Mergers and Acquisitions - Alimera Sciences, Inc. has agreed to sell to ANI Pharmaceuticals, Inc. for $5.50 per share in cash at closing, plus a contingent value right for up to $0.50 per share if specific net revenue targets are met in 2026 and 2027 [1] - BEST, Inc. has entered into a definitive agreement to merge with BEST Global Partners and Phoenix Global Partners for $2.88 in cash per American Depository Share [2] - UMB Financial Corporation has agreed to acquire Heartland Financial in an all-stock transaction valued at around $2 billion [5] - Territorial Bancorp Inc. has agreed to be acquired by Hope Bancorp, Inc., with each Territorial share exchanged for 0.8048 shares of Hope common stock, resulting in Territorial shareholders owning about 5.6% of the combined company [6] Legal Investigations - Kuehn Law is investigating whether the Boards of the mentioned companies acted to maximize shareholder value, failed to disclose material information, and conducted a fair process [1][4] - Kuehn Law may seek additional disclosures or other relief on behalf of the shareholders of these companies [4]

The Zacks Consensus Estimate for UMB Financial's 2024 and 2025 earnings have been revised upward by 14.4% and 16.3%, respectively, over the past 60 days, indicating that analysts are optimistic regarding its earnings growth potential. UMBF currently sports a Zacks Rank #1 (Strong Buy). Image Source: Zacks Investment Research Revenue Growth: UMB Financial has been witnessing steady revenue growth. The company's revenues witnessed a compound annual growth rate (CAGR) of 7.6% in the last five years (2018-2023) ...

A month has gone by since the last earnings report for UMB Financial (UMBF) . Shares have added about 1.2% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is UMB due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. UMB Financial Q1 Earnings & Revenues Top Estimates UMB ...

PART I – FINANCIAL INFORMATION This section provides the unaudited financial statements and management's discussion and analysis for UMB Financial Corporation, covering financial condition, results of operations, and market risk disclosures [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of UMB Financial Corporation for the three months ended March 31, 2024, including balance sheets, income statements, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes on accounting policies, loan portfolio, securities, and other financial instruments [CONSOLIDATED BALANCE SHEETS](index=3&type=section&id=Consolidated%20Balance%20Sheets) This statement presents the Company's financial position, detailing assets, liabilities, and shareholders' equity as of March 31, 2024, and December 31, 2023 | Metric | March 31, 2024 (unaudited, in thousands) | December 31, 2023 (audited, in thousands) | | :----------------------------------- | :--------------------------- | :---------------------------- | | **ASSETS** | | | | Total assets | $45,343,375 | $44,011,674 | | Net loans | $23,411,490 | $22,952,746 | | Total securities | $12,677,629 | $13,268,251 | | Interest-bearing due from banks | $6,673,104 | $5,159,802 | | **LIABILITIES** | | | | Total deposits | $36,913,610 | $35,792,859 | | Noninterest-bearing demand deposits | $13,251,090 | $12,130,662 | | Interest-bearing demand and savings | $21,018,911 | $20,588,606 | | Federal funds purchased and repurchase agreements | $2,225,474 | $2,119,644 | | Total liabilities | $42,190,559 | $40,911,255 | | **SHAREHOLDERS' EQUITY** | | | | Total shareholders' equity | $3,152,816 | $3,100,419 | - Total assets increased by **$1.33 billion (3.0%)** from December 31, 2023, to March 31, 2024, primarily driven by increases in net loans and interest-bearing due from banks[9](index=9&type=chunk) - Total deposits increased by **$1.12 billion (3.1%)** from December 31, 2023, to March 31, 2024, with noninterest-bearing demand deposits showing a notable increase[9](index=9&type=chunk) [CONSOLIDATED STATEMENTS OF INCOME](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This statement reports the Company's revenues, expenses, and net income for the three months ended March 31, 2024, and March 31, 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total interest income | $520,065 | $408,747 | | Total interest expense | $280,631 | $167,051 | | Net interest income | $239,434 | $241,696 | | Provision for credit losses | $10,000 | $23,250 | | Total noninterest income | $159,244 | $130,200 | | Total noninterest expense | $254,804 | $237,052 | | Income before income taxes | $133,874 | $111,594 | | Net income | $110,258 | $92,437 | | Net income – basic per share | $2.27 | $1.91 | | Net income – diluted per share | $2.25 | $1.90 | | Dividends per share | $0.39 | $0.38 | - Net income increased by **$17.8 million (19.3%)** year-over-year, reaching **$110.3 million** for Q1 2024[12](index=12&type=chunk) - Total interest income grew significantly by **$111.3 million (27.2%)** YoY, primarily from loans and interest-bearing due from banks[12](index=12&type=chunk) - Total interest expense also increased substantially by **$113.6 million (68.0%)** YoY, mainly due to higher deposit interest[12](index=12&type=chunk) - Net interest income slightly decreased by **$2.3 million (0.9%)** YoY[12](index=12&type=chunk) - Provision for credit losses decreased by **$13.3 million (57.2%)** YoY[12](index=12&type=chunk) - Total noninterest income increased by **$29.0 million (22.3%)** YoY, driven by investment securities gains and trust/securities processing[12](index=12&type=chunk) [CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents the Company's net income and other comprehensive income (loss) components, such as unrealized gains/losses on securities, for the three months ended March 31, 2024, and March 31, 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $110,258 | $92,437 | | Other comprehensive (loss) income, before tax | $(50,221) | $99,985 | | Income tax benefit (expense) | $12,618 | $(24,026) | | Other comprehensive (loss) income | $(37,603) | $75,959 | | Comprehensive income | $72,655 | $168,396 | - Comprehensive income decreased significantly from **$168.4 million** in Q1 2023 to **$72.7 million** in Q1 2024, primarily due to a shift from other comprehensive income to loss before tax[14](index=14&type=chunk) - The change in unrealized gains and losses on debt securities shifted from a gain of **$104.1 million** in Q1 2023 to a loss of **$32.9 million** in Q1 2024[14](index=14&type=chunk) [CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement details the changes in the Company's shareholders' equity, including net income, dividends, and stock transactions, for the three months ended March 31, 2024, and March 31, 2023 | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | | :----------------------------------- | :------------- | :------------- | | Balance – January 1 | $3,100,419 | $2,667,093 | | Total comprehensive income | $72,655 | $168,396 | | Dividends paid | $(17,976) | $(18,595) | | Purchase of treasury stock | $(7,537) | $(7,902) | | Issuances of equity awards, net | $703 | $719 | | Recognition of equity-based compensation | $4,271 | $4,516 | | Sale of treasury stock | $130 | $127 | | Exercise of stock options | $151 | $305 | | Balance – March 31 | $3,152,816 | $2,814,659 | - Total shareholders' equity increased by **$52.4 million** from January 1, 2024, to March 31, 2024, reaching **$3.15 billion**[17](index=17&type=chunk) - Dividends paid increased slightly to **$0.39 per share** in Q1 2024 from **$0.38 per share** in Q1 2023[12](index=12&type=chunk)[17](index=17&type=chunk) [CONSOLIDATED STATEMENTS OF CASH FLOWS](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the Company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024, and March 31, 2023 | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $56,144 | $1,696 | | Net cash provided by (used in) investing activities | $158,393 | $(41,776) | | Net cash provided by financing activities | $1,200,313 | $2,005,510 | | Increase in cash and cash equivalents | $1,414,850 | $1,965,430 | | Cash and cash equivalents at end of period | $6,943,108 | $3,523,304 | - Net cash provided by operating activities significantly increased to **$56.1 million** in Q1 2024 from **$1.7 million** in Q1 2023[20](index=20&type=chunk) - Investing activities shifted from a net cash outflow of **$41.8 million** in Q1 2023 to a net cash inflow of **$158.4 million** in Q1 2024, primarily due to higher maturities/repayments of available-for-sale securities and lower net increase in loans[20](index=20&type=chunk) - Financing activities provided **$1.2 billion** in cash in Q1 2024, down from **$2.0 billion** in Q1 2023, mainly due to a decrease in time deposits and no proceeds/repayments of short-term debt in 2024[21](index=21&type=chunk) - Cash and cash equivalents at period-end more than doubled year-over-year, reaching **$6.94 billion**[21](index=21&type=chunk) [NOTES TO CONSOLIDATED FINANCIAL STATEMENTS](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements, covering accounting policies, loan portfolio, securities, and other financial instruments [1. Financial Statement Presentation](index=11&type=section&id=1.%20Financial%20Statement%20Presentation) The Company's consolidated financial statements include UMB Financial Corporation and its subsidiaries, with intercompany transactions eliminated. The statements are unaudited and reflect management's best estimates, which may not be indicative of full-year results. The Company operates as a financial holding company offering diverse banking and financial services across multiple states - The Company is a financial holding company offering a wide range of banking and financial services through branches and offices in multiple states, including Missouri, Arizona, Colorado, Illinois, Kansas, Nebraska, Oklahoma, Texas, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, Wisconsin, Iowa, Delaware, and New York[25](index=25&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines key accounting policies, including the definition of cash and cash equivalents, the computation of basic and diluted earnings per share, and the accounting treatment for derivatives, emphasizing fair value measurement and hedge accounting Cash and Cash Equivalents (in thousands) | Item | March 31, 2024 | March 31, 2023 | | :----------------------- | :------------- | :------------- | | Due from the FRB | $6,586,145 | $3,051,056 | | Cash and due from banks | $356,963 | $472,248 | | Total | $6,943,108 | $3,523,304 | - Diluted net income per share for Q1 2024 includes the dilutive effect of **257,348 shares**, compared to **311,546 shares** in Q1 2023[29](index=29&type=chunk) - The Company records all derivatives at fair value on the Consolidated Balance Sheets. Ten derivatives are designated in qualifying hedging relationships, while others are not and their fair value changes are recognized directly in earnings[31](index=31&type=chunk) [3. New Accounting Pronouncements](index=12&type=section&id=3.%20New%20Accounting%20Pronouncements) The Company adopted ASU 2022-02 on Troubled Debt Restructurings, which eliminated TDR accounting guidance and enhanced disclosures, with no impact on financial statements beyond disclosures. ASU 2023-02 on Equity-Method Investments was adopted, allowing proportional amortization for tax equity investments, also with no financial statement impact. ASU 2023-09 on Income Taxes, effective after December 15, 2024, will enhance income tax disclosures but not impact financial statements - ASU 2022-02 (Troubled Debt Restructurings) was adopted on January 1, 2023, eliminating TDR accounting guidance and enhancing disclosures for loan refinancings/restructurings when borrowers face financial difficulty. It had no impact on the Consolidated Financial Statements other than disclosures[32](index=32&type=chunk) - ASU 2023-02 (Equity-Method Investments) was adopted on January 1, 2024, allowing the proportional amortization method for qualifying tax equity investments. The Company elected to continue using the practical expedient for low-income housing and historic tax credit investments, with no impact on financial statements aside from annual disclosures[33](index=33&type=chunk) - ASU 2023-09 (Income Taxes) is effective for fiscal years beginning after December 15, 2024, and will require additional disclosures related to rate reconciliation and income taxes paid, but will not impact the Consolidated Financial Statements[34](index=34&type=chunk)[35](index=35&type=chunk) [4. Loans and Allowance for Credit Losses](index=13&type=section&id=4.%20Loans%20and%20Allowance%20for%20Credit%20Losses) This section details the Company's loan portfolio, credit risk management, and allowance for credit losses (ACL). It covers underwriting standards for various loan types, an aging analysis of past due loans, and credit quality indicators. The ACL is estimated using a collective basis for similar risk characteristics, incorporating historical loss experience, economic forecasts, and qualitative factors, with specific methodologies for different portfolio segments - The Company's loan portfolio totaled **$23.64 billion** at March 31, 2024, an increase from **$23.17 billion** at December 31, 2023[9](index=9&type=chunk)[44](index=44&type=chunk) Total Loans by Category (in thousands) | Loan Category | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Commercial and industrial | $9,940,487 | $9,929,929 | | Specialty lending | $508,162 | $498,786 | | Commercial real estate | $9,285,165 | $8,893,926 | | Consumer real estate | $2,972,731 | $2,960,632 | | Consumer | $146,602 | $163,291 | | Credit cards | $538,498 | $423,956 | | Leases and other | $246,004 | $301,964 | | **Total loans** | **$23,637,649** | **$23,172,484** | - Nonaccrual loans increased to **$17.8 million** at March 31, 2024, from **$13.2 million** at December 31, 2023[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The Allowance for Credit Losses (ACL) on loans increased to **$226.2 million** at March 31, 2024, from **$219.7 million** at December 31, 2023[9](index=9&type=chunk)[105](index=105&type=chunk) - The Company purchased a co-branded credit card portfolio during Q1 2024, including **$109.4 million** in credit card receivables[42](index=42&type=chunk) [Loan Origination/Risk Management](index=13&type=section&id=Loan%20Origination/Risk%20Management) The Company employs strict lending policies and procedures to minimize risk, including portfolio diversification, established authority levels for credit extension, and an independent loan review department. Underwriting standards are tailored for different loan types, such as commercial and industrial, specialty lending, commercial real estate, consumer real estate, consumer, and credit cards, focusing on borrower's ability to repay, collateral value, and market conditions - The Company minimizes loan portfolio risk through diversification, established credit authority levels, and an independent loan review department that continuously validates risk assessments[36](index=36&type=chunk) - Commercial and industrial loans are underwritten based on borrower profitability and collateral, while specialty lending (asset-based loans) primarily relies on collateral value[37](index=37&type=chunk)[38](index=38&type=chunk) - Commercial real estate loans are assessed as cash flow loans first, then by real estate collateral, with construction loans carrying higher risks due to project completion and market sensitivity[39](index=39&type=chunk) - Consumer real estate and consumer loans are underwritten based on loan-to-value, collection remedies, and repayment ability, with delinquencies closely monitored[40](index=40&type=chunk)[41](index=41&type=chunk) - Credit card loans, both commercial and consumer, are underwritten based on cash flow, business capital, and repayment ability, with consumer cards also monitored by credit scores[42](index=42&type=chunk) [Loan Aging Analysis](index=14&type=section&id=Loan%20Aging%20Analysis) The loan aging analysis provides a summary of past due loans, showing a slight increase in total past due loans from December 31, 2023, to March 31, 2024. Nonaccrual loans also increased during this period, with all interest accrued but not received on nonaccrual loans being reversed Loan Aging Analysis (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | 30-89 Days Past Due and Accruing | $15,409 | $11,283 | | 90 Days Past Due and Accruing | $3,076 | $3,111 | | Nonaccrual Loans | $17,756 | $13,212 | | **Total Past Due** | **$36,241** | **$27,606** | | Current Loans | $23,601,408 | $23,144,878 | | **Total Loans** | **$23,637,649** | **$23,172,484** | - Total past due loans (including nonaccrual) increased by **$8.6 million** from December 31, 2023, to March 31, 2024[44](index=44&type=chunk)[45](index=45&type=chunk) - Nonaccrual loans increased to **$17.8 million** at March 31, 2024, from **$13.2 million** at December 31, 2023. All interest accrued but not received for nonaccrual loans is reversed[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [Amortized Cost](index=16&type=section&id=Amortized%20Cost) This section provides a detailed breakdown of the amortized cost balance of the Company's loan classes by collateral type and origination year, along with gross charge-offs for the three months ended March 31, 2024. Accrued interest on loans is excluded from amortized cost and is not subject to an allowance for credit losses Total Loans Amortized Cost by Origination Year (in thousands) - March 31, 2024 | Origination Year | Term Loans | Revolving Loans | Loans Converted to Term | Total | | :--------------- | :--------- | :-------------- | :---------------------- | :---- | | 2024 | $850,359 | $6,553,066 | $9,367 | $7,412,792 | | 2023 | $3,728,244 | | | $3,728,244 | | 2022 | $5,288,011 | | | $5,288,011 | | 2021 | $3,811,318 | | | $3,811,318 | | 2020 | $1,962,866 | | | $1,962,866 | | Prior | $1,434,418 | | | $1,434,418 | | **Total** | **$17,075,216** | **$6,553,066** | **$9,367** | **$23,637,649** | Gross Charge-offs by Loan Class (in thousands) - Q1 2024 | Loan Class | Charge-offs | | :-------------------------- | :---------- | | Commercial and industrial | $944 | | Commercial real estate | $250 | | Consumer real estate | $174 | | Consumer | $408 | | Credit cards | $3,701 | | **Total** | **$5,477** | - Accrued interest on loans totaled **$123.1 million** at March 31, 2024, and is excluded from the amortized cost basis, with no allowance for credit losses measured for it[51](index=51&type=chunk) [Credit Quality Indicators](index=18&type=section&id=Credit%20Quality%20Indicators) The Company monitors credit quality through risk grading, net charge-offs, non-performing loans, and economic conditions. Loans are categorized into Non-watch list, Watch, Special Mention, Substandard, and Doubtful. Detailed risk factors and amortized cost breakdowns are provided for Commercial and industrial, Specialty lending, Commercial real estate, Consumer real estate, Consumer, Credit cards, and Leases and other segments, highlighting specific collateral risks and performance metrics - The Company uses a risk grading matrix for commercial, commercial real estate, and construction real estate loans, with categories including Non-watch list, Watch, Special Mention, Substandard, and Doubtful[54](index=54&type=chunk)[57](index=57&type=chunk) - For Commercial and industrial loans, Equipment/Accounts Receivable/Inventory and Agriculture segments have specific collateral-based risks, while Overdrafts are typically short-term and unsecured[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) Commercial and Industrial Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Rating | Equipment/Accounts Receivable/Inventory | Agriculture | | :-------------------- | :------------------------------------ | :---------- | | Non-watch list – Pass | $8,978,784 | $108,745 | | Watch – Pass | $436,954 | $55,823 | | Special Mention | $186,399 | $1,824 | | Substandard | $150,267 | $9,128 | | Doubtful | $950 | $0 | | **Total** | **$9,753,354** | **$175,520** | - Specialty lending (Asset-based lending) is primarily underwritten based on collateral value, with continuous monitoring of loan-to-collateral positions. All asset-based loans were 'In-margin' at March 31, 2024, totaling **$508.2 million**[60](index=60&type=chunk)[61](index=61&type=chunk) - Commercial real estate loans (Owner-occupied, Non-owner-occupied, Farmland, 5+ Multi-family, 1-4 Family construction, General construction) are susceptible to economic cycles, market conditions, and project completion risks[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) Commercial Real Estate Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Rating | Owner-occupied | Non-owner-occupied | Farmland | 5+ Multi-family | 1-4 Family construction | General construction | | :-------------------- | :------------- | :----------------- | :------- | :-------------- | :---------------------- | :------------------- | | Non-watch list – Pass | $1,992,859 | $3,275,589 | $472,722 | $448,704 | $101,810 | $2,575,193 | | Watch – Pass | $57,350 | $241,940 | $387 | $0 | $0 | $1,711 | | Special Mention | $36,502 | $24,256 | $6,722 | $0 | $0 | $177 | | Substandard | $8,416 | $5,113 | $27,598 | $0 | $0 | $8,003 | | Doubtful | $0 | $0 | $0 | $0 | $0 | $113 | | **Total** | **$2,095,127** | **$3,546,898** | **$507,429** | **$448,704** | **$101,810** | **$2,585,197** | - Consumer real estate loans (HELOC, First lien: 1-4 family, Junior lien: 1-4 family) are exposed to borrower repayment ability and market volatility impacting home values[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) Consumer Real Estate Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Rating | HELOC | First lien: 1-4 family | Junior lien: 1-4 family | | :-------------------- | :------ | :--------------------- | :-------------------- | | Performing | $361,992 | $2,561,397 | $43,348 | | Non-performing | $1,473 | $4,424 | $97 | | **Total** | **$363,465** | **$2,565,821** | **$43,445** | - Consumer loans (Revolving line, Auto, Other) face risks related to market volatility, collateral depreciation, and unsecured nature[78](index=78&type=chunk)[79](index=79&type=chunk) Consumer Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Rating | Revolving line | Auto | Other | | :-------------------- | :------------- | :--- | :---- | | Performing | $61,480 | $23,725 | $61,368 | | Non-performing | $0 | $15 | $14 | | **Total** | **$61,480** | **$23,740** | **$61,382** | - Credit card loans (Consumer, Commercial) are generally unsecured, relying on borrower repayment capacity. Consumer cards are segmented by transactors/revolvers and credit score, while commercial cards are by payment status[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) Credit Card Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Category | Consumer | Commercial | | :-------------------- | :------- | :--------- | | Transactor accounts | $98,728 | N/A | | Revolver accounts (by credit score) | $196,579 | N/A | | Current | N/A | $223,096 | | Past Due | N/A | $20,095 | | **Total** | **$295,307** | **$243,191** | - Leases and other loans are secured by lease agreements or various collateral types, with risks tied to collateral value and market performance[89](index=89&type=chunk)[90](index=90&type=chunk) Leases and Other Loans by Risk Rating (in thousands) - March 31, 2024 | Risk Rating | Leases | Other | | :-------------------- | :----- | :---- | | Non-watch list – Pass | $1,699 | $243,484 | | Watch – Pass | $0 | $796 | | Substandard | $0 | $25 | | **Total** | **$1,699** | **$244,305** | [Allowance for Credit Losses](index=33&type=section&id=Allowance%20for%20Credit%20Losses) The ACL is a valuation account for expected credit losses on loans and held-to-maturity (HTM) securities, estimated using historical loss experience, current conditions, and economic forecasts (Moody's baseline scenario for a one-year period). It is measured collectively for similar risk characteristics, incorporating qualitative factors and using various modeling techniques based on portfolio segments (e.g., PD/LGD for Commercial and industrial, origination vintage for Consumer real estate) - The ACL is a valuation account for expected credit losses on loans and HTM securities, estimated using internal and external data, historical loss experience, current conditions, and reasonable and supportable economic forecasts (Moody's baseline scenario for a one-year period)[92](index=92&type=chunk)[93](index=93&type=chunk) - The ACL is measured on a collective basis for portfolio segments like Commercial and industrial, Specialty lending, Commercial real estate, Consumer real estate, Consumer, Credit cards, Leases and other, and HTM securities, using various modeling techniques (e.g., PD/LGD, origination vintage, roll-rate)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) Rollforward of Allowance for Credit Losses (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Beginning balance | $222,996 | $194,243 | | Charge-offs | $(5,477) | $(5,834) | | Recoveries | $2,460 | $1,191 | | Provision | $10,000 | $23,250 | | **Ending balance - ACL** | **$229,979** | **$212,850** | | ACL on loans | $226,159 | $210,509 | | ACL on HTM securities | $3,820 | $2,341 | | ACL on off-balance sheet credit exposures | $5,088 | $3,088 | - Expected credit losses for credit card receivables are determined by estimating future cash flows and recording ACL for the excess of outstanding balance over expected principal payments[103](index=103&type=chunk) - Loans not sharing risk characteristics are evaluated individually, including nonaccrual loans or those with concessionary modifications, with expected credit losses based on collateral fair value[104](index=104&type=chunk) [Collateral Dependent Financial Assets](index=36&type=section&id=Collateral%20Dependent%20Financial%20Assets) This section provides a summary of financial assets considered collateral dependent, which are primarily loans where expected credit losses are based on the fair value of the collateral. The total amortized cost of collateral dependent assets with no related allowance increased from $13.09 million at December 31, 2023, to $17.65 million at March 31, 2024 Amortized Cost of Collateral Dependent Assets (in thousands) | Loan Segment and Type | March 31, 2024 | December 31, 2023 | | :------------------------------------ | :------------- | :---------------- | | Commercial and industrial | $5,634 | $7,033 | | Commercial real estate | $5,993 | $900 | | Consumer real estate | $5,994 | $5,058 | | Consumer | $29 | $28 | | Leases and other | $0 | $71 | | **Total loans** | **$17,650** | **$13,090** | - The total amortized cost of collateral dependent assets with no related allowance increased by **$4.56 million** from December 31, 2023, to March 31, 2024[106](index=106&type=chunk)[107](index=107&type=chunk) [Modifications made to Borrowers Experiencing Financial Difficulty](index=37&type=section&id=Modifications%20made%20to%20Borrowers%20Experiencing%20Financial%20Difficulty) The Company analyzes loan modifications to determine if they are concessionary and made to borrowers experiencing financial difficulty. Such loans are then considered collateral dependent and evaluated as part of the ACL. For the three months ended March 31, 2024 and 2023, the Company did not modify any loans under these conditions and had no payment defaults within 12 months following such modifications - The Company did not modify any loans for borrowers experiencing financial difficulty during the three months ended March 31, 2024, or March 31, 2023[109](index=109&type=chunk) - There were no loan modifications made to borrowers experiencing financial difficulty that resulted in a payment default within 12 months following the modification date for the three-month periods ended March 31, 2024, and March 31, 2023[110](index=110&type=chunk) [5. Securities](index=38&type=section&id=5.%20Securities) This section provides detailed information on the Company's securities portfolio, including available-for-sale (AFS), held-to-maturity (HTM), trading, and other securities. It covers amortized cost, fair value, unrealized gains/losses, and contractual maturities. The unrealized losses in both AFS and HTM portfolios are primarily due to interest rate changes, not credit deterioration, with agency-backed securities having no risk of loss Total Securities (in thousands) | Type | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Available for sale | $6,541,391 | $7,068,613 | | Held to maturity (net of ACL) | $5,622,617 | $5,688,610 | | Trading securities | $40,187 | $18,093 | | Other securities | $473,434 | $492,935 | | **Total securities** | **$12,677,629** | **$13,268,251** | - The total securities portfolio decreased by **$590.6 million (4.4%)** from December 31, 2023, to March 31, 2024[9](index=9&type=chunk) - Unrealized losses in both AFS and HTM portfolios are primarily due to changes in interest rates, not credit decline, with agency-backed securities having no risk of loss[116](index=116&type=chunk)[124](index=124&type=chunk) [Securities Available for Sale](index=38&type=section&id=Securities%20Available%20for%20Sale) The AFS securities portfolio decreased to $6.54 billion at March 31, 2024, from $7.07 billion at December 31, 2023. It recorded a gross unrealized loss of $668.1 million at March 31, 2024, primarily due to interest rate changes. Proceeds from sales of AFS securities were $19.2 million in Q1 2024, generating $139 thousand in gross realized gains Securities Available for Sale (in thousands) | Type | Amortized Cost (Mar 31, 2024) | Fair Value (Mar 31, 2024) | Gross Unrealized Losses (Mar 31, 2024) | | :------------------------------------ | :---------------------------- | :------------------------ | :------------------------------------- | | U.S. Treasury | $809,561 | $802,500 | $(7,216) | | U.S. Agencies | $161,766 | $159,022 | $(2,748) | | Mortgage-backed | $4,213,875 | $3,674,183 | $(540,155) | | State and political subdivisions | $1,323,080 | $1,233,920 | $(89,723) | | Corporates | $357,878 | $330,037 | $(27,841) | | Collateralized loan obligations | $341,171 | $341,729 | $(387) | | **Total** | **$7,207,331** | **$6,541,391** | **$(668,070)** | - The AFS portfolio decreased by **$527.2 million (7.5%)** from December 31, 2023, to March 31, 2024[111](index=111&type=chunk) - Gross unrealized losses on AFS securities totaled **$668.1 million** at March 31, 2024, with the majority in mortgage-backed securities[111](index=111&type=chunk) - Proceeds from sales of AFS securities were **$19.2 million** in Q1 2024, resulting in **$139 thousand** in gross realized gains[112](index=112&type=chunk)[113](index=113&type=chunk) - No ACL was related to AFS securities as the decline in fair value was not due to credit issues[119](index=119&type=chunk) [Securities Held to Maturity](index=42&type=section&id=Securities%20Held%20to%20Maturity) The HTM securities portfolio, net of ACL, was $5.62 billion at March 31, 2024, slightly down from $5.69 billion at December 31, 2023. It had a gross unrealized loss of $617.3 million at March 31, 2024, primarily due to interest rate changes. No sales of HTM securities occurred in Q1 2024 or Q1 2023. The portfolio includes a net unamortized unrealized loss of $198.4 million from securities transferred from AFS in 2022 Securities Held to Maturity (in thousands) | Type | Amortized Cost (Mar 31, 2024) | Fair Value (Mar 31, 2024) | Gross Unrealized Losses (Mar 31, 2024) | | :------------------------------------ | :---------------------------- | :------------------------ | :------------------------------------- | | U.S. Agencies | $123,240 | $120,579 | $(2,661) | | Mortgage-backed | $2,691,133 | $2,286,613 | $(404,520) | | State and political subdivisions | $2,812,064 | $2,617,946 | $(210,075) | | **Total** | **$5,626,437** | **$5,025,138** | **$(617,256)** | - The HTM portfolio, net of ACL, decreased by **$66 million (1.2%)** from December 31, 2023, to March 31, 2024[120](index=120&type=chunk) - Gross unrealized losses on HTM securities totaled **$617.3 million** at March 31, 2024, primarily from mortgage-backed and state/political subdivision securities[120](index=120&type=chunk) - No sales of HTM securities occurred during the three months ended March 31, 2024, or 2023[121](index=121&type=chunk) - The amortized cost balance of HTM securities includes a net unamortized unrealized loss of **$198.4 million** at March 32, 2024, related to securities transferred from AFS in 2022[122](index=122&type=chunk) [Trading Securities](index=46&type=section&id=Trading%20Securities) The trading securities portfolio increased to $40.2 million at March 31, 2024, from $18.1 million at December 31, 2023. It recorded a net unrealized loss of $40 thousand at March 31, 2024. Securities sold not yet purchased (short positions) also increased to $11.7 million - Trading securities increased to **$40.2 million** at March 31, 2024, from **$18.1 million** at December 31, 2023[9](index=9&type=chunk)[129](index=129&type=chunk) - A net unrealized loss of **$40 thousand** was recorded on trading securities at March 31, 2024, recognized in trading and investment banking income[129](index=129&type=chunk) - Securities sold not yet purchased (short positions) totaled **$11.7 million** at March 31, 2024, up from **$8.0 million** at December 31, 2023[129](index=129&type=chunk) [Other Securities](index=46&type=section&id=Other%20Securities) Other securities, including FRB/FHLB stock and equity securities, totaled $473.4 million at March 31, 2024, a decrease from $492.9 million at December 31, 2023. Equity securities with readily determinable fair values are traded on exchanges, while those without are held by a Small Business Investment Company subsidiary or in low-income housing partnerships Other Securities (in thousands) | Type | March 31, 2024 | December 31, 2023 | | :------------------------------------ | :------------- | :---------------- | | FRB and FHLB stock | $87,672 | $87,672 | | Equity securities with readily determinable fair values | $11,292 | $11,228 | | Equity securities without readily determinable fair values | $374,470 | $394,035 | | **Total** | **$473,434** | **$492,935** | - Other securities decreased by **$19.5 million (4.0%)** from December 31, 2023, to March 31, 2024[130](index=130&type=chunk) - Equity securities without readily determinable fair values include investments by a Small Business Investment Company subsidiary and in low-income housing partnerships[131](index=131&type=chunk) [Investment Securities Gains, Net](index=48&type=section&id=Investment%20Securities%20Gains,%20Net) Net investment securities gains were $9.37 million in Q1 2024, a significant improvement from a $5.32 million loss in Q1 2023. This was primarily driven by a $9.71 million gain on sales of equity securities without readily determinable fair values in Q1 2024, contrasting with a $4.8 million impairment of an AFS security in Q1 2023 Investment Securities Gains (Losses), Net (in thousands) | Component | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Gains realized on AFS debt securities | $139 | $0 | | Losses realized on AFS debt securities | $0 | $(2) | | Impairment of AFS security | $0 | $(4,800) | | Fair value adjustments, net (equity securities with readily determinable fair values) | $(23) | $88 | | Fair value adjustments, net (equity securities without readily determinable fair values) | $(450) | $(610) | | Sales (equity securities without readily determinable fair values) | $9,705 | $0 | | **Total** | **$9,371** | **$(5,324)** | - Net investment securities gains increased by **$14.7 million (276.0%)** from a loss in Q1 2023 to a gain in Q1 2024[132](index=132&type=chunk) - The increase was primarily due to a **$9.7 million** gain on sales of equity securities without readily determinable fair values in Q1 2024 and the absence of the **$4.8 million** AFS security impairment recorded in Q1 2023[132](index=132&type=chunk) [6. Goodwill and Other Intangibles](index=48&type=section&id=6.%20Goodwill%20and%20Other%20Intangibles) Goodwill remained stable at $207.39 million across all segments (Commercial, Institutional, Personal Banking) from January 1, 2023, to March 31, 2024. Finite-lived intangible assets, primarily customer relationships, had a net carrying amount of $69.05 million at March 31, 2024, down from $71.01 million at December 31, 2023, due to amortization expense of $1.96 million in Q1 2024 Goodwill by Segment (in thousands) | Segment | January 1, 2024 | March 31, 2024 | | :-------------------- | :-------------- | :------------- | | Commercial Banking | $63,113 | $63,113 | | Institutional Banking | $76,492 | $76,492 | | Personal Banking | $67,780 | $67,780 | | **Total** | **$207,385** | **$207,385** | Finite-Lived Intangible Assets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------- | :------------- | :---------------- | | Gross carrying amount | $88,805 | $112,323 | | Accumulated amortization | $19,753 | $41,311 | | **Net carrying amount** | **$69,052** | **$71,012** | | Aggregate amortization expense (Q1) | $1,960 | $2,298 | - Goodwill remained unchanged at **$207.39 million** across all reportable segments from January 1, 2023, through March 31, 2024[133](index=133&type=chunk) - Net carrying amount of finite-lived intangible assets decreased by **$1.96 million** from December 31, 2023, to March 31, 2024, due to amortization[133](index=133&type=chunk)[134](index=134&type=chunk) [7. Borrowed Funds](index=50&type=section&id=7.%20Borrowed%20Funds) Total borrowed funds remained stable at $2.18 billion at March 31, 2024. Short-term debt consists of $1.0 billion from FHLB and $800 million from the Federal Reserve Bank's BTFP. Long-term debt includes trust preferred securities and subordinated notes. The Company has access to additional liquidity through FHLB advances and the Federal Reserve Discount Window, and maintains a revolving line of credit with Wells Fargo Bank, N.A. Repurchase agreements are used for short-term funding, totaling $2.18 billion at March 31, 2024 Borrowed Funds (in thousands) | Type | March 31, 2024 | December 31, 2023 | | :------------------------------------ | :------------- | :---------------- | | **Short-term debt** | | | | Federal Home Loan Bank | $1,000,000 | $1,000,000 | | Federal Reserve Bank Term Funding Program | $800,000 | $800,000 | | **Total short-term debt** | **$1,800,000** | **$1,800,000** | | **Long-term debt** | | | | Trust Preferred Securities | $75,888 | $75,605 | | Subordinated notes 3.70% | $199,344 | $199,232 | | Subordinated notes 6.25% | $108,510 | $108,403 | | **Total long-term debt** | **$383,742** | **$383,247** | | **Total borrowed funds** | **$2,183,742** | **$2,183,247** | - The Company had a **$1.0 billion** short-term advance outstanding with FHLB of Des Moines and an **$800.0 million** short-term borrowing with the Federal Reserve Bank's BTFP at March 31, 2024[138](index=138&type=chunk)[139](index=139&type=chunk) - Remaining borrowing capacity with the FHLB was **$952.7 million**, and with the Federal Reserve Discount Window was **$11.0 billion** at March 31, 2024[138](index=138&type=chunk)[139](index=139&type=chunk) - Repurchase agreements totaled **$2.18 billion** at March 31, 2024, primarily secured by U.S. Agencies (**$1.97 billion**)[142](index=142&type=chunk) [8. Business Segment Reporting](index=53&type=section&id=8.%20Business%20Segment%20Reporting) The Company operates through three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. These segments offer a diverse range of financial products and services, from commercial loans and treasury management to fund administration, wealth management, and consumer banking. Segment financial results are regularly evaluated by senior executives for resource allocation and performance assessment - The Company's three reportable segments are Commercial Banking, Institutional Banking, and Personal Banking[143](index=143&type=chunk) - Commercial Banking serves small to middle-market businesses with commercial loans, real estate financing, credit cards, and treasury management services[144](index=144&type=chunk) - Institutional Banking provides banking, fund, asset management, and healthcare services to institutional clients, including fixed income trading, corporate trust, and HSA custodial services[145](index=145&type=chunk) - Personal Banking offers consumer banking and wealth management services, including deposit accounts, retail credit cards, private banking, installment loans, and estate planning[146](index=146&type=chunk) Business Segment Net Income (in thousands) | Segment | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Commercial Banking | $83,050 | $57,236 | | Institutional Banking | $34,065 | $41,351 | | Personal Banking | $(6,857) | $(6,150) | | **Total Net Income** | **$110,258** | **$92,437** | [9. Revenue Recognition](index=54&type=section&id=9.%20Revenue%20Recognition) This section describes the Company's principal revenue streams, including trust and securities processing, trading and investment banking, service charges on deposits, insurance fees, brokerage fees, bankcard fees, investment securities gains/losses, and other income. It outlines how performance obligations are satisfied and revenue is recognized for each category, noting that many revenue streams are outside the scope of ASC 606. Total receivables from ASC 606-scoped revenue were $89.7 million at March 31, 2024 Disaggregated Noninterest Income (in thousands) - Three Months Ended March 31, 2024 | Revenue Stream | Commercial Banking | Institutional Banking | Personal Banking | Revenue (Expense) out of Scope of ASC 606 | Total | | :------------------------------------ | :----------------- | :-------------------- | :--------------- | :---------------------------------------- | :------ | | Trust and securities processing | $0 | $55,241 | $14,237 | $0 | $69,478 | | Trading and investment banking | $0 | $45 | $0 | $5,417 | $5,462 | | Service charges on deposit accounts | $10,351 | $9,095 | $1,284 | $27 | $20,757 | | Insurance fees and commissions | $0 | $0 | $283 | $0 | $283 | | Brokerage fees | $68 | $11,323 | $1,769 | $0 | $13,160 | | Bankcard fees | $16,548 | $8,157 | $5,146 | $(7,883) | $21,968 | | Investment securities gains, net | $0 | $0 | $0 | $9,371 | $9,371 | | Other | $138 | $799 | $675 | $17,153 | $18,765 | | **Total Noninterest income** | **$27,105** | **$84,660** | **$23,394** | **$24,085** | **$159,244** | - Trust and securities processing fees are primarily asset-based, recognized upon service completion, and are a significant revenue source for Institutional and Personal Banking[149](index=149&type=chunk) - Bankcard fees, mainly interchange revenue, are recognized per transaction. Rebates and rewards programs resulted in **$7.9 million** expense in Q1 2024[154](index=154&type=chunk) - Investment securities gains/losses are recognized outside ASC 606, reflecting gains/losses on sales of AFS securities and fair value adjustments on equity securities[155](index=155&type=chunk) - Total receivables from revenue recognized under ASC 606 were **$89.7 million** at March 31, 2024[157](index=157&type=chunk) [10. Commitments, Contingencies and Guarantees](index=59&type=section&id=10.%20Commitments,%20Contingencies%20and%20Guarantees) The Company engages in off-balance-sheet financial instruments like loan commitments, commercial and standby letters of credit, and derivatives to meet customer financing needs and manage interest rate risk. These instruments involve credit and interest rate risk, with many commitments expiring unused. The allowance for credit losses on off-balance sheet credit exposures was $5.1 million at March 31, 2024, with no provision recorded in Q1 2024 or Q1 2023 Off-Balance Sheet Financial Instruments (in thousands) | Instrument | March 31, 2024 | December 31, 2023 | | :---------------------------------------------------- | :------------- | :---------------- | | Commitments to extend credit for loans (excluding credit card loans) | $12,687,851 | $12,831,831 | | Commitments to extend credit under credit card loans | $5,298,162 | $4,286,604 | | Commercial letters of credit | $885 | $1,224 | | Standby letters of credit | $431,331 | $407,574 | | Forward contracts | $40,215 | $26,471 | | Spot foreign exchange contracts | $74,984 | $4,830 | | Commitments to extend credit for securities purchased under agreements to resell | $300,000 | $0 | - The Company's off-balance sheet financial instruments totaled **$18.83 billion** at March 31, 2024, an increase from **$17.55 billion** at December 31, 2023[163](index=163&type=chunk) - The allowance for credit losses on off-balance sheet credit exposures was **$5.1 million** at both March 31, 2024, and December 31, 2023, with no provision recorded in Q1 2024 or Q1 2023[168](index=168&type=chunk)[169](index=169&type=chunk) [11. Derivatives and Hedging Activities](index=60&type=section&id=11.%20Derivatives%20and%20Hedging%20Activities) The Company uses derivative financial instruments to manage interest rate risk arising from its business operations and to provide services to customers. Derivatives are recorded at fair value, with changes recognized in earnings for non-designated hedges and in AOCI for cash flow hedges. The Company had $220.9 million in derivative assets and $119.5 million in derivative liabilities at March 31, 2024 - The Company uses derivatives to manage interest rate exposures and offers interest rate swaps to customers, offsetting its own risk with third-party instruments[170](index=170&type=chunk)[182](index=182&type=chunk) Fair Value of Derivative Instruments (in thousands) | Type | Derivative Assets (Mar 31, 2024) | Derivative Liabilities (Mar 31, 2024) | | :------------------------------------ | :------------------------------- | :-------------------------------- | | Derivatives not designated as hedging instruments | $113,585 | $119,491 | | Derivatives designated as hedging instruments | $107,328 | $38 | | **Total** | **$220,913** | **$119,529** | - The Company had no interest rate swaps designated as fair value hedges at March 31, 2024, but reclassified **$2.6 million** from AOCI to Interest income in Q1 2024 from terminated hedges[175](index=175&type=chunk)[176](index=176&type=chunk) - As of March 31, 2024, the Company had eight interest rate floors and floor spreads with an aggregate notional amount of **$2.0 billion** designated as cash flow hedges, up from three instruments with **$1.0 billion** notional at December 31, 2023[179](index=179&type=chunk) - Non-designated hedges, primarily customer interest rate swaps, had an aggregate notional amount of **$4.7 billion** at March 31, 2024, with fair value changes recognized directly in earnings[182](index=182&type=chunk) [12. Fair Value Measurements](index=63&type=section&id=12.%20Fair%20Value%20Measurements) This section details the fair value measurements of the Company's assets and liabilities on both a recurring and non-recurring basis, categorized into Level 1, Level 2, and Level 3 inputs. Recurring fair value measurements include trading securities, AFS securities, equity securities, and derivatives, primarily using observable market inputs (Level 1 and 2). Non-recurring measurements, such as collateral dependent assets and other real estate owned, use unobservable inputs (Level 3) based on appraisals and internal estimates - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[188](index=188&type=chunk) Assets Measured at Fair Value on a Recurring Basis (in thousands) - March 31, 2024 | Asset Type | Total Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------------- | :------ | :------ | :------ | | Trading securities | $40,187 | $8,520 | $31,667 | $0 | | Available-for-sale securities | $6,541,391 | $1,132,537 | $5,408,854 | $0 | | Equity securities with readily determinable fair values | $11,292 | $11,292 | $0 | $0 | | Company-owned life insurance | $73,419 | $0 | $73,419 | $0 | | Bank-owned life insurance | $527,897 | $0 | $527,897 | $0 | | Derivatives | $220,913 | $0 | $220,913 | $0 | | **Total Assets** | **$7,415,099** | **$1,152,349** | **$6,262,750** | **$0** | Liabilities Measured at Fair Value on a Recurring Basis (in thousands) - March 31, 2024 | Liability Type | Total Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------------- | :------ | :------ | :------ | | Derivatives | $119,529 | $0 | $119,529 | $0 | | Securities sold not yet purchased | $11,680 | $0 | $11,680 | $0 | | **Total Liabilities** | **$131,209** | **$0** | **$131,209** | **$0** | Assets Measured at Fair Value on a Non-Recurring Basis (in thousands) - March 31, 2024 | Asset Type | Total Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------------- | :------ | :------ | :------ | | Collateral dependent assets | $50 | $0 | $0 | $50 | | Other real estate owned | $793 | $0 | $0 | $793 | | **Total** | **$843** | **$0** | **$0** | **$843** | - Collateral dependent assets and other real estate owned are measured at fair value on a non-recurring basis, primarily using Level 3 unobservable inputs based on external appraisals and internal estimates[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [13. Subsequent Event](index=72&type=section&id=13.%20Subsequent%20Event) On April 29, 2024, the Company announced a definitive merger agreement to acquire Heartland Financial USA, Inc. (HTLF) in an all-stock transaction valued at approximately $2.0 billion. HTLF stockholders will receive 0.55 shares of UMB common stock for each HTLF share. The merger is subject to regulatory and shareholder approvals. In connection with the merger, the Company also entered into forward sale agreements for 3,220,000 shares of its common stock, raising approximately $201.6 million initially - On April 29, 2024, UMB Financial Corporation announced the acquisition of Heartland Financial USA, Inc. (HTLF) in an all-stock transaction valued at approximately **$2.0 billion**[214](index=214&type=chunk) - HTLF stockholders will receive a fixed exchange ratio of **0.55 shares** of UMB common stock for each share of HTLF common stock[214](index=214&type=chunk) - The merger is subject to customary closing conditions, including regulatory approval and approval by shareholders of both companies[215](index=215&type=chunk) - In connection with the merger, the Company entered into forward sale agreements to issue **3,220,000 shares** of common stock, raising approximately **$201.6 million**[216](index=216&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=73&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2024, highlighting key changes, strategic objectives, and performance drivers. It discusses the impact of interest rate volatility, the FDIC special assessment, and the Company's focus on operating efficiencies, net interest income growth, noninterest revenue diversification, and effective capital management - The Company's four core financial objectives are: improving operating efficiencies, increasing net interest income through loan/deposit growth, growing noninterest revenue, and effective capital management[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk) - The FDIC special assessment increased by **25%** in February 2024, leading to an additional **$13.0 million** expense recognized in Q1 2024[226](index=226&type=chunk) - Total revenue increased by **$26.8 million (7.2%)** in Q1 2024 compared to Q1 2023, while noninterest expense increased by **$17.8 million (7.5%)**[228](index=228&type=chunk) - Net interest income decreased by **$2.3 million (0.9%)** in Q1 2024 YoY, driven by higher interest expense from an unfavorable liability mix shift, partially offset by loan growth[229](index=229&type=chunk) - Noninterest income increased by **$29.0 million (22.3%)** in Q1 2024 YoY, representing **39.9%** of total revenues, up from **35.0%** in Q1 2023[230](index=230&type=chunk)[231](index=231&type=chunk) - Total shareholders' equity increased by **$338.2 million (12.0%)** YoY to **$3.2 billion** at March 31, 2024[232](index=232&type=chunk) [CAUTIONARY NOTICE ABOUT FORWARD-LOOKING STATEMENTS](index=73&type=section&id=Cautionary%20Notice%20About%20Forward-Looking%20Statements) This section provides a cautionary notice regarding forward-looking statements within the Form 10-Q, emphasizing that such statements are subject to assumptions, risks, and uncertainties that may cause actual results to differ materially. It lists various factors, including economic conditions, regulatory changes, market shifts, and operational risks, that could impact future performance. The Company does not undertake to update these statements unless required by law - Forward-looking statements are subject to assumptions, risks, and uncertainties, and actual future results may differ materially from expectations[221](index=221&type=chunk) - Key factors that may cause actual results to differ include local/national economic conditions, regulatory changes, shifts in investor sentiment, changes in monetary policies, and the Company's ability to manage capital, liquidity, and attract deposits[222](index=222&type=chunk)[224](index=224&type=chunk) - The Company does not undertake to update forward-looking statements to reflect new events or circumstances, except as required by applicable securities laws[223](index=223&type=chunk) [Overview](index=75&type=section&id=Overview) The Company's overview highlights the significant volatility in the U.S. banking sector due to rising interest rates and bank failures in 2023, leading to increased focus on liquidity and capital. The Company recognized an additional $13.0 million expense in Q1 2024 for the increased FDIC special assessment. It outlines four core financial objectives: improving operating efficiencies, increasing net interest income, growing noninterest revenue, and effective capital management, noting progress and challenges in each area - The U.S. banking sector experienced significant volatility in 2022-2023 due to rising interest rates and bank failures, increasing focus on liquidity, uninsured deposits, and capital[225](index=225&type=chunk) - The Company recorded an additional **$13.0 million** expense in Q1 2024 due to a **25%** increase in the estimated FDIC special assessment[226](index=226&type=chunk) - Operating efficiencies are being improved through organizational simplification, back-office streamlining, and technology investments, with total revenue increasing **7.2%** and noninterest expense increasing **7.5%** in Q1 2024 YoY[228](index=228&type=chunk) - Net interest income decreased by **0.9%** in Q1 2024 YoY, primarily due to higher interest expense from an unfavorable liability mix shift, partially offset by a **9.8%** increase in average loans[229](index=229&type=chunk) - Noninterest income grew by **22.3%** in Q1 2024 YoY, driven by investment securities gains, trust and securities processing, and bankcard income, now representing **39.9%** of total revenues[230](index=230&type=chunk)[231](index=231&type=chunk) - Capital management focuses on maintaining a strong capital position, with total shareholders' equity increasing **12.0%** YoY to **$3.2 billion** at March 31, 2024[232](index=232&type=chunk) [Earnings Summary](index=76&type=section&id=Earnings%20Summary) The Company reported net income of $110.3 million for Q1 2024, a 19.3% increase from $92.4 million in Q1 2023. Basic EPS rose to $2.27 from $1.91. Return on average assets was 1.06% and return on average common shareholders' equity was 14.11%. Net interest income slightly decreased, while provision for credit losses significantly declined. Noninterest income increased substantially, and noninterest expense also rose Earnings Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $110,258 | $92,437 | | Basic earnings per share | $2.27 | $1.91 | | Diluted earnings per share | $2.25 | $1.90 | | Return on average assets | 1.06% | 0.97% | | Return on average common shareholders' equity | 14.11% | 13.76% | | Net interest income | $239,434 | $241,696 | | Provision for credit losses | $10,000 | $23,250 | | Noninterest income | $159,244 | $130,200 | | Noninterest expense | $254,804 | $237,052 | - Net income increased by **$17.8 million (19.3%)** YoY, with basic EPS rising from **$1.91** to **$2.27**[233](index=233&type=chunk) - Net interest income decreased slightly by **$2.3 million (0.9%)** YoY, while net interest margin (tax-equivalent) decreased to **2.48%** from **2.76%**[234](index=234&type=chunk)[246](index=246&type=chunk) - Provision for credit losses decreased by **$13.3 million (57.2%)** YoY, and nonperforming loans increased to **$17.8 million**[235](index=235&type=chunk) - Noninterest income increased by **$29.0 million (22.3%)** YoY, and noninterest expense increased by **$17.8 million (7.5%)** YoY[236](index=236&type=chunk) [Net Interest Income](index=76&type=section&id=Net%20Interest%20Income) Net interest income, a primary earnings source, decreased by $2.3 million (0.9%) in Q1 2024 YoY, primarily due to a 43 basis point contraction in net interest spread and a 28 basis point decrease in net interest margin. This was driven by a significant increase in the cost and mix of interest-bearing liabilities (up 112 bps), partially offset by higher loan volumes and repricing of earning assets (yield up 69 bps). The benefit from interest-free funds increased by 15 basis points despite a $1.3 billion decrease in average interest-free funds - Net interest income decreased by **$2.3 million (0.9%)** for Q1 2024 compared to Q1 2023[238](index=238&type=chunk) - Net interest spread decreased by **43 basis points**, and net interest margin (tax-equivalent) decreased by **28 basis points** to **2.48%** in Q1 2024 YoY[239](index=239&type=chunk)[246](index=246&type=chunk) - The cost of interest-bearing liabilities increased by **112 basis points**, while the yield on earning assets increased by **69 basis points** YoY[239](index=239&type=chunk)[246](index=246&type=chunk) - Average earning assets increased by **$3.4 billion (9.4%)** YoY, driven by higher average loan and interest-bearing due from bank balances[234](index=234&type=chunk)[239](index=239&type=chunk)[242](index=242&type=chunk) - The benefit from interest-free funds increased by **15 basis points** in Q1 2024, despite a **$1.3 billion** decrease in average interest-free funds[242](index=242&type=chunk)[246](index=246&type=chunk) [Provision and Allowance for Credit Losses](index=79&type=section&id=Provision%20and%20Allowance%20for%20Credit%20Losses) The Company recorded a provision for credit losses of $10.0 million in Q1 2024, a decrease from $23.3 million in Q1 2023, reflecting changes in macro-economic data and portfolio credit metrics. The Allowance for Credit Losses (ACL) on loans as a percentage of total loans slightly decreased to 0.96% at March 31, 2024, from 0.97% at March 31, 2023. Net charge-offs were $3.0 million in Q1 2024, down from $4.6 million in Q1 2023 - Provision for credit losses decreased by **$13.3 million (57.2%)** to **$10.0 million** in Q1 2024 compared to Q1 2023[235](index=235&type=chunk)[254](index=254&type=chunk) - The ACL on loans as a percentage of total loans slightly decreased to **0.96%** at March 31, 2024, from **0.97%** at March 31, 2023[235](index=235&type=chunk)[254](index=254&type=chunk)[257](index=257&type=chunk) Allowance for Credit Losses Analysis (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Beginning balance | $222,996 | $194,243 | | Provision for credit losses | $10,000 | $23,250 | | Total charge-offs | $(5,477) | $(5,834) | | Total recoveries | $2,460 | $1,191 | | **Net charge-offs** | **$(3,017)** | **$(4,643)** | | **Ending balance – ACL** | **$229,979** | **$212,850** | | ACL on loans | $226,159 | $210,509 | | ACL on held-to-maturity securities | $3,820 | $2,341 | | ACL on loans as a percent of loans | 0.96% | 0.97% | | Net charge-offs to average loans | 0.05% | 0.09% | - Net charge-offs decreased to **$3.0 million** in Q1 2024 from **$4.6 million** in Q1 2023[255](index=255&type=chunk)[257](index=257&type=chunk) [Noninterest Income](index=82&type=section&id=Noninterest%20Income) Noninterest income increased by $29.0 million (22.3%) to $159.2 million in Q1 2024 YoY, driven by significant increases in investment securities gains, trust and securities processing income, and bankcard fees. This growth reflects the Company's objective to diversify revenue sources beyond interest rates, although market volatility continues to impact asset-based fees Summary of Noninterest Income (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Dollar Change | Percent Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------ | :------------- | | Trust and securities processing | $69,478 | $62,359 | $7,119 | 11.4% | | Trading and investment banking | $5,462 | $5,308 | $154 | 2.9% | | Service charges on deposits | $20,757 | $21,159 | $(402) | (1.9%) | | Insurance fees and commissions | $283 | $274 | $9 | 3.3% | | Brokerage fees | $13,160 | $13,676 | $(516) | (3.8%) | | Bankcard fees | $21,968 | $18,172 | $3,796 | 20.9% | | Investment securities gains (losses), net | $9,371 | $(5,324) | $14,695 | 276.0% | | Other | $18,765 | $14,576 | $4,189 | 28.7% | | **Total noninterest income** | **$159,244** | **$130,200** | **$29,044** | **22.3%** | - Noninterest income increased by **$29.0 million (22.3%)** in Q1 2024 YoY[260](index=260&type=chunk) - Investment securities gains, net, increased by **$14.7 million (276.0%)** YoY, driven by a **$10.7 million** gain on disposition of an equity security and the absence of a **$4.8 million** impairment from Q1 2023[263](index=263&type=chunk) - Trust and securities processing income increased by **$7.1 million (11.4%)** YoY, primarily due to higher fund services, trust services, and corporate trust revenue[261](index=261&type=chunk) - Bankcard fees increased by **$3.8 million (20.9%)** YoY, driven by higher interchange income and lower rebate/reward costs[262](index=262&type=chunk) - Other noninterest income increased by **$4.2 million (28.7%)** YoY, primarily due to a **$4.0 million** legal settlement and a **$1.8 million** gain on sale of land[264](index=264&type=chunk) [Noninterest Expense](index=85&type=section&id=Noninterest%20Expense) Noninterest expense increased by $17.8 million (7.5%) to $254.8 million in Q1 2024 YoY. This rise was primarily driven by a $13.8 million increase in regulatory fees due to the FDIC special assessment, along with increases in processing fees and bankcard expenses. These increases were partially offset by decreases in equipment, supplies and services, and other expenses Summary of Noninterest Expense (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Dollar Change | Percent Change | | :-----------------------------

Transaction Overview - UMB is acquiring Heartland Financial USA (HTLF) in a 100% stock transaction with a fixed exchange ratio of 0.55x UMB shares for each HTLF share[13] - The deal is valued at $2.0 billion, equivalent to $45.74 per HTLF share, representing a 28.1% premium[13] - UMB will raise $210 million of common equity priced at $75.00 per share[13] - Post-closing, the UMB Board will have 16 members, including 11 UMB directors and 5 Heartland directors[13] - The transaction is anticipated to close in the first quarter of 2025[13] Financial Impact - The combined company will have approximately $65 billion in assets[26, 27] - UMB anticipates $124 million in pre-tax run-rate cost savings from the transaction[9, 12, 15, 31] - The transaction is expected to result in 31% EPS accretion[29] - The combined company is projected to have a Common Equity Tier 1 (CET1) ratio of approximately 10% at closing[29, 32] Strategic Rationale - The acquisition enhances UMB's scale and density in existing markets and expands into new geographies[26] - The combination is expected to increase Assets Under Management (AUM) / Assets Under Advisement (AUA) by approximately 31%[26] - The combined company will have a loan-to-deposit ratio of 67%, positioning UMB for growth[26] - The transaction is projected to enhance Return on Average Tangible Common Equity (ROATCE) by approximately 800 basis points[26] Company Information - Heartland Financial USA has total assets of $19.1 billion and total deposits of $15.3 billion as of March 31, 2024[17] - Heartland has $5.0 billion in AUM/AUA[41, 60] - Heartland has 107 branches located across the Midwest, West, and Southwest regions[16, 28]

Financial Data and Key Metrics Changes - The company reported GAAP earnings of $110.3 million or $2.25 per share, with operating EPS of $2.47 per share, representing a 7.7% increase compared to Q4 2023 [41] - Average loan balances increased by 4.2% annualized, driven by construction draws and commercial and industrial (C&I) loans [41] - Net interest margin increased by 2 basis points to 2.48%, with expectations of modest pressure on net interest margin in the second quarter due to higher cost institutional client deposits [31][32] Business Line Data and Key Metrics Changes - Card purchase volumes increased by 12% year-over-year to a record $4.6 billion, contributing to interchange income [43] - Fee income rose by $19 million from the previous quarter to $159 million, benefiting from an 18% increase in bank card fees and a $3 million increase in trust and securities processing income [62] Market Data and Key Metrics Changes - The company anticipates strong core earnings power with approximately $700 million in net income based on 2025 estimates, with a loan-to-deposit ratio of 67% [52] - The transaction will expand the company's footprint to 13 states, gaining top 10 market share in five states [53] Company Strategy and Development Direction - The acquisition of Heartland Financial is expected to accelerate growth strategy, diversify, and derisk the business model [40] - The company aims to leverage Heartland's strong deposit franchise and enhance its retail banking presence, nearly doubling its retail footprint [66] - The focus is on generating revenue synergies through cross-selling opportunities and enhancing fee income [55][74] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transaction's potential to unlock value and enhance shareholder returns, with a strong emphasis on maintaining a conservative credit culture [65][66] - The company is optimistic about the combined entity's ability to generate significant capital and return to a CET1 ratio of 11.1% within 18 months post-transaction [90] Other Important Information - The transaction is an all-stock deal valued at approximately $2 billion, with an exchange ratio of 0.55 UMBF shares for every HTLF share [51] - The company expects to close the transaction in the first quarter of 2025, subject to regulatory and shareholder approvals [70] Q&A Session Summary Question: What are the expected cost savings from the transaction? - Management indicated expected cost savings of 27.5% of Heartland's non-interest expense, with 40% to be recognized in 2025 [57] Question: How will the deal affect balance sheet growth? - Management expects the combined balance sheet to provide ample capacity for growth, leveraging a strong deposit base [96] Question: What is the expected impact on net interest margin? - Management anticipates modest downward pressure on net interest margin due to seasonal factors and higher cost deposits [133]

Exhibit 99.1 UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106 816.860.7000 umb.com "Our performance validates the perspective I shared earlier this year that the dramatized and highly exaggerated regional bank crisis from a year ago— and similar frenzy over idiosyncratic commercial real estate headlines earlier this year—do not apply to the whole regional banking industry, which remains on strong footing. As students of history, we believe in gravity and that what goes up will eventually ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ___ Commission file number: 001-38481 UMB FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Missouri 43-0903811 (State or other juri ...

Financial Data and Key Metrics Changes - For the full year of 2023, net income was $350 million or $7.18 per share, with adjusted net operating income at $397.1 million or $8.14 per share [16] - In Q4, net interest income increased by $8.2 million to $230.5 million, driven by loan growth and repricing, with net interest margin at 2.46%, up 3 basis points from the previous quarter [38][44] - Total revenue for Q4 increased by 4.3% from the linked quarter, with positive operating leverage of 1.3% on a linked quarter basis [34] Business Line Data and Key Metrics Changes - Average loan balances increased by 6.3% on an annualized basis from Q3 to $23.1 billion, with strong growth in construction and commercial real estate [18] - Noninterest income for Q4 was $148.3 million, representing 38% of total revenue, significantly higher than the 17% median reported by peers [45] - Average deposits increased by 17.2% on an annualized basis from Q3, led by commercial customers [43][50] Market Data and Key Metrics Changes - The company reported a 11% decrease in classified loans and nonperforming loan levels improved to 6 basis points [32] - The unrealized loss position in the combined securities book improved to $1.1 billion, down from 14% in the previous quarter [55] - The company expects loan yields to continue benefiting from repricing and higher yields on new origination [53] Company Strategy and Development Direction - The company remains focused on operating leverage despite challenges from elevated interest expenses and the interest rate environment [12] - The management expressed confidence in the company's diversified business model and its ability to weather economic cycles [37] - The company plans to continue deploying cash flows from the securities portfolio into loans, with expectations of maintaining strong loan growth [44][70] Management's Comments on Operating Environment and Future Outlook - Management noted a muted but resilient macro environment for 2024, with expectations of modest compression in net interest income due to seasonal factors [64] - The company anticipates that loan growth in Q1 2024 looks stronger than in Q4 2023, indicating positive momentum [80] - Management emphasized the importance of maintaining a strong capital position and high-quality loan portfolio [37] Other Important Information - The company recognized a $52.8 million FDIC special assessment in Q4, impacting net income [15][57] - The effective tax rate for 2023 was 17%, with expectations for a similar rate in 2024 [66] Q&A Session Summary Question: How do you view the NII sensitivity and potential offsets? - Management acknowledged a projected 3.1% impact to NII from a 100 basis point decline in rates, but noted potential offsets from loan and deposit growth [14] Question: Can you discuss the trends in criticized classified loans and charge-offs? - Management reported low charge-offs and indicated that they do not foresee significant deterioration in their office portfolio, which remains strong [22][83] Question: What are the expectations for loan growth in 2024? - Management expressed confidence in outperforming peers in loan growth, driven by market share gains and a strong pipeline entering 2024 [70][77]

FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ____ Commission file number 001-38481 UMB FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) | Missouri | 43-0903811 | | --- ...