KANSAS CITY, Mo. - UMB Financial (NASDAQ:UMBF) Corporation (NASDAQ: UMBF) and Heartland Financial USA, Inc. (NASDAQ: NASDAQ:HTLF) announced Monday an agreement under which UMB will acquire Heartland Financial in a stock transaction valued at approximately $2 billion. The merger, expected to close in the first quarter of 2025, will significantly increase UMB's geographic presence and financial assets.
The acquisition is the largest in UMB's 111-year history and will expand its footprint to 13 states, adding California, Minnesota, New Mexico, Iowa, and Wisconsin to its current presence. This move will elevate UMB's assets to $64.5 billion, placing it among the top 5% of publicly traded banks in the United States.
Heartland Financial, which operates under the brand name HTLF, boasts $19.4 billion in assets, $16.2 billion in total deposits, and $12.1 billion in total loans as of March 31, 2024. The merger is set to enhance UMB's private wealth management's assets under management/administration by 31% and nearly double its retail deposit base.
UMB Chairman and CEO Mariner Kemper (NYSE:KMPR) stated that this merger represents a significant expansion of UMB's core services in both existing and new markets. HTLF President and CEO Bruce K. Lee expressed excitement for the merger's benefits to employees, customers, stockholders, and communities.
Under the terms of the agreement, HTLF stockholders will receive 0.55 shares of UMB common stock for each share of HTLF common stock they own, valued at $45.74 per share based on UMB's closing price on April 26, 2024. Post-merger, former HTLF stockholders will own approximately 31% of the combined entity.
The transaction is subject to customary closing conditions, including regulatory approvals and approval by UMB shareholders and HTLF stockholders. The companies will continue to operate independently until the merger's completion.
UMB hosted an investment community call on Monday to discuss the acquisition details. BofA Securities, Inc. and Davis Polk and Wardwell LLP are serving as financial and legal advisors to UMB, respectively, while Keefe, Bruyette & Woods, A Stifel Company, and Wachtell, Lipton, Rosen & Katz are advising HTLF.
This announcement is based on a press release statement and does not constitute an offer of securities or a solicitation of any vote or approval.
InvestingPro Insights
As UMB Financial Corporation (NASDAQ: UMBF) gears up for its landmark acquisition of Heartland Financial USA, Inc., the latest data from InvestingPro provides a deeper understanding of UMB's financial health and market position. With a market capitalization of $4.05 billion and a P/E ratio sitting at 11.58, UMBF presents a value proposition in the banking sector.
InvestingPro Tips point to UMBF's commendable track record of raising its dividend for 31 consecutive years, signaling a strong commitment to shareholder returns. Moreover, the company has maintained dividend payments for an impressive 54 years, underscoring its financial stability and reliability as an income-generating investment. These aspects are particularly relevant as investors consider the potential long-term benefits of the merger.
The data also reveals that UMBF has experienced a significant price uptick over the last six months, with a 35.27% return, reflecting growing investor confidence in the company's prospects. This is further supported by analysts' predictions that UMBF will be profitable this year, as evidenced by the two analysts who have revised their earnings upwards for the upcoming period.
Investors interested in further insights and additional InvestingPro Tips can explore the full range of analytics and forecasts for UMBF at https://www.investing.com/pro/UMBF. There are numerous additional tips available, and by using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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