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UMB Financial Corporation Reports Second Quarter Net Income of $137.6 Million

Second Quarter 2022 Financial Highlights

  • GAAP net income of $137.6 million, or $2.83 per diluted share.
  • Operating pre-tax, pre-provision income (Operating PTPP, a non-GAAP financial measure) of $187.1 million, an increase of 56.7% compared to the first quarter of 2022.
  • Average loan balances increased $1.5 billion, or 8.9% compared to the second quarter of 2021.
  • Excluding Paycheck Protection Program (PPP) balances, average loans increased 23.3% on a linked-quarter, annualized basis.
  • Average deposits grew 13.7% compared to the second quarter of 2021.
  • Net interest margin expanded 25 basis points from the linked quarter.
  • Noninterest income increased 34.0% as compared to the second quarter of 2021, equal to 44.0% of total revenue.

UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2022 of $137.6 million, or $2.83 per diluted share, compared to $106.0 million, or $2.17 per diluted share, in the first quarter of 2022 (linked quarter) and $87.4 million, or $1.79 per diluted share, in the second 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 $137.6 million, or $2.83 per diluted share, for the second quarter of 2022, compared to $106.1 million, or $2.17 per diluted share, for the linked quarter and $87.6 million, or $1.80 per diluted share, for the second quarter of 2021. 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 $187.1 million, or $3.84 per diluted share, for the second quarter of 2022, compared to $119.4 million, or $2.44 per diluted share, for the linked quarter, and $131.6 million, or $2.71 per diluted share, for the second quarter of 2021. These operating PTPP results represent increases of 56.7% on a linked-quarter basis and 42.1%, compared to the second quarter of 2021, and include 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.

“Our strong financial results for the second quarter of 2022 were driven by a 23.3% linked-quarter annualized increase in average loans excluding PPP, strong net interest margin expansion, and continued momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Our strong loan growth, coupled with the benefits from higher short and long-term interest rates drove a 6.9% linked-quarter increase in net interest income. Our net charge-offs were elevated this quarter driven entirely by a $27.7 million write-down related to one commercial relationship. Nonperforming loans declined 83.6% from the prior quarter as the portfolio continues to perform well. During the quarter, we made a $5.0 million contribution to the UMB Financial Corporation Charitable Foundation to continue our support of diverse and impactful philanthropic organizations within the communities we serve.”

Summary of quarterly financial results

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

 

2022

 

2022

 

2021

Net income (GAAP)

 

$

137,556

 

 

$

105,963

 

 

$

87,412

 

Earnings per share (diluted)

 

 

2.83

 

 

 

2.17

 

 

 

1.79

 

 

 

 

 

 

 

 

 

 

 

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

 

 

187,051

 

 

 

119,400

 

 

 

131,607

 

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

 

 

3.84

 

 

 

2.44

 

 

 

2.71

 

 

 

 

 

 

 

 

 

 

 

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

 

 

193,329

 

 

 

125,799

 

 

 

138,236

 

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

 

 

3.97

 

 

 

2.57

 

 

 

2.84

 

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

137,596

 

 

 

106,073

 

 

 

87,634

 

Operating earnings per share (diluted)

 

 

2.83

 

 

 

2.17

 

 

 

1.80

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.47

%

 

 

1.10

%

 

 

1.02

%

Return on average equity

 

 

20.83

 

 

 

14.65

 

 

 

11.43

 

Efficiency ratio

 

 

53.08

 

 

 

63.98

 

 

 

60.41

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.47

%

 

 

1.10

%

 

 

1.03

%

Operating return on average equity

 

 

20.84

 

 

 

14.67

 

 

 

11.46

 

Operating efficiency ratio

 

 

53.06

 

 

 

63.93

 

 

 

60.33

 

Summary of year-to-date financial results

 

UMB Financial Corporation

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

 

June

 

June

 

 

YTD

 

YTD

 

 

2022

 

2021

Net income (GAAP)

 

$

243,519

 

 

$

180,055

 

Earnings per share (diluted)

 

 

4.99

 

 

 

3.70

 

 

 

 

 

 

 

 

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

 

 

306,451

 

 

 

233,849

 

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

 

 

6.29

 

 

 

4.81

 

 

 

 

 

 

 

 

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

 

 

319,128

 

 

 

247,156

 

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

 

 

6.55

 

 

 

5.09

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

243,669

 

 

 

180,414

 

Operating earnings per share (diluted)

 

 

4.99

 

 

 

3.71

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

Return on average assets

 

 

1.28

%

 

 

1.08

%

Return on average equity

 

 

17.60

 

 

 

11.98

 

Efficiency ratio

 

 

58.03

 

 

 

63.29

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

Operating return on average assets

 

 

1.28

%

 

 

1.08

%

Operating return on average equity

 

 

17.61

 

 

 

12.01

 

Operating efficiency ratio

 

 

58.00

 

 

 

63.21

 

Summary of revenue

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Net interest income

 

$

224,791

 

 

$

210,355

 

 

$

201,071

 

 

$

14,436

 

 

$

23,720

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

58,886

 

 

 

59,528

 

 

 

53,863

 

 

 

(642

)

 

 

5,023

 

Trading and investment banking

 

 

7,123

 

 

 

5,440

 

 

 

8,670

 

 

 

1,683

 

 

 

(1,547

)

Service charges on deposit accounts

 

 

20,835

 

 

 

24,642

 

 

 

22,592

 

 

 

(3,807

)

 

 

(1,757

)

Insurance fees and commissions

 

 

245

 

 

 

259

 

 

 

245

 

 

 

(14

)

 

 

 

Brokerage fees

 

 

12,391

 

 

 

3,456

 

 

 

2,592

 

 

 

8,935

 

 

 

9,799

 

Bankcard fees

 

 

17,840

 

 

 

16,635

 

 

 

16,063

 

 

 

1,205

 

 

 

1,777

 

Investment securities gains (losses), net

 

 

60,720

 

 

 

(522

)

 

 

15,455

 

 

 

61,242

 

 

 

45,265

 

Other

 

 

(1,705

)

 

 

14,240

 

 

 

12,109

 

 

 

(15,945

)

 

 

(13,814

)

Total noninterest income

 

$

176,335

 

 

$

123,678

 

 

$

131,589

 

 

$

52,657

 

 

$

44,746

 

Total revenue

 

$

401,126

 

 

$

334,033

 

 

$

332,660

 

 

$

67,093

 

 

$

68,466

 

Net interest income (FTE)

 

$

231,069

 

 

$

216,754

 

 

$

207,700

 

 

 

 

 

 

 

Net interest margin (FTE)

 

 

2.60

%

 

 

2.35

%

 

 

2.56

%

 

 

 

 

 

 

Total noninterest income as a % of total revenue

 

 

44.0

 

 

 

37.0

 

 

 

39.6

 

 

 

 

 

 

 

Net interest income

  • Net interest income totaled $224.8 million, an increase of $14.4 million, or 6.9% from the linked quarter, driven by an increase of $956.9 million in average loans and the impact from increased short-term and long-term interest rates.
  • Average earning assets decreased $1.8 billion, or 4.7%, largely driven by a decrease of $2.7 billion in interest-bearing due from banks, partially offset by the increase of $956.9 million in average loans noted above. Average interest-bearing liabilities declined $1.5 billion, or 6.8%, primarily driven by a decrease of $1.2 billion in interest-bearing deposits.
  • Net interest margin for the second quarter was 2.60%, an increase of 25 basis points from the linked quarter, driven by an increase in loan yields of 23 basis points. Earning asset yields increased 39 basis points from the linked quarter, driven by the recent increases in short-term and long-term interest rates, mix changes, and the benefit of free funds. The cost of interest-bearing liabilities increased 26 basis points to 0.47%. Net interest spread increased 13 basis points to 2.39% from the linked quarter but was eight basis points lower than the second quarter of 2021.
  • On a year-over-year basis, net interest income increased $23.7 million, or 11.8%, driven by a $2.3 billion, or 20.7% increase in average securities, coupled with a $1.5 billion, or 8.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity.
  • Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposit balances increased 1.3% on a linked-quarter basis and 32.8% compared to the second quarter of 2021.

Noninterest income

  • Second quarter 2022 noninterest income increased $52.7 million on a linked-quarter basis, largely due to:
    • A gain of $66.2 million realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by a decline of $3.7 million in mark-to-market gains on marketable securities, both recorded in investment securities gains, net.
    • An increase of $8.9 million in brokerage income, largely driven by increases in 12b-1 fees and money market income.
    • These increases were partially offset by decreases of $10.5 million in company-owned life insurance income and $4.2 million in derivative income, both recorded in other income, and a decrease of $3.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees.
  • Compared to the prior year, noninterest income in the second quarter of 2022 increased $44.7 million, or 34.0%, primarily driven by:
    • An increase of $45.3 million in investment securities gains, primarily due to the $66.2 million gain realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by declines of $14.1 million and $5.5 million in mark-to-market gains on marketable securities and non-marketable securities, respectively.
    • An increase of $9.8 million in brokerage income, largely driven by increases in 12b-1 fees and money market income.
    • Increases of $3.7 million and $1.7 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing.
    • These increases were partially offset by decreases of $11.6 million in company-owned life insurance income and $2.6 million in derivative income, both recorded in other income, and a decrease of $1.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees.

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Salaries and employee benefits

 

$

121,390

 

 

$

130,634

 

 

$

120,415

 

 

$

(9,244

)

 

$

975

 

Occupancy, net

 

 

11,976

 

 

 

12,232

 

 

 

12,296

 

 

 

(256

)

 

 

(320

)

Equipment

 

 

18,315

 

 

 

18,164

 

 

 

19,196

 

 

 

151

 

 

 

(881

)

Supplies and services

 

 

3,492

 

 

 

3,262

 

 

 

3,469

 

 

 

230

 

 

 

23

 

Marketing and business development

 

 

5,308

 

 

 

4,932

 

 

 

4,797

 

 

 

376

 

 

 

511

 

Processing fees

 

 

19,338

 

 

 

18,443

 

 

 

16,501

 

 

 

895

 

 

 

2,837

 

Legal and consulting

 

 

11,265

 

 

 

6,911

 

 

 

8,147

 

 

 

4,354

 

 

 

3,118

 

Bankcard

 

 

5,880

 

 

 

6,567

 

 

 

4,529

 

 

 

(687

)

 

 

1,351

 

Amortization of other intangible assets

 

 

1,225

 

 

 

1,071

 

 

 

1,157

 

 

 

154

 

 

 

68

 

Regulatory fees

 

 

3,464

 

 

 

3,482

 

 

 

2,769

 

 

 

(18

)

 

 

695

 

Other

 

 

12,474

 

 

 

9,080

 

 

 

8,062

 

 

 

3,394

 

 

 

4,412

 

Total noninterest expense

 

$

214,127

 

 

$

214,778

 

 

$

201,338

 

 

$

(651

)

 

$

12,789

 

  • Noninterest expense for the second quarter of 2022 was $214.1 million, a decrease of $0.7 million, or 0.3%, from the linked quarter and an increase of $12.8 million, or 6.4%, from the second quarter of 2021.
  • The linked-quarter decrease in noninterest expense was driven by:
    • A decrease of $16.4 million in employee benefits expense, recorded in salaries and employee benefits, driven primarily by a decrease of $10.7 million in deferred compensation expense and a seasonal decrease of $6.2 million in payroll taxes, insurance, and 401(k) expense recognized in the second quarter. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above.
    • These decreases were offset by an increase of $7.2 million in bonus and salary expense, recorded in salaries and employee benefits, driven by increased company performance, an increase of $4.4 million in legal and consulting expense due to the timing of multiple projects, and an increase of $4.4 million in charitable contributions expense, recorded in other expense.
  • The year-over-year increase in noninterest expense was driven by:
    • An increase of $9.8 million in salaries and bonus expense, recorded in salaries and employee benefits, driven by increased company performance.
    • An increase of $4.4 million in charitable contributions expense, recorded in other expense.
    • Increases of $3.1 million in legal and consulting expense and $2.8 million in processing fees due to the timing of multiple projects.
    • An increase of $1.4 million in bankcard expense primarily due to higher processing expense.
    • These increases were partially offset by a decrease of $8.8 million in employee benefits expense, recorded in salaries and employee benefits, primarily due to a decrease of $10.4 million in deferred compensation expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above.

Income taxes

  • The company’s effective tax rate was 18.7% for the six months ended June 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 second quarter of 2022 were $37.6 billion compared to $39.2 billion for the linked quarter and $34.3 billion for the same period in 2021.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Commercial and industrial

 

$

7,918,552

 

 

$

7,409,623

 

 

$

7,402,653

 

 

$

508,929

 

 

$

515,899

 

Specialty lending

 

 

518,575

 

 

 

463,793

 

 

 

505,687

 

 

 

54,782

 

 

 

12,888

 

Commercial real estate

 

 

6,569,784

 

 

 

6,338,160

 

 

 

6,165,780

 

 

 

231,624

 

 

 

404,004

 

Consumer real estate

 

 

2,458,815

 

 

 

2,339,050

 

 

 

2,068,663

 

 

 

119,765

 

 

 

390,152

 

Consumer

 

 

148,412

 

 

 

135,942

 

 

 

122,439

 

 

 

12,470

 

 

 

25,973

 

Credit cards

 

 

428,167

 

 

 

399,857

 

 

 

386,032

 

 

 

28,310

 

 

 

42,135

 

Leases and other

 

 

275,638

 

 

 

274,652

 

 

 

166,420

 

 

 

986

 

 

 

109,218

 

Total loans

 

$

18,317,943

 

 

$

17,361,077

 

 

$

16,817,674

 

 

$

956,866

 

 

$

1,500,269

 

  • Average loans for the second quarter of 2022 increased 5.5% on a linked-quarter basis and 8.9% compared to the second quarter of 2021. Excluding PPP balances, average loans increased 5.8% on a linked-quarter basis and 16.8% as compared to the second quarter of 2021.

Summary of average securities - QTD Average

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

639,161

 

 

$

176,476

 

 

$

40,013

 

 

$

462,685

 

 

$

599,148

 

U.S. Agencies

 

 

172,798

 

 

 

125,017

 

 

 

94,794

 

 

 

47,781

 

 

 

78,004

 

Mortgage-backed

 

 

4,764,452

 

 

 

7,317,968

 

 

 

6,096,099

 

 

 

(2,553,516

)

 

 

(1,331,647

)

State and political subdivisions

 

 

1,891,377

 

 

 

3,170,757

 

 

 

3,565,443

 

 

 

(1,279,380

)

 

 

(1,674,066

)

Corporates

 

 

377,586

 

 

 

337,526

 

 

 

127,581

 

 

 

40,060

 

 

 

250,005

 

Collateralized loan obligations

 

 

247,639

 

 

 

150,134

 

 

 

 

 

 

97,505

 

 

 

247,639

 

Total securities available for sale

 

$

8,093,013

 

 

$

11,277,878

 

 

$

9,923,930

 

 

$

(3,184,865

)

 

$

(1,830,917

)

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Agencies

 

$

65,964

 

 

$

133

 

 

$

 

 

$

65,831

 

 

$

65,964

 

Mortgage-backed

 

 

2,892,986

 

 

 

708,075

 

 

 

 

 

 

2,184,911

 

 

 

2,892,986

 

State and political subdivisions

 

 

2,240,018

 

 

 

1,185,609

 

 

 

1,057,091

 

 

 

1,054,409

 

 

 

1,182,927

 

Total securities held to maturity

 

$

5,198,968

 

 

$

1,893,817

 

 

$

1,057,091

 

 

$

3,305,151

 

 

$

4,141,877

 

Trading securities

 

 

10,190

 

 

 

20,836

 

 

 

21,409

 

 

 

(10,646

)

 

 

(11,219

)

Other securities

 

 

347,527

 

 

 

329,611

 

 

 

302,981

 

 

 

17,916

 

 

 

44,546

 

Total securities

 

$

13,649,698

 

 

$

13,522,142

 

 

$

11,305,411

 

 

$

127,556

 

 

$

2,344,287

 

  • Average total securities increased 0.9% on a linked-quarter basis and 20.7% compared to the second quarter of 2021.

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q2

 

CQ vs.

 

CQ vs.

 

 

2022

 

2022

 

2021

 

LQ

 

PY

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

14,209,159

 

 

$

14,025,585

 

 

$

10,701,656

 

 

$

183,574

 

 

$

3,507,503

 

Interest-bearing demand and savings

 

 

16,808,998

 

 

 

17,852,721

 

 

 

16,421,742

 

 

 

(1,043,723

)

 

 

387,256

 

Time deposits

 

 

570,812

 

 

 

701,973

 

 

 

659,228

 

 

 

(131,161

)

 

 

(88,416

)

Total deposits

 

$

31,588,969

 

 

$

32,580,279

 

 

$

27,782,626

 

 

$

(991,310

)

 

$

3,806,343

 

Noninterest bearing deposits as % of total

 

 

44.98

%

 

 

43.05

%

 

 

38.52

%

 

 

 

 

 

 

  • Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021.
  • Average noninterest-bearing demand deposits increased 1.3% on a linked-quarter basis to $14.2 billion.

Capital

Capital information

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Total equity

 

$

2,642,888

 

 

$

2,748,405

 

 

$

3,090,244

 

Book value per common share

 

 

54.71

 

 

 

56.78

 

 

 

63.92

 

Tangible book value per common share (Non-GAAP)

 

 

50.64

 

 

 

52.69

 

 

 

59.96

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

3,055,747

 

 

$

2,938,100

 

 

$

2,730,062

 

Tier 1 capital

 

 

3,055,747

 

 

 

2,938,100

 

 

 

2,730,062

 

Total capital

 

 

3,473,040

 

 

 

3,369,866

 

 

 

3,172,878

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

11.44

%

 

 

11.81

%

 

 

11.91

%

Tier 1 risk-based capital ratio

 

 

11.44

 

 

 

11.81

 

 

 

11.91

 

Total risk-based capital ratio

 

 

13.00

 

 

 

13.55

 

 

 

13.84

 

Tier 1 leverage ratio

 

 

8.17

 

 

 

7.53

 

 

 

8.00

 

  • At June 30, 2022, 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

 

 

2022

 

2022

 

2021

 

2021

 

2021

Net charge-offs - Total loans

 

$

28,128

 

 

$

8,378

 

 

$

8,061

 

 

$

3,127

 

 

$

28,374

 

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

 

 

0.62

%

 

 

0.20

%

 

 

0.19

%

 

 

0.07

%

 

 

0.68

%

Loans over 90 days past due

 

$

3,446

 

 

$

3,600

 

 

$

2,633

 

 

$

2,319

 

 

$

1,265

 

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

 

 

0.02

%

 

 

0.02

%

 

 

0.02

%

 

 

0.01

%

 

 

0.01

%

Nonaccrual and restructured loans

 

$

18,117

 

 

$

110,356

 

 

$

92,300

 

 

$

96,536

 

 

$

58,219

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.10

%

 

 

0.62

%

 

 

0.54

%

 

 

0.59

%

 

 

0.34

%

Provision for credit losses

 

$

13,400

 

 

$

(6,500

)

 

$

8,500

 

 

$

(5,000

)

 

$

24,000

 

  • Provision for credit losses for the second quarter increased $19.9 million from the linked quarter and decreased $10.6 million from the second quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics.
  • Net charge-offs for the second quarter totaled $28.1 million, or 0.62%, of average loans, compared to $8.4 million, or 0.20%, of average loans in the linked quarter, and $28.4 million, or 0.68%, of average loans for the second quarter of 2021.
  • The increase in net charge-offs in the second quarter of 2022 is due to a $27.7 million write-down on a single commercial relationship.
  • Nonaccrual loans decreased 83.6% from the linked quarter to 0.10% of total loans.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on October 3, 2022, to shareholders of record at the close of business on September 12, 2022.

Conference Call

The company plans to host a conference call to discuss its second quarter 2022 earnings results on Wednesday, July 27, 2022, at 9:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 636921. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 2Q 2022 Conference Call

A replay of the conference call may be heard through August 10, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 826164. 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; 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)

 

 

 

 

 

 

 

 

June 30,

 

 

2022

 

2021

ASSETS

 

 

 

 

 

 

Loans

 

$

18,972,158

 

 

$

16,910,790

 

Allowance for credit losses on loans

 

 

(164,346

)

 

 

(200,563

)

Net loans

 

 

18,807,812

 

 

 

16,710,227

 

Loans held for sale

 

 

750

 

 

 

5,303

 

Securities:

 

 

 

 

 

 

Available for sale

 

 

7,739,216

 

 

 

10,347,531

 

Held to maturity, net of allowance for credit losses

 

 

5,707,282

 

 

 

1,081,173

 

Trading securities

 

 

9,646

 

 

 

40,552

 

Other securities

 

 

342,543

 

 

 

254,315

 

Total securities

 

 

13,798,687

 

 

 

11,723,571

 

Federal funds sold and resell agreements

 

 

1,055,459

 

 

 

1,146,521

 

Interest-bearing due from banks

 

 

1,825,295

 

 

 

5,059,098

 

Cash and due from banks

 

 

360,242

 

 

 

469,883

 

Premises and equipment, net

 

 

257,729

 

 

 

281,011

 

Accrued income

 

 

144,874

 

 

 

131,188

 

Goodwill

 

 

182,225

 

 

 

174,518

 

Other intangibles, net

 

 

14,465

 

 

 

16,636

 

Other assets

 

 

1,060,303

 

 

 

901,059

 

Total assets

 

$

37,507,841

 

 

$

36,619,015

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing demand

 

$

14,925,555

 

 

$

12,513,031

 

Interest-bearing demand and savings

 

 

16,007,087

 

 

 

16,857,127

 

Time deposits under $250,000

 

 

383,832

 

 

 

430,713

 

Time deposits of $250,000 or more

 

 

169,550

 

 

 

247,600

 

Total deposits

 

 

31,486,024

 

 

 

30,048,471

 

Federal funds purchased and repurchase agreements

 

 

2,661,283

 

 

 

2,783,389

 

Long-term debt

 

 

272,505

 

 

 

270,558

 

Accrued expenses and taxes

 

 

182,185

 

 

 

254,589

 

Other liabilities

 

 

262,956

 

 

 

171,764

 

Total liabilities

 

 

34,864,953

 

 

 

33,528,771

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,115,504

 

 

 

1,098,139

 

Retained earnings

 

 

2,384,454

 

 

 

2,040,134

 

Accumulated other comprehensive (loss) income, net

 

 

(564,803

)

 

 

223,107

 

Treasury stock

 

 

(347,324

)

 

 

(326,193

)

Total shareholders' equity

 

 

2,642,888

 

 

 

3,090,244

 

Total liabilities and shareholders' equity

 

$

37,507,841

 

 

$

36,619,015

 

Consolidated Statements of Income

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2022

 

2021

 

2022

 

2021

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

169,919

 

 

$

154,537

 

 

$

319,389

 

 

$

304,707

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest

 

 

47,295

 

 

 

29,780

 

 

 

90,677

 

 

 

56,942

 

Tax-exempt interest

 

 

23,538

 

 

 

24,743

 

 

 

47,393

 

 

 

49,707

 

Total securities income

 

 

70,833

 

 

 

54,523

 

 

 

138,070

 

 

 

106,649

 

Federal funds and resell agreements

 

 

3,497

 

 

 

2,552

 

 

 

5,947

 

 

 

5,373

 

Interest-bearing due from banks

 

 

4,207

 

 

 

833

 

 

 

6,664

 

 

 

1,536

 

Trading securities

 

 

114

 

 

 

189

 

 

 

299

 

 

 

348

 

Total interest income

 

 

248,570

 

 

 

212,634

 

 

 

470,369

 

 

 

418,613

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

15,439

 

 

 

6,574

 

 

 

21,612

 

 

 

13,372

 

Federal funds and repurchase agreements

 

 

4,998

 

 

 

1,779

 

 

 

7,146

 

 

 

3,665

 

Other

 

 

3,342

 

 

 

3,210

 

 

 

6,465

 

 

 

6,390

 

Total interest expense

 

 

23,779

 

 

 

11,563

 

 

 

35,223

 

 

 

23,427

 

Net interest income

 

 

224,791

 

 

 

201,071

 

 

 

435,146

 

 

 

395,186

 

Provision for credit losses

 

 

13,400

 

 

 

24,000

 

 

 

6,900

 

 

 

16,500

 

Net interest income after provision for credit losses

 

 

211,391

 

 

 

177,071

 

 

 

428,246

 

 

 

378,686

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

58,886

 

 

 

53,863

 

 

 

118,414

 

 

 

108,697

 

Trading and investment banking

 

 

7,123

 

 

 

8,670

 

 

 

12,563

 

 

 

18,026

 

Service charges on deposit accounts

 

 

20,835

 

 

 

22,592

 

 

 

45,477

 

 

 

44,568

 

Insurance fees and commissions

 

 

245

 

 

 

245

 

 

 

504

 

 

 

665

 

Brokerage fees

 

 

12,391

 

 

 

2,592

 

 

 

15,847

 

 

 

5,926

 

Bankcard fees

 

 

17,840

 

 

 

16,063

 

 

 

34,475

 

 

 

30,736

 

Investment securities gains, net

 

 

60,720

 

 

 

15,455

 

 

 

60,198

 

 

 

7,119

 

Other

 

 

(1,705

)

 

 

12,109

 

 

 

12,535

 

 

 

24,749

 

Total noninterest income

 

 

176,335

 

 

 

131,589

 

 

 

300,013

 

 

 

240,486

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

121,390

 

 

 

120,415

 

 

 

252,024

 

 

 

248,096

 

Occupancy, net

 

 

11,976

 

 

 

12,296

 

 

 

24,208

 

 

 

24,231

 

Equipment

 

 

18,315

 

 

 

19,196

 

 

 

36,479

 

 

 

38,811

 

Supplies and services

 

 

3,492

 

 

 

3,469

 

 

 

6,754

 

 

 

6,961

 

Marketing and business development

 

 

5,308

 

 

 

4,797

 

 

 

10,240

 

 

 

7,142

 

Processing fees

 

 

19,338

 

 

 

16,501

 

 

 

37,781

 

 

 

31,918

 

Legal and consulting

 

 

11,265

 

 

 

8,147

 

 

 

18,176

 

 

 

13,902

 

Bankcard

 

 

5,880

 

 

 

4,529

 

 

 

12,447

 

 

 

9,485

 

Amortization of other intangible assets

 

 

1,225

 

 

 

1,157

 

 

 

2,296

 

 

 

2,537

 

Regulatory fees

 

 

3,464

 

 

 

2,769

 

 

 

6,946

 

 

 

5,315

 

Other

 

 

12,474

 

 

 

8,062

 

 

 

21,554

 

 

 

13,886

 

Total noninterest expense

 

 

214,127

 

 

 

201,338

 

 

 

428,905

 

 

 

402,284

 

Income before income taxes

 

 

173,599

 

 

 

107,322

 

 

 

299,354

 

 

 

216,888

 

Income tax expense

 

 

36,043

 

 

 

19,910

 

 

 

55,835

 

 

 

36,833

 

NET INCOME

 

$

137,556

 

 

$

87,412

 

 

$

243,519

 

 

$

180,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income – basic

 

$

2.85

 

 

$

1.81

 

 

$

5.03

 

 

$

3.74

 

Net income – diluted

 

 

2.83

 

 

 

1.79

 

 

 

4.99

 

 

 

3.70

 

Dividends

 

 

0.37

 

 

 

0.32

 

 

 

0.74

 

 

 

0.64

 

Weighted average shares outstanding – basic

 

 

48,347,226

 

 

 

48,294,952

 

 

 

48,376,868

 

 

 

48,196,345

 

Weighted average shares outstanding – diluted

 

 

48,673,964

 

 

 

48,698,319

 

 

 

48,755,059

 

 

 

48,604,140

 

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2022

 

2021

 

2022

 

2021

Net income

 

$

137,556

 

 

$

87,412

 

 

$

243,519

 

 

$

180,055

 

Other comprehensive (loss) income, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

(308,352

)

 

 

76,335

 

 

 

(931,262

)

 

 

(122,703

)

Less: Reclassification adjustment for gains included in net income

 

 

 

 

 

(1,300

)

 

 

 

 

 

(4,020

)

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

 

 

12,539

 

 

 

 

 

 

13,121

 

 

 

 

Change in unrealized gains and losses on debt securities

 

 

(295,813

)

 

 

75,035

 

 

 

(918,141

)

 

 

(126,723

)

Unrealized gains and losses on derivative hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gains and losses on derivative hedges, net

 

 

4,437

 

 

 

(3,422

)

 

 

9,117

 

 

 

3,081

 

Less: Reclassification adjustment for gains included in net income

 

 

(1,090

)

 

 

(877

)

 

 

(1,941

)

 

 

(1,719

)

Change in unrealized gains and losses on derivative hedges

 

 

3,347

 

 

 

(4,299

)

 

 

7,176

 

 

 

1,362

 

Other comprehensive (loss) income, before tax

 

 

(292,466

)

 

 

70,736

 

 

 

(910,965

)

 

 

(125,361

)

Income tax benefit (expense)

 

 

70,791

 

 

 

(16,826

)

 

 

219,848

 

 

 

30,128

 

Other comprehensive (loss) income

 

 

(221,675

)

 

 

53,910

 

 

 

(691,117

)

 

 

(95,233

)

Comprehensive (loss) income

 

$

(84,119

)

 

$

141,322

 

 

$

(447,598

)

 

$

84,822

 

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)

 

 

 

 

 

 

 

 

180,055

 

 

 

(95,233

)

 

 

 

 

 

84,822

 

Dividends ($0.64 per share)

 

 

 

 

 

 

 

 

(31,167

)

 

 

 

 

 

 

 

 

(31,167

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,088

)

 

 

(4,088

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(4,122

)

 

 

 

 

 

 

 

 

4,817

 

 

 

695

 

Recognition of equity-based compensation

 

 

 

 

 

8,609

 

 

 

 

 

 

 

 

 

 

 

 

8,609

 

Sale of treasury stock

 

 

 

 

 

148

 

 

 

 

 

 

 

 

 

153

 

 

 

301

 

Exercise of stock options

 

 

 

 

 

3,054

 

 

 

 

 

 

 

 

 

11,070

 

 

 

14,124

 

Balance - June 30, 2021

 

$

55,057

 

 

$

1,098,139

 

 

$

2,040,134

 

 

$

223,107

 

 

$

(326,193

)

 

$

3,090,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2022

 

$

55,057

 

 

$

1,110,520

 

 

$

2,176,998

 

 

$

126,314

 

 

$

(323,465

)

 

$

3,145,424

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

243,519

 

 

 

(691,117

)

 

 

 

 

 

(447,598

)

Dividends ($0.74 per share)

 

 

 

 

 

 

 

 

(36,063

)

 

 

 

 

 

 

 

 

(36,063

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,806

)

 

 

(31,806

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(6,630

)

 

 

 

 

 

 

 

 

7,309

 

 

 

679

 

Recognition of equity-based compensation

 

 

 

 

 

11,223

 

 

 

 

 

 

 

 

 

 

 

 

11,223

 

Sale of treasury stock

 

 

 

 

 

174

 

 

 

 

 

 

 

 

 

111

 

 

 

285

 

Exercise of stock options

 

 

 

 

 

217

 

 

 

 

 

 

 

 

 

527

 

 

 

744

 

Balance - June 30, 2022

 

$

55,057

 

 

$

1,115,504

 

 

$

2,384,454

 

 

$

(564,803

)

 

$

(347,324

)

 

$

2,642,888

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

2022

 

2021

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

18,317,943

 

 

 

3.72

%

 

$

16,817,674

 

 

 

3.69

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

9,825,114

 

 

 

1.93

 

 

 

6,994,559

 

 

 

1.71

 

Tax-exempt

 

 

3,814,394

 

 

 

3.13

 

 

 

4,289,443

 

 

 

2.93

 

Total securities

 

 

13,639,508

 

 

 

2.27

 

 

 

11,284,002

 

 

 

2.17

 

Federal funds and resell agreements

 

 

1,100,918

 

 

 

1.27

 

 

 

1,110,433

 

 

 

0.92

 

Interest bearing due from banks

 

 

2,632,307

 

 

 

0.64

 

 

 

3,343,311

 

 

 

0.10

 

Trading securities

 

 

10,190

 

 

 

5.35

 

 

 

21,409

 

 

 

4.27

 

Total earning assets

 

 

35,700,866

 

 

 

2.86

 

 

 

32,576,829

 

 

 

2.70

 

Allowance for credit losses

 

 

(182,118

)

 

 

 

 

 

(199,379

)

 

 

 

Other assets

 

 

2,043,977

 

 

 

 

 

 

1,886,774

 

 

 

 

Total assets

 

$

37,562,725

 

 

 

 

 

$

34,264,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

17,379,810

 

 

 

0.36

%

 

$

17,080,970

 

 

 

0.15

%

Federal funds and repurchase agreements

 

 

2,658,219

 

 

 

0.75

 

 

 

2,744,516

 

 

 

0.26

 

Borrowed funds

 

 

272,254

 

 

 

4.92

 

 

 

270,305

 

 

 

4.76

 

Total interest-bearing liabilities

 

 

20,310,283

 

 

 

0.47

 

 

 

20,095,791

 

 

 

0.23

 

Noninterest-bearing demand deposits

 

 

14,209,159

 

 

 

 

 

 

10,701,656

 

 

 

 

Other liabilities

 

 

394,923

 

 

 

 

 

 

398,319

 

 

 

 

Shareholders' equity

 

 

2,648,360

 

 

 

 

 

 

3,068,458

 

 

 

 

Total liabilities and shareholders' equity

 

$

37,562,725

 

 

 

 

 

$

34,264,224

 

 

 

 

Net interest spread

 

 

 

 

 

2.39

%

 

 

 

 

 

2.47

%

Net interest margin

 

 

 

 

 

2.60

 

 

 

 

 

 

2.56

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2022

 

2021

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

17,842,153

 

 

 

3.61

%

 

$

16,533,463

 

 

 

3.72

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

9,644,345

 

 

 

1.90

 

 

 

6,698,020

 

 

 

1.71

 

Tax-exempt

 

 

3,926,444

 

 

 

3.08

 

 

 

4,295,317

 

 

 

2.95

 

Total securities

 

 

13,570,789

 

 

 

2.24

 

 

 

10,993,337

 

 

 

2.20

 

Federal funds and resell agreements

 

 

1,182,891

 

 

 

1.01

 

 

 

1,375,689

 

 

 

0.79

 

Interest bearing due from banks

 

 

3,965,267

 

 

 

0.34

 

 

 

3,079,684

 

 

 

0.10

 

Trading securities

 

 

15,484

 

 

 

4.70

 

 

 

19,485

 

 

 

4.28

 

Total earning assets

 

 

36,576,584

 

 

 

2.66

 

 

 

32,001,658

 

 

 

2.72

 

Allowance for credit losses

 

 

(190,123

)

 

 

 

 

 

(209,469

)

 

 

 

Other assets

 

 

1,966,176

 

 

 

 

 

 

1,862,036

 

 

 

 

Total assets

 

$

38,352,637

 

 

 

 

 

$

33,654,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

17,964,006

 

 

 

0.24

%

 

$

17,076,681

 

 

 

0.16

%

Federal funds and repurchase agreements

 

 

2,815,130

 

 

 

0.51

 

 

 

2,632,567

 

 

 

0.28

 

Borrowed funds

 

 

271,994

 

 

 

4.79

 

 

 

269,942

 

 

 

4.77

 

Total interest-bearing liabilities

 

 

21,051,130

 

 

 

0.34

 

 

 

19,979,190

 

 

 

0.24

 

Noninterest-bearing demand deposits

 

 

14,117,879

 

 

 

 

 

 

10,230,287

 

 

 

 

Other liabilities

 

 

393,732

 

 

 

 

 

 

414,535

 

 

 

 

Shareholders' equity

 

 

2,789,896

 

 

 

 

 

 

3,030,213

 

 

 

 

Total liabilities and shareholders' equity

 

$

38,352,637

 

 

 

 

 

$

33,654,225

 

 

 

 

Net interest spread

 

 

 

 

 

2.32

%

 

 

 

 

 

2.48

%

Net interest margin

 

 

 

 

 

2.47

 

 

 

 

 

 

2.57

 

Business Segment Information

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

149,094

 

 

$

34,981

 

 

$

40,716

 

 

$

224,791

 

Provision for credit losses

 

 

12,067

 

 

 

89

 

 

 

1,244

 

 

 

13,400

 

Noninterest income

 

 

56,894

 

 

 

81,082

 

 

 

38,359

 

 

 

176,335

 

Noninterest expense

 

 

79,521

 

 

 

76,511

 

 

 

58,095

 

 

 

214,127

 

Income before taxes

 

 

114,400

 

 

 

39,463

 

 

 

19,736

 

 

 

173,599

 

Income tax expense

 

 

23,752

 

 

 

8,193

 

 

 

4,098

 

 

 

36,043

 

Net income

 

$

90,648

 

 

$

31,270

 

 

$

15,638

 

 

$

137,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2021

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

142,878

 

 

$

21,258

 

 

$

36,935

 

 

$

201,071

 

Provision for credit losses

 

 

21,993

 

 

 

147

 

 

 

1,860

 

 

 

24,000

 

Noninterest income

 

 

37,106

 

 

 

68,745

 

 

 

25,738

 

 

 

131,589

 

Noninterest expense

 

 

73,472

 

 

 

72,575

 

 

 

55,291

 

 

 

201,338

 

Income before taxes

 

 

84,519

 

 

 

17,281

 

 

 

5,522

 

 

 

107,322

 

Income tax expense

 

 

15,679

 

 

 

3,206

 

 

 

1,025

 

 

 

19,910

 

Net income

 

$

68,840

 

 

$

14,075

 

 

$

4,497

 

 

$

87,412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2022

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

294,096

 

 

$

61,233

 

 

$

79,817

 

 

$

435,146

 

Provision for credit losses

 

 

5,027

 

 

 

240

 

 

 

1,633

 

 

 

6,900

 

Noninterest income

 

 

83,594

 

 

 

154,354

 

 

 

62,065

 

 

 

300,013

 

Noninterest expense

 

 

159,110

 

 

 

152,112

 

 

 

117,683

 

 

 

428,905

 

Income before taxes

 

 

213,553

 

 

 

63,235

 

 

 

22,566

 

 

 

299,354

 

Income tax expense

 

 

39,831

 

 

 

11,795

 

 

 

4,209

 

 

 

55,835

 

Net income

 

$

173,722

 

 

$

51,440

 

 

$

18,357

 

 

$

243,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

 

Commercial

Banking

 

Institutional

Banking

 

Personal

Banking

 

Total

Net interest income

 

$

279,287

 

 

$

43,397

 

 

$

72,502

 

 

$

395,186

 

Provision for credit losses

 

 

13,816

 

 

 

367

 

 

 

2,317

 

 

 

16,500

 

Noninterest income

 

 

45,281

 

 

 

137,166

 

 

 

58,039

 

 

 

240,486

 

Noninterest expense

 

 

143,196

 

 

 

143,857

 

 

 

115,231

 

 

 

402,284

 

Income before taxes

 

 

167,556

 

 

 

36,339

 

 

 

12,993

 

 

 

216,888

 

Income tax expense

 

 

28,455

 

 

 

6,171

 

 

 

2,207

 

 

 

36,833

 

Net income

 

$

139,101

 

 

$

30,168

 

 

$

10,786

 

 

$

180,055

 

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

June 30,

 

Six Months Ended

June 30,

 

 

2022

 

2021

 

2022

 

2021

Net income (GAAP)

 

$

137,556

 

 

$

87,412

 

 

$

243,519

 

 

$

180,055

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

52

 

 

 

103

 

 

 

197

 

 

 

124

 

COVID-19 related expense

 

 

 

 

 

182

 

 

 

 

 

 

337

 

Tax-impact of adjustments (i)

 

 

(12

)

 

 

(63

)

 

 

(47

)

 

 

(102

)

Total Non-GAAP adjustments (net of tax)

 

 

40

 

 

 

222

 

 

 

150

 

 

 

359

 

Net operating income (Non-GAAP)

 

$

137,596

 

 

$

87,634

 

 

$

243,669

 

 

$

180,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - diluted (GAAP)

 

$

2.83

 

 

$

1.79

 

 

$

4.99

 

 

$

3.70

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 related expense

 

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

Tax-impact of adjustments (i)

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings per share - diluted (Non-GAAP)

 

$

2.83

 

 

$

1.80

 

 

$

4.99

 

 

$

3.71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.47

%

 

 

1.02

%

 

 

1.28

%

 

 

1.08

%

Return on average equity

 

 

20.83

 

 

 

11.43

 

 

 

17.60

 

 

 

11.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.47

%

 

 

1.03

%

 

 

1.28

%

 

 

1.08

%

Operating return on average equity

 

 

20.84

 

 

 

11.46

 

 

 

17.61

 

 

 

12.01

 

(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

June 30,

 

Six Months Ended

June 30,

 

 

2022

 

2021

 

2022

 

2021

Noninterest expense

 

$

214,127

 

 

$

201,338

 

 

$

428,905

 

 

$

402,284

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

52

 

 

 

103

 

 

 

197

 

 

 

124

 

COVID-19 related expense

 

 

 

 

 

182

 

 

 

 

 

 

337

 

Total Non-GAAP adjustments (pre-tax)

 

 

52

 

 

 

285

 

 

 

197

 

 

 

461

 

Operating noninterest expense (Non-GAAP)

 

$

214,075

 

 

$

201,053

 

 

$

428,708

 

 

$

401,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

214,127

 

 

$

201,338

 

 

$

428,905

 

 

$

402,284

 

Less: Amortization of other intangibles

 

 

1,225

 

 

 

1,157

 

 

 

2,296

 

 

 

2,537

 

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

 

$

212,902

 

 

$

200,181

 

 

$

426,609

 

 

$

399,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

214,075

 

 

$

201,053

 

 

$

428,708

 

 

$

401,823

 

Less: Amortization of other intangibles

 

 

1,225

 

 

 

1,157

 

 

 

2,296

 

 

 

2,537

 

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

 

$

212,850

 

 

$

199,896

 

 

$

426,412

 

 

$

399,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

224,791

 

 

$

201,071

 

 

$

435,146

 

 

$

395,186

 

Noninterest income

 

 

176,335

 

 

 

131,589

 

 

 

300,013

 

 

 

240,486

 

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

 

 

 

 

 

1,300

 

 

 

 

 

 

4,020

 

Total Non-GAAP Revenue (denominator A)

 

$

401,126

 

 

$

331,360

 

 

$

735,159

 

 

$

631,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

53.08

%

 

 

60.41

%

 

 

58.03

%

 

 

63.29

%

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

 

 

53.06

 

 

 

60.33

 

 

 

58.00

 

 

 

63.21

 

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

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

Net interest income (GAAP)

 

$

224,791

 

 

$

210,355

 

 

$

201,071

 

 

$

435,146

 

 

$

395,186

 

Noninterest income (GAAP)

 

 

176,335

 

 

 

123,678

 

 

 

131,589

 

 

 

300,013

 

 

 

240,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

214,127

 

 

 

214,778

 

 

 

201,338

 

 

 

428,905

 

 

 

402,284

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

52

 

 

 

145

 

 

 

103

 

 

 

197

 

 

 

124

 

COVID-19 related expense

 

 

 

 

 

 

 

 

182

 

 

 

 

 

 

337

 

Total Non-GAAP adjustments

 

 

52

 

 

 

145

 

 

 

285

 

 

 

197

 

 

 

461

 

Operating noninterest expense (Non-GAAP)

 

 

214,075

 

 

 

214,633

 

 

 

201,053

 

 

 

428,708

 

 

 

401,823

 

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

 

$

187,051

 

 

$

119,400

 

 

$

131,607

 

 

$

306,451

 

 

$

233,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.62

 

 

$

4.31

 

 

$

4.13

 

 

$

8.93

 

 

$

8.13

 

Noninterest income (GAAP)

 

 

3.62

 

 

 

2.53

 

 

 

2.70

 

 

 

6.16

 

 

 

4.95

 

Noninterest expense (GAAP)

 

 

4.40

 

 

 

4.40

 

 

 

4.13

 

 

 

8.80

 

 

 

8.28

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 related expense

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

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

 

$

3.84

 

 

$

2.44

 

 

$

2.71

 

 

$

6.29

 

 

$

4.81

 

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

UMB Financial Corporation 

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

Net interest income (GAAP)

 

$

224,791

 

 

$

210,355

 

 

$

201,071

 

 

$

435,146

 

 

$

395,186

 

Adjustments to arrive at net interest income - FTE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent interest

 

 

6,278

 

 

 

6,399

 

 

 

6,629

 

 

 

12,677

 

 

 

13,307

 

Net interest income - FTE (Non-GAAP)

 

$

231,069

 

 

$

216,754

 

 

$

207,700

 

 

$

447,823

 

 

$

408,493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

 

176,335

 

 

 

123,678

 

 

 

131,589

 

 

 

300,013

 

 

 

240,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

 

214,127

 

 

 

214,778

 

 

 

201,338

 

 

 

428,905

 

 

 

402,284

 

Adjustments to arrive at operating noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

52

 

 

 

145

 

 

 

103

 

 

 

197

 

 

 

124

 

COVID-19 related expense

 

 

 

 

 

 

 

 

182

 

 

 

 

 

 

337

 

Total Non-GAAP adjustments

 

 

52

 

 

 

145

 

 

 

285

 

 

 

197

 

 

 

461

 

Operating noninterest expense (Non-GAAP)

 

 

214,075

 

 

 

214,633

 

 

 

201,053

 

 

 

428,708

 

 

 

401,823

 

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

 

$

193,329

 

 

$

125,799

 

 

$

138,236

 

 

$

319,128

 

 

$

247,156

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted (GAAP)

 

$

4.62

 

 

$

4.31

 

 

$

4.13

 

 

$

8.93

 

 

$

8.13

 

Tax equivalent interest

 

 

0.13

 

 

 

0.13

 

 

 

0.13

 

 

 

0.26

 

 

 

0.28

 

Net interest income - FTE (Non-GAAP)

 

 

4.75

 

 

 

4.44

 

 

 

4.26

 

 

 

9.19

 

 

 

8.41

 

Noninterest income (GAAP)

 

 

3.62

 

 

 

2.53

 

 

 

2.70

 

 

 

6.16

 

 

 

4.95

 

Noninterest expense (GAAP)

 

 

4.40

 

 

 

4.40

 

 

 

4.13

 

 

 

8.80

 

 

 

8.28

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 related expense

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

0.01

 

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

 

$

3.97

 

 

$

2.57

 

 

$

2.84

 

 

$

6.55

 

 

$

5.09

 

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

2022

 

2021

Total shareholders' equity (GAAP)

 

$

2,642,888

 

 

$

3,090,244

 

Less: Intangible assets

 

 

 

 

 

 

 

 

Goodwill

 

 

182,225

 

 

 

174,518

 

Other intangibles, net

 

 

14,465

 

 

 

16,636

 

Total intangibles, net

 

 

196,690

 

 

 

191,154

 

Total tangible shareholders' equity (Non-GAAP)

 

$

2,446,198

 

 

$

2,899,090

 

 

 

 

 

 

 

 

 

 

Total shares outstanding

 

 

48,305,286

 

 

 

48,346,371