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 First Quarter Net Income of $106.0 Million By: UMB Financial Corporation via Business Wire April 26, 2022 at 16:15 PM EDT First Quarter 2022 Financial Highlights GAAP net income of $106.0 million, or $2.17 per diluted share; net operating income (a non-GAAP financial measure) of $106.1 million, or $2.17 per diluted share. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE, a non-GAAP financial measure) of $125.7 million, an increase of 10.9% compared to the fourth quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.1% on a linked-quarter, annualized basis. Quarterly average deposits grew 21.5% compared to the first quarter of 2021. Noninterest income increased 13.6% as compared to the first quarter of 2021, equal to 37.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.20% of average loans, consistent with the company’s historical performance. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2022 of $106.0 million, or $2.17 per diluted share, compared to $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021 (linked quarter) and $92.6 million, or $1.91 per diluted share, in the first quarter of 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $106.1 million, or $2.17 per diluted share, for the first quarter of 2022, compared to $78.9 million, or $1.62 per diluted share, for the linked quarter and $92.8 million, or $1.91 per diluted share, for the first quarter of 2021. 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 $125.7 million, or $2.57 per diluted share, for the first quarter of 2022, compared to $113.4 million, or $2.32 per diluted share, for the linked quarter, and $108.7 million, or $2.24 per diluted share, for the first quarter of 2021. These PTPP-FTE results represent increases of 10.9% on a linked-quarter basis and 15.6% compared to the first quarter of 2021. “Our results for the first quarter of 2022 reflect the team’s continued execution of our differentiated business model, with robust growth on both sides of our balance sheet, strong asset quality metrics, and sustained momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Compared to the first quarter of 2021, average loans excluding PPP balances and average deposits increased 15.6% and 21.5%, respectively. Together with a 13.6% increase in fee income, our first quarter revenues increased 10.2% compared to the prior period. In addition, our results benefited from a provision release of $6.5 million in the first quarter, driven by favorable portfolio metrics and the improving macro-economic outlook. I am also extremely proud of the team’s continued commitment to the communities we serve, which you may read about in our 2022 corporate citizenship and ESG report.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2022 2021 2021 Net income (GAAP) $ 105,963 $ 78,496 $ 92,643 Earnings per share (diluted) 2.17 1.61 1.91 Pre-tax, pre-provision income (Non-GAAP) 119,255 106,869 102,066 Pre-tax, pre-provision earnings per share (diluted) 2.44 2.19 2.10 Pre-tax, pre-provision income - FTE (Non-GAAP) 125,654 113,352 108,744 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.57 2.32 2.24 Net operating income (Non-GAAP) 106,073 78,921 92,780 Operating earnings per share (diluted) 2.17 1.62 1.91 GAAP Return on average assets 1.10 % 0.82 % 1.14 % Return on average equity 14.65 9.91 12.56 Efficiency ratio 63.98 67.78 66.46 Non-GAAP Operating return on average assets 1.10 % 0.82 % 1.14 % Operating return on average equity 14.67 9.97 12.58 Operating efficiency ratio 63.93 67.61 66.40 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Net interest income $ 210,355 $ 210,570 $ 194,115 $ (215 ) $ 16,240 Noninterest income: Trust and securities processing 59,528 58,515 54,834 1,013 4,694 Trading and investment banking 5,440 6,977 9,356 (1,537 ) (3,916 ) Service charges on deposit accounts 24,642 21,607 21,976 3,035 2,666 Insurance fees and commissions 259 359 420 (100 ) (161 ) Brokerage fees 3,456 3,346 3,334 110 122 Bankcard fees 16,635 16,642 14,673 (7 ) 1,962 Investment securities (losses) gains, net (522 ) 1,448 (8,336 ) (1,970 ) 7,814 Other 14,240 9,888 12,640 4,352 1,600 Total noninterest income $ 123,678 $ 118,782 $ 108,897 $ 4,896 $ 14,781 Total revenue $ 334,033 $ 329,352 $ 303,012 $ 4,681 $ 31,021 Net interest income (FTE) $ 216,754 $ 217,053 $ 200,793 Net interest margin (FTE) 2.35 % 2.37 % 2.59 % Total noninterest income as a % of total revenue 37.03 36.07 35.94 Net interest income Net interest income totaled $210.4 million, which is flat as compared to the linked quarter. The benefit from growth in average earning assets was partially offset by $4.1 million in reduced income from PPP loans. Average earning assets increased $1.2 billion, or 3.2%, driven by loan growth and an increase in investment securities purchases, while noninterest-bearing deposits increased $900.7 million, or 6.9% and interest-bearing liabilities increased $406.1 million, or 1.9%. Net interest margin for the first quarter was 2.35%, a decrease of two basis points from the linked quarter, driven by a decline in loan yields primarily due to $4.1 million in reduced income from PPP loans. Earning asset yields declined two basis points from the linked quarter, driven by a twenty-basis-point decline in loan yields and mix changes. The cost of interest-bearing liabilities increased one basis point to 0.21%. Net interest spread decreased three basis points to 2.26% from the linked quarter and was 24 basis points lower than the first quarter of 2021. On a year-over-year basis, net interest income increased $16.2 million, or 8.4%, driven by a $2.8 billion, or 26.2% increase in average securities, coupled with a $1.1 billion, or 6.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposit balances increased 6.9% on a linked-quarter basis and 43.8% compared to the first quarter of 2021. Noninterest income First quarter 2022 noninterest income increased $4.9 million, or 4.1%, on a linked-quarter basis, largely due to: An increase of $3.0 million in service charges on deposits primarily driven by increased healthcare income related to customer transfer and conversion fees. A gain of $2.4 million on the sale of the company’s factoring loan portfolio during the first quarter of 2022, recorded in other income. An increase of $1.9 million in derivative income and $0.8 million in company-owned life insurance income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $0.9 million in corporate trust income and $0.4 million in fund services income, both recorded in trust and securities processing. These increases were partially offset by a decrease of $2.7 million in gains on sales of available-for-sale securities, recorded in investment securities gains, and a decrease of $1.5 million in trading and investment banking income driven by decreased trading volume. Compared to the prior year, noninterest income in the first quarter of 2022 increased $14.8 million, or 13.6%, primarily driven by: An increase of $7.8 million in investment securities gains, primarily due to mark-to-market valuations on the company’s equity investment in TTCF. Increases of $5.0 million in derivative income, recorded in other income, and $2.0 million in bankcard income, due to higher interchange revenue. An increase of $4.7 million in trust and securities processing income, primarily driven by increases of $6.4 million and $1.7 million in fund services and corporate trust income, respectively. These increases were partially offset by a decrease of $3.4 million in trust income. An increase of $2.7 million in service charges on deposits driven by increased healthcare income related to customer transfer and conversion fees and increased corporate service charge income. These increases were partially offset by decreases of $3.9 million in trading and investment banking income driven by lower trading volume, $2.1 million in gains on sale of other assets, and $1.2 million in company-owned life insurance income, both recorded in other income. 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) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Salaries and employee benefits $ 130,634 $ 131,360 $ 127,681 $ (726 ) $ 2,953 Occupancy, net 12,232 10,907 11,935 1,325 297 Equipment 18,164 19,886 19,615 (1,722 ) (1,451 ) Supplies and services 3,262 4,646 3,492 (1,384 ) (230 ) Marketing and business development 4,932 6,528 2,345 (1,596 ) 2,587 Processing fees 18,443 19,083 15,417 (640 ) 3,026 Legal and consulting 6,911 10,858 5,755 (3,947 ) 1,156 Bankcard 6,567 4,865 4,956 1,702 1,611 Amortization of other intangible assets 1,071 1,110 1,380 (39 ) (309 ) Regulatory fees 3,482 3,393 2,546 89 936 Other 9,080 9,847 5,824 (767 ) 3,256 Total noninterest expense $ 214,778 $ 222,483 $ 200,946 $ (7,705 ) $ 13,832 Noninterest expense for the first quarter of 2022 was $214.8 million, a decrease of $7.7 million, or 3.5%, from the linked quarter and an increase of $13.8 million, or 6.9%, from the first quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $11.5 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2021. Decreases of $3.9 million in legal and consulting expense and $1.6 million in marketing and business development due to the timing of multiple projects. Decreases of $1.7 million in equipment expense driven by reduced software expense and $1.4 million in supplies expense primarily due to decreased computer hardware purchases. These decreases were partially offset by increases of $10.7 million in employee benefits expense driven by a seasonal increase of $9.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $1.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.7 million in bankcard processing expense. The year-over-year increase in noninterest expense was driven by: An increase of $3.0 million in processing fees due to the timing of multiple software projects. Increases of $2.6 million in marketing and business development and $1.2 million in legal and consulting expense due to the timing of multiple projects. Increases of $2.4 million in salaries and bonus expense and $1.3 million in payroll taxes, insurance, and 401(k) expense, both recorded in salaries and employee benefits, primarily driven by increased company performance in the first quarter of 2022. An increase of $1.6 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $1.2 million in operational losses, and $0.9 million in derivative-related expense, both recorded in other expense. These increases were partially offset by a decrease of $1.2 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. Income taxes The company’s effective tax rate was 15.7% for the three months ended March 31, 2022, compared to 15.4% for the same period in 2021. Balance sheet Average total assets for the first quarter of 2022 were $39.2 billion compared to $38.1 billion for the linked quarter and $33.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Commercial and industrial $ 7,409,623 $ 6,994,935 $ 7,139,101 $ 414,688 $ 270,522 Specialty lending 463,793 484,552 502,585 (20,759 ) (38,792 ) Commercial real estate 6,338,160 6,218,138 5,971,047 120,022 367,113 Consumer real estate 2,339,050 2,272,498 1,970,767 66,552 368,283 Consumer 135,942 107,841 117,095 28,101 18,847 Credit cards 399,857 414,267 362,051 (14,410 ) 37,806 Leases and other 274,652 200,417 183,447 74,235 91,205 Total loans $ 17,361,077 $ 16,692,648 $ 16,246,093 $ 668,429 $ 1,114,984 Average loans for the first quarter of 2022 increased 4.0% on a linked-quarter basis and 6.9% compared to the first quarter of 2021. Excluding PPP balances, average loans increased 4.8% on a linked-quarter basis and increased 15.6% as compared to the first quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Securities available for sale: U.S. Treasury $ 176,476 $ 69,398 $ 36,032 $ 107,078 $ 140,444 U.S. Agencies 125,017 93,619 95,494 31,398 29,523 Mortgage-backed 7,317,968 7,395,528 5,599,987 (77,560 ) 1,717,981 State and political subdivisions 3,170,757 3,437,841 3,552,945 (267,084 ) (382,188 ) Corporates 337,526 236,743 83,271 100,783 254,255 Collateralized loan obligations 150,134 38,099 — 112,035 150,134 Total securities available for sale $ 11,277,878 $ 11,271,228 $ 9,367,729 $ 6,650 $ 1,910,149 Securities held to maturity: U.S. Agencies $ 133 $ — $ — $ 133 $ 133 Mortgage-backed 708,075 105,622 — 602,453 708,075 State and political subdivisions 1,185,609 1,089,587 1,023,418 96,022 162,191 Total securities held to maturity $ 1,893,817 $ 1,195,209 $ 1,023,418 $ 698,608 $ 870,399 Trading securities 20,836 29,426 17,540 (8,590 ) 3,296 Other securities 329,611 299,829 308,297 29,782 21,314 Total securities $ 13,522,142 $ 12,795,692 $ 10,716,984 $ 726,450 $ 2,805,158 Average total securities increased 5.7% on a linked-quarter basis and 26.2% compared to the first quarter of 2021. In March 2022, securities with an amortized cost of $3.0 billion and a fair value of $2.9 billion were transferred from the available-for-sale classification to the held-to-maturity classification in order to reduce volatility in the company’s equity as a result of higher interest rates. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,025,585 $ 13,124,918 $ 9,753,680 $ 900,667 $ 4,271,905 Interest-bearing demand and savings 17,852,721 17,809,817 16,302,880 42,904 1,549,841 Time deposits 701,973 701,836 769,464 137 (67,491 ) Total deposits $ 32,580,279 $ 31,636,571 $ 26,826,024 $ 943,708 $ 5,754,255 Noninterest bearing deposits as % of total 43.05 % 41.49 % 36.36 % Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposits increased 6.9% on a linked-quarter basis to $14.0 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2022 December 31, 2021 March 31, 2021 Total equity $ 2,748,405 $ 3,145,424 $ 2,958,239 Book value per common share 56.78 64.95 61.24 Tangible book value per common share 52.69 61.05 57.26 Regulatory capital: Common equity Tier 1 capital $ 2,938,100 $ 2,885,576 $ 2,660,102 Tier 1 capital 2,938,100 2,885,576 2,660,102 Total capital 3,369,866 3,324,284 3,102,333 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.81 % 12.05 % 12.25 % Tier 1 risk-based capital ratio 11.81 12.05 12.25 Total risk-based capital ratio 13.55 13.88 14.28 Tier 1 leverage ratio 7.53 7.61 8.08 At March 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q3 Q2 Q1 2022 2021 2021 2021 2021 Net charge-offs - Total loans $ 8,378 $ 8,061 $ 3,127 $ 28,374 $ 5,310 Net loan charge-offs as a % of total average loans 0.20 % 0.19 % 0.07 % 0.68 % 0.13 % Loans over 90 days past due $ 3,600 $ 2,633 $ 2,319 $ 1,265 $ 1,773 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 110,356 $ 92,300 $ 96,536 $ 58,219 $ 76,706 Nonaccrual and restructured loans as a % of total loans 0.62 % 0.54 % 0.59 % 0.34 % 0.46 % Provision for credit losses $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 $ (7,500 ) Provision for credit losses for the first quarter decreased $15.0 million from the linked quarter and increased $1.0 million from the first quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the first quarter totaled $8.4 million, or 0.20%, of average loans, compared to $8.1 million, or 0.19%, of average loans in the linked quarter, and $5.3 million, or 0.13%, of average loans for the first quarter of 2021. Dividend Declaration and Share Repurchase Authorization At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on July 1, 2022, to shareholders of record at the close of business on June 10, 2022. As in prior years, the Board also approved the repurchase of up to 2,000,000 shares of the company’s common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2023 annual meeting of the company’s shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management. Conference Call The company plans to host a conference call to discuss its first quarter 2022 earnings results on Wednesday, April 27, 2022, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 758098. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2022 Conference Call A replay of the conference call may be heard through May 11, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 176268. 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). PTPP income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. PTPP-FTE 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, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) March 31, 2022 2021 ASSETS Loans $ 17,731,700 $ 16,497,385 Allowance for credit losses on loans (179,288 ) (202,814 ) Net loans 17,552,412 16,294,571 Loans held for sale 384 10,275 Securities: Available for sale 8,550,093 9,753,392 Held to maturity, net of allowance for credit losses 4,600,187 1,039,711 Trading securities 17,059 29,099 Other securities 332,123 298,209 Total securities 13,499,462 11,120,411 Federal funds sold and resell agreements 1,319,809 1,629,813 Interest-bearing due from banks 6,355,941 3,860,763 Cash and due from banks 357,772 387,230 Premises and equipment, net 264,519 286,068 Accrued income 127,139 131,533 Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Other assets 930,389 756,414 Total assets $ 40,605,742 $ 34,669,389 LIABILITIES Deposits: Noninterest-bearing demand $ 15,946,738 $ 11,604,415 Interest-bearing demand and savings 17,828,794 16,011,812 Time deposits under $250,000 399,467 457,290 Time deposits of $250,000 or more 187,566 207,275 Total deposits 34,362,565 28,280,792 Federal funds purchased and repurchase agreements 2,840,535 2,759,818 Long-term debt 272,036 270,074 Accrued expenses and taxes 178,130 239,001 Other liabilities 204,071 161,465 Total liabilities 37,857,337 31,711,150 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,109,585 1,093,667 Retained earnings 2,265,129 1,968,318 Accumulated other comprehensive (loss) income, net (343,128 ) 169,197 Treasury stock (338,238 ) (328,000 ) Total shareholders' equity 2,748,405 2,958,239 Total liabilities and shareholders' equity $ 40,605,742 $ 34,669,389 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2022 2021 INTEREST INCOME Loans $ 149,470 $ 150,170 Securities: Taxable interest 43,382 27,162 Tax-exempt interest 23,855 24,964 Total securities income 67,237 52,126 Federal funds and resell agreements 2,450 2,821 Interest-bearing due from banks 2,457 703 Trading securities 185 159 Total interest income 221,799 205,979 INTEREST EXPENSE Deposits 6,173 6,798 Federal funds and repurchase agreements 2,148 1,886 Other 3,123 3,180 Total interest expense 11,444 11,864 Net interest income 210,355 194,115 Provision for credit losses (6,500 ) (7,500 ) Net interest income after provision for credit losses 216,855 201,615 NONINTEREST INCOME Trust and securities processing 59,528 54,834 Trading and investment banking 5,440 9,356 Service charges on deposit accounts 24,642 21,976 Insurance fees and commissions 259 420 Brokerage fees 3,456 3,334 Bankcard fees 16,635 14,673 Investment securities losses, net (522 ) (8,336 ) Other 14,240 12,640 Total noninterest income 123,678 108,897 NONINTEREST EXPENSE Salaries and employee benefits 130,634 127,681 Occupancy, net 12,232 11,935 Equipment 18,164 19,615 Supplies and services 3,262 3,492 Marketing and business development 4,932 2,345 Processing fees 18,443 15,417 Legal and consulting 6,911 5,755 Bankcard 6,567 4,956 Amortization of other intangible assets 1,071 1,380 Regulatory fees 3,482 2,546 Other 9,080 5,824 Total noninterest expense 214,778 200,946 Income before income taxes 125,755 109,566 Income tax expense 19,792 16,923 NET INCOME $ 105,963 $ 92,643 PER SHARE DATA Net income – basic $ 2.19 $ 1.93 Net income – diluted 2.17 1.91 Dividends 0.37 0.32 Weighted average shares outstanding – basic 48,406,840 48,096,643 Weighted average shares outstanding – diluted 48,832,177 48,520,752 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Net income $ 105,963 $ 92,643 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (622,910 ) (199,038 ) Less: Reclassification adjustment for gains included in net income — (2,720 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 582 — Change in unrealized gains and losses on debt securities (622,328 ) (201,758 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,680 6,503 Less: Reclassification adjustment for gains included in net income (851 ) (842 ) Change in unrealized gains and losses on derivative hedges 3,829 5,661 Other comprehensive loss, before tax (618,499 ) (196,097 ) Income tax benefit 149,057 46,954 Other comprehensive loss (469,442 ) (149,143 ) Comprehensive loss $ (363,479 ) $ (56,500 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 92,643 (149,143 ) — (56,500 ) Dividends ($0.32 per share) — — (15,571 ) — — (15,571 ) Purchase of treasury stock — — — — (4,027 ) (4,027 ) Issuances of equity awards, net of forfeitures — (4,043 ) — — 4,738 695 Recognition of equity-based compensation — 4,457 — — — 4,457 Sale of treasury stock — 65 — — 86 151 Exercise of stock options — 2,738 — — 9,348 12,086 Balance - March 31, 2021 $ 55,057 $ 1,093,667 $ 1,968,318 $ 169,197 $ (328,000 ) $ 2,958,239 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,361,077 3.49 % $ 16,246,093 3.75 % Securities: Taxable 9,461,567 1.86 6,398,188 1.72 Tax-exempt 4,039,739 3.03 4,301,256 2.98 Total securities 13,501,306 2.21 10,699,444 2.23 Federal funds and resell agreements 1,265,776 0.78 1,643,894 0.70 Interest bearing due from banks 5,320,360 0.19 2,823,771 0.10 Trading securities 20,836 4.38 17,540 4.30 Total earning assets 37,469,355 2.47 31,430,742 2.74 Allowance for credit losses (198,217 ) (219,672 ) Other assets 1,882,376 1,841,224 Total assets $ 39,153,514 $ 33,052,294 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,554,694 0.13 % $ 17,072,344 0.16 % Federal funds and repurchase agreements 2,973,785 0.29 2,519,373 0.30 Borrowed funds 271,731 4.66 269,576 4.78 Total interest-bearing liabilities 21,800,210 0.21 19,861,293 0.24 Noninterest-bearing demand deposits 14,025,585 9,753,680 Other liabilities 394,714 445,777 Shareholders' equity 2,933,005 2,991,544 Total liabilities and shareholders' equity $ 39,153,514 $ 33,052,294 Net interest spread 2.26 % 2.50 % Net interest margin 2.35 2.59 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 $ 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,707 73,262 23,709 123,678 Noninterest expense 79,596 75,592 59,590 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 Three Months Ended March 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 136,410 $ 22,138 $ 35,567 $ 194,115 Provision for credit losses (8,178 ) 220 458 (7,500 ) Noninterest income 8,176 68,421 32,300 108,897 Noninterest expense 69,725 71,282 59,939 200,946 Income before taxes 83,039 19,057 7,470 109,566 Income tax expense 12,826 2,943 1,154 16,923 Net income $ 70,213 $ 16,114 $ 6,316 $ 92,643 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income (GAAP) $ 105,963 $ 92,643 Adjustments: Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Tax-impact of adjustments (i) (35 ) (39 ) Total Non-GAAP adjustments (net of tax) 110 137 Net operating income (Non-GAAP) $ 106,073 $ 92,780 Earnings per share - diluted (GAAP) $ 2.17 $ 1.91 Acquisition expense — — Severance expense — — COVID-19 related expense — — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 2.17 $ 1.91 GAAP Return on average assets 1.10 % 1.14 % Return on average equity 14.65 12.56 Non-GAAP Operating return on average assets 1.10 % 1.14 % Operating return on average equity 14.67 12.58 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Noninterest expense $ 214,778 $ 200,946 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Total Non-GAAP adjustments (pre-tax) 145 176 Operating noninterest expense (Non-GAAP) $ 214,633 $ 200,770 Noninterest expense $ 214,778 $ 200,946 Less: Amortization of other intangibles 1,071 1,380 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 213,707 $ 199,566 Operating noninterest expense $ 214,633 $ 200,770 Less: Amortization of other intangibles 1,071 1,380 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 213,562 $ 199,390 Net interest income $ 210,355 $ 194,115 Noninterest income 123,678 108,897 Less: Gains on sales of securities available for sale, net — 2,720 Total Non-GAAP Revenue (denominator A) $ 334,033 $ 300,292 Efficiency ratio (numerator A/denominator A) 63.98 % 66.46 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.93 66.40 Pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income before taxes (GAAP) $ 125,755 $ 109,566 Adjustments: Provision for credit losses (6,500 ) (7,500 ) Pre-tax, pre-provision income (Non-GAAP) $ 119,255 $ 102,066 Pre-tax earnings per share - diluted (GAAP) $ 2.58 $ 2.26 Provision for credit losses (0.14 ) (0.16 ) Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.44 $ 2.10 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net interest income $ 210,355 $ 194,115 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,399 6,678 Net interest income - FTE $ 216,754 $ 200,793 Noninterest income 123,678 108,897 Less: Noninterest expense 214,778 200,946 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 125,654 $ 108,744 Net interest income earnings per share - diluted $ 4.31 $ 4.00 Tax equivalent interest 0.13 0.14 Net interest income - FTE 4.44 4.14 Noninterest income 2.53 2.24 Less: Noninterest expense 4.40 4.14 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.57 $ 2.24 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,748,405 $ 2,958,239 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Total intangibles, net 197,915 192,311 Total tangible shareholders' equity (Non-GAAP) $ 2,550,490 $ 2,765,928 Total shares outstanding 48,403,262 48,302,634 Ratio of total shareholders' equity (book value) per share $ 56.78 $ 61.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.69 57.26 View source version on businesswire.com: https://www.businesswire.com/news/home/20220426005071/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. 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UMB Financial Corporation Reports First Quarter Net Income of $106.0 Million By: UMB Financial Corporation via Business Wire April 26, 2022 at 16:15 PM EDT First Quarter 2022 Financial Highlights GAAP net income of $106.0 million, or $2.17 per diluted share; net operating income (a non-GAAP financial measure) of $106.1 million, or $2.17 per diluted share. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE, a non-GAAP financial measure) of $125.7 million, an increase of 10.9% compared to the fourth quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.1% on a linked-quarter, annualized basis. Quarterly average deposits grew 21.5% compared to the first quarter of 2021. Noninterest income increased 13.6% as compared to the first quarter of 2021, equal to 37.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.20% of average loans, consistent with the company’s historical performance. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2022 of $106.0 million, or $2.17 per diluted share, compared to $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021 (linked quarter) and $92.6 million, or $1.91 per diluted share, in the first quarter of 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $106.1 million, or $2.17 per diluted share, for the first quarter of 2022, compared to $78.9 million, or $1.62 per diluted share, for the linked quarter and $92.8 million, or $1.91 per diluted share, for the first quarter of 2021. 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 $125.7 million, or $2.57 per diluted share, for the first quarter of 2022, compared to $113.4 million, or $2.32 per diluted share, for the linked quarter, and $108.7 million, or $2.24 per diluted share, for the first quarter of 2021. These PTPP-FTE results represent increases of 10.9% on a linked-quarter basis and 15.6% compared to the first quarter of 2021. “Our results for the first quarter of 2022 reflect the team’s continued execution of our differentiated business model, with robust growth on both sides of our balance sheet, strong asset quality metrics, and sustained momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Compared to the first quarter of 2021, average loans excluding PPP balances and average deposits increased 15.6% and 21.5%, respectively. Together with a 13.6% increase in fee income, our first quarter revenues increased 10.2% compared to the prior period. In addition, our results benefited from a provision release of $6.5 million in the first quarter, driven by favorable portfolio metrics and the improving macro-economic outlook. I am also extremely proud of the team’s continued commitment to the communities we serve, which you may read about in our 2022 corporate citizenship and ESG report.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2022 2021 2021 Net income (GAAP) $ 105,963 $ 78,496 $ 92,643 Earnings per share (diluted) 2.17 1.61 1.91 Pre-tax, pre-provision income (Non-GAAP) 119,255 106,869 102,066 Pre-tax, pre-provision earnings per share (diluted) 2.44 2.19 2.10 Pre-tax, pre-provision income - FTE (Non-GAAP) 125,654 113,352 108,744 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.57 2.32 2.24 Net operating income (Non-GAAP) 106,073 78,921 92,780 Operating earnings per share (diluted) 2.17 1.62 1.91 GAAP Return on average assets 1.10 % 0.82 % 1.14 % Return on average equity 14.65 9.91 12.56 Efficiency ratio 63.98 67.78 66.46 Non-GAAP Operating return on average assets 1.10 % 0.82 % 1.14 % Operating return on average equity 14.67 9.97 12.58 Operating efficiency ratio 63.93 67.61 66.40 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Net interest income $ 210,355 $ 210,570 $ 194,115 $ (215 ) $ 16,240 Noninterest income: Trust and securities processing 59,528 58,515 54,834 1,013 4,694 Trading and investment banking 5,440 6,977 9,356 (1,537 ) (3,916 ) Service charges on deposit accounts 24,642 21,607 21,976 3,035 2,666 Insurance fees and commissions 259 359 420 (100 ) (161 ) Brokerage fees 3,456 3,346 3,334 110 122 Bankcard fees 16,635 16,642 14,673 (7 ) 1,962 Investment securities (losses) gains, net (522 ) 1,448 (8,336 ) (1,970 ) 7,814 Other 14,240 9,888 12,640 4,352 1,600 Total noninterest income $ 123,678 $ 118,782 $ 108,897 $ 4,896 $ 14,781 Total revenue $ 334,033 $ 329,352 $ 303,012 $ 4,681 $ 31,021 Net interest income (FTE) $ 216,754 $ 217,053 $ 200,793 Net interest margin (FTE) 2.35 % 2.37 % 2.59 % Total noninterest income as a % of total revenue 37.03 36.07 35.94 Net interest income Net interest income totaled $210.4 million, which is flat as compared to the linked quarter. The benefit from growth in average earning assets was partially offset by $4.1 million in reduced income from PPP loans. Average earning assets increased $1.2 billion, or 3.2%, driven by loan growth and an increase in investment securities purchases, while noninterest-bearing deposits increased $900.7 million, or 6.9% and interest-bearing liabilities increased $406.1 million, or 1.9%. Net interest margin for the first quarter was 2.35%, a decrease of two basis points from the linked quarter, driven by a decline in loan yields primarily due to $4.1 million in reduced income from PPP loans. Earning asset yields declined two basis points from the linked quarter, driven by a twenty-basis-point decline in loan yields and mix changes. The cost of interest-bearing liabilities increased one basis point to 0.21%. Net interest spread decreased three basis points to 2.26% from the linked quarter and was 24 basis points lower than the first quarter of 2021. On a year-over-year basis, net interest income increased $16.2 million, or 8.4%, driven by a $2.8 billion, or 26.2% increase in average securities, coupled with a $1.1 billion, or 6.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposit balances increased 6.9% on a linked-quarter basis and 43.8% compared to the first quarter of 2021. Noninterest income First quarter 2022 noninterest income increased $4.9 million, or 4.1%, on a linked-quarter basis, largely due to: An increase of $3.0 million in service charges on deposits primarily driven by increased healthcare income related to customer transfer and conversion fees. A gain of $2.4 million on the sale of the company’s factoring loan portfolio during the first quarter of 2022, recorded in other income. An increase of $1.9 million in derivative income and $0.8 million in company-owned life insurance income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $0.9 million in corporate trust income and $0.4 million in fund services income, both recorded in trust and securities processing. These increases were partially offset by a decrease of $2.7 million in gains on sales of available-for-sale securities, recorded in investment securities gains, and a decrease of $1.5 million in trading and investment banking income driven by decreased trading volume. Compared to the prior year, noninterest income in the first quarter of 2022 increased $14.8 million, or 13.6%, primarily driven by: An increase of $7.8 million in investment securities gains, primarily due to mark-to-market valuations on the company’s equity investment in TTCF. Increases of $5.0 million in derivative income, recorded in other income, and $2.0 million in bankcard income, due to higher interchange revenue. An increase of $4.7 million in trust and securities processing income, primarily driven by increases of $6.4 million and $1.7 million in fund services and corporate trust income, respectively. These increases were partially offset by a decrease of $3.4 million in trust income. An increase of $2.7 million in service charges on deposits driven by increased healthcare income related to customer transfer and conversion fees and increased corporate service charge income. These increases were partially offset by decreases of $3.9 million in trading and investment banking income driven by lower trading volume, $2.1 million in gains on sale of other assets, and $1.2 million in company-owned life insurance income, both recorded in other income. 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) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Salaries and employee benefits $ 130,634 $ 131,360 $ 127,681 $ (726 ) $ 2,953 Occupancy, net 12,232 10,907 11,935 1,325 297 Equipment 18,164 19,886 19,615 (1,722 ) (1,451 ) Supplies and services 3,262 4,646 3,492 (1,384 ) (230 ) Marketing and business development 4,932 6,528 2,345 (1,596 ) 2,587 Processing fees 18,443 19,083 15,417 (640 ) 3,026 Legal and consulting 6,911 10,858 5,755 (3,947 ) 1,156 Bankcard 6,567 4,865 4,956 1,702 1,611 Amortization of other intangible assets 1,071 1,110 1,380 (39 ) (309 ) Regulatory fees 3,482 3,393 2,546 89 936 Other 9,080 9,847 5,824 (767 ) 3,256 Total noninterest expense $ 214,778 $ 222,483 $ 200,946 $ (7,705 ) $ 13,832 Noninterest expense for the first quarter of 2022 was $214.8 million, a decrease of $7.7 million, or 3.5%, from the linked quarter and an increase of $13.8 million, or 6.9%, from the first quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $11.5 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2021. Decreases of $3.9 million in legal and consulting expense and $1.6 million in marketing and business development due to the timing of multiple projects. Decreases of $1.7 million in equipment expense driven by reduced software expense and $1.4 million in supplies expense primarily due to decreased computer hardware purchases. These decreases were partially offset by increases of $10.7 million in employee benefits expense driven by a seasonal increase of $9.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $1.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.7 million in bankcard processing expense. The year-over-year increase in noninterest expense was driven by: An increase of $3.0 million in processing fees due to the timing of multiple software projects. Increases of $2.6 million in marketing and business development and $1.2 million in legal and consulting expense due to the timing of multiple projects. Increases of $2.4 million in salaries and bonus expense and $1.3 million in payroll taxes, insurance, and 401(k) expense, both recorded in salaries and employee benefits, primarily driven by increased company performance in the first quarter of 2022. An increase of $1.6 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $1.2 million in operational losses, and $0.9 million in derivative-related expense, both recorded in other expense. These increases were partially offset by a decrease of $1.2 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. Income taxes The company’s effective tax rate was 15.7% for the three months ended March 31, 2022, compared to 15.4% for the same period in 2021. Balance sheet Average total assets for the first quarter of 2022 were $39.2 billion compared to $38.1 billion for the linked quarter and $33.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Commercial and industrial $ 7,409,623 $ 6,994,935 $ 7,139,101 $ 414,688 $ 270,522 Specialty lending 463,793 484,552 502,585 (20,759 ) (38,792 ) Commercial real estate 6,338,160 6,218,138 5,971,047 120,022 367,113 Consumer real estate 2,339,050 2,272,498 1,970,767 66,552 368,283 Consumer 135,942 107,841 117,095 28,101 18,847 Credit cards 399,857 414,267 362,051 (14,410 ) 37,806 Leases and other 274,652 200,417 183,447 74,235 91,205 Total loans $ 17,361,077 $ 16,692,648 $ 16,246,093 $ 668,429 $ 1,114,984 Average loans for the first quarter of 2022 increased 4.0% on a linked-quarter basis and 6.9% compared to the first quarter of 2021. Excluding PPP balances, average loans increased 4.8% on a linked-quarter basis and increased 15.6% as compared to the first quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Securities available for sale: U.S. Treasury $ 176,476 $ 69,398 $ 36,032 $ 107,078 $ 140,444 U.S. Agencies 125,017 93,619 95,494 31,398 29,523 Mortgage-backed 7,317,968 7,395,528 5,599,987 (77,560 ) 1,717,981 State and political subdivisions 3,170,757 3,437,841 3,552,945 (267,084 ) (382,188 ) Corporates 337,526 236,743 83,271 100,783 254,255 Collateralized loan obligations 150,134 38,099 — 112,035 150,134 Total securities available for sale $ 11,277,878 $ 11,271,228 $ 9,367,729 $ 6,650 $ 1,910,149 Securities held to maturity: U.S. Agencies $ 133 $ — $ — $ 133 $ 133 Mortgage-backed 708,075 105,622 — 602,453 708,075 State and political subdivisions 1,185,609 1,089,587 1,023,418 96,022 162,191 Total securities held to maturity $ 1,893,817 $ 1,195,209 $ 1,023,418 $ 698,608 $ 870,399 Trading securities 20,836 29,426 17,540 (8,590 ) 3,296 Other securities 329,611 299,829 308,297 29,782 21,314 Total securities $ 13,522,142 $ 12,795,692 $ 10,716,984 $ 726,450 $ 2,805,158 Average total securities increased 5.7% on a linked-quarter basis and 26.2% compared to the first quarter of 2021. In March 2022, securities with an amortized cost of $3.0 billion and a fair value of $2.9 billion were transferred from the available-for-sale classification to the held-to-maturity classification in order to reduce volatility in the company’s equity as a result of higher interest rates. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,025,585 $ 13,124,918 $ 9,753,680 $ 900,667 $ 4,271,905 Interest-bearing demand and savings 17,852,721 17,809,817 16,302,880 42,904 1,549,841 Time deposits 701,973 701,836 769,464 137 (67,491 ) Total deposits $ 32,580,279 $ 31,636,571 $ 26,826,024 $ 943,708 $ 5,754,255 Noninterest bearing deposits as % of total 43.05 % 41.49 % 36.36 % Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposits increased 6.9% on a linked-quarter basis to $14.0 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2022 December 31, 2021 March 31, 2021 Total equity $ 2,748,405 $ 3,145,424 $ 2,958,239 Book value per common share 56.78 64.95 61.24 Tangible book value per common share 52.69 61.05 57.26 Regulatory capital: Common equity Tier 1 capital $ 2,938,100 $ 2,885,576 $ 2,660,102 Tier 1 capital 2,938,100 2,885,576 2,660,102 Total capital 3,369,866 3,324,284 3,102,333 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.81 % 12.05 % 12.25 % Tier 1 risk-based capital ratio 11.81 12.05 12.25 Total risk-based capital ratio 13.55 13.88 14.28 Tier 1 leverage ratio 7.53 7.61 8.08 At March 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q3 Q2 Q1 2022 2021 2021 2021 2021 Net charge-offs - Total loans $ 8,378 $ 8,061 $ 3,127 $ 28,374 $ 5,310 Net loan charge-offs as a % of total average loans 0.20 % 0.19 % 0.07 % 0.68 % 0.13 % Loans over 90 days past due $ 3,600 $ 2,633 $ 2,319 $ 1,265 $ 1,773 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 110,356 $ 92,300 $ 96,536 $ 58,219 $ 76,706 Nonaccrual and restructured loans as a % of total loans 0.62 % 0.54 % 0.59 % 0.34 % 0.46 % Provision for credit losses $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 $ (7,500 ) Provision for credit losses for the first quarter decreased $15.0 million from the linked quarter and increased $1.0 million from the first quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the first quarter totaled $8.4 million, or 0.20%, of average loans, compared to $8.1 million, or 0.19%, of average loans in the linked quarter, and $5.3 million, or 0.13%, of average loans for the first quarter of 2021. Dividend Declaration and Share Repurchase Authorization At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on July 1, 2022, to shareholders of record at the close of business on June 10, 2022. As in prior years, the Board also approved the repurchase of up to 2,000,000 shares of the company’s common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2023 annual meeting of the company’s shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management. Conference Call The company plans to host a conference call to discuss its first quarter 2022 earnings results on Wednesday, April 27, 2022, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 758098. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2022 Conference Call A replay of the conference call may be heard through May 11, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 176268. 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). PTPP income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. PTPP-FTE 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, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) March 31, 2022 2021 ASSETS Loans $ 17,731,700 $ 16,497,385 Allowance for credit losses on loans (179,288 ) (202,814 ) Net loans 17,552,412 16,294,571 Loans held for sale 384 10,275 Securities: Available for sale 8,550,093 9,753,392 Held to maturity, net of allowance for credit losses 4,600,187 1,039,711 Trading securities 17,059 29,099 Other securities 332,123 298,209 Total securities 13,499,462 11,120,411 Federal funds sold and resell agreements 1,319,809 1,629,813 Interest-bearing due from banks 6,355,941 3,860,763 Cash and due from banks 357,772 387,230 Premises and equipment, net 264,519 286,068 Accrued income 127,139 131,533 Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Other assets 930,389 756,414 Total assets $ 40,605,742 $ 34,669,389 LIABILITIES Deposits: Noninterest-bearing demand $ 15,946,738 $ 11,604,415 Interest-bearing demand and savings 17,828,794 16,011,812 Time deposits under $250,000 399,467 457,290 Time deposits of $250,000 or more 187,566 207,275 Total deposits 34,362,565 28,280,792 Federal funds purchased and repurchase agreements 2,840,535 2,759,818 Long-term debt 272,036 270,074 Accrued expenses and taxes 178,130 239,001 Other liabilities 204,071 161,465 Total liabilities 37,857,337 31,711,150 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,109,585 1,093,667 Retained earnings 2,265,129 1,968,318 Accumulated other comprehensive (loss) income, net (343,128 ) 169,197 Treasury stock (338,238 ) (328,000 ) Total shareholders' equity 2,748,405 2,958,239 Total liabilities and shareholders' equity $ 40,605,742 $ 34,669,389 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2022 2021 INTEREST INCOME Loans $ 149,470 $ 150,170 Securities: Taxable interest 43,382 27,162 Tax-exempt interest 23,855 24,964 Total securities income 67,237 52,126 Federal funds and resell agreements 2,450 2,821 Interest-bearing due from banks 2,457 703 Trading securities 185 159 Total interest income 221,799 205,979 INTEREST EXPENSE Deposits 6,173 6,798 Federal funds and repurchase agreements 2,148 1,886 Other 3,123 3,180 Total interest expense 11,444 11,864 Net interest income 210,355 194,115 Provision for credit losses (6,500 ) (7,500 ) Net interest income after provision for credit losses 216,855 201,615 NONINTEREST INCOME Trust and securities processing 59,528 54,834 Trading and investment banking 5,440 9,356 Service charges on deposit accounts 24,642 21,976 Insurance fees and commissions 259 420 Brokerage fees 3,456 3,334 Bankcard fees 16,635 14,673 Investment securities losses, net (522 ) (8,336 ) Other 14,240 12,640 Total noninterest income 123,678 108,897 NONINTEREST EXPENSE Salaries and employee benefits 130,634 127,681 Occupancy, net 12,232 11,935 Equipment 18,164 19,615 Supplies and services 3,262 3,492 Marketing and business development 4,932 2,345 Processing fees 18,443 15,417 Legal and consulting 6,911 5,755 Bankcard 6,567 4,956 Amortization of other intangible assets 1,071 1,380 Regulatory fees 3,482 2,546 Other 9,080 5,824 Total noninterest expense 214,778 200,946 Income before income taxes 125,755 109,566 Income tax expense 19,792 16,923 NET INCOME $ 105,963 $ 92,643 PER SHARE DATA Net income – basic $ 2.19 $ 1.93 Net income – diluted 2.17 1.91 Dividends 0.37 0.32 Weighted average shares outstanding – basic 48,406,840 48,096,643 Weighted average shares outstanding – diluted 48,832,177 48,520,752 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Net income $ 105,963 $ 92,643 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (622,910 ) (199,038 ) Less: Reclassification adjustment for gains included in net income — (2,720 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 582 — Change in unrealized gains and losses on debt securities (622,328 ) (201,758 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,680 6,503 Less: Reclassification adjustment for gains included in net income (851 ) (842 ) Change in unrealized gains and losses on derivative hedges 3,829 5,661 Other comprehensive loss, before tax (618,499 ) (196,097 ) Income tax benefit 149,057 46,954 Other comprehensive loss (469,442 ) (149,143 ) Comprehensive loss $ (363,479 ) $ (56,500 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 92,643 (149,143 ) — (56,500 ) Dividends ($0.32 per share) — — (15,571 ) — — (15,571 ) Purchase of treasury stock — — — — (4,027 ) (4,027 ) Issuances of equity awards, net of forfeitures — (4,043 ) — — 4,738 695 Recognition of equity-based compensation — 4,457 — — — 4,457 Sale of treasury stock — 65 — — 86 151 Exercise of stock options — 2,738 — — 9,348 12,086 Balance - March 31, 2021 $ 55,057 $ 1,093,667 $ 1,968,318 $ 169,197 $ (328,000 ) $ 2,958,239 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,361,077 3.49 % $ 16,246,093 3.75 % Securities: Taxable 9,461,567 1.86 6,398,188 1.72 Tax-exempt 4,039,739 3.03 4,301,256 2.98 Total securities 13,501,306 2.21 10,699,444 2.23 Federal funds and resell agreements 1,265,776 0.78 1,643,894 0.70 Interest bearing due from banks 5,320,360 0.19 2,823,771 0.10 Trading securities 20,836 4.38 17,540 4.30 Total earning assets 37,469,355 2.47 31,430,742 2.74 Allowance for credit losses (198,217 ) (219,672 ) Other assets 1,882,376 1,841,224 Total assets $ 39,153,514 $ 33,052,294 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,554,694 0.13 % $ 17,072,344 0.16 % Federal funds and repurchase agreements 2,973,785 0.29 2,519,373 0.30 Borrowed funds 271,731 4.66 269,576 4.78 Total interest-bearing liabilities 21,800,210 0.21 19,861,293 0.24 Noninterest-bearing demand deposits 14,025,585 9,753,680 Other liabilities 394,714 445,777 Shareholders' equity 2,933,005 2,991,544 Total liabilities and shareholders' equity $ 39,153,514 $ 33,052,294 Net interest spread 2.26 % 2.50 % Net interest margin 2.35 2.59 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 $ 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,707 73,262 23,709 123,678 Noninterest expense 79,596 75,592 59,590 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 Three Months Ended March 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 136,410 $ 22,138 $ 35,567 $ 194,115 Provision for credit losses (8,178 ) 220 458 (7,500 ) Noninterest income 8,176 68,421 32,300 108,897 Noninterest expense 69,725 71,282 59,939 200,946 Income before taxes 83,039 19,057 7,470 109,566 Income tax expense 12,826 2,943 1,154 16,923 Net income $ 70,213 $ 16,114 $ 6,316 $ 92,643 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income (GAAP) $ 105,963 $ 92,643 Adjustments: Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Tax-impact of adjustments (i) (35 ) (39 ) Total Non-GAAP adjustments (net of tax) 110 137 Net operating income (Non-GAAP) $ 106,073 $ 92,780 Earnings per share - diluted (GAAP) $ 2.17 $ 1.91 Acquisition expense — — Severance expense — — COVID-19 related expense — — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 2.17 $ 1.91 GAAP Return on average assets 1.10 % 1.14 % Return on average equity 14.65 12.56 Non-GAAP Operating return on average assets 1.10 % 1.14 % Operating return on average equity 14.67 12.58 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Noninterest expense $ 214,778 $ 200,946 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Total Non-GAAP adjustments (pre-tax) 145 176 Operating noninterest expense (Non-GAAP) $ 214,633 $ 200,770 Noninterest expense $ 214,778 $ 200,946 Less: Amortization of other intangibles 1,071 1,380 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 213,707 $ 199,566 Operating noninterest expense $ 214,633 $ 200,770 Less: Amortization of other intangibles 1,071 1,380 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 213,562 $ 199,390 Net interest income $ 210,355 $ 194,115 Noninterest income 123,678 108,897 Less: Gains on sales of securities available for sale, net — 2,720 Total Non-GAAP Revenue (denominator A) $ 334,033 $ 300,292 Efficiency ratio (numerator A/denominator A) 63.98 % 66.46 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.93 66.40 Pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income before taxes (GAAP) $ 125,755 $ 109,566 Adjustments: Provision for credit losses (6,500 ) (7,500 ) Pre-tax, pre-provision income (Non-GAAP) $ 119,255 $ 102,066 Pre-tax earnings per share - diluted (GAAP) $ 2.58 $ 2.26 Provision for credit losses (0.14 ) (0.16 ) Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.44 $ 2.10 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net interest income $ 210,355 $ 194,115 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,399 6,678 Net interest income - FTE $ 216,754 $ 200,793 Noninterest income 123,678 108,897 Less: Noninterest expense 214,778 200,946 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 125,654 $ 108,744 Net interest income earnings per share - diluted $ 4.31 $ 4.00 Tax equivalent interest 0.13 0.14 Net interest income - FTE 4.44 4.14 Noninterest income 2.53 2.24 Less: Noninterest expense 4.40 4.14 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.57 $ 2.24 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,748,405 $ 2,958,239 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Total intangibles, net 197,915 192,311 Total tangible shareholders' equity (Non-GAAP) $ 2,550,490 $ 2,765,928 Total shares outstanding 48,403,262 48,302,634 Ratio of total shareholders' equity (book value) per share $ 56.78 $ 61.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.69 57.26 View source version on businesswire.com: https://www.businesswire.com/news/home/20220426005071/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106
First Quarter 2022 Financial Highlights GAAP net income of $106.0 million, or $2.17 per diluted share; net operating income (a non-GAAP financial measure) of $106.1 million, or $2.17 per diluted share. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE, a non-GAAP financial measure) of $125.7 million, an increase of 10.9% compared to the fourth quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.1% on a linked-quarter, annualized basis. Quarterly average deposits grew 21.5% compared to the first quarter of 2021. Noninterest income increased 13.6% as compared to the first quarter of 2021, equal to 37.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.20% of average loans, consistent with the company’s historical performance.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2022 of $106.0 million, or $2.17 per diluted share, compared to $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021 (linked quarter) and $92.6 million, or $1.91 per diluted share, in the first quarter of 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $106.1 million, or $2.17 per diluted share, for the first quarter of 2022, compared to $78.9 million, or $1.62 per diluted share, for the linked quarter and $92.8 million, or $1.91 per diluted share, for the first quarter of 2021. 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 $125.7 million, or $2.57 per diluted share, for the first quarter of 2022, compared to $113.4 million, or $2.32 per diluted share, for the linked quarter, and $108.7 million, or $2.24 per diluted share, for the first quarter of 2021. These PTPP-FTE results represent increases of 10.9% on a linked-quarter basis and 15.6% compared to the first quarter of 2021. “Our results for the first quarter of 2022 reflect the team’s continued execution of our differentiated business model, with robust growth on both sides of our balance sheet, strong asset quality metrics, and sustained momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Compared to the first quarter of 2021, average loans excluding PPP balances and average deposits increased 15.6% and 21.5%, respectively. Together with a 13.6% increase in fee income, our first quarter revenues increased 10.2% compared to the prior period. In addition, our results benefited from a provision release of $6.5 million in the first quarter, driven by favorable portfolio metrics and the improving macro-economic outlook. I am also extremely proud of the team’s continued commitment to the communities we serve, which you may read about in our 2022 corporate citizenship and ESG report.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2022 2021 2021 Net income (GAAP) $ 105,963 $ 78,496 $ 92,643 Earnings per share (diluted) 2.17 1.61 1.91 Pre-tax, pre-provision income (Non-GAAP) 119,255 106,869 102,066 Pre-tax, pre-provision earnings per share (diluted) 2.44 2.19 2.10 Pre-tax, pre-provision income - FTE (Non-GAAP) 125,654 113,352 108,744 Pre-tax, pre-provision earnings per share - FTE (diluted) 2.57 2.32 2.24 Net operating income (Non-GAAP) 106,073 78,921 92,780 Operating earnings per share (diluted) 2.17 1.62 1.91 GAAP Return on average assets 1.10 % 0.82 % 1.14 % Return on average equity 14.65 9.91 12.56 Efficiency ratio 63.98 67.78 66.46 Non-GAAP Operating return on average assets 1.10 % 0.82 % 1.14 % Operating return on average equity 14.67 9.97 12.58 Operating efficiency ratio 63.93 67.61 66.40 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Net interest income $ 210,355 $ 210,570 $ 194,115 $ (215 ) $ 16,240 Noninterest income: Trust and securities processing 59,528 58,515 54,834 1,013 4,694 Trading and investment banking 5,440 6,977 9,356 (1,537 ) (3,916 ) Service charges on deposit accounts 24,642 21,607 21,976 3,035 2,666 Insurance fees and commissions 259 359 420 (100 ) (161 ) Brokerage fees 3,456 3,346 3,334 110 122 Bankcard fees 16,635 16,642 14,673 (7 ) 1,962 Investment securities (losses) gains, net (522 ) 1,448 (8,336 ) (1,970 ) 7,814 Other 14,240 9,888 12,640 4,352 1,600 Total noninterest income $ 123,678 $ 118,782 $ 108,897 $ 4,896 $ 14,781 Total revenue $ 334,033 $ 329,352 $ 303,012 $ 4,681 $ 31,021 Net interest income (FTE) $ 216,754 $ 217,053 $ 200,793 Net interest margin (FTE) 2.35 % 2.37 % 2.59 % Total noninterest income as a % of total revenue 37.03 36.07 35.94 Net interest income Net interest income totaled $210.4 million, which is flat as compared to the linked quarter. The benefit from growth in average earning assets was partially offset by $4.1 million in reduced income from PPP loans. Average earning assets increased $1.2 billion, or 3.2%, driven by loan growth and an increase in investment securities purchases, while noninterest-bearing deposits increased $900.7 million, or 6.9% and interest-bearing liabilities increased $406.1 million, or 1.9%. Net interest margin for the first quarter was 2.35%, a decrease of two basis points from the linked quarter, driven by a decline in loan yields primarily due to $4.1 million in reduced income from PPP loans. Earning asset yields declined two basis points from the linked quarter, driven by a twenty-basis-point decline in loan yields and mix changes. The cost of interest-bearing liabilities increased one basis point to 0.21%. Net interest spread decreased three basis points to 2.26% from the linked quarter and was 24 basis points lower than the first quarter of 2021. On a year-over-year basis, net interest income increased $16.2 million, or 8.4%, driven by a $2.8 billion, or 26.2% increase in average securities, coupled with a $1.1 billion, or 6.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposit balances increased 6.9% on a linked-quarter basis and 43.8% compared to the first quarter of 2021. Noninterest income First quarter 2022 noninterest income increased $4.9 million, or 4.1%, on a linked-quarter basis, largely due to: An increase of $3.0 million in service charges on deposits primarily driven by increased healthcare income related to customer transfer and conversion fees. A gain of $2.4 million on the sale of the company’s factoring loan portfolio during the first quarter of 2022, recorded in other income. An increase of $1.9 million in derivative income and $0.8 million in company-owned life insurance income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $0.9 million in corporate trust income and $0.4 million in fund services income, both recorded in trust and securities processing. These increases were partially offset by a decrease of $2.7 million in gains on sales of available-for-sale securities, recorded in investment securities gains, and a decrease of $1.5 million in trading and investment banking income driven by decreased trading volume. Compared to the prior year, noninterest income in the first quarter of 2022 increased $14.8 million, or 13.6%, primarily driven by: An increase of $7.8 million in investment securities gains, primarily due to mark-to-market valuations on the company’s equity investment in TTCF. Increases of $5.0 million in derivative income, recorded in other income, and $2.0 million in bankcard income, due to higher interchange revenue. An increase of $4.7 million in trust and securities processing income, primarily driven by increases of $6.4 million and $1.7 million in fund services and corporate trust income, respectively. These increases were partially offset by a decrease of $3.4 million in trust income. An increase of $2.7 million in service charges on deposits driven by increased healthcare income related to customer transfer and conversion fees and increased corporate service charge income. These increases were partially offset by decreases of $3.9 million in trading and investment banking income driven by lower trading volume, $2.1 million in gains on sale of other assets, and $1.2 million in company-owned life insurance income, both recorded in other income. 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) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Salaries and employee benefits $ 130,634 $ 131,360 $ 127,681 $ (726 ) $ 2,953 Occupancy, net 12,232 10,907 11,935 1,325 297 Equipment 18,164 19,886 19,615 (1,722 ) (1,451 ) Supplies and services 3,262 4,646 3,492 (1,384 ) (230 ) Marketing and business development 4,932 6,528 2,345 (1,596 ) 2,587 Processing fees 18,443 19,083 15,417 (640 ) 3,026 Legal and consulting 6,911 10,858 5,755 (3,947 ) 1,156 Bankcard 6,567 4,865 4,956 1,702 1,611 Amortization of other intangible assets 1,071 1,110 1,380 (39 ) (309 ) Regulatory fees 3,482 3,393 2,546 89 936 Other 9,080 9,847 5,824 (767 ) 3,256 Total noninterest expense $ 214,778 $ 222,483 $ 200,946 $ (7,705 ) $ 13,832 Noninterest expense for the first quarter of 2022 was $214.8 million, a decrease of $7.7 million, or 3.5%, from the linked quarter and an increase of $13.8 million, or 6.9%, from the first quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $11.5 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2021. Decreases of $3.9 million in legal and consulting expense and $1.6 million in marketing and business development due to the timing of multiple projects. Decreases of $1.7 million in equipment expense driven by reduced software expense and $1.4 million in supplies expense primarily due to decreased computer hardware purchases. These decreases were partially offset by increases of $10.7 million in employee benefits expense driven by a seasonal increase of $9.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $1.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.7 million in bankcard processing expense. The year-over-year increase in noninterest expense was driven by: An increase of $3.0 million in processing fees due to the timing of multiple software projects. Increases of $2.6 million in marketing and business development and $1.2 million in legal and consulting expense due to the timing of multiple projects. Increases of $2.4 million in salaries and bonus expense and $1.3 million in payroll taxes, insurance, and 401(k) expense, both recorded in salaries and employee benefits, primarily driven by increased company performance in the first quarter of 2022. An increase of $1.6 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $1.2 million in operational losses, and $0.9 million in derivative-related expense, both recorded in other expense. These increases were partially offset by a decrease of $1.2 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. Income taxes The company’s effective tax rate was 15.7% for the three months ended March 31, 2022, compared to 15.4% for the same period in 2021. Balance sheet Average total assets for the first quarter of 2022 were $39.2 billion compared to $38.1 billion for the linked quarter and $33.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Commercial and industrial $ 7,409,623 $ 6,994,935 $ 7,139,101 $ 414,688 $ 270,522 Specialty lending 463,793 484,552 502,585 (20,759 ) (38,792 ) Commercial real estate 6,338,160 6,218,138 5,971,047 120,022 367,113 Consumer real estate 2,339,050 2,272,498 1,970,767 66,552 368,283 Consumer 135,942 107,841 117,095 28,101 18,847 Credit cards 399,857 414,267 362,051 (14,410 ) 37,806 Leases and other 274,652 200,417 183,447 74,235 91,205 Total loans $ 17,361,077 $ 16,692,648 $ 16,246,093 $ 668,429 $ 1,114,984 Average loans for the first quarter of 2022 increased 4.0% on a linked-quarter basis and 6.9% compared to the first quarter of 2021. Excluding PPP balances, average loans increased 4.8% on a linked-quarter basis and increased 15.6% as compared to the first quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Securities available for sale: U.S. Treasury $ 176,476 $ 69,398 $ 36,032 $ 107,078 $ 140,444 U.S. Agencies 125,017 93,619 95,494 31,398 29,523 Mortgage-backed 7,317,968 7,395,528 5,599,987 (77,560 ) 1,717,981 State and political subdivisions 3,170,757 3,437,841 3,552,945 (267,084 ) (382,188 ) Corporates 337,526 236,743 83,271 100,783 254,255 Collateralized loan obligations 150,134 38,099 — 112,035 150,134 Total securities available for sale $ 11,277,878 $ 11,271,228 $ 9,367,729 $ 6,650 $ 1,910,149 Securities held to maturity: U.S. Agencies $ 133 $ — $ — $ 133 $ 133 Mortgage-backed 708,075 105,622 — 602,453 708,075 State and political subdivisions 1,185,609 1,089,587 1,023,418 96,022 162,191 Total securities held to maturity $ 1,893,817 $ 1,195,209 $ 1,023,418 $ 698,608 $ 870,399 Trading securities 20,836 29,426 17,540 (8,590 ) 3,296 Other securities 329,611 299,829 308,297 29,782 21,314 Total securities $ 13,522,142 $ 12,795,692 $ 10,716,984 $ 726,450 $ 2,805,158 Average total securities increased 5.7% on a linked-quarter basis and 26.2% compared to the first quarter of 2021. In March 2022, securities with an amortized cost of $3.0 billion and a fair value of $2.9 billion were transferred from the available-for-sale classification to the held-to-maturity classification in order to reduce volatility in the company’s equity as a result of higher interest rates. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2022 2021 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,025,585 $ 13,124,918 $ 9,753,680 $ 900,667 $ 4,271,905 Interest-bearing demand and savings 17,852,721 17,809,817 16,302,880 42,904 1,549,841 Time deposits 701,973 701,836 769,464 137 (67,491 ) Total deposits $ 32,580,279 $ 31,636,571 $ 26,826,024 $ 943,708 $ 5,754,255 Noninterest bearing deposits as % of total 43.05 % 41.49 % 36.36 % Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposits increased 6.9% on a linked-quarter basis to $14.0 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2022 December 31, 2021 March 31, 2021 Total equity $ 2,748,405 $ 3,145,424 $ 2,958,239 Book value per common share 56.78 64.95 61.24 Tangible book value per common share 52.69 61.05 57.26 Regulatory capital: Common equity Tier 1 capital $ 2,938,100 $ 2,885,576 $ 2,660,102 Tier 1 capital 2,938,100 2,885,576 2,660,102 Total capital 3,369,866 3,324,284 3,102,333 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.81 % 12.05 % 12.25 % Tier 1 risk-based capital ratio 11.81 12.05 12.25 Total risk-based capital ratio 13.55 13.88 14.28 Tier 1 leverage ratio 7.53 7.61 8.08 At March 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q3 Q2 Q1 2022 2021 2021 2021 2021 Net charge-offs - Total loans $ 8,378 $ 8,061 $ 3,127 $ 28,374 $ 5,310 Net loan charge-offs as a % of total average loans 0.20 % 0.19 % 0.07 % 0.68 % 0.13 % Loans over 90 days past due $ 3,600 $ 2,633 $ 2,319 $ 1,265 $ 1,773 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 110,356 $ 92,300 $ 96,536 $ 58,219 $ 76,706 Nonaccrual and restructured loans as a % of total loans 0.62 % 0.54 % 0.59 % 0.34 % 0.46 % Provision for credit losses $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 $ (7,500 ) Provision for credit losses for the first quarter decreased $15.0 million from the linked quarter and increased $1.0 million from the first quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the first quarter totaled $8.4 million, or 0.20%, of average loans, compared to $8.1 million, or 0.19%, of average loans in the linked quarter, and $5.3 million, or 0.13%, of average loans for the first quarter of 2021. Dividend Declaration and Share Repurchase Authorization At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on July 1, 2022, to shareholders of record at the close of business on June 10, 2022. As in prior years, the Board also approved the repurchase of up to 2,000,000 shares of the company’s common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2023 annual meeting of the company’s shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management. Conference Call The company plans to host a conference call to discuss its first quarter 2022 earnings results on Wednesday, April 27, 2022, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 758098. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2022 Conference Call A replay of the conference call may be heard through May 11, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 176268. 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). PTPP income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses. PTPP-FTE 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, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) March 31, 2022 2021 ASSETS Loans $ 17,731,700 $ 16,497,385 Allowance for credit losses on loans (179,288 ) (202,814 ) Net loans 17,552,412 16,294,571 Loans held for sale 384 10,275 Securities: Available for sale 8,550,093 9,753,392 Held to maturity, net of allowance for credit losses 4,600,187 1,039,711 Trading securities 17,059 29,099 Other securities 332,123 298,209 Total securities 13,499,462 11,120,411 Federal funds sold and resell agreements 1,319,809 1,629,813 Interest-bearing due from banks 6,355,941 3,860,763 Cash and due from banks 357,772 387,230 Premises and equipment, net 264,519 286,068 Accrued income 127,139 131,533 Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Other assets 930,389 756,414 Total assets $ 40,605,742 $ 34,669,389 LIABILITIES Deposits: Noninterest-bearing demand $ 15,946,738 $ 11,604,415 Interest-bearing demand and savings 17,828,794 16,011,812 Time deposits under $250,000 399,467 457,290 Time deposits of $250,000 or more 187,566 207,275 Total deposits 34,362,565 28,280,792 Federal funds purchased and repurchase agreements 2,840,535 2,759,818 Long-term debt 272,036 270,074 Accrued expenses and taxes 178,130 239,001 Other liabilities 204,071 161,465 Total liabilities 37,857,337 31,711,150 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,109,585 1,093,667 Retained earnings 2,265,129 1,968,318 Accumulated other comprehensive (loss) income, net (343,128 ) 169,197 Treasury stock (338,238 ) (328,000 ) Total shareholders' equity 2,748,405 2,958,239 Total liabilities and shareholders' equity $ 40,605,742 $ 34,669,389 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2022 2021 INTEREST INCOME Loans $ 149,470 $ 150,170 Securities: Taxable interest 43,382 27,162 Tax-exempt interest 23,855 24,964 Total securities income 67,237 52,126 Federal funds and resell agreements 2,450 2,821 Interest-bearing due from banks 2,457 703 Trading securities 185 159 Total interest income 221,799 205,979 INTEREST EXPENSE Deposits 6,173 6,798 Federal funds and repurchase agreements 2,148 1,886 Other 3,123 3,180 Total interest expense 11,444 11,864 Net interest income 210,355 194,115 Provision for credit losses (6,500 ) (7,500 ) Net interest income after provision for credit losses 216,855 201,615 NONINTEREST INCOME Trust and securities processing 59,528 54,834 Trading and investment banking 5,440 9,356 Service charges on deposit accounts 24,642 21,976 Insurance fees and commissions 259 420 Brokerage fees 3,456 3,334 Bankcard fees 16,635 14,673 Investment securities losses, net (522 ) (8,336 ) Other 14,240 12,640 Total noninterest income 123,678 108,897 NONINTEREST EXPENSE Salaries and employee benefits 130,634 127,681 Occupancy, net 12,232 11,935 Equipment 18,164 19,615 Supplies and services 3,262 3,492 Marketing and business development 4,932 2,345 Processing fees 18,443 15,417 Legal and consulting 6,911 5,755 Bankcard 6,567 4,956 Amortization of other intangible assets 1,071 1,380 Regulatory fees 3,482 2,546 Other 9,080 5,824 Total noninterest expense 214,778 200,946 Income before income taxes 125,755 109,566 Income tax expense 19,792 16,923 NET INCOME $ 105,963 $ 92,643 PER SHARE DATA Net income – basic $ 2.19 $ 1.93 Net income – diluted 2.17 1.91 Dividends 0.37 0.32 Weighted average shares outstanding – basic 48,406,840 48,096,643 Weighted average shares outstanding – diluted 48,832,177 48,520,752 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Net income $ 105,963 $ 92,643 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (622,910 ) (199,038 ) Less: Reclassification adjustment for gains included in net income — (2,720 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 582 — Change in unrealized gains and losses on debt securities (622,328 ) (201,758 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,680 6,503 Less: Reclassification adjustment for gains included in net income (851 ) (842 ) Change in unrealized gains and losses on derivative hedges 3,829 5,661 Other comprehensive loss, before tax (618,499 ) (196,097 ) Income tax benefit 149,057 46,954 Other comprehensive loss (469,442 ) (149,143 ) Comprehensive loss $ (363,479 ) $ (56,500 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 92,643 (149,143 ) — (56,500 ) Dividends ($0.32 per share) — — (15,571 ) — — (15,571 ) Purchase of treasury stock — — — — (4,027 ) (4,027 ) Issuances of equity awards, net of forfeitures — (4,043 ) — — 4,738 695 Recognition of equity-based compensation — 4,457 — — — 4,457 Sale of treasury stock — 65 — — 86 151 Exercise of stock options — 2,738 — — 9,348 12,086 Balance - March 31, 2021 $ 55,057 $ 1,093,667 $ 1,968,318 $ 169,197 $ (328,000 ) $ 2,958,239 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,361,077 3.49 % $ 16,246,093 3.75 % Securities: Taxable 9,461,567 1.86 6,398,188 1.72 Tax-exempt 4,039,739 3.03 4,301,256 2.98 Total securities 13,501,306 2.21 10,699,444 2.23 Federal funds and resell agreements 1,265,776 0.78 1,643,894 0.70 Interest bearing due from banks 5,320,360 0.19 2,823,771 0.10 Trading securities 20,836 4.38 17,540 4.30 Total earning assets 37,469,355 2.47 31,430,742 2.74 Allowance for credit losses (198,217 ) (219,672 ) Other assets 1,882,376 1,841,224 Total assets $ 39,153,514 $ 33,052,294 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,554,694 0.13 % $ 17,072,344 0.16 % Federal funds and repurchase agreements 2,973,785 0.29 2,519,373 0.30 Borrowed funds 271,731 4.66 269,576 4.78 Total interest-bearing liabilities 21,800,210 0.21 19,861,293 0.24 Noninterest-bearing demand deposits 14,025,585 9,753,680 Other liabilities 394,714 445,777 Shareholders' equity 2,933,005 2,991,544 Total liabilities and shareholders' equity $ 39,153,514 $ 33,052,294 Net interest spread 2.26 % 2.50 % Net interest margin 2.35 2.59 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 $ 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,707 73,262 23,709 123,678 Noninterest expense 79,596 75,592 59,590 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 Three Months Ended March 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 136,410 $ 22,138 $ 35,567 $ 194,115 Provision for credit losses (8,178 ) 220 458 (7,500 ) Noninterest income 8,176 68,421 32,300 108,897 Noninterest expense 69,725 71,282 59,939 200,946 Income before taxes 83,039 19,057 7,470 109,566 Income tax expense 12,826 2,943 1,154 16,923 Net income $ 70,213 $ 16,114 $ 6,316 $ 92,643 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income (GAAP) $ 105,963 $ 92,643 Adjustments: Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Tax-impact of adjustments (i) (35 ) (39 ) Total Non-GAAP adjustments (net of tax) 110 137 Net operating income (Non-GAAP) $ 106,073 $ 92,780 Earnings per share - diluted (GAAP) $ 2.17 $ 1.91 Acquisition expense — — Severance expense — — COVID-19 related expense — — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 2.17 $ 1.91 GAAP Return on average assets 1.10 % 1.14 % Return on average equity 14.65 12.56 Non-GAAP Operating return on average assets 1.10 % 1.14 % Operating return on average equity 14.67 12.58 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2022 2021 Noninterest expense $ 214,778 $ 200,946 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — Severance expense 145 21 COVID-19 related expense — 155 Total Non-GAAP adjustments (pre-tax) 145 176 Operating noninterest expense (Non-GAAP) $ 214,633 $ 200,770 Noninterest expense $ 214,778 $ 200,946 Less: Amortization of other intangibles 1,071 1,380 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 213,707 $ 199,566 Operating noninterest expense $ 214,633 $ 200,770 Less: Amortization of other intangibles 1,071 1,380 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 213,562 $ 199,390 Net interest income $ 210,355 $ 194,115 Noninterest income 123,678 108,897 Less: Gains on sales of securities available for sale, net — 2,720 Total Non-GAAP Revenue (denominator A) $ 334,033 $ 300,292 Efficiency ratio (numerator A/denominator A) 63.98 % 66.46 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.93 66.40 Pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net income before taxes (GAAP) $ 125,755 $ 109,566 Adjustments: Provision for credit losses (6,500 ) (7,500 ) Pre-tax, pre-provision income (Non-GAAP) $ 119,255 $ 102,066 Pre-tax earnings per share - diluted (GAAP) $ 2.58 $ 2.26 Provision for credit losses (0.14 ) (0.16 ) Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.44 $ 2.10 Pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2022 2021 Net interest income $ 210,355 $ 194,115 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,399 6,678 Net interest income - FTE $ 216,754 $ 200,793 Noninterest income 123,678 108,897 Less: Noninterest expense 214,778 200,946 Pre-tax, pre-provision income - FTE (Non-GAAP) $ 125,654 $ 108,744 Net interest income earnings per share - diluted $ 4.31 $ 4.00 Tax equivalent interest 0.13 0.14 Net interest income - FTE 4.44 4.14 Noninterest income 2.53 2.24 Less: Noninterest expense 4.40 4.14 Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.57 $ 2.24 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,748,405 $ 2,958,239 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 15,690 17,793 Total intangibles, net 197,915 192,311 Total tangible shareholders' equity (Non-GAAP) $ 2,550,490 $ 2,765,928 Total shares outstanding 48,403,262 48,302,634 Ratio of total shareholders' equity (book value) per share $ 56.78 $ 61.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.69 57.26 View source version on businesswire.com: https://www.businesswire.com/news/home/20220426005071/en/