Efforts continue to pave the way for a merger between a national financial services company and a banking institution with a large Dubuque presence.
UMB Financial executives in April announced their intention to acquire HTLF, the parent company of Dubuque Bank & Trust, in a roughly $2 billion, all-stock deal expected to close in early 2025 pending regulatory approval.
Leaders from both institutions provided updates on the merger this week in quarterly earnings reports covering the quarter that ended June 30.
“Our focus is to ensure a seamless transition without disrupting business-as-usual activity,” UMB Financial CEO Mariner Kemper said during a Wednesday earnings call with investors. “… We see this addition as a great fit from a strategic, financial and cultural perspective.”
As part of the deal approved by the boards of both financial institutions, HTLF shareholders will get a fixed exchange ratio of 0.55 shares of UMB common stock for each share of HTLF common stock. Five HTLF representatives also will assume roles on the UMB board of directors.
Per updates delivered at UMB’s earnings call, an integration program governance structure has been created for the merger, and candidate vetting continues for the five UMB board seats to be held by HTLF directors.
UMB management also has participated in site visits and town hall meetings in all HTLF regions. Exact staffing impacts have not been announced, although UMB has expressed intentions to maintain a strong Dubuque presence.
“We see a lot of opportunity to leverage the work that (HTLF) has already done … and reap the rewards,” Kemper said.
On the call, UMB announced net operating income of $105.9 million for the quarter ending June 30. Average loans increased $1.6 billion, or 7.3%, as compared to the same quarter last year, and average deposits jumped to $34.3 billion.
For its part, HTLF this week reported net income available to common shareholders of $37.7 million for the second quarter, a decrease of 20% from the same quarter last year.
HTLF reported total assets of $18.81 billion as of June 30, a 3% decrease from $19.41 billion at the end of 2023. Total deposits also dipped to $14.96 billion at the end of the quarter, compared to $16.2 billion on Dec. 31.
HTLF Chief Financial Officer Kevin Thompson said via email that the reduction in assets can be attributed to the sale of investment properties over the past year, as well as normal paydowns in the securities portfolio.
He added that proceeds from those sales were used to pay down higher-cost, wholesale deposit liabilities with the goal of improving the bank’s credit and liquidity profile.
“When adjusting for the loss associated with the securities sales, earnings and financial metrics have improved from the prior year,” Thompson wrote.