UMB investment community call today, Monday,
April 29, at 7:30 a.m. (CT) / 8:30 a.m. (ET)
First Quarter 2024 Financial Highlights
- GAAP net income of $110.3 million, or $2.25 per diluted
share.
- Net operating income(i) of $120.7 million, or $2.47 per diluted
share.
- Average loans increased 4.2% on a linked-quarter, annualized
basis, to $23.4 billion.
- Average loans increased $2.1 billion, or 9.8%, as compared to
the first quarter of 2023.
- Average deposits increased 10.4% on a linked-quarter,
annualized basis, to $33.5 billion.
- Net interest income increased 3.9% from the linked
quarter.
- Net interest margin was 2.48%, an increase of two basis points
from the linked quarter.
- Noninterest income increased 22.3% from the first quarter of
2023, equal to 39.9% of total revenue.
- Credit quality remained strong, with net charge-offs of just
0.05% of average loans.
UMB Financial Corporation (Nasdaq: UMBF), a financial services
company, announced net income for the first quarter of 2024 of
$110.3 million, or $2.25 per diluted share, compared to $70.9
million, or $1.45 per diluted share, in the fourth quarter of 2023
(linked quarter) and $92.4 million, or $1.90 per diluted share, in
the first quarter of 2023. The results for the first quarter of
2024 and the fourth quarter of 2023 include pre-tax expense of
$13.0 million and $52.8 million, respectively, for the
industry-wide FDIC special assessment.
Net operating income, a non-GAAP financial measure reconciled
later in this release to net income, the nearest comparable GAAP
measure, was $120.7 million, or $2.47 per diluted share, for the
first quarter of 2024, compared to $112.0 million, or $2.29 per
diluted share, for the linked quarter and $92.8 million, or $1.91
per diluted share, for the first quarter of 2023. Operating
pre-tax, pre-provision income (operating PTPP), a non-GAAP measure
reconciled later in this release to the components of net income
before taxes, the nearest comparable GAAP measure, was $157.5
million, or $3.22 per diluted share, for the first quarter of 2024,
compared to $134.9 million, or $2.76 per diluted share, for the
linked quarter, and $135.4 million, or $2.78 per diluted share, for
the first quarter of 2023. These operating PTPP results represent
increases of 16.7% on a linked-quarter basis and 16.3% compared to
the first quarter of 2023.
“Our 2024 is off to a great start, with strong first quarter
financial results driven by balance sheet and net interest income
growth, net interest margin expansion, double-digit growth in our
fee income revenue, and stable credit metrics,” said Mariner
Kemper, UMB Financial Corporation chairman and chief executive
officer.
“Our performance validates the perspective I shared earlier this
year that the dramatized and highly exaggerated regional bank
crisis from a year ago—and similar frenzy over idiosyncratic
commercial real estate headlines earlier this year—do not apply to
the whole regional banking industry, which remains on strong
footing. As students of history, we believe in gravity and that
what goes up will eventually come down. We run the company based on
this expectation.
“While indications suggest the economy is on reasonably stable
footing, persistently high inflation, an upcoming presidential
election cycle, and a potential 'No Landing' scenario may dictate a
constrictive Federal Reserve monetary policy that could pose
economic challenges.
“In the first quarter of 2024, average loans increased 9.8% to
$23.4 billion, while average deposits increased $2.0 billion or
6.2%, from one year ago. Our financial metrics demonstrate our
borrowers and depository clients remain cautiously optimistic and
selective with their investments. The overall loan portfolio
remains healthy as exemplified by net charge-offs averaging less
than 10 basis points in each of the past seven quarters, and
non-performing loans at a meager eight basis points of total loans.
Also of note for the quarter is that we closed on the purchase of a
co-branded credit card portfolio partnership with Rural King, a
preeminent, family-owned general merchandise store with more than
130 locations in a 13-state footprint.”
(i) A non-GAAP financial measure reconciled later in this
release to net income, the nearest comparable GAAP measure.
First Quarter 2024 earnings discussion
Summary of quarterly financial
results
UMB Financial
Corporation
(unaudited, dollars in thousands, except
per share data)
Q1
Q4
Q1
2024
2023
2023
Net income (GAAP)
$
110,258
$
70,923
$
92,437
Earnings per share - diluted (GAAP)
2.25
1.45
1.90
Operating pre-tax, pre-provision income
(Non-GAAP)(i)
157,451
134,901
135,369
Operating pre-tax, pre-provision earnings
per share - diluted (Non-GAAP)(i)
3.22
2.76
2.78
Operating pre-tax, pre-provision income -
FTE (Non-GAAP)(i)
163,967
141,571
141,924
Operating pre-tax, pre-provision earnings
per share - FTE - diluted (Non-GAAP)(i)
3.35
2.90
2.91
Net operating income (Non-GAAP)(i)
120,712
112,038
92,836
Operating earnings per share - diluted
(Non-GAAP)(i)
2.47
2.29
1.91
GAAP
Return on average assets
1.06
%
0.69
%
0.97
%
Return on average equity
14.11
9.52
13.76
Efficiency ratio
63.44
77.65
63.12
Non-GAAP(i)
Operating return on average assets
1.16
%
1.10
%
0.98
%
Operating return on average equity
15.44
15.04
13.82
Operating efficiency ratio
60.04
63.06
62.98
(i) See reconciliation of Non-GAAP
measures to their nearest comparable GAAP measures later in this
release.
Summary of revenue
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2024
2023
2023
LQ
PY
Net interest income
$
239,434
$
230,522
$
241,696
$
8,912
$
(2,262
)
Noninterest income:
Trust and securities processing
69,478
66,584
62,359
2,894
7,119
Trading and investment banking
5,462
5,751
5,308
(289
)
154
Service charges on deposit accounts
20,757
21,330
21,159
(573
)
(402
)
Insurance fees and commissions
283
238
274
45
9
Brokerage fees
13,160
13,439
13,676
(279
)
(516
)
Bankcard fees
21,968
18,672
18,172
3,296
3,796
Investment securities gains (losses),
net
9,371
1,014
(5,324
)
8,357
14,695
Other
18,765
13,226
14,576
5,539
4,189
Total noninterest income
$
159,244
$
140,254
$
130,200
$
18,990
$
29,044
Total revenue
$
398,678
$
370,776
$
371,896
$
27,902
$
26,782
Net interest income (FTE)
$
245,950
$
237,192
$
248,251
Net interest margin (FTE)
2.48
%
2.46
%
2.76
%
Total noninterest income as a % of total
revenue
39.9
37.8
35.0
Net interest income
- First quarter 2024 net interest income totaled $239.4 million,
an increase of $8.9 million, or 3.9%, from the linked quarter,
driven primarily by continued growth in average loans and higher
levels of liquidity, $1.4 million in municipal bond hedge gain
amortization, partially offset by higher interest expense.
- Average earning assets increased $1.6 billion, or 4.1%, from
the linked quarter, largely driven by an increase of $931.4 million
in interest-bearing due from banks, an increase of $428.4 million
in average securities, and an increase of $245.0 million in average
loans.
- Average interest-bearing liabilities increased $1.3 billion, or
4.9%, from the linked quarter, primarily driven by increases of
$903.2 million in interest-bearing deposits and $501.4 million in
federal funds and repurchase agreements, partially offset by a
decrease of $102.8 million in borrowed funds. Average
noninterest-bearing demand deposits decreased $52.3 million, or
0.5%, as compared to the linked quarter.
- Net interest margin for the first quarter was 2.48%, an
increase of two basis points from the linked quarter, driven by
increased loan yields, the benefit of free funds, favorable impact
of bond hedge gain amortization, and earning asset mix changes,
partially offset by the increased cost of interest-bearing
liabilities. The cost of interest-bearing liabilities increased
eight basis points to 4.03%. Total cost of funds increased nine
basis points from the linked quarter to 2.96%. Both average loan
yields and earning asset yields increased 10 basis points from the
linked quarter.
- On a year-over-year basis, net interest income decreased $2.3
million, or 0.9%, driven by higher interest expense, primarily due
to an unfavorable mix shift in the composition of liabilities and
new deposit client acquisitions at prevailing market rates. This
decrease was partially offset by a $2.1 billion, or 9.8%, increase
in average loans as well as the benefit from higher short-term
interest rates on loan pricing and yields.
- Compared to the first quarter of 2023, average earning assets
increased $3.4 billion, or 9.4%, largely driven by the increase in
average loans noted above and an increase of $1.8 billion in
interest-bearing due from banks, partially offset by a decrease of
$244.7 million in federal funds sold and resell agreements.
- Average deposits increased 6.2% compared to the first quarter
of 2023. Average noninterest-bearing demand deposit balances
decreased 15.5% compared to the first quarter of 2023, driven by
migration to rate-bearing deposit categories, as expected in a
higher interest rate environment. Average demand deposit balances
comprised 30.0% of total deposits, compared to 31.0% in the linked
quarter and 37.8% in the first quarter of 2023.
- Average borrowed funds decreased $102.8 million as compared to
the linked quarter and increased $983.1 million as compared to the
first quarter of 2023, driven by short-term borrowings with the
Federal Home Loan Bank and the Federal Reserve.
Noninterest income
- First quarter 2024 noninterest income increased $19.0 million,
or 13.5%, on a linked-quarter basis, largely due to:
- $8.4 million in higher investment securities gains, primarily
driven by a net $8.6 million gain on disposition of two of the
company's non-marketable securities. The company recognized a gain
of $10.7 million and a loss of $2.1 million, respectively, on these
two securities.
- An increase of $5.8 million in other miscellaneous income,
recorded in other income, related to a $4.0 million legal
settlement and a $1.8 million gain on sale of land, both recorded
during the first quarter of 2024.
- An increase of $3.3 million in bankcard income primarily driven
by higher interchange revenue and lower rebates and rewards expense
as compared to the linked quarter.
- Increases of $1.1 million in trust income, $1.0 million in fund
services income, and $0.8 million in corporate trust income, all
recorded in trust and securities processing.
- These increases were partially offset by decreases of $0.8
million in derivative income, recorded in other income, and $0.6
million in service charges on deposits.
- Compared to the prior year, noninterest income in the first
quarter of 2024 increased $29.0 million, or 22.3%, primarily driven
by:
- An increase of $14.7 million in investment securities gains,
primarily driven by a $10.7 million gain on disposition of one of
the company's non-marketable securities during the first quarter of
2024, coupled with the impairment loss on an available-for-sale
subordinated debt security recorded in the prior year.
- An increase of $5.7 million in other miscellaneous income,
recorded in other income, related to a $4.0 million legal
settlement and a $1.8 million gain on sale of land, both recorded
during the first quarter of 2024.
- Increases of $5.0 million in fund services income, $1.1 million
in trust income, and $1.0 million in corporate trust income, all
recorded in trust and securities processing.
- An increase of $3.8 million in bankcard income primarily driven
by higher interchange revenue and lower rebates and rewards expense
as compared to the prior year.
- These increases were partially offset by a decrease of $2.4
million in derivative income, recorded in other income.
Noninterest expense
Summary of noninterest expense
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2024
2023
2023
LQ
PY
Salaries and employee benefits
$
143,006
$
134,231
$
142,498
$
8,775
$
508
Occupancy, net
12,270
12,296
12,177
(26
)
93
Equipment
16,503
16,579
17,849
(76
)
(1,346
)
Supplies and services
3,301
5,546
3,875
(2,245
)
(574
)
Marketing and business development
6,025
6,659
5,335
(634
)
690
Processing fees
27,936
27,271
23,240
665
4,696
Legal and consulting
7,894
8,424
7,285
(530
)
609
Bankcard
10,567
8,677
7,133
1,890
3,434
Amortization of other intangible
assets
1,960
2,048
2,298
(88
)
(338
)
Regulatory fees
19,395
59,183
5,551
(39,788
)
13,844
Other
5,947
9,060
9,811
(3,113
)
(3,864
)
Total noninterest expense
$
254,804
$
289,974
$
237,052
$
(35,170
)
$
17,752
- GAAP noninterest expense for the first quarter of 2024 was
$254.8 million, a decrease of $35.2 million, or 12.1%, from the
linked quarter and an increase of $17.8 million, or 7.5% from the
first quarter of 2023. Operating noninterest expense, a non-GAAP
financial measure reconciled later in this release to noninterest
expense, the nearest comparable GAAP measure, was $241.2 million
for the first quarter of 2024, an increase of $5.4 million, or
2.3%, from the linked quarter and an increase of $4.7 million, or
2.0%, from the first quarter of 2023.
- The linked-quarter decrease in GAAP noninterest expense was
driven by:
- A decrease of $39.8 million in regulatory fees expense, driven
by the lower FDIC special assessment levied on banks to recoup the
losses related to two of the bank failures in March 2023. The
results for the first quarter of 2024 and the fourth quarter of
2023 include pre-tax expense of $13.0 million and $52.8 million,
respectively, for the industry-wide FDIC special assessment.
- A decrease of $2.2 million in supplies driven by purchases of
computers during the linked quarter.
- Decreases of $1.5 million in operational losses and $1.3
million in charitable contribution expense, both recorded in other
expense.
- These decreases were partially offset by a seasonal increase of
$9.1 million in payroll taxes, insurance, and 401(k) expense
recognized in the first quarter.
- The year-over-year increase in GAAP noninterest expense was
driven by:
- An increase of $13.8 million in regulatory fees, primarily
driven by the aforementioned $13.0 million FDIC special assessment
recorded in the first quarter of 2024.
- An increase of $4.7 million in processing fees expense due to
the ongoing modernization of the company’s core systems and the
timing of multiple software projects.
- An increase of $3.4 million in bankcard expense driven by
higher administrative expenses and fraud losses.
- These increases were partially offset by decreases of $3.5
million in operational losses, recorded in other expense, and $1.3
million in equipment expense, driven by reduced software
expense.
Income taxes
- The company’s effective tax rate was 17.6% for the three months
ended March 31, 2024, compared to 17.2% for the same period in
2023.
Balance sheet
- Average total assets for the first quarter of 2024 were $42.0
billion compared to $40.5 billion for the linked quarter and $38.5
billion for the same period in 2023.
Summary of average loans and leases -
QTD Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2024
2023
2023
LQ
PY
Commercial and industrial
$
9,942,457
$
9,825,043
$
9,287,319
$
117,414
$
655,138
Specialty lending
485,989
496,816
564,633
(10,827
)
(78,644
)
Commercial real estate
9,026,511
8,890,057
7,812,140
136,454
1,214,371
Consumer real estate
2,968,320
2,945,114
2,738,184
23,206
230,136
Consumer
154,062
153,791
136,571
271
17,491
Credit cards
489,546
495,502
453,704
(5,956
)
35,842
Leases and other
287,158
302,740
279,049
(15,582
)
8,109
Total loans
$
23,354,043
$
23,109,063
$
21,271,600
$
244,980
$
2,082,443
- Average loans for the first quarter of 2024 increased $245.0
million, or 1.1%, on a linked-quarter basis and $2.1 billion, or
9.8%, compared to the first quarter of 2023.
Summary of average securities - QTD
Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2024
2023
2023
LQ
PY
Securities available for sale:
U.S. Treasury
$
1,127,611
$
859,114
$
783,170
$
268,497
$
344,441
U.S. Agencies
199,719
169,723
171,825
29,996
27,894
Mortgage-backed
3,595,619
3,466,152
3,938,137
129,467
(342,518
)
State and political subdivisions
1,254,148
1,218,176
1,356,785
35,972
(102,637
)
Corporates
341,142
345,634
364,854
(4,492
)
(23,712
)
Collateralized loan obligations
347,063
349,149
348,477
(2,086
)
(1,414
)
Total securities available for sale
$
6,865,302
$
6,407,948
$
6,963,248
$
457,354
$
(97,946
)
Securities held to maturity:
U.S. Agencies
$
123,225
$
123,195
$
123,106
$
30
$
119
Mortgage-backed
2,707,780
2,756,528
2,934,113
(48,748
)
(226,333
)
State and political subdivisions
2,821,799
2,825,138
2,814,912
(3,339
)
6,887
Total securities held to maturity
$
5,652,804
$
5,704,861
$
5,872,131
$
(52,057
)
$
(219,327
)
Trading securities
$
17,893
$
16,880
$
9,258
$
1,013
$
8,635
Other securities
478,805
456,758
359,238
22,047
119,567
Total securities
$
13,014,804
$
12,586,447
$
13,203,875
$
428,357
$
(189,071
)
- Average total securities increased 3.4% on a linked-quarter
basis and decreased 1.4% compared to the first quarter of
2023.
- At March 31, 2024, the unrealized pre-tax net loss on the
available-for-sale securities portfolio was $665.9 million, or 9.2%
of the $7.2 billion amortized cost balance. At March 31, 2024, the
unrealized pre-tax net loss on the securities designated as held to
maturity was $601.3 million, or 10.7% of the $5.6 billion amortized
cost value.
Summary of average deposits - QTD
Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2024
2023
2023
LQ
PY
Deposits:
Noninterest-bearing demand
$
10,066,409
$
10,118,748
$
11,919,277
$
(52,339
)
$
(1,852,868
)
Interest-bearing demand and savings
20,701,659
19,457,878
18,427,662
1,243,781
2,273,997
Time deposits
2,758,064
3,098,636
1,215,506
(340,572
)
1,542,558
Total deposits
$
33,526,132
$
32,675,262
$
31,562,445
$
850,870
$
1,963,687
Noninterest bearing deposits as % of
total
30.0
%
31.0
%
37.8
%
- Average deposits increased 2.6% on a linked-quarter basis and
6.2% compared to the first quarter of 2023.
- As of March 31, 2024, total estimated uninsured deposits were
$25.3 billion, or approximately 68.4% of total deposits. Estimated
uninsured deposits, when adjusted to exclude affiliate
(company-owned) and collateralized deposits, were $17.9 billion,
and represented approximately 48.6% of total deposits. During the
quarter, estimated adjusted uninsured deposits averaged $14.4
billion, or approximately 43.0% of total average deposits.
Capital
Capital information
UMB Financial
Corporation
(unaudited, dollars in thousands, except
per share data)
March 31, 2024
December 31, 2023
March 31, 2023
Total equity
$
3,152,816
$
3,100,419
$
2,814,659
Accumulated other comprehensive loss,
net
(594,538
)
(556,935
)
(626,776
)
Book value per common share
64.68
63.85
58.03
Tangible book value per common share
(Non-GAAP)(i)
59.01
58.12
52.17
Regulatory capital:
Common equity Tier 1 capital
$
3,503,837
$
3,418,676
$
3,196,111
Tier 1 capital
3,503,837
3,418,676
3,196,111
Total capital
4,115,097
4,014,910
3,776,407
Regulatory capital ratios:
Common equity Tier 1 capital ratio
11.09
%
10.94
%
10.57
%
Tier 1 risk-based capital ratio
11.09
10.94
10.57
Total risk-based capital ratio
13.03
12.85
12.49
Tier 1 leverage ratio
8.39
8.49
8.35
(i) See reconciliation of Non-GAAP
measures to their nearest comparable GAAP measures later in this
release.
- At March 31, 2024, the regulatory capital ratios presented in
the foregoing table exceeded all “well-capitalized” regulatory
thresholds.
Asset Quality
Credit quality
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q3
Q2
Q1
2024
2023
2023
2023
2023
Net charge-offs (recoveries) - total
loans
$
3,017
$
1,352
$
4,618
$
(139
)
$
4,643
Net loan charge-offs (recoveries) as a %
of total average loans
0.05
%
0.02
%
0.08
%
(0.00
)%
0.09
%
Loans over 90 days past due
$
3,076
$
3,111
$
3,044
$
10,675
$
1,723
Loans over 90 days past due as a % of
total loans
0.01
%
0.01
%
0.01
%
0.05
%
0.01
%
Nonaccrual and restructured loans
$
17,756
$
13,212
$
17,042
$
19,347
$
15,480
Nonaccrual and restructured loans as a %
of total loans
0.08
%
0.06
%
0.07
%
0.09
%
0.07
%
Provision for credit losses
$
10,000
$
—
$
4,977
$
13,000
$
23,250
- Provision for credit losses for the first quarter increased
$10.0 million from the linked quarter and decreased $13.3 million
from the first quarter of 2023. This quarter's provision included
approximately $6.7 million related to the purchase of $109.4
million in co-branded credit card receivables. Excluding this, the
variances in provision expense were driven largely by changes in
macro-economic variables and credit metrics in the current period
as compared to the prior periods.
- Net charge-offs for the first quarter totaled $3.0 million, or
0.05% of average loans, compared to $1.4 million, or 0.02% of
average loans in the linked quarter, and $4.6 million, or 0.09% of
average loans for the first quarter of 2023.
Dividend Declaration and Share
Repurchase Authorization
At the company’s quarterly board meeting, the Board of Directors
declared a $0.39 per share quarterly cash dividend, payable on July
1, 2024, to shareholders of record at the close of business on June
10, 2024.
The Board also approved the repurchase of up to 1,000,000 shares
of the company's common stock. Share repurchases may occur from
time to time at any point until the regular meeting of the Board
that immediately follows the 2025 annual meeting of the company’s
shareholders. Shares acquired under the repurchase program may be
available for reissuance or resale, including in connection with
the company's compensation plans and dividend reinvestment plan.
Under the repurchase program, the company may acquire the shares
from time to time in open market or privately negotiated
transactions, at the discretion of management.
Conference Call
The company will host a call for the investment community on
Monday, April 29, 2024, at 7:30 a.m. (CT). This call has been
rescheduled from the previously announced date and time.
Interested parties may access the call by dialing (toll-free)
833-470-1428 or (international) 404-975-4839 and requesting to join
the UMB Financial call with access code 397231. The live call may
also be accessed by visiting investorrelations.umb.com or by using
the following link:
UMB Financial Conference Call
A replay of the conference call may be heard through May 13,
2024, by calling (toll-free) 866-813-9403 or (international)
929-458-6194. The replay access code required for playback is
182605. The call replay may also be accessed at
investorrelations.umb.com.
Non-GAAP Financial
Information
In this release, we provide information about net operating
income, operating earnings per share – diluted (operating EPS),
operating return on average equity (operating ROE), operating
return on average assets (operating ROA), operating noninterest
expense, operating efficiency ratio, operating pre-tax,
pre-provision income (operating PTPP), operating pre-tax,
pre-provision earnings per share – diluted (operating PTPP EPS),
operating pre-tax, pre-provision income on a fully tax equivalent
basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE
earnings per share – diluted (operating PTPP-FTE EPS), tangible
shareholders’ equity, and tangible book value per share, all of
which are non-GAAP financial measures. This information supplements
the results that are reported according to generally accepted
accounting principles in the United States (GAAP) and should not be
viewed in isolation from, or as a substitute for, GAAP results. The
differences between the non-GAAP financial measures – net operating
income, operating EPS, operating ROE, operating ROA, operating
noninterest expense, operating efficiency ratio, operating PTPP,
operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS,
tangible shareholders’ equity, and tangible book value per share –
and the nearest comparable GAAP financial measures are reconciled
later in this release. The company believes that these non-GAAP
financial measures and the reconciliations may be useful to
investors because they adjust for acquisition- and
severance-related items, and the FDIC special assessment that
management does not believe reflect the company’s fundamental
operating performance.
Net operating income for the relevant period is defined as GAAP
net income, adjusted to reflect the impact of excluding expenses
related to acquisitions, severance expense, the FDIC special
assessment, and the cumulative tax impact of these adjustments.
Operating EPS (diluted) is calculated as earnings per share as
reported, adjusted to reflect, on a per share basis, the impact of
excluding the non-GAAP adjustments described above for the relevant
period. Operating ROE is calculated as net operating income,
divided by the company’s average total shareholders’ equity for the
relevant period. Operating ROA is calculated as net operating
income, divided by the company’s average assets for the relevant
period. Operating noninterest expense for the relevant period is
defined as GAAP noninterest expense, adjusted to reflect the
pre-tax impact of non-GAAP adjustments described above. Operating
efficiency ratio is calculated as the company’s operating
noninterest expense, net of amortization of other intangibles,
divided by the company’s total non-GAAP revenue (calculated as net
interest income plus noninterest income, less gains on sales of
securities available for sale, net).
Operating PTPP income for the relevant period is defined as GAAP
net interest income plus GAAP noninterest income, less noninterest
expense, adjusted to reflect the impact of excluding expenses
related to acquisitions and severance, and the FDIC special
assessment.
Operating PTPP-FTE for the relevant period is defined as GAAP
net interest income on a fully tax equivalent basis plus GAAP
noninterest income, less noninterest expense, adjusted to reflect
the impact of excluding expenses related to acquisitions and
severance, and the FDIC special assessment.
Tangible shareholders’ equity for the relevant period is defined
as GAAP shareholders’ equity, net of intangible assets. Tangible
book value per share is defined as tangible shareholders’ equity
divided by the Company’s total shares outstanding.
Forward-Looking
Statements:
This press release contains, and our other communications may
contain, forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
can be identified by the fact that they do not relate strictly to
historical or current facts. Forward-looking statements often use
words such as “believe,” “expect,” “anticipate,” “intend,”
“estimate,” “project,” “outlook,” “forecast,” “target,” “trend,”
“plan,” “goal,” or other words of comparable meaning or
future-tense or conditional verbs such as “may,” “will,” “should,”
“would,” or “could.” Forward-looking statements convey our
expectations, intentions, or forecasts about future events,
circumstances, results, or aspirations. All forward-looking
statements are subject to assumptions, risks, and uncertainties,
which may change over time and many of which are beyond our
control. You should not rely on any forward-looking statement as a
prediction or guarantee about the future. Our actual future
objectives, strategies, plans, prospects, performance, condition,
or results may differ materially from those set forth in any
forward-looking statement. Some of the factors that may cause
actual results or other future events, circumstances, or
aspirations to differ from those in forward-looking statements are
described in our Annual Report on Form 10-K for the year ended
December 31, 2023, our subsequent Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K, or other applicable documents that are
filed or furnished with the U.S. Securities and Exchange Commission
(SEC). In addition to such factors that have been disclosed
previously: macroeconomic and adverse developments and
uncertainties related to the collateral effects of the collapse of,
and challenges for, domestic and international banks, including the
impacts to the U.S. and global economies; sustained levels of high
inflation and the potential for an economic recession on the heels
of aggressive quantitative tightening by the Federal Reserve; and
impacts related to or resulting from instability in the Middle East
and Russia’s military action in Ukraine, such as the broader
impacts to financial markets and the global macroeconomic and
geopolitical environments, may also cause actual results or other
future events, circumstances, or aspirations to differ from our
forward-looking statements. Any forward-looking statement made by
us or on our behalf speaks only as of the date that it was made. We
do not undertake to update any forward-looking statement to reflect
the impact of events, circumstances, or results that arise after
the date that the statement was made, except to the extent required
by applicable securities laws. You, however, should consult further
disclosures (including disclosures of a forward-looking nature)
that we may make in any subsequent Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other
applicable document that is filed or furnished with the SEC.
About UMB:
UMB Financial Corporation (Nasdaq: UMBF) is a financial services
company headquartered in Kansas City, Missouri. UMB offers
commercial banking, which includes comprehensive deposit, lending
and investment services, personal banking, which includes wealth
management and financial planning services, and institutional
banking, which includes asset servicing, corporate trust solutions,
investment banking, and healthcare services. UMB operates branches
throughout Missouri, Illinois, Colorado, Kansas, Oklahoma,
Nebraska, Arizona and Texas. As the company’s reach continues to
grow, it also serves business clients nationwide and institutional
clients in several countries. For more information, visit UMB.com,
UMB Blog, UMB Facebook and UMB
LinkedIn.
Consolidated Balance Sheets
UMB Financial
Corporation
(unaudited, dollars in thousands)
March 31,
2024
2023
ASSETS
Loans
$
23,637,649
$
21,812,972
Allowance for credit losses on loans
(226,159
)
(210,509
)
Net loans
23,411,490
21,602,463
Loans held for sale
4,415
1,422
Securities:
Available for sale
6,541,391
6,907,897
Held to maturity, net of allowance for
credit losses
5,622,617
5,859,323
Trading securities
40,187
19,823
Other securities
473,434
416,337
Total securities
12,677,629
13,203,380
Federal funds sold and resell
agreements
180,275
368,158
Interest-bearing due from banks
6,673,104
3,121,323
Cash and due from banks
356,963
472,248
Premises and equipment, net
231,918
260,623
Accrued income
221,447
181,586
Goodwill
207,385
207,385
Other intangibles, net
69,052
76,426
Other assets
1,309,697
1,112,176
Total assets
$
45,343,375
$
40,607,190
LIABILITIES
Deposits:
Noninterest-bearing demand
$
13,251,090
$
12,488,803
Interest-bearing demand and savings
21,018,911
16,760,603
Time deposits under $250,000
2,044,280
456,129
Time deposits of $250,000 or more
599,329
2,226,369
Total deposits
36,913,610
31,931,904
Federal funds purchased and repurchase
agreements
2,225,474
2,160,808
Short-term debt
1,800,000
2,800,000
Long-term debt
383,742
381,796
Accrued expenses and taxes
374,888
207,633
Other liabilities
492,845
310,390
Total liabilities
42,190,559
37,792,531
SHAREHOLDERS' EQUITY
Common stock
55,057
55,057
Capital surplus
1,127,806
1,120,877
Retained earnings
2,903,106
2,609,928
Accumulated other comprehensive loss,
net
(594,538
)
(626,776
)
Treasury stock
(338,615
)
(344,427
)
Total shareholders' equity
3,152,816
2,814,659
Total liabilities and shareholders'
equity
$
45,343,375
$
40,607,190
Consolidated Statements of
Income
UMB Financial
Corporation
(unaudited, dollars in thousands except
share and per share data)
Three Months Ended
March 31,
2024
2023
INTEREST INCOME
Loans
$
385,566
$
308,441
Securities:
Taxable interest
61,111
53,049
Tax-exempt interest
25,333
25,306
Total securities income
86,444
78,355
Federal funds and resell agreements
3,062
5,651
Interest-bearing due from banks
44,688
16,166
Trading securities
305
134
Total interest income
520,065
408,747
INTEREST EXPENSE
Deposits
223,875
127,899
Federal funds and repurchase
agreements
27,662
23,302
Other
29,094
15,850
Total interest expense
280,631
167,051
Net interest income
239,434
241,696
Provision for credit losses
10,000
23,250
Net interest income after provision for
credit losses
229,434
218,446
NONINTEREST INCOME
Trust and securities processing
69,478
62,359
Trading and investment banking
5,462
5,308
Service charges on deposit accounts
20,757
21,159
Insurance fees and commissions
283
274
Brokerage fees
13,160
13,676
Bankcard fees
21,968
18,172
Investment securities gains (losses),
net
9,371
(5,324
)
Other
18,765
14,576
Total noninterest income
159,244
130,200
NONINTEREST EXPENSE
Salaries and employee benefits
143,006
142,498
Occupancy, net
12,270
12,177
Equipment
16,503
17,849
Supplies and services
3,301
3,875
Marketing and business development
6,025
5,335
Processing fees
27,936
23,240
Legal and consulting
7,894
7,285
Bankcard
10,567
7,133
Amortization of other intangible
assets
1,960
2,298
Regulatory fees
19,395
5,551
Other
5,947
9,811
Total noninterest expense
254,804
237,052
Income before income taxes
133,874
111,594
Income tax expense
23,616
19,157
NET INCOME
$
110,258
$
92,437
PER SHARE DATA
Net income – basic
$
2.27
$
1.91
Net income – diluted
2.25
1.90
Dividends
0.39
0.38
Weighted average shares outstanding –
basic
48,663,515
48,435,016
Weighted average shares outstanding –
diluted
48,920,863
48,746,562
Consolidated Statements of
Comprehensive Income
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended
March 31,
2024
2023
Net income
$
110,258
$
92,437
Other comprehensive (loss) income, before
tax:
Unrealized gains and losses on debt
securities:
Change in unrealized holding gains and
losses, net
(41,553
)
93,657
Less: Reclassification adjustment for net
(gains) losses included in net income
(139
)
433
Amortization of net unrealized loss on
securities transferred from available-for-sale to
held-to-maturity
8,789
9,983
Change in unrealized gains and losses on
debt securities
(32,903
)
104,073
Unrealized gains and losses on derivative
hedges:
Change in unrealized gains and losses on
derivative hedges, net
(13,658
)
(1,527
)
Less: Reclassification adjustment for net
gains included in net income
(3,660
)
(2,561
)
Change in unrealized gains and losses on
derivative hedges
(17,318
)
(4,088
)
Other comprehensive (loss) income, before
tax
(50,221
)
99,985
Income tax benefit (expense)
12,618
(24,026
)
Other comprehensive (loss) income
(37,603
)
75,959
Comprehensive income
$
72,655
$
168,396
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 (Loss) Income
Treasury Stock
Total
Balance - January 1, 2023
$
55,057
$
1,125,949
$
2,536,086
$
(702,735
)
$
(347,264
)
$
2,667,093
Total comprehensive income
—
—
92,437
75,959
—
168,396
Dividends ($0.38 per share)
—
—
(18,595
)
—
—
(18,595
)
Purchase of treasury stock
—
—
—
—
(7,902
)
(7,902
)
Issuances of equity awards, net of
forfeitures
—
(9,764
)
—
—
10,483
719
Recognition of equity-based
compensation
—
4,516
—
—
—
4,516
Sale of treasury stock
—
71
—
—
56
127
Exercise of stock options
—
105
—
—
200
305
Balance - March 31, 2023
$
55,057
$
1,120,877
$
2,609,928
$
(626,776
)
$
(344,427
)
$
2,814,659
Balance - January 1, 2024
$
55,057
$
1,134,363
$
2,810,824
$
(556,935
)
$
(342,890
)
$
3,100,419
Total comprehensive income (loss)
—
—
110,258
(37,603
)
—
72,655
Dividends ($0.39 per share)
—
—
(17,976
)
—
—
(17,976
)
Purchase of treasury stock
—
—
—
—
(7,537
)
(7,537
)
Issuances of equity awards, net of
forfeitures
—
(10,964
)
—
—
11,667
703
Recognition of equity-based
compensation
—
4,271
—
—
—
4,271
Sale of treasury stock
—
70
—
—
60
130
Exercise of stock options
—
66
—
—
85
151
Balance - March 31, 2024
$
55,057
$
1,127,806
$
2,903,106
$
(594,538
)
$
(338,615
)
$
3,152,816
Average Balances / Yields and
Rates
UMB Financial
Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
Three Months Ended March
31,
2024
2023
Average
Average
Average
Average
Balance
Yield/Rate
Balance
Yield/Rate
Assets
Loans, net of unearned interest
$
23,354,043
6.64
%
$
21,271,600
5.88
%
Securities:
Taxable
9,264,789
2.65
9,349,351
2.30
Tax-exempt
3,732,122
3.42
3,845,266
3.35
Total securities
12,996,911
2.87
13,194,617
2.61
Federal funds and resell agreements
206,443
5.97
451,188
5.08
Interest bearing due from banks
3,304,142
5.44
1,533,704
4.27
Trading securities
17,893
7.33
9,258
6.31
Total earning assets
39,879,432
5.31
36,460,367
4.62
Allowance for credit losses
(222,116
)
(196,128
)
Other assets
2,360,092
2,239,140
Total assets
$
42,017,408
$
38,503,379
Liabilities and Shareholders'
Equity
Interest-bearing deposits
$
23,459,723
3.84
%
$
19,643,168
2.64
%
Federal funds and repurchase
agreements
2,384,754
4.67
2,461,942
3.84
Borrowed funds
2,183,494
5.36
1,200,346
5.36
Total interest-bearing liabilities
28,027,971
4.03
23,305,456
2.91
Noninterest-bearing demand deposits
10,066,409
11,919,277
Other liabilities
779,510
554,211
Shareholders' equity
3,143,518
2,724,435
Total liabilities and shareholders'
equity
$
42,017,408
$
38,503,379
Net interest spread
1.28
%
1.71
%
Net interest margin
2.48
2.76
Business Segment Information
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended March 31,
2024
Commercial Banking
Institutional Banking
Personal Banking
Total
Net interest income
$
157,247
$
49,860
$
32,327
$
239,434
Provision for credit losses
7,520
479
2,001
10,000
Noninterest income
42,966
92,716
23,562
159,244
Noninterest expense
92,420
100,376
62,008
254,804
Income (loss) before taxes
100,273
41,721
(8,120
)
133,874
Income tax expense (benefit)
17,223
7,656
(1,263
)
23,616
Net income (loss)
$
83,050
$
34,065
$
(6,857
)
$
110,258
Three Months Ended March 31,
2023
Commercial Banking
Institutional Banking
Personal Banking
Total
Net interest income
$
151,027
$
55,085
35,584
$
241,696
Provision for credit losses
21,045
96
2,109
23,250
Noninterest income
22,902
84,238
23,060
130,200
Noninterest expense
84,002
89,372
63,678
237,052
Income (loss) before taxes
68,882
49,855
(7,143
)
111,594
Income tax expense (benefit)
11,646
8,504
(993
)
19,157
Net income (loss)
$
57,236
$
41,351
$
(6,150
)
$
92,437
The company has strategically aligned its operations into the
following three reportable segments: Commercial Banking,
Institutional Banking, and Personal Banking. Senior executive
officers regularly evaluate business segment financial results
produced by the company’s internal reporting system in deciding how
to allocate resources and assess performance for individual
business segments. The company’s reportable segments include
certain corporate overhead, technology and service costs that are
allocated based on methodologies that are applied consistently
between periods. For comparability purposes, amounts in all periods
are based on methodologies in effect at March 31, 2024.
Non-GAAP Financial Measures
Net operating income Non-GAAP
reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
per share data)
Three Months Ended March
31,
2024
2023
Net income (GAAP)
$
110,258
$
92,437
Adjustments:
Acquisition expense
431
39
Severance expense
146
486
FDIC special assessment
13,000
—
Tax-impact of adjustments (i)
(3,123
)
(126
)
Total Non-GAAP adjustments (net of
tax)
10,454
399
Net operating income (Non-GAAP)
$
120,712
$
92,836
Earnings per share - diluted (GAAP)
$
2.25
$
1.90
Acquisition expense
0.01
—
Severance expense
—
0.01
FDIC special assessment
0.27
—
Tax-impact of adjustments (i)
(0.06
)
—
Operating earnings per share - diluted
(Non-GAAP)
$
2.47
$
1.91
GAAP
Return on average assets
1.06
%
0.97
%
Return on average equity
14.11
13.76
Non-GAAP
Operating return on average assets
1.16
%
0.98
%
Operating return on average equity
15.44
13.82
(i) Calculated using the company’s
marginal tax rate of 23.0% for 2024 and 24.0% for 2023.
Operating noninterest expense and
operating efficiency ratio Non-GAAP reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended March
31,
2024
2023
Noninterest expense
$
254,804
$
237,052
Adjustments to arrive at operating
noninterest expense (pre-tax):
Acquisition expense
431
39
Severance expense
146
486
FDIC special assessment
13,000
—
Total Non-GAAP adjustments (pre-tax)
13,577
525
Operating noninterest expense
(Non-GAAP)
$
241,227
$
236,527
Noninterest expense
$
254,804
$
237,052
Less: Amortization of other
intangibles
1,960
2,298
Noninterest expense, net of amortization
of other intangibles (Non-GAAP) (numerator A)
$
252,844
$
234,754
Operating noninterest expense
$
241,227
$
236,527
Less: Amortization of other
intangibles
1,960
2,298
Operating expense, net of amortization of
other intangibles (Non-GAAP) (numerator B)
$
239,267
$
234,229
Net interest income
$
239,434
$
241,696
Noninterest income
159,244
130,200
Less: Gains (losses) on sales of
securities available for sale, net
139
(2
)
Total Non-GAAP Revenue (denominator A)
$
398,539
$
371,898
Efficiency ratio (numerator A/denominator
A)
63.44
%
63.12
%
Operating efficiency ratio (Non-GAAP)
(numerator B/denominator A)
60.04
62.98
Operating pre-tax, pre-provision income
non-GAAP reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
per share data)
Three Months Ended March
31,
2024
2023
Net interest income (GAAP)
$
239,434
$
241,696
Noninterest income (GAAP)
159,244
130,200
Noninterest expense (GAAP)
254,804
237,052
Adjustments to arrive at operating
noninterest expense:
Acquisition expense
431
39
Severance expense
146
486
FDIC special assessment
13,000
—
Total Non-GAAP adjustments
13,577
525
Operating noninterest expense
(Non-GAAP)
241,227
236,527
Operating pre-tax, pre-provision income
(Non-GAAP)
$
157,451
$
135,369
Net interest income earnings per share -
diluted (GAAP)
$
4.89
$
4.96
Noninterest income (GAAP)
3.26
2.67
Noninterest expense (GAAP)
5.21
4.86
Acquisition expense
0.01
—
Severance expense
—
0.01
FDIC special assessment
0.27
—
Operating pre-tax, pre-provision earnings
per share - diluted (Non-GAAP)
$
3.22
$
2.78
Operating pre-tax, pre-provision income
- FTE Non-GAAP reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
per share data)
Three Months Ended March
31,
2024
2023
Net interest income (GAAP)
$
239,434
$
241,696
Adjustments to arrive at net interest
income - FTE:
Tax equivalent interest
6,516
6,555
Net interest income - FTE (Non-GAAP)
245,950
248,251
Noninterest income (GAAP)
159,244
130,200
Noninterest expense (GAAP)
254,804
237,052
Adjustments to arrive at operating
noninterest expense:
Acquisition expense
431
39
Severance expense
146
486
FDIC special assessment
13,000
—
Total Non-GAAP adjustments
13,577
525
Operating noninterest expense
(Non-GAAP)
241,227
236,527
Operating pre-tax, pre-provision income -
FTE (Non-GAAP)
$
163,967
$
141,924
Net interest income earnings per share -
diluted (GAAP)
$
4.89
$
4.96
Tax equivalent interest
0.13
0.13
Net interest income - FTE (Non-GAAP)
5.02
5.09
Noninterest income (GAAP)
3.26
2.67
Noninterest expense (GAAP)
5.21
4.86
Acquisition expense
0.01
—
Severance expense
—
0.01
FDIC special assessment
0.27
—
Operating pre-tax, pre-provision income -
FTE earnings per share - diluted (Non-GAAP)
$
3.35
$
2.91
Tangible book value non-GAAP
reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
share and per share data)
As of March 31,
2024
2023
Total shareholders' equity (GAAP)
$
3,152,816
$
2,814,659
Less: Intangible assets
Goodwill
207,385
207,385
Other intangibles, net
69,052
76,426
Total intangibles, net
276,437
283,811
Total tangible shareholders' equity
(Non-GAAP)
$
2,876,379
$
2,530,848
Total shares outstanding
48,743,348
48,507,116
Ratio of total shareholders' equity (book
value) per share
$
64.68
$
58.03
Ratio of total tangible shareholders'
equity (tangible book value) per share (Non-GAAP)
59.01
52.17
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240420807468/en/
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