First Interstate BancSystem in Billings, Mont., announced its third deal in two years as it inched closer to $10 billion of assets.

The $8.7 billion-asset company said late Wednesday that it has agreed to buy Flathead Bank of Bigfork in Montana for $34.2 million in cash. The $231.6 million-asset Flathead has seven branches in western and northwestern Montana.

The deal would provide First Interstate with a "solid presence in the Gallatin and Flathead markets," President and Chief Executive Kevin Riley said in a press release. First Interstate has more than 80 branches in Montana, Wyoming and South Dakota.

The acquisition should be immediately accretive to earnings and is expected to close in the third quarter, First Interstate said. It would also move the company closer to the $10 billion-asset threshold at which it would be subject to additional regulatory requirements and caps on interchange fees kick in. Riley said during a conference call in January that the company wasn't currently prepared to cross $10 billion of assets but would be so by the end of this year.

First Interstate has been an active acquirer since 2009. Its most recent deals include the purchase of the $647 million-asset Mountain West Financial Corp. in Helena, Mont., in 2014 and the $74 million-asset United Bank in Absarokee, Mont., last year.

First Interstate's financial adviser was Sandler O'Neill and its legal counsel was Luse Gorman. D.A. Davidson was Flathead's financial adviser and Lindquist & Vennum was its legal counsel.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.