UMBF Beats Q3 Earnings on Strong NII & Fee Income, Ups Dividend

Core Insights - UMB Financial Corp. (UMBF) reported third-quarter 2025 operating earnings per share of $2.70, exceeding the Zacks Consensus Estimate of $2.48 and up from $2.25 in the same quarter last year [1][10] Financial Performance - The company achieved net income (GAAP basis) of $180.4 million, a significant increase of 64.5% year over year [3] - Quarterly revenues (FTE) reached $686.7 million, a surge of 66.4% year over year, surpassing the Zacks Consensus Estimate by 4.2% [4] - Net interest income (NII) on an FTE basis was $483.4 million, a jump of 90.3% from the prior-year quarter, with a net interest margin of 3.04%, up 58 basis points year over year [4] - Non-interest income was $203.3 million, reflecting a year-over-year increase of 28.1, primarily driven by trust and securities processing, and service charges on deposit accounts [5] - Non-interest expenses totaled $419.3 million, up 66.1% year over year, including $35.6 million in acquisition-related and non-recurring costs [5] Efficiency and Capital Ratios - The efficiency ratio improved to 58.1%, down from 61.7% in the prior-year quarter, indicating increased profitability [6] - As of September 30, 2025, the Tier 1 risk-based capital ratio was 11.3%, slightly up from 11.2% a year ago, while the Tier 1 leverage ratio decreased to 8.3% from 8.6% [11] Loan and Deposit Growth - Average loans and leases as of September 30, 2025, were $37.1 billion, up 2% sequentially, and average deposits increased 2% year over year to $56.7 billion [7] Credit Quality Concerns - The ratio of net charge-offs to average loans was 0.20%, up from 0.14% in the prior-year quarter, with total non-accrual and restructured loans rising to $131.9 million from $19.3 million [8] - The provision for credit losses was $22.5 million in the third quarter of 2025, compared to $18 million in the prior-year quarter [8] Dividend Announcement - The company announced a quarterly dividend of 43 cents per share, marking a 7.5% increase from the prior quarter and the 23rd increase in the past 20 years [13] Overall Assessment - UMB Financial's robust third-quarter results were driven by strong NII and non-interest income growth, alongside improving margins, with the Heartland Financial acquisition contributing to loan and deposit growth [14]