Le Lézard
Classified in: Business
Subjects: EARNINGS, Dividend, Conference Call, Webcast, Stock Sale/Buyback

UMB Financial Corporation Reports Second Quarter Net Income of $90.1 Million


UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2023 of $90.1 million, or $1.85 per diluted share, compared to $92.4 million, or $1.90 per diluted share, in the first quarter of 2023 (linked quarter) and $137.6 million, or $2.83 per diluted share, in the second quarter of 2022. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company's entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company's charitable foundation.

Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $93.8 million, or $1.93 per diluted share, for the second quarter of 2023, compared to $92.8 million, or $1.91 per diluted share, for the linked quarter and $137.6 million, or $2.83 per diluted share, for the second quarter of 2022. 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 $127.9 million, or $2.63 per diluted share, for the second quarter of 2023, compared to $135.4 million, or $2.78 per diluted share, for the linked quarter, and $187.1 million, or $3.84 per diluted share, for the second quarter of 2022. These operating PTPP results represent decreases of 5.5% on a linked-quarter basis and 31.6%, compared to the second quarter of 2022.

"In the second quarter of 2023, the positive impacts of fee income trends, a double-digit annualized increase in average loan balances, excellent asset quality metrics and expense management were masked by higher interest expense driven by the Federal Reserve's monetary tightening actions as well as expected increases in funding costs in this high interest rate environment," said Mariner Kemper, chairman, president and chief executive officer. "Average loans increased 17.3% on a linked-quarter annualized basis with nearly half of the increase driven by commercial & industrial loan balances. Credit metrics remain strong as evidenced by net recoveries this quarter and nine basis points of non-performing loans to total loans. Noninterest income was $138.1 million for the quarter. It's important to note that noninterest income for the same quarter in 2022 included a pre-tax gain of $66.2 million on the sale of our Visa Inc. Class B common shares. Finally, period-end deposit balances at quarter end were $33.5 billion, an increase of $1.6 billion, or 5.0%, as compared to March 31, 2023."

Second Quarter 2023 earnings discussion

Summary of quarterly financial results

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

 

2023

 

2023

 

2022

Net income (GAAP)

 

$

90,110

 

 

$

92,437

 

 

$

137,556

 

Earnings per share (diluted)

 

 

1.85

 

 

 

1.90

 

 

 

2.83

 

 

 

 

 

 

 

 

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

 

 

127,929

 

 

 

135,369

 

 

 

187,051

 

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

 

 

2.63

 

 

 

2.78

 

 

 

3.84

 

 

 

 

 

 

 

 

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

 

 

134,504

 

 

 

141,924

 

 

 

193,329

 

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

 

 

2.77

 

 

 

2.91

 

 

 

3.97

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)(i)

 

 

93,841

 

 

 

92,836

 

 

 

137,596

 

Operating earnings per share (diluted)

 

 

1.93

 

 

 

1.91

 

 

 

2.83

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

Return on average assets

 

 

0.90

%

 

 

0.97

%

 

 

1.47

%

Return on average equity

 

 

12.56

 

 

 

13.76

 

 

 

20.83

 

Efficiency ratio

 

 

65.59

 

 

 

63.12

 

 

 

53.08

 

 

 

 

 

 

 

 

Non-GAAP (i)

 

 

 

 

 

 

Operating return on average assets

 

 

0.93

%

 

 

0.98

%

 

 

1.47

%

Operating return on average equity

 

 

13.08

 

 

 

13.82

 

 

 

20.84

 

Operating return on average tangible equity excluding AOCI

 

 

11.63

 

 

 

12.21

 

 

 

18.65

 

Operating efficiency ratio

 

 

64.24

 

 

 

62.98

 

 

 

53.06

 

(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)

 

June

 

June

 

 

YTD

 

YTD

 

 

2023

 

2022

Net income (GAAP)

 

$

182,547

 

 

$

243,519

 

Earnings per share (diluted)

 

 

3.75

 

 

 

4.99

 

 

 

 

 

 

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

 

 

263,298

 

 

 

306,451

 

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

 

 

5.41

 

 

 

6.29

 

 

 

 

 

 

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

 

 

276,428

 

 

 

319,128

 

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

 

 

5.68

 

 

 

6.55

 

 

 

 

 

 

Net operating income (Non-GAAP)(i)

 

 

186,677

 

 

 

243,669

 

Operating earnings per share (diluted)

 

 

3.83

 

 

 

4.99

 

 

 

 

 

 

GAAP

 

 

 

 

Return on average assets

 

 

0.93

%

 

 

1.28

%

Return on average equity

 

 

13.14

 

 

 

17.60

 

Efficiency ratio

 

 

64.34

 

 

 

58.03

 

 

 

 

 

 

Non-GAAP (i)

 

 

 

 

Operating return on average assets

 

 

0.95

%

 

 

1.28

%

Operating return on average equity

 

 

13.44

 

 

 

17.61

 

Operating return on average tangible equity excluding AOCI

 

 

11.91

 

 

 

16.86

 

Operating efficiency ratio

 

 

63.61

 

 

 

58.00

 

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

Summary of revenue

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2023

 

2023

 

2022

 

LQ

 

PY

Net interest income

 

$

225,611

 

 

$

241,696

 

 

$

224,791

 

 

$

(16,085

)

 

$

820

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

61,589

 

 

 

62,359

 

 

 

58,886

 

 

 

(770

)

 

 

2,703

 

Trading and investment banking

 

 

4,800

 

 

 

5,308

 

 

 

7,123

 

 

 

(508

)

 

 

(2,323

)

Service charges on deposit accounts

 

 

21,381

 

 

 

21,159

 

 

 

20,835

 

 

 

222

 

 

 

546

 

Insurance fees and commissions

 

 

225

 

 

 

274

 

 

 

245

 

 

 

(49

)

 

 

(20

)

Brokerage fees

 

 

13,604

 

 

 

13,676

 

 

 

12,391

 

 

 

(72

)

 

 

1,213

 

Bankcard fees

 

 

18,579

 

 

 

18,172

 

 

 

17,840

 

 

 

407

 

 

 

739

 

Investment securities gains (losses), net

 

 

900

 

 

 

(5,324

)

 

 

60,720

 

 

 

6,224

 

 

 

(59,820

)

Other

 

 

17,004

 

 

 

14,576

 

 

 

(1,705

)

 

 

2,428

 

 

 

18,709

 

Total noninterest income

 

$

138,082

 

 

$

130,200

 

 

$

176,335

 

 

$

7,882

 

 

$

(38,253

)

Total revenue

 

$

363,693

 

 

$

371,896

 

 

$

401,126

 

 

$

(8,203

)

 

$

(37,433

)

Net interest income (FTE)

 

$

232,186

 

 

$

248,251

 

 

$

231,069

 

 

 

 

 

Net interest margin (FTE)

 

 

2.44

%

 

 

2.76

%

 

 

2.60

%

 

 

 

 

Total noninterest income as a % of total revenue

 

 

38.0

 

 

 

35.0

 

 

 

44.0

 

 

 

 

 

Net interest income

Noninterest income

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2023

 

2023

 

2022

 

LQ

 

PY

Salaries and employee benefits

 

$

143,312

 

 

$

142,498

 

 

$

121,390

 

 

$

814

 

 

$

21,922

 

Occupancy, net

 

 

11,746

 

 

 

12,177

 

 

 

11,976

 

 

 

(431

)

 

 

(230

)

Equipment

 

 

17,086

 

 

 

17,849

 

 

 

18,315

 

 

 

(763

)

 

 

(1,229

)

Supplies and services

 

 

4,195

 

 

 

3,875

 

 

 

3,492

 

 

 

320

 

 

 

703

 

Marketing and business development

 

 

7,124

 

 

 

5,335

 

 

 

5,308

 

 

 

1,789

 

 

 

1,816

 

Processing fees

 

 

26,572

 

 

 

23,240

 

 

 

19,338

 

 

 

3,332

 

 

 

7,234

 

Legal and consulting

 

 

7,059

 

 

 

7,285

 

 

 

11,265

 

 

 

(226

)

 

 

(4,206

)

Bankcard

 

 

8,307

 

 

 

7,133

 

 

 

5,880

 

 

 

1,174

 

 

 

2,427

 

Amortization of other intangible assets

 

 

2,117

 

 

 

2,298

 

 

 

1,225

 

 

 

(181

)

 

 

892

 

Regulatory fees

 

 

6,123

 

 

 

5,551

 

 

 

3,464

 

 

 

572

 

 

 

2,659

 

Other

 

 

7,032

 

 

 

9,811

 

 

 

12,474

 

 

 

(2,779

)

 

 

(5,442

)

Total noninterest expense

 

$

240,673

 

 

$

237,052

 

 

$

214,127

 

 

$

3,621

 

 

$

26,546

 

Income taxes

Balance sheet

Summary of average loans and leases - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2023

 

2023

 

2022

 

LQ

 

PY

Commercial and industrial

 

$

9,724,300

 

$

9,287,319

 

$

7,918,552

 

$

436,981

 

 

$

1,805,748

 

Specialty lending

 

 

574,220

 

 

 

564,633

 

 

 

518,575

 

 

 

9,587

 

 

 

55,645

 

Commercial real estate

 

 

8,178,463

 

 

 

7,812,140

 

 

 

6,569,784

 

 

 

366,323

 

 

 

1,608,679

 

Consumer real estate

 

 

2,833,739

 

 

 

2,738,184

 

 

 

2,458,815

 

 

 

95,555

 

 

 

374,924

 

Consumer

 

 

139,705

 

 

 

136,571

 

 

 

148,412

 

 

 

3,134

 

 

 

(8,707

)

Credit cards

 

 

485,749

 

 

 

453,704

 

 

 

428,167

 

 

 

32,045

 

 

 

57,582

 

Leases and other

 

 

255,425

 

 

 

279,049

 

 

 

275,638

 

 

 

(23,624

)

 

 

(20,213

)

Total loans

 

$

22,191,601

 

 

$

21,271,600

 

 

$

18,317,943

 

 

$

920,001

 

 

$

3,873,658

 

Summary of average securities - QTD Average

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2023

 

2023

 

2022

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

797,104

 

$

783,170

 

$

639,161

 

$

13,934

 

 

$

157,943

 

U.S. Agencies

 

 

189,091

 

 

 

171,825

 

 

 

172,798

 

 

 

17,266

 

 

 

16,293

 

Mortgage-backed

 

 

3,813,234

 

 

 

3,938,137

 

 

 

4,764,452

 

 

 

(124,903

)

 

 

(951,218

)

State and political subdivisions

 

 

1,319,398

 

 

 

1,356,785

 

 

 

1,891,377

 

 

 

(37,387

)

 

 

(571,979

)

Corporates

 

 

349,318

 

 

 

364,854

 

 

 

377,586

 

 

 

(15,536

)

 

 

(28,268

)

Collateralized loan obligations

 

 

348,078

 

 

 

348,477

 

 

 

247,639

 

 

 

(399

)

 

 

100,439

 

Total securities available for sale

 

$

6,816,223

 

 

$

6,963,248

 

 

$

8,093,013

 

 

$

(147,025

)

 

$

(1,276,790

)

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

U.S. Agencies

 

$

123,135

 

 

$

123,106

 

 

$

65,964

 

 

$

29

 

 

$

57,171

 

Mortgage-backed

 

 

2,878,657

 

 

 

2,934,113

 

 

 

2,892,986

 

 

 

(55,456

)

 

 

(14,329

)

State and political subdivisions

 

 

2,822,218

 

 

 

2,814,912

 

 

 

2,240,018

 

 

 

7,306

 

 

 

582,200

 

Total securities held to maturity

 

$

5,824,010

 

 

$

5,872,131

 

 

$

5,198,968

 

 

$

(48,121

)

 

$

625,042

 

Trading securities

 

$

12,538

 

 

$

9,258

 

 

$

10,190

 

 

$

3,280

 

 

$

2,348

 

Other securities

 

 

407,754

 

 

 

359,238

 

 

 

347,527

 

 

 

48,516

 

 

 

60,227

 

Total securities

 

$

13,060,525

 

 

$

13,203,875

 

 

$

13,649,698

 

 

$

(143,350

)

 

$

(589,173

)

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2023

 

2023

 

2022

 

LQ

 

PY

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

10,535,325

 

 

$

11,919,277

 

 

$

14,209,159

 

 

$

(1,383,952

)

 

$

(3,673,834

)

Interest-bearing demand and savings

 

 

17,463,022

 

 

 

18,427,662

 

 

 

16,808,998

 

 

 

(964,640

)

 

 

654,024

 

Time deposits

 

 

3,476,616

 

 

 

1,215,506

 

 

 

570,812

 

 

 

2,261,110

 

 

 

2,905,804

 

Total deposits

 

$

31,474,963

 

 

$

31,562,445

 

 

$

31,588,969

 

 

$

(87,482

)

 

$

(114,006

)

Noninterest bearing deposits as % of total

 

 

33.5

%

 

 

37.8

%

 

 

45.0

%

 

 

 

 

Capital

Capital information

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Total equity

 

$

2,831,628

 

 

$

2,814,659

 

 

$

2,642,888

 

Accumulated other comprehensive loss, net

 

 

(685,831

)

 

 

(626,776

)

 

 

(564,803

)

Book value per common share

 

 

58.36

 

 

 

58.03

 

 

 

54.71

 

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

 

 

52.54

 

 

 

52.17

 

 

 

50.64

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

3,273,841

 

 

$

3,196,111

 

 

$

3,055,747

 

Tier 1 capital

 

 

3,273,841

 

 

 

3,196,111

 

 

 

3,055,747

 

Total capital

 

 

3,870,101

 

 

 

3,776,407

 

 

 

3,473,040

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

10.65

%

 

 

10.57

%

 

 

11.44

%

Tier 1 risk-based capital ratio

 

 

10.65

 

 

 

10.57

 

 

 

11.44

 

Total risk-based capital ratio

 

 

12.59

 

 

 

12.49

 

 

 

13.00

 

Tier 1 leverage ratio

 

 

8.16

 

 

 

8.35

 

 

 

8.17

 

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

Asset Quality

Credit quality

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

 

 

2023

 

2023

 

2022

 

2022

 

2022

Net (recoveries) charge-offs - total loans

 

$

(139

)

 

$

4,643

 

 

$

2,189

 

 

$

1,173

 

 

$

28,128

 

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

 

 

(0.00

)%

 

 

0.09

%

 

 

0.04

%

 

 

0.02

%

 

 

0.62

%

Loans over 90 days past due

 

$

10,861

 

 

$

1,723

 

 

$

1,617

 

 

$

2,513

 

 

$

3,446

 

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

 

 

0.05

%

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

 

 

0.02

%

Nonaccrual and restructured loans

 

$

19,347

 

 

$

15,480

 

 

$

19,269

 

 

$

19,817

 

 

$

18,117

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.09

%

 

 

0.07

%

 

 

0.09

%

 

 

0.10

%

 

 

0.10

%

Provision for credit losses

 

$

13,000

 

 

$

23,250

 

 

$

9,000

 

 

$

22,000

 

 

$

13,400

 

Dividend Declaration and Share Repurchase Authorization

At the company's quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on October 2, 2023, to shareholders of record at the close of business on September 11, 2023.

The Board also approved the repurchase of up to 1,000,000 shares of the company's common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2024 annual meeting of the company's shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management.

Conference Call

The company plans to host a conference call to discuss its second quarter 2023 earnings results on Wednesday, July 26, 2023, at 9:30 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 835446. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 2Q 2023 Conference Call

A replay of the conference call may be heard through August 9, 2023, by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 506453. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we may 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, tangible book value per share, and operating return on average tangible equity excluding AOCI, 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, tangible book value per share, and operating return on average tangible equity excluding AOCI ? 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 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, 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 expense.

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 expense.

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.

Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company's average tangible shareholders' equity exclusive of AOCI for the relevant period.

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, 2022, 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 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)

 

 

 

 

 

 

June 30,

 

 

2023

 

2022

ASSETS

 

 

 

 

Loans

 

$

22,483,542

 

 

$

18,972,158

 

Allowance for credit losses on loans

 

 

(222,161

)

 

 

(164,346

)

Net loans

 

 

22,261,381

 

 

 

18,807,812

 

Loans held for sale

 

 

3,819

 

 

 

750

 

Securities:

 

 

 

 

Available for sale

 

 

6,668,615

 

 

 

7,739,216

 

Held to maturity, net of allowance for credit losses

 

 

5,807,763

 

 

 

5,707,282

 

Trading securities

 

 

28,887

 

 

 

9,646

 

Other securities

 

 

428,149

 

 

 

342,543

 

Total securities

 

 

12,933,414

 

 

 

13,798,687

 

Federal funds sold and resell agreements

 

 

319,838

 

 

 

1,055,459

 

Interest-bearing due from banks

 

 

3,369,911

 

 

 

1,825,295

 

Cash and due from banks

 

 

431,527

 

 

 

360,242

 

Premises and equipment, net

 

 

255,127

 

 

 

257,729

 

Accrued income

 

 

190,387

 

 

 

144,874

 

Goodwill

 

 

207,385

 

 

 

182,225

 

Other intangibles, net

 

 

75,184

 

 

 

14,465

 

Other assets

 

 

1,195,069

 

 

 

1,060,303

 

Total assets

 

$

41,243,042

 

 

$

37,507,841

 

 

 

 

 

 

LIABILITIES

 

 

 

 

Deposits:

 

 

 

 

Noninterest-bearing demand

 

$

12,142,906

 

 

$

14,925,555

 

Interest-bearing demand and savings

 

 

18,184,063

 

 

 

16,007,087

 

Time deposits under $250,000

 

 

2,665,166

 

 

 

383,832

 

Time deposits of $250,000 or more

 

 

528,326

 

 

 

169,550

 

Total deposits

 

 

33,520,461

 

 

 

31,486,024

 

Federal funds purchased and repurchase agreements

 

 

2,050,583

 

 

 

2,661,283

 

Short-term debt

 

 

1,800,000

 

 

 

?

 

Long-term debt

 

 

382,280

 

 

 

272,505

 

Accrued expenses and taxes

 

 

256,845

 

 

 

182,185

 

Other liabilities

 

 

401,245

 

 

 

262,956

 

Total liabilities

 

 

38,411,414

 

 

 

34,864,953

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,124,977

 

 

 

1,115,504

 

Retained earnings

 

 

2,681,448

 

 

 

2,384,454

 

Accumulated other comprehensive loss, net

 

 

(685,831

)

 

 

(564,803

)

Treasury stock

 

 

(344,023

)

 

 

(347,324

)

Total shareholders' equity

 

 

2,831,628

 

 

 

2,642,888

 

Total liabilities and shareholders' equity

 

$

41,243,042

 

 

$

37,507,841

 

Consolidated Statements of Income

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

INTEREST INCOME

 

 

 

 

 

 

 

 

Loans

 

$

342,994

 

$

169,919

 

 

$

651,435

 

 

$

319,389

Securities:

 

 

 

 

 

 

 

 

Taxable interest

 

 

54,587

 

 

 

47,295

 

 

 

107,636

 

 

 

90,677

 

Tax-exempt interest

 

 

25,550

 

 

 

23,538

 

 

 

50,856

 

 

 

47,393

 

Total securities income

 

 

80,137

 

 

 

70,833

 

 

 

158,492

 

 

 

138,070

 

Federal funds and resell agreements

 

 

3,889

 

 

 

3,497

 

 

 

9,540

 

 

 

5,947

 

Interest-bearing due from banks

 

 

34,206

 

 

 

4,207

 

 

 

50,372

 

 

 

6,664

 

Trading securities

 

 

154

 

 

 

114

 

 

 

288

 

 

 

299

 

Total interest income

 

 

461,380

 

 

 

248,570

 

 

 

870,127

 

 

 

470,369

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

Deposits

 

 

170,550

 

 

 

15,439

 

 

 

298,449

 

 

 

21,612

 

Federal funds and repurchase agreements

 

 

24,745

 

 

 

4,998

 

 

 

48,047

 

 

 

7,146

 

Other

 

 

40,474

 

 

 

3,342

 

 

 

56,324

 

 

 

6,465

 

Total interest expense

 

 

235,769

 

 

 

23,779

 

 

 

402,820

 

 

 

35,223

 

Net interest income

 

 

225,611

 

 

 

224,791

 

 

 

467,307

 

 

 

435,146

 

Provision for credit losses

 

 

13,000

 

 

 

13,400

 

 

 

36,250

 

 

 

6,900

 

Net interest income after provision for credit losses

 

 

212,611

 

 

 

211,391

 

 

 

431,057

 

 

 

428,246

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

61,589

 

 

 

58,886

 

 

 

123,948

 

 

 

118,414

 

Trading and investment banking

 

 

4,800

 

 

 

7,123

 

 

 

10,108

 

 

 

12,563

 

Service charges on deposit accounts

 

 

21,381

 

 

 

20,835

 

 

 

42,540

 

 

 

45,477

 

Insurance fees and commissions

 

 

225

 

 

 

245

 

 

 

499

 

 

 

504

 

Brokerage fees

 

 

13,604

 

 

 

12,391

 

 

 

27,280

 

 

 

15,847

 

Bankcard fees

 

 

18,579

 

 

 

17,840

 

 

 

36,751

 

 

 

34,475

 

Investment securities gains (losses), net

 

 

900

 

 

 

60,720

 

 

 

(4,424

)

 

 

60,198

 

Other

 

 

17,004

 

 

 

(1,705

)

 

 

31,580

 

 

 

12,535

 

Total noninterest income

 

 

138,082

 

 

 

176,335

 

 

 

268,282

 

 

 

300,013

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

143,312

 

 

 

121,390

 

 

 

285,810

 

 

 

252,024

 

Occupancy, net

 

 

11,746

 

 

 

11,976

 

 

 

23,923

 

 

 

24,208

 

Equipment

 

 

17,086

 

 

 

18,315

 

 

 

34,935

 

 

 

36,479

 

Supplies and services

 

 

4,195

 

 

 

3,492

 

 

 

8,070

 

 

 

6,754

 

Marketing and business development

 

 

7,124

 

 

 

5,308

 

 

 

12,459

 

 

 

10,240

 

Processing fees

 

 

26,572

 

 

 

19,338

 

 

 

49,812

 

 

 

37,781

 

Legal and consulting

 

 

7,059

 

 

 

11,265

 

 

 

14,344

 

 

 

18,176

 

Bankcard

 

 

8,307

 

 

 

5,880

 

 

 

15,440

 

 

 

12,447

 

Amortization of other intangible assets

 

 

2,117

 

 

 

1,225

 

 

 

4,415

 

 

 

2,296

 

Regulatory fees

 

 

6,123

 

 

 

3,464

 

 

 

11,674

 

 

 

6,946

 

Other

 

 

7,032

 

 

 

12,474

 

 

 

16,843

 

 

 

21,554

 

Total noninterest expense

 

 

240,673

 

 

 

214,127

 

 

 

477,725

 

 

 

428,905

 

Income before income taxes

 

 

110,020

 

 

 

173,599

 

 

 

221,614

 

 

 

299,354

 

Income tax expense

 

 

19,910

 

 

 

36,043

 

 

 

39,067

 

 

 

55,835

 

NET INCOME

 

$

90,110

 

 

$

137,556

 

 

$

182,547

 

 

$

243,519

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

Net income ? basic

 

$

1.86

 

 

$

2.85

 

 

$

3.77

 

 

$

5.03

 

Net income ? diluted

 

 

1.85

 

 

 

2.83

 

 

 

3.75

 

 

 

4.99

 

Dividends

 

 

0.38

 

 

 

0.37

 

 

 

0.76

 

 

 

0.74

 

Weighted average shares outstanding ? basic

 

 

48,514,277

 

 

 

48,347,226

 

 

 

48,474,865

 

 

 

48,376,868

 

Weighted average shares outstanding ? diluted

 

 

48,668,413

 

 

 

48,673,964

 

 

 

48,707,487

 

 

 

48,755,059

 

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

Net income

 

$

90,110

 

 

$

137,556

 

 

$

182,547

 

 

$

243,519

 

Other comprehensive (loss) income, before tax:

 

 

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

(87,505

)

 

 

(308,352

)

 

 

6,152

 

 

 

(931,262

)

Less: Reclassification adjustment for net losses included in net income

 

 

?

 

 

 

?

 

 

 

433

 

 

 

?

 

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

 

 

10,312

 

 

 

12,539

 

 

 

20,295

 

 

 

13,121

 

Change in unrealized gains and losses on debt securities

 

 

(77,193

)

 

 

(295,813

)

 

 

26,880

 

 

 

(918,141

)

Unrealized gains and losses on derivative hedges:

 

 

 

 

 

 

 

 

Change in unrealized gains and losses on derivative hedges, net

 

 

1,848

 

 

 

4,437

 

 

 

321

 

 

 

9,117

 

Less: Reclassification adjustment for net gains included in net income

 

 

(2,660

)

 

 

(1,090

)

 

 

(5,221

)

 

 

(1,941

)

Change in unrealized gains and losses on derivative hedges

 

 

(812

)

 

 

3,347

 

 

 

(4,900

)

 

 

7,176

 

Other comprehensive (loss) income, before tax

 

 

(78,005

)

 

 

(292,466

)

 

 

21,980

 

 

 

(910,965

)

Income tax benefit (expense)

 

 

18,950

 

 

 

70,791

 

 

 

(5,076

)

 

 

219,848

 

Other comprehensive (loss) income

 

 

(59,055

)

 

 

(221,675

)

 

 

16,904

 

 

 

(691,117

)

Comprehensive income (loss)

 

$

31,055

 

 

$

(84,119

)

 

$

199,451

 

 

$

(447,598

)

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
Income (Loss)

 

Treasury
Stock

 

Total

Balance - January 1, 2022

 

$

55,057

 

$

1,110,520

 

 

$

2,176,998

 

 

$

126,314

 

 

$

(323,465

)

 

$

3,145,424

 

Total comprehensive income (loss)

 

 

?

 

 

 

?

 

 

 

243,519

 

 

 

(691,117

)

 

 

?

 

 

 

(447,598

)

Dividends ($0.74 per share)

 

 

?

 

 

 

?

 

 

 

(36,063

)

 

 

?

 

 

 

?

 

 

 

(36,063

)

Purchase of treasury stock

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(31,806

)

 

 

(31,806

)

Issuances of equity awards, net of forfeitures

 

 

?

 

 

 

(6,630

)

 

 

?

 

 

 

?

 

 

 

7,309

 

 

 

679

 

Recognition of equity-based compensation

 

 

?

 

 

 

11,223

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

11,223

 

Sale of treasury stock

 

 

?

 

 

 

174

 

 

 

?

 

 

 

?

 

 

 

111

 

 

 

285

 

Exercise of stock options

 

 

?

 

 

 

217

 

 

 

?

 

 

 

?

 

 

 

527

 

 

 

744

 

Balance - June 30, 2022

 

$

55,057

 

 

$

1,115,504

 

 

$

2,384,454

 

 

$

(564,803

)

 

$

(347,324

)

 

$

2,642,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2023

 

$

55,057

 

 

$

1,125,949

 

 

$

2,536,086

 

 

$

(702,735

)

 

$

(347,264

)

 

$

2,667,093

 

Total comprehensive income

 

 

?

 

 

 

?

 

 

 

182,547

 

 

 

16,904

 

 

 

?

 

 

 

199,451

 

Dividends ($0.76 per share)

 

 

?

 

 

 

?

 

 

 

(37,185

)

 

 

?

 

 

 

?

 

 

 

(37,185

)

Purchase of treasury stock

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(7,902

)

 

 

(7,902

)

Issuances of equity awards, net of forfeitures

 

 

?

 

 

 

(9,764

)

 

 

?

 

 

 

?

 

 

 

10,483

 

 

 

719

 

Recognition of equity-based compensation

 

 

?

 

 

 

8,455

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

8,455

 

Sale of treasury stock

 

 

?

 

 

 

115

 

 

 

?

 

 

 

?

 

 

 

140

 

 

 

255

 

Exercise of stock options

 

 

?

 

 

 

222

 

 

 

?

 

 

 

?

 

 

 

520

 

 

 

742

 

Balance - June 30, 2023

 

$

55,057

 

 

$

1,124,977

 

 

$

2,681,448

 

 

$

(685,831

)

 

$

(344,023

)

 

$

2,831,628

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

2023

 

2022

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

22,191,601

 

 

 

6.20

%

 

$

18,317,943

 

 

 

3.72

%

Securities:

 

 

 

 

 

 

 

 

Taxable

 

 

9,228,103

 

 

 

2.37

 

 

 

9,825,114

 

 

 

1.93

 

Tax-exempt

 

 

3,819,884

 

 

 

3.36

 

 

 

3,814,394

 

 

 

3.13

 

Total securities

 

 

13,047,987

 

 

 

2.66

 

 

 

13,639,508

 

 

 

2.27

 

Federal funds and resell agreements

 

 

276,459

 

 

 

5.64

 

 

 

1,100,918

 

 

 

1.27

 

Interest bearing due from banks

 

 

2,707,740

 

 

 

5.07

 

 

 

2,632,307

 

 

 

0.64

 

Trading securities

 

 

12,538

 

 

 

5.37

 

 

 

10,190

 

 

 

5.35

 

Total earning assets

 

 

38,236,325

 

 

 

4.91

 

 

 

35,700,866

 

 

 

2.86

 

Allowance for credit losses

 

 

(216,876

)

 

 

 

 

(182,118

)

 

 

Other assets

 

 

2,345,714

 

 

 

 

 

2,043,977

 

 

 

Total assets

 

$

40,365,163

 

 

 

 

$

37,562,725

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

20,939,638

 

 

 

3.27

%

 

$

17,379,810

 

 

 

0.36

%

Federal funds and repurchase agreements

 

 

2,336,929

 

 

 

4.25

 

 

 

2,658,219

 

 

 

0.75

 

Borrowed funds

 

 

3,137,267

 

 

 

5.17

 

 

 

272,254

 

 

 

4.92

 

Total interest-bearing liabilities

 

 

26,413,834

 

 

 

3.58

 

 

 

20,310,283

 

 

 

0.47

 

Noninterest-bearing demand deposits

 

 

10,535,325

 

 

 

 

 

14,209,159

 

 

 

Other liabilities

 

 

539,172

 

 

 

 

 

394,923

 

 

 

Shareholders' equity

 

 

2,876,832

 

 

 

 

 

2,648,360

 

 

 

Total liabilities and shareholders' equity

 

$

40,365,163

 

 

 

 

$

37,562,725

 

 

 

Net interest spread

 

 

 

 

1.33

%

 

 

 

 

2.39

%

Net interest margin

 

 

 

 

2.44

 

 

 

 

 

2.60

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2023

 

2022

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

21,734,142

 

 

 

6.05

%

 

$

17,842,153

 

 

 

3.61

%

Securities:

 

 

 

 

 

 

 

 

Taxable

 

 

9,288,392

 

 

 

2.34

 

 

 

9,644,345

 

 

 

1.90

 

Tax-exempt

 

 

3,832,505

 

 

 

3.36

 

 

 

3,926,444

 

 

 

3.08

 

Total securities

 

 

13,120,897

 

 

 

2.64

 

 

 

13,570,789

 

 

 

2.24

 

Federal funds and resell agreements

 

 

363,341

 

 

 

5.29

 

 

 

1,182,891

 

 

 

1.01

 

Interest bearing due from banks

 

 

2,127,343

 

 

 

4.77

 

 

 

3,965,267

 

 

 

0.34

 

Trading securities

 

 

10,907

 

 

 

5.77

 

 

 

15,484

 

 

 

4.70

 

Total earning assets

 

 

37,356,630

 

 

 

4.77

 

 

 

36,576,584

 

 

 

2.66

 

Allowance for credit losses

 

 

(206,559

)

 

 

 

 

(190,123

)

 

 

Other assets

 

 

2,292,479

 

 

 

 

 

1,966,176

 

 

 

Total assets

 

$

39,442,550

 

 

 

 

$

38,352,637

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

20,294,984

 

 

 

2.97

%

 

$

17,964,006

 

 

 

0.24

%

Federal funds and repurchase agreements

 

 

2,399,090

 

 

 

4.04

 

 

 

2,815,130

 

 

 

0.51

 

Borrowed funds

 

 

2,174,157

 

 

 

5.22

 

 

 

271,994

 

 

 

4.79

 

Total interest-bearing liabilities

 

 

24,868,231

 

 

 

3.27

 

 

 

21,051,130

 

 

 

0.34

 

Noninterest-bearing demand deposits

 

 

11,223,478

 

 

 

 

 

14,117,879

 

 

 

Other liabilities

 

 

549,787

 

 

 

 

 

393,732

 

 

 

Shareholders' equity

 

 

2,801,054

 

 

 

 

 

2,789,896

 

 

 

Total liabilities and shareholders' equity

 

$

39,442,550

 

 

 

 

$

38,352,637

 

 

 

Net interest spread

 

 

 

 

1.50

%

 

 

 

 

2.32

%

Net interest margin

 

 

 

 

2.59

 

 

 

 

 

2.47

 

Business Segment Information

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

 

Commercial
Banking

 

Institutional
Banking

 

Personal
Banking

 

Total

Net interest income

 

$

144,389

 

$

50,397

 

$

30,825

 

 

$

225,611

Provision for credit losses

 

 

11,055

 

 

 

234

 

 

 

1,711

 

 

 

13,000

 

Noninterest income

 

 

25,666

 

 

 

86,813

 

 

 

25,603

 

 

 

138,082

 

Noninterest expense

 

 

85,896

 

 

 

91,591

 

 

 

63,186

 

 

 

240,673

 

Income (loss) before taxes

 

 

73,104

 

 

 

45,385

 

 

 

(8,469

)

 

 

110,020

 

Income tax expense (benefit)

 

 

13,230

 

 

 

8,213

 

 

 

(1,533

)

 

 

19,910

 

Net income (loss)

 

$

59,874

 

 

$

37,172

 

 

$

(6,936

)

 

$

90,110

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

 

Commercial
Banking

 

Institutional
Banking

 

Personal
Banking

 

Total

Net interest income

 

$

149,094

 

 

$

34,981

 

 

 

40,716

 

 

$

224,791

 

Provision for credit losses

 

 

12,067

 

 

 

89

 

 

 

1,244

 

 

 

13,400

 

Noninterest income

 

 

56,894

 

 

 

81,082

 

 

 

38,359

 

 

 

176,335

 

Noninterest expense

 

 

79,521

 

 

 

76,511

 

 

 

58,095

 

 

 

214,127

 

Income before taxes

 

 

114,400

 

 

 

39,463

 

 

 

19,736

 

 

 

173,599

 

Income tax expense

 

 

23,752

 

 

 

8,193

 

 

 

4,098

 

 

 

36,043

 

Net income

 

$

90,648

 

 

$

31,270

 

 

$

15,638

 

 

$

137,556

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023

 

 

Commercial
Banking

 

Institutional
Banking

 

Personal
Banking

 

Total

Net interest income

 

$

295,416

 

 

$

105,482

 

 

$

66,409

 

 

$

467,307

 

Provision for credit losses

 

 

32,099

 

 

 

331

 

 

 

3,820

 

 

 

36,250

 

Noninterest income

 

 

48,568

 

 

 

171,051

 

 

 

48,663

 

 

 

268,282

 

Noninterest expense

 

 

169,900

 

 

 

180,962

 

 

 

126,863

 

 

 

477,725

 

Income (loss) before taxes

 

 

141,985

 

 

 

95,240

 

 

 

(15,611

)

 

 

221,614

 

Income tax expense (benefit)

 

 

25,030

 

 

 

16,789

 

 

 

(2,752

)

 

 

39,067

 

Net income (loss)

 

$

116,955

 

 

$

78,451

 

 

$

(12,859

)

 

$

182,547

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

Commercial
Banking

 

Institutional
Banking

 

Personal
Banking

 

Total

Net interest income

 

$

294,096

 

 

$

61,233

 

 

$

79,817

 

 

$

435,146

 

Provision for credit losses

 

 

5,027

 

 

 

240

 

 

 

1,633

 

 

 

6,900

 

Noninterest income

 

 

83,594

 

 

 

154,354

 

 

 

62,065

 

 

 

300,013

 

Noninterest expense

 

 

159,110

 

 

 

152,112

 

 

 

117,683

 

 

 

428,905

 

Income before taxes

 

 

213,553

 

 

 

63,235

 

 

 

22,566

 

 

 

299,354

 

Income tax expense

 

 

39,831

 

 

 

11,795

 

 

 

4,209

 

 

 

55,835

 

Net income

 

$

173,722

 

 

$

51,440

 

 

$

18,357

 

 

$

243,519

 

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 June 30, 2023.

Non-GAAP Financial Measures

Net operating income Non-GAAP reconciliations:

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

2022

 

2023

 

2022

Net income (GAAP)

 

$

90,110

 

 

$

137,556

 

 

$

182,547

 

 

$

243,519

 

Adjustments:

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

?

 

 

 

57

 

 

 

?

 

Severance expense

 

 

4,891

 

 

 

52

 

 

 

5,377

 

 

 

197

 

Tax-impact of adjustments (i)

 

 

(1,178

)

 

 

(12

)

 

 

(1,304

)

 

 

(47

)

Total Non-GAAP adjustments (net of tax)

 

 

3,731

 

 

 

40

 

 

 

4,130

 

 

 

150

 

Net operating income (Non-GAAP)

 

$

93,841

 

 

$

137,596

 

 

$

186,677

 

 

$

243,669

 

 

 

 

 

 

 

 

 

 

Earnings per share - diluted (GAAP)

 

$

1.85

 

 

$

2.83

 

 

$

3.75

 

 

$

4.99

 

Acquisition expense

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Severance expense

 

 

0.10

 

 

 

?

 

 

 

0.11

 

 

 

?

 

Tax-impact of adjustments (i)

 

 

(0.02

)

 

 

?

 

 

 

(0.03

)

 

 

?

 

Operating earnings per share - diluted (Non-GAAP)

 

$

1.93

 

 

$

2.83

 

 

$

3.83

 

 

$

4.99

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.90

%

 

 

1.47

%

 

 

0.93

%

 

 

1.28

%

Return on average equity

 

 

12.56

 

 

 

20.83

 

 

 

13.14

 

 

 

17.60

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.93

%

 

 

1.47

%

 

 

0.95

%

 

 

1.28

%

Operating return on average equity

 

 

13.08

 

 

 

20.84

 

 

 

13.44

 

 

 

17.61

 

(i) Calculated using the company's marginal tax rate of 24.0%.

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

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

2022

 

2023

 

2022

Noninterest expense

 

$

240,673

 

 

$

214,127

 

 

$

477,725

 

 

$

428,905

 

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

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

?

 

 

 

57

 

 

 

?

 

Severance expense

 

 

4,891

 

 

 

52

 

 

 

5,377

 

 

 

197

 

Total Non-GAAP adjustments (pre-tax)

 

 

4,909

 

 

 

52

 

 

 

5,434

 

 

 

197

 

Operating noninterest expense (Non-GAAP)

 

$

235,764

 

 

$

214,075

 

 

$

472,291

 

 

$

428,708

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

240,673

 

 

$

214,127

 

 

$

477,725

 

 

$

428,905

 

Less: Amortization of other intangibles

 

 

2,117

 

 

 

1,225

 

 

 

4,415

 

 

 

2,296

 

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

 

$

238,556

 

 

$

212,902

 

 

$

473,310

 

 

$

426,609

 

 

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

235,764

 

 

$

214,075

 

 

$

472,291

 

 

$

428,708

 

Less: Amortization of other intangibles

 

 

2,117

 

 

 

1,225

 

 

 

4,415

 

 

 

2,296

 

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

 

$

233,647

 

 

$

212,850

 

 

$

467,876

 

 

$

426,412

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

225,611

 

 

$

224,791

 

 

$

467,307

 

 

$

435,146

 

Noninterest income

 

 

138,082

 

 

 

176,335

 

 

 

268,282

 

 

 

300,013

 

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

 

 

?

 

 

 

?

 

 

 

(2

)

 

 

?

 

Total Non-GAAP Revenue (denominator A)

 

$

363,693

 

 

$

401,126

 

 

$

735,591

 

 

$

735,159

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

65.59

%

 

 

53.08

%

 

 

64.34

%

 

 

58.03

%

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

 

 

64.24

 

 

 

53.06

 

 

 

63.61

 

 

 

58.00

 

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

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

2022

 

2023

 

2022

Net interest income (GAAP)

 

$

225,611

 

$

224,791

 

$

467,307

 

$

435,146

Noninterest income (GAAP)

 

 

138,082

 

 

 

176,335

 

 

 

268,282

 

 

 

300,013

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

240,673

 

 

 

214,127

 

 

 

477,725

 

 

 

428,905

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

?

 

 

 

57

 

 

 

?

 

Severance expense

 

 

4,891

 

 

 

52

 

 

 

5,377

 

 

 

197

 

Total Non-GAAP adjustments

 

 

4,909

 

 

 

52

 

 

 

5,434

 

 

 

197

 

Operating noninterest expense (Non-GAAP)

 

 

235,764

 

 

 

214,075

 

 

 

472,291

 

 

 

428,708

 

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

 

$

127,929

 

 

$

187,051

 

 

$

263,298

 

 

$

306,451

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.64

 

 

$

4.62

 

 

$

9.60

 

 

$

8.93

 

Noninterest income (GAAP)

 

 

2.84

 

 

 

3.62

 

 

 

5.51

 

 

 

6.16

 

Noninterest expense (GAAP)

 

 

4.95

 

 

 

4.40

 

 

 

9.81

 

 

 

8.80

 

Acquisition expense

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Severance expense

 

 

0.10

 

 

 

?

 

 

 

0.11

 

 

 

?

 

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

 

$

2.63

 

 

$

3.84

 

 

$

5.41

 

 

$

6.29

 

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

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

2022

 

2023

 

2022

Net interest income (GAAP)

 

$

225,611

 

$

224,791

 

$

467,307

 

$

435,146

Adjustments to arrive at net interest income - FTE:

 

 

 

 

 

 

 

 

Tax equivalent interest

 

 

6,575

 

 

 

6,278

 

 

 

13,130

 

 

 

12,677

 

Net interest income - FTE (Non-GAAP)

 

 

232,186

 

 

 

231,069

 

 

 

480,437

 

 

 

447,823

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

 

138,082

 

 

 

176,335

 

 

 

268,282

 

 

 

300,013

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

240,673

 

 

 

214,127

 

 

 

477,725

 

 

 

428,905

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

?

 

 

 

57

 

 

 

?

 

Severance expense

 

 

4,891

 

 

 

52

 

 

 

5,377

 

 

 

197

 

Total Non-GAAP adjustments

 

 

4,909

 

 

 

52

 

 

 

5,434

 

 

 

197

 

Operating noninterest expense (Non-GAAP)

 

 

235,764

 

 

 

214,075

 

 

 

472,291

 

 

 

428,708

 

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

 

$

134,504

 

 

$

193,329

 

 

$

276,428

 

 

$

319,128

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.64

 

 

$

4.62

 

 

$

9.60

 

 

$

8.93

 

Tax equivalent interest

 

 

0.14

 

 

 

0.13

 

 

 

0.27

 

 

 

0.26

 

Net interest income - FTE (Non-GAAP)

 

 

4.78

 

 

 

4.75

 

 

 

9.87

 

 

 

9.19

 

Noninterest income (GAAP)

 

 

2.84

 

 

 

3.62

 

 

 

5.51

 

 

 

6.16

 

Noninterest expense (GAAP)

 

 

4.95

 

 

 

4.40

 

 

 

9.81

 

 

 

8.80

 

Acquisition expense

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Severance expense

 

 

0.10

 

 

 

?

 

 

 

0.11

 

 

 

?

 

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

 

$

2.77

 

 

$

3.97

 

 

$

5.68

 

 

$

6.55

 

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

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

 

 

 

 

 

 

As of June 30,

 

 

2023

 

2022

Total shareholders' equity (GAAP)

 

$

2,831,628

 

$

2,642,888

Less: Intangible assets

 

 

 

 

Goodwill

 

 

207,385

 

 

 

182,225

 

Other intangibles, net

 

 

75,184

 

 

 

14,465

 

Total intangibles, net

 

 

282,569

 

 

 

196,690

 

Total tangible shareholders' equity (Non-GAAP)

 

$

2,549,059

 

 

$

2,446,198

 

 

 

 

 

 

Total shares outstanding

 

 

48,517,750

 

 

 

48,305,286

 

 

 

 

 

 

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

 

$

58.36

 

 

$

54.71

 

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

 

 

52.54

 

 

 

50.64

 

Operating return on average tangible equity excluding AOCI non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

2022

 

2023

 

2022

Average total shareholders' equity (GAAP)

 

$

2,876,832

 

 

$

2,648,360

 

 

$

2,801,054

 

 

$

2,789,896

 

Less: Average intangible assets

 

 

 

 

 

 

 

 

Average goodwill

 

 

207,385

 

 

 

182,225

 

 

 

207,385

 

 

 

178,478

 

Average other intangibles, net

 

 

75,685

 

 

 

15,261

 

 

 

76,954

 

 

 

14,686

 

Average total intangibles, net

 

 

283,070

 

 

 

197,486

 

 

 

284,339

 

 

 

193,164

 

Average total tangible shareholders' equity (Non-GAAP)

 

 

2,593,762

 

 

 

2,450,874

 

 

 

2,516,715

 

 

 

2,596,732

 

Less: Average accumulated other comprehensive loss (AOCI)

 

 

(644,003

)

 

 

(507,740

)

 

 

(643,782

)

 

 

(318,119

)

Average total tangible shareholders' equity excluding AOCI (Non-GAAP)

 

$

3,237,765

 

 

$

2,958,614

 

 

$

3,160,497

 

 

$

2,914,851

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

$

93,841

 

 

$

137,596

 

 

$

186,677

 

 

$

243,669

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

Operating return on average tangible equity excluding AOCI

 

 

11.63

%

 

 

18.65

%

 

 

11.91

%

 

 

16.86

%

 


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