Mariner Kemper just closed the biggest deal of his life.
Last Friday, UMB Financial
Kemper, UMB’s CEO, is far from the first member of his family to lead the bank. He took over from his father, R. Crosby Kemper, in 2004. And he’s the sixth Kemper to hold a leadership position at UMB, which was founded in Missouri by his great-grandfather in 1913.
But even amid that long family history, the Heartland deal makes Kemper stand out. Acquiring the Denver-based bank, also known as HTLF, grows UMB’s assets to about $68 billion — a 45% increase — and expands its footprint from eight to 13 states. The deal makes the Kansas City-based firm, which was already Missouri’s biggest bank, into the 26th largest publicly traded bank in the country, according to UMB.
But the merger has not come without difficulties. Just as UMB reported
As UMB and Heartland began their first month as one company, American Banker asked Kemper about the new challenges and opportunities facing his business — and how he plans to lead it through them.
The following is a transcript of the interview, edited for length and clarity.
American Banker: Congratulations, first of all, on closing the deal with Heartland. I wonder if you could start just by telling me about why that deal is so significant for UMB.
Mariner Kemper: As an entrepreneurial company, we’re constantly thinking about what’s next, and M&A is always a part of that. And over the years, you build your list of potential partners, and then you work on them. What was beautiful about Heartland, from the beginning of starting to work on the relationship, was if we were to do a deal, it would double our retail presence, both in number of branches as well as deposits. It diversifies our deposit base away from just being largely institutional/commercial, which allows us to invest in our retail business more efficiently.
Secondly, we’re keen on growing our wealth management business, and this transaction grows that by about 30%, again allowing us to invest in our wealth business more efficiently. So those are a couple of the big strategic drivers.
And being a pretty liquid company with a great loan to deposit ratio, all the targets we’ve pursued have had a lot of liquidity and a low loan-to-deposit ratio. So we can keep our story alive as we grow, which is to make ourselves available to our customers, and never be lent up so much that you have to buy your deposits and chase the next dollar of revenue in a less efficient way.
So all of that aligned, and then we spent time working on it, and built the rapport, and the stars aligned, and we were able to bring everybody to the table on the same page, and got the deal done.
AB: And in addition to those opportunities, of course, there are also some challenges. Obviously UMB just came off of a very strong quarter, in the fourth quarter of 2024. Heartland, on the other hand, fell short of some expectations — in terms of net income, revenue, earnings per share. I’m wondering if that’s a concern for you at all, and how that affects your thinking about the deal.
Kemper: Yeah, I think that storyline was misunderstood and overplayed. So they were cleaning up their balance sheet in order to give us a clean balance sheet. They knew they were going to be picking up our stock, and they want our stock to perform, so they wanted to make sure that they did everything that they could to start off on the right foot. So they did all the things they could, following their own procedures and processes and working with their accounting firm, to really take care of as much as possible by year-end.
I think how I would describe the fourth quarter of theirs is a lot more sort of one-time activity to prepare the company for us. So I think it would be the wrong thing to do to project their fourth quarter forward as a run rate.
AB: I wonder if you could talk a little bit more about wealth management. As you mentioned before, this deal grows UMB assets under management by about 32%. Was that a major motive for making this deal?
Kemper: Yeah, strategically the doubling of our retail business and growing our wealth management business were strategic drivers of doing it. So that allows us to invest in both those businesses more and more efficiently.
AB: And what in particular about wealth management is important, in your view?
Kemper: Well, it fits beautifully into the stack of things that we do well, and the client base that we have, where we can sell multiple products to the same client. So as a commercial bank, you are doing business with CFOs, C-suite people, controllers, treasurers, presidents, CEOs, chairmen, patriarchs, private equity people, etc. And when you’ve built relationships with them, then you have things to offer that can add value to their life, it’s easier to bolt those products into someone’s life when you already have a relationship.
AB: And you mentioned before that your footprint has expanded, from eight states to 13 states. I’m wondering, in the long run, what’s the goal here? Is it to ultimately reach all 50 states?
Kemper: Well, I think what we want to do is do what we do really well where we are. So we take the opportunity of the markets that we’re in to become a top player and integrate ourselves into the communities, and take our share, and be a top — ultimately, we’d like to be a top-10 player and in a perfect world, be a top-three player everywhere we do business. So that’s the intended goal.
There’s a lot we can do before we think about other states. And so, strategically, it would be to get better and more profitable where we are, take advantage of the markets we’re expanding into, and really hone in and really take our share and add value and really connect with the markets that we’re in. And then opportunistically, we keep our eye open for other opportunities.
AB: On a more personal note, I saw that you have a goal of reading the biography of every president. Do you have a favorite president so far?
Kemper: I’ve got three: Washington, Lincoln and Reagan. Adams is a close fourth, maybe.
AB: Do you feel like you’ve learned any leadership lessons by reading their biographies?
Kemper: I am a big fan of mistakes, not successes. And most biographies, most business books, are really mostly written about the successes, not so much the failures. So I’m always on the lookout for stuff I don’t like, more than I am the stuff I do like, because I think there’s more to be learned there. How do you avoid pitfalls? You study pitfalls.