When talking to Kevin Riley a few weeks ago, the CEO of Billings, Montana-based First Interstate BancSystem, I learned that the $31.3 billion banking company typically assigns a “buddy banker” to work with branch staff when acquiring another bank. That First Interstate employee troubleshoots problems with the newly acquired bank during the conversion process.
But when it was integrating Sioux Falls, South Dakota-based Great Western Bancorp this year, First Interstate initially chose to skip the buddy bankers and provide phone support instead, given the more than 600-mile distance between the two banks’ headquarters.
“We'll never do that again,” Riley says. “We'll have buddy bankers in the branches with those people when we convert [the next deal] because that's the smoothest way to do it.”
First Interstate employees changed gears and quickly volunteered to fly to the new markets and help with the integration. For the newly acquired branch staff, it was simply easier and faster to learn the new systems when the person guiding the process was next to them.
First Interstate’s story may be of interest to potential acquirers thinking through post-deal assimilation issues. When asked on Bank Director's 2023 Bank M&A Survey about integration, likely acquirers ranked technology integration as a top concern, after cultural integration and retaining key talent.
This story illustrates the importance of trying a new approach — and also being smart enough to change tactics if you find it’s not working as well as you’d hoped. In spite of the hiccup, Riley tells me the Great Western integration (its largest deal to date) went more smoothly than he expected.
As Riley puts it: “We took a little different approach this time, we saw it wasn't working so we changed immediately. We won’t take that approach again.”
• Laura Alix, director of research for Bank Director