UMB Financial Corp.’s purchase of Marquette Financial Cos. promises growth and profit potential, but the companies’ shared culture made the deal possible, UMB chief executive Mariner Kemper said Tuesday.
“We have looked at a lot of potential transactions, and this one is compelling,” Kemper said during a conference call with analysts. “Culture is what will make us successful.”
UMB shares gained $1.18, or 2.2 percent, and closed Tuesday at $54.63.
The companies announced the deal late Monday. Marquette’s owners will receive shares of UMB equal to about 7 percent of the Kansas City-based banking company. UMB gains Marquette’s bank branches in Arizona and Texas as well as its lending businesses, including one that focuses on transportation companies and another that lends against various kinds of assets.
Kemper said a thorough review of those businesses assured him that Marquette’s lending practices were sound.
“We found a very similar credit culture, which gives us great comfort as we proceed with this merger agreement,” Kemper said.
Kemper said the deal makes sense because it combines UMB’s low funding costs with Marquette’s higher-earning loans and other assets. It allows the combined companies to allow higher-cost funding sources at Marquette to wind down over the next two years.
Kemper said Marquette’s higher funding costs, limits on its ability to grow and higher operating costs have kept its profits recently below levels he expects it to contribute in the future. Cost savings of $14 million mostly in personnel and back office expenses will help.
Marquette’s owners, led by the Pohlad family of Minneapolis, who also own the Minnesota Twins baseball team, will receive 3.4 million UMB shares, worth $182.5 million at recent prices. The Kemper family is a principal owner of UMB.
The merger agreement has no provision requiring that a Marquette representative join either UMB’s board or the board of UMB Bank.