UMB Financial Corp. is talking about buying Heartland Financial USA Inc. This could be the biggest merger between regional banks in the United States this year.
People who know about the situation say an announcement might happen soon, maybe within weeks. But they warn that talks are still going on and there could be delays or the deal might not happen at all.
Both UMB Financial Corp. and Heartland Financial haven’t said much about it. A spokesperson from UMB said they don’t talk about “market speculation,” and Heartland Financial hasn’t replied to questions yet.
In America, there are lots of small banks trying to compete with big ones like JPMorgan Chase & Co. and Bank of America Corp. But it’s tough for them because the big banks have more resources.
Plus, things are getting trickier with interest rates going up, more loans not getting paid back, and regional banks having a tough time last year.
Because of all this, many people think it’s a good idea for smaller banks to team up and become bigger. But despite the tough conditions, there haven’t been many big mergers lately, except for Capital One Financial Corp. buying Discover Financial Services for a huge $35 billion.
If UMB does end up buying Heartland Financial in Denver, it would be a big deal, even bigger than when Wintrust Financial Corp. bought Macatawa Bank for $510 million earlier this year. Heartland Financial’s shares have dropped by 5.1% this year, making the company worth about $1.5 billion.
The merger would be significant not just because it’s big, but also because UMB and Heartland seem like a good match. Both have banks in similar places across the Midwest and Southwest United States, which could help them compete better against the big national banks.
