KANSAS CITY, Mo.--(BUSINESS WIRE)--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) | ||||||||||||
Q3 | Q2 | Q3 | ||||||||||
2024 | 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 | September | ||||||
YTD | 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) | ||||||||||||||||||||
Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
2024 | 2024 | 2023 | LQ | PY | ||||||||||||||||
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 | 15 | 10 | |||||||||||||||
Brokerage fees | 15,749 | 14,020 | 13,400 | 1,729 | 2,349 | |||||||||||||||
Bankcard fees | 22,394 | 22,346 | 19,296 | 48 | 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) | ||||||||||||||||||||
Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
2024 | 2024 | 2023 | LQ | PY | ||||||||||||||||
Salaries and employee benefits | $ | 146,984 | $ | 142,861 | $ | 133,380 | $ | 4,123 | $ | 13,604 | ||||||||||
Occupancy, net | 12,274 | 11,723 | 12,283 | 551 | (9 | ) | ||||||||||||||
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 | (4 | ) | 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 | 6 | (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) | ||||||||||||||||||||
Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
2024 | 2024 | 2023 | LQ | PY | ||||||||||||||||
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) | ||||||||||||||||||||
Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
2024 | 2024 | 2023 | LQ | PY | ||||||||||||||||
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) | ||||||||||||||||||||
Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
2024 | 2024 | 2023 | LQ | PY | ||||||||||||||||
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,
| June 30,
| September 30,
| ||||||||||
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) | ||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | ||||||||||||||||
2024 | 2024 | 2024 | 2023 | 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 | % | 0.05 | % | 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 | % | 0.01 | % | 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 | 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 | 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, | 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, | 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
| Capital
| Retained
| Accumulated
| Treasury
| 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 | Average | Average | 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 | Average | Average | 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
| Institutional
| Personal
| 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
| Institutional
| Personal
| 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
| Institutional
| Personal
| 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
| Institutional
| Personal
| 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
| Nine Months Ended
| |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net income (GAAP) | $ | 109,643 | $ | 96,554 | $ | 321,246 | $ | 279,101 | ||||||||
Adjustments: | ||||||||||||||||
Acquisition expense | 2,611 | 70 | 12,592 | 127 | ||||||||||||
Severance expense | 48 | 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
| UMB Financial Corporation | |||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||
Three Months Ended
| Nine Months Ended
| |||||||||||||||
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 | 70 | 12,592 | 127 | ||||||||||||
Severance expense | 48 | 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
| Nine Months Ended
| |||||||||||||||
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 | 70 | 12,592 | 127 | ||||||||||||
Severance expense | 48 | 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
| Nine Months Ended
| |||||||||||||||
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 | 70 | 12,592 | 127 | ||||||||||||
Severance expense | 48 | 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 | 0.13 | 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 | 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 | ||||||
Contacts
Media Contact: Stephanie Hague: 816.729.1027
Investor Relations Contact: Kay Gregory: 816.860.7106
