Financial Data and Key Metrics Changes - Earnings per share (EPS) for the second quarter was $0.91, excluding merger-related charges, representing an 86% increase year over year [5][14] - Net interest margin improved to 3.59%, a 64 basis point increase year over year [6][17] - Net income excluding merger and restructuring expenses was $87.3 million, compared to $29.4 million in the prior year [5][14] - Total assets increased by 52% year over year to $27.6 billion, driven by the Premier acquisition and organic growth [15] Business Line Data and Key Metrics Changes - Fee income grew by 40% year over year, totaling $44 million in the second quarter [8][18] - Organic loan growth was 6% year over year, with total commercial loans increasing by 7% [10][14] - The trust and securities brokerage business grew to $10 billion in assets under management [8] Market Data and Key Metrics Changes - Total deposits increased by 58% year over year to $21.2 billion, with organic growth of $849 million [17] - Organic deposit growth excluding certificates of deposit was more than 5% year over year [9] Company Strategy and Development Direction - The company aims to grow fee income as a percentage of total revenue and expand its presence in new markets, including Knoxville and Northern Virginia [9][11] - Strategic investments are being made in the healthcare sector to meet unique client needs [11][32] - The focus remains on executing the Premier acquisition and enhancing operational efficiency [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth despite potential headwinds from commercial real estate payoffs [71] - The company anticipates mid to upper single-digit loan growth for the remainder of 2025 [37][39] - Management expects to fund loan growth with deposit growth for the full year [9][17] Other Important Information - The efficiency ratio improved by 10 percentage points year over year to 55.5% [6] - The company has begun to see a rebound in deposits in July after a seasonal decline [17] - Regulatory capital ratios remain above well-capitalized standards [19] Q&A Session Summary Question: Increase in criticized loans and maintaining credit culture - Management noted that the increase in criticized loans is primarily due to regrading of acquired clients, but they expect improvements in the third quarter [28][30] Question: Capital deployment priorities - The company prioritizes dividends and organic growth, with M&A and buybacks being lower on the list [31][33] Question: Loan growth expectations - Management targets mid to upper single-digit growth, contingent on commercial real estate payoffs [37][39] Question: Branch rationalization - The company will evaluate branch profitability and may close some branches in the second half of the year [40][41] Question: Margin accretion assumptions - Management anticipates a drop in margin accretion in the third quarter but expects a rebound in the fourth quarter [46][63] Question: Deposit pipelines and growth - The company plans to launch a new deposit campaign and expects robust growth in the commercial space [78][80] Question: Preferred stock and subordinated debt refinancing - Management is evaluating options for calling preferred stock and refinancing subordinated debt that will reset soon [90][91]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per diluted share of $0.72, representing an adjusted return on assets of 1.41% [4] - Net interest income increased by 4.6% over the prior quarter, while fee income rose by 15% [11] - The net interest margin improved by 10 basis points to 3.51% [12] - Adjusted pre-provision net revenue grew by 23.2% over the prior quarter [27] Business Line Data and Key Metrics Changes - The retirement services business generated stable revenue of over $16 million, with assets under administration and management increasing by 6.3% [17][18] - The wealth management business saw revenues increase by 6.6% on a linked quarter basis, with assets under management rising by 2.5% [18] - Noninterest income from banking was $8.4 million for the second quarter, with a $2.1 million gain related to the sale of hospitality loans [16] Market Data and Key Metrics Changes - Deposits shrank by 3.3% due to expected seasonal outflows from public funds [15] - The company expects continued seasonal volatility in deposits, with average deposit account sizes growing over 20% since 2019 [15] Company Strategy and Development Direction - The company is focused on maximizing profitability through disciplined pricing and enhancing its diversified business model [4][5] - Strategic initiatives include optimizing the balance sheet and investing in talent and technology to deepen client relationships [8][9] - The company aims to achieve consistent performance levels and is targeting mid-single-digit loan growth for 2025 [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainty and competitive pressures but emphasized a disciplined approach to growth and credit risk management [87] - The guidance for the year remains consistent, with expectations for low single-digit deposit growth and continued focus on core business lines [22][26] Other Important Information - The company recorded no provision for the quarter due to a net gain from the sale of hospitality loans [6] - The adjusted efficiency ratio improved to 52.4% from 66.9% in the prior quarter [19] - The company remains well-capitalized with a common equity Tier one capital ratio of 10.5% [21] Q&A Session Summary Question: What are the expectations for third and fourth quarter accretion? - The company expects 27 basis points of purchase accounting accretion in the third quarter and 22 basis points in the fourth quarter, with no early payoffs included [29][34] Question: What is the status of the larger construction credit? - The final certificate of occupancy was issued, and the property is currently at 57% leased, with expectations for a sale in early 2026 [37][65] Question: How does the company view the capital deployment for the rest of the year? - The company prioritizes organic balance sheet growth, maintaining dividend history, and pursuing M&A opportunities in the retirement sector [45] Question: What is the outlook for noninterest income? - The company expects noninterest income to be up low single digits for the year, factoring in seasonal downturns in the mortgage business [25][80] Question: How is the company addressing nonperforming assets? - Nonperforming assets are primarily driven by two large relationships, with resolutions expected in early 2026 [65][66] Question: What is the outlook for deposit costs? - The company anticipates an increase of 8 to 10 basis points in deposit costs due to competition and a shift from non-interest bearing to interest-bearing deposits [73][76]

Financial Data and Key Metrics Changes - The company reported earnings of $140 million, or EPS of $2.19 per diluted share for the second quarter, indicating a positive momentum in financial performance [4] - Net interest income grew for the fifth consecutive quarter, with a loan to deposit ratio of 64% and total capital levels remaining robust, with TCE reaching 9.6% and CET1 reaching 13.6% [6][7] - Total outstanding loans increased by 2.5% quarter over quarter, translating to over 10% on an annualized basis [8] Business Line Data and Key Metrics Changes - Fee income increased by 7.2% sequentially, with total fees and commissions contributing $197.3 million to revenue [5][14] - The core C and I loan portfolio grew by 1.1%, while the specialty lending portfolio decreased by 1.6% [8] - The commercial real estate (CRE) business saw a significant increase of 6.9% quarter over quarter, primarily driven by multifamily housing, retail, and industrial projects [9] Market Data and Key Metrics Changes - The trading revenue, including trading-related net interest income, was $30.5 million, representing a growth of 31% from the prior quarter [14] - Assets Under Management (AUMA) increased by $3.9 billion to $117.9 billion, reflecting increased market valuations and continued new business growth [16] Company Strategy and Development Direction - The company plans to launch a new mortgage finance line of business to support future loan growth, which is expected to enhance long-term sustainable growth [5][10] - The management emphasized the importance of investing in talent and systems to enable future growth, despite the increase in current period expenses [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the loan growth outlook set at the beginning of the year, despite acknowledging economic policy uncertainty as a risk factor [21][22] - The company expects net charge-offs to remain below historical norms, supported by strong credit quality across the loan portfolio [12][22] Other Important Information - The company repurchased over 660,000 shares below $94 per share and redeemed all $131 million of Tier two capital instruments [7] - The combined allowance for credit losses is $330 million, or 1.36% of outstanding loans, indicating a healthy reserve level [13] Q&A Session Summary Question: Expectations for margin trajectory behind NII - Management noted that margin behaved well in Q2, with good lift from fixed asset repricing and deposit pricing, expecting continued support for margin growth [27][28] Question: Loan growth pace through the quarter - Management indicated that loan growth built throughout the quarter, with expectations for continued growth in the second half of the year, particularly in C and I and CRE [36][39] Question: Competitive environment for loan yields - Management acknowledged strong competition in their markets, with some spread compression observed on the C and I side, but overall spreads are holding well [40][41] Question: Fee income guidance for the full year - Management expressed confidence in continued growth across various fee income lines, driven by strong performance in fiduciary and asset management, transaction card, and deposit service charges [49][50] Question: Outlook on mortgage finance and expected balances - Management expects to achieve approximately $500 million in commitments by the end of the year, with a utilization rate of around 25% to 50% [81][82] Question: Funding expectations for loan growth - Management indicated a strong loan to deposit ratio and expects to continue growing deposits, with cash flows from the bond book and loan book supporting funding needs [102][103]

Financial Data and Key Metrics Changes - The company reported a strong first quarter with net operating income available to common shareholders of $168.9 million, or $2.58 per share, excluding merger-related and non-recurring charges [9][21] - Average loans increased by 27.8% to $32.3 billion, while average deposits rose by 32.3% to $50.3 billion on a linked quarter basis [9][10] - The operating efficiency ratio improved to 55.6%, and the operating return on assets (ROA) reached 1.14% [8] Business Line Data and Key Metrics Changes - Fee income for the quarter was reported at $166.2 million, impacted by $5.2 million in mark-to-market losses on certain equity investments [21] - Credit and debit card purchase volume increased by 18.6% year-over-year, surpassing $5.4 billion for the first time [13] - Assets under administration in institutional businesses grew by 16% year-over-year, reaching $559 billion, with corporate trust assets increasing by 25% [14] Market Data and Key Metrics Changes - The company noted an 8.3% linked quarter annualized increase in loan balances on a legacy UMB basis, outperforming peer banks that reported a median increase of 3.3% [10] - Nonperforming loans related to legacy UMB were just eight basis points, consistent with prior quarters, while the median NPL ratio for peer banks was reported at 8.45% [12] Company Strategy and Development Direction - The acquisition of Heartland added over $14 billion in deposits and more than doubled the branch presence across 13 states, with a focus on achieving cost synergies and cultural integration [6][7] - The company aims to leverage the lower-cost, granular core deposits from the acquisition to enhance its net interest margin [7][8] - The management expressed confidence in the growth opportunities presented by the acquisition, particularly in new markets and with new clients [68][70] Management's Comments on Operating Environment and Future Outlook - Management is closely monitoring the impact of tariffs and general economic conditions, noting that most clients are currently able to pass on costs [16][17] - The company expects to maintain strong loan growth driven by market share gains rather than economic activity, with a robust production pipeline for the upcoming quarters [39][70] - Management emphasized their role as risk managers and their preparedness to navigate periods of uncertainty [17] Other Important Information - The effective tax rate for the first quarter was 12.6%, including a benefit from the remeasurement of deferred tax assets [23] - The company expects second quarter margins to range between 2.75% and 2.8%, influenced by various factors including excess liquidity and Fed rate movements [23][24] Q&A Session Summary Question: Can you help us with the near-term NII trajectory? - Management highlighted that the first quarter EPS included a one-time tax benefit and noted adjustments for share count and mark-to-market impacts, indicating a positive outlook for future quarters [33][34][36] Question: What are the assumptions for core NIM in the second quarter? - Management expects core NIM to remain stable, influenced by additional month contributions from Heartland and potential rate cuts [50][52] Question: Any common thread among HTLF net charge-offs? - Charge-offs were identified through diligence and were part of normal business operations, with expectations for overall performance to align with historical trends [54][56] Question: How will Heartland contribute to loan growth? - The acquisition is expected to enhance growth through a larger deposit base and improved operational efficiency, with a strong pipeline of high-quality deals already emerging [68][70] Question: What is the outlook for deposit growth and DDA? - Management indicated that deposit growth is driven by client acquisition and higher average balances, with expectations for stability in the second quarter [86][90] Question: What is the plan for excess cash and balance sheet management? - The company plans to deploy excess cash into investments over the next three to six months, evaluating opportunities in treasuries and other securities [43][44] Question: How is the company addressing credit quality post-acquisition? - Management is aligning the acquired portfolio with UMB standards, ensuring that underwriting practices maintain high-quality credit performance [108][112]

Financial Data and Key Metrics Changes - In 2024, the company achieved a record annual net income of $206 million, a 24% increase from the previous year, with a return on equity of 16.2%, up from 14.7% in 2023 [19][11] - The commercial portfolio grew by 18%, reaching $10 billion, while deposits increased by 23% for year-end closing balances and 33% in average balances for the year [7][8] - The net interest income for the year reached $259 million, an 11% increase from the prior year, with a stable net interest margin of 2.47% [34][10] Business Line Data and Key Metrics Changes - The credit portfolio stood at approximately $11.2 billion, reflecting an 18% increase year-over-year, driven by a loan growth of $1.2 billion or 16% [24][22] - Fee income reached unprecedented levels, growing by 37% compared to the previous year, with letters of credit fees totaling $26.5 million for the year, up 24% year-over-year [35][36] Market Data and Key Metrics Changes - The company noted strong growth in Brazil, the Dominican Republic, and Guatemala, indicating robust expansion and diversification in these markets [7] - The deposit base closed at $5.4 billion at year-end, representing 54% of total financial liabilities, with significant increases from corporate clients [26] Company Strategy and Development Direction - The company is currently in the second phase of its five-year strategic plan, focusing on expanding its product offerings and deploying technological platforms [15][17] - The trade finance platform is 56% complete and expected to launch in the second half of the year, aimed at enhancing transaction processing capabilities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to changes in the trade environment, particularly regarding the implications of U.S. foreign policy on Latin America [44][45] - Projections for 2025 include a commercial portfolio growth of 10% to 12% and average deposits expected to increase by 15% to 17% [50] Other Important Information - The company maintained a strong capital ratio with a tier one capital ratio of 15.5%, well within its defined target [10] - The board approved an increase in the quarterly dividend from $0.50 to $0.625 per share, reflecting confidence in the company's earnings trajectory [31] Q&A Session Summary Question: Can you comment on NIM contraction estimate for 2025? - Management indicated that tighter lending spreads and competitive market conditions are contributing factors, with expectations of continued pressure [60][62] Question: What are the potential drivers for the loan structuring syndication business? - Management noted a strong pipeline and historical growth in syndication fees, driven by project finance and enhanced structuring capabilities [63][64] Question: How do you see the current tariffs affecting the company's outlook? - Management expressed confidence in the resilience of the Mexican portfolio, with stress tests indicating low leverage among key clients [70][71] Question: What is the expected target for provisions in 2025? - Management projected reserves for 2025 to be in the $17 to $20 million range, similar to 2024 levels [95] Question: What countries are expected to lead portfolio growth in 2025? - Management indicated balanced growth across countries, with a focus on Mexico and potential opportunities in Central America and Argentina [92][94]