Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries UMB Financial Corporation Reports Second Quarter Net Income of $87.4 Million; Announces 15.6% Increase to Quarterly Cash Dividend By: UMB Financial Corporation via Business Wire July 27, 2021 at 16:15 PM EDT Second quarter 2021 Financial Highlights (all comparisons to prior year unless otherwise noted) GAAP net income of $87.4 million, or $1.79 per diluted share; net operating income of $87.6 million, or $1.80 per diluted share. Pre-tax, pre-provision (PTPP) income of $131.3 million, an increase of $41.2 million. Quarterly average loan balances increased $1.7 billion, or 11.4%. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.0% on a linked-quarter, annualized basis. Quarterly average deposits grew 22.0% to $27.8 billion. Noninterest income increased 9.2% and comprised 39.6% of revenue. Board of Directors increased quarterly cash dividend by 15.6% to $0.37 per share. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2021 of $87.4 million, or $1.79 per diluted share, compared to $92.6 million, or $1.91 per diluted share, in the first quarter of 2021 (linked quarter) and $60.5 million, or $1.26 per diluted share, in the second quarter of 2020. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $87.6 million, or $1.80 per diluted share, for the second quarter of 2021, compared to $92.8 million, or $1.91 per diluted share, for the linked quarter and $63.8 million, or $1.33 per diluted share, for the second quarter of 2020. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), a non-GAAP measure reconciled to the components of net income before taxes, the nearest comparable GAAP measure, later in this release, was $138.0 million, or $2.83 per diluted share, for the second quarter of 2021, compared to $108.7 million, or $2.24 per diluted share, for the linked quarter, and $96.8 million, or $2.01 per diluted share, for the second quarter of 2020. These PTPP-FTE results represent an increase of 26.9% on a linked-quarter basis and an increase of 42.6% compared to the second quarter of 2020. Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2021 2021 2020 Net income (GAAP) $ 87,412 $ 92,643 $ 60,529 Earnings per share (diluted) 1.79 1.91 1.26 Pre-tax, pre-provision income (Non-GAAP) 131,322 102,066 90,152 Pre-tax, pre-provision earnings per share (diluted) 2.70 2.10 1.88 Pre-tax, pre-provision income - FTE (Non-GAAP) 137,951 108,744 96,756 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.83 2.24 2.01 Net operating income (Non-GAAP) 87,634 92,780 63,835 Operating earnings per share (diluted) 1.80 1.91 1.33 GAAP Return on average assets 1.02 % 1.14 % 0.87 % Return on average equity 11.43 12.56 8.95 Efficiency ratio 60.41 66.46 70.20 Non-GAAP Operating return on average assets 1.03 % 1.14 % 0.91 % Operating return on average equity 11.46 12.58 9.44 Operating efficiency ratio 60.33 66.40 68.76 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2021 2020 Net income (GAAP) $ 180,055 $ 57,090 Earnings per share (diluted) 3.70 1.18 Pre-tax, pre-provision income (Non-GAAP) 233,388 173,898 Pre-tax, pre-provision earnings per share (diluted) 4.80 3.59 Pre-tax, pre-provision income - FTE (Non-GAAP) 246,695 186,980 Pre-tax, pre-provision earnings per share - FTE (diluted) 5.08 3.86 Net operating income (Non-GAAP) 180,414 61,954 Operating earnings per share (diluted) 3.71 1.28 GAAP Return on average assets 1.08 % 0.42 % Return on average equity 11.98 4.22 Efficiency ratio 63.29 69.59 Non-GAAP Operating return on average assets 1.08 % 0.46 % Operating return on average equity 12.01 4.58 Operating efficiency ratio 63.21 68.49 “Our strong second quarter results demonstrated the benefits of our diverse business model and validates our investment thesis which includes above-peer loan growth, continued net interest income and strong fee income growth across all operating and interest rate environments,” said Mariner Kemper, chairman, president and chief executive officer. “During the second quarter, average loans, excluding PPP balances, increased 19.0% annualized on a linked-quarter basis. Noninterest income increased 20.8% from the prior quarter and 9.2% over the year-ago period. Our $24.0 million provision was higher than previous levels due to strong loan growth and elevated net charge-offs related to one commercial factoring relationship. Excluding this credit event, we would have had net recoveries in the quarter and the underlying asset quality of our loan portfolio remains strong. Nonperforming loan balances declined 24.1% from prior quarter-end. During the quarter, we monetized 3.5 million shares of our Tattooed Chef, Inc. (TTCF) holdings for net proceeds of approximately $72.8 million. Finally, we are excited to announce that our Board of Directors approved a five cent or 15.6% increase in the quarterly cash dividend to our shareholders.” Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Net interest income $ 201,071 $ 194,115 $ 178,229 $ 6,956 $ 22,842 Noninterest income: Trust and securities processing 53,863 54,834 46,321 (971 ) 7,542 Trading and investment banking 8,670 9,356 12,851 (686 ) (4,181 ) Service charges on deposit accounts 22,592 21,976 19,074 616 3,518 Insurance fees and commissions 245 420 533 (175 ) (288 ) Brokerage fees 2,592 3,334 5,753 (742 ) (3,161 ) Bankcard fees 16,063 14,673 12,916 1,390 3,147 Investment securities gains (losses), net 15,455 (8,336 ) 4,579 23,791 10,876 Other 12,109 12,640 18,429 (531 ) (6,320 ) Total noninterest income $ 131,589 $ 108,897 $ 120,456 $ 22,692 $ 11,133 Total revenue $ 332,660 $ 303,012 $ 298,685 $ 29,648 $ 33,975 Net interest income (FTE) $ 207,700 $ 200,793 $ 184,833 Net interest margin (FTE) 2.56 % 2.59 % 2.79 % Total noninterest income as a % of total revenue 39.56 35.94 40.33 Net interest income Net interest income totaled $201.1 million, which is an increase of $7.0 million as compared to the linked quarter. The positive impact from strong balance sheet growth was partially offset by the impacts of lower PPP income in the quarter. Average earning assets increased $1.1 billion, or 3.6%, driven in part by an increase in securities and loans, while interest-bearing liabilities increased $234.5 million, or 1.2%. Net interest margin for the second quarter was 2.56%, a decrease of three basis points from the linked quarter, driven in large part by earning asset mix shift and lower market and reinvestment rates. Earning asset yields declined four basis points from the linked quarter, driven by a six-basis-point decline in both loan and securities yields and mix changes. The cost of interest-bearing liabilities decreased one basis point to 0.23%. Net interest spread decreased three basis points to 2.47% from the linked quarter and was 20 basis points lower than the second quarter of 2020. On a year-over-year basis, net interest income increased $22.8 million, or 12.8%, driven by a $2.1 billion, or 23.0% increase in average securities, coupled with a $1.7 billion, or 11.4%, increase in average loans. These increases were driven by organic loan growth, excess liquidity, and the company’s PPP participation. Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposit balances increased 9.7% on a linked-quarter basis and 39.7% compared to the second quarter of 2020. Noninterest income Second quarter 2021 noninterest income increased $22.7 million, or 20.8%, on a linked-quarter basis, largely due to: An increase of $23.8 million in investment securities gains, primarily due to an increase of $23.3 million in gains on the company’s equity investment in TTCF. An increase of $1.4 million in bankcard fees, primarily due to increased interchange income. These increases were partially offset by decreases of $1.0 million in trust and securities processing income and $0.7 million in trading and investment banking income. The decrease in trust and securities processing income is primarily driven by the previously announced sale of Prairie Capital Management, LLC (PCM) in March 2021, offset by increased fund services income. The decline in trading and investment banking income is primarily due to decreased trading volume. Compared to the prior year, noninterest income in the second quarter of 2021 increased $11.1 million, or 9.2%, primarily driven by: An increase of $10.9 million in investment securities gains, primarily due to an increase of $14.2 million in gains on equity investments, partially offset by decreases of $2.7 million and $0.6 million in gains on the sale of available for sale securities and PCM-related equity earnings on alternative investments, respectively. Increases of $6.7 million and $2.0 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. An increase of $3.5 million in service charges on deposits, driven by increased healthcare income related to customer transfer and conversion fees, and increased corporate service charges. An increase of $2.5 million in derivative income, recorded in other income. These increases were partially offset by a decrease of $9.8 million in the market value of company-owned life insurance, recorded in other income, and a decrease of $4.2 million in trading and investment banking, due to decreased trading volumes. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Salaries and employee benefits $ 120,415 $ 127,681 $ 130,938 $ (7,266 ) $ (10,523 ) Occupancy, net 12,296 11,935 11,411 361 885 Equipment 19,196 19,615 21,502 (419 ) (2,306 ) Supplies and services 3,469 3,492 3,785 (23 ) (316 ) Marketing and business development 4,797 2,345 3,284 2,452 1,513 Processing fees 16,501 15,417 13,603 1,084 2,898 Legal and consulting 8,147 5,755 6,220 2,392 1,927 Bankcard 4,529 4,956 4,549 (427 ) (20 ) Amortization of other intangible assets 1,157 1,380 1,658 (223 ) (501 ) Regulatory fees 2,769 2,546 3,211 223 (442 ) Other 8,062 5,824 8,372 2,238 (310 ) Total noninterest expense $ 201,338 $ 200,946 $ 208,533 $ 392 $ (7,195 ) Noninterest expense for the second quarter of 2021 was $201.3 million, an increase of $0.4 million, or 0.2%, from the linked quarter and a decrease of $7.2 million, or 3.5%, from the second quarter of 2020. The linked-quarter increase in noninterest expense was driven by: Increases of $2.5 million, $2.4 million, and $1.1 million in marketing and business development expense, legal and consulting expense, and processing fees, respectively, due to timing of various marketing initiatives, legal costs, and timing of software projects. Increases of $0.9 million in losses on sales of other real estate, $0.7 million in derivative expense, and $0.7 million in miscellaneous loan fee expense, all recorded in other noninterest expense. These increases were offset by decreases of $5.7 million in payroll taxes, insurance and 401(k) expense, and $1.8 million in bonus and commission expense, both recorded in salary and employee benefits. The year-over-year decrease in noninterest expense was driven by: A decrease of $10.5 million in deferred compensation expense, recorded in salaries and employee benefits. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $2.1 million in software expense, recorded in equipment expense. These decreases were partially offset by increases of $2.9 million in processing fees, $1.9 million in legal and professional expense, and $1.5 million in marketing and business development, due to timing of software projects, legal costs, and various marketing initiatives. Income taxes The company’s effective tax rate was 17.0% for the six months ended June 30, 2021, compared to 11.3% for the same period in 2020. The increase in the effective rate for 2021 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 2021 were $34.3 billion compared to $33.1 billion for the linked quarter and $28.1 billion for the same period in 2020. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Commercial and industrial $ 7,402,653 $ 7,139,101 $ 6,970,223 $ 263,552 $ 432,430 Specialty lending 505,687 502,585 471,571 3,102 34,116 Commercial real estate 6,165,780 5,971,047 5,435,428 194,733 730,352 Consumer real estate 2,068,663 1,970,767 1,528,501 97,896 540,162 Consumer 122,439 117,095 146,120 5,344 (23,681 ) Credit cards 386,032 362,051 353,424 23,981 32,608 Leases and other 166,420 183,447 193,099 (17,027 ) (26,679 ) Total loans $ 16,817,674 $ 16,246,093 $ 15,098,366 $ 571,581 $ 1,719,308 Average loans for the second quarter of 2021 increased 3.5% on a linked-quarter basis and 11.4% compared to the second quarter of 2020 primarily due to increased commercial and industrial and commercial real estate loans. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Securities available for sale: U.S. Treasury $ 40,013 $ 36,032 $ 31,150 $ 3,981 $ 8,863 U.S. Agencies 94,794 95,494 403,290 (700 ) (308,496 ) Mortgage-backed 6,096,099 5,599,987 4,284,374 496,112 1,811,725 State and political subdivisions 3,565,443 3,552,945 3,108,661 12,498 456,782 Commercial Paper — — 2,040 — (2,040 ) Corporates 127,581 83,271 98,089 44,310 29,492 Total securities available for sale $ 9,923,930 $ 9,367,729 $ 7,927,604 $ 556,201 $ 1,996,326 Securities held to maturity: State and political subdivisions $ 1,057,091 $ 1,023,418 $ 1,100,843 $ 33,673 $ (43,752 ) Trading securities 21,409 17,540 37,816 3,869 (16,407 ) Other securities 302,981 308,297 148,918 (5,316 ) 154,063 Total securities $ 11,305,411 $ 10,716,984 $ 9,215,181 $ 588,427 $ 2,090,230 Average securities available for sale increased 5.9% on a linked-quarter basis and 25.2% compared to the second quarter of 2020. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Deposits: Noninterest-bearing demand $ 10,701,656 $ 9,753,680 $ 7,662,836 $ 947,976 $ 3,038,820 Interest-bearing demand and savings 16,421,742 16,302,880 14,160,722 118,862 2,261,020 Time deposits 659,228 769,464 957,007 (110,236 ) (297,779 ) Total deposits $ 27,782,626 $ 26,826,024 $ 22,780,565 $ 956,602 $ 5,002,061 Noninterest bearing deposits as % of total 38.52 % 36.36 % 33.64 % Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposits increased 9.7% on a linked-quarter basis to $10.7 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Total equity $ 3,090,244 $ 2,958,239 $ 2,777,395 Book value per common share 63.92 61.24 57.84 Tangible book value per common share 59.96 57.26 53.57 Regulatory capital: Common equity Tier 1 capital $ 2,730,062 $ 2,660,102 $ 2,335,625 Tier 1 capital 2,730,062 2,660,102 2,335,625 Total capital 3,172,878 3,102,333 2,580,849 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.91 % 12.25 % 11.92 % Tier 1 risk-based capital ratio 11.91 12.25 11.92 Total risk-based capital ratio 13.84 14.28 13.17 Tier 1 leverage ratio 8.00 8.08 8.35 At June 30, 2021, 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 2021 2021 2020 2020 2020 Net charge-offs - Total loans $ 28,374 $ 5,310 $ 1,801 $ 5,111 $ 5,541 Net loan charge-offs as a % of total average loans 0.68 % 0.13 % 0.04 % 0.13 % 0.15 % Loans over 90 days past due $ 1,265 $ 1,773 $ 1,952 $ 1,372 $ 4,588 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.01 % 0.03 % Nonaccrual and restructured loans $ 58,219 $ 76,706 $ 87,823 $ 93,695 $ 82,245 Nonaccrual and restructured loans as a % of total loans 0.34 % 0.46 % 0.55 % 0.59 % 0.54 % Provision for credit losses $ 24,000 $ (7,500 ) $ 5,000 $ 16,000 $ 21,500 Provision for credit losses for the second quarter increased $31.5 million from the linked quarter and $2.5 million from the second quarter of 2020. This increase is driven by impacts to the Allowance for Credit Losses by a large charge-off during the second quarter, offset by the impacts of positive macro-economic metrics. Net charge-offs for the second quarter totaled $28.4 million, or 0.68%, of average loans, compared to $5.3 million, or 0.13%, of average loans in the linked quarter, and $5.5 million, or 0.15%, of average loans for the second quarter of 2020. The increase in net charge-offs in the second quarter of 2021 is due to a $31.9 million loss on one commercial relationship. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, or an increase of 15.6%. This cash dividend will be payable on October 1, 2021, to shareholders of record at the close of business on September 10, 2021. Conference Call The company plans to host a conference call to discuss its second quarter 2021 earnings results on Wednesday, July 28, 2021, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2021 Conference Call A replay of the conference call may be heard through August 11, 2021 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10157858. 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, pre-tax, pre-provision income, pre-tax, pre-provision earnings per share – diluted (PTPP EPS), pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), pre-tax, pre-provision FTE earnings per share – diluted (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, PTPP, PTPP EPS, PTPP-FTE, 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). Pre-tax, pre-provision income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. Pre-tax, pre-provision income on a fully tax equivalent basis for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus noninterest income, less noninterest 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, 2020, 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, the COVID-19 pandemic (the pandemic) may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. The pandemic has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. It is currently adversely affecting the company and its customers, counterparties, employees, and first-party service providers, and the continued adverse impacts on our business, financial position, results of operations, and prospects could be significant. We are not able to accurately predict the extent of the impact of the pandemic on our capital, liquidity, and other financial positions and on our business, results of operations, and prospects at this time, and we believe it will depend on a number of evolving factors, including: (i) the duration, extent and severity of the pandemic; (ii) the response of governmental and non-governmental authorities to the pandemic, which is rapidly changing and not always coordinated or consistent across jurisdictions; (iii) the effect of the pandemic on our customers, counterparties, employees and first-party service providers, which may vary widely, and which is generally expected to increase our credit, counterparty, operational, and other risks; and (iv) the effect of the pandemic on economies and markets, which in turn could adversely affect, among other things, the origination of new loans and the performance of our existing loans. Any forward-looking statement should be evaluated in light of these considerations. 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, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach and relief measures during the COVID-19 pandemic, please visit umb.com/COVID-19. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2021 2020 ASSETS Loans $ 16,910,790 $ 15,305,097 Allowance for credit losses on loans (200,563 ) (200,300 ) Net loans 16,710,227 15,104,797 Loans held for sale 5,303 8,213 Securities: Available for sale 10,347,531 8,483,624 Held to maturity, net of allowance for credit losses 1,081,173 1,111,625 Trading securities 40,552 51,383 Other securities 254,315 154,206 Total securities 11,723,571 9,800,838 Federal funds sold and resell agreements 1,146,521 1,347,643 Interest-bearing due from banks 5,059,098 1,714,478 Cash and due from banks 469,883 462,849 Premises and equipment, net 281,011 300,174 Accrued income 131,188 126,962 Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Other assets 901,059 682,606 Total assets $ 36,619,015 $ 29,753,608 LIABILITIES Deposits: Noninterest-bearing demand $ 12,513,031 $ 8,633,603 Interest-bearing demand and savings 16,857,127 15,033,643 Time deposits under $250,000 430,713 546,089 Time deposits of $250,000 or more 247,600 246,069 Total deposits 30,048,471 24,459,404 Federal funds purchased and repurchase agreements 2,783,389 1,963,694 Short-term debt — 15,000 Long-term debt 270,558 70,996 Accrued expenses and taxes 254,589 239,254 Other liabilities 171,764 227,865 Total liabilities 33,528,771 26,976,213 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,098,139 1,081,713 Retained earnings 2,040,134 1,692,289 Accumulated other comprehensive income, net 223,107 284,262 Treasury stock (326,193 ) (335,926 ) Total shareholders' equity 3,090,244 2,777,395 Total liabilities and shareholders' equity $ 36,619,015 $ 29,753,608 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, 2021 2020 2021 2020 INTEREST INCOME Loans $ 154,537 $ 140,004 $ 304,707 $ 291,030 Securities: Taxable interest 29,780 25,870 56,942 53,082 Tax-exempt interest 24,743 24,612 49,707 49,016 Total securities income 54,523 50,482 106,649 102,098 Federal funds and resell agreements 2,552 1,573 5,373 7,025 Interest-bearing due from banks 833 398 1,536 3,061 Trading securities 189 312 348 966 Total interest income 212,634 192,769 418,613 404,180 INTEREST EXPENSE Deposits 6,574 11,243 13,372 40,975 Federal funds and repurchase agreements 1,779 1,950 3,665 8,331 Other 3,210 1,347 6,390 2,704 Total interest expense 11,563 14,540 23,427 52,010 Net interest income 201,071 178,229 395,186 352,170 Provision for credit losses 24,000 21,500 16,500 109,500 Net interest income after provision for credit losses 177,071 156,729 378,686 242,670 NONINTEREST INCOME Trust and securities processing 53,863 46,321 108,697 93,321 Trading and investment banking 8,670 12,851 18,026 14,574 Service charges on deposit accounts 22,592 19,074 44,568 44,155 Insurance fees and commissions 245 533 665 792 Brokerage fees 2,592 5,753 5,926 15,613 Bankcard fees 16,063 12,916 30,736 29,461 Investment securities gains, net 15,455 4,579 7,119 8,099 Other 12,109 18,429 24,749 12,865 Total noninterest income 131,589 120,456 240,486 218,880 NONINTEREST EXPENSE Salaries and employee benefits 120,415 130,938 248,096 241,998 Occupancy, net 12,296 11,411 24,231 23,591 Equipment 19,196 21,502 38,811 42,743 Supplies and services 3,469 3,785 6,961 7,970 Marketing and business development 4,797 3,284 7,142 7,924 Processing fees 16,501 13,603 31,918 26,993 Legal and consulting 8,147 6,220 13,902 12,330 Bankcard 4,529 4,549 9,485 9,409 Amortization of other intangible assets 1,157 1,658 2,537 3,392 Regulatory fees 2,769 3,211 5,315 5,577 Other 8,062 8,372 13,886 15,225 Total noninterest expense 201,338 208,533 402,284 397,152 Income before income taxes 107,322 68,652 216,888 64,398 Income tax expense 19,910 8,123 36,833 7,308 NET INCOME $ 87,412 $ 60,529 $ 180,055 $ 57,090 PER SHARE DATA Net income – basic $ 1.81 $ 1.26 $ 3.74 $ 1.18 Net income – diluted 1.79 1.26 3.70 1.18 Dividends 0.32 0.31 0.64 0.62 Weighted average shares outstanding – basic 48,294,952 47,991,283 48,196,345 48,340,579 Weighted average shares outstanding – diluted 48,698,319 48,077,810 48,604,140 48,491,526 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net income $ 87,412 $ 60,529 $ 180,055 $ 57,090 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 76,335 84,885 (122,703 ) 249,001 Less: Reclassification adjustment for gains included in net income (1,300 ) (4,006 ) (4,020 ) (5,233 ) Change in unrealized gains and losses on debt securities 75,035 80,879 (126,723 ) 243,768 Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (3,422 ) 4,612 3,081 19,137 Less: Reclassification adjustment for (gains) losses included in net income (877 ) (514 ) (1,719 ) 254 Change in unrealized gains and losses on derivative hedges (4,299 ) 4,098 1,362 19,391 Other comprehensive income (loss), before tax 70,736 84,977 (125,361 ) 263,159 Income tax (expense) benefit (16,826 ) (20,105 ) 30,128 (62,077 ) Other comprehensive income (loss) 53,910 64,872 (95,233 ) 201,082 Comprehensive income $ 141,322 $ 125,401 $ 84,822 $ 258,172 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, 2020 $ 55,057 $ 1,073,764 $ 1,672,438 $ 83,180 $ (277,999 ) $ 2,606,440 Total comprehensive income — — 57,090 201,082 — 258,172 Dividends ($0.62 per share) — — (30,200 ) — — (30,200 ) Purchase of treasury stock — 615 — — (60,074 ) (59,459 ) Forfeitures of equity awards, net of issuances — 676 — — (83 ) 593 Recognition of equity-based compensation — 6,109 — — — 6,109 Sale of treasury stock — 120 — — 201 321 Exercise of stock options — 429 — — 2,029 2,458 Cumulative effect adjustment — — (7,039 ) — — (7,039 ) Balance - June 30, 2020 $ 55,057 $ 1,081,713 $ 1,692,289 $ 284,262 $ (335,926 ) $ 2,777,395 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 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,817,674 3.69 % $ 15,098,366 3.73 % Securities: Taxable 6,994,559 1.71 5,069,290 2.05 Tax-exempt 4,289,443 2.93 4,108,075 3.05 Total securities 11,284,002 2.17 9,177,365 2.50 Federal funds and resell agreements 1,110,433 0.92 807,245 0.78 Interest bearing due from banks 3,343,311 0.10 1,492,798 0.11 Trading securities 21,409 4.27 37,816 3.79 Total earning assets 32,576,829 2.70 26,613,590 3.01 Allowance for credit losses (199,379 ) (195,373 ) Other assets 1,886,774 1,717,808 Total assets $ 34,264,224 $ 28,136,025 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,080,970 0.15 % $ 15,117,729 0.30 % Federal funds and repurchase agreements 2,744,516 0.26 2,138,156 0.37 Borrowed funds 270,305 4.76 85,681 6.32 Total interest-bearing liabilities 20,095,791 0.23 17,341,566 0.34 Noninterest-bearing demand deposits 10,701,656 7,662,836 Other liabilities 398,319 411,964 Shareholders' equity 3,068,458 2,719,659 Total liabilities and shareholders' equity $ 34,264,224 $ 28,136,025 Net interest spread 2.47 % 2.67 % Net interest margin 2.56 2.79 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,533,463 3.72 % $ 14,357,466 4.08 % Securities: Taxable 6,698,020 1.71 4,881,854 2.19 Tax-exempt 4,295,317 2.95 4,085,558 3.05 Total securities 10,993,337 2.20 8,967,412 2.58 Federal funds and resell agreements 1,375,689 0.79 1,015,720 1.39 Interest bearing due from banks 3,079,684 0.10 1,164,405 0.53 Trading securities 19,485 4.28 42,959 4.93 Total earning assets 32,001,658 2.72 25,547,962 3.28 Allowance for credit losses (209,469 ) (154,062 ) Other assets 1,862,036 1,693,684 Total assets $ 33,654,225 $ 27,087,584 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,076,681 0.16 % $ 14,723,895 0.56 % Federal funds and repurchase agreements 2,632,567 0.28 2,084,271 0.80 Borrowed funds 269,942 4.77 78,164 6.96 Total interest-bearing liabilities 19,979,190 0.24 16,886,330 0.62 Noninterest-bearing demand deposits 10,230,287 7,079,224 Other liabilities 414,535 401,724 Shareholders' equity 3,030,213 2,720,306 Total liabilities and shareholders' equity $ 33,654,225 $ 27,087,584 Net interest spread 2.48 % 2.66 % Net interest margin 2.57 2.88 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 135,656 $ 21,258 $ 44,157 $ 201,071 Provision for credit losses 22,009 147 1,844 24,000 Noninterest income 36,391 68,745 26,453 131,589 Noninterest expense 69,144 72,575 59,619 201,338 Income before taxes 80,894 17,281 9,147 107,322 Income tax expense 15,007 3,206 1,697 19,910 Net income $ 65,887 $ 14,075 $ 7,450 $ 87,412 Three Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 113,095 $ 28,124 $ 37,010 $ 178,229 Provision for credit losses 19,281 298 1,921 21,500 Noninterest income 24,078 66,488 29,890 120,456 Noninterest expense 62,123 76,953 69,457 208,533 Income (loss) before taxes 55,769 17,361 (4,478 ) 68,652 Income tax expense (benefit) 6,597 2,055 (529 ) 8,123 Net income (loss) $ 49,172 $ 15,306 $ (3,949 ) $ 60,529 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 268,687 $ 43,397 $ 83,102 $ 395,186 Provision for credit losses 13,827 367 2,306 16,500 Noninterest income 43,777 137,166 59,543 240,486 Noninterest expense 134,789 143,857 123,638 402,284 Income before taxes 163,848 36,339 16,701 216,888 Income tax expense 27,825 6,171 2,837 36,833 Net income $ 136,023 $ 30,168 $ 13,864 $ 180,055 Six Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 220,044 $ 61,159 $ 70,967 $ 352,170 Provision for credit losses 101,501 573 7,426 109,500 Noninterest income 35,318 128,440 55,122 218,880 Noninterest expense 121,166 145,406 130,580 397,152 Income (loss) before taxes 32,695 43,620 (11,917 ) 64,398 Income tax expense (benefit) 3,709 4,951 (1,352 ) 7,308 Net income (loss) $ 28,986 $ 38,669 $ (10,565 ) $ 57,090 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, 2021. 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, 2021 2020 2021 2020 Net income (GAAP) $ 87,412 $ 60,529 $ 180,055 $ 57,090 Adjustments: Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Tax-impact of adjustments (i) (63 ) (943 ) (102 ) (1,388 ) Total Non-GAAP adjustments (net of tax) 222 3,306 359 4,864 Net operating income (Non-GAAP) $ 87,634 $ 63,835 $ 180,414 $ 61,954 Earnings per share - diluted (GAAP) $ 1.79 $ 1.26 $ 3.70 $ 1.18 Acquisition expense — — — 0.01 Severance expense — 0.01 — 0.04 COVID-19 related expense 0.01 0.08 0.01 0.08 Tax-impact of adjustments (i) — (0.02 ) — (0.03 ) Operating earnings per share - diluted (Non-GAAP) $ 1.80 $ 1.33 $ 3.71 $ 1.28 GAAP Return on average assets 1.02 % 0.87 % 1.08 % 0.42 % Return on average equity 11.43 8.95 11.98 4.22 Non-GAAP Operating return on average assets 1.03 % 0.91 % 1.08 % 0.46 % Operating return on average equity 11.46 9.44 12.01 4.58 (i) Calculated using the company’s marginal tax rate of 22.2%. 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, 2021 2020 2021 2020 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Total Non-GAAP adjustments (pre-tax) 285 4,249 461 6,252 Operating noninterest expense (Non-GAAP) $ 201,053 $ 204,284 $ 401,823 $ 390,900 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 200,181 $ 206,875 $ 399,747 $ 393,760 Operating noninterest expense $ 201,053 $ 204,284 $ 401,823 $ 390,900 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 199,896 $ 202,626 $ 399,286 $ 387,508 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Noninterest income 131,589 120,456 240,486 218,880 Less: Gains on sales of securities available for sale, net 1,300 4,006 4,020 5,233 Total Non-GAAP Revenue (denominator A) $ 331,360 $ 294,679 $ 631,652 $ 565,817 Efficiency ratio (numerator A/denominator A) 60.41 % 70.20 % 63.29 % 69.59 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 60.33 68.76 63.21 68.49 Pre-tax, pre-provision 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, 2021 2020 2021 2020 Net income before taxes (GAAP) $ 107,322 $ 68,652 $ 216,888 $ 64,398 Adjustments: Provision for credit losses 24,000 21,500 16,500 109,500 Pre-tax, pre-provision income (Non-GAAP) $ 131,322 $ 90,152 $ 233,388 $ 173,898 Pre-tax earnings per share - diluted (GAAP) $ 2.20 $ 1.43 $ 4.46 $ 1.33 Provision for credit losses 0.50 0.45 0.34 2.26 Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.70 $ 1.88 $ 4.80 $ 3.59 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,629 6,604 13,307 13,082 Net interest income - FTE $ 207,700 $ 184,833 $ 408,493 $ 365,252 Noninterest income 131,589 120,456 240,486 218,880 Less: Noninterest expense 201,338 208,533 402,284 397,152 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 137,951 $ 96,756 $ 246,695 $ 186,980 Net interest income earnings per share - diluted $ 4.13 $ 3.71 $ 8.13 $ 7.26 Tax equivalent interest 0.13 0.14 0.28 0.27 Net interest income - FTE 4.26 3.85 8.41 7.53 Noninterest income 2.70 2.50 4.95 4.52 Less: Noninterest expense 4.13 4.34 8.28 8.19 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.83 $ 2.01 $ 5.08 $ 3.86 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2021 2020 Total shareholders' equity (GAAP) $ 3,090,244 $ 2,777,395 Less: Intangible assets Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Total intangibles, net 191,154 205,048 Total tangible shareholders' equity (Non-GAAP) $ 2,899,090 $ 2,572,347 Total shares outstanding 48,346,371 48,021,707 Ratio of total shareholders' equity (book value) per share $ 63.92 $ 57.84 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 59.96 53.57 View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005159/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
UMB Financial Corporation Reports Second Quarter Net Income of $87.4 Million; Announces 15.6% Increase to Quarterly Cash Dividend By: UMB Financial Corporation via Business Wire July 27, 2021 at 16:15 PM EDT Second quarter 2021 Financial Highlights (all comparisons to prior year unless otherwise noted) GAAP net income of $87.4 million, or $1.79 per diluted share; net operating income of $87.6 million, or $1.80 per diluted share. Pre-tax, pre-provision (PTPP) income of $131.3 million, an increase of $41.2 million. Quarterly average loan balances increased $1.7 billion, or 11.4%. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.0% on a linked-quarter, annualized basis. Quarterly average deposits grew 22.0% to $27.8 billion. Noninterest income increased 9.2% and comprised 39.6% of revenue. Board of Directors increased quarterly cash dividend by 15.6% to $0.37 per share. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2021 of $87.4 million, or $1.79 per diluted share, compared to $92.6 million, or $1.91 per diluted share, in the first quarter of 2021 (linked quarter) and $60.5 million, or $1.26 per diluted share, in the second quarter of 2020. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $87.6 million, or $1.80 per diluted share, for the second quarter of 2021, compared to $92.8 million, or $1.91 per diluted share, for the linked quarter and $63.8 million, or $1.33 per diluted share, for the second quarter of 2020. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), a non-GAAP measure reconciled to the components of net income before taxes, the nearest comparable GAAP measure, later in this release, was $138.0 million, or $2.83 per diluted share, for the second quarter of 2021, compared to $108.7 million, or $2.24 per diluted share, for the linked quarter, and $96.8 million, or $2.01 per diluted share, for the second quarter of 2020. These PTPP-FTE results represent an increase of 26.9% on a linked-quarter basis and an increase of 42.6% compared to the second quarter of 2020. Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2021 2021 2020 Net income (GAAP) $ 87,412 $ 92,643 $ 60,529 Earnings per share (diluted) 1.79 1.91 1.26 Pre-tax, pre-provision income (Non-GAAP) 131,322 102,066 90,152 Pre-tax, pre-provision earnings per share (diluted) 2.70 2.10 1.88 Pre-tax, pre-provision income - FTE (Non-GAAP) 137,951 108,744 96,756 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.83 2.24 2.01 Net operating income (Non-GAAP) 87,634 92,780 63,835 Operating earnings per share (diluted) 1.80 1.91 1.33 GAAP Return on average assets 1.02 % 1.14 % 0.87 % Return on average equity 11.43 12.56 8.95 Efficiency ratio 60.41 66.46 70.20 Non-GAAP Operating return on average assets 1.03 % 1.14 % 0.91 % Operating return on average equity 11.46 12.58 9.44 Operating efficiency ratio 60.33 66.40 68.76 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2021 2020 Net income (GAAP) $ 180,055 $ 57,090 Earnings per share (diluted) 3.70 1.18 Pre-tax, pre-provision income (Non-GAAP) 233,388 173,898 Pre-tax, pre-provision earnings per share (diluted) 4.80 3.59 Pre-tax, pre-provision income - FTE (Non-GAAP) 246,695 186,980 Pre-tax, pre-provision earnings per share - FTE (diluted) 5.08 3.86 Net operating income (Non-GAAP) 180,414 61,954 Operating earnings per share (diluted) 3.71 1.28 GAAP Return on average assets 1.08 % 0.42 % Return on average equity 11.98 4.22 Efficiency ratio 63.29 69.59 Non-GAAP Operating return on average assets 1.08 % 0.46 % Operating return on average equity 12.01 4.58 Operating efficiency ratio 63.21 68.49 “Our strong second quarter results demonstrated the benefits of our diverse business model and validates our investment thesis which includes above-peer loan growth, continued net interest income and strong fee income growth across all operating and interest rate environments,” said Mariner Kemper, chairman, president and chief executive officer. “During the second quarter, average loans, excluding PPP balances, increased 19.0% annualized on a linked-quarter basis. Noninterest income increased 20.8% from the prior quarter and 9.2% over the year-ago period. Our $24.0 million provision was higher than previous levels due to strong loan growth and elevated net charge-offs related to one commercial factoring relationship. Excluding this credit event, we would have had net recoveries in the quarter and the underlying asset quality of our loan portfolio remains strong. Nonperforming loan balances declined 24.1% from prior quarter-end. During the quarter, we monetized 3.5 million shares of our Tattooed Chef, Inc. (TTCF) holdings for net proceeds of approximately $72.8 million. Finally, we are excited to announce that our Board of Directors approved a five cent or 15.6% increase in the quarterly cash dividend to our shareholders.” Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Net interest income $ 201,071 $ 194,115 $ 178,229 $ 6,956 $ 22,842 Noninterest income: Trust and securities processing 53,863 54,834 46,321 (971 ) 7,542 Trading and investment banking 8,670 9,356 12,851 (686 ) (4,181 ) Service charges on deposit accounts 22,592 21,976 19,074 616 3,518 Insurance fees and commissions 245 420 533 (175 ) (288 ) Brokerage fees 2,592 3,334 5,753 (742 ) (3,161 ) Bankcard fees 16,063 14,673 12,916 1,390 3,147 Investment securities gains (losses), net 15,455 (8,336 ) 4,579 23,791 10,876 Other 12,109 12,640 18,429 (531 ) (6,320 ) Total noninterest income $ 131,589 $ 108,897 $ 120,456 $ 22,692 $ 11,133 Total revenue $ 332,660 $ 303,012 $ 298,685 $ 29,648 $ 33,975 Net interest income (FTE) $ 207,700 $ 200,793 $ 184,833 Net interest margin (FTE) 2.56 % 2.59 % 2.79 % Total noninterest income as a % of total revenue 39.56 35.94 40.33 Net interest income Net interest income totaled $201.1 million, which is an increase of $7.0 million as compared to the linked quarter. The positive impact from strong balance sheet growth was partially offset by the impacts of lower PPP income in the quarter. Average earning assets increased $1.1 billion, or 3.6%, driven in part by an increase in securities and loans, while interest-bearing liabilities increased $234.5 million, or 1.2%. Net interest margin for the second quarter was 2.56%, a decrease of three basis points from the linked quarter, driven in large part by earning asset mix shift and lower market and reinvestment rates. Earning asset yields declined four basis points from the linked quarter, driven by a six-basis-point decline in both loan and securities yields and mix changes. The cost of interest-bearing liabilities decreased one basis point to 0.23%. Net interest spread decreased three basis points to 2.47% from the linked quarter and was 20 basis points lower than the second quarter of 2020. On a year-over-year basis, net interest income increased $22.8 million, or 12.8%, driven by a $2.1 billion, or 23.0% increase in average securities, coupled with a $1.7 billion, or 11.4%, increase in average loans. These increases were driven by organic loan growth, excess liquidity, and the company’s PPP participation. Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposit balances increased 9.7% on a linked-quarter basis and 39.7% compared to the second quarter of 2020. Noninterest income Second quarter 2021 noninterest income increased $22.7 million, or 20.8%, on a linked-quarter basis, largely due to: An increase of $23.8 million in investment securities gains, primarily due to an increase of $23.3 million in gains on the company’s equity investment in TTCF. An increase of $1.4 million in bankcard fees, primarily due to increased interchange income. These increases were partially offset by decreases of $1.0 million in trust and securities processing income and $0.7 million in trading and investment banking income. The decrease in trust and securities processing income is primarily driven by the previously announced sale of Prairie Capital Management, LLC (PCM) in March 2021, offset by increased fund services income. The decline in trading and investment banking income is primarily due to decreased trading volume. Compared to the prior year, noninterest income in the second quarter of 2021 increased $11.1 million, or 9.2%, primarily driven by: An increase of $10.9 million in investment securities gains, primarily due to an increase of $14.2 million in gains on equity investments, partially offset by decreases of $2.7 million and $0.6 million in gains on the sale of available for sale securities and PCM-related equity earnings on alternative investments, respectively. Increases of $6.7 million and $2.0 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. An increase of $3.5 million in service charges on deposits, driven by increased healthcare income related to customer transfer and conversion fees, and increased corporate service charges. An increase of $2.5 million in derivative income, recorded in other income. These increases were partially offset by a decrease of $9.8 million in the market value of company-owned life insurance, recorded in other income, and a decrease of $4.2 million in trading and investment banking, due to decreased trading volumes. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Salaries and employee benefits $ 120,415 $ 127,681 $ 130,938 $ (7,266 ) $ (10,523 ) Occupancy, net 12,296 11,935 11,411 361 885 Equipment 19,196 19,615 21,502 (419 ) (2,306 ) Supplies and services 3,469 3,492 3,785 (23 ) (316 ) Marketing and business development 4,797 2,345 3,284 2,452 1,513 Processing fees 16,501 15,417 13,603 1,084 2,898 Legal and consulting 8,147 5,755 6,220 2,392 1,927 Bankcard 4,529 4,956 4,549 (427 ) (20 ) Amortization of other intangible assets 1,157 1,380 1,658 (223 ) (501 ) Regulatory fees 2,769 2,546 3,211 223 (442 ) Other 8,062 5,824 8,372 2,238 (310 ) Total noninterest expense $ 201,338 $ 200,946 $ 208,533 $ 392 $ (7,195 ) Noninterest expense for the second quarter of 2021 was $201.3 million, an increase of $0.4 million, or 0.2%, from the linked quarter and a decrease of $7.2 million, or 3.5%, from the second quarter of 2020. The linked-quarter increase in noninterest expense was driven by: Increases of $2.5 million, $2.4 million, and $1.1 million in marketing and business development expense, legal and consulting expense, and processing fees, respectively, due to timing of various marketing initiatives, legal costs, and timing of software projects. Increases of $0.9 million in losses on sales of other real estate, $0.7 million in derivative expense, and $0.7 million in miscellaneous loan fee expense, all recorded in other noninterest expense. These increases were offset by decreases of $5.7 million in payroll taxes, insurance and 401(k) expense, and $1.8 million in bonus and commission expense, both recorded in salary and employee benefits. The year-over-year decrease in noninterest expense was driven by: A decrease of $10.5 million in deferred compensation expense, recorded in salaries and employee benefits. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $2.1 million in software expense, recorded in equipment expense. These decreases were partially offset by increases of $2.9 million in processing fees, $1.9 million in legal and professional expense, and $1.5 million in marketing and business development, due to timing of software projects, legal costs, and various marketing initiatives. Income taxes The company’s effective tax rate was 17.0% for the six months ended June 30, 2021, compared to 11.3% for the same period in 2020. The increase in the effective rate for 2021 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 2021 were $34.3 billion compared to $33.1 billion for the linked quarter and $28.1 billion for the same period in 2020. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Commercial and industrial $ 7,402,653 $ 7,139,101 $ 6,970,223 $ 263,552 $ 432,430 Specialty lending 505,687 502,585 471,571 3,102 34,116 Commercial real estate 6,165,780 5,971,047 5,435,428 194,733 730,352 Consumer real estate 2,068,663 1,970,767 1,528,501 97,896 540,162 Consumer 122,439 117,095 146,120 5,344 (23,681 ) Credit cards 386,032 362,051 353,424 23,981 32,608 Leases and other 166,420 183,447 193,099 (17,027 ) (26,679 ) Total loans $ 16,817,674 $ 16,246,093 $ 15,098,366 $ 571,581 $ 1,719,308 Average loans for the second quarter of 2021 increased 3.5% on a linked-quarter basis and 11.4% compared to the second quarter of 2020 primarily due to increased commercial and industrial and commercial real estate loans. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Securities available for sale: U.S. Treasury $ 40,013 $ 36,032 $ 31,150 $ 3,981 $ 8,863 U.S. Agencies 94,794 95,494 403,290 (700 ) (308,496 ) Mortgage-backed 6,096,099 5,599,987 4,284,374 496,112 1,811,725 State and political subdivisions 3,565,443 3,552,945 3,108,661 12,498 456,782 Commercial Paper — — 2,040 — (2,040 ) Corporates 127,581 83,271 98,089 44,310 29,492 Total securities available for sale $ 9,923,930 $ 9,367,729 $ 7,927,604 $ 556,201 $ 1,996,326 Securities held to maturity: State and political subdivisions $ 1,057,091 $ 1,023,418 $ 1,100,843 $ 33,673 $ (43,752 ) Trading securities 21,409 17,540 37,816 3,869 (16,407 ) Other securities 302,981 308,297 148,918 (5,316 ) 154,063 Total securities $ 11,305,411 $ 10,716,984 $ 9,215,181 $ 588,427 $ 2,090,230 Average securities available for sale increased 5.9% on a linked-quarter basis and 25.2% compared to the second quarter of 2020. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Deposits: Noninterest-bearing demand $ 10,701,656 $ 9,753,680 $ 7,662,836 $ 947,976 $ 3,038,820 Interest-bearing demand and savings 16,421,742 16,302,880 14,160,722 118,862 2,261,020 Time deposits 659,228 769,464 957,007 (110,236 ) (297,779 ) Total deposits $ 27,782,626 $ 26,826,024 $ 22,780,565 $ 956,602 $ 5,002,061 Noninterest bearing deposits as % of total 38.52 % 36.36 % 33.64 % Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposits increased 9.7% on a linked-quarter basis to $10.7 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Total equity $ 3,090,244 $ 2,958,239 $ 2,777,395 Book value per common share 63.92 61.24 57.84 Tangible book value per common share 59.96 57.26 53.57 Regulatory capital: Common equity Tier 1 capital $ 2,730,062 $ 2,660,102 $ 2,335,625 Tier 1 capital 2,730,062 2,660,102 2,335,625 Total capital 3,172,878 3,102,333 2,580,849 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.91 % 12.25 % 11.92 % Tier 1 risk-based capital ratio 11.91 12.25 11.92 Total risk-based capital ratio 13.84 14.28 13.17 Tier 1 leverage ratio 8.00 8.08 8.35 At June 30, 2021, 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 2021 2021 2020 2020 2020 Net charge-offs - Total loans $ 28,374 $ 5,310 $ 1,801 $ 5,111 $ 5,541 Net loan charge-offs as a % of total average loans 0.68 % 0.13 % 0.04 % 0.13 % 0.15 % Loans over 90 days past due $ 1,265 $ 1,773 $ 1,952 $ 1,372 $ 4,588 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.01 % 0.03 % Nonaccrual and restructured loans $ 58,219 $ 76,706 $ 87,823 $ 93,695 $ 82,245 Nonaccrual and restructured loans as a % of total loans 0.34 % 0.46 % 0.55 % 0.59 % 0.54 % Provision for credit losses $ 24,000 $ (7,500 ) $ 5,000 $ 16,000 $ 21,500 Provision for credit losses for the second quarter increased $31.5 million from the linked quarter and $2.5 million from the second quarter of 2020. This increase is driven by impacts to the Allowance for Credit Losses by a large charge-off during the second quarter, offset by the impacts of positive macro-economic metrics. Net charge-offs for the second quarter totaled $28.4 million, or 0.68%, of average loans, compared to $5.3 million, or 0.13%, of average loans in the linked quarter, and $5.5 million, or 0.15%, of average loans for the second quarter of 2020. The increase in net charge-offs in the second quarter of 2021 is due to a $31.9 million loss on one commercial relationship. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, or an increase of 15.6%. This cash dividend will be payable on October 1, 2021, to shareholders of record at the close of business on September 10, 2021. Conference Call The company plans to host a conference call to discuss its second quarter 2021 earnings results on Wednesday, July 28, 2021, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2021 Conference Call A replay of the conference call may be heard through August 11, 2021 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10157858. 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, pre-tax, pre-provision income, pre-tax, pre-provision earnings per share – diluted (PTPP EPS), pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), pre-tax, pre-provision FTE earnings per share – diluted (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, PTPP, PTPP EPS, PTPP-FTE, 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). Pre-tax, pre-provision income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. Pre-tax, pre-provision income on a fully tax equivalent basis for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus noninterest income, less noninterest 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, 2020, 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, the COVID-19 pandemic (the pandemic) may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. The pandemic has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. It is currently adversely affecting the company and its customers, counterparties, employees, and first-party service providers, and the continued adverse impacts on our business, financial position, results of operations, and prospects could be significant. We are not able to accurately predict the extent of the impact of the pandemic on our capital, liquidity, and other financial positions and on our business, results of operations, and prospects at this time, and we believe it will depend on a number of evolving factors, including: (i) the duration, extent and severity of the pandemic; (ii) the response of governmental and non-governmental authorities to the pandemic, which is rapidly changing and not always coordinated or consistent across jurisdictions; (iii) the effect of the pandemic on our customers, counterparties, employees and first-party service providers, which may vary widely, and which is generally expected to increase our credit, counterparty, operational, and other risks; and (iv) the effect of the pandemic on economies and markets, which in turn could adversely affect, among other things, the origination of new loans and the performance of our existing loans. Any forward-looking statement should be evaluated in light of these considerations. 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, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach and relief measures during the COVID-19 pandemic, please visit umb.com/COVID-19. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2021 2020 ASSETS Loans $ 16,910,790 $ 15,305,097 Allowance for credit losses on loans (200,563 ) (200,300 ) Net loans 16,710,227 15,104,797 Loans held for sale 5,303 8,213 Securities: Available for sale 10,347,531 8,483,624 Held to maturity, net of allowance for credit losses 1,081,173 1,111,625 Trading securities 40,552 51,383 Other securities 254,315 154,206 Total securities 11,723,571 9,800,838 Federal funds sold and resell agreements 1,146,521 1,347,643 Interest-bearing due from banks 5,059,098 1,714,478 Cash and due from banks 469,883 462,849 Premises and equipment, net 281,011 300,174 Accrued income 131,188 126,962 Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Other assets 901,059 682,606 Total assets $ 36,619,015 $ 29,753,608 LIABILITIES Deposits: Noninterest-bearing demand $ 12,513,031 $ 8,633,603 Interest-bearing demand and savings 16,857,127 15,033,643 Time deposits under $250,000 430,713 546,089 Time deposits of $250,000 or more 247,600 246,069 Total deposits 30,048,471 24,459,404 Federal funds purchased and repurchase agreements 2,783,389 1,963,694 Short-term debt — 15,000 Long-term debt 270,558 70,996 Accrued expenses and taxes 254,589 239,254 Other liabilities 171,764 227,865 Total liabilities 33,528,771 26,976,213 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,098,139 1,081,713 Retained earnings 2,040,134 1,692,289 Accumulated other comprehensive income, net 223,107 284,262 Treasury stock (326,193 ) (335,926 ) Total shareholders' equity 3,090,244 2,777,395 Total liabilities and shareholders' equity $ 36,619,015 $ 29,753,608 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, 2021 2020 2021 2020 INTEREST INCOME Loans $ 154,537 $ 140,004 $ 304,707 $ 291,030 Securities: Taxable interest 29,780 25,870 56,942 53,082 Tax-exempt interest 24,743 24,612 49,707 49,016 Total securities income 54,523 50,482 106,649 102,098 Federal funds and resell agreements 2,552 1,573 5,373 7,025 Interest-bearing due from banks 833 398 1,536 3,061 Trading securities 189 312 348 966 Total interest income 212,634 192,769 418,613 404,180 INTEREST EXPENSE Deposits 6,574 11,243 13,372 40,975 Federal funds and repurchase agreements 1,779 1,950 3,665 8,331 Other 3,210 1,347 6,390 2,704 Total interest expense 11,563 14,540 23,427 52,010 Net interest income 201,071 178,229 395,186 352,170 Provision for credit losses 24,000 21,500 16,500 109,500 Net interest income after provision for credit losses 177,071 156,729 378,686 242,670 NONINTEREST INCOME Trust and securities processing 53,863 46,321 108,697 93,321 Trading and investment banking 8,670 12,851 18,026 14,574 Service charges on deposit accounts 22,592 19,074 44,568 44,155 Insurance fees and commissions 245 533 665 792 Brokerage fees 2,592 5,753 5,926 15,613 Bankcard fees 16,063 12,916 30,736 29,461 Investment securities gains, net 15,455 4,579 7,119 8,099 Other 12,109 18,429 24,749 12,865 Total noninterest income 131,589 120,456 240,486 218,880 NONINTEREST EXPENSE Salaries and employee benefits 120,415 130,938 248,096 241,998 Occupancy, net 12,296 11,411 24,231 23,591 Equipment 19,196 21,502 38,811 42,743 Supplies and services 3,469 3,785 6,961 7,970 Marketing and business development 4,797 3,284 7,142 7,924 Processing fees 16,501 13,603 31,918 26,993 Legal and consulting 8,147 6,220 13,902 12,330 Bankcard 4,529 4,549 9,485 9,409 Amortization of other intangible assets 1,157 1,658 2,537 3,392 Regulatory fees 2,769 3,211 5,315 5,577 Other 8,062 8,372 13,886 15,225 Total noninterest expense 201,338 208,533 402,284 397,152 Income before income taxes 107,322 68,652 216,888 64,398 Income tax expense 19,910 8,123 36,833 7,308 NET INCOME $ 87,412 $ 60,529 $ 180,055 $ 57,090 PER SHARE DATA Net income – basic $ 1.81 $ 1.26 $ 3.74 $ 1.18 Net income – diluted 1.79 1.26 3.70 1.18 Dividends 0.32 0.31 0.64 0.62 Weighted average shares outstanding – basic 48,294,952 47,991,283 48,196,345 48,340,579 Weighted average shares outstanding – diluted 48,698,319 48,077,810 48,604,140 48,491,526 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net income $ 87,412 $ 60,529 $ 180,055 $ 57,090 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 76,335 84,885 (122,703 ) 249,001 Less: Reclassification adjustment for gains included in net income (1,300 ) (4,006 ) (4,020 ) (5,233 ) Change in unrealized gains and losses on debt securities 75,035 80,879 (126,723 ) 243,768 Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (3,422 ) 4,612 3,081 19,137 Less: Reclassification adjustment for (gains) losses included in net income (877 ) (514 ) (1,719 ) 254 Change in unrealized gains and losses on derivative hedges (4,299 ) 4,098 1,362 19,391 Other comprehensive income (loss), before tax 70,736 84,977 (125,361 ) 263,159 Income tax (expense) benefit (16,826 ) (20,105 ) 30,128 (62,077 ) Other comprehensive income (loss) 53,910 64,872 (95,233 ) 201,082 Comprehensive income $ 141,322 $ 125,401 $ 84,822 $ 258,172 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, 2020 $ 55,057 $ 1,073,764 $ 1,672,438 $ 83,180 $ (277,999 ) $ 2,606,440 Total comprehensive income — — 57,090 201,082 — 258,172 Dividends ($0.62 per share) — — (30,200 ) — — (30,200 ) Purchase of treasury stock — 615 — — (60,074 ) (59,459 ) Forfeitures of equity awards, net of issuances — 676 — — (83 ) 593 Recognition of equity-based compensation — 6,109 — — — 6,109 Sale of treasury stock — 120 — — 201 321 Exercise of stock options — 429 — — 2,029 2,458 Cumulative effect adjustment — — (7,039 ) — — (7,039 ) Balance - June 30, 2020 $ 55,057 $ 1,081,713 $ 1,692,289 $ 284,262 $ (335,926 ) $ 2,777,395 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 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,817,674 3.69 % $ 15,098,366 3.73 % Securities: Taxable 6,994,559 1.71 5,069,290 2.05 Tax-exempt 4,289,443 2.93 4,108,075 3.05 Total securities 11,284,002 2.17 9,177,365 2.50 Federal funds and resell agreements 1,110,433 0.92 807,245 0.78 Interest bearing due from banks 3,343,311 0.10 1,492,798 0.11 Trading securities 21,409 4.27 37,816 3.79 Total earning assets 32,576,829 2.70 26,613,590 3.01 Allowance for credit losses (199,379 ) (195,373 ) Other assets 1,886,774 1,717,808 Total assets $ 34,264,224 $ 28,136,025 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,080,970 0.15 % $ 15,117,729 0.30 % Federal funds and repurchase agreements 2,744,516 0.26 2,138,156 0.37 Borrowed funds 270,305 4.76 85,681 6.32 Total interest-bearing liabilities 20,095,791 0.23 17,341,566 0.34 Noninterest-bearing demand deposits 10,701,656 7,662,836 Other liabilities 398,319 411,964 Shareholders' equity 3,068,458 2,719,659 Total liabilities and shareholders' equity $ 34,264,224 $ 28,136,025 Net interest spread 2.47 % 2.67 % Net interest margin 2.56 2.79 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,533,463 3.72 % $ 14,357,466 4.08 % Securities: Taxable 6,698,020 1.71 4,881,854 2.19 Tax-exempt 4,295,317 2.95 4,085,558 3.05 Total securities 10,993,337 2.20 8,967,412 2.58 Federal funds and resell agreements 1,375,689 0.79 1,015,720 1.39 Interest bearing due from banks 3,079,684 0.10 1,164,405 0.53 Trading securities 19,485 4.28 42,959 4.93 Total earning assets 32,001,658 2.72 25,547,962 3.28 Allowance for credit losses (209,469 ) (154,062 ) Other assets 1,862,036 1,693,684 Total assets $ 33,654,225 $ 27,087,584 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,076,681 0.16 % $ 14,723,895 0.56 % Federal funds and repurchase agreements 2,632,567 0.28 2,084,271 0.80 Borrowed funds 269,942 4.77 78,164 6.96 Total interest-bearing liabilities 19,979,190 0.24 16,886,330 0.62 Noninterest-bearing demand deposits 10,230,287 7,079,224 Other liabilities 414,535 401,724 Shareholders' equity 3,030,213 2,720,306 Total liabilities and shareholders' equity $ 33,654,225 $ 27,087,584 Net interest spread 2.48 % 2.66 % Net interest margin 2.57 2.88 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 135,656 $ 21,258 $ 44,157 $ 201,071 Provision for credit losses 22,009 147 1,844 24,000 Noninterest income 36,391 68,745 26,453 131,589 Noninterest expense 69,144 72,575 59,619 201,338 Income before taxes 80,894 17,281 9,147 107,322 Income tax expense 15,007 3,206 1,697 19,910 Net income $ 65,887 $ 14,075 $ 7,450 $ 87,412 Three Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 113,095 $ 28,124 $ 37,010 $ 178,229 Provision for credit losses 19,281 298 1,921 21,500 Noninterest income 24,078 66,488 29,890 120,456 Noninterest expense 62,123 76,953 69,457 208,533 Income (loss) before taxes 55,769 17,361 (4,478 ) 68,652 Income tax expense (benefit) 6,597 2,055 (529 ) 8,123 Net income (loss) $ 49,172 $ 15,306 $ (3,949 ) $ 60,529 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 268,687 $ 43,397 $ 83,102 $ 395,186 Provision for credit losses 13,827 367 2,306 16,500 Noninterest income 43,777 137,166 59,543 240,486 Noninterest expense 134,789 143,857 123,638 402,284 Income before taxes 163,848 36,339 16,701 216,888 Income tax expense 27,825 6,171 2,837 36,833 Net income $ 136,023 $ 30,168 $ 13,864 $ 180,055 Six Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 220,044 $ 61,159 $ 70,967 $ 352,170 Provision for credit losses 101,501 573 7,426 109,500 Noninterest income 35,318 128,440 55,122 218,880 Noninterest expense 121,166 145,406 130,580 397,152 Income (loss) before taxes 32,695 43,620 (11,917 ) 64,398 Income tax expense (benefit) 3,709 4,951 (1,352 ) 7,308 Net income (loss) $ 28,986 $ 38,669 $ (10,565 ) $ 57,090 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, 2021. 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, 2021 2020 2021 2020 Net income (GAAP) $ 87,412 $ 60,529 $ 180,055 $ 57,090 Adjustments: Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Tax-impact of adjustments (i) (63 ) (943 ) (102 ) (1,388 ) Total Non-GAAP adjustments (net of tax) 222 3,306 359 4,864 Net operating income (Non-GAAP) $ 87,634 $ 63,835 $ 180,414 $ 61,954 Earnings per share - diluted (GAAP) $ 1.79 $ 1.26 $ 3.70 $ 1.18 Acquisition expense — — — 0.01 Severance expense — 0.01 — 0.04 COVID-19 related expense 0.01 0.08 0.01 0.08 Tax-impact of adjustments (i) — (0.02 ) — (0.03 ) Operating earnings per share - diluted (Non-GAAP) $ 1.80 $ 1.33 $ 3.71 $ 1.28 GAAP Return on average assets 1.02 % 0.87 % 1.08 % 0.42 % Return on average equity 11.43 8.95 11.98 4.22 Non-GAAP Operating return on average assets 1.03 % 0.91 % 1.08 % 0.46 % Operating return on average equity 11.46 9.44 12.01 4.58 (i) Calculated using the company’s marginal tax rate of 22.2%. 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, 2021 2020 2021 2020 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Total Non-GAAP adjustments (pre-tax) 285 4,249 461 6,252 Operating noninterest expense (Non-GAAP) $ 201,053 $ 204,284 $ 401,823 $ 390,900 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 200,181 $ 206,875 $ 399,747 $ 393,760 Operating noninterest expense $ 201,053 $ 204,284 $ 401,823 $ 390,900 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 199,896 $ 202,626 $ 399,286 $ 387,508 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Noninterest income 131,589 120,456 240,486 218,880 Less: Gains on sales of securities available for sale, net 1,300 4,006 4,020 5,233 Total Non-GAAP Revenue (denominator A) $ 331,360 $ 294,679 $ 631,652 $ 565,817 Efficiency ratio (numerator A/denominator A) 60.41 % 70.20 % 63.29 % 69.59 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 60.33 68.76 63.21 68.49 Pre-tax, pre-provision 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, 2021 2020 2021 2020 Net income before taxes (GAAP) $ 107,322 $ 68,652 $ 216,888 $ 64,398 Adjustments: Provision for credit losses 24,000 21,500 16,500 109,500 Pre-tax, pre-provision income (Non-GAAP) $ 131,322 $ 90,152 $ 233,388 $ 173,898 Pre-tax earnings per share - diluted (GAAP) $ 2.20 $ 1.43 $ 4.46 $ 1.33 Provision for credit losses 0.50 0.45 0.34 2.26 Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.70 $ 1.88 $ 4.80 $ 3.59 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,629 6,604 13,307 13,082 Net interest income - FTE $ 207,700 $ 184,833 $ 408,493 $ 365,252 Noninterest income 131,589 120,456 240,486 218,880 Less: Noninterest expense 201,338 208,533 402,284 397,152 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 137,951 $ 96,756 $ 246,695 $ 186,980 Net interest income earnings per share - diluted $ 4.13 $ 3.71 $ 8.13 $ 7.26 Tax equivalent interest 0.13 0.14 0.28 0.27 Net interest income - FTE 4.26 3.85 8.41 7.53 Noninterest income 2.70 2.50 4.95 4.52 Less: Noninterest expense 4.13 4.34 8.28 8.19 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.83 $ 2.01 $ 5.08 $ 3.86 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2021 2020 Total shareholders' equity (GAAP) $ 3,090,244 $ 2,777,395 Less: Intangible assets Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Total intangibles, net 191,154 205,048 Total tangible shareholders' equity (Non-GAAP) $ 2,899,090 $ 2,572,347 Total shares outstanding 48,346,371 48,021,707 Ratio of total shareholders' equity (book value) per share $ 63.92 $ 57.84 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 59.96 53.57 View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005159/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106
Second quarter 2021 Financial Highlights (all comparisons to prior year unless otherwise noted) GAAP net income of $87.4 million, or $1.79 per diluted share; net operating income of $87.6 million, or $1.80 per diluted share. Pre-tax, pre-provision (PTPP) income of $131.3 million, an increase of $41.2 million. Quarterly average loan balances increased $1.7 billion, or 11.4%. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.0% on a linked-quarter, annualized basis. Quarterly average deposits grew 22.0% to $27.8 billion. Noninterest income increased 9.2% and comprised 39.6% of revenue. Board of Directors increased quarterly cash dividend by 15.6% to $0.37 per share.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2021 of $87.4 million, or $1.79 per diluted share, compared to $92.6 million, or $1.91 per diluted share, in the first quarter of 2021 (linked quarter) and $60.5 million, or $1.26 per diluted share, in the second quarter of 2020. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $87.6 million, or $1.80 per diluted share, for the second quarter of 2021, compared to $92.8 million, or $1.91 per diluted share, for the linked quarter and $63.8 million, or $1.33 per diluted share, for the second quarter of 2020. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), a non-GAAP measure reconciled to the components of net income before taxes, the nearest comparable GAAP measure, later in this release, was $138.0 million, or $2.83 per diluted share, for the second quarter of 2021, compared to $108.7 million, or $2.24 per diluted share, for the linked quarter, and $96.8 million, or $2.01 per diluted share, for the second quarter of 2020. These PTPP-FTE results represent an increase of 26.9% on a linked-quarter basis and an increase of 42.6% compared to the second quarter of 2020. Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2021 2021 2020 Net income (GAAP) $ 87,412 $ 92,643 $ 60,529 Earnings per share (diluted) 1.79 1.91 1.26 Pre-tax, pre-provision income (Non-GAAP) 131,322 102,066 90,152 Pre-tax, pre-provision earnings per share (diluted) 2.70 2.10 1.88 Pre-tax, pre-provision income - FTE (Non-GAAP) 137,951 108,744 96,756 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.83 2.24 2.01 Net operating income (Non-GAAP) 87,634 92,780 63,835 Operating earnings per share (diluted) 1.80 1.91 1.33 GAAP Return on average assets 1.02 % 1.14 % 0.87 % Return on average equity 11.43 12.56 8.95 Efficiency ratio 60.41 66.46 70.20 Non-GAAP Operating return on average assets 1.03 % 1.14 % 0.91 % Operating return on average equity 11.46 12.58 9.44 Operating efficiency ratio 60.33 66.40 68.76 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2021 2020 Net income (GAAP) $ 180,055 $ 57,090 Earnings per share (diluted) 3.70 1.18 Pre-tax, pre-provision income (Non-GAAP) 233,388 173,898 Pre-tax, pre-provision earnings per share (diluted) 4.80 3.59 Pre-tax, pre-provision income - FTE (Non-GAAP) 246,695 186,980 Pre-tax, pre-provision earnings per share - FTE (diluted) 5.08 3.86 Net operating income (Non-GAAP) 180,414 61,954 Operating earnings per share (diluted) 3.71 1.28 GAAP Return on average assets 1.08 % 0.42 % Return on average equity 11.98 4.22 Efficiency ratio 63.29 69.59 Non-GAAP Operating return on average assets 1.08 % 0.46 % Operating return on average equity 12.01 4.58 Operating efficiency ratio 63.21 68.49 “Our strong second quarter results demonstrated the benefits of our diverse business model and validates our investment thesis which includes above-peer loan growth, continued net interest income and strong fee income growth across all operating and interest rate environments,” said Mariner Kemper, chairman, president and chief executive officer. “During the second quarter, average loans, excluding PPP balances, increased 19.0% annualized on a linked-quarter basis. Noninterest income increased 20.8% from the prior quarter and 9.2% over the year-ago period. Our $24.0 million provision was higher than previous levels due to strong loan growth and elevated net charge-offs related to one commercial factoring relationship. Excluding this credit event, we would have had net recoveries in the quarter and the underlying asset quality of our loan portfolio remains strong. Nonperforming loan balances declined 24.1% from prior quarter-end. During the quarter, we monetized 3.5 million shares of our Tattooed Chef, Inc. (TTCF) holdings for net proceeds of approximately $72.8 million. Finally, we are excited to announce that our Board of Directors approved a five cent or 15.6% increase in the quarterly cash dividend to our shareholders.” Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Net interest income $ 201,071 $ 194,115 $ 178,229 $ 6,956 $ 22,842 Noninterest income: Trust and securities processing 53,863 54,834 46,321 (971 ) 7,542 Trading and investment banking 8,670 9,356 12,851 (686 ) (4,181 ) Service charges on deposit accounts 22,592 21,976 19,074 616 3,518 Insurance fees and commissions 245 420 533 (175 ) (288 ) Brokerage fees 2,592 3,334 5,753 (742 ) (3,161 ) Bankcard fees 16,063 14,673 12,916 1,390 3,147 Investment securities gains (losses), net 15,455 (8,336 ) 4,579 23,791 10,876 Other 12,109 12,640 18,429 (531 ) (6,320 ) Total noninterest income $ 131,589 $ 108,897 $ 120,456 $ 22,692 $ 11,133 Total revenue $ 332,660 $ 303,012 $ 298,685 $ 29,648 $ 33,975 Net interest income (FTE) $ 207,700 $ 200,793 $ 184,833 Net interest margin (FTE) 2.56 % 2.59 % 2.79 % Total noninterest income as a % of total revenue 39.56 35.94 40.33 Net interest income Net interest income totaled $201.1 million, which is an increase of $7.0 million as compared to the linked quarter. The positive impact from strong balance sheet growth was partially offset by the impacts of lower PPP income in the quarter. Average earning assets increased $1.1 billion, or 3.6%, driven in part by an increase in securities and loans, while interest-bearing liabilities increased $234.5 million, or 1.2%. Net interest margin for the second quarter was 2.56%, a decrease of three basis points from the linked quarter, driven in large part by earning asset mix shift and lower market and reinvestment rates. Earning asset yields declined four basis points from the linked quarter, driven by a six-basis-point decline in both loan and securities yields and mix changes. The cost of interest-bearing liabilities decreased one basis point to 0.23%. Net interest spread decreased three basis points to 2.47% from the linked quarter and was 20 basis points lower than the second quarter of 2020. On a year-over-year basis, net interest income increased $22.8 million, or 12.8%, driven by a $2.1 billion, or 23.0% increase in average securities, coupled with a $1.7 billion, or 11.4%, increase in average loans. These increases were driven by organic loan growth, excess liquidity, and the company’s PPP participation. Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposit balances increased 9.7% on a linked-quarter basis and 39.7% compared to the second quarter of 2020. Noninterest income Second quarter 2021 noninterest income increased $22.7 million, or 20.8%, on a linked-quarter basis, largely due to: An increase of $23.8 million in investment securities gains, primarily due to an increase of $23.3 million in gains on the company’s equity investment in TTCF. An increase of $1.4 million in bankcard fees, primarily due to increased interchange income. These increases were partially offset by decreases of $1.0 million in trust and securities processing income and $0.7 million in trading and investment banking income. The decrease in trust and securities processing income is primarily driven by the previously announced sale of Prairie Capital Management, LLC (PCM) in March 2021, offset by increased fund services income. The decline in trading and investment banking income is primarily due to decreased trading volume. Compared to the prior year, noninterest income in the second quarter of 2021 increased $11.1 million, or 9.2%, primarily driven by: An increase of $10.9 million in investment securities gains, primarily due to an increase of $14.2 million in gains on equity investments, partially offset by decreases of $2.7 million and $0.6 million in gains on the sale of available for sale securities and PCM-related equity earnings on alternative investments, respectively. Increases of $6.7 million and $2.0 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. An increase of $3.5 million in service charges on deposits, driven by increased healthcare income related to customer transfer and conversion fees, and increased corporate service charges. An increase of $2.5 million in derivative income, recorded in other income. These increases were partially offset by a decrease of $9.8 million in the market value of company-owned life insurance, recorded in other income, and a decrease of $4.2 million in trading and investment banking, due to decreased trading volumes. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Salaries and employee benefits $ 120,415 $ 127,681 $ 130,938 $ (7,266 ) $ (10,523 ) Occupancy, net 12,296 11,935 11,411 361 885 Equipment 19,196 19,615 21,502 (419 ) (2,306 ) Supplies and services 3,469 3,492 3,785 (23 ) (316 ) Marketing and business development 4,797 2,345 3,284 2,452 1,513 Processing fees 16,501 15,417 13,603 1,084 2,898 Legal and consulting 8,147 5,755 6,220 2,392 1,927 Bankcard 4,529 4,956 4,549 (427 ) (20 ) Amortization of other intangible assets 1,157 1,380 1,658 (223 ) (501 ) Regulatory fees 2,769 2,546 3,211 223 (442 ) Other 8,062 5,824 8,372 2,238 (310 ) Total noninterest expense $ 201,338 $ 200,946 $ 208,533 $ 392 $ (7,195 ) Noninterest expense for the second quarter of 2021 was $201.3 million, an increase of $0.4 million, or 0.2%, from the linked quarter and a decrease of $7.2 million, or 3.5%, from the second quarter of 2020. The linked-quarter increase in noninterest expense was driven by: Increases of $2.5 million, $2.4 million, and $1.1 million in marketing and business development expense, legal and consulting expense, and processing fees, respectively, due to timing of various marketing initiatives, legal costs, and timing of software projects. Increases of $0.9 million in losses on sales of other real estate, $0.7 million in derivative expense, and $0.7 million in miscellaneous loan fee expense, all recorded in other noninterest expense. These increases were offset by decreases of $5.7 million in payroll taxes, insurance and 401(k) expense, and $1.8 million in bonus and commission expense, both recorded in salary and employee benefits. The year-over-year decrease in noninterest expense was driven by: A decrease of $10.5 million in deferred compensation expense, recorded in salaries and employee benefits. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $2.1 million in software expense, recorded in equipment expense. These decreases were partially offset by increases of $2.9 million in processing fees, $1.9 million in legal and professional expense, and $1.5 million in marketing and business development, due to timing of software projects, legal costs, and various marketing initiatives. Income taxes The company’s effective tax rate was 17.0% for the six months ended June 30, 2021, compared to 11.3% for the same period in 2020. The increase in the effective rate for 2021 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 2021 were $34.3 billion compared to $33.1 billion for the linked quarter and $28.1 billion for the same period in 2020. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Commercial and industrial $ 7,402,653 $ 7,139,101 $ 6,970,223 $ 263,552 $ 432,430 Specialty lending 505,687 502,585 471,571 3,102 34,116 Commercial real estate 6,165,780 5,971,047 5,435,428 194,733 730,352 Consumer real estate 2,068,663 1,970,767 1,528,501 97,896 540,162 Consumer 122,439 117,095 146,120 5,344 (23,681 ) Credit cards 386,032 362,051 353,424 23,981 32,608 Leases and other 166,420 183,447 193,099 (17,027 ) (26,679 ) Total loans $ 16,817,674 $ 16,246,093 $ 15,098,366 $ 571,581 $ 1,719,308 Average loans for the second quarter of 2021 increased 3.5% on a linked-quarter basis and 11.4% compared to the second quarter of 2020 primarily due to increased commercial and industrial and commercial real estate loans. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Securities available for sale: U.S. Treasury $ 40,013 $ 36,032 $ 31,150 $ 3,981 $ 8,863 U.S. Agencies 94,794 95,494 403,290 (700 ) (308,496 ) Mortgage-backed 6,096,099 5,599,987 4,284,374 496,112 1,811,725 State and political subdivisions 3,565,443 3,552,945 3,108,661 12,498 456,782 Commercial Paper — — 2,040 — (2,040 ) Corporates 127,581 83,271 98,089 44,310 29,492 Total securities available for sale $ 9,923,930 $ 9,367,729 $ 7,927,604 $ 556,201 $ 1,996,326 Securities held to maturity: State and political subdivisions $ 1,057,091 $ 1,023,418 $ 1,100,843 $ 33,673 $ (43,752 ) Trading securities 21,409 17,540 37,816 3,869 (16,407 ) Other securities 302,981 308,297 148,918 (5,316 ) 154,063 Total securities $ 11,305,411 $ 10,716,984 $ 9,215,181 $ 588,427 $ 2,090,230 Average securities available for sale increased 5.9% on a linked-quarter basis and 25.2% compared to the second quarter of 2020. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2021 2021 2020 LQ PY Deposits: Noninterest-bearing demand $ 10,701,656 $ 9,753,680 $ 7,662,836 $ 947,976 $ 3,038,820 Interest-bearing demand and savings 16,421,742 16,302,880 14,160,722 118,862 2,261,020 Time deposits 659,228 769,464 957,007 (110,236 ) (297,779 ) Total deposits $ 27,782,626 $ 26,826,024 $ 22,780,565 $ 956,602 $ 5,002,061 Noninterest bearing deposits as % of total 38.52 % 36.36 % 33.64 % Average deposits increased 3.6% on a linked-quarter basis and 22.0% compared to the second quarter of 2020. Average noninterest-bearing demand deposits increased 9.7% on a linked-quarter basis to $10.7 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Total equity $ 3,090,244 $ 2,958,239 $ 2,777,395 Book value per common share 63.92 61.24 57.84 Tangible book value per common share 59.96 57.26 53.57 Regulatory capital: Common equity Tier 1 capital $ 2,730,062 $ 2,660,102 $ 2,335,625 Tier 1 capital 2,730,062 2,660,102 2,335,625 Total capital 3,172,878 3,102,333 2,580,849 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.91 % 12.25 % 11.92 % Tier 1 risk-based capital ratio 11.91 12.25 11.92 Total risk-based capital ratio 13.84 14.28 13.17 Tier 1 leverage ratio 8.00 8.08 8.35 At June 30, 2021, 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 2021 2021 2020 2020 2020 Net charge-offs - Total loans $ 28,374 $ 5,310 $ 1,801 $ 5,111 $ 5,541 Net loan charge-offs as a % of total average loans 0.68 % 0.13 % 0.04 % 0.13 % 0.15 % Loans over 90 days past due $ 1,265 $ 1,773 $ 1,952 $ 1,372 $ 4,588 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.01 % 0.03 % Nonaccrual and restructured loans $ 58,219 $ 76,706 $ 87,823 $ 93,695 $ 82,245 Nonaccrual and restructured loans as a % of total loans 0.34 % 0.46 % 0.55 % 0.59 % 0.54 % Provision for credit losses $ 24,000 $ (7,500 ) $ 5,000 $ 16,000 $ 21,500 Provision for credit losses for the second quarter increased $31.5 million from the linked quarter and $2.5 million from the second quarter of 2020. This increase is driven by impacts to the Allowance for Credit Losses by a large charge-off during the second quarter, offset by the impacts of positive macro-economic metrics. Net charge-offs for the second quarter totaled $28.4 million, or 0.68%, of average loans, compared to $5.3 million, or 0.13%, of average loans in the linked quarter, and $5.5 million, or 0.15%, of average loans for the second quarter of 2020. The increase in net charge-offs in the second quarter of 2021 is due to a $31.9 million loss on one commercial relationship. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, or an increase of 15.6%. This cash dividend will be payable on October 1, 2021, to shareholders of record at the close of business on September 10, 2021. Conference Call The company plans to host a conference call to discuss its second quarter 2021 earnings results on Wednesday, July 28, 2021, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2021 Conference Call A replay of the conference call may be heard through August 11, 2021 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10157858. 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, pre-tax, pre-provision income, pre-tax, pre-provision earnings per share – diluted (PTPP EPS), pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), pre-tax, pre-provision FTE earnings per share – diluted (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, PTPP, PTPP EPS, PTPP-FTE, 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). Pre-tax, pre-provision income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. Pre-tax, pre-provision income on a fully tax equivalent basis for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus noninterest income, less noninterest 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, 2020, 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, the COVID-19 pandemic (the pandemic) may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. The pandemic has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. It is currently adversely affecting the company and its customers, counterparties, employees, and first-party service providers, and the continued adverse impacts on our business, financial position, results of operations, and prospects could be significant. We are not able to accurately predict the extent of the impact of the pandemic on our capital, liquidity, and other financial positions and on our business, results of operations, and prospects at this time, and we believe it will depend on a number of evolving factors, including: (i) the duration, extent and severity of the pandemic; (ii) the response of governmental and non-governmental authorities to the pandemic, which is rapidly changing and not always coordinated or consistent across jurisdictions; (iii) the effect of the pandemic on our customers, counterparties, employees and first-party service providers, which may vary widely, and which is generally expected to increase our credit, counterparty, operational, and other risks; and (iv) the effect of the pandemic on economies and markets, which in turn could adversely affect, among other things, the origination of new loans and the performance of our existing loans. Any forward-looking statement should be evaluated in light of these considerations. 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, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach and relief measures during the COVID-19 pandemic, please visit umb.com/COVID-19. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2021 2020 ASSETS Loans $ 16,910,790 $ 15,305,097 Allowance for credit losses on loans (200,563 ) (200,300 ) Net loans 16,710,227 15,104,797 Loans held for sale 5,303 8,213 Securities: Available for sale 10,347,531 8,483,624 Held to maturity, net of allowance for credit losses 1,081,173 1,111,625 Trading securities 40,552 51,383 Other securities 254,315 154,206 Total securities 11,723,571 9,800,838 Federal funds sold and resell agreements 1,146,521 1,347,643 Interest-bearing due from banks 5,059,098 1,714,478 Cash and due from banks 469,883 462,849 Premises and equipment, net 281,011 300,174 Accrued income 131,188 126,962 Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Other assets 901,059 682,606 Total assets $ 36,619,015 $ 29,753,608 LIABILITIES Deposits: Noninterest-bearing demand $ 12,513,031 $ 8,633,603 Interest-bearing demand and savings 16,857,127 15,033,643 Time deposits under $250,000 430,713 546,089 Time deposits of $250,000 or more 247,600 246,069 Total deposits 30,048,471 24,459,404 Federal funds purchased and repurchase agreements 2,783,389 1,963,694 Short-term debt — 15,000 Long-term debt 270,558 70,996 Accrued expenses and taxes 254,589 239,254 Other liabilities 171,764 227,865 Total liabilities 33,528,771 26,976,213 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,098,139 1,081,713 Retained earnings 2,040,134 1,692,289 Accumulated other comprehensive income, net 223,107 284,262 Treasury stock (326,193 ) (335,926 ) Total shareholders' equity 3,090,244 2,777,395 Total liabilities and shareholders' equity $ 36,619,015 $ 29,753,608 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, 2021 2020 2021 2020 INTEREST INCOME Loans $ 154,537 $ 140,004 $ 304,707 $ 291,030 Securities: Taxable interest 29,780 25,870 56,942 53,082 Tax-exempt interest 24,743 24,612 49,707 49,016 Total securities income 54,523 50,482 106,649 102,098 Federal funds and resell agreements 2,552 1,573 5,373 7,025 Interest-bearing due from banks 833 398 1,536 3,061 Trading securities 189 312 348 966 Total interest income 212,634 192,769 418,613 404,180 INTEREST EXPENSE Deposits 6,574 11,243 13,372 40,975 Federal funds and repurchase agreements 1,779 1,950 3,665 8,331 Other 3,210 1,347 6,390 2,704 Total interest expense 11,563 14,540 23,427 52,010 Net interest income 201,071 178,229 395,186 352,170 Provision for credit losses 24,000 21,500 16,500 109,500 Net interest income after provision for credit losses 177,071 156,729 378,686 242,670 NONINTEREST INCOME Trust and securities processing 53,863 46,321 108,697 93,321 Trading and investment banking 8,670 12,851 18,026 14,574 Service charges on deposit accounts 22,592 19,074 44,568 44,155 Insurance fees and commissions 245 533 665 792 Brokerage fees 2,592 5,753 5,926 15,613 Bankcard fees 16,063 12,916 30,736 29,461 Investment securities gains, net 15,455 4,579 7,119 8,099 Other 12,109 18,429 24,749 12,865 Total noninterest income 131,589 120,456 240,486 218,880 NONINTEREST EXPENSE Salaries and employee benefits 120,415 130,938 248,096 241,998 Occupancy, net 12,296 11,411 24,231 23,591 Equipment 19,196 21,502 38,811 42,743 Supplies and services 3,469 3,785 6,961 7,970 Marketing and business development 4,797 3,284 7,142 7,924 Processing fees 16,501 13,603 31,918 26,993 Legal and consulting 8,147 6,220 13,902 12,330 Bankcard 4,529 4,549 9,485 9,409 Amortization of other intangible assets 1,157 1,658 2,537 3,392 Regulatory fees 2,769 3,211 5,315 5,577 Other 8,062 8,372 13,886 15,225 Total noninterest expense 201,338 208,533 402,284 397,152 Income before income taxes 107,322 68,652 216,888 64,398 Income tax expense 19,910 8,123 36,833 7,308 NET INCOME $ 87,412 $ 60,529 $ 180,055 $ 57,090 PER SHARE DATA Net income – basic $ 1.81 $ 1.26 $ 3.74 $ 1.18 Net income – diluted 1.79 1.26 3.70 1.18 Dividends 0.32 0.31 0.64 0.62 Weighted average shares outstanding – basic 48,294,952 47,991,283 48,196,345 48,340,579 Weighted average shares outstanding – diluted 48,698,319 48,077,810 48,604,140 48,491,526 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net income $ 87,412 $ 60,529 $ 180,055 $ 57,090 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 76,335 84,885 (122,703 ) 249,001 Less: Reclassification adjustment for gains included in net income (1,300 ) (4,006 ) (4,020 ) (5,233 ) Change in unrealized gains and losses on debt securities 75,035 80,879 (126,723 ) 243,768 Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (3,422 ) 4,612 3,081 19,137 Less: Reclassification adjustment for (gains) losses included in net income (877 ) (514 ) (1,719 ) 254 Change in unrealized gains and losses on derivative hedges (4,299 ) 4,098 1,362 19,391 Other comprehensive income (loss), before tax 70,736 84,977 (125,361 ) 263,159 Income tax (expense) benefit (16,826 ) (20,105 ) 30,128 (62,077 ) Other comprehensive income (loss) 53,910 64,872 (95,233 ) 201,082 Comprehensive income $ 141,322 $ 125,401 $ 84,822 $ 258,172 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, 2020 $ 55,057 $ 1,073,764 $ 1,672,438 $ 83,180 $ (277,999 ) $ 2,606,440 Total comprehensive income — — 57,090 201,082 — 258,172 Dividends ($0.62 per share) — — (30,200 ) — — (30,200 ) Purchase of treasury stock — 615 — — (60,074 ) (59,459 ) Forfeitures of equity awards, net of issuances — 676 — — (83 ) 593 Recognition of equity-based compensation — 6,109 — — — 6,109 Sale of treasury stock — 120 — — 201 321 Exercise of stock options — 429 — — 2,029 2,458 Cumulative effect adjustment — — (7,039 ) — — (7,039 ) Balance - June 30, 2020 $ 55,057 $ 1,081,713 $ 1,692,289 $ 284,262 $ (335,926 ) $ 2,777,395 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 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,817,674 3.69 % $ 15,098,366 3.73 % Securities: Taxable 6,994,559 1.71 5,069,290 2.05 Tax-exempt 4,289,443 2.93 4,108,075 3.05 Total securities 11,284,002 2.17 9,177,365 2.50 Federal funds and resell agreements 1,110,433 0.92 807,245 0.78 Interest bearing due from banks 3,343,311 0.10 1,492,798 0.11 Trading securities 21,409 4.27 37,816 3.79 Total earning assets 32,576,829 2.70 26,613,590 3.01 Allowance for credit losses (199,379 ) (195,373 ) Other assets 1,886,774 1,717,808 Total assets $ 34,264,224 $ 28,136,025 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,080,970 0.15 % $ 15,117,729 0.30 % Federal funds and repurchase agreements 2,744,516 0.26 2,138,156 0.37 Borrowed funds 270,305 4.76 85,681 6.32 Total interest-bearing liabilities 20,095,791 0.23 17,341,566 0.34 Noninterest-bearing demand deposits 10,701,656 7,662,836 Other liabilities 398,319 411,964 Shareholders' equity 3,068,458 2,719,659 Total liabilities and shareholders' equity $ 34,264,224 $ 28,136,025 Net interest spread 2.47 % 2.67 % Net interest margin 2.56 2.79 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2021 2020 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 16,533,463 3.72 % $ 14,357,466 4.08 % Securities: Taxable 6,698,020 1.71 4,881,854 2.19 Tax-exempt 4,295,317 2.95 4,085,558 3.05 Total securities 10,993,337 2.20 8,967,412 2.58 Federal funds and resell agreements 1,375,689 0.79 1,015,720 1.39 Interest bearing due from banks 3,079,684 0.10 1,164,405 0.53 Trading securities 19,485 4.28 42,959 4.93 Total earning assets 32,001,658 2.72 25,547,962 3.28 Allowance for credit losses (209,469 ) (154,062 ) Other assets 1,862,036 1,693,684 Total assets $ 33,654,225 $ 27,087,584 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,076,681 0.16 % $ 14,723,895 0.56 % Federal funds and repurchase agreements 2,632,567 0.28 2,084,271 0.80 Borrowed funds 269,942 4.77 78,164 6.96 Total interest-bearing liabilities 19,979,190 0.24 16,886,330 0.62 Noninterest-bearing demand deposits 10,230,287 7,079,224 Other liabilities 414,535 401,724 Shareholders' equity 3,030,213 2,720,306 Total liabilities and shareholders' equity $ 33,654,225 $ 27,087,584 Net interest spread 2.48 % 2.66 % Net interest margin 2.57 2.88 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 135,656 $ 21,258 $ 44,157 $ 201,071 Provision for credit losses 22,009 147 1,844 24,000 Noninterest income 36,391 68,745 26,453 131,589 Noninterest expense 69,144 72,575 59,619 201,338 Income before taxes 80,894 17,281 9,147 107,322 Income tax expense 15,007 3,206 1,697 19,910 Net income $ 65,887 $ 14,075 $ 7,450 $ 87,412 Three Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 113,095 $ 28,124 $ 37,010 $ 178,229 Provision for credit losses 19,281 298 1,921 21,500 Noninterest income 24,078 66,488 29,890 120,456 Noninterest expense 62,123 76,953 69,457 208,533 Income (loss) before taxes 55,769 17,361 (4,478 ) 68,652 Income tax expense (benefit) 6,597 2,055 (529 ) 8,123 Net income (loss) $ 49,172 $ 15,306 $ (3,949 ) $ 60,529 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 268,687 $ 43,397 $ 83,102 $ 395,186 Provision for credit losses 13,827 367 2,306 16,500 Noninterest income 43,777 137,166 59,543 240,486 Noninterest expense 134,789 143,857 123,638 402,284 Income before taxes 163,848 36,339 16,701 216,888 Income tax expense 27,825 6,171 2,837 36,833 Net income $ 136,023 $ 30,168 $ 13,864 $ 180,055 Six Months Ended June 30, 2020 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 220,044 $ 61,159 $ 70,967 $ 352,170 Provision for credit losses 101,501 573 7,426 109,500 Noninterest income 35,318 128,440 55,122 218,880 Noninterest expense 121,166 145,406 130,580 397,152 Income (loss) before taxes 32,695 43,620 (11,917 ) 64,398 Income tax expense (benefit) 3,709 4,951 (1,352 ) 7,308 Net income (loss) $ 28,986 $ 38,669 $ (10,565 ) $ 57,090 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, 2021. 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, 2021 2020 2021 2020 Net income (GAAP) $ 87,412 $ 60,529 $ 180,055 $ 57,090 Adjustments: Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Tax-impact of adjustments (i) (63 ) (943 ) (102 ) (1,388 ) Total Non-GAAP adjustments (net of tax) 222 3,306 359 4,864 Net operating income (Non-GAAP) $ 87,634 $ 63,835 $ 180,414 $ 61,954 Earnings per share - diluted (GAAP) $ 1.79 $ 1.26 $ 3.70 $ 1.18 Acquisition expense — — — 0.01 Severance expense — 0.01 — 0.04 COVID-19 related expense 0.01 0.08 0.01 0.08 Tax-impact of adjustments (i) — (0.02 ) — (0.03 ) Operating earnings per share - diluted (Non-GAAP) $ 1.80 $ 1.33 $ 3.71 $ 1.28 GAAP Return on average assets 1.02 % 0.87 % 1.08 % 0.42 % Return on average equity 11.43 8.95 11.98 4.22 Non-GAAP Operating return on average assets 1.03 % 0.91 % 1.08 % 0.46 % Operating return on average equity 11.46 9.44 12.01 4.58 (i) Calculated using the company’s marginal tax rate of 22.2%. 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, 2021 2020 2021 2020 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — 123 — 246 Severance expense 103 137 124 1,789 COVID-19 related expense 182 3,989 337 4,217 Total Non-GAAP adjustments (pre-tax) 285 4,249 461 6,252 Operating noninterest expense (Non-GAAP) $ 201,053 $ 204,284 $ 401,823 $ 390,900 Noninterest expense $ 201,338 $ 208,533 $ 402,284 $ 397,152 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 200,181 $ 206,875 $ 399,747 $ 393,760 Operating noninterest expense $ 201,053 $ 204,284 $ 401,823 $ 390,900 Less: Amortization of other intangibles 1,157 1,658 2,537 3,392 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 199,896 $ 202,626 $ 399,286 $ 387,508 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Noninterest income 131,589 120,456 240,486 218,880 Less: Gains on sales of securities available for sale, net 1,300 4,006 4,020 5,233 Total Non-GAAP Revenue (denominator A) $ 331,360 $ 294,679 $ 631,652 $ 565,817 Efficiency ratio (numerator A/denominator A) 60.41 % 70.20 % 63.29 % 69.59 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 60.33 68.76 63.21 68.49 Pre-tax, pre-provision 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, 2021 2020 2021 2020 Net income before taxes (GAAP) $ 107,322 $ 68,652 $ 216,888 $ 64,398 Adjustments: Provision for credit losses 24,000 21,500 16,500 109,500 Pre-tax, pre-provision income (Non-GAAP) $ 131,322 $ 90,152 $ 233,388 $ 173,898 Pre-tax earnings per share - diluted (GAAP) $ 2.20 $ 1.43 $ 4.46 $ 1.33 Provision for credit losses 0.50 0.45 0.34 2.26 Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.70 $ 1.88 $ 4.80 $ 3.59 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net interest income $ 201,071 $ 178,229 $ 395,186 $ 352,170 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,629 6,604 13,307 13,082 Net interest income - FTE $ 207,700 $ 184,833 $ 408,493 $ 365,252 Noninterest income 131,589 120,456 240,486 218,880 Less: Noninterest expense 201,338 208,533 402,284 397,152 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 137,951 $ 96,756 $ 246,695 $ 186,980 Net interest income earnings per share - diluted $ 4.13 $ 3.71 $ 8.13 $ 7.26 Tax equivalent interest 0.13 0.14 0.28 0.27 Net interest income - FTE 4.26 3.85 8.41 7.53 Noninterest income 2.70 2.50 4.95 4.52 Less: Noninterest expense 4.13 4.34 8.28 8.19 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.83 $ 2.01 $ 5.08 $ 3.86 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2021 2020 Total shareholders' equity (GAAP) $ 3,090,244 $ 2,777,395 Less: Intangible assets Goodwill 174,518 180,867 Other intangibles, net 16,636 24,181 Total intangibles, net 191,154 205,048 Total tangible shareholders' equity (Non-GAAP) $ 2,899,090 $ 2,572,347 Total shares outstanding 48,346,371 48,021,707 Ratio of total shareholders' equity (book value) per share $ 63.92 $ 57.84 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 59.96 53.57 View source version on businesswire.com: https://www.businesswire.com/news/home/20210727005159/en/