KANSAS CITY, Mo.--(BUSINESS WIRE)--UMB Financial Corporation (Nasdaq: UMBF), a financial services company, will release earnings results for the third quarter 2025 after market hours on Tuesday, October 28, 2025. The company plans to host an investor conference call to discuss these results on Wednesday, October 29, at 8:30 a.m. (CT) / 9:30 a.m. (ET). Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 646-844-6383 and requesting to join the UMB Financi. ...

Core Insights - Bank stocks are a significant indicator of the health of the American economy, often referred to as the economy's circulatory system, facilitating capital flow across various sectors [1][4] - The article discusses the characteristics of bank stocks, their importance to investors, and how to identify the best bank stocks to buy [5][17] Group 1: Definition and Importance of Bank Stocks - Bank stocks represent companies in the banking sector and are classified under the broader category of financial stocks, which includes various financial services [7][8] - They are divided into two sub-categories: diversified banks, which have a national footprint and offer a wide range of services, and regional banks, which operate in limited geographic areas [13] Group 2: Investment Rationale - Investors are drawn to bank stocks due to their critical role in the economy, although their performance can be cyclical, reflecting economic conditions [9][10] - Banks primarily earn through the interest-rate spread, charging higher interest on loans than they pay on deposits, making economic activity a key factor in their profitability [10][11] Group 3: Characteristics of Bank Stocks - Diversified banks may offer more stability due to their varied operations, while regional banks can be more volatile but may provide better short-term opportunities for active investors [14][15] - The consolidation trend in the banking industry presents potential for growth, with over 4,600 banks in the U.S. indicating room for mergers and acquisitions [16][17] Group 4: Criteria for Selecting Bank Stocks - Ideal bank stocks should be part of the S&P Composite 1500, have a long-term EPS growth rate of at least 5%, and a trailing-12-month return on equity of at least 10% [18][19][20] - Stocks should also have at least five covering analysts and a consensus Buy rating, indicating strong market interest and positive outlook [21][22]

Group 1 - ClearBridge Investments released its second-quarter 2025 investor letter for the ClearBridge Small Cap Strategy, highlighting volatility in small-cap stocks and a 10% rebound in the Russell 2000 Index after a decline [1] - The Russell 2000 Index returned 8.5% for the quarter, underperforming the Russell 1000 Index, which returned 11.1% [1] - The strategy underperformed its benchmark during this period, indicating challenges in the small-cap sector [1] Group 2 - UMB Financial Corporation (NASDAQ:UMBF) was highlighted as a key stock, with a one-month return of 3.85% and a 14.75% increase over the last 52 weeks, closing at $120.39 per share with a market capitalization of $9.141 billion [2] - ClearBridge Small Cap Strategy actively adjusted its financial sector positioning by exiting Home BancShares for a new position in UMB Financial Corporation, citing superior quality and diversification [3] - UMB Financial Corporation was held by 28 hedge fund portfolios at the end of the second quarter, an increase from 25 in the previous quarter, although it is not among the 30 most popular stocks among hedge funds [4]

Core Insights - The article compares Associated Banc-Corp (ASB) and UMB Financial (UMBF) to determine which stock is more attractive to value investors [1] Valuation Metrics - ASB has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to UMBF, which has a Zacks Rank of 3 (Hold) [3] - ASB's forward P/E ratio is 10.19, while UMBF's forward P/E ratio is 11.80 [5] - ASB has a PEG ratio of 1.02, compared to UMBF's PEG ratio of 1.39, suggesting ASB is better positioned in terms of expected earnings growth [5] - ASB's P/B ratio is 0.96, indicating a lower market value relative to its book value, while UMBF has a P/B ratio of 1.34 [6] - Based on these valuation metrics, ASB holds a Value grade of B, while UMBF has a Value grade of D, making ASB the superior value option [6]

Core Viewpoint - UMB Financial reported strong second-quarter earnings, driven by significant growth in net interest income and the integration of Heartland Financial, despite facing challenges with asset quality and rising non-interest expenses [2][3][5]. Financial Performance - Operating earnings per share for Q2 2025 were $2.96, exceeding the Zacks Consensus Estimate of $2.35 and up from $2.16 in the previous year [2]. - Net income on a GAAP basis was $217.4 million, compared to $101.3 million in the same quarter last year [4]. - Quarterly revenues reached $689.2 million, a 73.8% increase year over year, surpassing the Zacks Consensus Estimate by 8.2% [5]. Income and Expenses - Net interest income (NII) on a fully taxable equivalent (FTE) basis was $475.3 million, an 88.9% increase from the prior year, with a net interest margin (NIM) of 3.10% compared to 2.51% [5]. - Non-interest income rose to $222.2 million, up 53.3% year over year, driven by gains in investment securities and service charges [6]. - Non-interest expenses increased to $393.2 million, a 57.8% rise year over year, primarily due to higher salaries and employee benefits from the Heartland acquisition [7]. Asset Quality - The ratio of net charge-offs to average loans was 0.17%, up from 0.05% in the prior year [10]. - Total non-accrual and restructured loans amounted to $97 million, compared to $13.7 million in the previous year [10]. - The provision for credit losses was $21 million, an increase from $14.1 million in the prior year [10]. Capital Ratios - As of June 30, 2025, the Tier 1 risk-based capital ratio was 11.24%, slightly up from 11.14% a year ago [12]. - The Tier 1 leverage ratio decreased to 8.34% from 8.50% in the prior year [12]. - The total risk-based capital ratio improved to 13.46% from 13.08% year over year [12]. Profitability Ratios - Return on average assets was 1.29%, up from 0.96% in the previous year [13]. - Operating return on average common equity was stable at 13.31%, compared to 13.30% in the prior year [13]. Outlook - For Q3 2025, operating expenses are expected to be slightly higher, in the range of $380 million to $385 million [14]. - The company anticipates a tax rate between 19% and 21% for 2025 [15]. - Estimates for the stock have been trending upward, indicating a promising outlook [16][18]. Industry Performance - UMB Financial is part of the Zacks Banks - Midwest industry, where Associated Banc-Corp reported revenues of $366.98 million, reflecting a year-over-year change of +12.7% [19]. - Associated Banc-Corp is expected to post earnings of $0.66 per share for the current quarter, indicating a change of +17.9% from the year-ago quarter [20].

PART I – FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The unaudited consolidated financial statements for UMB Financial Corporation as of June 30, 2025, reflect significant balance sheet expansion and increased net income, primarily driven by the HTLF acquisition [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheet as of June 30, 2025, reflects substantial growth, primarily from the HTLF acquisition, with total assets reaching **$71.8 billion** and shareholders' equity more than doubling Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$71,760,153** | **$50,409,664** | **42.4%** | | Net Loans | $36,418,015 | $25,383,212 | 43.5% | | Total Securities | $18,401,383 | $13,650,152 | 34.8% | | Goodwill | $1,812,694 | $207,385 | 774.1% | | **Total Liabilities** | **$64,474,388** | **$46,943,123** | **37.3%** | | Total Deposits | $59,987,009 | $43,142,029 | 39.1% | | **Total Shareholders' Equity** | **$7,285,765** | **$3,466,541** | **110.2%** | [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Net income for Q2 2025 more than doubled to **$217.4 million**, driven by a **90.5%** increase in net interest income, while year-to-date net income rose **41.2%** to **$298.7 million** despite a higher provision for credit losses Income Statement Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $467,024 | $245,108 | $864,663 | $484,542 | | Provision for Credit Losses | $21,000 | $14,050 | $107,000 | $24,050 | | Noninterest Income | $222,185 | $144,919 | $388,383 | $304,163 | | Noninterest Expense | $393,168 | $249,067 | $777,955 | $503,871 | | **Net Income** | **$217,394** | **$101,345** | **$298,727** | **$211,603** | | **Diluted EPS** | **$2.82** | **$2.07** | **$4.16** | **$4.32** | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Comprehensive income for Q2 2025 significantly increased to **$268.0 million**, driven by higher net income and a positive swing in other comprehensive income from unrealized gains on debt securities Comprehensive Income (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $217,394 | $101,345 | $298,727 | $211,603 | | Other Comprehensive Income (Loss) | $50,651 | $(11,096) | $131,003 | $(48,699) | | **Comprehensive Income** | **$268,045** | **$90,249** | **$429,730** | **$162,904** | [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS%27%20EQUITY) Total shareholders' equity nearly doubled to **$7.3 billion** by June 30, 2025, primarily due to **$2.9 billion** in stock issued for the HTLF acquisition, alongside net income and positive comprehensive income - Shareholders' equity grew to **$7.3 billion** at June 30, 2025, up from **$3.5 billion** at the beginning of the year[18](index=18&type=chunk) - The company issued common stock valued at **$2.76 billion** and preferred stock valued at **$110.7 million** as part of the HTLF acquisition[18](index=18&type=chunk) - Total comprehensive income for the first six months of 2025 was **$429.7 million**[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash and cash equivalents increased by **$2.5 billion** for the first half of 2025, driven by **$3.2 billion** in financing activities, largely from deposit growth and stock issuances for the HTLF acquisition Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $648,407 | $168,510 | | Net Cash from Investing Activities | $(1,334,676) | $(955,744) | | Net Cash from Financing Activities | $3,233,467 | $275,114 | | **Net Change in Cash** | **$2,547,198** | **$(512,120)** | - Non-cash financing and investing activities included the issuance of **$2.78 billion** in common stock and **$115.2 million** in preferred stock as consideration for the HTLF acquisition[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail accounting policies and financial components, including the HTLF business combination, loan portfolio, securities, goodwill, and segment performance [Note 4. Loans and Allowance for Credit Losses](index=14&type=section&id=Note%204.%20Loans%20and%20Allowance%20for%20Credit%20Losses) The total loan portfolio expanded to **$36.8 billion**, largely due to **$9.7 billion** in HTLF acquired loans, with nonaccrual loans and the allowance for credit losses also increasing significantly Loan Portfolio Composition (in thousands) | Loan Class | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Commercial and industrial | $14,565,693 | $10,901,502 | | Commercial real estate | $16,184,979 | $10,131,285 | | Consumer real estate | $4,293,263 | $3,187,130 | | Credit cards | $687,361 | $578,766 | | Other | $742,849 | $828,618 | | **Total Loans** | **$36,807,933** | **$25,642,301** | Allowance for Credit Losses Rollforward - YTD 2025 (in thousands) | Description | Amount | | :--- | :--- | | Beginning Balance (Jan 1, 2025) | $259,089 | | PCD ACL at Acquisition | $77,293 | | Provision for Credit Losses | $104,870 | | Net Charge-offs | $(51,334) | | **Ending Balance (June 30, 2025)** | **$389,918** | - Nonaccrual loans increased significantly to **$97.0 million** at June 30, 2025, from **$19.3 million** at December 31, 2024, primarily due to the HTLF acquisition[52](index=52&type=chunk) [Note 5. Securities](index=37&type=section&id=Note%205.%20Securities) Total securities grew to **$18.4 billion**, with the HTLF acquisition adding **$3.5 billion**, and both AFS and HTM portfolios showing significant unrealized losses primarily due to interest rate changes Securities Portfolio Summary (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Available for sale (Fair Value) | $12,162,688 | $7,774,334 | | Held to maturity (Net Carrying Amount) | $5,495,182 | $5,376,267 | | Trading securities | $24,698 | $28,533 | | Other securities | $718,815 | $471,018 | | **Total Securities** | **$18,401,383** | **$13,650,152** | - The AFS portfolio had net unrealized pre-tax losses of **$514.2 million** as of June 30, 2025, an improvement from **$633.3 million** at year-end 2024[116](index=116&type=chunk)[326](index=326&type=chunk) - The HTM portfolio included a net unamortized unrealized loss of **$155.0 million** from securities transferred from AFS in 2022[127](index=127&type=chunk) [Note 6. Goodwill and Other Intangibles](index=45&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangibles) Goodwill surged to **$1.81 billion** and other intangible assets to **$531.9 million**, almost entirely due to the **$1.61 billion** increase from the HTLF acquisition Goodwill Rollforward by Segment (in thousands) | Segment | Jan 1, 2025 | HTLF Acquisition | June 30, 2025 | | :--- | :--- | :--- | :--- | | Commercial Banking | $63,113 | $963,185 | $1,026,298 | | Institutional Banking | $76,492 | $— | $76,492 | | Personal Banking | $67,780 | $642,124 | $709,904 | | **Total** | **$207,385** | **$1,605,309** | **$1,812,694** | - The HTLF acquisition resulted in the recognition of a **$474.1 million** core deposit intangible asset and **$36.9 million** in customer relationship intangibles[139](index=139&type=chunk) [Note 13. Acquisition](index=65&type=section&id=Note%2013.%20Acquisition) The company completed its **$2.9 billion** all-stock acquisition of HTLF on January 31, 2025, adding **$16.1 billion** in assets, **$9.7 billion** in loans, and recognizing **$1.6 billion** in goodwill - UMB acquired HTLF on January 31, 2025, in an all-stock transaction valued at **$2.9 billion**[220](index=220&type=chunk)[221](index=221&type=chunk) Summary of Net Assets Acquired (in thousands) | Description | Fair Value | | :--- | :--- | | Total assets acquired | $16,139,769 | | Total liabilities assumed | $14,825,949 | | **Net identifiable assets acquired** | **$1,313,820** | | Preliminary goodwill | $1,605,309 | | **Net assets acquired** | **$2,919,129** | - Of the **$9.7 billion** in loans acquired, **$3.0 billion** were classified as Purchased Credit Deteriorated (PCD) loans[233](index=233&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes significant growth in assets, loans, deposits, and earnings to the HTLF acquisition, with net interest income and margin expanding, noninterest income increasing, and noninterest expense rising due to expanded operations - The acquisition of HTLF is the primary driver of significant changes in financial results for the first six months of 2025, adding approximately **$16.1 billion** in assets, **$9.7 billion** in net loans, and **$14.3 billion** in deposits[247](index=247&type=chunk) - For Q2 2025, net income available to common shareholders was **$215.4 million**, or **$2.82** per diluted share, compared to **$101.3 million**, or **$2.07** per diluted share, in Q2 2024[254](index=254&type=chunk) - The company's four core financial objectives are: improving operating efficiencies, increasing net interest income, growing noninterest revenue, and effective capital management[248](index=248&type=chunk) [Net Interest Income](index=75&type=section&id=Net%20Interest%20Income) Net interest income for Q2 2025 increased **90.5%** to **$467.0 million**, with the net interest margin expanding **59 basis points** to **3.10%**, primarily due to the HTLF acquisition and favorable balance sheet mix Net Interest Margin Analysis | Metric | Q2 2025 | Q2 2024 | Change (bps) | | :--- | :--- | :--- | :--- | | Tax-equivalent yield on earning assets | 5.61% | 5.44% | +17 bps | | Cost of interest-bearing liabilities | 3.44% | 4.15% | -71 bps | | **Net interest spread** | **2.17%** | **1.29%** | **+88 bps** | | **Net interest margin** | **3.10%** | **2.51%** | **+59 bps** | - The increase in net interest income was driven by a **$21.2 billion (52.7%)** increase in average earning assets compared to Q2 2024[256](index=256&type=chunk) [Provision and Allowance for Credit Losses](index=78&type=section&id=Provision%20and%20Allowance%20for%20Credit%20Losses) The provision for credit losses significantly increased to **$107.0 million** for H1 2025, including a **$62.0 million** provision for acquired non-PCD loans from HTLF, with net charge-offs also rising Credit Quality Ratios | Ratio | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | ACL on loans to total loans | 1.06% | 0.99% | | Net charge-offs to average loans (YTD) | 0.30% | 0.05% | | Nonperforming loans to total loans | 0.26% | 0.06% | - The six-month provision for credit losses of **$107.0 million** included **$62.0 million** related to establishing an allowance for acquired non-PCD loans from the HTLF transaction[276](index=276&type=chunk) [Noninterest Income](index=81&type=section&id=Noninterest%20Income) Noninterest income for Q2 2025 increased **53.3%** to **$222.2 million**, driven by broad-based growth from the HTLF acquisition and a significant **$39.6 million** increase in investment securities gains Noninterest Income Components - Q2 2025 vs Q2 2024 (in thousands) | Category | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trust and securities processing | $83,263 | $70,010 | $13,253 | 18.9% | | Service charges on deposits | $28,865 | $22,261 | $6,604 | 29.7% | | Bankcard fees | $29,018 | $22,346 | $6,672 | 29.9% | | Investment securities gains (losses), net | $37,685 | $(1,867) | $39,552 | 2,118.5% | | **Total Noninterest Income** | **$222,185** | **$144,919** | **$77,266** | **53.3%** | - Investment securities gains were driven by a **$29.4 million** pre-tax gain on the Voyager Technologies, Inc. investment and **$8.2 million** in gains from sales of non-marketable investments[287](index=287&type=chunk)[251](index=251&type=chunk) [Noninterest Expense](index=84&type=section&id=Noninterest%20Expense) Noninterest expense for Q2 2025 rose **57.9%** to **$393.2 million**, primarily due to increased salaries and benefits from the HTLF acquisition and higher amortization of intangible assets Noninterest Expense Components - Q2 2025 vs Q2 2024 (in thousands) | Category | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $213,551 | $142,861 | $70,690 | 49.5% | | Processing fees | $43,638 | $29,701 | $13,937 | 46.9% | | Amortization of other intangible assets | $25,268 | $1,911 | $23,357 | 1,222.2% | | **Total Noninterest Expense** | **$393,168** | **$249,067** | **$144,101** | **57.9%** | - For the first six months of 2025, noninterest expense included **$66.7 million** in acquisition-related costs and **$39.0 million** in intangible amortization related to the HTLF acquisition[291](index=291&type=chunk) [Balance Sheet Analysis](index=88&type=section&id=Balance%20Sheet%20Analysis) Total assets grew **42.4%** to **$71.8 billion**, and total deposits increased **39.0%** to **$60.0 billion**, primarily driven by the HTLF acquisition's **$16.1 billion** asset contribution - The HTLF acquisition was the primary driver of balance sheet growth, adding **$16.1 billion** in assets, including **$9.7 billion** in loans and **$3.7 billion** in securities[312](index=312&type=chunk) Balance Sheet Highlights (in billions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $71.8 | $50.4 | | Total Loans | $36.8 | $25.6 | | Total Deposits | $60.0 | $43.1 | [Capital and Liquidity](index=93&type=section&id=Capital%20and%20Liquidity) The company maintains strong capital, with all regulatory ratios exceeding well-capitalized standards, and robust liquidity supported by a large core deposit base and significant FHLB borrowing capacity Regulatory Capital Ratios | Ratio | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Common equity tier 1 capital ratio | 10.39% | 11.14% | | Tier 1 risk-based capital ratio | 11.24% | 11.14% | | Total risk-based capital ratio | 13.46% | 13.08% | | Leverage ratio | 8.34% | 8.50% | - Total shareholders' equity increased by **$3.8 billion** since December 31, 2024, primarily driven by the HTLF acquisition[339](index=339&type=chunk) - The company had remaining borrowing capacity with the FHLB of **$1.8 billion** and total additional liquidity of **$33.3 billion** as of June 30, 2025[342](index=342&type=chunk)[377](index=377&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=88&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages interest rate risk through NII simulation, showing a **4.1%** NII increase in a **+200 basis point** rate shock, while credit risk is managed with nonperforming loans increasing due to the HTLF acquisition Net Interest Income Sensitivity (Rate Shock Scenario) | Change in Basis Points | Year One % Change | Year Two % Change | | :--- | :--- | :--- | | +200 | 4.1% | 8.4% | | +100 | 1.3% | 3.6% | | -100 | (0.8)% | (3.5)% | | -200 | (1.5)% | (7.3)% | | -300 | (2.1)% | (11.1)% | - Nonperforming loans increased to **$97.0 million** at June 30, 2025, from **$19.3 million** at year-end 2024, with acquired HTLF loans accounting for **$69.8 million** of the new total[363](index=363&type=chunk) - The company maintains strong liquidity with primary sources including scheduled asset payments, a **$12.2 billion** AFS securities portfolio, and a stable core deposit base[368](index=368&type=chunk) [Controls and Procedures](index=93&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[383](index=383&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[384](index=384&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=94&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Management anticipates no materially adverse effect on the company's financial condition, results of operations, or cash flows from ongoing legal proceedings - In the opinion of management, ongoing legal proceedings are not expected to have a material adverse effect on the company[386](index=386&type=chunk) [Risk Factors](index=94&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to previously disclosed risk factors were reported for the current period - No material changes to risk factors were reported for the period[387](index=387&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=94&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company purchased **2,954** shares of common stock at an average price of **$98.02** for tax withholding obligations, separate from its one-million-share repurchase authorization Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 115 | $96.77 | | May 1 - May 31, 2025 | 2,309 | $97.28 | | June 1 - June 30, 2025 | 530 | $101.49 | | **Total** | **2,954** | **$98.02** | - The company has a plan to repurchase up to **one million** shares of common stock, which will terminate on April 28, 2026[391](index=391&type=chunk) [Exhibits](index=95&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files

Core Insights - UMB Financial reported strong Q2 2025 earnings, with Non-GAAP EPS at $2.96, exceeding consensus estimates of $2.37, and GAAP revenue reaching $689.2 million, surpassing estimates by $53.3 million, largely due to the acquisition of Heartland Financial USA, Inc. [1][2] Financial Performance - Non-GAAP EPS increased by 37.0% year over year from $2.16 in Q2 2024 [2] - GAAP EPS rose by 36.2% year over year from $2.07 in Q2 2024 [2] - Revenue grew by 76.7% year over year from $390.0 million in Q2 2024 [2] - Net interest income surged by 90.5% year over year to $467.0 million, up from $245.1 million in Q2 2024 [2] - Net operating income (Non-GAAP) increased by 112.9% year over year to $225.4 million from $105.9 million in Q2 2024 [2] Business Expansion and Integration - The acquisition of Heartland Financial significantly expanded UMB's branch network and deposit base, doubling its presence in new states [4] - Loans grew by 52.9% year over year to an average of $36.4 billion, while average deposits increased by 62.1% to $55.6 billion [5] Revenue Composition - Revenue growth was supported by nonrecurring investment gains, including $37.7 million in pre-tax gains from private investments, with $29.4 million from Voyager Technologies, Inc. [6] - Fee-based income grew solidly, with trust and securities processing up by 18.9% year over year and brokerage fees increasing by 46.4% year over year [6] Profitability Metrics - Net interest margin improved to 3.10% from 2.51% in the prior year, although management expects it to revert to a lower core level over time [7] - Operating efficiency ratio improved from 61.86% in Q2 2024 to 51.48% in Q2 2025, despite a 57.9% increase in GAAP noninterest expenses [8] Credit Quality - Net charge-offs were at 0.17% of average loans, with nonperforming loans at 0.26% of total loans, indicating stable credit metrics [9] Segment Performance - Commercial banking net income nearly doubled to $139.8 million from $71.7 million in Q2 2024 [10] - Institutional banking net income rose by 28% to $54.4 million [10] - Personal banking turned profitable with a net income of $23.3 million, recovering from a loss in Q2 2024 [10] Balance Sheet Strength - Total assets increased to $71.8 billion as of June 30, 2025, up 61.4% from a year earlier [11] - Book value per share (GAAP) rose to $90.68, while tangible book value per share (non-GAAP) decreased to $59.80 due to higher goodwill from the acquisition [11] Future Outlook - Management anticipates full cost and revenue synergies from the Heartland acquisition to materialize in Q4 2025 and into 2026 [12] - Core net interest margin is expected to move toward 2.75% to 2.80% as temporary effects fade [12]

Core Insights - UMB Financial Corp. reported second-quarter 2025 operating earnings per share of $2.96, exceeding the Zacks Consensus Estimate of $2.35 and up from $2.16 in the same quarter last year [1][12] - The strong performance was driven by organic growth in UMBF's operations and benefits from the acquisition of Heartland Financial USA, Inc. [2][15] Financial Performance - Net income on a GAAP basis was $217.4 million, compared to $101.3 million in the prior-year quarter [3] - Quarterly revenues reached $689.2 million, a 73.8% increase year over year, surpassing the Zacks Consensus Estimate by 8.2% [4] - Net interest income (NII) on a fully taxable equivalent (FTE) basis was $475.3 million, an 88.9% increase from the previous year, with a net interest margin (NIM) of 3.10% compared to 2.51% [5] - Non-interest income was $222.2 million, up 53.3% year over year, driven by gains in investment securities and service charges [6] Expense Analysis - Non-interest expenses totaled $393.2 million, a 57.8% increase year over year, primarily due to higher salaries and employee benefits from the Heartland acquisition [7] - The efficiency ratio improved to 53.38%, down from 63.37% in the prior-year quarter, indicating enhanced profitability [8] Asset Quality and Credit Metrics - Average loans and leases increased to $36.4 billion, up 12.7% sequentially, while average deposits rose 10.7% year over year to $55.6 billion [9] - The ratio of net charge-offs to average loans was 0.17%, up from 0.05% in the prior-year quarter, indicating a decline in credit quality [10] - Total non-accrual and restructured loans rose to $97 million from $13.7 million in the prior-year quarter, with a provision for credit losses of $21 million compared to $14.1 million previously [10] Capital Ratios - As of June 30, 2025, the Tier 1 risk-based capital ratio was 11.24%, slightly up from 11.14% a year ago, while the Tier 1 leverage ratio decreased to 8.34% from 8.50% [13] Profitability Metrics - Return on average assets improved to 1.29% from 0.96% in the prior-year quarter, while the operating return on average common equity was stable at 13.31% compared to 13.30% [14] Future Outlook - The company is expected to maintain performance momentum through continued integration of Heartland Financial and prudent risk management strategies [15]

Financial Data and Key Metrics Changes - The reported net income available for common shareholders was $215.4 million, which included $13.5 million of acquisition expenses, compared to $53.2 million in the first quarter [6] - The second quarter net operating income was $225.4 million or $2.96 per share, reflecting strong performance [6] - There was a pretax gain of $37.7 million on prior investments, including a $29.4 million gain from Voyager Technologies, resulting in a multiple on invested capital of 5.8 times and an internal rate of return of 59% [7][8] - The core net interest margin expanded by eight basis points, with average loans increasing by 12.7% to $36.4 billion and average deposits increasing by 10.7% to $55.6 billion [9] Business Line Data and Key Metrics Changes - The loan pipeline remains strong, with quarterly top line production reaching a record $1.9 billion in the second quarter, driven by growth in commercial and industrial (C&I) and commercial real estate (CRE) [10] - Average loan balances for legacy UMB increased by 15.3% on an annualized basis from the prior quarter, outpacing many peer banks [9] - Net charge-offs attributed to the legacy UMB portfolio were $9 million, or 13 basis points of average UMB loans for the quarter, with total net charge-offs at 17 basis points [11] Market Data and Key Metrics Changes - Total nonperforming loans to total loans improved by two basis points to 26 basis points, with nonperforming loans related to legacy UMB at just 10 basis points [11] - The company continues to rebuild capital with a CET1 ratio of 10.39%, a 28 basis point increase from March 31 [12] Company Strategy and Development Direction - The company is focused on leveraging its business model, which has proven effective in various economic environments, and is optimistic about future growth opportunities [5][6] - The successful pilot conversion of Heartland's Minnesota franchise onto the core UMB platform positions the company well for full conversion slated for mid-October [12] - The company anticipates achieving all targeted cost savings from the Heartland transaction, with a focus on positive operating leverage [36][47] Management's Comments on Operating Environment and Future Outlook - Management noted that borrower sentiment remains strong despite uncertainties, and they expect charge-off levels to remain near historical averages in the second half of the year [11] - The company is optimistic about the growth potential from the Heartland team, indicating that they are just beginning to see the contributions from this acquisition [90] Other Important Information - The company completed an offering of Series B preferred stock, netting $294 million of Tier one capital [12] - Charitable contributions in the quarter amounted to $8.3 million, compared to $524,000 in the first quarter [18] Q&A Session Summary Question: Can you deconstruct the loan growth and its sources? - Management indicated that the loan production number aligns with expectations, with strong contributions from both Heartland and legacy UMB, expecting similar performance in the next quarter [24][25] Question: What is the impact of HSA changes under the new budget bill? - Management noted that while there is potential for growth, it is expected to be marginal, with a focus on education for newly eligible clients [32][34] Question: How much of the $124 million cost savings have been realized? - Management reported $17 million in quarterly run rate savings so far, with more significant savings expected in the fourth quarter [45] Question: What is the outlook for deposit competition? - Management stated that they can grow commercial and institutional deposits easily, while consumer deposits are expected to grow with increased branch presence and marketing efforts [76][78] Question: What is the current state of credit quality at Heartland? - Management expressed confidence in improving nonperforming loans and charge-offs, expecting continued positive trends in the second half of the year [71][72]

Financial Data and Key Metrics Changes - The reported net income available for common shareholders was $215.4 million, which included $13.5 million of acquisition expenses, compared to $53.2 million in the first quarter [5] - The second quarter net operating income was $225.4 million or $2.96 per share, reflecting strong performance [5] - There was a pretax gain of $37.7 million on prior investments, including a $29.4 million gain from Voyager Technologies, resulting in a multiple on invested capital of 5.8 times and an internal rate of return of 59% [6] Business Line Data and Key Metrics Changes - Average loans increased by 12.7% to $36.4 billion, while average deposits increased by 10.7% to $55.6 billion, indicating solid organic growth [7] - Legacy UMB average loan balances increased by 15.3% on an annualized basis from the prior quarter, outperforming many peer banks [7] - Quarterly top line production reached a record of $1.9 billion in the second quarter, with strong growth in commercial and industrial (C&I) and commercial real estate (CRE) [9] Market Data and Key Metrics Changes - Total net charge-offs attributed to the legacy UMB portfolio were $9 million, or just 13 basis points of average UMB loans for the quarter [10] - Nonperforming loans to total loans improved by two basis points from the prior quarter to 26 basis points, with legacy UMB nonperforming loans at just 10 basis points [10] Company Strategy and Development Direction - The company is focused on leveraging its business model, which has proven effective in various economic environments, and is optimistic about future growth opportunities [4][5] - The company is actively working on integrating Heartland's operations and expects to see continued strong production from both legacy UMB and Heartland teams [22][24] - The company plans to continue aligning portfolios and expects that any resulting payoffs will not materially affect the balance sheet [28] Management's Comments on Operating Environment and Future Outlook - Management noted that borrower sentiment remains strong despite uncertainties, and they are focused on controllable factors [5] - The company expects charge-off levels to remain near or below historical averages in the second half of the year [10] - Management expressed confidence in the integration of Heartland and the potential for future growth from this acquisition [86] Other Important Information - The company completed a Series B preferred stock offering, netting $294 million of Tier one capital [11] - The CET1 ratio increased by 28 basis points to 10.39% as the company continues to rebuild capital following the acquisition [11] - The company made charitable contributions of $8.3 million in the quarter, significantly higher than $524,000 in the first quarter [16] Q&A Session Summary Question: Can you deconstruct the loan growth and its sources? - Management indicated that the loan production number aligns with expectations, with strong contributions from both Heartland and legacy UMB teams [22][24] Question: How much alignment is left to do between the two portfolios? - Management expects continued alignment without significant impact on payoff levels [28] Question: What is the impact of HSA changes under the new budget bill? - Management views it as a marginal opportunity, with a limited number of new eligible accounts [30][31] Question: What is the long-term expense growth rate post-integration? - Management indicated that they will achieve targeted cost savings from the acquisition and maintain positive operating leverage [32][33] Question: How much of the $124 million cost savings have been realized? - Management reported $17 million in quarterly savings so far, with more expected in the fourth quarter [41][42] Question: What is the outlook for deposit competition? - Management noted that they can grow commercial deposits easily but expect moderate growth in consumer deposits due to increased branch presence [72][74]