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UMB Financial Corporation Reports First Quarter Net Income of $92.4 Million

First Quarter 2023 Financial Highlights

  • GAAP net income of $92.4 million, or $1.90 per diluted share.
  • Average loans increased 19.3% on a linked-quarter, annualized basis.
  • Average deposits grew 2.4% on a linked-quarter, annualized basis.
  • Diverse deposit base with approximately 55% of deposit relationships spanning ten or more years.
  • At March 31, 2023, uninsured deposits represented 66.6% of total deposits. When adjusted to exclude affiliate and collateralized deposits, uninsured deposits were 43.1% of total deposits.
  • Within our commercial deposits, no one sector represents more than 5% of quarterly average deposits.
  • Strong risk-based capital ratios and liquidity positions.
  • Noninterest income increased 5.3% as compared to the first quarter of 2022, equal to 35.0% of total revenue.
  • Credit quality remained strong, with net charge-offs of just 0.09% of average loans and nonperforming loans of 0.07% of total loans.

UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2023 of $92.4 million, or $1.90 per diluted share, compared to $100.2 million, or $2.06 per diluted share, in the fourth quarter of 2022 (linked quarter) and $106.0 million, or $2.17 per diluted share, in the first quarter of 2022.

Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $92.8 million, or $1.91 per diluted share, for the first quarter of 2023, compared to $101.1 million, or $2.07 per diluted share, for the linked quarter and $106.1 million, or $2.17 per diluted share, for the first 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 $135.4 million, or $2.78 per diluted share, for the first quarter of 2023, compared to $134.1 million, or $2.75 per diluted share, for the linked quarter, and $119.4 million, or $2.44 per diluted share, for the first quarter of 2022. These operating PTPP results represent increases of 1.0% on a linked-quarter basis and 13.4%, compared to the first quarter of 2022.

“Comments made publicly about the health of the banking industry, driven by the mistaken presumption that the drivers of the failure of two banks would apply to other banks generally, did a great disservice not only to UMB, but to regional banks as a whole,” said Mariner Kemper, chairman, president and chief executive officer. “Despite the challenging environment resulting from this flawed and exaggerated crisis of confidence created by certain market participants, we had a strong first quarter, with average deposit growth of 2.4% and average loan growth of 19.3%, on a linked-quarter annualized basis. We had continued momentum in our fee businesses, and credit quality remains strong, with net charge offs of just 0.09% of average loans. Nonperforming loans further improved from year-end, and were just 0.07% of loans at March 31.” Mr. Kemper continued, “Our business model is built to withstand difficult economic environments and crises. Our deposit base is diverse across multiple lines of businesses and reflects long tenured and deeply entrenched relationships, with more than 55% of our customers having banked with us for ten years or more. Our regulatory capital ratios are above peer median, and our liquidity levels are strong, including many contingent sources. Despite conjectures in the aftermath of Silicon Valley Bank’s failure, not every bank, including UMB, needs to sell investment securities at a loss.”

First Quarter 2023 earnings discussion

Summary of quarterly financial results

 

UMB Financial Corporation

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

 

Q4

 

 

Q1

 

 

 

2023

 

 

2022

 

 

2022

 

Net income (GAAP)

 

$

92,437

 

 

$

100,173

 

 

$

105,963

 

Earnings per share (diluted)

 

 

1.90

 

 

 

2.06

 

 

 

2.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

135,369

 

 

 

134,054

 

 

 

119,400

 

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

 

 

2.78

 

 

 

2.75

 

 

 

2.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

141,924

 

 

 

140,717

 

 

 

125,799

 

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

 

 

2.91

 

 

 

2.89

 

 

 

2.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

92,836

 

 

 

101,092

 

 

 

106,073

 

Operating earnings per share (diluted)

 

 

1.91

 

 

 

2.07

 

 

 

2.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.97

%

 

 

1.06

%

 

 

1.10

%

Return on average equity

 

 

13.76

 

 

 

15.16

 

 

 

14.65

 

Efficiency ratio

 

 

63.12

 

 

 

63.72

 

 

 

63.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP (i)

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.98

%

 

 

1.07

%

 

 

1.10

%

Operating return on average equity

 

 

13.82

 

 

 

15.30

 

 

 

14.67

 

Operating return on average tangible equity excluding AOCI

 

 

12.21

 

 

 

12.85

 

 

 

14.99

 

Operating efficiency ratio

 

 

62.98

 

 

 

63.39

 

 

 

63.93

 

(i) See Non-GAAP reconciliation later in this release.

Summary of revenue

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q4

 

Q1

 

CQ vs.

 

CQ vs.

 

 

2023

 

2022

 

2022

 

LQ

 

PY

Net interest income

 

$

241,696

 

 

$

245,166

 

 

$

210,355

 

 

$

(3,470

)

 

$

31,341

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

62,359

 

 

 

59,207

 

 

 

59,528

 

 

 

3,152

 

 

 

2,831

 

Trading and investment banking

 

 

5,308

 

 

 

5,251

 

 

 

5,440

 

 

 

57

 

 

 

(132

)

Service charges on deposit accounts

 

 

21,159

 

 

 

19,758

 

 

 

24,642

 

 

 

1,401

 

 

 

(3,483

)

Insurance fees and commissions

 

 

274

 

 

 

459

 

 

 

259

 

 

 

(185

)

 

 

15

 

Brokerage fees

 

 

13,676

 

 

 

13,332

 

 

 

3,456

 

 

 

344

 

 

 

10,220

 

Bankcard fees

 

 

18,172

 

 

 

19,597

 

 

 

16,635

 

 

 

(1,425

)

 

 

1,537

 

Investment securities losses, net

 

 

(5,324

)

 

 

(409

)

 

 

(522

)

 

 

(4,915

)

 

 

(4,802

)

Other

 

 

14,576

 

 

 

8,302

 

 

 

14,240

 

 

 

6,274

 

 

 

336

 

Total noninterest income

 

$

130,200

 

 

$

125,497

 

 

$

123,678

 

 

$

4,703

 

 

$

6,522

 

Total revenue

 

$

371,896

 

 

$

370,663

 

 

$

334,033

 

 

$

1,233

 

 

$

37,863

 

Net interest income (FTE)

 

$

248,251

 

 

$

251,829

 

 

$

216,754

 

 

 

 

 

 

 

Net interest margin (FTE)

 

 

2.76

%

 

 

2.83

%

 

 

2.35

%

 

 

 

 

 

 

Total noninterest income as a % of total revenue

 

 

35.0

 

 

 

33.9

 

 

 

37.0

 

 

 

 

 

 

 

Net interest income

  • First quarter 2023 net interest income totaled $241.7 million, a decrease of $3.5 million, or 1.4% from the linked quarter, driven by the impact of fewer days in the first quarter, as well as higher interest costs primarily driven by unfavorable mix shift in the composition of liabilities, partially offset by continued growth in average loans.
  • Average earning assets increased $1.2 billion, or 3.3% from the linked quarter, largely driven by an increase of $976.9 million in average loans, an increase of $398.3 million in interest-bearing due from banks, partially offset by a decrease of $204.9 million in federal funds sold and resell agreements.
  • Average interest-bearing liabilities increased $1.6 billion, or 7.2% from the linked quarter, primarily driven by increases of $803.5 million in borrowed funds and $723.6 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $535.1 million, or 4.3% as compared to the linked quarter.
  • Net interest margin for the first quarter was 2.76%, a decrease of seven basis points from the linked quarter, driven by increased cost of interest-bearing liabilities, partially offset by the benefit of free funds and earning asset mix changes. The cost of interest-bearing liabilities increased 69 basis points to 2.91%. Total cost of funds increased 51 basis points from the linked quarter to 1.92%. Average loan yields increased 53 basis points while earning asset yields increased 42 basis points from the linked quarter.
  • On a year-over-year basis, net interest income increased $31.3 million, or 14.9%, driven by a $3.9 billion, or 22.5%, increase in average loans, favorable mix shift in earning assets, and benefit from higher interest rates, partially offset by higher cost of interest-bearing liabilities.
  • Compared to the first quarter of 2022, average earning assets decreased $1.0 billion, or 2.7%, largely driven by a decrease of $3.8 billion in interest-bearing due from banks and a decrease of $814.6 million in federal funds sold and resell agreements, partially offset by the increase in average loans noted above.
  • Average deposits decreased 3.1% compared to the first quarter of 2022. Average noninterest-bearing demand deposit balances decreased 15.0% compared to the first quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 37.8% of total deposits, compared to 39.7% in the linked quarter and 43.0% in the first quarter of 2022.
  • Average borrowed funds increased $803.5 million as compared to the linked quarter and $928.6 million as compared to the first quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window.

Noninterest income

  • First quarter 2023 noninterest income increased $4.7 million, or 3.7%, on a linked-quarter basis, largely due to:
    • Increases of $4.0 million in company-owned life insurance income and $1.8 million in derivative income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below.
    • Increases of $1.8 million in corporate trust income, $0.9 million in fund services income and $0.5 million in trust income, all recorded in trust and securities processing.
    • These increases were partially offset by a decrease of $4.9 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter.
  • Compared to the prior year, noninterest income in the first quarter of 2023 increased $6.5 million, or 5.3%, primarily driven by:
    • An increase of $10.2 million in brokerage income, largely driven by increases in 12b-1 fees and money market income.
    • An increase of $4.1 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below.
    • Increases of $2.3 million in corporate trust income and $1.3 million in fund services income, both recorded in trust and securities processing.
    • An increase of $1.5 million in bankcard income due to higher interchange revenue.
    • These increases were partially offset by the following decreases:
      • A decrease of $4.8 million in investment securities gains, driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter of 2023.
      • A decrease of $3.5 million in service charges on deposits primarily due to decreased healthcare services income related to customer transfer and conversion fees recognized in the first quarter of 2022.
      • A decrease of $2.4 million in other miscellaneous income, driven by the gain on sale of the company’s factoring loan portfolio recorded in the first quarter of 2022.
      • A decrease of $2.1 million in derivative income, recorded in other income.

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q4

 

Q1

 

CQ vs.

 

CQ vs.

 

 

2023

 

2022

 

2022

 

LQ

 

PY

Salaries and employee benefits

 

$

142,498

 

$

135,940

 

$

130,634

 

$

6,558

 

 

$

11,864

 

Occupancy, net

 

 

12,177

 

 

 

12,409

 

 

 

12,232

 

 

 

(232

)

 

 

(55

)

Equipment

 

 

17,849

 

 

 

18,969

 

 

 

18,164

 

 

 

(1,120

)

 

 

(315

)

Supplies and services

 

 

3,875

 

 

 

3,697

 

 

 

3,262

 

 

 

178

 

 

 

613

 

Marketing and business development

 

 

5,335

 

 

 

8,788

 

 

 

4,932

 

 

 

(3,453

)

 

 

403

 

Processing fees

 

 

23,240

 

 

 

23,545

 

 

 

18,443

 

 

 

(305

)

 

 

4,797

 

Legal and consulting

 

 

7,285

 

 

 

10,664

 

 

 

6,911

 

 

 

(3,379

)

 

 

374

 

Bankcard

 

 

7,133

 

 

 

7,369

 

 

 

6,567

 

 

 

(236

)

 

 

566

 

Amortization of other intangible assets

 

 

2,298

 

 

 

1,649

 

 

 

1,071

 

 

 

649

 

 

 

1,227

 

Regulatory fees

 

 

5,551

 

 

 

4,232

 

 

 

3,482

 

 

 

1,319

 

 

 

2,069

 

Other

 

 

9,811

 

 

 

10,556

 

 

 

9,080

 

 

 

(745

)

 

 

731

 

Total noninterest expense

 

$

237,052

 

 

$

237,818

 

 

$

214,778

 

 

$

(766

)

 

$

22,274

 

  • Noninterest expense for the first quarter of 2023 was $237.1 million, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $22.3 million, or 10.4%, from the first quarter of 2022.
  • The linked-quarter decrease in noninterest expense was driven by:
    • A decrease of $6.6 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2022.
    • Decreases of $3.5 million in marketing and business development expense and $3.4 million in legal and consulting expense due to the timing of multiple projects. The decrease in marketing and business development expense was also partially driven by a decrease in advertising for various projects and a decrease in travel and entertainment expense.
    • A decrease of $1.1 million in equipment expense driven by reduced software expense.
    • These decreases were partially offset by increases of $13.2 million in employee benefits expense driven by a seasonal increase of $11.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $2.5 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. Additionally, there was an increase of $1.3 million in regulatory fees expense driven by higher deposit insurance expense due to previously announced higher industry assessment rates.
  • The year-over-year increase in noninterest expense was driven by:
    • An increase of $11.9 million in salaries and employee benefits expense, driven primarily by increases of $11.0 million in salaries and wage expense and $4.7 million in employee benefits expense, primarily due to an increase of $3.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.7 million in deferred compensation expense. These increases were partially offset by a decrease of $3.8 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
    • An increase of $4.8 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects.
    • Increases of $2.1 million in regulatory fees expense driven by higher deposit insurance expense, $2.0 million in operational losses, recorded in other expense, and $1.2 million in intangible amortization expense. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022.

Income taxes

  • The company’s effective tax rate was 17.2% for the three months ended March 31, 2023, compared to 15.7% for the same period in 2022. The effective tax rate increased primarily as a result of a decrease in excess tax benefits associated with stock compensation recorded in the first quarter of 2023 compared to the same period a year earlier.

Balance sheet

  • Average total assets for the first quarter of 2023 were $38.5 billion compared to $37.3 billion for the linked quarter and $39.2 billion for the same period in 2022.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q4

 

Q1

 

CQ vs.

 

CQ vs.

 

 

2023

 

2022

 

2022

 

LQ

 

PY

Commercial and industrial

 

$

9,287,319

 

$

8,891,356

 

$

7,409,623

 

$

395,963

 

 

$

1,877,696

Specialty lending

 

 

564,633

 

 

 

559,200

 

 

 

463,793

 

 

 

5,433

 

 

 

100,840

 

Commercial real estate

 

 

7,812,140

 

 

 

7,323,877

 

 

 

6,338,160

 

 

 

488,263

 

 

 

1,473,980

 

Consumer real estate

 

 

2,738,184

 

 

 

2,678,771

 

 

 

2,339,050

 

 

 

59,413

 

 

 

399,134

 

Consumer

 

 

136,571

 

 

 

145,811

 

 

 

135,942

 

 

 

(9,240

)

 

 

629

 

Credit cards

 

 

453,704

 

 

 

457,043

 

 

 

399,857

 

 

 

(3,339

)

 

 

53,847

 

Leases and other

 

 

279,049

 

 

 

238,603

 

 

 

274,652

 

 

 

40,446

 

 

 

4,397

 

Total loans

 

$

21,271,600

 

 

$

20,294,661

 

 

$

17,361,077

 

 

$

976,939

 

 

$

3,910,523

 

  • Average loans for the first quarter of 2023 increased $976.9 million, or 4.8%, on a linked-quarter basis and $3.9 billion, or 22.5%, compared to the first quarter of 2022.

Summary of average securities - QTD Average

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q4

 

Q1

 

CQ vs.

 

CQ vs.

 

 

2023

 

2022

 

2022

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

783,170

 

$

752,339

 

$

176,476

 

$

30,831

 

 

$

606,694

 

U.S. Agencies

 

 

171,825

 

 

 

171,171

 

 

 

125,017

 

 

 

654

 

 

 

46,808

 

Mortgage-backed

 

 

3,938,137

 

 

 

4,027,120

 

 

 

7,317,968

 

 

 

(88,983

)

 

 

(3,379,831

)

State and political subdivisions

 

 

1,356,785

 

 

 

1,353,307

 

 

 

3,170,757

 

 

 

3,478

 

 

 

(1,813,972

)

Corporates

 

 

364,854

 

 

 

366,131

 

 

 

337,526

 

 

 

(1,277

)

 

 

27,328

 

Collateralized loan obligations

 

 

348,477

 

 

 

328,475

 

 

 

150,134

 

 

 

20,002

 

 

 

198,343

 

Total securities available for sale

 

$

6,963,248

 

 

$

6,998,543

 

 

$

11,277,878

 

 

$

(35,295

)

 

$

(4,314,630

)

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agencies

 

$

123,106

 

 

$

123,077

 

 

$

133

 

 

$

29

 

 

$

122,973

 

Mortgage-backed

 

 

2,934,113

 

 

 

2,983,489

 

 

 

708,075

 

 

 

(49,376

)

 

 

2,226,038

 

State and political subdivisions

 

 

2,814,912

 

 

 

2,765,717

 

 

 

1,185,609

 

 

 

49,195

 

 

 

1,629,303

 

Total securities held to maturity

 

$

5,872,131

 

 

$

5,872,283

 

 

$

1,893,817

 

 

$

(152

)

 

$

3,978,314

 

Trading securities

 

 

9,258

 

 

 

11,799

 

 

 

20,836

 

 

 

(2,541

)

 

 

(11,578

)

Other securities

 

 

359,238

 

 

 

315,748

 

 

 

329,611

 

 

 

43,490

 

 

 

29,627

 

Total securities

 

$

13,203,875

 

 

$

13,198,373

 

 

$

13,522,142

 

 

$

5,502

 

 

$

(318,267

)

  • Average total securities remained flat on a linked-quarter basis and decreased 2.4% compared to the first quarter of 2022.
  • At March 31, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio narrowed to $677.7 million, or 8.9% of the $7.6 billion amortized cost value, down from $771.6 million at December 31, 2022.
  • At March 31, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity narrowed to $489.8 million, or 8.4% of amortized cost value, compared to $580.9 million at December 31, 2022.
  • During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $237.1 million as of March 31, 2023 and was included in the amortized cost balance of held-to-maturity securities.
  • At March 31, 2023, an after-tax gain of $57.2 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, nine of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds.

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q4

 

Q1

 

CQ vs.

 

CQ vs.

 

 

2023

 

2022

 

2022

 

LQ

 

PY

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

11,919,277

 

 

$

12,454,413

 

 

$

14,025,585

 

 

$

(535,136

)

 

$

(2,106,308

)

Interest-bearing demand and savings

 

 

18,427,662

 

 

 

17,952,568

 

 

 

17,852,721

 

 

 

475,094

 

 

 

574,941

 

Time deposits

 

 

1,215,506

 

 

 

966,969

 

 

 

701,973

 

 

 

248,537

 

 

 

513,533

 

Total deposits

 

$

31,562,445

 

 

$

31,373,950

 

 

$

32,580,279

 

 

$

188,495

 

 

$

(1,017,834

)

Noninterest bearing deposits as % of total

 

 

37.8

%

 

 

39.7

%

 

 

43.0

%

 

 

 

 

 

 

  • Average deposits increased 0.6% on a linked-quarter basis and decreased 3.1% compared to the first quarter of 2022.
  • As of March 31, 2023, the total estimated uninsured deposits were $21.3 billion or approximately 66.6% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.8 billion and represented approximately 43.1% of total deposits.

Capital

Capital information

 

UMB Financial Corporation

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

2023

 

 

December 31,

2022

 

 

March 31,

2022

 

Total equity

 

$

2,814,659

 

 

$

2,667,093

 

 

$

2,748,405

 

Accumulated other comprehensive (loss) income, net

 

 

(626,776

)

 

 

(702,735

)

 

 

(343,128

)

Book value per common share

 

 

58.03

 

 

 

55.20

 

 

 

56.78

 

Tangible book value per common share (Non-GAAP)

 

 

52.17

 

 

 

49.28

 

 

 

52.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

3,196,111

 

 

$

3,129,030

 

 

$

2,938,100

 

Tier 1 capital

 

 

3,196,111

 

 

 

3,129,030

 

 

 

2,938,100

 

Total capital

 

 

3,776,407

 

 

 

3,682,619

 

 

 

3,369,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

10.57

%

 

 

10.62

%

 

 

11.81

%

Tier 1 risk-based capital ratio

 

 

10.57

 

 

 

10.62

 

 

 

11.81

 

Total risk-based capital ratio

 

 

12.49

 

 

 

12.50

 

 

 

13.55

 

Tier 1 leverage ratio

 

 

8.35

 

 

 

8.43

 

 

 

7.53

 

  • At March 31, 2023, 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Net charge-offs - total loans

 

$

4,643

 

 

$

2,189

 

 

$

1,173

 

 

$

28,128

 

 

$

8,378

 

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

 

 

0.09

%

 

 

0.04

%

 

 

0.02

%

 

 

0.62

%

 

 

0.20

%

Loans over 90 days past due

 

$

1,723

 

 

$

1,617

 

 

$

2,513

 

 

$

3,446

 

 

$

3,600

 

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

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

 

 

0.02

%

 

 

0.02

%

Nonaccrual and restructured loans

 

$

15,480

 

 

$

19,269

 

 

$

19,817

 

 

$

18,117

 

 

$

110,356

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.07

%

 

 

0.09

%

 

 

0.10

%

 

 

0.10

%

 

 

0.62

%

Provision for credit losses

 

$

23,250

 

 

$

9,000

 

 

$

22,000

 

 

$

13,400

 

 

$

(6,500

)

  • Provision for credit losses for the first quarter totaled $23.3 million, an increase of $14.3 million from the linked quarter and an increase of $29.8 million from the first quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic metrics in the current period as compared to the prior periods.
  • Net charge-offs for the first quarter totaled $4.6 million, or 0.09%, of average loans, compared to $2.2 million, or 0.04%, of average loans in the linked quarter, and $8.4 million, or 0.20%, of average loans for the first quarter of 2022.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on July 3, 2023, to shareholders of record at the close of business on June 12, 2023.

Conference Call

The company plans to host a conference call to discuss its first quarter 2023 earnings results on Wednesday, April 26, 2023, 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 443869. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 1Q 2023 Conference Call

A replay of the conference call may be heard through May 10, 2023, by calling (toll-free) 866-813-9403 or (international) 226-828-7578. The replay access code required for playback is 582627. 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)

 

 

 

 

 

 

 

 

March 31,

 

 

2023

 

2022

ASSETS

 

 

 

 

 

 

Loans

 

$

21,812,972

 

 

$

17,731,700

 

Allowance for credit losses on loans

 

 

(210,509

)

 

 

(179,288

)

Net loans

 

 

21,602,463

 

 

 

17,552,412

 

Loans held for sale

 

 

1,422

 

 

 

384

 

Securities:

 

 

 

 

 

 

Available for sale

 

 

6,907,897

 

 

 

8,550,093

 

Held to maturity, net of allowance for credit losses

 

 

5,859,323

 

 

 

4,600,187

 

Trading securities

 

 

19,823

 

 

 

17,059

 

Other securities

 

 

416,337

 

 

 

332,123

 

Total securities

 

 

13,203,380

 

 

 

13,499,462

 

Federal funds sold and resell agreements

 

 

368,158

 

 

 

1,319,809

 

Interest-bearing due from banks

 

 

3,121,323

 

 

 

6,355,941

 

Cash and due from banks

 

 

472,248

 

 

 

357,772

 

Premises and equipment, net

 

 

260,623

 

 

 

264,519

 

Accrued income

 

 

181,586

 

 

 

127,139

 

Goodwill

 

 

207,385

 

 

 

182,225

 

Other intangibles, net

 

 

76,426

 

 

 

15,690

 

Other assets

 

 

1,112,176

 

 

 

930,389

 

Total assets

 

$

40,607,190

 

 

$

40,605,742

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing demand

 

$

12,488,803

 

 

$

15,946,738

 

Interest-bearing demand and savings

 

 

16,760,603

 

 

 

17,828,794

 

Time deposits under $250,000

 

 

456,129

 

 

 

399,467

 

Time deposits of $250,000 or more

 

 

2,226,369

 

 

 

187,566

 

Total deposits

 

 

31,931,904

 

 

 

34,362,565

 

Federal funds purchased and repurchase agreements

 

 

2,160,808

 

 

 

2,840,535

 

Short-term debt

 

 

2,800,000

 

 

 

 

Long-term debt

 

 

381,796

 

 

 

272,036

 

Accrued expenses and taxes

 

 

207,633

 

 

 

178,130

 

Other liabilities

 

 

310,390

 

 

 

204,071

 

Total liabilities

 

 

37,792,531

 

 

 

37,857,337

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,120,877

 

 

 

1,109,585

 

Retained earnings

 

 

2,609,928

 

 

 

2,265,129

 

Accumulated other comprehensive loss, net

 

 

(626,776

)

 

 

(343,128

)

Treasury stock

 

 

(344,427

)

 

 

(338,238

)

Total shareholders' equity

 

 

2,814,659

 

 

 

2,748,405

 

Total liabilities and shareholders' equity

 

$

40,607,190

 

 

$

40,605,742

 

Consolidated Statements of Income

 

UMB Financial Corporation

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

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2023

 

2022

INTEREST INCOME

 

 

 

 

 

 

Loans

 

$

308,441

 

 

$

149,470

 

Securities:

 

 

 

 

 

 

Taxable interest

 

 

53,049

 

 

 

43,382

 

Tax-exempt interest

 

 

25,306

 

 

 

23,855

 

Total securities income

 

 

78,355

 

 

 

67,237

 

Federal funds and resell agreements

 

 

5,651

 

 

 

2,450

 

Interest-bearing due from banks

 

 

16,166

 

 

 

2,457

 

Trading securities

 

 

134

 

 

 

185

 

Total interest income

 

 

408,747

 

 

 

221,799

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

 

 

127,899

 

 

 

6,173

 

Federal funds and repurchase agreements

 

 

23,302

 

 

 

2,148

 

Other

 

 

15,850

 

 

 

3,123

 

Total interest expense

 

 

167,051

 

 

 

11,444

 

Net interest income

 

 

241,696

 

 

 

210,355

 

Provision for credit losses

 

 

23,250

 

 

 

(6,500

)

Net interest income after provision for credit losses

 

 

218,446

 

 

 

216,855

 

NONINTEREST INCOME

 

 

 

 

 

 

Trust and securities processing

 

 

62,359

 

 

 

59,528

 

Trading and investment banking

 

 

5,308

 

 

 

5,440

 

Service charges on deposit accounts

 

 

21,159

 

 

 

24,642

 

Insurance fees and commissions

 

 

274

 

 

 

259

 

Brokerage fees

 

 

13,676

 

 

 

3,456

 

Bankcard fees

 

 

18,172

 

 

 

16,635

 

Investment securities losses, net

 

 

(5,324

)

 

 

(522

)

Other

 

 

14,576

 

 

 

14,240

 

Total noninterest income

 

 

130,200

 

 

 

123,678

 

NONINTEREST EXPENSE

 

 

 

 

 

 

Salaries and employee benefits

 

 

142,498

 

 

 

130,634

 

Occupancy, net

 

 

12,177

 

 

 

12,232

 

Equipment

 

 

17,849

 

 

 

18,164

 

Supplies and services

 

 

3,875

 

 

 

3,262

 

Marketing and business development

 

 

5,335

 

 

 

4,932

 

Processing fees

 

 

23,240

 

 

 

18,443

 

Legal and consulting

 

 

7,285

 

 

 

6,911

 

Bankcard

 

 

7,133

 

 

 

6,567

 

Amortization of other intangible assets

 

 

2,298

 

 

 

1,071

 

Regulatory fees

 

 

5,551

 

 

 

3,482

 

Other

 

 

9,811

 

 

 

9,080

 

Total noninterest expense

 

 

237,052

 

 

 

214,778

 

Income before income taxes

 

 

111,594

 

 

 

125,755

 

Income tax expense

 

 

19,157

 

 

 

19,792

 

NET INCOME

 

$

92,437

 

 

$

105,963

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

Net income – basic

 

$

1.91

 

 

$

2.19

 

Net income – diluted

 

 

1.90

 

 

 

2.17

 

Dividends

 

 

0.38

 

 

 

0.37

 

Weighted average shares outstanding – basic

 

 

48,435,016

 

 

 

48,406,840

 

Weighted average shares outstanding – diluted

 

 

48,746,562

 

 

 

48,832,177

 

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2023

 

2022

Net income

 

$

92,437

 

 

$

105,963

 

Other comprehensive income (loss), before tax:

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

93,657

 

 

 

(622,910

)

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

 

 

9,983

 

 

 

582

 

Change in unrealized gains and losses on debt securities

 

 

104,073

 

 

 

(622,328

)

Unrealized gains and losses on derivative hedges:

 

 

 

 

 

 

Change in unrealized gains and losses on derivative hedges, net

 

 

(1,527

)

 

 

4,680

 

Less: Reclassification adjustment for net gains included in net income

 

 

(2,561

)

 

 

(851

)

Change in unrealized gains and losses on derivative hedges

 

 

(4,088

)

 

 

3,829

 

Other comprehensive income (loss), before tax

 

 

99,985

 

 

 

(618,499

)

Income tax (expense) benefit

 

 

(24,026

)

 

 

149,057

 

Other comprehensive income (loss)

 

 

75,959

 

 

 

(469,442

)

Comprehensive income (loss)

 

$

168,396

 

 

$

(363,479

)

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)

 

 

 

 

 

 

 

 

105,963

 

 

 

(469,442

)

 

 

 

 

 

(363,479

)

Dividends ($0.37 per share)

 

 

 

 

 

 

 

 

(17,832

)

 

 

 

 

 

 

 

 

(17,832

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,487

)

 

 

(22,487

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(6,630

)

 

 

 

 

 

 

 

 

7,309

 

 

 

679

 

Recognition of equity-based compensation

 

 

 

 

 

5,485

 

 

 

 

 

 

 

 

 

 

 

 

5,485

 

Sale of treasury stock

 

 

 

 

 

84

 

 

 

 

 

 

 

 

 

54

 

 

 

138

 

Exercise of stock options

 

 

 

 

 

126

 

 

 

 

 

 

 

 

 

351

 

 

 

477

 

Balance - March 31, 2022

 

$

55,057

 

 

$

1,109,585

 

 

$

2,265,129

 

 

$

(343,128

)

 

$

(338,238

)

 

$

2,748,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2023

 

$

55,057

 

 

$

1,125,949

 

 

$

2,536,086

 

 

$

(702,735

)

 

$

(347,264

)

 

$

2,667,093

 

Total comprehensive income

 

 

 

 

 

 

 

 

92,437

 

 

 

75,959

 

 

 

 

 

 

168,396

 

Dividends ($0.38 per share)

 

 

 

 

 

 

 

 

(18,595

)

 

 

 

 

 

 

 

 

(18,595

)

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

 

 

 

 

 

4,516

 

 

 

 

 

 

 

 

 

 

 

 

4,516

 

Sale of treasury stock

 

 

 

 

 

71

 

 

 

 

 

 

 

 

 

56

 

 

 

127

 

Exercise of stock options

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

200

 

 

 

305

 

Balance - March 31, 2023

 

$

55,057

 

 

$

1,120,877

 

 

$

2,609,928

 

 

$

(626,776

)

 

$

(344,427

)

 

$

2,814,659

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

21,271,600

 

 

 

5.88

%

 

$

17,361,077

 

 

 

3.49

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

9,349,351

 

 

 

2.30

 

 

 

9,461,567

 

 

 

1.86

 

Tax-exempt

 

 

3,845,266

 

 

 

3.35

 

 

 

4,039,739

 

 

 

3.03

 

Total securities

 

 

13,194,617

 

 

 

2.61

 

 

 

13,501,306

 

 

 

2.21

 

Federal funds and resell agreements

 

 

451,188

 

 

 

5.08

 

 

 

1,265,776

 

 

 

0.78

 

Interest bearing due from banks

 

 

1,533,704

 

 

 

4.27

 

 

 

5,320,360

 

 

 

0.19

 

Trading securities

 

 

9,258

 

 

 

6.31

 

 

 

20,836

 

 

 

4.38

 

Total earning assets

 

 

36,460,367

 

 

 

4.62

 

 

 

37,469,355

 

 

 

2.47

 

Allowance for credit losses

 

 

(196,128

)

 

 

 

 

 

(198,217

)

 

 

 

Other assets

 

 

2,239,140

 

 

 

 

 

 

1,882,376

 

 

 

 

Total assets

 

$

38,503,379

 

 

 

 

 

$

39,153,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

19,643,168

 

 

 

2.64

%

 

$

18,554,694

 

 

 

0.13

%

Federal funds and repurchase agreements

 

 

2,461,942

 

 

 

3.84

 

 

 

2,973,785

 

 

 

0.29

 

Borrowed funds

 

 

1,200,346

 

 

 

5.36

 

 

 

271,731

 

 

 

4.66

 

Total interest-bearing liabilities

 

 

23,305,456

 

 

 

2.91

 

 

 

21,800,210

 

 

 

0.21

 

Noninterest-bearing demand deposits

 

 

11,919,277

 

 

 

 

 

 

14,025,585

 

 

 

 

Other liabilities

 

 

554,211

 

 

 

 

 

 

394,714

 

 

 

 

Shareholders' equity

 

 

2,724,435

 

 

 

 

 

 

2,933,005

 

 

 

 

Total liabilities and shareholders' equity

 

$

38,503,379

 

 

 

 

 

$

39,153,514

 

 

 

 

Net interest spread

 

 

 

 

 

1.71

%

 

 

 

 

 

2.26

%

Net interest margin

 

 

 

 

 

2.76

 

 

 

 

 

 

2.35

 

Business Segment Information

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

151,027

 

 

$

55,085

 

$

35,584

 

 

$

241,696

 

Provision for credit losses

 

 

21,045

 

 

 

96

 

 

 

2,109

 

 

 

23,250

 

Noninterest income

 

 

22,902

 

 

 

84,238

 

 

 

23,060

 

 

 

130,200

 

Noninterest expense

 

 

84,002

 

 

 

89,372

 

 

 

63,678

 

 

 

237,052

 

Income (loss) before taxes

 

 

68,882

 

 

 

49,855

 

 

 

(7,143

)

 

 

111,594

 

Income tax expense (benefit)

 

 

11,825

 

 

 

8,558

 

 

 

(1,226

)

 

 

19,157

 

Net income (loss)

 

$

57,057

 

 

$

41,297

 

 

$

(5,917

)

 

$

92,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2022

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

145,002

 

 

$

26,253

 

 

 

39,100

 

 

$

210,355

 

Provision for credit losses

 

 

(7,040

)

 

 

151

 

 

 

389

 

 

 

(6,500

)

Noninterest income

 

 

26,700

 

 

 

73,272

 

 

 

23,706

 

 

 

123,678

 

Noninterest expense

 

 

79,589

 

 

 

75,602

 

 

 

59,587

 

 

 

214,778

 

Income before taxes

 

 

99,153

 

 

 

23,772

 

 

 

2,830

 

 

 

125,755

 

Income tax expense

 

 

15,606

 

 

 

3,741

 

 

 

445

 

 

 

19,792

 

Net income

 

$

83,547

 

 

$

20,031

 

 

$

2,385

 

 

$

105,963

 

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 March 31, 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 March 31,

 

 

2023

 

2022

Net income (GAAP)

 

$

92,437

 

 

$

105,963

 

Adjustments:

 

 

 

 

 

 

Acquisition expense

 

 

39

 

 

 

 

Severance expense

 

 

486

 

 

 

145

 

Tax-impact of adjustments (i)

 

 

(126

)

 

 

(35

)

Total Non-GAAP adjustments (net of tax)

 

 

399

 

 

 

110

 

Net operating income (Non-GAAP)

 

$

92,836

 

 

$

106,073

 

 

 

 

 

 

 

 

Earnings per share - diluted (GAAP)

 

$

1.90

 

 

$

2.17

 

Acquisition expense

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

 

Tax-impact of adjustments (i)

 

 

 

 

 

 

Operating earnings per share - diluted (Non-GAAP)

 

$

1.91

 

 

$

2.17

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

Return on average assets

 

 

0.97

%

 

 

1.10

%

Return on average equity

 

 

13.76

 

 

 

14.65

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

Operating return on average assets

 

 

0.98

%

 

 

1.10

%

Operating return on average equity

 

 

13.82

 

 

 

14.67

 

(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 March 31,

 

 

2023

 

2022

Noninterest expense

 

$

237,052

 

 

$

214,778

 

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

 

 

 

 

 

 

Acquisition expense

 

 

39

 

 

 

 

Severance expense

 

 

486

 

 

 

145

 

Total Non-GAAP adjustments (pre-tax)

 

 

525

 

 

 

145

 

Operating noninterest expense (Non-GAAP)

 

$

236,527

 

 

$

214,633

 

 

 

 

 

 

 

 

Noninterest expense

 

$

237,052

 

 

$

214,778

 

Less: Amortization of other intangibles

 

 

2,298

 

 

 

1,071

 

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

 

$

234,754

 

 

$

213,707

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

236,527

 

 

$

214,633

 

Less: Amortization of other intangibles

 

 

2,298

 

 

 

1,071

 

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

 

$

234,229

 

 

$

213,562

 

 

 

 

 

 

 

 

Net interest income

 

$

241,696

 

 

$

210,355

 

Noninterest income

 

 

130,200

 

 

 

123,678

 

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

 

 

(2

)

 

 

 

Total Non-GAAP Revenue (denominator A)

 

$

371,898

 

 

$

334,033

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

63.12

%

 

 

63.98

%

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

 

 

62.98

 

 

 

63.93

 

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

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

Net interest income (GAAP)

 

$

241,696

 

$

210,355

Noninterest income (GAAP)

 

 

130,200

 

 

 

123,678

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

237,052

 

 

 

214,778

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

Acquisition expense

 

 

39

 

 

 

 

Severance expense

 

 

486

 

 

 

145

 

Total Non-GAAP adjustments

 

 

525

 

 

 

145

 

Operating noninterest expense (Non-GAAP)

 

 

236,527

 

 

 

214,633

 

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

 

$

135,369

 

 

$

119,400

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.96

 

 

$

4.31

 

Noninterest income (GAAP)

 

 

2.67

 

 

 

2.53

 

Noninterest expense (GAAP)

 

 

4.86

 

 

 

4.40

 

Acquisition expense

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

 

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

 

$

2.78

 

 

$

2.44

 

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

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

Net interest income (GAAP)

 

$

241,696

 

$

210,355

Adjustments to arrive at net interest income - FTE:

 

 

 

 

 

 

Tax equivalent interest

 

 

6,555

 

 

 

6,399

 

Net interest income - FTE (Non-GAAP)

 

 

248,251

 

 

 

216,754

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

 

130,200

 

 

 

123,678

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

237,052

 

 

 

214,778

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

Acquisition expense

 

 

39

 

 

 

 

Severance expense

 

 

486

 

 

 

145

 

Total Non-GAAP adjustments

 

 

525

 

 

 

145

 

Operating noninterest expense (Non-GAAP)

 

 

236,527

 

 

 

214,633

 

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

 

$

141,924

 

 

$

125,799

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.96

 

 

$

4.31

 

Tax equivalent interest

 

 

0.13

 

 

 

0.13

 

Net interest income - FTE (Non-GAAP)

 

 

5.09

 

 

 

4.44

 

Noninterest income (GAAP)

 

 

2.67

 

 

 

2.53

 

Noninterest expense (GAAP)

 

 

4.86

 

 

 

4.40

 

Acquisition expense

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

 

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

 

$

2.91

 

 

$

2.57

 

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

As of March 31,

 

 

2023

 

2022

Total shareholders' equity (GAAP)

 

$

2,814,659

 

$

2,748,405

Less: Intangible assets

 

 

 

 

 

 

Goodwill

 

 

207,385

 

 

 

182,225

 

Other intangibles, net

 

 

76,426

 

 

 

15,690

 

Total intangibles, net

 

 

283,811

 

 

 

197,915

 

Total tangible shareholders' equity (Non-GAAP)

 

$

2,530,848

 

 

$

2,550,490

 

 

 

 

 

 

 

 

Total shares outstanding

 

 

48,507,116

 

 

 

48,403,262

 

 

 

 

 

 

 

 

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

 

$

58.03

 

 

$

56.78

 

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

 

 

52.17

 

 

 

52.69

 

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

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

 

 

2023

 

2022

 

2022

Average total shareholders' equity (GAAP)

 

$

2,724,435

 

 

$

2,621,693

 

 

$

2,933,005

 

Less: Average intangible assets

 

 

 

 

 

 

 

 

 

Average goodwill

 

 

207,385

 

 

 

194,805

 

 

 

174,689

 

Average other intangibles, net

 

 

77,575

 

 

 

46,243

 

 

 

14,105

 

Average total intangibles, net

 

 

284,960

 

 

 

241,049

 

 

 

188,794

 

Average total tangible shareholders' equity (Non-GAAP)

 

 

2,439,475

 

 

 

2,380,644

 

 

 

2,744,211

 

Less: Average accumulated other comprehensive (loss) income (AOCI)

 

 

(643,559

)

 

 

(741,438

)

 

 

(126,392

)

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

 

$

3,083,034

 

 

$

3,122,082

 

 

$

2,870,603

 

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

$

92,836

 

 

$

101,092

 

 

$

106,073

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Operating return on average tangible equity excluding AOCI

 

 

12.21

%

 

 

12.85

%

 

 

14.99

%

 

Contacts

Media Contact: Stephanie Hague: 816.860.5088

Investor Relations Contact: Kay Gregory: 816.860.7106

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