First Interstate Bank’s parent firm First Interstate BancSystem (FIBK) and Great Western Bancorp (GWB) have signed an all-stock merger deal valuing nearly $2bn.

Under the agreement, GWB, the parent of Great Western Bank, will merge into FIBK and the combined entity will operate under the First Interstate name and brand.

FIBK stated that it will offer its 0.8425 Class A common stock for each GWB share held. Upon completion, GWB shareholders will collectively own 43% of the merged entity.

The combined entity will have approximately $32bn in assets and a network of over 300 branches across 14 states of the US.

The merger will enable First Interstate to expand its footprint in eight new states.

FIBK president and CEO Kevin Riley said: “The strategic and cultural alignment between our organisations 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.”

GWB president and CEO Mark Borrecco said: “We will 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.”

Upon the deal completion, which is expected to happen in the first quarter of 2022, five directors from GWB will join the FIBK board of directors.

Earlier this week, Centennial Bank’s holding company Home BancShares agreed to acquire Happy Bancshares in an all-stock deal valuing nearly $919m.