11:22 AM EDT, 04/29/2024 (MT Newswires) -- UMB Financial ( UMBF ) agreed to buy Heartland Financial (HTLF) in an all-stock transaction valued at $2 billion that will significantly expand the former's geographic footprint.

Heartland's stockholders will receive 0.55 shares of UMB for each share owned, reflecting per-share valuation of $45.74 based on UMB's closing share price on Friday, according to a joint statement released Monday. That represents a premium of 28% over Heartland's stock price on Friday, MT Newswires' calculations showed.

UMB's stock fell 3.7% in recent Monday trade while that of Heartland Financial advanced 19%. Heartland stockholders will collectively own 31% of the combined company after deal completion, which is expected in the first quarter of 2025.

Upon close, UMB Financial's ( UMBF ) assets will balloon more than 40% to $64.5 billion. The deal is expected to add California, Minnesota, New Mexico, Iowa and Wisconsin to UMB's existing eight-state footprint. Heartland had $19.41 billion in assets, $16.2 billion in deposits and $12.07 billion in loans at the end of 2023, Heartland said in its first-quarter earnings release.

"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," UMB Chief Executive Mariner Kemper said in a statement.

For the first quarter ended March 31, UMB separately reported that non-GAAP operating earnings per share climbed to $2.47 from $1.91 a year ago and surpassed the $1.80 average analyst estimate on Capital IQ. Revenue, expressed as the sum of net interest and noninterest income, advanced to $398.7 million from $371.9 million.

Heartland, which also reported first-quarter earnings on Monday, said adjusted earnings per share ticked down to $1.22 from $1.26 year over year but topped the $1.11 average analyst estimate on Capital IQ. Non-GAAP revenue dipped to $183.7 million for the three months ended March 31 from $185.3 million a year ago.

"We grew customer deposits while continuing to pay down high cost wholesale deposits and our credit quality remains stable," CEO Bruce Lee said in a statement.

Price: 79.36, Change: -3.81, Percent Change: -4.58