UMB Financial Corp. will acquire rival Heartland Financial in an all-stock deal valued at around $2 billion, the banks announced Monday.
The deal, which the banks expect to close in the first quarter of 2025, will increase UMB’s total assets by more than 40% to $64.5 billion. Additionally, the deal will boost 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-based HTLF also would more than double UMB’s branch and ATM network, to 197 and 475, respectively. The deal will give UMB entry, too, to five new states: California, Iowa, Minnesota, New Mexico and Wisconsin.
“This is a historic and exciting milestone for our company,” UMB 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.”
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 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. At the time, the bank said it retained executive recruiting firm Heidrick & Struggles to find Lee’s successor, but a representative for HTLF told Banking Dive on 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.
“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.”
One state where HTLF is located — for now — that UMB won’t be expanding is Montana. HTLF announced in February it’s selling off its nine branches in the state.
Keefe, Bruyette & Woods analyst Christopher McGratty wrote in a note to clients Monday that the “financial metrics look compelling” for the UMB, Bloomberg reported.
