KANSAS CITY, Mo. - UMB Financial (NASDAQ:UMBF) Corporation, a financial services provider, has announced the pricing of its public offering of 2.8 million shares at a value of $75 each. The transaction, structured as a forward sale agreement with BofA Securities affiliate, is expected to generate net proceeds of about $201.6 million. The offering is slated to close on May 1, 2024, subject to customary closing conditions.
The underwriters have an option to purchase up to an additional 420,000 shares, which could lead to another forward sale agreement. Wellington Management and other institutional investors participated in the offering. BofA Securities serves as the lead book-running manager, with Morgan Stanley (NYSE:MS) & Co. LLC as the book-running manager. Piper Sandler & Co. and RBC (TSX:RY) Capital Markets, LLC are the co-managers.
Under the forward sale agreement, UMB will eventually sell the common stock to the forward purchaser at a price equal to the offering price, adjusted for certain terms. The forward purchaser, or its affiliate, will borrow and deliver the shares to the underwriters. UMB has up to 18 months to physically settle the forward sale agreement, with the option for cash or net share settlement.
UMB will not receive immediate proceeds from the sale of shares by the forward seller. The proceeds from the physical settlement of the forward sale agreement will be used for general corporate purposes, potentially including contributing Tier 1 capital to UMB Bank.
The securities are offered pursuant to an effective registration statement and a prospectus supplement filed with the SEC. Interested parties can obtain copies of these documents from the managing book-runners upon request.
UMB Financial Corporation operates across several states, offering a range of banking and financial services, including wealth management and investment banking. The company's forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those projected.
This report is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
InvestingPro Insights
As UMB Financial Corporation (UMBF) navigates through its latest public offering, the company's history of financial stability is reflected in its dividend track record. An InvestingPro Tip highlights the company's impressive history of raising its dividend for 31 consecutive years, showcasing a commitment to shareholder returns.
Moreover, UMBF has maintained dividend payments for an even more extended period of 54 years, which signals a robust and shareholder-friendly capital allocation policy.
The financial metrics provided by InvestingPro Data offer a deeper understanding of UMB's current market position. The company's market capitalization stands at approximately $4.05 billion USD, with a price-to-earnings (P/E) ratio of 11.58, aligning with the last twelve months as of Q4 2023.
This P/E ratio suggests a valuation that could be considered reasonable in the financial industry, given the context of its profitability and market conditions. Additionally, UMBF's price to book ratio of 1.31 indicates that the stock might be trading at a value close to its net asset value.
Investors should note the recent price performance, with a significant uptick over the last six months, as the six-month price total return stands at 35.27%. This could be indicative of positive market sentiment around the company's operational performance and future prospects.
For those looking to delve deeper into UMBF's financials and future outlook, InvestingPro offers more tips and insights. For instance, there are additional tips indicating analysts' upward earnings revisions for the upcoming period and predictions of profitability for the year.
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