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UMB Financial Corporation Reports Third Quarter Net Income of $88.0 Million and Announces 2.7% Cash Dividend Increase

Third Quarter 2022 Financial Highlights

  • GAAP net income of $88.0 million, or $1.81 per diluted share.
  • Average loan balances increased $2.5 billion, or 15.1%, compared to the third quarter of 2021.
  • Average deposits grew 1.3% compared to the third quarter of 2021.
  • Noninterest income increased 19.3% as compared to the third quarter of 2021, equal to 35.5% of total revenue.
  • Excluding Paycheck Protection Program (PPP) balances, average loans increased 21.9% on a linked-quarter, annualized basis.
  • Net interest margin expanded 16 basis points from the linked quarter.
  • Credit quality remained strong, with net charge-offs of just 0.02% of average loans.

 

UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the third quarter of 2022 of $88.0 million, or $1.81 per diluted share, compared to $137.6 million, or $2.83 per diluted share, in the second quarter of 2022 (linked quarter) and $94.5 million, or $1.94 per diluted share, in the third quarter of 2021. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company’s entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company’s charitable foundation.

Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $88.3 million, or $1.82 per diluted share, for the third quarter of 2022, compared to $137.6 million, or $2.83 per diluted share, for the linked quarter and $95.1 million, or $1.95 per diluted share, for the third quarter of 2021. 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 $131.2 million, or $2.70 per diluted share, for the third quarter of 2022, compared to $187.1 million, or $3.84 per diluted share, for the linked quarter, and $109.6 million, or $2.24 per diluted share, for the third quarter of 2021. These operating PTPP results represent a decrease of 29.9% on a linked-quarter basis and an increase of 19.6%, compared to the third quarter of 2021. The results in the linked quarter comparison were impacted by the benefit from the aforementioned gain on the sale of the company’s Visa Inc. Class B common shares net of the contribution to the company’s charitable foundation in the second quarter of 2022.

“On a linked-quarter basis, our strong third quarter 2022 results were facilitated again by robust loan growth, strong revenue growth which was driven by a 3.9% increase in net interest income, net interest margin expansion, and strong fee income growth, excluding the nonrecurring gain from the sale of Visa Class B shares,” said Mariner Kemper, chairman, president and chief executive officer. “Average loans excluding PPP balances increased 21.9% on a linked-quarter annualized basis with more than 53% of the increase driven by commercial & industrial loan growth. Our deposit costs increased in the third quarter, driven by repricing as short-term interest rates increased, and by our own efforts to attract new-to-bank customers through deposit initiatives. Our loan yields expanded 74 basis points from the second quarter and, coupled with a favorable shift in earning asset mix, drove a 16-basis-point expansion in our net interest margin. In September, we were successful in raising $110.0 million in growth capital through our subordinated notes offering that will facilitate our differentiated balance sheet growth for the remainder of this year and into 2023. Finally, our net charge-off ratio in the third quarter was just two basis points, while our nonaccrual loans comprised only ten basis points of loans.”

Summary of quarterly financial results

 

UMB Financial Corporation

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

 

2022

 

 

2022

 

 

2021

 

Net income (GAAP)

 

$

87,990

 

 

$

137,556

 

 

$

94,467

 

Earnings per share (diluted)

 

 

1.81

 

 

 

2.83

 

 

 

1.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

131,166

 

 

 

187,051

 

 

 

109,632

 

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

 

 

2.70

 

 

 

3.84

 

 

 

2.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

137,620

 

 

 

193,329

 

 

 

116,176

 

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

 

 

2.83

 

 

 

3.97

 

 

 

2.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

88,259

 

 

 

137,596

 

 

 

95,112

 

Operating earnings per share (diluted)

 

 

1.82

 

 

 

2.83

 

 

 

1.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.96

%

 

 

1.47

%

 

 

1.04

%

Return on average equity

 

 

12.90

 

 

 

20.83

 

 

 

11.89

 

Efficiency ratio

 

 

63.58

 

 

 

53.08

 

 

 

65.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.96

%

 

 

1.47

%

 

 

1.05

%

Operating return on average equity

 

 

12.94

 

 

 

20.84

 

 

 

11.97

 

Operating efficiency ratio

 

 

63.49

 

 

 

53.06

 

 

 

65.36

 

Summary of year-to-date financial results

 

UMB Financial Corporation

 

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

 

September

 

 

September

 

 

 

YTD

 

 

YTD

 

 

 

2022

 

 

2021

 

Net income (GAAP)

 

$

331,509

 

 

$

274,522

 

Earnings per share (diluted)

 

 

6.80

 

 

 

5.64

 

 

 

 

 

 

 

 

 

 

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

 

 

437,617

 

 

 

343,481

 

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

 

 

8.98

 

 

 

7.06

 

 

 

 

 

 

 

 

 

 

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

 

 

456,748

 

 

 

363,332

 

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

 

 

9.37

 

 

 

7.47

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

331,928

 

 

 

275,526

 

Operating earnings per share (diluted)

 

 

6.81

 

 

 

5.66

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.18

%

 

 

1.07

%

Return on average equity

 

 

16.05

 

 

 

11.95

 

Efficiency ratio

 

 

59.86

 

 

 

64.06

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.18

%

 

 

1.07

%

Operating return on average equity

 

 

16.07

 

 

 

11.99

 

Operating efficiency ratio

 

 

59.81

 

 

 

63.93

 

Summary of revenue

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q2

 

Q3

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Net interest income

 

$

233,485

 

 

$

224,791

 

 

$

209,765

 

 

$

8,694

 

 

$

23,720

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

59,586

 

 

 

58,886

 

 

 

56,914

 

 

 

700

 

 

 

2,672

 

Trading and investment banking

 

 

5,387

 

 

 

7,123

 

 

 

5,936

 

 

 

(1,736

)

 

 

(549

)

Service charges on deposit accounts

 

 

19,932

 

 

 

20,835

 

 

 

19,881

 

 

 

(903

)

 

 

51

 

Insurance fees and commissions

 

 

375

 

 

 

245

 

 

 

285

 

 

 

130

 

 

 

90

 

Brokerage fees

 

 

13,840

 

 

 

12,391

 

 

 

2,899

 

 

 

1,449

 

 

 

10,941

 

Bankcard fees

 

 

19,379

 

 

 

17,840

 

 

 

17,198

 

 

 

1,539

 

 

 

2,181

 

Investment securities (losses) gains, net

 

 

(1,345

)

 

 

60,720

 

 

 

(3,510

)

 

 

(62,065

)

 

 

2,165

 

Other

 

 

11,569

 

 

 

(1,705

)

 

 

8,304

 

 

 

13,274

 

 

 

3,265

 

Total noninterest income

 

$

128,723

 

 

$

176,335

 

 

$

107,907

 

 

$

(47,612

)

 

$

20,816

 

Total revenue

 

$

362,208

 

 

$

401,126

 

 

$

317,672

 

 

$

(38,918

)

 

$

44,536

 

Net interest income (FTE)

 

$

239,939

 

 

$

231,069

 

 

$

216,309

 

 

 

 

 

 

 

Net interest margin (FTE)

 

 

2.76

%

 

 

2.60

%

 

 

2.52

%

 

 

 

 

 

 

Total noninterest income as a % of total revenue

 

 

35.5

 

 

 

44.0

 

 

 

34.0

 

 

 

 

 

 

 

Net interest income

  • Third quarter 2022 net interest income totaled $233.5 million, an increase of $8.7 million, or 3.9% from the linked quarter, driven by an increase of $966.3 million in average loans and the impact from increased short-term and long-term interest rates.
  • Average earning assets decreased $1.2 billion, or 3.5%, largely driven by a decrease of $2.0 billion in interest-bearing due from banks, partially offset by the increase of $966.3 million in average loans noted above. The decrease in excess liquidity was commensurate with a decrease of $1.8 billion in average noninterest-bearing deposits. Average interest-bearing liabilities increased $442.8 million, or 2.2%, primarily driven by an increase of $396.9 million in federal funds purchased and repurchase agreements.
  • Net interest margin for the third quarter was 2.76%, an increase of 16 basis points from the linked quarter, driven by benefits of higher short-term interest rates as well as favorable earning asset mix changes. Average loan yields increased 74 basis points while earning asset yields increased 67 basis points from the linked quarter. The cost of interest-bearing liabilities increased 81 basis points to 1.28%. Net interest spread decreased 14 basis points to 2.25% from the linked quarter and was 18 basis points lower than the third quarter of 2021.
  • On a year-over-year basis, net interest income increased $23.7 million, or 11.3%, driven by a $2.5 billion, or 15.1% increase in average loans, coupled with a $1.8 billion, or 14.7% increase in average securities. These increases were driven by organic loan growth and excess liquidity.
  • Average deposits decreased 5.7% on a linked-quarter basis and increased 1.3% compared to the third quarter of 2021. Average noninterest-bearing demand deposit balances decreased 12.8% on a linked-quarter basis and increased 8.7% compared to the third quarter of 2021. The linked-quarter decline in average deposits was primarily driven by decreases in rate-sensitive institutional segment balances in the current interest rate environment. Demand deposit balances comprised 41.6% of total deposits, compared to 45.0% in the linked quarter and 38.7% in the third quarter of 2021.

Noninterest income

  • Third quarter 2022 noninterest income totaled $128.7 million, compared to $176.3 million in the linked quarter. The linked quarter results included the $66.2 million realized gain on the sale of the company’s Visa Inc. Class B common shares recorded in investment securities gains, net. The remainder of the change in noninterest income is largely due to:
    • Increases of $13.0 million in company-owned life insurance income and $1.2 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 $1.5 million and $1.4 million in bankcard income and brokerage income, respectively. These increases were driven by higher interchange income and increased 12b-1 fee income, respectively.
    • These increases were partially offset by a decrease of $1.7 million in trading and investment banking due to lower trading volume.
  • Compared to the prior year, noninterest income in the third quarter of 2022 increased $20.8 million, or 19.3%, primarily driven by:
    • An increase of $10.9 million in brokerage income, largely driven by increases in 12b-1 fees and money market income.
    • Increases of $2.1 million and $1.7 million in derivative income and company-owned life insurance income, respectively, 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.
    • An increase of $2.7 million in trust and securities processing income, largely driven by increased fund services income and corporate trust income.
    • Increases of $2.2 million in both bankcard income and investment securities gains, net, driven by increased interchange, and mark-to-market gains on marketable securities, respectively.

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

2022

 

 

2022

 

 

2021

 

 

LQ

 

PY

Salaries and employee benefits

 

$

136,467

 

 

$

121,390

 

 

$

124,986

 

 

$

15,077

 

 

$

11,481

 

Occupancy, net

 

 

12,231

 

 

 

11,976

 

 

 

12,207

 

 

 

255

 

 

 

24

 

Equipment

 

 

18,811

 

 

 

18,315

 

 

 

19,701

 

 

 

496

 

 

 

(890

)

Supplies and services

 

 

3,139

 

 

 

3,492

 

 

 

3,379

 

 

 

(353

)

 

 

(240

)

Marketing and business development

 

 

6,671

 

 

 

5,308

 

 

 

4,863

 

 

 

1,363

 

 

 

1,808

 

Processing fees

 

 

20,901

 

 

 

19,338

 

 

 

16,562

 

 

 

1,563

 

 

 

4,339

 

Legal and consulting

 

 

10,255

 

 

 

11,265

 

 

 

7,646

 

 

 

(1,010

)

 

 

2,609

 

Bankcard

 

 

6,551

 

 

 

5,880

 

 

 

4,795

 

 

 

671

 

 

 

1,756

 

Amortization of other intangible assets

 

 

1,092

 

 

 

1,225

 

 

 

1,110

 

 

 

(133

)

 

 

(18

)

Regulatory fees

 

 

4,200

 

 

 

3,464

 

 

 

3,186

 

 

 

736

 

 

 

1,014

 

Other

 

 

11,078

 

 

 

12,474

 

 

 

10,434

 

 

 

(1,396

)

 

 

644

 

Total noninterest expense

 

$

231,396

 

 

$

214,127

 

 

$

208,869

 

 

$

17,269

 

 

$

22,527

 

  • Noninterest expense for the third quarter of 2022 was $231.4 million, an increase of $17.3 million, or 8.1%, from the linked quarter and an increase of $22.5 million, or 10.8%, from the third quarter of 2021.
  • The linked-quarter increase in noninterest expense was driven by:
    • An increase of $15.1 million in salaries and employee benefits expense, primarily driven by an increase of $11.5 million in deferred compensation expense and an increase of $4.5 million in salaries and wage expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
    • An increase of $3.7 million in operational losses, recorded in other expense.
    • Increases of $1.6 million and $1.4 million in processing fees and marketing and business development expense, respectively, due to the timing of multiple projects.
    • These increases were offset by a decrease of $4.8 million in charitable contributions expense, recorded in other expense.
  • The year-over-year increase in noninterest expense was driven by:
    • An increase of $11.5 million in salaries and employee benefits expense, driven primarily by an increase of $7.0 million in salaries and wage expense and $4.1 million in employee benefits expense, primarily due to an increase of $1.7 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.3 million in deferred compensation expense.
    • Increases of $4.3 million, $2.6 million, and $1.8 million in processing fees, legal and consulting expense, and marketing and business development expense, respectively, due to the timing of multiple projects.
    • Increases of $1.5 million in operational losses, recorded in other expense, and $1.0 million in regulatory fees.

Income taxes

  • The company’s effective tax rate was 18.8% for the nine months ended September 30, 2022, compared to 17.0% for the same period in 2021. The increase in the effective rate in 2022 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities.

Balance sheet

  • Average total assets for the third quarter of 2022 were $36.3 billion compared to $37.6 billion for the linked quarter and $35.9 billion for the same period in 2021.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

 

2022

 

 

2022

 

 

2021

 

 

LQ

 

PY

 

Commercial and industrial

 

$

8,417,174

 

 

$

7,918,552

 

 

$

7,097,248

 

 

$

498,622

 

 

$

1,319,926

 

Specialty lending

 

 

559,797

 

 

 

518,575

 

 

 

486,021

 

 

 

41,222

 

 

 

73,776

 

Commercial real estate

 

 

6,892,484

 

 

 

6,569,784

 

 

 

6,285,348

 

 

 

322,700

 

 

 

607,136

 

Consumer real estate

 

 

2,574,926

 

 

 

2,458,815

 

 

 

2,178,010

 

 

 

116,111

 

 

 

396,916

 

Consumer

 

 

142,348

 

 

 

148,412

 

 

 

115,702

 

 

 

(6,064

)

 

 

26,646

 

Credit cards

 

 

438,235

 

 

 

428,167

 

 

 

400,189

 

 

 

10,068

 

 

 

38,046

 

Leases and other

 

 

259,298

 

 

 

275,638

 

 

 

194,235

 

 

 

(16,340

)

 

 

65,063

 

Total loans

 

$

19,284,262

 

 

$

18,317,943

 

 

$

16,756,753

 

 

$

966,319

 

 

$

2,527,509

 

  • Average loans for the third quarter of 2022 increased 5.3% on a linked-quarter basis and 15.1% compared to the third quarter of 2021. Excluding PPP balances, average loans increased 5.5% on a linked-quarter basis and 18.6% as compared to the third quarter of 2021.

Summary of average securities - QTD Average

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

2022

 

 

2022

 

 

2021

 

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

746,429

 

 

$

639,161

 

 

$

17,903

 

 

$

107,268

 

 

$

728,526

 

U.S. Agencies

 

 

173,980

 

 

 

172,798

 

 

 

94,049

 

 

 

1,182

 

 

 

79,931

 

Mortgage-backed

 

 

4,363,838

 

 

 

4,764,452

 

 

 

6,766,619

 

 

 

(400,614

)

 

 

(2,402,781

)

State and political subdivisions

 

 

1,600,043

 

 

 

1,891,377

 

 

 

3,530,031

 

 

 

(291,334

)

 

 

(1,929,988

)

Corporates

 

 

381,151

 

 

 

377,586

 

 

 

158,326

 

 

 

3,565

 

 

 

222,825

 

Collateralized loan obligations

 

 

300,475

 

 

 

247,639

 

 

 

 

 

 

52,836

 

 

 

300,475

 

Total securities available for sale

 

$

7,565,916

 

 

$

8,093,013

 

 

$

10,566,928

 

 

$

(527,097

)

 

$

(3,001,012

)

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agencies

 

$

123,048

 

 

$

65,964

 

 

$

 

 

$

57,084

 

 

$

123,048

 

Mortgage-backed

 

 

3,039,998

 

 

 

2,892,986

 

 

 

 

 

 

147,012

 

 

 

3,039,998

 

State and political subdivisions

 

 

2,621,633

 

 

 

2,240,018

 

 

 

1,073,133

 

 

 

381,615

 

 

 

1,548,500

 

Total securities held to maturity

 

$

5,784,679

 

 

$

5,198,968

 

 

$

1,073,133

 

 

$

585,711

 

 

$

4,711,546

 

Trading securities

 

 

5,651

 

 

 

10,190

 

 

 

25,392

 

 

 

(4,539

)

 

 

(19,741

)

Other securities

 

 

330,950

 

 

 

347,527

 

 

 

262,453

 

 

 

(16,577

)

 

 

68,497

 

Total securities

 

$

13,687,196

 

 

$

13,649,698

 

 

$

11,927,906

 

 

$

37,498

 

 

$

1,759,290

 

  • Average total securities increased 0.3% on a linked-quarter basis and 14.7% compared to the third quarter of 2021. During the third quarter, cash flows from the securities portfolio were not reinvested and were redeployed to fund loan growth.

Summary of average deposits - QTD Average

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

 

2022

 

 

2022

 

 

2021

 

 

LQ

 

PY

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

12,394,251

 

 

$

14,209,159

 

 

$

11,400,143

 

 

$

(1,814,908

)

 

$

994,108

 

Interest-bearing demand and savings

 

 

16,723,205

 

 

 

16,808,998

 

 

 

17,376,135

 

 

 

(85,793

)

 

 

(652,930

)

Time deposits

 

 

679,994

 

 

 

570,812

 

 

 

651,727

 

 

 

109,182

 

 

 

28,267

 

Total deposits

 

$

29,797,450

 

 

$

31,588,969

 

 

$

29,428,005

 

 

$

(1,791,519

)

 

$

369,445

 

Noninterest bearing deposits as % of total

 

 

41.6

%

 

 

45.0

%

 

 

38.7

%

 

 

 

 

 

 

 

  • Average deposits decreased 5.7% on a linked-quarter basis and increased 1.3% compared to the third quarter of 2021. The decrease in noninterest-bearing demand deposit balances was driven by the impact of higher short-term interest rates including higher earnings credit rates earned on such balances, as well as an overall decrease in customer balances consistent with typical trends observed during an economic tightening cycle.

Capital

Capital information

 

UMB Financial Corporation

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

 

June 30,

2022

 

 

September 30, 2021

 

Total equity

 

$

2,523,545

 

 

$

2,642,888

 

 

$

3,112,840

 

Book value per common share

 

 

52.24

 

 

 

54.71

 

 

 

64.37

 

Tangible book value per common share (Non-GAAP)

 

 

48.19

 

 

 

50.64

 

 

 

60.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

3,132,209

 

 

$

3,055,747

 

 

$

2,811,117

 

Tier 1 capital

 

 

3,132,209

 

 

 

3,055,747

 

 

 

2,811,117

 

Total capital

 

 

3,679,116

 

 

 

3,473,040

 

 

 

3,248,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

11.18

%

 

 

11.44

%

 

 

12.26

%

Tier 1 risk-based capital ratio

 

 

11.18

 

 

 

11.44

 

 

 

12.26

 

Total risk-based capital ratio

 

 

13.13

 

 

 

13.00

 

 

 

14.17

 

Tier 1 leverage ratio

 

 

8.66

 

 

 

8.17

 

 

 

7.87

 

  • At September 30, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds.
  • Total risk-based capital was favorably impacted by the $110.0 million subordinated note issuance during the third quarter.

Asset Quality

Credit quality

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q1

 

 

Q4

 

 

Q3

 

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Net charge-offs - total loans

 

$

1,173

 

 

$

28,128

 

 

$

8,378

 

 

$

8,061

 

 

$

3,127

 

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

 

 

0.02

%

 

 

0.62

%

 

 

0.20

%

 

 

0.19

%

 

 

0.07

%

Loans over 90 days past due

 

$

2,513

 

 

$

3,446

 

 

$

3,600

 

 

$

2,633

 

 

$

2,319

 

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

 

 

0.01

%

 

 

0.02

%

 

 

0.02

%

 

 

0.02

%

 

 

0.01

%

Nonaccrual and restructured loans

 

$

19,817

 

 

$

18,117

��

 

$

110,356

 

 

$

92,300

 

 

$

96,536

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.10

%

 

 

0.10

%

 

 

0.62

%

 

 

0.54

%

 

 

0.59

%

Provision for credit losses

 

$

22,000

 

 

$

13,400

 

 

$

(6,500

)

 

$

8,500

 

 

$

(5,000

)

  • Provision for credit losses for the third quarter increased $8.6 million from the linked quarter and $27.0 million from the third quarter of 2021. These increases are driven by loan growth, portfolio credit metric changes, and changes in macro-economic metrics in the current period as compared to the prior periods.
  • Net charge-offs for the third quarter totaled $1.2 million, or 0.02%, of average loans, compared to $28.1 million, or 0.62%, of average loans in the linked quarter, and $3.1 million, or 0.07%, of average loans for the third quarter of 2021. On a year-to-date basis, net charge-offs totaled $37.7 million, or 0.27%, of average loans, compared to $36.8 million, or 0.30%, of average loans, for the same period in 2021.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors approved a 2.7% increase in the company’s quarterly cash dividend to shareholders, to $0.38 per share. This dividend will be payable on January 3, 2023, to shareholders of record at the close of business on December 12, 2022.

Conference Call

The company plans to host a conference call to discuss its third quarter 2022 earnings results on Wednesday, October 26, 2022, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 646-904-5544 and requesting to join the UMB Financial call with access code 644175. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 3Q 2022 Conference Call

A replay of the conference call may be heard through November 9, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 298424. 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, 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-, severance-, and COVID-19 related items that management does not believe reflect the company’s fundamental operating performance. COVID-19 related expense includes hazard pay for branch associates, computer hardware expense to support associates working remotely, and additional equipment, cleaning, and janitorial supplies to protect the well-being of our associates and customers while on the company’s premises.

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, COVID-19 related 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, severance expense, and COVID-19 related 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, severance expense and COVID-19 related 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.

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, 2021, 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 other challenges and uncertainties related to the COVID-19 pandemic, such as 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, or follow us on Twitter at @UMBBank.

Consolidated Balance Sheets

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

September 30,

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

Loans

 

$

19,883,573

 

 

$

16,469,463

 

Allowance for credit losses on loans

 

 

(184,913

)

 

 

(194,156

)

Net loans

 

 

19,698,660

 

 

 

16,275,307

 

Loans held for sale

 

 

2,870

 

 

 

4,645

 

Securities:

 

 

 

 

 

 

Available for sale

 

 

7,128,277

 

 

 

11,162,690

 

Held to maturity, net of allowance for credit losses

 

 

5,835,187

 

 

 

1,087,308

 

Trading securities

 

 

14,390

 

 

 

68,882

 

Other securities

 

 

333,732

 

 

 

274,645

 

Total securities

 

 

13,311,586

 

 

 

12,593,525

 

Federal funds sold and resell agreements

 

 

716,549

 

 

 

1,092,104

 

Interest-bearing due from banks

 

 

1,768,008

 

 

 

5,739,267

 

Cash and due from banks

 

 

371,336

 

 

 

426,843

 

Premises and equipment, net

 

 

260,685

 

 

 

273,378

 

Accrued income

 

 

153,759

 

 

 

122,798

 

Goodwill

 

 

182,225

 

 

 

174,518

 

Other intangibles, net

 

 

13,373

 

 

 

15,526

 

Other assets

 

 

1,102,011

 

 

 

836,374

 

Total assets

 

$

37,581,062

 

 

$

37,554,285

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing demand

 

$

13,876,929

 

 

$

13,189,739

 

Interest-bearing demand and savings

 

 

17,059,492

 

 

 

17,461,390

 

Time deposits under $250,000

 

 

365,644

 

 

 

415,068

 

Time deposits of $250,000 or more

 

 

504,323

 

 

 

169,613

 

Total deposits

 

 

31,806,388

 

 

 

31,235,810

 

Federal funds purchased and repurchase agreements

 

 

2,314,168

 

 

 

2,500,340

 

Long-term debt

 

 

381,543

 

 

 

271,049

 

Accrued expenses and taxes

 

 

211,465

 

 

 

249,567

 

Other liabilities

 

 

343,953

 

 

 

184,679

 

Total liabilities

 

 

35,057,517

 

 

 

34,441,445

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,120,489

 

 

 

1,102,818

 

Retained earnings

 

 

2,454,422

 

 

 

2,116,568

 

Accumulated other comprehensive (loss) income, net

 

 

(759,260

)

 

 

164,307

 

Treasury stock

 

 

(347,163

)

 

 

(325,910

)

Total shareholders' equity

 

 

2,523,545

 

 

 

3,112,840

 

Total liabilities and shareholders' equity

 

$

37,581,062

 

 

$

37,554,285

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

216,970

 

 

$

159,242

 

 

$

536,359

 

 

$

463,949

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest

 

 

50,003

 

 

 

33,307

 

 

 

140,680

 

 

 

90,249

 

Tax-exempt interest

 

 

24,692

 

 

 

24,458

 

 

 

72,085

 

 

 

74,165

 

Total securities income

 

 

74,695

 

 

 

57,765

 

 

 

212,765

 

 

 

164,414

 

Federal funds and resell agreements

 

 

6,056

 

 

 

2,389

 

 

 

12,003

 

 

 

7,762

 

Interest-bearing due from banks

 

 

2,545

 

 

 

1,699

 

 

 

9,209

 

 

 

3,235

 

Trading securities

 

 

73

 

 

 

231

 

 

 

372

 

 

 

579

 

Total interest income

 

 

300,339

 

 

 

221,326

 

 

 

770,708

 

 

 

639,939

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

48,457

 

 

 

6,741

 

 

 

70,069

 

 

 

20,113

 

Federal funds and repurchase agreements

 

 

14,709

 

 

 

1,596

 

 

 

21,855

 

 

 

5,261

 

Other

 

 

3,688

 

 

 

3,224

 

 

 

10,153

 

 

 

9,614

 

Total interest expense

 

 

66,854

 

 

 

11,561

 

 

 

102,077

 

 

 

34,988

 

Net interest income

 

 

233,485

 

 

 

209,765

 

 

 

668,631

 

 

 

604,951

 

Provision for credit losses

 

 

22,000

 

 

 

(5,000

)

 

 

28,900

 

 

 

11,500

 

Net interest income after provision for credit losses

 

 

211,485

 

 

 

214,765

 

 

 

639,731

 

 

 

593,451

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

59,586

 

 

 

56,914

 

 

 

178,000

 

 

 

165,611

 

Trading and investment banking

 

 

5,387

 

 

 

5,936

 

 

 

17,950

 

 

 

23,962

 

Service charges on deposit accounts

 

 

19,932

 

 

 

19,881

 

 

 

65,409

 

 

 

64,449

 

Insurance fees and commissions

 

 

375

 

 

 

285

 

 

 

879

 

 

 

950

 

Brokerage fees

 

 

13,840

 

 

 

2,899

 

 

 

29,687

 

 

 

8,825

 

Bankcard fees

 

 

19,379

 

 

 

17,198

 

 

 

53,854

 

 

 

47,934

 

Investment securities (losses) gains, net

 

 

(1,345

)

 

 

(3,510

)

 

 

58,853

 

 

 

3,609

 

Other

 

 

11,569

 

 

 

8,304

 

 

 

24,104

 

 

 

33,053

 

Total noninterest income

 

 

128,723

 

 

 

107,907

 

 

 

428,736

 

 

 

348,393

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

136,467

 

 

 

124,986

 

 

 

388,491

 

 

 

373,082

 

Occupancy, net

 

 

12,231

 

 

 

12,207

 

 

 

36,439

 

 

 

36,438

 

Equipment

 

 

18,811

 

 

 

19,701

 

 

 

55,290

 

 

 

58,512

 

Supplies and services

 

 

3,139

 

 

 

3,379

 

 

 

9,893

 

 

 

10,340

 

Marketing and business development

 

 

6,671

 

 

 

4,863

 

 

 

16,911

 

 

 

12,005

 

Processing fees

 

 

20,901

 

 

 

16,562

 

 

 

58,682

 

 

 

48,480

 

Legal and consulting

 

 

10,255

 

 

 

7,646

 

 

 

28,431

 

 

 

21,548

 

Bankcard

 

 

6,551

 

 

 

4,795

 

 

 

18,998

 

 

 

14,280

 

Amortization of other intangible assets

 

 

1,092

 

 

 

1,110

 

 

 

3,388

 

 

 

3,647

 

Regulatory fees

 

 

4,200

 

 

 

3,186

 

 

 

11,146

 

 

 

8,501

 

Other

 

 

11,078

 

 

 

10,434

 

 

 

32,632

 

 

 

24,320

 

Total noninterest expense

 

 

231,396

 

 

 

208,869

 

 

 

660,301

 

 

 

611,153

 

Income before income taxes

 

 

108,812

 

 

 

113,803

 

 

 

408,166

 

 

 

330,691

 

Income tax expense

 

 

20,822

 

 

 

19,336

 

 

 

76,657

 

 

 

56,169

 

NET INCOME

 

$

87,990

 

 

$

94,467

 

 

$

331,509

 

 

$

274,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income – basic

 

$

1.82

 

 

$

1.96

 

 

$

6.86

 

 

$

5.69

 

Net income – diluted

 

 

1.81

 

 

 

1.94

 

 

 

6.80

 

 

 

5.64

 

Dividends

 

 

0.37

 

 

 

0.37

 

 

 

1.11

 

 

 

1.01

 

Weighted average shares outstanding – basic

 

 

48,300,129

 

 

 

48,319,414

 

 

 

48,351,007

 

 

 

48,237,819

 

Weighted average shares outstanding – diluted

 

 

48,648,804

 

 

 

48,742,883

 

 

 

48,723,572

 

 

 

48,658,290

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2022

 

2021

 

2022

 

2021

Net income

 

$

87,990

 

 

$

94,467

 

 

$

331,509

 

 

$

274,522

 

Other comprehensive loss, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

(271,079

)

 

 

(75,717

)

 

 

(1,202,341

)

 

 

(198,420

)

Less: Reclassification adjustment for gains included in net income

 

 

 

 

 

(1,058

)

 

 

 

 

 

(5,078

)

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

 

 

12,587

 

 

 

 

 

 

25,708

 

 

 

 

Change in unrealized gains and losses on debt securities

 

 

(258,492

)

 

 

(76,775

)

 

 

(1,176,633

)

 

 

(203,498

)

Unrealized gains and losses on derivative hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gains and losses on derivative hedges, net

 

 

3,321

 

 

 

432

 

 

 

12,438

 

 

 

3,513

 

Less: Reclassification adjustment for gains included in net income

 

 

(1,470

)

 

 

(831

)

 

 

(3,411

)

 

 

(2,550

)

Change in unrealized gains and losses on derivative hedges

 

 

1,851

 

 

 

(399

)

 

 

9,027

 

 

 

963

 

Other comprehensive loss, before tax

 

 

(256,641

)

 

 

(77,174

)

 

 

(1,167,606

)

 

 

(202,535

)

Income tax benefit

 

 

62,184

 

 

 

18,374

 

 

 

282,032

 

 

 

48,502

 

Other comprehensive loss

 

 

(194,457

)

 

 

(58,800

)

 

 

(885,574

)

 

 

(154,033

)

Comprehensive (loss) income

 

$

(106,467

)

 

$

35,667

 

 

$

(554,065

)

 

$

120,489

 

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, 2021

 

$

55,057

 

 

$

1,090,450

 

 

$

1,891,246

 

 

$

318,340

 

 

$

(338,145

)

 

$

3,016,948

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

274,522

 

 

 

(154,033

)

 

 

 

 

 

120,489

 

Dividends ($1.01 per share)

 

 

 

 

 

 

 

 

(49,200

)

 

 

 

 

 

 

 

 

(49,200

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,269

)

 

 

(4,269

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(4,374

)

 

 

 

 

 

 

 

 

5,069

 

 

 

695

 

Recognition of equity-based compensation

 

 

 

 

 

13,401

 

 

 

 

 

 

 

 

 

 

 

 

13,401

 

Sale of treasury stock

 

 

 

 

 

223

 

 

 

 

 

 

 

 

 

214

 

 

 

437

 

Exercise of stock options

 

 

 

 

 

3,118

 

 

 

 

 

 

 

 

 

11,221

 

 

 

14,339

 

Balance - September 30, 2021

 

$

55,057

 

 

$

1,102,818

 

 

$

2,116,568

 

 

$

164,307

 

 

$

(325,910

)

 

$

3,112,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2022

 

$

55,057

 

 

$

1,110,520

 

 

$

2,176,998

 

 

$

126,314

 

 

$

(323,465

)

 

$

3,145,424

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

331,509

 

 

 

(885,574

)

 

 

 

 

 

(554,065

)

Dividends ($1.11 per share)

 

 

 

 

 

 

 

 

(54,085

)

 

 

 

 

 

 

 

 

(54,085

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,806

)

 

 

(31,806

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(6,630

)

 

 

 

 

 

 

 

 

7,309

 

 

 

679

 

Recognition of equity-based compensation

 

 

 

 

 

16,062

 

 

 

 

 

 

 

 

 

 

 

 

16,062

 

Sale of treasury stock

 

 

 

 

 

257

 

 

 

 

 

 

 

 

 

172

 

 

 

429

 

Exercise of stock options

 

 

 

 

 

280

 

 

 

 

 

 

 

 

 

627

 

 

 

907

 

Balance - September 30, 2022

 

$

55,057

 

 

$

1,120,489

 

 

$

2,454,422

 

 

$

(759,260

)

 

$

(347,163

)

 

$

2,523,545

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

 

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

Average

 

 

Average

 

 

Average

 

 

Average

 

 

 

Balance

 

 

Yield/Rate

 

 

Balance

 

 

Yield/Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

19,284,262

 

 

 

4.46

%

 

$

16,756,753

 

 

 

3.77

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

9,796,212

 

 

 

2.03

 

 

 

7,662,106

 

 

 

1.72

 

Tax-exempt

 

 

3,885,333

 

 

 

3.18

 

 

 

4,240,408

 

 

 

2.90

 

Total securities

 

 

13,681,545

 

 

 

2.35

 

 

 

11,902,514

 

 

 

2.14

 

Federal funds and resell agreements

 

 

848,844

 

 

 

2.83

 

 

 

1,092,266

 

 

 

0.87

 

Interest bearing due from banks

 

 

632,595

 

 

 

1.60

 

 

 

4,345,422

 

 

 

0.16

 

Trading securities

 

 

5,651

 

 

 

5.69

 

 

 

25,392

 

 

 

4.30

 

Total earning assets

 

 

34,452,897

 

 

 

3.53

 

 

 

34,122,347

 

 

 

2.65

 

Allowance for credit losses

 

 

(167,939

)

 

 

 

 

 

 

(203,144

)

 

 

 

 

Other assets

 

 

2,025,193

 

 

 

 

 

 

 

1,953,337

 

 

 

 

 

Total assets

 

$

36,310,151

 

 

 

 

 

 

$

35,872,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

17,403,199

 

 

 

1.10

%

 

$

18,027,862

 

 

 

0.15

%

Federal funds and repurchase agreements

 

 

3,055,164

 

 

 

1.91

 

 

 

2,596,326

 

 

 

0.24

 

Borrowed funds

 

 

294,739

 

 

 

4.96

 

 

 

270,795

 

 

 

4.72

 

Total interest-bearing liabilities

 

 

20,753,102

 

 

 

1.28

 

 

 

20,894,983

 

 

 

0.22

 

Noninterest-bearing demand deposits

 

 

12,394,251

 

 

 

 

 

 

 

11,400,143

 

 

 

 

 

Other liabilities

 

 

456,992

 

 

 

 

 

 

 

425,385

 

 

 

 

 

Shareholders' equity

 

 

2,705,806

 

 

 

 

 

 

 

3,152,029

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

36,310,151

 

 

 

 

 

 

$

35,872,540

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

2.25

%

 

 

 

 

 

 

2.43

%

Net interest margin

 

 

 

 

 

 

2.76

 

 

 

 

 

 

 

2.52

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

 

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

Average

 

 

Average

 

 

Average

 

 

Average

 

 

 

Balance

 

 

Yield/Rate

 

 

Balance

 

 

Yield/Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

18,328,139

 

 

 

3.91

%

 

$

16,608,711

 

 

 

3.74

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

9,695,499

 

 

 

1.94

 

 

 

7,022,914

 

 

 

1.72

 

Tax-exempt

 

 

3,912,590

 

 

 

3.11

 

 

 

4,276,813

 

 

 

2.93

 

Total securities

 

 

13,608,089

 

 

 

2.28

 

 

 

11,299,727

 

 

 

2.18

 

Federal funds and resell agreements

 

 

1,070,319

 

 

 

1.50

 

 

 

1,280,177

 

 

 

0.81

 

Interest bearing due from banks

 

 

2,841,510

 

 

 

0.43

 

 

 

3,506,727

 

 

 

0.12

 

Trading securities

 

 

12,170

 

 

 

4.86

 

 

 

21,475

 

 

 

4.28

 

Total earning assets

 

 

35,860,227

 

 

 

2.94

 

 

 

32,716,817

 

 

 

2.70

 

Allowance for credit losses

 

 

(182,647

)

 

 

 

 

 

 

(207,338

)

 

 

 

 

Other assets

 

 

1,988,189

 

 

 

 

 

 

 

1,892,516

 

 

 

 

 

Total assets

 

$

37,665,769

 

 

 

 

 

 

$

34,401,995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

17,775,016

 

 

 

0.53

%

 

$

17,397,225

 

 

 

0.15

%

Federal funds and repurchase agreements

 

 

2,896,021

 

 

 

1.01

 

 

 

2,620,354

 

 

 

0.27

 

Borrowed funds

 

 

279,659

 

 

 

4.85

 

 

 

270,230

 

 

 

4.76

 

Total interest-bearing liabilities

 

 

20,950,696

 

 

 

0.65

 

 

 

20,287,809

 

 

 

0.23

 

Noninterest-bearing demand deposits

 

 

13,537,023

 

 

 

 

 

 

 

10,624,524

 

 

 

 

 

Other liabilities

 

 

416,492

 

 

 

 

 

 

 

418,397

 

 

 

 

 

Shareholders' equity

 

 

2,761,558

 

 

 

 

 

 

 

3,071,265

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

37,665,769

 

 

 

 

 

 

$

34,401,995

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

2.29

%

 

 

 

 

 

 

2.47

%

Net interest margin

 

 

 

 

 

 

2.56

 

 

 

 

 

 

 

2.55

 

Business Segment Information

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

 

Commercial Banking

 

Institutional Banking

 

Personal Banking

 

Total

Net interest income

 

$

150,080

 

 

$

43,382

 

$

40,023

 

 

$

233,485

 

Provision for credit losses

 

 

20,156

 

 

 

162

 

 

1,682

 

 

 

22,000

 

Noninterest income

 

 

16,785

 

 

 

89,386

 

 

22,552

 

 

 

128,723

 

Noninterest expense

 

 

87,120

 

 

 

82,073

 

 

62,203

 

 

 

231,396

 

Income (loss) before taxes

 

 

59,589

 

 

 

50,533

 

 

(1,310

)

 

 

108,812

 

Income tax expense (benefit)

 

 

11,403

 

 

 

9,670

 

 

(251

)

 

 

20,822

 

Net income (loss)

 

$

48,186

 

 

$

40,863

 

$

(1,059

)

 

$

87,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2021

 

 

Commercial Banking

 

Institutional Banking

 

Personal Banking

 

Total

Net interest income

 

$

150,871

 

 

$

21,203

 

 

37,691

 

 

$

209,765

 

Provision for credit losses

 

 

(5,720

)

 

 

172

 

 

548

 

 

 

(5,000

)

Noninterest income

 

 

17,048

 

 

 

65,568

 

 

25,291

 

 

 

107,907

 

Noninterest expense

 

 

78,708

 

 

 

73,369

 

 

56,792

 

 

 

208,869

 

Income before taxes

 

 

94,931

 

 

 

13,230

 

 

5,642

 

 

 

113,803

 

Income tax expense

 

 

16,130

 

 

 

2,248

 

 

958

 

 

 

19,336

 

Net income

 

$

78,801

 

 

$

10,982

 

$

4,684

 

 

$

94,467

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

 

Commercial Banking

 

Institutional Banking

 

Personal Banking

 

Total

Net interest income

 

$

444,176

 

 

$

104,615

 

$

119,840

 

 

$

668,631

 

Provision for credit losses

 

 

25,183

 

 

 

402

 

 

3,315

 

 

 

28,900

 

Noninterest income

 

 

100,379

 

 

 

243,740

 

 

84,617

 

 

 

428,736

 

Noninterest expense

 

 

246,230

 

 

 

234,185

 

 

179,886

 

 

 

660,301

 

Income before taxes

 

 

273,142

 

 

 

113,768

 

 

21,256

 

 

 

408,166

 

Income tax expense

 

 

51,298

 

 

 

21,367

 

 

3,992

 

 

 

76,657

 

Net income

 

$

221,844

 

 

$

92,401

 

$

17,264

 

 

$

331,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2021

 

 

Commercial Banking

 

Institutional Banking

 

Personal Banking

 

Total

Net interest income

 

$

430,158

 

 

$

64,599

 

$

110,194

 

 

$

604,951

 

Provision for credit losses

 

 

8,096

 

 

 

539

 

 

2,865

 

 

 

11,500

 

Noninterest income

 

 

62,306

 

 

 

202,769

 

 

83,318

 

 

 

348,393

 

Noninterest expense

 

 

221,883

 

 

 

217,257

 

 

172,013

 

 

 

611,153

 

Income before taxes

 

 

262,485

 

 

 

49,572

 

 

18,634

 

 

 

330,691

 

Income tax expense

 

 

44,584

 

 

 

8,419

 

 

3,166

 

 

 

56,169

 

Net income

 

$

217,901

 

 

$

41,153

 

$

15,468

 

 

$

274,522

 

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, 2022.

Non-GAAP Financial Measures

Net operating income Non-GAAP reconciliations:

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

Net income (GAAP)

 

$

87,990

 

 

$

94,467

 

 

$

331,509

 

 

$

274,522

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

71

 

 

 

 

 

 

71

 

 

 

 

Severance expense

 

 

283

 

 

 

639

 

 

 

480

 

 

 

763

 

COVID-19 related expense

 

 

 

 

 

190

 

 

 

 

 

 

527

 

Tax-impact of adjustments (i)

 

 

(85

)

 

 

(184

)

 

 

(132

)

 

 

(286

)

Total Non-GAAP adjustments (net of tax)

 

 

269

 

 

 

645

 

 

 

419

 

 

 

1,004

 

Net operating income (Non-GAAP)

 

$

88,259

 

 

$

95,112

 

 

$

331,928

 

 

$

275,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - diluted (GAAP)

 

$

1.81

 

 

$

1.94

 

 

$

6.80

 

 

$

5.64

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

COVID-19 related expense

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Tax-impact of adjustments (i)

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Operating earnings per share - diluted (Non-GAAP)

 

$

1.82

 

 

$

1.95

 

 

$

6.81

 

 

$

5.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.96

%

 

 

1.04

%

 

 

1.18

%

 

 

1.07

%

Return on average equity

 

 

12.90

 

 

 

11.89

 

 

 

16.05

 

 

 

11.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.96

%

 

 

1.05

%

 

 

1.18

%

 

 

1.07

%

Operating return on average equity

 

 

12.94

 

 

 

11.97

 

 

 

16.07

 

 

 

11.99

 

 

(i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021.

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

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Noninterest expense

 

$

231,396

 

 

$

208,869

 

 

$

660,301

 

 

$

611,153

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

71

 

 

 

 

 

 

71

 

 

 

 

Severance expense

 

 

283

 

 

 

639

 

 

 

480

 

 

 

763

 

COVID-19 related expense

 

 

 

 

 

190

 

 

 

 

 

 

527

 

Total Non-GAAP adjustments (pre-tax)

 

 

354

 

 

 

829

 

 

 

551

 

 

 

1,290

 

Operating noninterest expense (Non-GAAP)

 

$

231,042

 

 

$

208,040

 

 

$

659,750

 

 

$

609,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

231,396

 

 

$

208,869

 

 

$

660,301

 

 

$

611,153

 

Less: Amortization of other intangibles

 

 

1,092

 

 

 

1,110

 

 

 

3,388

 

 

 

3,647

 

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

 

$

230,304

 

 

$

207,759

 

 

$

656,913

 

 

$

607,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

231,042

 

 

$

208,040

 

 

$

659,750

 

 

$

609,863

 

Less: Amortization of other intangibles

 

 

1,092

 

 

 

1,110

 

 

 

3,388

 

 

 

3,647

 

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

 

$

229,950

 

 

$

206,930

 

 

$

656,362

 

 

$

606,216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

233,485

 

 

$

209,765

 

 

$

668,631

 

 

$

604,951

 

Noninterest income

 

 

128,723

 

 

 

107,907

 

 

 

428,736

 

 

 

348,393

 

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

 

 

 

 

 

1,058

 

 

 

 

 

 

5,078

 

Total Non-GAAP Revenue (denominator A)

 

$

362,208

 

 

$

316,614

 

 

$

1,097,367

 

 

$

948,266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

63.58

%

 

 

65.62

%

 

 

59.86

%

 

 

64.06

%

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

 

 

63.49

 

 

 

65.36

 

 

 

59.81

 

 

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net interest income (GAAP)

 

$

233,485

 

 

$

209,765

 

 

$

668,631

 

 

$

604,951

 

Noninterest income (GAAP)

 

 

128,723

 

 

 

107,907

 

 

 

428,736

 

 

 

348,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

231,396

 

 

 

208,869

 

 

 

660,301

 

 

 

611,153

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

71

 

 

 

 

 

 

71

 

 

 

 

Severance expense

 

 

283

 

 

 

639

 

 

 

480

 

 

 

763

 

COVID-19 related expense

 

 

 

 

 

190

 

 

 

 

 

 

527

 

Total Non-GAAP adjustments

 

 

354

 

 

 

829

 

 

 

551

 

 

 

1,290

 

Operating noninterest expense (Non-GAAP)

 

 

231,042

 

 

 

208,040

 

 

 

659,750

 

 

 

609,863

 

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

 

$

131,166

 

 

$

109,632

 

 

$

437,617

 

 

$

343,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.80

 

 

$

4.30

 

 

$

13.72

 

 

$

12.43

 

Noninterest income (GAAP)

 

 

2.65

 

 

 

2.22

 

 

 

8.80

 

 

 

7.16

 

Noninterest expense (GAAP)

 

 

4.76

 

 

 

4.29

 

 

 

13.55

 

 

 

12.56

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

COVID-19 related expense

 

 

 

 

 

 

 

 

 

 

 

0.01

 

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

 

$

2.70

 

 

$

2.24

 

 

$

8.98

 

 

$

7.06

 

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

 

UMB Financial Corporation

 

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net interest income (GAAP)

 

$

233,485

 

 

$

209,765

 

 

$

668,631

 

 

$

604,951

 

Adjustments to arrive at net interest income - FTE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent interest

 

 

6,454

 

 

 

6,544

 

 

 

19,131

 

 

 

19,851

 

Net interest income - FTE (Non-GAAP)

 

239,939

 

 

216,309

 

 

687,762

 

 

624,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

 

128,723

 

 

 

107,907

 

 

 

428,736

 

 

 

348,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

231,396

 

 

 

208,869

 

 

 

660,301

 

 

 

611,153

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

71

 

 

 

 

 

 

71

 

 

 

 

Severance expense

 

 

283

 

 

 

639

 

 

 

480

 

 

 

763

 

COVID-19 related expense

 

 

 

 

 

190

 

 

 

 

 

 

527

 

Total Non-GAAP adjustments

 

 

354

 

 

 

829

 

 

 

551

 

 

 

1,290

 

Operating noninterest expense (Non-GAAP)

 

 

231,042

 

 

 

208,040

 

 

 

659,750

 

 

 

609,863

 

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

 

$

137,620

 

 

$

116,176

 

 

$

456,748

 

 

$

363,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.80

 

 

$

4.30

 

 

$

13.72

 

 

$

12.43

 

Tax equivalent interest

 

 

0.13

 

 

 

0.14

 

 

 

0.39

 

 

 

0.41

 

Net interest income - FTE (Non-GAAP)

 

 

4.93

 

 

 

4.44

 

 

 

14.11

 

 

 

12.84

 

Noninterest income (GAAP)

 

 

2.65

 

 

 

2.22

 

 

 

8.80

 

 

 

7.16

 

Noninterest expense (GAAP)

 

 

4.76

 

 

 

4.29

 

 

 

13.55

 

 

 

12.56

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

COVID-19 related expense

 

 

 

 

 

 

 

 

 

 

 

0.01

 

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

 

$

2.83

 

 

$

2.38

 

 

$

9.37

 

 

$

7.47

 

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

 

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

 

 

 

 

 

 

 

 

 

 

As of September 30,

 

 

 

2022

 

 

2021

 

Total shareholders' equity (GAAP)

 

$

2,523,545

 

 

$

3,112,840

 

Less: Intangible assets

 

 

 

 

 

 

 

 

Goodwill

 

 

182,225

 

 

 

174,518

 

Other intangibles, net

 

 

13,373

 

 

 

15,526

 

Total intangibles, net

 

 

195,598

 

 

 

190,044

 

Total tangible shareholders' equity (Non-GAAP)

 

$

2,327,947

 

 

$

2,922,796

 

 

 

 

 

 

 

 

 

 

Total shares outstanding

 

 

48,309,638

 

 

 

48,355,373

 

 

 

 

 

 

 

 

 

 

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

 

$

52.24

 

 

$

64.37

 

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

 

 

48.19

 

 

 

60.44

 

 

Contacts

Media Contact: Stephanie Hague: 816.860.5088

Investor Relations Contact: Kay Gregory: 816.860.7106