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]

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** |