The Bank Slate


UMB Financial to buy Heartland Financial for $2 billion

UMB Financial in Kansas City, Mo., has agreed to buy Heartland Financial USA in Denver.

The $45.1 billion-asset UMB said in a press release that it will pay $2 billion in stock for the $19.4 billion-asset Heartland. The deal, which is expected to close in the first quarter, priced Heartland at 153% of its tangible book value.

Heartland has 107 branches, $16.2 billion of deposits and $12.1 billion of loans across 13 states. UMB will enter California, Minnesota, New Mexico, Iowa and Wisconsin as part of the acquisition.

“While we have maintained an outstanding pace of organic growth during the past decade, this compelling combination with Heartland marks a truly momentous expansion of all our core services in both existing and new markets,” Mariner Kemper, UMB’s chairman and CEO, said in the release.

“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,” Kemper added.

“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.”

Five Heartland directors will join UMB’s board, which will be expanded to 16 members.

The deal should be 30.6% accretive to UMB’s 2025 earnings per share.

UMB plans to cut 27.5% of Heartland’s annual noninterest expenses, or roughly $124 million. It expects to incur about $215 million of pretax merger-related charges.

BofA Securities and Davis Polk and Wardwell advised UMB. Keefe, Bruyette & Woods and Wachtell, Lipton, Rosen & Katz advised Heartland.

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