US-based commercial banking company UMB Financial (UMB) has agreed to acquire bank holding company Heartland Financial, USA (HTLF), in a transaction valued at around $2bn.
Under the terms of the merger deal, HTLF stockholders will receive 0.55 shares of UMB common stock for each share of HTLF common stock held.
The consideration values UMB’s shares at $45.74 a piece, based on the last closing share price of $83.17, as of 26 April 2024.
The acquisition has been approved by the Boards of Directors of both companies.
It is expected to be closed in the first quarter of 2025, subject to customary closing conditions, including regulatory approvals and approval by UMB shareholders and HTLF stockholders.
Upon completion of the proposed transaction, previous HTLF stockholders will collectively represent around 31% of the combined company.
As part of the acquisition, five of the HTLF Board of Directors will be appointed to the UMB Board, expanding it to 16 members.
UMB Financial Corporation chairman and CEO Mariner Kemper said: “This is a historic and exciting milestone for our company.
“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.”
Established in 1981 and based in Denver, HTLF has $19.4bn in assets, $16.2bn in total deposits and $12.1bn in total loans, as of 31 March 2024.
HTLF operates Minnesota Bank & Trust, Wisconsin Bank & Trust, Dubuque Bank & Trust, Illinois Bank & Trust, Bank of Blue Valley, Citywide Banks, Premier Valley Bank, Arizona Bank & Trust, New Mexico Bank & Trust and First Bank & Trust.
The merger would create a combined regional banking hub with branches across 13 states.
It will add California, Minnesota, New Mexico, Iowa and Wisconsin to UMB’s existing footprint including Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.
UMB will have $64.5bn in assets, increase its private wealth management’s AUM/AUA by 31% and almost double its retail deposit base.
Also, the merger will add 107 branches and 237 ATMs to UMB’s 90 branches and 238 ATMs, expanding the network for both companies’ customers.
BofA Securities served as financial advisor and Davis Polk and Wardwell as legal advisor to UMB on this transaction.
Also, Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor and Wachtell, Lipton, Rosen & Katz as legal advisor to HTLF.
HTLF president and CEO Bruce Lee said: “HTLF’s merger with UMB represents our continued focus on ensuring we deliver the best products, services and expertise to our customers.
“This is an excellent match for HTLF, and we’re truly excited for what this means for our employees, customers, stockholders and communities.”
Kemper added: “This acquisition further diversifies our business, adding more scale to our consumer and small business capabilities.
“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.”
