UMB Financial Corp. will acquire rival Heartland Financial in an all-stock deal valued at around $2 billion, the banks announced Monday.
The deal will mark UMB’s largest acquisition in its 111-year history, increasing total assets by more than 40% to $64.5 billion. Additionally, the deal will increase assets under management or advisement in UMB’s private wealth business by 31% and nearly doubles the Kansas City, Missouri-based bank’s retail deposit base.
The acquisition of Denver, Colorado-based HTLF also more than doubles UMB’s branch and ATM network, to 197 and 475, respectively.
“This is a historic and exciting milestone for our company,” UMB Financial Corporation Chairman and CEO Mariner Kemper said in a prepared statement. “While we have maintained an outstanding pace of organic growth during the past decade, this compelling combination with HTLF marks a truly momentous expansion of all our core services in both existing and new markets. This synergy, along with a like-minded culture and customer approach, is an ideal fit for our business model, our credit and risk profiles, and our associates, customers and communities.”
Branches of the combined bank will span California, Minnesota, New Mexico, Iowa, Wisconsin, Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.
“This acquisition further diversifies our business, adding more scale to our consumer and small business capabilities,” Kemper said in the statement. “It also significantly expands our market share in several existing markets and leverages our commercial banking expertise to HTLF customers and prospects in our newly acquired markets.”
Keefe, Bruyette & Woods analyst Christopher McGratty wrote in a note to clients Monday that the “financial metrics look compelling” for the buyer, Bloomberg reported.
The deal was approved by the boards of directors at each company and is subject to customary closing conditions and regulatory approvals. Under the merger agreement terms, HTLF stockholders will receive a fixed exchange ratio of 0.55 shares of UMB common stock for each share of HTLF common stock.
HTLF President and CEO Bruce K. Lee said the deal is an “excellent match” for his bank, representing a continued focus on delivering the “best products, services and expertise to our customers.”
Lee announced in February his plans to retire at year’s end; he’s been employed by HTLF since 2015 and at the helm of the bank since 2018.
At the time, the bank said it retained executive recruiting firm Heidrick & Struggles to find Lee’s successor, but a representative for HTFL told Banking Dive Monday that the search for Lee’s successor has been suspended and that he, with support of the bank’s board of directors, plans to stay on as president and CEO until the transaction closes.
HTFL also announced in February it’s selling off its retail footprint in Montana.
The banks expect the deal to close in the first quarter of 2025.
