UMB Financial Corporation Reports Third Quarter Net Income of $109.6 Million and Net Operating Income(i) of $110.4 Million.

Share Name	Share Symbol	Market	Type
UMB Financial Corporation	NASDAQ:UMBF	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.655	-0.57%	113.955	113.83	114.07	114.99	113.095	113.84	242,444	19:58:31

UMB Financial (NASDAQ:UMBF)
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Third Quarter 2024 Financial Highlights

GAAP net income of $109.6 million, or $2.23 per diluted share.
Net operating income(i) of $110.4 million, or $2.25 per diluted share.
Average loans increased 9.8% on a linked-quarter, annualized basis, to $24.4 billion.
Average loans increased $1.6 billion, or 7.2%, as compared to the third quarter of 2023.
Average deposits increased 11.1% on a linked-quarter, annualized basis, to $35.3 billion.
Credit quality remained strong, with net charge-offs of just 0.08% of average loans for the nine months ended September 30, 2024.

UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the third quarter of 2024 of $109.6 million, or $2.23 per diluted share, compared to $101.3 million, or $2.07 per diluted share, in the second quarter (linked quarter) and $96.6 million, or $1.98 per diluted share, in the third quarter of 2023.

Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $110.4 million, or $2.25 per diluted share, for the third quarter of 2024, compared to $105.9 million, or $2.16 per diluted share, for the linked quarter and $98.4 million, or $2.02 per diluted share, for the third quarter of 2023. Operating pre-tax, pre-provision income (operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $154.6 million, or $3.15 per diluted share, for the third quarter of 2024, compared to $146.8 million, or $3.00 per diluted share, for the linked quarter, and $126.6 million, or $2.60 per diluted share, for the third quarter of 2023. These operating PTPP results represent increases of 5.3% on a linked-quarter basis and 22.1% compared to the third quarter of 2023.

“We are pleased with another quarter of solid financial performance across the board,” said Mariner Kemper, UMB Financial Corporation chairman and chief executive officer. “Strong institutional banking activity contributed to the 9.5% increase in fee income compared to the linked quarter, and near-double digit annualized loan growth drove net interest income higher. Net interest margin decreased five basis points sequentially due largely to the decline in average noninterest-bearing deposit balances driven by net client disbursements within our asset servicing and corporate trust lines of business, which can be episodic in nature. Asset quality remains strong as evidenced by only eight basis points of net charge-offs to average loans on a year-to-date basis; the higher provision expense in the quarter largely reflects the impact of $793.3 million in net loan growth that was driven by record top-line loan production of $1.4 billion.

“We are on track to complete our pending acquisition of Heartland Financial, subject to regulatory and other approvals, in the first quarter of 2025. Our preparations for legal day one of the acquisition are well underway, with many cross-functional workstreams collaborating with personnel from Heartland Financial. This financially and strategically compelling combination will add further diversity and scale to our already well-diversified financial model. We look forward to serving our prospective clients and geographies as well as welcoming new associates to our UMB family.”

(i)

A non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure.

Third Quarter 2024 earnings discussion

Summary of quarterly financial results

UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

2024

2023

Net income (GAAP)

109,643

101,345

96,554

Earnings per share - diluted (GAAP)

2.23

2.07

1.98

Operating pre-tax, pre-provision income (Non-GAAP)(i)

154,594

146,840

126,592

Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP)(i)

3.15

3.00

2.60

Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i)

161,195

153,247

133,151

Operating pre-tax, pre-provision earnings per share - FTE - diluted (Non-GAAP)(i)

3.28

3.13

2.73

Net operating income (Non-GAAP)(i)

110,358

105,873

98,400

Operating earnings per share - diluted (Non-GAAP)(i)

2.25

2.16

2.02

GAAP

Return on average assets

1.01

0.96

0.97

Return on average equity

12.63

12.73

13.25

Efficiency ratio

61.69

63.37

64.51

Non-GAAP(i)

Operating return on average assets

1.01

1.00

0.99

Operating return on average equity

12.71

13.30

13.50

Operating efficiency ratio

61.46

61.86

63.83

(i)

See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release.

Summary of year-to-date financial results

UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

September

YTD

2024

2023

Net income (GAAP)

321,246

279,101

Earnings per share - diluted (GAAP)

6.56

5.73

Operating pre-tax, pre-provision income (Non-GAAP)(i)

458,885

389,890

Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP)(i)

9.37

8.00

Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i)

478,409

409,579

Operating pre-tax, pre-provision earnings per share - FTE - diluted (Non-GAAP)(i)

9.76

8.40

Net operating income (Non-GAAP)(i)

336,943

285,077

Operating earnings per share - diluted (Non-GAAP)(i)

6.88

5.85

GAAP

Return on average assets

1.01

0.95

Return on average equity

13.13

13.18

Efficiency ratio

62.82

64.40

Non-GAAP(i)

Operating return on average assets

1.06

0.97

Operating return on average equity

13.77

13.46

Operating efficiency ratio

61.12

63.68

Summary of revenue

UMB Financial Corporation

(unaudited, dollars in thousands)

CQ vs.

2024

2023

Net interest income

247,376

245,108

222,287

2,268

25,089

Noninterest income:

Trust and securities processing

74,222

70,010

66,668

4,212

7,554

Trading and investment banking

7,118

5,461

3,771

1,657

3,347

Service charges on deposit accounts

20,089

22,261

21,080

(2,172

)

(991

)

Insurance fees and commissions

282

267

272

Brokerage fees

15,749

14,020

13,400

1,729

2,349

Bankcard fees

22,394

22,346

19,296

3,098

Investment securities gains (losses), net

2,623

(1,867

)

271

4,490

2,352

Other

16,266

12,421

8,559

3,845

7,707

Total noninterest income

158,743

144,919

133,317

13,824

25,426

Total revenue

406,119

390,027

355,604

16,092

50,515

Net interest income (FTE)

253,977

251,515

228,846

Net interest margin (FTE)

2.46

2.51

2.43

Total noninterest income as a % of total revenue

39.1

37.2

37.5

Net interest income

Third quarter 2024 net interest income totaled $247.4 million, an increase of $2.3 million, or 0.9%, from the linked quarter, driven primarily by continued growth in average loans and higher levels of liquidity, partially offset by higher interest expense driven by a mix shift in the funding composition.
Average earning assets increased $783.1 million, or 1.9%, from the linked quarter, largely driven by an increase of $581.3 million in average loans, an increase of $82.1 million in federal funds sold and resell agreements, and an increase of $75.8 million in interest-bearing due from banks.
Average interest-bearing liabilities increased $1.1 billion, or 4.0%, from the linked quarter, primarily driven by an increase of $1.6 billion in interest-bearing deposits, partially offset by a decrease of $280.1 million in borrowed funds. Average noninterest-bearing demand deposits decreased $600.9 million, or 5.9%, as compared to the linked quarter, driven by net cash disbursements within the asset servicing and other corporate trust lines of business. Compared to the linked quarter, average commercial demand deposit balances increased 2.8% during the quarter.
Net interest margin for the third quarter was 2.46%, a decrease of five basis points from the linked quarter, driven by the increased cost of interest-bearing liabilities due to mix shift in the funding composition, partially offset by increased loan yields and earning asset mix changes. The cost of interest-bearing liabilities increased three basis points to 4.18%. Total cost of funds increased 10 basis points from the linked quarter to 3.16%. Average loan yields increased two basis points while earning asset yields increased three basis points from the linked quarter.
On a year-over-year basis, net interest income increased $25.1 million, or 11.3%, driven by a $1.6 billion, or 7.2%, increase in average loans, partially offset by higher interest costs due to unfavorable mix shift in the composition of liabilities as well as the impact of higher short-term interest rates.
Compared to the third quarter of 2023, average earning assets increased $3.7 billion, or 9.8%, largely driven by an increase of $2.0 billion in interest-bearing due from banks and the increase in average loans noted above.
Average deposits increased 12.6% compared to the third quarter of 2023. Average noninterest-bearing demand deposit balances decreased 5.1% compared to the third quarter of 2023, driven by net cash disbursements within the commercial and institutional segments. Average demand deposit balances comprised 26.9% of total deposits, compared to 29.4% in the linked quarter and 32.0% in the third quarter of 2023.
Average borrowed funds decreased $280.1 million as compared to the linked quarter and $1.1 billion as compared to the third quarter of 2023, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve.

Noninterest income

Third quarter 2024 noninterest income increased $13.8 million, or 9.5%, on a linked-quarter basis, largely due to:
- $2.6 million in investment securities gains, primarily driven by increased valuations in the company's non-marketable securities compared to a $1.9 million loss in the linked quarter.
- Increases of $2.8 million in fund services income and $1.6 million in corporate trust income, both recorded in trust and securities processing.
- An increase of $2.7 million in company-owned life insurance and a gain of $1.1 million on the sale of a building during the third quarter of 2024, both recorded in other income. The increase in company-owned life insurance was offset by a proportionate increase in deferred compensation expense as noted below.
- Increases of $1.7 million in both brokerage income and trading and investment banking, primarily driven by higher 12b-1 fees and money market income and increased trading volume, respectively.
- These increases were partially offset by a decrease of $2.2 million in service charges on deposit accounts primarily due to lower healthcare income related to customer transfer and conversion.
Compared to the prior year, noninterest income in the third quarter of 2024 increased $25.4 million, or 19.1%, primarily driven by:
- An increase of $7.7 million in other income, primarily driven by an increase of $4.0 million in company-owned life insurance income, a $1.1 million gain on the sale of a building during the third quarter of 2024, and an increase of $0.7 million in bank-owned life insurance income. The increase in company-owned life insurance was offset by a proportionate increase in deferred compensation expense as noted below.
- Increases of $5.2 million in fund services income, $1.8 million in corporate trust income, and $0.6 million in trust income, all recorded in trust and securities processing.
- Increases of $3.3 million in trading and investment banking, driven by higher trading volume and $3.1 million in bankcard income, driven by increased interchange income.
- Increases of $2.4 million in investment securities gains, primarily driven by increased valuations in the company's non-marketable securities and $2.3 million in brokerage income, driven by higher 12b-1 fees and money market income.

Noninterest expense

Summary of noninterest expense

UMB Financial Corporation

(unaudited, dollars in thousands)

CQ vs.

2024

2023

Salaries and employee benefits

146,984

142,861

133,380

4,123

13,604

Occupancy, net

12,274

11,723

12,283

551

)

Equipment

15,988

15,603

17,204

385

(1,216

)

Supplies and services

4,967

3,404

3,213

1,563

1,754

Marketing and business development

6,817

6,598

6,631

219

186

Processing fees

29,697

29,701

26,016

)

3,681

Legal and consulting

9,518

16,566

7,230

(7,048

)

2,288

Bankcard

12,482

11,818

8,852

664

3,630

Amortization of other intangible assets

1,917

1,911

2,124

(207

)

Regulatory fees

4,686

2,568

6,153

2,118

(1,467

)

Other

7,124

6,314

8,355

810

(1,231

)

Total noninterest expense

252,454

249,067

231,441

3,387

21,013

GAAP noninterest expense for the third quarter of 2024 was $252.5 million, an increase of $3.4 million, or 1.4%, from the linked quarter and an increase of $21.0 million, or 9.1% from the third quarter of 2023. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $251.5 million for the third quarter of 2024, an increase of $8.3 million, or 3.4%, from the linked quarter and an increase of $22.5 million, or 9.8%, from the third quarter of 2023.
The linked-quarter increase in GAAP noninterest expense was driven by:
- An increase of $2.1 million in regulatory fees expense, driven primarily by changes in loss estimates related to the industry-wide FDIC special assessment levied on banks to recoup the losses related to two of the bank failures in March 2023. The results for the third quarter of 2024 include a reduction of $1.7 million in pre-tax FDIC special assessment expense while the second quarter included a reduction of $3.8 million.
- Increases of $1.9 million in deferred compensation expense, $1.9 million in salary and wage expense, and $1.3 million in bonus and commission expense, tied to improved company performance, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
- Increases of $1.6 million in supplies driven by purchases of computers during the third quarter, $0.8 million in other expense, and $0.7 million in bankcard expense driven by higher administrative expense.
- These increases were partially offset by a decrease of $7.0 million in legal and consulting expense driven by expense related to the announced acquisition of Heartland Financial USA, Inc. during the linked quarter.
The year-over-year increase in GAAP noninterest expense was driven by:
- Increases of $5.4 million in salary and wage expense, $3.6 million in bonus and commission expense tied to improved company performance, and $2.7 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
- Increases of $3.7 million in processing fees expense due to increased software subscription costs and $3.6 million in bankcard expense driven by higher administrative expense.
- Increases of $2.3 million in legal and consulting expense related to the announced acquisition of Heartland Financial USA, Inc. and $1.8 million in supplies driven by purchases of computers during the third quarter of 2024.
- These increases were partially offset by the following decreases:
  - A decrease of $1.5 million in regulatory fees expense driven by the aforementioned reduction of $1.7 million in FDIC special assessment expense recorded in the third quarter of 2024.
  - A decrease of $1.9 million in operational losses, recorded in other expense, driven by lower activity in the current period.

Income taxes

The company’s effective tax rate was 19.0% for the nine months ended September 30, 2024, compared to 18.1% for the same period in 2023. The increase in the effective tax rate in 2024 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities and higher non-deductible acquisition costs in 2024.

Balance sheet

Average total assets for the third quarter of 2024 were $43.3 billion compared to $42.5 billion for the linked quarter and $39.5 billion for the same period in 2023.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

CQ vs.

2024

2023

Commercial and industrial

10,176,502

9,926,855

9,852,335

249,647

324,167

Specialty lending

508,957

502,646

526,711

6,311

(17,754

)

Commercial real estate

9,669,076

9,360,991

8,545,206

308,085

1,123,870

Consumer real estate

3,045,229

2,998,560

2,922,753

46,669

122,476

Consumer

164,105

159,743

139,384

4,362

24,721

Credit cards

613,663

617,502

477,904

(3,839

)

135,759

Leases and other

209,631

239,532

287,174

(29,901

)

(77,543

)

Total loans

24,387,163

23,805,829

22,751,467

581,334

1,635,696

Average loans for the third quarter of 2024 increased $581.3 million, or 2.4%, on a linked-quarter basis and $1.6 billion, or 7.2%, compared to the third quarter of 2023.

Summary of average securities - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

CQ vs.

2024

2023

Securities available for sale:

U.S. Treasury

821,308

900,348

786,136

(79,040

)

35,172

U.S. Agencies

166,250

210,151

172,832

(43,901

)

(6,582

)

Mortgage-backed

3,888,879

3,667,289

3,611,305

221,590

277,574

State and political subdivisions

1,240,199

1,213,000

1,275,591

27,199

(35,392

)

Corporates

320,570

323,751

345,026

(3,181

)

(24,456

)

Collateralized loan obligations

340,604

336,273

346,426

4,331

(5,822

)

Total securities available for sale

6,777,810

6,650,812

6,537,316

126,998

240,494

Securities held to maturity:

U.S. Agencies

116,286

120,563

123,165

(4,277

)

(6,879

)

Mortgage-backed

2,597,430

2,656,096

2,814,467

(58,666

)

(217,037

)

State and political subdivisions

2,785,138

2,798,371

2,828,029

(13,233

)

(42,891

)

Total securities held to maturity

5,498,854

5,575,030

5,765,661

(76,176

)

(266,807

)

Trading securities

19,743

26,381

17,327

(6,638

)

2,416

Other securities

447,698

448,015

445,380

(317

)

2,318

Total securities

12,744,105

12,700,238

12,765,684

43,867

(21,579

)

Average total securities increased 0.3% on a linked-quarter basis and decreased 0.2% compared to the third quarter of 2023.
At September 30, 2024, the unrealized pre-tax net loss on the available-for-sale securities portfolio was $449.4 million, or 6.0% of the $7.5 billion amortized cost balance. At September 30, 2024, the unrealized pre-tax net loss on the securities designated as held to maturity was $563.5 million, or 10.3% of the $5.5 billion amortized cost value.

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

CQ vs.

2024

2023

Deposits:

Noninterest-bearing demand

9,502,106

10,103,035

10,014,686

(600,929

)

(512,580

)

Interest-bearing demand and savings

23,779,651

21,914,116

18,142,212

1,865,535

5,637,439

Time deposits

2,010,199

2,323,610

3,173,549

(313,411

)

(1,163,350

)

Total deposits

35,291,956

34,340,761

31,330,447

951,195

3,961,509

Noninterest bearing deposits as % of total

26.9

29.4

32.0

Average deposits increased 2.8% on a linked-quarter basis and 12.6% compared to the third quarter of 2023.

Capital

Capital information

UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

September 30, 2024

June 30, 2024

September 30, 2023

Total equity

3,535,489

3,227,347

2,806,659

Accumulated other comprehensive loss, net

(395,856

)

(605,634

)

(792,371

)

Book value per common share

72.45

66.21

57.83

Tangible book value per common share (Non-GAAP)(i)

66.86

60.58

52.06

Regulatory capital:

Common equity Tier 1 capital

3,691,874

3,591,755

3,357,986

Tier 1 capital

3,691,874

3,591,755

3,357,986

Total capital

4,324,890

4,214,712

3,955,093

Regulatory capital ratios:

Common equity Tier 1 capital ratio

11.22

11.14

10.77

Tier 1 risk-based capital ratio

11.22

11.14

10.77

Total risk-based capital ratio

13.14

13.08

12.68

Tier 1 leverage ratio

8.58

8.50

8.55

(i)

See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release.

At September 30, 2024, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds.

Asset Quality

Credit quality

UMB Financial Corporation

(unaudited, dollars in thousands)

2024

2023

Net charge-offs - total loans

8,454

2,856

3,017

1,352

4,618

Net loan charge-offs as a % of total average loans

0.14

0.05

0.02

0.08

Loans over 90 days past due

7,133

5,644

3,076

3,111

3,044

Loans over 90 days past due as a % of total loans

0.03

0.02

0.01

Nonaccrual and restructured loans

19,291

13,743

17,756

13,212

17,042

Nonaccrual and restructured loans as a % of total loans

0.08

0.06

0.08

0.06

0.07

Provision for credit losses

18,000

14,050

10,000

—

4,977

Provision for credit losses for the third quarter increased $4.0 million from the linked quarter and $13.0 million from the third quarter of 2023. These changes are driven largely by provision tied to the $793.3 million and $2.1 billion increases, respectively, in period-end loans from the prior periods, as well as general portfolio trends in the current period as compared to the prior periods.
Net charge-offs for the third quarter totaled $8.5 million, or 0.14% of average loans, compared to $2.9 million, or 0.05% of average loans in the linked quarter, and $4.6 million, or 0.08% of average loans for the third quarter of 2023.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors approved a 2.6% increase in the quarterly cash dividend to $0.40 per share. The cash dividend will be payable on January 2, 2025, to shareholders of record at the close of business on December 10, 2024.

Conference Call

The company will host a conference call to discuss its third quarter 2024 earnings results on Wednesday, October 30, 2024, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 961896. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 3Q 2024 Conference Call

A replay of the conference call may be heard through November 13, 2024, by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 489413. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we provide information about net operating income, operating earnings per share – diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, and tangible book value per share – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items, and the FDIC special assessment that management does not believe reflect the company’s fundamental operating performance.

Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, the FDIC special assessment, and the cumulative tax impact of these adjustments.

Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net).

Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance, and the FDIC special assessment.

Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance, and the FDIC special assessment.

Tangible shareholders’ equity for the relevant period is defined as GAAP shareholders’ equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders’ equity divided by the Company’s total shares outstanding.

Forward-Looking Statements:

This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2023, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve; and impacts related to or resulting from instability in the Middle East and Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn.

Consolidated Balance Sheets

UMB Financial Corporation

(unaudited, dollars in thousands)

September 30,

2024

2023

ASSETS

Loans

24,990,791

22,881,689

Allowance for credit losses on loans

(248,907

)

(221,462

)

Net loans

24,741,884

22,660,227

Loans held for sale

5,176

2,824

Securities:

Available for sale

7,015,998

6,330,699

Held to maturity, net of allowance for credit losses

5,474,710

5,729,697

Trading securities

35,839

24,509

Other securities

465,477

473,255

Total securities

12,992,024

12,558,160

Federal funds sold and resell agreements

399,234

248,203

Interest-bearing due from banks

6,601,866

3,556,076

Cash and due from banks

778,069

454,705

Premises and equipment, net

222,056

249,037

Accrued income

218,651

208,594

Goodwill

207,385

Other intangibles, net

65,564

73,060

Other assets

1,264,519

1,246,411

Total assets

47,496,428

41,464,682

LIABILITIES

Deposits:

Noninterest-bearing demand

12,840,940

11,254,885

Interest-bearing demand and savings

24,798,869

18,833,614

Time deposits under $250,000

1,245,532

2,834,181

Time deposits of $250,000 or more

817,251

509,072

Total deposits

39,702,592

33,431,752

Federal funds purchased and repurchase agreements

2,023,297

1,757,602

Short-term debt

1,050,000

2,300,000

Long-term debt

384,758

382,768

Accrued expenses and taxes

387,223

319,283

Other liabilities

413,069

466,618

Total liabilities

43,960,939

38,658,023

SHAREHOLDERS' EQUITY

Common stock

55,057

Capital surplus

1,138,350

1,128,239

Retained earnings

3,074,617

2,759,415

Accumulated other comprehensive loss, net

(395,856

)

(792,371

)

Treasury stock

(336,679

)

(343,681

)

Total shareholders' equity

3,535,489

2,806,659

Total liabilities and shareholders' equity

47,496,428

41,464,682

Consolidated Statements of Income

UMB Financial Corporation

(unaudited, dollars in thousands except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

2024

2023

2024

2023

INTEREST INCOME

Loans

416,400

367,485

1,202,317

1,018,920

Securities:

Taxable interest

63,466

53,455

186,159

161,091

Tax-exempt interest

24,578

25,704

74,988

76,560

Total securities income

88,044

79,159

261,147

237,651

Federal funds and resell agreements

4,990

4,567

11,726

14,107

Interest-bearing due from banks

47,969

20,551

139,831

70,923

Trading securities

291

214

1,020

502

Total interest income

557,694

471,976

1,616,041

1,342,103

INTEREST EXPENSE

Deposits

262,599

191,919

726,999

490,368

Federal funds and repurchase agreements

27,070

23,076

82,813

71,123

Other

20,649

34,694

74,311

91,018

Total interest expense

310,318

249,689

884,123

652,509

Net interest income

247,376

222,287

731,918

689,594

Provision for credit losses

18,000

4,977

42,050

41,227

Net interest income after provision for credit losses

229,376

217,310

689,868

648,367

NONINTEREST INCOME

Trust and securities processing

74,222

66,668

213,710

190,616

Trading and investment banking

7,118

3,771

18,041

13,879

Service charges on deposit accounts

20,089

21,080

63,107

63,620

Insurance fees and commissions

282

272

832

771

Brokerage fees

15,749

13,400

42,929

40,680

Bankcard fees

22,394

19,296

66,708

56,047

Investment securities gains (losses), net

2,623

271

10,127

(4,153

)

Other

16,266

8,559

47,452

40,139

Total noninterest income

158,743

133,317

462,906

401,599

NONINTEREST EXPENSE

Salaries and employee benefits

146,984

133,380

432,851

419,190

Occupancy, net

12,274

12,283

36,267

36,206

Equipment

15,988

17,204

48,094

52,139

Supplies and services

4,967

3,213

11,672

11,283

Marketing and business development

6,817

6,631

19,440

19,090

Processing fees

29,697

26,016

87,334

75,828

Legal and consulting

9,518

7,230

33,978

21,574

Bankcard

12,482

8,852

34,867

24,292

Amortization of other intangible assets

1,917

2,124

5,788

6,539

Regulatory fees

4,686

6,153

26,649

17,827

Other

7,124

8,355

19,385

25,198

Total noninterest expense

252,454

231,441

756,325

709,166

Income before income taxes

135,665

119,186

396,449

340,800

Income tax expense

26,022

22,632

75,203

61,699

NET INCOME

109,643

96,554

321,246

279,101

PER SHARE DATA

Net income – basic

2.25

1.99

6.59

5.76

Net income – diluted

2.23

1.98

6.56

5.73

Dividends

0.39

0.38

1.17

1.14

Weighted average shares outstanding – basic

48,775,072

48,525,776

48,727,914

48,492,022

Weighted average shares outstanding – diluted

49,078,497

48,762,696

48,993,581

48,737,065

Consolidated Statements of Comprehensive Income

UMB Financial Corporation

(unaudited, dollars in thousands)

Three Months Ended

Nine Months Ended

September 30,

2024

2023

2024

2023

Net income

109,643

96,554

321,246

279,101

Other comprehensive income (loss), before tax:

Unrealized gains and losses on debt securities:

Change in unrealized holding gains and losses, net

229,285

(151,753

)

175,005

(145,601

)

Less: Reclassification adjustment for net (gains) losses included in net income

—

(154

)

(139

)

279

Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity

9,618

10,268

27,345

30,563

Change in unrealized gains and losses on debt securities

238,903

(141,639

)

202,211

(114,759

)

Unrealized gains and losses on derivative hedges:

Change in unrealized gains and losses on derivative hedges, net

40,445

3,927

18,012

4,248

Less: Reclassification adjustment for net gains included in net income

(1,666

)

(2,844

)

(7,392

)

(8,065

)

Change in unrealized gains and losses on derivative hedges

38,779

1,083

10,620

(3,817

)

Other comprehensive income (loss), before tax

277,682

(140,556

)

212,831

(118,576

)

Income tax (expense) benefit

(67,904

)

34,016

(51,752

)

28,940

Other comprehensive income (loss)

209,778

(106,540

)

161,079

(89,636

)

Comprehensive income (loss)

319,421

(9,986

)

482,325

189,465

Consolidated Statements of Shareholders' Equity

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Common Stock

Capital Surplus

Retained Earnings

Accumulated Other Comprehensive (Loss) Income

Treasury Stock

Total

Balance - January 1, 2023

55,057

1,125,949

2,536,086

(702,735

)

(347,264

)

2,667,093

Total comprehensive income (loss)

—

279,101

(89,636

)

—

189,465

Dividends ($1.14 per share)

—

(55,772

)

—

(55,772

)

Purchase of treasury stock

—

(8,096

)

(8,096

)

Issuances of equity awards, net of forfeitures

—

(10,115

)

—

10,834

719

Recognition of equity-based compensation

—

11,983

—

11,983

Sale of treasury stock

—

167

—

216

383

Exercise of stock options

—

255

—

629

884

Balance - September 30, 2023

55,057

1,128,239

2,759,415

(792,371

)

(343,681

)

2,806,659

Balance - January 1, 2024

55,057

1,134,363

2,810,824

(556,935

)

(342,890

)

3,100,419

Total comprehensive income

—

321,246

161,079

—

482,325

Dividends ($1.17 per share)

—

(57,453

)

—

(57,453

)

Purchase of treasury stock

—

(7,738

)

(7,738

)

Issuances of equity awards, net of forfeitures

—

(11,220

)

—

11,923

703

Recognition of equity-based compensation

—

14,886

—

14,886

Sale of treasury stock

—

237

—

184

421

Exercise of stock options

—

1,433

—

1,842

3,275

Common stock issuance costs

—

(1,349

)

—

(1,349

)

Balance - September 30, 2024

55,057

1,138,350

3,074,617

(395,856

)

(336,679

)

3,535,489

Average Balances / Yields and Rates

UMB Financial Corporation

(tax - equivalent basis)

(unaudited, dollars in thousands)

Three Months Ended September 30,

2024

2023

Average

Balance

Yield/Rate

Balance

Yield/Rate

Assets

Loans, net of unearned interest

24,387,163

6.79

22,751,467

6.41

Securities:

Taxable

9,122,386

2.77

8,964,467

2.37

Tax-exempt

3,601,976

3.43

3,783,890

3.37

Total securities

12,724,362

2.96

12,748,357

2.66

Federal funds and resell agreements

328,240

6.05

303,864

5.96

Interest bearing due from banks

3,562,746

5.36

1,548,867

5.26

Trading securities

19,743

6.37

17,327

5.31

Total earning assets

41,022,254

5.47

37,369,882

5.08

Allowance for credit losses

(239,950

)

(227,878

)

Other assets

2,484,538

2,381,496

Total assets

43,266,842

39,523,500

Liabilities and Shareholders' Equity

Interest-bearing deposits

25,789,850

4.05

21,315,761

3.57

Federal funds and repurchase agreements

2,298,240

4.69

2,027,382

4.52

Borrowed funds

1,464,393

5.61

2,605,897

5.28

Total interest-bearing liabilities

29,552,483

4.18

25,949,040

3.82

Noninterest-bearing demand deposits

9,502,106

10,014,686

Other liabilities

757,379

667,920

Shareholders' equity

3,454,874

2,891,854

Total liabilities and shareholders' equity

43,266,842

39,523,500

Net interest spread

1.29

1.26

Net interest margin

2.46

2.43

Average Balances / Yields and Rates

UMB Financial Corporation

(tax - equivalent basis)

(unaudited, dollars in thousands)

Nine Months Ended September 30,

2024

2023

Average

Balance

Yield/Rate

Balance

Yield/Rate

Assets

Loans, net of unearned interest

23,850,976

6.73

22,076,977

6.17

Securities:

Taxable

9,140,270

2.72

9,179,230

2.35

Tax-exempt

3,657,837

3.44

3,816,122

3.36

Total securities

12,798,107

2.93

12,995,352

2.64

Federal funds and resell agreements

260,520

6.01

343,297

5.49

Interest bearing due from banks

3,451,537

5.41

1,935,029

4.90

Trading securities

21,333

6.88

13,071

5.56

Total earning assets

40,382,473

5.41

37,363,726

4.87

Allowance for credit losses

(230,181

)

(213,744

)

Other assets

2,433,597

2,322,171

Total assets

42,585,889

39,472,153

Liabilities and Shareholders' Equity

Interest-bearing deposits

24,500,489

3.96

20,638,982

3.18

Federal funds and repurchase agreements

2,367,985

4.67

2,273,826

4.18

Borrowed funds

1,796,230

5.53

2,319,652

5.25

Total interest-bearing liabilities

28,664,704

4.12

25,232,460

3.46

Noninterest-bearing demand deposits

9,889,099

10,816,120

Other liabilities

764,733

591,919

Shareholders' equity

3,267,353

2,831,654

Total liabilities and shareholders' equity

42,585,889

39,472,153

Net interest spread

1.29

1.41

Net interest margin

2.49

2.54

Business Segment Information

UMB Financial Corporation

(unaudited, dollars in thousands)

Three Months Ended September 30, 2024

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

167,769

45,341

34,266

247,376

Provision for credit losses

15,764

435

1,801

18,000

Noninterest income

30,223

100,687

27,833

158,743

Noninterest expense

85,198

102,565

64,691

252,454

Income (loss) before taxes

97,030

43,028

(4,393

)

135,665

Income tax expense (benefit)

18,527

8,147

(652

)

26,022

Net income (loss)

78,503

34,881

(3,741

)

109,643

Three Months Ended September 30, 2023

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

148,666

43,133

30,488

222,287

Provision for credit losses

3,010

423

1,544

4,977

Noninterest income

23,091

86,521

23,705

133,317

Noninterest expense

81,767

87,502

62,172

231,441

Income (loss) before taxes

86,980

41,729

(9,523

)

119,186

Income tax expense (benefit)

16,181

7,797

(1,346

)

22,632

Net income (loss)

70,799

33,932

(8,177

)

96,554

Nine Months Ended September 30, 2024

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

485,503

146,703

99,712

731,918

Provision for credit losses

34,763

1,760

5,527

42,050

Noninterest income

100,908

288,495

73,503

462,906

Noninterest expense

263,397

298,472

194,456

756,325

Income (loss) before taxes

288,251

134,966

(26,768

)

396,449

Income tax expense (benefit)

53,747

25,016

(3,560

)

75,203

Net income (loss)

234,504

109,950

(23,208

)

321,246

Nine Months Ended September 30, 2023

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

444,083

148,615

96,896

689,594

Provision for credit losses

35,110

754

5,363

41,227

Noninterest income

71,658

257,573

72,368

401,599

Noninterest expense

251,667

268,464

189,035

709,166

Income (loss) before taxes

228,964

136,970

(25,134

)

340,800

Income tax expense (benefit)

40,727

24,405

(3,433

)

61,699

Net income (loss)

188,237

112,565

(21,701

)

279,101

The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at September 30, 2024.

Non-GAAP Financial Measures

Net operating income Non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Net income (GAAP)

109,643

96,554

321,246

279,101

Adjustments:

Acquisition expense

2,611

12,592

127

Severance expense

2,359

324

7,736

FDIC special assessment

(1,730

)

—

7,470

—

Tax-impact of adjustments (i)

(214

)

(583

)

(4,689

)

(1,887

)

Total Non-GAAP adjustments (net of tax)

715

1,846

15,697

5,976

Net operating income (Non-GAAP)

110,358

98,400

336,943

285,077

Earnings per share - diluted (GAAP)

2.23

1.98

6.56

5.73

Acquisition expense

0.06

—

0.26

—

Severance expense

—

0.05

0.01

0.16

FDIC special assessment

(0.04

)

—

0.15

—

Tax-impact of adjustments (i)

—

(0.01

)

(0.10

)

(0.04

)

Operating earnings per share - diluted (Non-GAAP)

2.25

2.02

6.88

5.85

GAAP

Return on average assets

1.01

0.97

1.01

0.95

Return on average equity

12.63

13.25

13.13

13.18

Non-GAAP

Operating return on average assets

1.01

0.99

1.06

0.97

Operating return on average equity

12.71

13.50

13.77

13.46

(i)

Calculated using the company’s marginal tax rate of 23.0% for 2024 and 24.0% for 2023.

Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Noninterest expense

252,454

231,441

756,325

709,166

Adjustments to arrive at operating noninterest expense (pre-tax):

Acquisition expense

2,611

12,592

127

Severance expense

2,359

324

7,736

FDIC special assessment

(1,730

)

—

7,470

—

Total Non-GAAP adjustments (pre-tax)

929

2,429

20,386

7,863

Operating noninterest expense (Non-GAAP)

251,525

229,012

735,939

701,303

Noninterest expense

252,454

231,441

756,325

709,166

Less: Amortization of other intangibles

1,917

2,124

5,788

6,539

Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)

250,537

229,317

750,537

702,627

Operating noninterest expense

251,525

229,012

735,939

701,303

Less: Amortization of other intangibles

1,917

2,124

5,788

6,539

Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)

249,608

226,888

730,151

694,764

Net interest income

247,376

222,287

731,918

689,594

Noninterest income

158,743

133,317

462,906

401,599

Less: Gains on sales of securities available for sale, net

—

154

139

152

Total Non-GAAP Revenue (denominator A)

406,119

355,450

1,194,685

1,091,041

Efficiency ratio (numerator A/denominator A)

61.69

64.51

62.82

64.40

Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)

61.46

63.83

61.12

63.68

Operating pre-tax, pre-provision income non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Net interest income (GAAP)

247,376

222,287

731,918

689,594

Noninterest income (GAAP)

158,743

133,317

462,906

401,599

Noninterest expense (GAAP)

252,454

231,441

756,325

709,166

Adjustments to arrive at operating noninterest expense:

Acquisition expense

2,611

12,592

127

Severance expense

2,359

324

7,736

FDIC special assessment

(1,730

)

—

7,470

—

Total Non-GAAP adjustments

929

2,429

20,386

7,863

Operating noninterest expense (Non-GAAP)

251,525

229,012

735,939

701,303

Operating pre-tax, pre-provision income (Non-GAAP)

154,594

126,592

458,885

389,890

Net interest income earnings per share - diluted (GAAP)

5.04

4.56

14.94

14.15

Noninterest income (GAAP)

3.24

2.73

9.45

8.24

Noninterest expense (GAAP)

5.15

4.74

15.44

14.55

Acquisition expense

0.06

—

0.26

—

Severance expense

—

0.05

0.01

0.16

FDIC special assessment

(0.04

)

—

0.15

—

Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP)

3.15

2.60

9.37

8.00

Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Net interest income (GAAP)

247,376

222,287

731,918

689,594

Adjustments to arrive at net interest income - FTE:

Tax equivalent interest

6,601

6,559

19,524

19,689

Net interest income - FTE (Non-GAAP)

253,977

228,846

751,442

709,283

Noninterest income (GAAP)

158,743

133,317

462,906

401,599

Noninterest expense (GAAP)

252,454

231,441

756,325

709,166

Adjustments to arrive at operating noninterest expense:

Acquisition expense

2,611

12,592

127

Severance expense

2,359

324

7,736

FDIC special assessment

(1,730

)

—

7,470

—

Total Non-GAAP adjustments

929

2,429

20,386

7,863

Operating noninterest expense (Non-GAAP)

251,525

229,012

735,939

701,303

Operating pre-tax, pre-provision income - FTE (Non-GAAP)

161,195

133,151

478,409

409,579

Net interest income earnings per share - diluted (GAAP)

5.04

4.56

14.94

14.15

Tax equivalent interest

0.13

0.39

0.40

Net interest income - FTE (Non-GAAP)

5.17

4.69

15.33

14.55

Noninterest income (GAAP)

3.24

2.73

9.45

8.24

Noninterest expense (GAAP)

5.15

4.74

15.44

14.55

Acquisition expense

0.06

—

0.26

—

Severance expense

—

0.05

0.01

0.16

FDIC special assessment

(0.04

)

—

0.15

—

Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP)

3.28

2.73

9.76

8.40

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except share and per share data)

As of September 30,

2024

2023

Total shareholders' equity (GAAP)

3,535,489

2,806,659

Less: Intangible assets

Goodwill

207,385

Other intangibles, net

65,564

73,060

Total intangibles, net

272,949

280,445

Total tangible shareholders' equity (Non-GAAP)

3,262,540

2,526,214

Total shares outstanding

48,797,672

48,529,097

Ratio of total shareholders' equity (book value) per share

72.45

57.83

Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP)

66.86

52.06

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024169402/en/

Media Contact: Stephanie Hague: 816.729.1027 Investor Relations Contact: Kay Gregory: 816.860.7106

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UMBF UMB Financial Corporation