UMB Financial and Heartland Financial (HTLF) entered into a definitive merger agreement under which UMB will acquire Heartland Financial in an all-stock transaction valued at approximately $2 billion.
The combination of companies will create a regional banking enterprise spanning a 13-state branch footprint, adding California, Minnesota, New Mexico, Iowa and Wisconsin to UMB’s existing eight-state footprint, which includes Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.
“This is a historic and exciting milestone for our company,” Mariner Kemper, chairman and CEO of UMB, said. “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.”
This transaction, the largest in UMB’s 111-year history, will result in UMB having $64.5 billion in assets, elevating it to the top 5% of the 616 publicly traded banks in the U.S. The transaction will increase UMB’s private wealth management’s AUM/AUA by 31% and nearly doubles its retail deposit base. It will also add 107 branches and 237 ATMs to UMB’s 90 branches and 238 ATMs, dramatically expanding the network for both companies’ customers.
“This acquisition further diversifies our business, adding more scale to our consumer and small business capabilities,” Kemper said. “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.”
Under the terms of the merger agreement, which were approved by the boards of directors of each company, HTLF stockholders will receive a fixed exchange ratio of 0.55 shares of UMB common stock for each share of HTLF common stock. This per share consideration is valued at $45.74 per share based on UMB’s closing price of $83.17 on April 26, 2024. Following completion of this contemplated transaction, former HTLF stockholders are expected to collectively represent approximately 31% of the combined company. At the closing of the transaction, five members of the HTLF board of directors will join the UMB Board, which will be expanded to 16 members.
“HTLF’s merger with UMB represents our continued focus on ensuring we deliver the best products, services and expertise to our customers,” Bruce K. Lee, president and CEO of HTLF, said. “This is an excellent match for HTLF, and we’re truly excited for what this means for our employees, customers, stockholders and communities.”
Within its 11-state footprint, HTLF does business as: 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.
HTLF has 1,900 associates and UMB has 3,600. Until the transaction closes, the companies will continue to operate independently.
The transaction is subject to customary closing conditions, including regulatory approvals and approval by UMB shareholders and HTLF stockholders, and is expected to close in Q1/25.
BofA Securities is serving as financial advisor to UMB and Davis Polk and Wardwell is serving as UMB’s legal advisor. Keefe, Bruyette & Woods is serving as financial advisor to HTLF, and Wachtell, Lipton, Rosen & Katz is serving as HTLF’s legal advisor.
