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.5(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
+ Stock Option and Stock Appreciation Rights Plan of
First Interstate BancSystem, Inc., as amended</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.6(8)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
+ Employee Stock Purchase Plan of First Interstate
BancSystem, Inc. dated May&nbsp;1, 1998</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.7(9)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Interstate BancSystem, Inc. Stockholders&#146;
Agreements with Scott family members dated January
11, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.8(9)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Specimen of Charity Shareholder&#146;s Agreement with
Charitable Shareholders</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.9(5)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Credit Agreement between Billings 401 Joint Venture
and Colorado National Bank dated as of September&nbsp;26,
1995</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.10(3)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trademark License Agreement between Wells Fargo &#38;
Company and First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.11(6)+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Resignation Agreement between First Interstate
BancSystem, Inc. and William H. Ruegamer</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.12+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Employment Agreement between First Interstate
BancSystem, Inc. and Lyle R. Knight</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.13+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Interstate BancSystem, Inc. Executive
Non-Qualified Deferred Compensation Plan dated
November&nbsp;20, 1998</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">12.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Statement Regarding Computation of Ratio of Earnings
to Fixed Charges</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">21.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Subsidiaries of First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">23.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Consent of KPMG LLP, Independent Auditors</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">27.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Financial Data Schedule as of December&nbsp;31, 1999</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">+ Management contract or compensatory plan.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-84540.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Form&nbsp;8-K dated
October&nbsp;1, 1996.</TD>
</TR>
</TABLE>


<P align="center">&nbsp;
<!-- PAGEBREAK -->
<P><HR noshade><P>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(3)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-25633.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(4)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-3250.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(5)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Post-Effective Amendment
No.&nbsp;2 to the Registrant&#146;s Registration Statement on Form
S-1, No.&nbsp;33-84540.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(6)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-37847.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(7)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Form&nbsp;10-K for
the fiscal year ended December&nbsp;31, 1997, No.&nbsp;33-64304.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(8)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-8, No.&nbsp;333-53011.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(9)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-8, No.&nbsp;333-76825.</TD>
</TR>
</TABLE>
<!-- link2 "(b)&nbsp;Reports on Form&nbsp;8-K" -->
<A name="020"></A>
<P align="left"><B>(b)&nbsp;Reports on Form&nbsp;8-K</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No reports on Form&nbsp;8-K were filed during the fourth quarter of 1999.

<!-- link2 "(c)&nbsp;Exhibits" -->
<A name="021"></A>
<P align="left"><B>(c)&nbsp;Exhibits</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item&nbsp;14(a)3 above.

<!-- link2 "(d)&nbsp;Financial Statements Schedules" -->
<A name="022"></A>
<P align="left"><B>(d)&nbsp;Financial Statements Schedules</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item&nbsp;14(a)2 above.

<P align="center">&nbsp;
<!-- PAGEBREAK -->
<P><HR noshade><P>

<P align="center"><B>Exhibit&nbsp;Index</B>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%" align="center">
<TR valign="bottom">
<TD width="14%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="81%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><FONT size="2"><B>Exhibit No.</B></FONT></TD>
<TD></TD>
<TD nowrap align="center"><FONT size="2"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center"><HR size="1"></TD>
<TD></TD>
<TD nowrap align="center"><HR size="1"></TD>
</TR>

<TR valign="bottom">
<TD valign="top"><FONT size="2">3.1(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Restated Articles of Incorporation dated February&nbsp;27,
1986</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.2(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated September&nbsp;26, 1996</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.3(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated September&nbsp;26, 1996</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.4(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Articles of Amendment to Restated Articles of
Incorporation dated October&nbsp;7, 1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.5(3)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Bylaws of First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">3.6</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amendment to Bylaws of First Interstate BancSystem,
Inc. dated March&nbsp;18, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.1(4)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Specimen of common stock certificate of First
Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.2(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Stockholder&#146;s Agreement for non-Scott family members</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.3(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Junior Subordinated Indenture dated November&nbsp;7, 1997
entered into between First Interstate and Wilmington
Trust Company, as Indenture Trustee</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.4(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Certificate of Trust of FIB Capital Trust dated as of
October&nbsp;1, 1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.5(6)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trust Agreement of FIB Capital dated as of October&nbsp;1,
1997</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.6(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Amended and Restated Trust Agreement of FIB Capital
Trust</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.7(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trust Preferred Certificate of FIB Capital Trust
(included as an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.8(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Common Securities Certificate of FIB Capital Trust
(included as an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.9(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Guarantee Agreement between First Interstate
BancSystem, Inc. and Wilmington Trust Company</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">4.10(7)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Agreement as to Expenses and Liabilities (included as
an exhibit to Exhibit&nbsp;4.6)</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.1(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Loan Agreement dated October&nbsp;1, 1996, between First
Interstate BancSystem, Inc., as borrower, and First
Security Bank, N.A., Colorado National Bank, N.A. and
Wells Fargo Bank, N.A.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.2</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Amendment to Loan Agreement between First
Interstate BancSystem, Inc., as borrower, and First
Security Bank, N.A. dated August&nbsp;20, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.3(2)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Note Purchase Agreement dated August&nbsp;30, 1996,
between First Interstate BancSystem, Inc. and the
Montana Board of Investments</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.4(1)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Lease Agreement Between Billings 401 Joint Venture
and First Interstate Bank Montana and addendum
thereto</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.5(1)+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Stock Option and Stock Appreciation Rights Plan of
First Interstate BancSystem, Inc., as amended</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.6(8)+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Employee Stock Purchase Plan of First Interstate
BancSystem, Inc. dated May&nbsp;1, 1998</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.7(9)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Interstate BancSystem, Inc. Stockholders&#146;
Agreements with Scott family members dated January
11, 1999</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.8(9)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Specimen of Charity Shareholder&#146;s Agreement with
Charitable Shareholders</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.9(5)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Credit Agreement between Billings 401 Joint Venture
and Colorado National Bank dated as of September&nbsp;26,
1995</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.10(3)</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Trademark License Agreement between Wells Fargo &#38;
Company and First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.11(6)+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Resignation Agreement between First Interstate
BancSystem, Inc. and William H. Ruegamer</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.12+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Employment Agreement between First Interstate
BancSystem, Inc. and Lyle R. Knight</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">10.13+</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
First Interstate BancSystem, Inc. Executive
Non-Qualified Deferred Compensation Plan dated
November&nbsp;20, 1998</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">12.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Statement Regarding Computation of Ratio of Earnings
to Fixed Charges</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">21.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Subsidiaries of First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">23.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Consent of KPMG LLP, Independent Auditors</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD valign="top"><FONT size="2">27.1</FONT></TD>
<TD></TD>
<TD align="left" valign="top"><FONT size="2">
Financial Data Schedule as of December&nbsp;31, 1999</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">+ Management contract or compensatory plan.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
<TD width="1%" align="left">(1)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-84540.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(2)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Form&nbsp;8-K dated
October&nbsp;1, 1996. (3)&nbsp;Incorporated by reference to the
Registrant&#146;s Registration Statement on Form&nbsp;S-1, No.
333-25633.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(4)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-3250.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(5)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Post-Effective Amendment
No.&nbsp;2 to the Registrant&#146;s Registration Statement on Form
S-1, No.&nbsp;33-84540.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(6)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-1, No.&nbsp;333-37847.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(7)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Form&nbsp;10-K for
the fiscal year ended December&nbsp;31, 1997, No.&nbsp;33-64304.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(8)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-8, No.&nbsp;333-53011.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top">
<TD width="1%" align="left">(9)</TD>
<TD width="3%">&nbsp;</TD>
<TD width="96%">Incorporated by reference to the Registrant&#146;s Registration
Statement on Form&nbsp;S-8, No.&nbsp;333-76825.</TD>
</TR>
</TABLE>

<P align="center">&nbsp;
<!-- PAGEBREAK -->
<P><HR noshade><P>



<!-- link1 "SIGNATURES" -->
<A name="023"></A>
<P align="center"><B>SIGNATURES</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Billings, State of Montana.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%" align="center">
<TR valign="bottom">
<TD width="75%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>
<TD width="20%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top"><FONT size="2">First Interstate BancSystem, Inc.</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top"><U>By: /s/ LYLE R. KNIGHT</U><BR>
Lyle R. Knight<BR>
President and Chief Operating Officer</TD>
<TD></TD>
<TD Valign="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>

</TR>
</TABLE>
</CENTER>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the dates indicated.

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" align="center">
<TR valign="bottom">
<TD width="8%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="55%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="17%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ HOMER A. SCOTT, JR.</U><BR>
Homer A. Scott, Jr.<BR>
Chairman
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ DAN S. SCOTT</U><BR>
Dan S. Scott, Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ JAMES R. SCOTT</U><BR>
James R. Scott, Vice Chairman of the Board
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ RANDALL I. SCOTT</U><BR>
Randall I. Scott, Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ JOHN M. HEYNEMAN</U><BR>
John M. Heyneman, Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ JOEL T. LONG</U><BR>
Joel T. Long, Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ JAMES W. HAUGH</U><BR>
James W. Haugh, Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ THOMAS W. SCOTT</U><BR>
Thomas W. Scott<BR>
Chief Executive Officer and Director<BR>
(Principal executive officer)
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ LYLE R. KNIGHT</U><BR>
Lyle R. Knight<BR>
President, Chief Operating Officer<BR>
and Director
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
<TD valign="top">By:</TD>
<TD></TD>
<TD align="left" valign="top">
<U>/s/ TERRILL R. MOORE</U><BR>
Terrill R. Moore<BR>
Senior Vice President,<BR>
Chief Financial Officer<BR>
and Secretary (Principal<BR>
financial and accounting officer)
</TD>
<TD></TD>
<TD align="left" valign="top"><U>MARCH 6, 2000</U><BR>
Date</TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><B>Supplemental Information to be Furnished with Reports Filed<BR>
Pursuant to Section&nbsp;15(d) of the Act by Registrants which have not</B>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registered Securities Pursuant to Section&nbsp;12 of the Act
The Registrant has not yet provided any annual report to security holders
covering the 1999 fiscal year, nor has any proxy statement, form of proxy or
other proxy soliciting material been sent to any security holder of the
Registrant with respect to the Registrant&#146;s 2000 annual meeting of shareholders.
If any such annual report or proxy material is sent to security holders
subsequent to the filing of this Annual Report on Form&nbsp;10-K, the Registrant
shall furnish copies of such report and material to the Commission when it is
sent to security holders.


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