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UMB Financial to Buy Bancorp’s HSAs to Expand in Healthcare

Zacks

UMB Bank, a division of the UMB Financial Corporation UMBF, announced that it has entered into an agreement with The Bancorp Inc. TBBK to acquire a subset of the latter’s remaining health savings accounts (HSAs). Notably, the deal value was not disclosed and the transaction is awaiting regulatory approvals.

The divestiture by The Bancorp is in line with its plan to exit HSA business, the initiatives for which began in 2015. In Oct 2015, the company sold approximately 170,000 accounts totaling more than $400 million in deposits to HealthEquity for $34.4 million. Nonetheless, the company is expected to continue its partnerships with non-bank financial service companies in the healthcare sector, including maintaining and growing its card-issuing services for pre-tax benefit programs.

UMB Bank’s Rationale Behind the Acquisition

In Feb 2006, as a reaction to President Bush’s recommendation of a comprehensive agenda to make health care more affordable, portable, transparent and efficient in America, UMB Healthcare Services proposed the agenda for the expansion of HSAs.


The then president of UMB Healthcare Services, Dennis Triplett said, “The President proposed an agenda focused on making health care more affordable and accessible. These changes would also open the door to beneficial health care for a vast population who currently has difficulty accessing health care. The reforms the President outlined last night will further accelerate that momentum and eventually help the health care situation in America."

Currently, UMB Healthcare Services is one of the top HSA custodians in the country with 826,000 HSAs and $1.6 billion in HSA deposits and investment assets. Hence, with a view to maintain its goal of improving the healthcare sector in America and gain further market share, the bank inked the above-mentioned deal. Notably, the transaction is expected to add approximately 40,000 accounts with $76 million in deposits and investment assets to the bank’s portfolio.

Conclusion

UMB Financial has the experience, systems backbone, investment options and client base in bringing an integrated solution to the health care industry. Hence, this acquisition will help in maintaining the company’s ongoing commitment to its HSA business and further aid its growth and expansion.

In addition, UMB Healthcare Services is focusing on providing a seamless transition to The Bancorp’s account holders with its user-friendly technology and personalized customer services. Hence, the acquisition is anticipated to be beneficial to both account holders and business partners.

Currently, UMB Financial holds a Zacks Rank #2 (Buy) while The Bancorp carries a Zacks Rank #4 (Sell).

Stocks Worth A Look

A couple of other favorably ranked finance stocks include Apollo Global Management, LLC APO and Meta Financial Group, Inc. CASH, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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