Dive Brief:
- HTLF Bank has agreed to sell all nine of its Rocky Mountain Bank division branches in Montana to two in-state banks.
- Six of the branches will be sold to Kalispell-based Glacier Bank, and three will be acquired by Miles City-based Stockman Bank. Financial terms of the deals were not disclosed.
- The sales include approximately $594 million of deposits and $363 million in loans, and both are expected to close in the late third quarter or early fourth quarter of 2024.
Dive Insight:
HTLF Bank's parent company, the $19.4 billion-asset Heartland Financial USA, said in a press release that the sales will improve its capital and increase the efficiency of its footprint.
Heartland, which does business as HTLF, said it intends to strategically reinvest sales proceeds in talent, technology and other existing markets where it has greatest growth potential.
The six Rocky Mountain Bank branches being sold to Glacier include two in Billings and one each in Bozeman, Plentywood, Stevensville and Whitehall.
Stockman Bank will acquire branches in Bigfork, Kalispell and Plains.
“We are excited for this opportunity to serve more of our neighbors in Northwest Montana,” said Bill Coffee, CEO of Stockman Bank, in a press release. “We welcome Rocky Mountain Bank’s employees and customers to Stockman.”
Coffee said all Rocky Mountain Bank employees will be offered employment with Stockman Bank.
After the sale, HTLF would operate 10 community bank brands in 11 states including California and Texas.
The company said the deals align with “HTLF 3.0,” the company’s new strategic plan to better serve customers and drive efficiency, enhance revenue growth, deliver higher return on assets and find more efficient use of capital.
In late October and the first half of November, HTLF repositioned its balance sheet by selling investment securities with proceeds totaling $805.8 million and suffered a pretax loss of $129.1 million, which caused the company to report a net loss for the fourth quarter of 2023.
The Denver-based company lost $72.4 million, or $1.69 per share in the quarter, compared to net income of $58.6 million, or $1.37 per share, a year earlier.
Heartland’s largest M&A deal in recent years was the acquisition of Overland Park, Kansas-based Blue Valley Ban Corp. in an all-stock transaction announced in 2019.
Glacier Bancorp last year agreed to acquire Community Financial Group, Inc., the holding company for Wheatland Bank.
Jeff Cardone, a partner at Luse Gorman, told Banking Dive there are still major M&A headwinds from a regulatory and macroeconomic standpoint, particularly with the recent jittery news on interest rates and inflation.
“Therefore, we are not anticipating a robust 2024 for larger bank M&A transactions,” he said. “We are, however, seeing accelerated M&A activity for small bank institutions with shareholders that desire liquidity and have an interest in exploring a transaction with a second-tier buyer, such as a credit union or an investor group.”
