First Interstate BancSystem in Billings, Mont., has agreed to buy Absarokee Bancorp. in Absarokee, Mont.

The $8.6 billion-asset First Interstate said in a press release Thursday that it will pay $7.2 million in cash for the $74 million-asset parent of United Bank. First Interstate noted that Absorokee is its second in-market acquisition in the last year; it agreed in February to buy Mountain West Financial in Helena, Mont.

"United Bank is a locally owned bank committed to great customer service backed by small-town values," Ed Garding, First Interstate's president and chief executive, said in the release. "Bringing our two companies together makes good sense and will benefit" customers of both companies.

First Interstate said it expects the transaction to be immediately accretive to earnings per share. The transaction is expected to close in the third quarter.

Sandler O'Neill and Crowley Fleck advised First Interstate. Hovde Group and Lindquist & Vennum advised Absarokee.

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