Shares of UMB Bank (UMBF) are down around 8% premarket Monday after the company reported its first quarter results and announced that it it has agreed a deal to acquire Heartland Financial (HTLF).
The company has entered into an all-stock transaction agreement to acquire Heartland, valued at approximately $2 billion.
Heartland, headquartered in Denver, has $19.4 billion in assets, $16.2 billion in total deposits and $12.1 billion in total loans, as of March 31, 2024, according to UMB's press release.
It is believed that the combination will create a regional banking powerhouse spanning 13 states, 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.
The transaction is the largest in UMB's 111-year history and will result in it having $64.5 billion in assets, elevating it to the top 5% of the 616 publicly traded banks in the U.S.
“This is a historic and exciting milestone for our company,” said UMB Financial (NASDAQ:UMBF) Corporation Chairman and CEO Mariner Kemper. “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.
Meanwhile, UMB reported a net income of $110.3 million, or $2.25 per diluted share, in the first quarter, with net operating income of $120.7 million, or $2.47 per diluted share.
Average loans increased $2.1 billion, or 9.8%, as compared to the first quarter of 2023, while average deposits increased 10.4% on a linked-quarter, annualized basis, to $33.5 billion. Net interest income increased 3.9% from the linked quarter. Total revenue came in at $398.68 million.
“Our 2024 is off to a great start, with strong first quarter financial results driven by balance sheet and net interest income growth, net interest margin expansion, double-digit growth in our fee income revenue, and stable credit metrics,” said Mariner Kemper, UMB Financial Corporation chairman and chief executive officer.