Financial Performance Highlights - Net interest income increased to $467 million in 2Q 2025, which included $29.1 million in contractual accretion income and $13.1 million from accelerated loan payoffs[54] - Noninterest income rose to $222.2 million in 2Q 2025, driven by strong fund services income, higher card purchase volume, and increased 12b-1 fees, including a $37.7 million gain on investment securities[54] - Operating PTPP (Pre-Tax, Pre-Provision) income reached $309.2 million, or $4.06 per diluted share[54] - Average total deposits grew to $55.649 billion in 2Q 2025, with average noninterest-bearing deposits (DDA) increasing by $975 million to $14.403 billion[55] - The FTE Net Interest Margin was 3.10%, which included a $42.2 million benefit from purchase accounting accretion; excluding PAA, the core NIM was 2.83%[55] Balance Sheet and Credit Quality - Average loans increased to $36.407 billion in 2Q 2025, led by C&I growth, followed by owner-occupied and investment CRE[55] - The allowance for credit losses on total loans was 1.06%[55] - Net charge-offs were 0.17% of average loans, with legacy UMB NCOs at 0.13%[55] HTLF Acquisition Impact - $42.2 million in net interest income accretion was recognized in 2Q 2025 related to the HTLF acquisition[44] - Core deposit intangible amortization related to the HTLF acquisition was $(21.6) million in 2Q 2025[45] Business Segment Performance - Commercial & Personal Banking Services revenue was $514.9 million in 2Q 2025, with average deposits of $39 billion[8] - Institutional Banking Services revenue was $174.3 million in 2Q 2025, with average deposits of $16.6 billion and $600.6 billion in AUA[10]

Core Insights - UMB Financial (UMBF) reported quarterly earnings of $2.96 per share, exceeding the Zacks Consensus Estimate of $2.35 per share, and showing an increase from $2.16 per share a year ago, resulting in an earnings surprise of +25.96% [1] - The company achieved revenues of $689.21 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.18%, and up from $396.43 million year-over-year [2] - UMB has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.38 on revenues of $646.55 million, while for the current fiscal year, the estimate is $9.75 on revenues of $2.52 billion [7] - The earnings outlook will be influenced by management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Industry Context - UMB operates within the Zacks Banks - Midwest industry, which is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The performance of UMB's stock may be affected by the overall industry trends, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Executive Summary & Highlights [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) UMB Financial Corporation achieved strong financial results in Q2 2025, with significant growth in net income, EPS, and operating income, driven by balance sheet expansion, increased fee income, improved asset quality, and enhanced operating leverage, with the Heartland acquisition contributing significantly Key Financial Highlights for Q2 2025 | Metric | Amount/Ratio | | :------------------------------------------ | :---------- | | GAAP Net Income Attributable to Common Shareholders | $215.4 million | | GAAP Diluted Earnings Per Share | $2.82 | | GAAP Net Income Year-over-Year Growth | 112.5% | | Operating Net Income Attributable to Common Shareholders (Non-GAAP) | $225.4 million | | Operating Diluted Earnings Per Share (Non-GAAP) | $2.96 | | Operating Net Income Year-over-Year Growth | 112.9% | | Operating Pre-Provision Net Revenue (Non-GAAP) | $309.2 million | | Return on Average Assets | 1.29% | | Return on Average Common Equity | 12.7% | | Efficiency Ratio | 53.4% | | Fully Taxable Equivalent Net Interest Margin | 3.10% | | Average Loans Quarter-over-Quarter Growth | 12.7% | | Average Total Loans | $36.4 billion | | Average Loans Year-over-Year Growth | 52.9% | | Net Interest Income | $467.0 million | | Net Interest Income Quarter-over-Quarter Growth | 17.4% | | Noninterest Income | $222.2 million | | Noninterest Income Quarter-over-Quarter Growth | 33.7% | | Investment Gains in Noninterest Income | $37.7 million | | Of which, Voyager Technologies, Inc. Investment Gains | $29.4 million | | Period-End Total Loans | $36.8 billion | | Average Deposits Quarter-over-Quarter Growth | 10.7% | | Average Total Deposits | $55.6 billion | | Period-End Total Deposits | $60.0 billion | | Total Assets as of June 30, 2025 | $71.8 billion | | Total Assets Year-over-Year Growth | 61.4% | | Net Charge-off Rate (bps of average loans) | 17 bps | | Nonperforming Loan Rate (bps of total loans) | 26 bps | - The company completed a public offering of Series B Non-Cumulative Perpetual Preferred Stock, raising approximately **$294.1 million** in net Tier 1 regulatory capital[3](index=3&type=chunk) - Successfully integrated the acquired Heartland Financial, USA, Inc. (HTLF) Minnesota franchise into UMB's core system, with plans to complete the conversion of the remaining HTLF franchises by October 2025[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Mariner Kemper highlighted strong Q2 financial performance, attributing it to robust growth across the balance sheet, exceptional fee income, improved asset quality metrics, and enhanced operating leverage, specifically noting the ongoing benefits from the Heartland acquisition and the successful exit of the Voyager Technologies, Inc. investment - Total revenue reached **$689.2 million** in Q2, a **22.2% quarter-over-quarter increase**, primarily driven by organic growth in UMB's legacy business and ongoing benefits from the Heartland acquisition[6](index=6&type=chunk) - Operating net income attributable to common shareholders doubled year-over-year to **$225.4 million**, representing a **33.5% quarter-over-quarter increase**[6](index=6&type=chunk) - Net interest margin expanded by **14 basis points** quarter-over-quarter to **3.10%**, primarily driven by Heartland's granular core deposit base[6](index=6&type=chunk) - Fee income primarily benefited from net growth in UMB Capital Corporation's managed investment portfolio and other private investments, including **$29.4 million** in pre-tax gains from the June IPO of Voyager Technologies, Inc[6](index=6&type=chunk) - Net charge-offs improved to **$15.5 million** in Q2, representing **17 basis points** of average loans, including **$6.5 million** in losses related to the acquired Heartland loan portfolio[6](index=6&type=chunk) - The Heartland Minnesota franchise has been successfully converted to UMB's core platform, with the remaining acquired businesses expected to complete conversion in October[6](index=6&type=chunk) Financial Performance Overview [Summary of Quarterly Financial Results](index=3&type=section&id=Summary%20of%20Quarterly%20Financial%20Results) This section presents key GAAP and non-GAAP financial metrics for Q2 2025, Q1 2025, and Q2 2024, highlighting significant improvements in net income, operating income, and efficiency ratios Summary of Quarterly Financial Results (Thousands of Dollars, except per share data and percentages) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------------ | :------------- | :------------- | :------------- | | Net Income (GAAP) | $217,394 | $81,333 | $101,345 | | Net Income Attributable to Common Shareholders (GAAP) | $215,382 | $79,320 | $101,345 | | Diluted Earnings Per Share (GAAP) | $2.82 | $1.21 | $2.07 | | Operating Pre-Provision Net Revenue (Non-GAAP) | $309,182 | $233,293 | $146,840 | | Operating Net Income Attributable to Common Shareholders (Non-GAAP) | $225,379 | $168,878 | $105,873 | | Return on Average Assets (GAAP) | 1.29% | 0.54% | 0.96% | | Return on Average Common Equity (GAAP) | 12.72% | 5.86% | 12.73% | | Efficiency Ratio (GAAP) | 53.38% | 65.19% | 63.37% | | Operating Return on Average Assets (Non-GAAP) | 1.35% | 1.14% | 1.00% | | Operating Return on Average Common Equity (Non-GAAP) | 13.31% | 12.47% | 13.30% | | Operating Efficiency Ratio (Non-GAAP) | 51.48% | 55.56% | 61.86% | [Summary of Year-to-Date Financial Results](index=4&type=section&id=Summary%20of%20Year-to-Date%20Financial%20Results) This section provides a summary of year-to-date financial performance for 2025 and 2024, showing growth in net income and operating income, a slight decrease in GAAP EPS and ROAA, and improvements in non-GAAP operating metrics Summary of Year-to-Date Financial Results (Thousands of Dollars, except per share data and percentages) | Metric | H1 2025 | H1 2024 | | :-------------------------------------------------- | :------------------------- | :------------------------- | | Net Income (GAAP) | $298,727 | $211,603 | | Net Income Attributable to Common Shareholders (GAAP) | $294,702 | $211,603 | | Diluted Earnings Per Share (GAAP) | $4.16 | $4.32 | | Operating Pre-Provision Net Revenue (Non-GAAP) | $542,475 | $304,291 | | Operating Net Income Attributable to Common Shareholders (Non-GAAP) | $394,257 | $226,585 | | Return on Average Assets (GAAP) | 0.94% | 1.01% | | Return on Average Common Equity (GAAP) | 9.67% | 13.41% | | Efficiency Ratio (GAAP) | 58.69% | 63.41% | | Operating Return on Average Assets (Non-GAAP) | 1.25% | 1.08% | | Operating Return on Average Common Equity (Non-GAAP) | 12.94% | 14.36% | | Operating Efficiency Ratio (Non-GAAP) | 53.31% | 60.94% | [Summary of Revenue](index=4&type=section&id=Summary%20of%20Revenue) Total revenue significantly increased quarter-over-quarter and year-over-year, driven by substantial growth in net interest income and noninterest income, particularly from investment securities gains Summary of Revenue (Thousands of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :---------------------------------- | :------------- | :------------- | :------------- | :--------- | :--------- | | Net Interest Income | $467,024 | $397,639 | $245,108 | $69,385 | $221,916 | | Noninterest Income: | | | | | | | Trust and Securities Processing | $83,263 | $79,781 | $70,010 | $3,482 | $13,253 | | Trading and Investment Banking | $6,170 | $5,911 | $5,461 | $259 | $709 | | Deposit Account Service Charges | $28,865 | $27,457 | $22,261 | $1,408 | $6,604 | | Insurance Premiums and Commissions | $189 | $178 | $267 | $11 | $(78) | | Brokerage Fees | $20,525 | $18,102 | $14,020 | $2,423 | $6,505 | | Bank Card Fees | $29,018 | $26,293 | $22,346 | $2,725 | $6,672 | | Investment Securities Gains (Losses), Net | $37,685 | $(4,782) | $(1,867) | $42,467 | $39,552 | | Other | $16,470 | $13,258 | $12,421 | $3,212 | $4,049 | | **Total Noninterest Income** | **$222,185** | **$166,198** | **$144,919** | **$55,987** | **$77,266** | | **Total Revenue** | **$689,209** | **$563,837** | **$390,027** | **$125,372** | **$299,182** | | Fully Taxable Equivalent Net Interest Income | $475,315 | $405,144 | $251,515 | | | | Fully Taxable Equivalent Net Interest Margin | 3.10% | 2.96% | 2.51% | | | | Noninterest Income as a Percentage of Total Revenue | 32.2% | 29.5% | 37.2% | | | Detailed Financial Analysis [Net Interest Income](index=4&type=section&id=Net%20Interest%20Income) Net interest income saw significant quarter-over-quarter and year-over-year growth in Q2 2025, driven by organic average loan growth, benefits from the Heartland acquisition (including favorable purchase accounting amortization), and an expanded net interest margin - Net interest income totaled **$467.0 million** in Q2 2025, an increase of **$69.4 million** or **17.4%** from the prior quarter[10](index=10&type=chunk) - Growth was primarily driven by continued organic growth in average loans and an additional month of benefit from the Heartland franchise acquisition, including favorable purchase accounting amortization, partially offset by increased interest expense due to strong deposit growth[10](index=10&type=chunk)[11](index=11&type=chunk) - The net interest margin for Q2 was **3.10%**, an increase of **14 basis points** from the prior quarter, mainly due to higher yields on loans and securities, largely attributable to the net impact of purchase accounting amortization income on acquired Heartland assets and liabilities, and changes in the earning asset mix[13](index=13&type=chunk) - Average loan yields increased by **13 basis points** quarter-over-quarter, and total earning asset yields increased by **17 basis points** quarter-over-quarter; total cost of funds increased by **2 basis points** quarter-over-quarter to **2.60%**[13](index=13&type=chunk) - Compared to the prior year, net interest income increased by **$221.9 million**, or **90.5%**, driven by a **$21.2 billion (52.7%)** increase in average earning assets, primarily due to rate and mix changes related to the Heartland acquisition[13](index=13&type=chunk) [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income experienced substantial quarter-over-quarter and year-over-year growth in Q2 2025, primarily driven by significant investment securities gains (especially from the Voyager Technologies, Inc. IPO), alongside increases in trust and securities processing, bank card, and brokerage fees - Noninterest income increased by **$56.0 million**, or **33.7%**, quarter-over-quarter in Q2 2025[13](index=13&type=chunk) - Key drivers of the quarter-over-quarter increase included: **$42.5 million** in investment securities gains (of which **$29.4 million** was a pre-tax gain from the Voyager Technologies, Inc. IPO and **$8.2 million** from the sale of two non-marketable investments); **$3.5 million** in trust and securities processing income; **$2.7 million** in bank card income; and **$2.4 million** in brokerage income[13](index=13&type=chunk) - Compared to the prior year, noninterest income increased by **$77.3 million**, or **53.3%**, in Q2 2025[17](index=17&type=chunk) - Key drivers of the year-over-year increase included: **$39.6 million** in investment securities gains (primarily from Voyager Technologies, Inc. investment gains and non-marketable investment sales); **$13.3 million** in trust and securities processing income; **$6.7 million** in bank card income; **$6.5 million** in brokerage income; and **$6.6 million** in deposit account service charges (driven by the HTLF acquisition and increased corporate service fees)[17](index=17&type=chunk) [Noninterest Expense](index=6&type=section&id=Noninterest%20Expense) GAAP noninterest expense increased quarter-over-quarter and year-over-year in Q2 2025, primarily due to the Heartland acquisition impacting salaries, intangible asset amortization, processing fees, and regulatory fees, though acquisition-related non-recurring costs decreased quarter-over-quarter - GAAP noninterest expense was **$393.2 million** in Q2 2025, an increase of **$8.4 million (2.2%)** quarter-over-quarter and **$144.1 million (57.9%)** year-over-year[16](index=16&type=chunk) - Q2 expenses included **$13.5 million** in acquisition-related and other non-recurring costs, down from **$53.2 million** in Q1[16](index=16&type=chunk)[22](index=22&type=chunk) - Key drivers of the quarter-over-quarter increase included: **$16.8 million** in salaries and wages (due to a full quarter of HTLF acquired employees); **$7.8 million** in intangible asset amortization; **$7.7 million** in charitable contributions; **$3.3 million** in marketing and business development; **$2.8 million** in processing fees; **$2.5 million** in occupancy expense; **$1.6 million** in supplies and services; and **$1.0 million** in regulatory fees[18](index=18&type=chunk) - The quarter-over-quarter increase was partially offset by: **$19.0 million** decrease in incentive and commission expense; **$8.3 million** decrease in payroll taxes and 401(k) expense (due to Q1 severance, retention, and change-in-control payments for HTLF employees); and **$10.1 million** decrease in legal and consulting expense (due to significant acquisition-related expenses in Q1)[18](index=18&type=chunk) - Key drivers of the year-over-year increase included: **$70.7 million** in salaries and employee benefits (due to additional employees from the HTLF acquisition); **$23.4 million** in intangible asset amortization; **$13.9 million** in processing fees; and **$11.6 million** in other expenses (primarily due to increased charitable contributions and operating losses)[18](index=18&type=chunk) [Income Taxes](index=8&type=section&id=Income%20Taxes) The company maintained a stable effective tax rate for the first half of 2025 compared to the same period in 2024 - The company's effective tax rate for the six months ended June 30, 2025, was **18.8%**, compared to **18.9%** for the same period in 2024[19](index=19&type=chunk) Balance Sheet and Capital [Balance Sheet Overview](index=8&type=section&id=Balance%20Sheet%20Overview) The company's average total assets significantly increased quarter-over-quarter and year-over-year in Q2 2025, reflecting the combined impact of the Heartland acquisition and organic growth - Average total assets for Q2 2025 were **$66.9 billion**, up from **$60.0 billion** in the prior quarter and **$42.5 billion** in the same period of 2024[20](index=20&type=chunk) [Average Loans and Leases](index=8&type=section&id=Average%20Loans%20and%20Leases) Average loans and leases showed strong quarter-over-quarter and year-over-year growth in Q2 2025, driven by organic momentum in UMB's legacy business and balances from the Heartland acquisition, with commercial real estate and commercial and industrial loans being the largest growth categories Summary of Average Loans and Leases (Thousands of Dollars) | Loan Category | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------- | :------------- | :------------- | :------------- | :--------- | :--------- | | Commercial and Industrial | $14,213,008 | $12,761,998 | $9,926,855 | $1,451,010 | $4,286,153 | | Professional Loans | $561,669 | $522,583 | $502,646 | $39,086 | $59,023 | | Commercial Real Estate | $16,163,813 | $14,074,863 | $9,360,991 | $2,088,950 | $6,802,822 | | Consumer Real Estate | $4,255,571 | $3,819,602 | $2,998,560 | $435,969 | $1,257,011 | | Consumer | $295,118 | $264,467 | $159,743 | $30,651 | $135,375 | | Credit Card | $754,601 | $689,645 | $617,502 | $64,956 | $137,099 | | Leases and Other | $162,973 | $176,539 | $239,532 | $(13,566) | $(76,559) | | **Total Loans** | **$36,406,753** | **$32,309,697** | **$23,805,829** | **$4,097,056** | **$12,600,924** | - Average loans increased by **$4.1 billion (12.7%)** quarter-over-quarter and **$12.6 billion (52.9%)** year-over-year in Q2 2025[21](index=21&type=chunk) - These increases reflect continued organic growth momentum in UMB's legacy business and the impact of acquired HTLF balances[21](index=21&type=chunk) [Average Securities](index=9&type=section&id=Average%20Securities) Total average securities significantly increased quarter-over-quarter and year-over-year in Q2 2025, with the largest increases in available-for-sale securities, particularly mortgage-backed securities and U.S. Treasury securities Summary of Average Securities (Thousands of Dollars) | Security Type | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------------- | :------------- | :------------- | :------------- | :--------- | :--------- | | Available-for-Sale Securities: | | | | | | | U.S. Treasury | $1,806,041 | $1,397,844 | $900,348 | $408,197 | $905,693 | | U.S. Agency | $85,969 | $133,852 | $210,151 | $(47,883) | $(124,182) | | Mortgage-Backed Securities | $6,285,195 | $5,303,047 | $3,667,289 | $982,148 | $2,617,906 | | State and Local Government | $2,403,741 | $2,084,441 | $1,213,000 | $319,300 | $1,190,741 | | Corporate Debt | $271,915 | $317,378 | $323,751 | $(45,463) | $(51,836) | | Mortgage Debt | $553,844 | $398,418 | $336,273 | $155,426 | $217,571 | | **Total Available-for-Sale Securities** | **$11,406,705** | **$9,634,980** | **$6,650,812** | **$1,771,725** | **$4,755,893** | | Held-to-Maturity Securities: | | | | | | | U.S. Agency | $49,643 | $112,547 | $120,563 | $(62,904) | $(70,920) | | Mortgage-Backed Securities | $2,439,844 | $2,492,446 | $2,656,096 | $(52,602) | $(216,252) | | State and Local Government | $3,108,030 | $3,022,878 | $2,798,371 | $85,152 | $309,659 | | **Total Held-to-Maturity Securities** | **$5,597,517** | **$5,627,871** | **$5,575,030** | **$(30,354)** | **$22,487** | | Trading Securities | $16,693 | $20,863 | $26,381 | $(4,170) | $(9,688) | | Other Securities | $679,212 | $586,866 | $448,015 | $92,346 | $231,197 | | **Total Securities** | **$17,700,127** | **$15,870,580** | **$12,700,238** | **$1,829,547** | **$4,999,889** | - Total average securities increased by **11.5%** quarter-over-quarter and **39.4%** year-over-year[23](index=23&type=chunk) [Average Deposits](index=9&type=section&id=Average%20Deposits) Average deposits showed strong quarter-over-quarter and year-over-year growth in Q2 2025, driven by organic momentum in UMB's legacy business and balances from the Heartland acquisition, with interest-bearing demand and savings deposits showing the largest increases Summary of Average Deposits (Thousands of Dollars) | Deposit Type | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------------- | :------------- | :------------- | :------------- | :--------- | :--------- | | Noninterest-Bearing Demand Deposits | $14,403,211 | $13,428,205 | $10,103,035 | $975,006 | $4,300,176 | | Interest-Bearing Demand and Savings Deposits | $37,958,601 | $33,991,906 | $21,914,116 | $3,966,695 | $16,044,485 | | Time Deposits | $3,287,556 | $2,864,408 | $2,323,610 | $423,148 | $963,946 | | **Total Deposits** | **$55,649,368** | **$50,284,519** | **$34,340,761** | **$5,364,849** | **$21,308,607** | | Noninterest-Bearing Deposits as a Percentage of Total Deposits | 25.9% | 26.7% | 29.4% | | | - Average deposits increased by **10.7%** quarter-over-quarter and **62.1%** year-over-year[24](index=24&type=chunk) - These increases reflect continued organic growth momentum in UMB's legacy business and the impact of acquired HTLF balances[24](index=24&type=chunk) [Capital](index=9&type=section&id=Capital) UMB Financial Corporation maintained strong regulatory capital ratios, exceeding all 'well-capitalized' thresholds, enhanced Tier 1 capital through a Series B preferred stock offering, and announced the redemption of Series A preferred stock Capital Information (Thousands of Dollars, except per share data and percentages) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------- | :------------- | :------------- | | Total Equity | $7,285,765 | $6,748,434 | $3,227,347 | | Total Common Equity | $6,885,023 | $6,637,730 | $3,227,347 | | Book Value Per Share | $90.68 | $87.43 | $66.21 | | Tangible Book Value Per Share (Non-GAAP) | $59.80 | $56.40 | $60.58 | | Regulatory Capital: | | | | | Common Equity Tier 1 Capital | $4,974,093 | $4,767,403 | $3,591,755 | | Tier 1 Capital | $5,378,860 | $4,878,108 | $3,591,755 | | Total Capital | $6,438,598 | $5,914,197 | $4,214,712 | | Regulatory Capital Ratios: | | | | | Common Equity Tier 1 Ratio | 10.39% | 10.11% | 11.14% | | Tier 1 Risk-Based Capital Ratio | 11.24% | 10.35% | 11.14% | | Total Risk-Based Capital Ratio | 13.46% | 12.54% | 13.08% | | Tier 1 Leverage Ratio | 8.34% | 8.47% | 8.50% | - As of June 30, 2025, all regulatory capital ratios exceeded the 'well-capitalized' regulatory thresholds[27](index=27&type=chunk) - The public offering of Series B Non-Cumulative Perpetual Preferred Stock was completed in Q2, raising approximately **$294.1 million** in net Tier 1 regulatory capital[3](index=3&type=chunk)[27](index=27&type=chunk) - In June 2025, the company announced the redemption of **$115.0 million** of Series A Non-Cumulative Perpetual Preferred Stock, which was completed in mid-July 2025[27](index=27&type=chunk) Asset Quality [Credit Quality Metrics](index=10&type=section&id=Credit%20Quality%20Metrics) Credit quality improved in Q2 2025, with net charge-offs significantly decreasing quarter-over-quarter (though increasing year-over-year) and nonperforming loans also improving, while the provision for credit losses decreased quarter-over-quarter as Day 1 provision for Heartland loans was no longer included Summary of Credit Quality (Thousands of Dollars, except percentages and basis points) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :-------------------------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | Net Charge-offs - Total Loans | $15,462 | $35,872 | $8,935 | $8,454 | $2,856 | | Net Loan Charge-offs as a Percentage of Average Loans | 0.17% | 0.45% | 0.14% | 0.14% | 0.05% | | Loans 90 Days or More Past Due | $6,813 | $6,346 | $7,602 | $7,133 | $5,644 | | Loans 90 Days or More Past Due as a Percentage of Total Loans | 0.02% | 0.02% | 0.03% | 0.03% | 0.02% | | Nonaccrual and Restructured Loans | $97,029 | $100,885 | $19,282 | $19,291 | $13,743 | | Nonaccrual and Restructured Loans as a Percentage of Total Loans | 0.26% | 0.28% | 0.08% | 0.08% | 0.06% | | Provision for Credit Losses | $21,000 | $86,000 | $19,000 | $18,000 | $14,050 | - Net charge-offs totaled **$15.5 million (0.17%** of average loans) in Q2, down from **$35.9 million (0.45%** of average loans) in the prior quarter[28](index=28&type=chunk) - Approximately **$6.5 million** of net charge-offs in Q2 2025 were related to acquired Heartland loans, compared to **$29.7 million** in Q1 2025[28](index=28&type=chunk) - The provision for credit losses decreased by **$65.0 million** quarter-over-quarter, as Q1 2025 included **$62.0 million** in Day 1 provision expense to establish the allowance for credit losses on acquired HTLF loans[26](index=26&type=chunk) Corporate Actions and Information [Dividend Declaration](index=11&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of $0.40 per share on common stock and a dividend of $264.79 per share ($0.66 per depositary share) on Series B 7.75% Preferred Stock - A quarterly cash dividend of **$0.40 per share** on common stock will be paid on October 1, 2025, to common shareholders of record at the close of business on September 10, 2025[29](index=29&type=chunk) - A dividend of **$264.79 per share ($0.66 per depositary share)** on Series B 7.75% Preferred Stock will be paid on October 15, 2025, to preferred shareholders of record at the close of business on September 30, 2025[29](index=29&type=chunk) [Conference Call Details](index=11&type=section&id=Conference%20Call%20Details) UMB Financial Corporation will host a conference call on July 30, 2025, to discuss Q2 2025 earnings results, with replay options available - The company will host a conference call on Wednesday, July 30, 2025, at 8:30 a.m. (Central Time) to discuss Q2 2025 earnings results[30](index=30&type=chunk) - Toll-free and international dial-in numbers and access codes are provided, and investors can also access the live webcast and replay via the company's investor relations website or a designated link[30](index=30&type=chunk) [Non-GAAP Financial Information](index=11&type=section&id=Non-GAAP%20Financial%20Information) This report provides several non-GAAP financial measures, such as operating net income, operating EPS, operating ROACE, operating ROAA, operating noninterest expense, operating efficiency ratio, operating pre-provision net revenue, and tangible book value per share, which supplement GAAP results by adjusting for items related to acquisitions, severance, and FDIC special assessments that management believes do not reflect the company's core operating performance - Non-GAAP financial measures provided in this press release include: operating net income attributable to common shareholders, operating diluted earnings per share, operating return on average common equity, operating return on average assets, operating noninterest expense, operating efficiency ratio, operating pre-provision net revenue, operating diluted pre-provision net revenue per share, fully taxable equivalent operating pre-provision net revenue, fully taxable equivalent operating diluted pre-provision net revenue per share, tangible common shareholders' equity, and tangible book value per share[31](index=31&type=chunk) - These non-GAAP measures supplement GAAP results by adjusting for items related to acquisitions and severance, as well as FDIC special assessments, which management believes do not reflect the company's core operating performance[31](index=31&type=chunk) - The report details the calculation methods for each non-GAAP financial measure, explaining how they are adjusted from the most comparable GAAP measures[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to various assumptions, risks, and uncertainties, including macroeconomic conditions, inflation, and geopolitical instability, with no commitment to update these statements unless required by applicable securities laws - This press release contains forward-looking statements that are not strictly based on historical or current facts and are subject to assumptions, risks, and uncertainties, many of which are beyond the company's control[38](index=38&type=chunk) - Factors that could cause actual results to differ from forward-looking statements include: macroeconomic and adverse developments, collateral effects of domestic and international bank failures and challenges, sustained levels of high inflation, the possibility of a recession following aggressive quantitative tightening by the Federal Reserve, and broader impacts from military actions in the Middle East and Russia[38](index=38&type=chunk) - The company does not undertake any obligation to update any forward-looking statements, except as required by applicable securities laws[38](index=38&type=chunk) [About UMB Financial Corporation](index=12&type=section&id=About%20UMB%20Financial%20Corporation) UMB Financial Corporation is a Kansas City, Missouri-based financial services company offering commercial, personal, and institutional banking services across multiple U.S. states, serving national commercial clients and global institutional clients - UMB Financial Corporation (NASDAQ: UMBF) is a financial services company headquartered in Kansas City, Missouri[40](index=40&type=chunk) - The company offers commercial banking (including comprehensive deposit, lending, investment, and retirement plan services), personal banking (including comprehensive deposit, lending, wealth management, and financial planning services), and institutional banking (including asset servicing, corporate trust solutions, investment banking, and healthcare services)[40](index=40&type=chunk) - UMB has branches in Missouri, Arizona, California, Colorado, Iowa, Kansas, Illinois, Minnesota, Nebraska, New Mexico, Oklahoma, Texas, and Wisconsin, serving commercial clients nationwide and institutional clients in various countries globally[40](index=40&type=chunk) Consolidated Financial Statements [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show significant year-over-year growth in total assets, loans, and deposits as of June 30, 2025, reflecting the substantial impact of the Heartland acquisition, with shareholders' equity also increasing considerably Summary of Consolidated Balance Sheets (Thousands of Dollars) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------- | :------------- | | **Assets** | | | | Loans | $36,807,933 | $24,197,462 | | Allowance for Loan Credit Losses | $(389,918) | $(239,167) | | Net Loans | $36,418,015 | $23,958,295 | | Total Securities | $18,401,383 | $13,130,638 | | Federal Funds Sold and Agreements to Resell | $737,191 | $247,462 | | Interest-Bearing Deposits in Banks | $10,026,186 | $4,640,418 | | Cash and Due from Banks | $1,087,696 | $464,719 | | Goodwill | $1,812,694 | $207,385 | | Other Intangible Assets, Net | $531,918 | $67,141 | | **Total Assets** | **$71,760,153** | **$44,469,414** | | **Liabilities** | | | | Total Deposits | $59,987,009 | $36,517,570 | | Federal Funds Purchased and Agreements to Repurchase | $2,932,606 | $2,217,033 | | Short-Term Borrowings | — | $1,300,000 | | Long-Term Debt | $657,324 | $384,245 | | **Total Liabilities** | **$64,474,388** | **$41,242,067** | | **Shareholders' Equity** | | | | Series B Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock | $294,062 | — | | Common Stock | $78,666 | $55,057 | | Capital Surplus | $4,000,973 | $1,132,301 | | Retained Earnings | $3,409,706 | $2,984,152 | | Accumulated Other Comprehensive Loss, Net | $(442,047) | $(605,634) | | Treasury Stock | $(166,300) | $(338,529) | | **Total Shareholders' Equity** | **$7,285,765** | **$3,227,347** | | **Total Liabilities and Shareholders' Equity** | **$71,760,153** | **$44,469,414** | [Consolidated Statements of Income](index=15&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statements of income show strong growth in both net interest income and noninterest income for the three and six months ended June 30, 2025, compared to the same period in 2024, leading to a significant increase in net income attributable to common shareholders Summary of Consolidated Statements of Income (Thousands of Dollars, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Interest Income | $850,537 | $538,282 | $1,588,507 | $1,058,347 | | Total Interest Expense | $383,513 | $293,174 | $723,844 | $573,805 | | Net Interest Income | $467,024 | $245,108 | $864,663 | $484,542 | | Provision for Credit Losses | $21,000 | $14,050 | $107,000 | $24,050 | | Total Noninterest Income | $222,185 | $144,919 | $388,383 | $304,163 | | Total Noninterest Expense | $393,168 | $249,067 | $777,955 | $503,871 | | Net Income Attributable to Common Shareholders | $215,382 | $101,345 | $294,702 | $211,603 | | Diluted Net Income Per Share | $2.82 | $2.07 | $4.16 | $4.32 | [Consolidated Statements of Comprehensive Income](index=16&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The consolidated statements of comprehensive income show significant growth in comprehensive income for the three and six months ended June 30, 2025, compared to the same period in 2024, primarily driven by increased net income and positive changes in unrealized gains/losses on debt securities Summary of Consolidated Statements of Comprehensive Income (Thousands of Dollars) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income | $217,394 | $101,345 | $298,727 | $211,603 | | Other Comprehensive Income (Loss), Pre-Tax | $67,720 | $(14,630) | $174,477 | $(64,851) | | 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 Shareholders' Equity](index=17&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) The consolidated statements of shareholders' equity reflect a substantial increase in total shareholders' equity from January 1, 2025, to June 30, 2025, primarily due to stock issuance related to the Heartland acquisition and the issuance of Series B preferred stock Summary of Consolidated Statements of Shareholders' Equity (Thousands of Dollars) | Metric | Balance as of January 1, 2025 | Balance as of June 30, 2025 | | :------------------------------------------ | :---------------- | :---------------- | | Preferred Stock | — | $404,767 | | Common Stock | $55,057 | $78,666 | | Capital Surplus | $1,145,638 | $4,000,973 | | Retained Earnings | $3,174,948 | $3,409,706 | | Accumulated Other Comprehensive Loss, Net | $(573,050) | $(442,047) | | Treasury Stock | $(336,052) | $(166,300) | | **Total Shareholders' Equity** | **$3,466,541** | **$7,285,765** | | Stock Issued for Acquisition, Net of Issuance Costs | — | $2,898,216 | | Preferred Stock Issued | — | $294,062 | Supplementary Financial Data [Average Balances / Yields and Rates](index=18&type=section&id=Average%20Balances%20%2F%20Yields%20and%20Rates) Average balances, yields, and rates data show increases in total earning assets and net interest margin for Q2 2025 compared to Q2 2024, while the cost of interest-bearing liabilities decreased Average Balances / Yields and Rates for Q2 2025 vs. Q2 2024 (Thousands of Dollars, except percentages) | Metric | Q2 2025 Average Balance | Q2 2025 Average Yield/Rate | Q2 2024 Average Balance | Q2 2024 Average Yield/Rate | | :-------------------------- | :--------------------- | :-------------------------- | :--------------------- | :-------------------------- | | Loans, Net of Unearned Interest | $36,406,753 | 6.75% | $23,805,829 | 6.77% | | Total Securities | $17,683,434 | 3.71% | $12,673,857 | 2.95% | | Total Earning Assets | $61,451,738 | 5.61% | $40,239,106 | 5.44% | | Interest-Bearing Deposits | $41,246,157 | 3.34% | $24,237,726 | 3.99% | | Total Interest-Bearing Liabilities | $44,668,948 | 3.44% | $28,403,901 | 4.15% | | Net Interest Spread | | 2.17% | | 1.29% | | Net Interest Margin | | 3.10% | | 2.51% | Average Balances / Yields and Rates for H1 2025 vs. H1 2024 (Thousands of Dollars, except percentages) | Metric | H1 2025 Average Balance | H1 2025 Average Yield/Rate | H1 2024 Average Balance | H1 2024 Average Yield/Rate | | :-------------------------- | :--------------------- | :-------------------------- | :--------------------- | :-------------------------- | | Loans, Net of Unearned Interest | $34,369,543 | 6.69% | $23,579,936 | 6.70% | | Total Securities | $16,755,569 | 3.60% | $12,835,384 | 2.91% | | Total Earning Assets | $58,498,488 | 5.53% | $40,059,211 | 5.38% | | Interest-Bearing Deposits | $39,063,362 | 3.34% | $23,848,724 | 3.92% | | Total Interest-Bearing Liabilities | $42,406,865 | 3.44% | $28,215,935 | 4.09% | | Net Interest Spread | | 2.09% | | 1.29% | | Net Interest Margin | | 3.04% | | 2.50% | [Business Segment Information](index=20&type=section&id=Business%20Segment%20Information) Commercial Banking remains the largest segment for net interest income and net income, showing significant growth in Q2 2025 compared to Q2 2024, while Institutional Banking also contributed positively, and Personal Banking transitioned from a net loss to a net income Business Segment Performance for Q2 2025 vs. Q2 2024 (Thousands of Dollars) | Segment | Q2 2025 Net Interest Income | Q2 2025 Net Income | Q2 2024 Net Interest Income | Q2 2024 Net Income | | :------------------ | :------------------------- | :----------------- | :------------------------- | :----------------- | | Commercial Banking | $322,619 | $139,788 | $161,163 | $71,706 | | Institutional Banking | $66,331 | $54,350 | $50,826 | $42,306 | | Personal Banking | $78,074 | $23,256 | $33,119 | $(12,667) | | **Total** | **$467,024** | **$217,394** | **$245,108** | **$101,345** | Business Segment Performance for H1 2025 vs. H1 2024 (Thousands of Dollars) | Segment | H1 2025 Net Interest Income | H1 2025 Net Income | H1 2024 Net Interest Income | H1 2024 Net Income | | :------------------ | :------------------------- | :----------------- | :------------------------- | :----------------- | | Commercial Banking | $596,536 | $201,452 | $319,145 | $153,814 | | Institutional Banking | $127,489 | $102,268 | $99,951 | $77,773 | | Personal Banking | $140,638 | $(4,993) | $65,446 | $(19,984) | | **Total** | **$864,663** | **$298,727** | **$484,542** | **$211,603** | - Commercial Banking's net income more than doubled year-over-year in Q2 2025[47](index=47&type=chunk) - Personal Banking transitioned from a net loss of **$12.7 million** in Q2 2024 to a net income of **$23.3 million** in Q2 2025[47](index=47&type=chunk) [Non-GAAP Reconciliations](index=21&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliation tables for various non-GAAP financial measures to their most comparable GAAP metrics, including operating net income, operating noninterest expense, operating efficiency ratio, operating pre-provision net revenue, and tangible book value, with adjustments primarily for acquisition-related expenses, severance, and FDIC special assessments Reconciliation of Operating Net Income Attributable to Common Shareholders (Non-GAAP) (Thousands of Dollars, except per share data and percentages) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | Net Income Attributable to Common Shareholders (GAAP) | $215,382 | $101,345 | $294,702 | $211,603 | | Adjustments: | | | | | | Day 1 Acquisition Provision Expense | — | — | $62,037 | — | | Acquisition-Related Expenses | $13,494 | $9,550 | $66,663 | $9,981 | | Severance Expense | $373 | $130 | $818 | $276 | | FDIC Special Assessment | $(726) | $(3,800) | $(97) | $9,200 | | Tax Impact of Adjustments | $(3,144) | $(1,352) | $(29,866) | $(4,475) | | **Total Non-GAAP Adjustments (After-Tax)** | **$9,997** | **$4,528** | **$99,555** | **$14,982** | | **Operating Net Income (Non-GAAP)** | **$225,379** | **$105,873** | **$394,257** | **$226,585** | | Diluted Earnings Per Share (GAAP) | $2.82 | $2.07 | $4.16 | $4.32 | | **Operating Diluted Earnings Per Share (Non-GAAP)** | **$2.96** | **$2.16** | **$5.56** | **$4.63** | | Return on Average Assets (GAAP) | 1.29% | 0.96% | 0.94% | 1.01% | | **Operating Return on Average Assets (Non-GAAP)** | **1.35%** | **1.00%** | **1.25%** | **1.08%** | | Return on Average Common Equity (GAAP) | 12.72% | 12.73% | 9.67% | 13.41% | | **Operating Return on Average Common Equity (Non-GAAP)** | **13.31%** | **13.30%** | **12.94%** | **14.36%** | Reconciliation of Operating Noninterest Expense and Operating Efficiency Ratio (Non-GAAP) (Thousands of Dollars, except percentages) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | Noninterest Expense | $393,168 | $249,067 | $777,955 | $503,871 | | Adjustments (Pre-Tax): | | | | | | Acquisition-Related Expenses | $13,494 | $9,550 | $66,663 | $9,981 | | Severance Expense | $373 | $130 | $818 | $276 | | FDIC Special Assessment | $(726) | $(3,800) | $(97) | $9,200 | | **Total Non-GAAP Adjustments (Pre-Tax)** | **$13,141** | **$5,880** | **$67,384** | **$19,457** | | **Operating Noninterest Expense (Non-GAAP)** | **$380,027** | **$243,187** | **$710,571** | **$484,414** | | Efficiency Ratio (GAAP) | 53.38% | 63.37% | 58.69% | 63.41% | | **Operating Efficiency Ratio (Non-GAAP)** | **51.48%** | **61.86%** | **53.31%** | **60.94%** | Reconciliation of Operating Pre-Provision Net Revenue (Non-GAAP) (Thousands of Dollars, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------------- | :------------- | :----------- | :----------- | | Net Interest Income (GAAP) | $467,024 | $245,108 | $864,663 | $484,542 | | Noninterest Income (GAAP) | $222,185 | $144,919 | $388,383 | $304,163 | | Noninterest Expense (GAAP) | $393,168 | $249,067 | $777,955 | $503,871 | | Adjustments (Pre-Tax): | | | | | | Acquisition-Related Expenses | $13,494 | $9,550 | $66,663 | $9,981 | | Severance Expense | $373 | $130 | $818 | $276 | | FDIC Special Assessment | $(726) | $(3,800) | $(97) | $9,200 | | **Operating Noninterest Expense (Non-GAAP)** | **$380,027** | **$243,187** | **$710,571** | **$484,414** | | **Operating Pre-Provision Net Revenue (Non-GAAP)** | **$309,182** | **$146,840** | **$542,475** | **$304,291** | | **Operating Diluted Pre-Provision Net Revenue Per Share (Non-GAAP)** | **$4.06** | **$3.00** | **$7.65** | **$6.22** | Reconciliation of Tangible Book Value (Non-GAAP) (Thousands of Dollars, except per share data) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------- | :------------- | | Total Common Shareholders' Equity (GAAP) | $6,885,023 | $3,227,347 | | Less: Intangible Assets | | | | Goodwill | $1,812,694 | $207,385 | | Other Intangible Assets, Net | $531,918 | $67,141 | | Total Intangible Assets, Net | $2,344,612 | $274,526 | | **Total Tangible Common Shareholders' Equity (Non-GAAP)** | **$4,540,411** | **$2,952,821** | | Total Common Shares Outstanding | 75,927,002 | 48,745,090 | | Common Shareholders' Equity Per Share (Book Value) | $90.68 | $66.21 | | **Tangible Common Shareholders' Equity Per Share (Tangible Book Value, Non-GAAP)** | **$59.80** | **$60.58** |

Core Viewpoint - 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 forward P/E ratio of 10.37, while UMBF has a forward P/E of 11.83 [5] - ASB's PEG ratio is 1.13, compared to UMBF's PEG ratio of 1.29, indicating ASB may offer better value considering expected earnings growth [5] - ASB's P/B ratio is 0.95, while UMBF's P/B ratio is 1.26, suggesting ASB is undervalued relative to its book value [6] Earnings Outlook - ASB is currently experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7] - ASB holds a Zacks Rank of 2 (Buy), while UMBF has a Zacks Rank of 4 (Sell), indicating a more favorable earnings estimate revision for ASB [3]

Group 1 - The article discusses UMB Financial Corporation's latest listed security, which is a 7.75% fixed-income security IPO [1] - The focus is on providing insights into the exchange-traded fixed-income security market [1] Group 2 - The article emphasizes that past performance does not guarantee future results, highlighting the inherent risks in investment [2] - It clarifies that no specific investment recommendations are being made, and opinions expressed may not reflect the views of the entire platform [2]

Core Viewpoint - The U.S. tariff situation is causing fluctuations in the market, impacting investor sentiment, while shares of UMB Financial have remained relatively stable since the initial analysis [1]. Company Analysis - UMB Financial (NASDAQ: UMBF) has shown flat performance in its stock price, indicating a potential stability amidst market volatility [1]. - The investment strategy focuses on a long-term, buy-and-hold approach, particularly favoring stocks that can deliver sustainable high-quality earnings, often found in the dividend and income sectors [1]. Market Context - The ongoing changes in U.S. tariffs are creating a mixed environment of optimism and despair among investors, which may influence stock performance across various sectors [1].

Financial Performance - The net income for the three months ended March 31, 2025, was $81,333 thousand, a decrease of 26.3% compared to $110,258 thousand for the same period in 2024[33]. - Basic net income per common share for Q1 2025 was $1.22, down from $2.27 in Q1 2024, reflecting a decline of 46.2%[33]. - Noninterest income for the three months ended March 31, 2025, totaled $166.198 million, up from $159.244 million in the same period of 2024, reflecting a growth of 4.4%[159]. - The total noninterest expense for the three months ended March 31, 2025, was $384.787 million, up from $254.804 million in the same period of 2024, representing an increase of 50.9%[159]. - The Commercial Banking segment reported a net income of $62.385 million for the three months ended March 31, 2025, compared to $82.178 million in the same period of 2024, a decrease of 24.2%[159]. - The Institutional Banking segment's net income was $50.043 million for the three months ended March 31, 2025, compared to $35.321 million for the same period in 2024, reflecting an increase of 41.7%[159]. - The Personal Banking segment reported a net loss of $31.095 million for the three months ended March 31, 2025, compared to a net loss of $7.241 million in the same period of 2024, indicating a worsening performance[159]. Asset and Loan Growth - As of March 31, 2025, cash and cash equivalents totaled $10,610,066 thousand, up from $6,943,108 thousand as of March 31, 2024, representing an increase of approximately 52.5%[28]. - As of March 31, 2025, the total loans amounted to $35,936.2 million, compared to $25,642.3 million on December 31, 2024, reflecting a significant increase[47]. - The total current loans increased to $35,762.1 million at March 31, 2025, from $25,603.9 million at December 31, 2024[47]. - Total loans amounted to $35,936.28 million, with a significant increase from $5,077.094 million in the previous year[52]. - The total amount of non-performing loans is monitored as part of the credit quality indicators, reflecting ongoing risk assessment[54]. - The company continues to focus on market expansion and new strategies to enhance loan offerings and customer engagement[52]. Credit Quality and Risk Management - The Company maintains an independent loan review department to continually assess and validate risk within its loan portfolio[38]. - The Company utilizes a risk grading matrix to continuously monitor credit risk across its loan portfolio[55]. - The company assigns risk ratings to borrowers based on their financial position, with categories including Pass, Special Mention, Substandard, and Doubtful[59]. - The company tracks individual borrower credit risk based on their loan to collateral position, with any borrower position where the underlying value of collateral is below the fair value of the loan considered higher risk[62]. - The company emphasizes the importance of economic conditions on the performance of non-owner-occupied commercial real estate loans, which are sensitive to local market factors[65]. - The company actively monitors credit quality indicators, which include changes in economic forecasts and updated financial records from borrowers[105]. Allowance for Credit Losses - The allowance for credit losses (ACL) is estimated based on historical credit loss experience and current loan-specific risk characteristics, with a focus on economic forecasts from Moody's[98]. - The ACL for Commercial and industrial loans was $192,146,000 as of March 31, 2025, up from $160,912,000 at the beginning of the period, reflecting a provision of $22,018,000[110]. - Total ACL for all segments reached $373,488,000 as of March 31, 2025, compared to $261,734,000 at the beginning of the previous year, indicating a significant increase in credit loss provisions[110]. - The ACL for Consumer segments is driven by the year of origination and macroeconomic variables such as unemployment and home price index[103]. Securities and Investments - As of March 31, 2025, the total fair value of securities available for sale was $10,895,659 thousand, an increase from $7,774,334 thousand as of December 31, 2024, representing a growth of 40%[117][118]. - The Company holds $5,717,330,000 in securities held to maturity, with unrealized losses of $(619,383,000) as of March 31, 2025, compared to $5,378,912,000 and $(642,009,000) as of December 31, 2024[126][129]. - The total investment securities (losses) gains, net for the three months ended March 31, 2025, was $(4.78) million, a decrease from $9.37 million in the same period of 2024[140]. - The Company has no allowance for credit losses related to available-for-sale securities as the decline in fair value did not result from credit issues[125]. Borrowings and Debt - As of March 31, 2025, total borrowed funds amounted to $654.4 million, an increase from $385.3 million as of December 31, 2024, reflecting a significant growth in long-term debt[144]. - The total long-term debt increased to $654.4 million as of March 31, 2025, driven by the acquisition activities and new issuances[144]. - The Company’s borrowing capacity with the FHLB was $1.6 billion as of March 31, 2025, indicating strong liquidity support[150]. Derivatives and Fair Value Measurements - The fair value of the company's assets measured at fair value as of March 31, 2025, was $11,237.155 million, with $1,910.925 million classified as Level 1 inputs and $9,326.230 million as Level 2 inputs[203]. - The estimated fair value of derivatives as of March 31, 2025, was $294,003,000, compared to $234,443,000 on December 31, 2024, reflecting an increase of approximately 25%[214][215]. - The company employs various valuation methods for financial instruments, including external appraisals and market comparisons, ensuring accurate fair value measurements[212].

Group 1 - UMB Financial's shares have increased by 19% over the past year, driven by strong loan quality and an accretive acquisition [1] - The acquisition is expected to help UMB Financial build scale across key markets and unlock efficiency gains [1]

Core Viewpoint - UMB Financial Corp. reported strong operating earnings in Q1 2025, driven by increased net interest income and non-interest income, despite challenges from weak asset quality and rising non-interest expenses [1][10]. Financial Performance - Operating earnings per share for Q1 2025 were $2.58, exceeding the Zacks Consensus Estimate of $2.21 and up from $2.47 in the same quarter last year [1]. - Net income on a GAAP basis was $81.3 million, reflecting a 26.2% decline year over year [2]. - Quarterly revenues reached $571.3 million, a 41% increase year over year, surpassing the Zacks Consensus Estimate by 2.9% [3]. - Net interest income (NII) on a fully taxable equivalent (FTE) basis was $405.1 million, up 64.7% from the prior-year quarter, with a net interest margin (NIM) of 2.96% compared to 2.48% a year ago [3]. Income and Expenses - Non-interest income totaled $166.2 million, a 4.4% increase year over year, primarily due to growth in trust and securities processing, service charges, and brokerage income [4]. - Non-interest expenses rose to $384.8 million, a 51% increase year over year, driven by higher salaries, legal and consulting expenses, and amortization of intangibles [4]. - The efficiency ratio was 65.19%, up from 63.44% in the prior-year quarter, indicating a decrease in profitability [5]. Loans and Deposits - Average loans and leases as of March 31, 2025, were $32.3 billion, a 27.8% sequential increase, while average deposits rose 32.3% year over year to $50.3 billion [6]. Credit Quality - The ratio of net charge-offs to average loans was 0.45%, significantly higher than 0.05% in the prior-year quarter [7]. - Total non-accrual and restructured loans amounted to $100.9 million, up from $17.8 million a year ago [7]. - The provision for credit losses was $86 million in Q1 2025, compared to $10 million in the same quarter last year [7]. Capital Ratios - As of March 31, 2025, the Tier 1 risk-based capital ratio was 10.35%, down from 11.09% a year earlier, while the Tier 1 leverage ratio improved slightly to 8.47% from 8.39% [8]. - The total risk-based capital ratio decreased to 12.54% from 13.03% in the prior-year quarter [8]. Profitability Ratios - Return on average assets was 0.54%, down from 1.06% in the year-ago quarter [9]. - Operating return on average common equity was 12.47%, compared to 15.44% in the prior-year quarter [9].

Financial Data and Key Metrics Changes - The company reported a strong first quarter with net operating income available to common shareholders of $168.9 million, or $2.58 per share, excluding merger-related and non-recurring charges [9][21] - Average loans increased by 27.8% to $32.3 billion, while average deposits rose by 32.3% to $50.3 billion on a linked quarter basis [9][10] - The operating efficiency ratio improved to 55.6%, and the operating return on assets (ROA) reached 1.14% [8] Business Line Data and Key Metrics Changes - Fee income for the quarter was reported at $166.2 million, impacted by $5.2 million in mark-to-market losses on certain equity investments [21] - Credit and debit card purchase volume increased by 18.6% year-over-year, surpassing $5.4 billion for the first time [13] - Assets under administration in institutional businesses grew by 16% year-over-year, reaching $559 billion, with corporate trust assets increasing by 25% [14] Market Data and Key Metrics Changes - The company noted an 8.3% linked quarter annualized increase in loan balances on a legacy UMB basis, outperforming peer banks that reported a median increase of 3.3% [10] - Nonperforming loans related to legacy UMB were just eight basis points, consistent with prior quarters, while the median NPL ratio for peer banks was reported at 8.45% [12] Company Strategy and Development Direction - The acquisition of Heartland added over $14 billion in deposits and more than doubled the branch presence across 13 states, with a focus on achieving cost synergies and cultural integration [6][7] - The company aims to leverage the lower-cost, granular core deposits from the acquisition to enhance its net interest margin [7][8] - The management expressed confidence in the growth opportunities presented by the acquisition, particularly in new markets and with new clients [68][70] Management's Comments on Operating Environment and Future Outlook - Management is closely monitoring the impact of tariffs and general economic conditions, noting that most clients are currently able to pass on costs [16][17] - The company expects to maintain strong loan growth driven by market share gains rather than economic activity, with a robust production pipeline for the upcoming quarters [39][70] - Management emphasized their role as risk managers and their preparedness to navigate periods of uncertainty [17] Other Important Information - The effective tax rate for the first quarter was 12.6%, including a benefit from the remeasurement of deferred tax assets [23] - The company expects second quarter margins to range between 2.75% and 2.8%, influenced by various factors including excess liquidity and Fed rate movements [23][24] Q&A Session Summary Question: Can you help us with the near-term NII trajectory? - Management highlighted that the first quarter EPS included a one-time tax benefit and noted adjustments for share count and mark-to-market impacts, indicating a positive outlook for future quarters [33][34][36] Question: What are the assumptions for core NIM in the second quarter? - Management expects core NIM to remain stable, influenced by additional month contributions from Heartland and potential rate cuts [50][52] Question: Any common thread among HTLF net charge-offs? - Charge-offs were identified through diligence and were part of normal business operations, with expectations for overall performance to align with historical trends [54][56] Question: How will Heartland contribute to loan growth? - The acquisition is expected to enhance growth through a larger deposit base and improved operational efficiency, with a strong pipeline of high-quality deals already emerging [68][70] Question: What is the outlook for deposit growth and DDA? - Management indicated that deposit growth is driven by client acquisition and higher average balances, with expectations for stability in the second quarter [86][90] Question: What is the plan for excess cash and balance sheet management? - The company plans to deploy excess cash into investments over the next three to six months, evaluating opportunities in treasuries and other securities [43][44] Question: How is the company addressing credit quality post-acquisition? - Management is aligning the acquired portfolio with UMB standards, ensuring that underwriting practices maintain high-quality credit performance [108][112]