PART I – FINANCIAL INFORMATION Financial Statements (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 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 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 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 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 year18 - The company issued common stock valued at $2.76 billion and preferred stock valued at $110.7 million as part of the HTLF acquisition18 - Total comprehensive income for the first six months of 2025 was $429.7 million18 Consolidated Statements of Cash Flows 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 acquisition22 Notes to Consolidated Financial Statements 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 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 acquisition52 Note 5. Securities 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 2024116326 - The HTM portfolio included a net unamortized unrealized loss of $155.0 million from securities transferred from AFS in 2022127 Note 6. Goodwill and Other Intangibles 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 intangibles139 Note 13. Acquisition 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 billion220221 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) loans233 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 deposits247 - 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 2024254 - The company's four core financial objectives are: improving operating efficiencies, increasing net interest income, growing noninterest revenue, and effective capital management248 Net Interest Income 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 2024256 Provision and Allowance for Credit Losses 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 transaction276 Noninterest Income 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 investments287251 Noninterest Expense 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 acquisition291 Balance Sheet Analysis 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 securities312 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 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 acquisition339 - 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, 2025342377 Quantitative and Qualitative Disclosures About Market Risk 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 total363 - The company maintains strong liquidity with primary sources including scheduled asset payments, a $12.2 billion AFS securities portfolio, and a stable core deposit base368 Controls and Procedures 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 period383 - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025384 PART II - OTHER INFORMATION Legal Proceedings 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 company386 Risk Factors No material changes to previously disclosed risk factors were reported for the current period - No material changes to risk factors were reported for the period387 Unregistered Sales of Equity Securities and Use of Proceeds 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, 2026391 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files
UMB(UMBF) - 2025 Q2 - Quarterly Report