Sioux Falls-based Great Western is merging with Montana-based First Interstate Bank.

The combined company will be based in Billings and operate under the First Interstate name and brand.

Great Western is headquartered in Sioux Falls and employs 1,700 people nationwide.

In a statement, First Interstate said it will “maintain a strong presence in GWB’s headquarters of Sioux Falls.”

The agreement was unanimously approved by both boards of directors.

The combined bank will be one of the region’s largest financial institutions, with over $32 billion in assets and more than 300 branches across 14 states.

“This is a transformative moment for our 53-year-old company,” said First Interstate president and CEO Kevin Riley. “The strategic and cultural alignment between our organizations is what makes this transaction so exciting, as we both pride ourselves on being community banks with a strong focus on relationship building, customer service, and community outreach. We are eager to expand our community banking model into eight new states and look forward to building relationships with the employees and clients who call these beautiful regions home.”

Pending regulatory and shareholder approvals, the transaction is expected to close during the first calendar quarter of 2022. The conversion of Great Western  branches to First Interstate Bank is expected to take place during the second calendar quarter of 2022.

“We’re excited to join forces, and confident that both companies’ stakeholders will benefit from this partnership,” said Mark Borrecco, GWB president and CEO. “We’ll be able to offer customers access to additional branch locations and new products and services, provide new growth and professional development opportunities to our employees, deliver additional returns to our shareholders, and have an even greater impact on our communities.”

Borrecco last year became the successor to retiring CEO Ken Karels.

Upon close of the transaction, five directors from Great Western will join the First Interstate board of directors.

Great Western has more than 170 branches in nine states. It acquired Sioux Falls-based Home Federal Bank in 2016 and later moved its headquarters office to the former downtown Home Federal office.

First Interstate has significant family ownership and that will continue, it said.

“Throughout our many years of ownership, we have prided ourselves on the ability to stay true to our values and roots while simultaneously adapting, innovating, and responding to the unique needs of our clients and communities,” said Jim Scott, director of the board  and son of First Interstate’s founders, Homer Scott, Sr. and Mildred Scott. “This combination is an extension of our legacy in the region where our family’s roots began. It increases the Bank’s community commitment while expanding our brand of community banking.”

To “punctuate the milestone moment for the company and to celebrate the Scott family’s legacy,” as part this transaction, First Interstate announced it will gift more than $20 million to the First Interstate BancSystem Foundation.

“Who First Interstate is as an organization and the successes we’ve enjoyed are due in large part to the leadership, support, and vision of Scott family members,” Riley said. “These funds will ensure that our shared passion for giving back to the places we call home not only continues in our existing communities but extends into our new communities in meaningful and relevant ways.”