Financial Performance - As of September 30, 2024, cash and cash equivalents totaled $7,276,764 thousand, a 85.5% increase from $3,927,229 thousand in the same period of 2023[25] - Basic net income per share for the quarter includes the dilutive effect of 303,425 shares in 2024 compared to 236,920 shares in 2023[26] - Net income for the three months ended September 30, 2024, was $109.643 million, representing a 13.5% increase from $96.554 million in the same quarter of 2023[145] - Net income for the nine months ended September 30, 2024, was $321.246 million, up 15.1% from $279.101 million in the same period of 2023[145] - Average assets for the three months ended September 30, 2024, totaled $43.267 billion, compared to $39.524 billion for the same period in 2023, reflecting a growth of 9.4%[145] - Average assets for the nine months ended September 30, 2024, were $42.586 billion, compared to $39.472 billion for the same period in 2023, indicating a growth of 7.1%[145] Loan Portfolio and Credit Quality - As of September 30, 2024, total loans amounted to $24,948.3 million, a slight decrease from $24,990.7 million on December 31, 2023[41] - Nonaccrual loans with no related allowance for credit losses increased to $19.3 million at September 30, 2024, compared to $13.2 million at December 31, 2023, representing a 46.2% increase[44] - Loans 90 days past due and still accruing interest rose to $7.1 million as of September 30, 2024, up from $3.1 million at December 31, 2023, indicating a 129% increase[44] - The company reported a total of $42,394 million in past due loans as of September 30, 2024, compared to $97 million in total loans past due at December 31, 2023[41] - The company tracks credit quality indicators, including trends in risk grading, net charge-offs, and non-performing loans[49] - The risk grading matrix categorizes loans into Pass, Special Mention, Substandard, and Doubtful, with ongoing monitoring of credit risk[51] Allowance for Credit Losses - The allowance for credit losses (ACL) is estimated using historical credit loss experience and current economic forecasts, with a focus on macroeconomic variables affecting risk ratings[86][88] - The allowance for credit losses increased to $251,669 thousand as of September 30, 2024, up from $242,123 thousand at the beginning of the period, reflecting a growth of approximately 4.3%[100] - The overall increase in the allowance for credit losses suggests a cautious outlook in response to potential credit risks in the market[100] - The provision for credit losses during the same period was $18,000 thousand, which is a notable increase from the previous provision levels[100] Securities and Investments - Securities available for sale totaled $7.47 billion with gross unrealized losses of $481.97 million as of September 30, 2024[108] - The total amortized cost of securities available for sale was $7.47 billion as of September 30, 2024[108] - The Company has no allowance for credit losses (ACL) related to available-for-sale securities as the decline in fair value did not result from credit issues[114] - The total fair value of U.S. Treasury securities was $882.54 million as of September 30, 2024, with unrealized losses of $2.48 million[108] Noninterest Income - Noninterest income for the three months ended September 30, 2024, was $158.743 million, up 19.1% from $133.317 million in the prior year[145] - Noninterest income for the nine months ended September 30, 2024, was $462.906 million, an increase of 15.3% from $401.599 million in the prior year[145] - Trust and securities processing revenue increased to $74,222 thousand in Q3 2024 from $66,668 thousand in Q3 2023, reflecting a growth of 11.6%[157] - Other noninterest income increased by $7.7 million, or 90.0%, for the three months ended September 30, 2024, compared to the same period in 2023[257] Borrowings and Funding - The Company’s total borrowed funds decreased from $2,183,247 thousand as of December 31, 2023, to $1,434,758 thousand as of September 30, 2024, reflecting a reduction of approximately 34.3%[131] - The Company had an outstanding short-term borrowing of $800,000 thousand with the Federal Reserve Bank's Bank Term Funding Program (BTFP) as of September 30, 2024, which was repaid in October 2024[135] - The Company’s borrowing capacity with the Federal Home Loan Bank (FHLB) was $1.6 billion as of September 30, 2024[134] Risk Management - The company has implemented lending policies to minimize risk, with a focus on diversification of the loan portfolio[33] - Credit risk is managed through formal risk management practices and consistent underwriting standards[40] - The company continues to monitor charge-offs and borrower performance on a loan origination vintage basis to assess risk[76] - The company has identified that the repayment of asset-based loans relies on the collection of accounts receivable within 30 to 90 days, emphasizing the importance of cash flow management[57] Market Conditions and Economic Impact - The company noted that commercial real estate loans are influenced by economic cycles, with owner-occupied loans being particularly sensitive to local market conditions[60] - The primary risk for HELOC loans is the borrower's inability to repay debt, which is influenced by market volatility impacting home values[69] - The company reported a significant risk associated with market volatility impacting the value of collateral for consumer loans[74] - The recent volatile markets have impacted trust and securities processing income, which is highly correlated to changes in market value of assets[258]
UMB Financial Corporation(UMBFP) - 2024 Q3 - Quarterly Report