Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries UMB Financial Corporation Reports Second Quarter Net Income of $137.6 Million By: UMB Financial Corporation via Business Wire July 26, 2022 at 16:15 PM EDT Second Quarter 2022 Financial Highlights GAAP net income of $137.6 million, or $2.83 per diluted share. Operating pre-tax, pre-provision income (Operating PTPP, a non-GAAP financial measure) of $187.1 million, an increase of 56.7% compared to the first quarter of 2022. Average loan balances increased $1.5 billion, or 8.9% compared to the second quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 23.3% on a linked-quarter, annualized basis. Average deposits grew 13.7% compared to the second quarter of 2021. Net interest margin expanded 25 basis points from the linked quarter. Noninterest income increased 34.0% as compared to the second quarter of 2021, equal to 44.0% of total revenue. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2022 of $137.6 million, or $2.83 per diluted share, compared to $106.0 million, or $2.17 per diluted share, in the first quarter of 2022 (linked quarter) and $87.4 million, or $1.79 per diluted share, in the second quarter of 2021. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company’s entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company’s charitable foundation. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $137.6 million, or $2.83 per diluted share, for the second quarter of 2022, compared to $106.1 million, or $2.17 per diluted share, for the linked quarter and $87.6 million, or $1.80 per diluted share, for the second quarter of 2021. Operating PTPP, a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $187.1 million, or $3.84 per diluted share, for the second quarter of 2022, compared to $119.4 million, or $2.44 per diluted share, for the linked quarter, and $131.6 million, or $2.71 per diluted share, for the second quarter of 2021. These operating PTPP results represent increases of 56.7% on a linked-quarter basis and 42.1%, compared to the second quarter of 2021, and include the benefit from the aforementioned gain on the sale of the company’s Visa Inc. Class B common shares net of the contribution to the company’s charitable foundation. “Our strong financial results for the second quarter of 2022 were driven by a 23.3% linked-quarter annualized increase in average loans excluding PPP, strong net interest margin expansion, and continued momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Our strong loan growth, coupled with the benefits from higher short and long-term interest rates drove a 6.9% linked-quarter increase in net interest income. Our net charge-offs were elevated this quarter driven entirely by a $27.7 million write-down related to one commercial relationship. Nonperforming loans declined 83.6% from the prior quarter as the portfolio continues to perform well. During the quarter, we made a $5.0 million contribution to the UMB Financial Corporation Charitable Foundation to continue our support of diverse and impactful philanthropic organizations within the communities we serve.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2022 2022 2021 Net income (GAAP) $ 137,556 $ 105,963 $ 87,412 Earnings per share (diluted) 2.83 2.17 1.79 Operating pre-tax, pre-provision income (Non-GAAP) 187,051 119,400 131,607 Operating pre-tax, pre-provision earnings per share (diluted) 3.84 2.44 2.71 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 193,329 125,799 138,236 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 3.97 2.57 2.84 Net operating income (Non-GAAP) 137,596 106,073 87,634 Operating earnings per share (diluted) 2.83 2.17 1.80 GAAP Return on average assets 1.47 % 1.10 % 1.02 % Return on average equity 20.83 14.65 11.43 Efficiency ratio 53.08 63.98 60.41 Non-GAAP Operating return on average assets 1.47 % 1.10 % 1.03 % Operating return on average equity 20.84 14.67 11.46 Operating efficiency ratio 53.06 63.93 60.33 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2022 2021 Net income (GAAP) $ 243,519 $ 180,055 Earnings per share (diluted) 4.99 3.70 Operating pre-tax, pre-provision income (Non-GAAP) 306,451 233,849 Operating pre-tax, pre-provision earnings per share (diluted) 6.29 4.81 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 319,128 247,156 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 6.55 5.09 Net operating income (Non-GAAP) 243,669 180,414 Operating earnings per share (diluted) 4.99 3.71 GAAP Return on average assets 1.28 % 1.08 % Return on average equity 17.60 11.98 Efficiency ratio 58.03 63.29 Non-GAAP Operating return on average assets 1.28 % 1.08 % Operating return on average equity 17.61 12.01 Operating efficiency ratio 58.00 63.21 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 224,791 $ 210,355 $ 201,071 $ 14,436 $ 23,720 Noninterest income: Trust and securities processing 58,886 59,528 53,863 (642 ) 5,023 Trading and investment banking 7,123 5,440 8,670 1,683 (1,547 ) Service charges on deposit accounts 20,835 24,642 22,592 (3,807 ) (1,757 ) Insurance fees and commissions 245 259 245 (14 ) — Brokerage fees 12,391 3,456 2,592 8,935 9,799 Bankcard fees 17,840 16,635 16,063 1,205 1,777 Investment securities gains (losses), net 60,720 (522 ) 15,455 61,242 45,265 Other (1,705 ) 14,240 12,109 (15,945 ) (13,814 ) Total noninterest income $ 176,335 $ 123,678 $ 131,589 $ 52,657 $ 44,746 Total revenue $ 401,126 $ 334,033 $ 332,660 $ 67,093 $ 68,466 Net interest income (FTE) $ 231,069 $ 216,754 $ 207,700 Net interest margin (FTE) 2.60 % 2.35 % 2.56 % Total noninterest income as a % of total revenue 44.0 37.0 39.6 Net interest income Net interest income totaled $224.8 million, an increase of $14.4 million, or 6.9% from the linked quarter, driven by an increase of $956.9 million in average loans and the impact from increased short-term and long-term interest rates. Average earning assets decreased $1.8 billion, or 4.7%, largely driven by a decrease of $2.7 billion in interest-bearing due from banks, partially offset by the increase of $956.9 million in average loans noted above. Average interest-bearing liabilities declined $1.5 billion, or 6.8%, primarily driven by a decrease of $1.2 billion in interest-bearing deposits. Net interest margin for the second quarter was 2.60%, an increase of 25 basis points from the linked quarter, driven by an increase in loan yields of 23 basis points. Earning asset yields increased 39 basis points from the linked quarter, driven by the recent increases in short-term and long-term interest rates, mix changes, and the benefit of free funds. The cost of interest-bearing liabilities increased 26 basis points to 0.47%. Net interest spread increased 13 basis points to 2.39% from the linked quarter but was eight basis points lower than the second quarter of 2021. On a year-over-year basis, net interest income increased $23.7 million, or 11.8%, driven by a $2.3 billion, or 20.7% increase in average securities, coupled with a $1.5 billion, or 8.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposit balances increased 1.3% on a linked-quarter basis and 32.8% compared to the second quarter of 2021. Noninterest income Second quarter 2022 noninterest income increased $52.7 million on a linked-quarter basis, largely due to: A gain of $66.2 million realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by a decline of $3.7 million in mark-to-market gains on marketable securities, both recorded in investment securities gains, net. An increase of $8.9 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. These increases were partially offset by decreases of $10.5 million in company-owned life insurance income and $4.2 million in derivative income, both recorded in other income, and a decrease of $3.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Compared to the prior year, noninterest income in the second quarter of 2022 increased $44.7 million, or 34.0%, primarily driven by: An increase of $45.3 million in investment securities gains, primarily due to the $66.2 million gain realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by declines of $14.1 million and $5.5 million in mark-to-market gains on marketable securities and non-marketable securities, respectively. An increase of $9.8 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. Increases of $3.7 million and $1.7 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. These increases were partially offset by decreases of $11.6 million in company-owned life insurance income and $2.6 million in derivative income, both recorded in other income, and a decrease of $1.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 121,390 $ 130,634 $ 120,415 $ (9,244 ) $ 975 Occupancy, net 11,976 12,232 12,296 (256 ) (320 ) Equipment 18,315 18,164 19,196 151 (881 ) Supplies and services 3,492 3,262 3,469 230 23 Marketing and business development 5,308 4,932 4,797 376 511 Processing fees 19,338 18,443 16,501 895 2,837 Legal and consulting 11,265 6,911 8,147 4,354 3,118 Bankcard 5,880 6,567 4,529 (687 ) 1,351 Amortization of other intangible assets 1,225 1,071 1,157 154 68 Regulatory fees 3,464 3,482 2,769 (18 ) 695 Other 12,474 9,080 8,062 3,394 4,412 Total noninterest expense $ 214,127 $ 214,778 $ 201,338 $ (651 ) $ 12,789 Noninterest expense for the second quarter of 2022 was $214.1 million, a decrease of $0.7 million, or 0.3%, from the linked quarter and an increase of $12.8 million, or 6.4%, from the second quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $16.4 million in employee benefits expense, recorded in salaries and employee benefits, driven primarily by a decrease of $10.7 million in deferred compensation expense and a seasonal decrease of $6.2 million in payroll taxes, insurance, and 401(k) expense recognized in the second quarter. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were offset by an increase of $7.2 million in bonus and salary expense, recorded in salaries and employee benefits, driven by increased company performance, an increase of $4.4 million in legal and consulting expense due to the timing of multiple projects, and an increase of $4.4 million in charitable contributions expense, recorded in other expense. The year-over-year increase in noninterest expense was driven by: An increase of $9.8 million in salaries and bonus expense, recorded in salaries and employee benefits, driven by increased company performance. An increase of $4.4 million in charitable contributions expense, recorded in other expense. Increases of $3.1 million in legal and consulting expense and $2.8 million in processing fees due to the timing of multiple projects. An increase of $1.4 million in bankcard expense primarily due to higher processing expense. These increases were partially offset by a decrease of $8.8 million in employee benefits expense, recorded in salaries and employee benefits, primarily due to a decrease of $10.4 million in deferred compensation expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. Income taxes The company’s effective tax rate was 18.7% for the six months ended June 30, 2022, compared to 17.0% for the same period in 2021. The increase in the effective rate in 2022 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the second quarter of 2022 were $37.6 billion compared to $39.2 billion for the linked quarter and $34.3 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 7,918,552 $ 7,409,623 $ 7,402,653 $ 508,929 $ 515,899 Specialty lending 518,575 463,793 505,687 54,782 12,888 Commercial real estate 6,569,784 6,338,160 6,165,780 231,624 404,004 Consumer real estate 2,458,815 2,339,050 2,068,663 119,765 390,152 Consumer 148,412 135,942 122,439 12,470 25,973 Credit cards 428,167 399,857 386,032 28,310 42,135 Leases and other 275,638 274,652 166,420 986 109,218 Total loans $ 18,317,943 $ 17,361,077 $ 16,817,674 $ 956,866 $ 1,500,269 Average loans for the second quarter of 2022 increased 5.5% on a linked-quarter basis and 8.9% compared to the second quarter of 2021. Excluding PPP balances, average loans increased 5.8% on a linked-quarter basis and 16.8% as compared to the second quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 639,161 $ 176,476 $ 40,013 $ 462,685 $ 599,148 U.S. Agencies 172,798 125,017 94,794 47,781 78,004 Mortgage-backed 4,764,452 7,317,968 6,096,099 (2,553,516 ) (1,331,647 ) State and political subdivisions 1,891,377 3,170,757 3,565,443 (1,279,380 ) (1,674,066 ) Corporates 377,586 337,526 127,581 40,060 250,005 Collateralized loan obligations 247,639 150,134 — 97,505 247,639 Total securities available for sale $ 8,093,013 $ 11,277,878 $ 9,923,930 $ (3,184,865 ) $ (1,830,917 ) Securities held to maturity: U.S. Agencies $ 65,964 $ 133 $ — $ 65,831 $ 65,964 Mortgage-backed 2,892,986 708,075 — 2,184,911 2,892,986 State and political subdivisions 2,240,018 1,185,609 1,057,091 1,054,409 1,182,927 Total securities held to maturity $ 5,198,968 $ 1,893,817 $ 1,057,091 $ 3,305,151 $ 4,141,877 Trading securities 10,190 20,836 21,409 (10,646 ) (11,219 ) Other securities 347,527 329,611 302,981 17,916 44,546 Total securities $ 13,649,698 $ 13,522,142 $ 11,305,411 $ 127,556 $ 2,344,287 Average total securities increased 0.9% on a linked-quarter basis and 20.7% compared to the second quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,209,159 $ 14,025,585 $ 10,701,656 $ 183,574 $ 3,507,503 Interest-bearing demand and savings 16,808,998 17,852,721 16,421,742 (1,043,723 ) 387,256 Time deposits 570,812 701,973 659,228 (131,161 ) (88,416 ) Total deposits $ 31,588,969 $ 32,580,279 $ 27,782,626 $ (991,310 ) $ 3,806,343 Noninterest bearing deposits as % of total 44.98 % 43.05 % 38.52 % Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposits increased 1.3% on a linked-quarter basis to $14.2 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2022 March 31, 2022 June 30, 2021 Total equity $ 2,642,888 $ 2,748,405 $ 3,090,244 Book value per common share 54.71 56.78 63.92 Tangible book value per common share (Non-GAAP) 50.64 52.69 59.96 Regulatory capital: Common equity Tier 1 capital $ 3,055,747 $ 2,938,100 $ 2,730,062 Tier 1 capital 3,055,747 2,938,100 2,730,062 Total capital 3,473,040 3,369,866 3,172,878 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.44 % 11.81 % 11.91 % Tier 1 risk-based capital ratio 11.44 11.81 11.91 Total risk-based capital ratio 13.00 13.55 13.84 Tier 1 leverage ratio 8.17 7.53 8.00 At June 30, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q4 Q3 Q2 2022 2022 2021 2021 2021 Net charge-offs - Total loans $ 28,128 $ 8,378 $ 8,061 $ 3,127 $ 28,374 Net loan charge-offs as a % of total average loans 0.62 % 0.20 % 0.19 % 0.07 % 0.68 % Loans over 90 days past due $ 3,446 $ 3,600 $ 2,633 $ 2,319 $ 1,265 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.02 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 18,117 $ 110,356 $ 92,300 $ 96,536 $ 58,219 Nonaccrual and restructured loans as a % of total loans 0.10 % 0.62 % 0.54 % 0.59 % 0.34 % Provision for credit losses $ 13,400 $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 Provision for credit losses for the second quarter increased $19.9 million from the linked quarter and decreased $10.6 million from the second quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the second quarter totaled $28.1 million, or 0.62%, of average loans, compared to $8.4 million, or 0.20%, of average loans in the linked quarter, and $28.4 million, or 0.68%, of average loans for the second quarter of 2021. The increase in net charge-offs in the second quarter of 2022 is due to a $27.7 million write-down on a single commercial relationship. Nonaccrual loans decreased 83.6% from the linked quarter to 0.10% of total loans. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on October 3, 2022, to shareholders of record at the close of business on September 12, 2022. Conference Call The company plans to host a conference call to discuss its second quarter 2022 earnings results on Wednesday, July 27, 2022, at 9:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 636921. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2022 Conference Call A replay of the conference call may be heard through August 10, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 826164. The call replay may also be accessed at investorrelations.umb.com. Non-GAAP Financial Information In this release, we may provide information about net operating income, operating earnings per share - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, and tangible book value per share – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, severance-, and COVID-19 related items that management does not believe reflect the company’s fundamental operating performance. COVID-19 related expense includes hazard pay for branch associates, computer hardware expense to support associates working remotely, and additional equipment, cleaning, and janitorial supplies to protect the well-being of our associates and customers while on the company’s premises. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, COVID-19 related expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and COVID-19 related expense. Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense and COVID-19 related expense. Tangible shareholders’ equity for the relevant period is defined as GAAP shareholders’ equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders’ equity divided by the Company’s total shares outstanding. Forward-Looking Statements: This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2022 2021 ASSETS Loans $ 18,972,158 $ 16,910,790 Allowance for credit losses on loans (164,346 ) (200,563 ) Net loans 18,807,812 16,710,227 Loans held for sale 750 5,303 Securities: Available for sale 7,739,216 10,347,531 Held to maturity, net of allowance for credit losses 5,707,282 1,081,173 Trading securities 9,646 40,552 Other securities 342,543 254,315 Total securities 13,798,687 11,723,571 Federal funds sold and resell agreements 1,055,459 1,146,521 Interest-bearing due from banks 1,825,295 5,059,098 Cash and due from banks 360,242 469,883 Premises and equipment, net 257,729 281,011 Accrued income 144,874 131,188 Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Other assets 1,060,303 901,059 Total assets $ 37,507,841 $ 36,619,015 LIABILITIES Deposits: Noninterest-bearing demand $ 14,925,555 $ 12,513,031 Interest-bearing demand and savings 16,007,087 16,857,127 Time deposits under $250,000 383,832 430,713 Time deposits of $250,000 or more 169,550 247,600 Total deposits 31,486,024 30,048,471 Federal funds purchased and repurchase agreements 2,661,283 2,783,389 Long-term debt 272,505 270,558 Accrued expenses and taxes 182,185 254,589 Other liabilities 262,956 171,764 Total liabilities 34,864,953 33,528,771 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,115,504 1,098,139 Retained earnings 2,384,454 2,040,134 Accumulated other comprehensive (loss) income, net (564,803 ) 223,107 Treasury stock (347,324 ) (326,193 ) Total shareholders' equity 2,642,888 3,090,244 Total liabilities and shareholders' equity $ 37,507,841 $ 36,619,015 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 INTEREST INCOME Loans $ 169,919 $ 154,537 $ 319,389 $ 304,707 Securities: Taxable interest 47,295 29,780 90,677 56,942 Tax-exempt interest 23,538 24,743 47,393 49,707 Total securities income 70,833 54,523 138,070 106,649 Federal funds and resell agreements 3,497 2,552 5,947 5,373 Interest-bearing due from banks 4,207 833 6,664 1,536 Trading securities 114 189 299 348 Total interest income 248,570 212,634 470,369 418,613 INTEREST EXPENSE Deposits 15,439 6,574 21,612 13,372 Federal funds and repurchase agreements 4,998 1,779 7,146 3,665 Other 3,342 3,210 6,465 6,390 Total interest expense 23,779 11,563 35,223 23,427 Net interest income 224,791 201,071 435,146 395,186 Provision for credit losses 13,400 24,000 6,900 16,500 Net interest income after provision for credit losses 211,391 177,071 428,246 378,686 NONINTEREST INCOME Trust and securities processing 58,886 53,863 118,414 108,697 Trading and investment banking 7,123 8,670 12,563 18,026 Service charges on deposit accounts 20,835 22,592 45,477 44,568 Insurance fees and commissions 245 245 504 665 Brokerage fees 12,391 2,592 15,847 5,926 Bankcard fees 17,840 16,063 34,475 30,736 Investment securities gains, net 60,720 15,455 60,198 7,119 Other (1,705 ) 12,109 12,535 24,749 Total noninterest income 176,335 131,589 300,013 240,486 NONINTEREST EXPENSE Salaries and employee benefits 121,390 120,415 252,024 248,096 Occupancy, net 11,976 12,296 24,208 24,231 Equipment 18,315 19,196 36,479 38,811 Supplies and services 3,492 3,469 6,754 6,961 Marketing and business development 5,308 4,797 10,240 7,142 Processing fees 19,338 16,501 37,781 31,918 Legal and consulting 11,265 8,147 18,176 13,902 Bankcard 5,880 4,529 12,447 9,485 Amortization of other intangible assets 1,225 1,157 2,296 2,537 Regulatory fees 3,464 2,769 6,946 5,315 Other 12,474 8,062 21,554 13,886 Total noninterest expense 214,127 201,338 428,905 402,284 Income before income taxes 173,599 107,322 299,354 216,888 Income tax expense 36,043 19,910 55,835 36,833 NET INCOME $ 137,556 $ 87,412 $ 243,519 $ 180,055 PER SHARE DATA Net income – basic $ 2.85 $ 1.81 $ 5.03 $ 3.74 Net income – diluted 2.83 1.79 4.99 3.70 Dividends 0.37 0.32 0.74 0.64 Weighted average shares outstanding – basic 48,347,226 48,294,952 48,376,868 48,196,345 Weighted average shares outstanding – diluted 48,673,964 48,698,319 48,755,059 48,604,140 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 137,556 $ 87,412 $ 243,519 $ 180,055 Other comprehensive (loss) income, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (308,352 ) 76,335 (931,262 ) (122,703 ) Less: Reclassification adjustment for gains included in net income — (1,300 ) — (4,020 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 12,539 — 13,121 — Change in unrealized gains and losses on debt securities (295,813 ) 75,035 (918,141 ) (126,723 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,437 (3,422 ) 9,117 3,081 Less: Reclassification adjustment for gains included in net income (1,090 ) (877 ) (1,941 ) (1,719 ) Change in unrealized gains and losses on derivative hedges 3,347 (4,299 ) 7,176 1,362 Other comprehensive (loss) income, before tax (292,466 ) 70,736 (910,965 ) (125,361 ) Income tax benefit (expense) 70,791 (16,826 ) 219,848 30,128 Other comprehensive (loss) income (221,675 ) 53,910 (691,117 ) (95,233 ) Comprehensive (loss) income $ (84,119 ) $ 141,322 $ (447,598 ) $ 84,822 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 180,055 (95,233 ) — 84,822 Dividends ($0.64 per share) — — (31,167 ) — — (31,167 ) Purchase of treasury stock — — — — (4,088 ) (4,088 ) Issuances of equity awards, net of forfeitures — (4,122 ) — — 4,817 695 Recognition of equity-based compensation — 8,609 — — — 8,609 Sale of treasury stock — 148 — — 153 301 Exercise of stock options — 3,054 — — 11,070 14,124 Balance - June 30, 2021 $ 55,057 $ 1,098,139 $ 2,040,134 $ 223,107 $ (326,193 ) $ 3,090,244 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 243,519 (691,117 ) — (447,598 ) Dividends ($0.74 per share) — — (36,063 ) — — (36,063 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 11,223 — — — 11,223 Sale of treasury stock — 174 — — 111 285 Exercise of stock options — 217 — — 527 744 Balance - June 30, 2022 $ 55,057 $ 1,115,504 $ 2,384,454 $ (564,803 ) $ (347,324 ) $ 2,642,888 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,317,943 3.72 % $ 16,817,674 3.69 % Securities: Taxable 9,825,114 1.93 6,994,559 1.71 Tax-exempt 3,814,394 3.13 4,289,443 2.93 Total securities 13,639,508 2.27 11,284,002 2.17 Federal funds and resell agreements 1,100,918 1.27 1,110,433 0.92 Interest bearing due from banks 2,632,307 0.64 3,343,311 0.10 Trading securities 10,190 5.35 21,409 4.27 Total earning assets 35,700,866 2.86 32,576,829 2.70 Allowance for credit losses (182,118 ) (199,379 ) Other assets 2,043,977 1,886,774 Total assets $ 37,562,725 $ 34,264,224 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,379,810 0.36 % $ 17,080,970 0.15 % Federal funds and repurchase agreements 2,658,219 0.75 2,744,516 0.26 Borrowed funds 272,254 4.92 270,305 4.76 Total interest-bearing liabilities 20,310,283 0.47 20,095,791 0.23 Noninterest-bearing demand deposits 14,209,159 10,701,656 Other liabilities 394,923 398,319 Shareholders' equity 2,648,360 3,068,458 Total liabilities and shareholders' equity $ 37,562,725 $ 34,264,224 Net interest spread 2.39 % 2.47 % Net interest margin 2.60 2.56 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,842,153 3.61 % $ 16,533,463 3.72 % Securities: Taxable 9,644,345 1.90 6,698,020 1.71 Tax-exempt 3,926,444 3.08 4,295,317 2.95 Total securities 13,570,789 2.24 10,993,337 2.20 Federal funds and resell agreements 1,182,891 1.01 1,375,689 0.79 Interest bearing due from banks 3,965,267 0.34 3,079,684 0.10 Trading securities 15,484 4.70 19,485 4.28 Total earning assets 36,576,584 2.66 32,001,658 2.72 Allowance for credit losses (190,123 ) (209,469 ) Other assets 1,966,176 1,862,036 Total assets $ 38,352,637 $ 33,654,225 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,964,006 0.24 % $ 17,076,681 0.16 % Federal funds and repurchase agreements 2,815,130 0.51 2,632,567 0.28 Borrowed funds 271,994 4.79 269,942 4.77 Total interest-bearing liabilities 21,051,130 0.34 19,979,190 0.24 Noninterest-bearing demand deposits 14,117,879 10,230,287 Other liabilities 393,732 414,535 Shareholders' equity 2,789,896 3,030,213 Total liabilities and shareholders' equity $ 38,352,637 $ 33,654,225 Net interest spread 2.32 % 2.48 % Net interest margin 2.47 2.57 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,094 $ 34,981 $ 40,716 $ 224,791 Provision for credit losses 12,067 89 1,244 13,400 Noninterest income 56,894 81,082 38,359 176,335 Noninterest expense 79,521 76,511 58,095 214,127 Income before taxes 114,400 39,463 19,736 173,599 Income tax expense 23,752 8,193 4,098 36,043 Net income $ 90,648 $ 31,270 $ 15,638 $ 137,556 Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 142,878 $ 21,258 $ 36,935 $ 201,071 Provision for credit losses 21,993 147 1,860 24,000 Noninterest income 37,106 68,745 25,738 131,589 Noninterest expense 73,472 72,575 55,291 201,338 Income before taxes 84,519 17,281 5,522 107,322 Income tax expense 15,679 3,206 1,025 19,910 Net income $ 68,840 $ 14,075 $ 4,497 $ 87,412 Six Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 294,096 $ 61,233 $ 79,817 $ 435,146 Provision for credit losses 5,027 240 1,633 6,900 Noninterest income 83,594 154,354 62,065 300,013 Noninterest expense 159,110 152,112 117,683 428,905 Income before taxes 213,553 63,235 22,566 299,354 Income tax expense 39,831 11,795 4,209 55,835 Net income $ 173,722 $ 51,440 $ 18,357 $ 243,519 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 279,287 $ 43,397 $ 72,502 $ 395,186 Provision for credit losses 13,816 367 2,317 16,500 Noninterest income 45,281 137,166 58,039 240,486 Noninterest expense 143,196 143,857 115,231 402,284 Income before taxes 167,556 36,339 12,993 216,888 Income tax expense 28,455 6,171 2,207 36,833 Net income $ 139,101 $ 30,168 $ 10,786 $ 180,055 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at June 30, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income (GAAP) $ 137,556 $ 87,412 $ 243,519 $ 180,055 Adjustments: Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Tax-impact of adjustments (i) (12 ) (63 ) (47 ) (102 ) Total Non-GAAP adjustments (net of tax) 40 222 150 359 Net operating income (Non-GAAP) $ 137,596 $ 87,634 $ 243,669 $ 180,414 Earnings per share - diluted (GAAP) $ 2.83 $ 1.79 $ 4.99 $ 3.70 Acquisition expense — — — — Severance expense — — — — COVID-19 related expense — 0.01 — 0.01 Tax-impact of adjustments (i) — — — — Operating earnings per share - diluted (Non-GAAP) $ 2.83 $ 1.80 $ 4.99 $ 3.71 GAAP Return on average assets 1.47 % 1.02 % 1.28 % 1.08 % Return on average equity 20.83 11.43 17.60 11.98 Non-GAAP Operating return on average assets 1.47 % 1.03 % 1.28 % 1.08 % Operating return on average equity 20.84 11.46 17.61 12.01 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Total Non-GAAP adjustments (pre-tax) 52 285 197 461 Operating noninterest expense (Non-GAAP) $ 214,075 $ 201,053 $ 428,708 $ 401,823 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 212,902 $ 200,181 $ 426,609 $ 399,747 Operating noninterest expense $ 214,075 $ 201,053 $ 428,708 $ 401,823 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 212,850 $ 199,896 $ 426,412 $ 399,286 Net interest income $ 224,791 $ 201,071 $ 435,146 $ 395,186 Noninterest income 176,335 131,589 300,013 240,486 Less: Gains on sales of securities available for sale, net — 1,300 — 4,020 Total Non-GAAP Revenue (denominator A) $ 401,126 $ 331,360 $ 735,159 $ 631,652 Efficiency ratio (numerator A/denominator A) 53.08 % 60.41 % 58.03 % 63.29 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 53.06 60.33 58.00 63.21 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income (Non-GAAP) $ 187,051 $ 119,400 $ 131,607 $ 306,451 $ 233,849 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 3.84 $ 2.44 $ 2.71 $ 6.29 $ 4.81 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,278 6,399 6,629 12,677 13,307 Net interest income - FTE (Non-GAAP) $ 231,069 $ 216,754 $ 207,700 $ 447,823 $ 408,493 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 193,329 $ 125,799 $ 138,236 $ 319,128 $ 247,156 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Tax equivalent interest 0.13 0.13 0.13 0.26 0.28 Net interest income - FTE (Non-GAAP) 4.75 4.44 4.26 9.19 8.41 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 3.97 $ 2.57 $ 2.84 $ 6.55 $ 5.09 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2022 2021 Total shareholders' equity (GAAP) $ 2,642,888 $ 3,090,244 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Total intangibles, net 196,690 191,154 Total tangible shareholders' equity (Non-GAAP) $ 2,446,198 $ 2,899,090 Total shares outstanding 48,305,286 48,346,371 Ratio of total shareholders' equity (book value) per share $ 54.71 $ 63.92 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 50.64 59.96 View source version on businesswire.com: https://www.businesswire.com/news/home/20220726005061/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 Second Quarter Net Income of $137.6 Million By: UMB Financial Corporation via Business Wire July 26, 2022 at 16:15 PM EDT Second Quarter 2022 Financial Highlights GAAP net income of $137.6 million, or $2.83 per diluted share. Operating pre-tax, pre-provision income (Operating PTPP, a non-GAAP financial measure) of $187.1 million, an increase of 56.7% compared to the first quarter of 2022. Average loan balances increased $1.5 billion, or 8.9% compared to the second quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 23.3% on a linked-quarter, annualized basis. Average deposits grew 13.7% compared to the second quarter of 2021. Net interest margin expanded 25 basis points from the linked quarter. Noninterest income increased 34.0% as compared to the second quarter of 2021, equal to 44.0% of total revenue. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2022 of $137.6 million, or $2.83 per diluted share, compared to $106.0 million, or $2.17 per diluted share, in the first quarter of 2022 (linked quarter) and $87.4 million, or $1.79 per diluted share, in the second quarter of 2021. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company’s entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company’s charitable foundation. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $137.6 million, or $2.83 per diluted share, for the second quarter of 2022, compared to $106.1 million, or $2.17 per diluted share, for the linked quarter and $87.6 million, or $1.80 per diluted share, for the second quarter of 2021. Operating PTPP, a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $187.1 million, or $3.84 per diluted share, for the second quarter of 2022, compared to $119.4 million, or $2.44 per diluted share, for the linked quarter, and $131.6 million, or $2.71 per diluted share, for the second quarter of 2021. These operating PTPP results represent increases of 56.7% on a linked-quarter basis and 42.1%, compared to the second quarter of 2021, and include the benefit from the aforementioned gain on the sale of the company’s Visa Inc. Class B common shares net of the contribution to the company’s charitable foundation. “Our strong financial results for the second quarter of 2022 were driven by a 23.3% linked-quarter annualized increase in average loans excluding PPP, strong net interest margin expansion, and continued momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Our strong loan growth, coupled with the benefits from higher short and long-term interest rates drove a 6.9% linked-quarter increase in net interest income. Our net charge-offs were elevated this quarter driven entirely by a $27.7 million write-down related to one commercial relationship. Nonperforming loans declined 83.6% from the prior quarter as the portfolio continues to perform well. During the quarter, we made a $5.0 million contribution to the UMB Financial Corporation Charitable Foundation to continue our support of diverse and impactful philanthropic organizations within the communities we serve.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2022 2022 2021 Net income (GAAP) $ 137,556 $ 105,963 $ 87,412 Earnings per share (diluted) 2.83 2.17 1.79 Operating pre-tax, pre-provision income (Non-GAAP) 187,051 119,400 131,607 Operating pre-tax, pre-provision earnings per share (diluted) 3.84 2.44 2.71 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 193,329 125,799 138,236 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 3.97 2.57 2.84 Net operating income (Non-GAAP) 137,596 106,073 87,634 Operating earnings per share (diluted) 2.83 2.17 1.80 GAAP Return on average assets 1.47 % 1.10 % 1.02 % Return on average equity 20.83 14.65 11.43 Efficiency ratio 53.08 63.98 60.41 Non-GAAP Operating return on average assets 1.47 % 1.10 % 1.03 % Operating return on average equity 20.84 14.67 11.46 Operating efficiency ratio 53.06 63.93 60.33 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2022 2021 Net income (GAAP) $ 243,519 $ 180,055 Earnings per share (diluted) 4.99 3.70 Operating pre-tax, pre-provision income (Non-GAAP) 306,451 233,849 Operating pre-tax, pre-provision earnings per share (diluted) 6.29 4.81 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 319,128 247,156 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 6.55 5.09 Net operating income (Non-GAAP) 243,669 180,414 Operating earnings per share (diluted) 4.99 3.71 GAAP Return on average assets 1.28 % 1.08 % Return on average equity 17.60 11.98 Efficiency ratio 58.03 63.29 Non-GAAP Operating return on average assets 1.28 % 1.08 % Operating return on average equity 17.61 12.01 Operating efficiency ratio 58.00 63.21 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 224,791 $ 210,355 $ 201,071 $ 14,436 $ 23,720 Noninterest income: Trust and securities processing 58,886 59,528 53,863 (642 ) 5,023 Trading and investment banking 7,123 5,440 8,670 1,683 (1,547 ) Service charges on deposit accounts 20,835 24,642 22,592 (3,807 ) (1,757 ) Insurance fees and commissions 245 259 245 (14 ) — Brokerage fees 12,391 3,456 2,592 8,935 9,799 Bankcard fees 17,840 16,635 16,063 1,205 1,777 Investment securities gains (losses), net 60,720 (522 ) 15,455 61,242 45,265 Other (1,705 ) 14,240 12,109 (15,945 ) (13,814 ) Total noninterest income $ 176,335 $ 123,678 $ 131,589 $ 52,657 $ 44,746 Total revenue $ 401,126 $ 334,033 $ 332,660 $ 67,093 $ 68,466 Net interest income (FTE) $ 231,069 $ 216,754 $ 207,700 Net interest margin (FTE) 2.60 % 2.35 % 2.56 % Total noninterest income as a % of total revenue 44.0 37.0 39.6 Net interest income Net interest income totaled $224.8 million, an increase of $14.4 million, or 6.9% from the linked quarter, driven by an increase of $956.9 million in average loans and the impact from increased short-term and long-term interest rates. Average earning assets decreased $1.8 billion, or 4.7%, largely driven by a decrease of $2.7 billion in interest-bearing due from banks, partially offset by the increase of $956.9 million in average loans noted above. Average interest-bearing liabilities declined $1.5 billion, or 6.8%, primarily driven by a decrease of $1.2 billion in interest-bearing deposits. Net interest margin for the second quarter was 2.60%, an increase of 25 basis points from the linked quarter, driven by an increase in loan yields of 23 basis points. Earning asset yields increased 39 basis points from the linked quarter, driven by the recent increases in short-term and long-term interest rates, mix changes, and the benefit of free funds. The cost of interest-bearing liabilities increased 26 basis points to 0.47%. Net interest spread increased 13 basis points to 2.39% from the linked quarter but was eight basis points lower than the second quarter of 2021. On a year-over-year basis, net interest income increased $23.7 million, or 11.8%, driven by a $2.3 billion, or 20.7% increase in average securities, coupled with a $1.5 billion, or 8.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposit balances increased 1.3% on a linked-quarter basis and 32.8% compared to the second quarter of 2021. Noninterest income Second quarter 2022 noninterest income increased $52.7 million on a linked-quarter basis, largely due to: A gain of $66.2 million realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by a decline of $3.7 million in mark-to-market gains on marketable securities, both recorded in investment securities gains, net. An increase of $8.9 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. These increases were partially offset by decreases of $10.5 million in company-owned life insurance income and $4.2 million in derivative income, both recorded in other income, and a decrease of $3.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Compared to the prior year, noninterest income in the second quarter of 2022 increased $44.7 million, or 34.0%, primarily driven by: An increase of $45.3 million in investment securities gains, primarily due to the $66.2 million gain realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by declines of $14.1 million and $5.5 million in mark-to-market gains on marketable securities and non-marketable securities, respectively. An increase of $9.8 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. Increases of $3.7 million and $1.7 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. These increases were partially offset by decreases of $11.6 million in company-owned life insurance income and $2.6 million in derivative income, both recorded in other income, and a decrease of $1.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 121,390 $ 130,634 $ 120,415 $ (9,244 ) $ 975 Occupancy, net 11,976 12,232 12,296 (256 ) (320 ) Equipment 18,315 18,164 19,196 151 (881 ) Supplies and services 3,492 3,262 3,469 230 23 Marketing and business development 5,308 4,932 4,797 376 511 Processing fees 19,338 18,443 16,501 895 2,837 Legal and consulting 11,265 6,911 8,147 4,354 3,118 Bankcard 5,880 6,567 4,529 (687 ) 1,351 Amortization of other intangible assets 1,225 1,071 1,157 154 68 Regulatory fees 3,464 3,482 2,769 (18 ) 695 Other 12,474 9,080 8,062 3,394 4,412 Total noninterest expense $ 214,127 $ 214,778 $ 201,338 $ (651 ) $ 12,789 Noninterest expense for the second quarter of 2022 was $214.1 million, a decrease of $0.7 million, or 0.3%, from the linked quarter and an increase of $12.8 million, or 6.4%, from the second quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $16.4 million in employee benefits expense, recorded in salaries and employee benefits, driven primarily by a decrease of $10.7 million in deferred compensation expense and a seasonal decrease of $6.2 million in payroll taxes, insurance, and 401(k) expense recognized in the second quarter. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were offset by an increase of $7.2 million in bonus and salary expense, recorded in salaries and employee benefits, driven by increased company performance, an increase of $4.4 million in legal and consulting expense due to the timing of multiple projects, and an increase of $4.4 million in charitable contributions expense, recorded in other expense. The year-over-year increase in noninterest expense was driven by: An increase of $9.8 million in salaries and bonus expense, recorded in salaries and employee benefits, driven by increased company performance. An increase of $4.4 million in charitable contributions expense, recorded in other expense. Increases of $3.1 million in legal and consulting expense and $2.8 million in processing fees due to the timing of multiple projects. An increase of $1.4 million in bankcard expense primarily due to higher processing expense. These increases were partially offset by a decrease of $8.8 million in employee benefits expense, recorded in salaries and employee benefits, primarily due to a decrease of $10.4 million in deferred compensation expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. Income taxes The company’s effective tax rate was 18.7% for the six months ended June 30, 2022, compared to 17.0% for the same period in 2021. The increase in the effective rate in 2022 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the second quarter of 2022 were $37.6 billion compared to $39.2 billion for the linked quarter and $34.3 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 7,918,552 $ 7,409,623 $ 7,402,653 $ 508,929 $ 515,899 Specialty lending 518,575 463,793 505,687 54,782 12,888 Commercial real estate 6,569,784 6,338,160 6,165,780 231,624 404,004 Consumer real estate 2,458,815 2,339,050 2,068,663 119,765 390,152 Consumer 148,412 135,942 122,439 12,470 25,973 Credit cards 428,167 399,857 386,032 28,310 42,135 Leases and other 275,638 274,652 166,420 986 109,218 Total loans $ 18,317,943 $ 17,361,077 $ 16,817,674 $ 956,866 $ 1,500,269 Average loans for the second quarter of 2022 increased 5.5% on a linked-quarter basis and 8.9% compared to the second quarter of 2021. Excluding PPP balances, average loans increased 5.8% on a linked-quarter basis and 16.8% as compared to the second quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 639,161 $ 176,476 $ 40,013 $ 462,685 $ 599,148 U.S. Agencies 172,798 125,017 94,794 47,781 78,004 Mortgage-backed 4,764,452 7,317,968 6,096,099 (2,553,516 ) (1,331,647 ) State and political subdivisions 1,891,377 3,170,757 3,565,443 (1,279,380 ) (1,674,066 ) Corporates 377,586 337,526 127,581 40,060 250,005 Collateralized loan obligations 247,639 150,134 — 97,505 247,639 Total securities available for sale $ 8,093,013 $ 11,277,878 $ 9,923,930 $ (3,184,865 ) $ (1,830,917 ) Securities held to maturity: U.S. Agencies $ 65,964 $ 133 $ — $ 65,831 $ 65,964 Mortgage-backed 2,892,986 708,075 — 2,184,911 2,892,986 State and political subdivisions 2,240,018 1,185,609 1,057,091 1,054,409 1,182,927 Total securities held to maturity $ 5,198,968 $ 1,893,817 $ 1,057,091 $ 3,305,151 $ 4,141,877 Trading securities 10,190 20,836 21,409 (10,646 ) (11,219 ) Other securities 347,527 329,611 302,981 17,916 44,546 Total securities $ 13,649,698 $ 13,522,142 $ 11,305,411 $ 127,556 $ 2,344,287 Average total securities increased 0.9% on a linked-quarter basis and 20.7% compared to the second quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,209,159 $ 14,025,585 $ 10,701,656 $ 183,574 $ 3,507,503 Interest-bearing demand and savings 16,808,998 17,852,721 16,421,742 (1,043,723 ) 387,256 Time deposits 570,812 701,973 659,228 (131,161 ) (88,416 ) Total deposits $ 31,588,969 $ 32,580,279 $ 27,782,626 $ (991,310 ) $ 3,806,343 Noninterest bearing deposits as % of total 44.98 % 43.05 % 38.52 % Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposits increased 1.3% on a linked-quarter basis to $14.2 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2022 March 31, 2022 June 30, 2021 Total equity $ 2,642,888 $ 2,748,405 $ 3,090,244 Book value per common share 54.71 56.78 63.92 Tangible book value per common share (Non-GAAP) 50.64 52.69 59.96 Regulatory capital: Common equity Tier 1 capital $ 3,055,747 $ 2,938,100 $ 2,730,062 Tier 1 capital 3,055,747 2,938,100 2,730,062 Total capital 3,473,040 3,369,866 3,172,878 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.44 % 11.81 % 11.91 % Tier 1 risk-based capital ratio 11.44 11.81 11.91 Total risk-based capital ratio 13.00 13.55 13.84 Tier 1 leverage ratio 8.17 7.53 8.00 At June 30, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q4 Q3 Q2 2022 2022 2021 2021 2021 Net charge-offs - Total loans $ 28,128 $ 8,378 $ 8,061 $ 3,127 $ 28,374 Net loan charge-offs as a % of total average loans 0.62 % 0.20 % 0.19 % 0.07 % 0.68 % Loans over 90 days past due $ 3,446 $ 3,600 $ 2,633 $ 2,319 $ 1,265 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.02 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 18,117 $ 110,356 $ 92,300 $ 96,536 $ 58,219 Nonaccrual and restructured loans as a % of total loans 0.10 % 0.62 % 0.54 % 0.59 % 0.34 % Provision for credit losses $ 13,400 $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 Provision for credit losses for the second quarter increased $19.9 million from the linked quarter and decreased $10.6 million from the second quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the second quarter totaled $28.1 million, or 0.62%, of average loans, compared to $8.4 million, or 0.20%, of average loans in the linked quarter, and $28.4 million, or 0.68%, of average loans for the second quarter of 2021. The increase in net charge-offs in the second quarter of 2022 is due to a $27.7 million write-down on a single commercial relationship. Nonaccrual loans decreased 83.6% from the linked quarter to 0.10% of total loans. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on October 3, 2022, to shareholders of record at the close of business on September 12, 2022. Conference Call The company plans to host a conference call to discuss its second quarter 2022 earnings results on Wednesday, July 27, 2022, at 9:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 636921. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2022 Conference Call A replay of the conference call may be heard through August 10, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 826164. The call replay may also be accessed at investorrelations.umb.com. Non-GAAP Financial Information In this release, we may provide information about net operating income, operating earnings per share - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, and tangible book value per share – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, severance-, and COVID-19 related items that management does not believe reflect the company’s fundamental operating performance. COVID-19 related expense includes hazard pay for branch associates, computer hardware expense to support associates working remotely, and additional equipment, cleaning, and janitorial supplies to protect the well-being of our associates and customers while on the company’s premises. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, COVID-19 related expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and COVID-19 related expense. Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense and COVID-19 related expense. Tangible shareholders’ equity for the relevant period is defined as GAAP shareholders’ equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders’ equity divided by the Company’s total shares outstanding. Forward-Looking Statements: This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2022 2021 ASSETS Loans $ 18,972,158 $ 16,910,790 Allowance for credit losses on loans (164,346 ) (200,563 ) Net loans 18,807,812 16,710,227 Loans held for sale 750 5,303 Securities: Available for sale 7,739,216 10,347,531 Held to maturity, net of allowance for credit losses 5,707,282 1,081,173 Trading securities 9,646 40,552 Other securities 342,543 254,315 Total securities 13,798,687 11,723,571 Federal funds sold and resell agreements 1,055,459 1,146,521 Interest-bearing due from banks 1,825,295 5,059,098 Cash and due from banks 360,242 469,883 Premises and equipment, net 257,729 281,011 Accrued income 144,874 131,188 Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Other assets 1,060,303 901,059 Total assets $ 37,507,841 $ 36,619,015 LIABILITIES Deposits: Noninterest-bearing demand $ 14,925,555 $ 12,513,031 Interest-bearing demand and savings 16,007,087 16,857,127 Time deposits under $250,000 383,832 430,713 Time deposits of $250,000 or more 169,550 247,600 Total deposits 31,486,024 30,048,471 Federal funds purchased and repurchase agreements 2,661,283 2,783,389 Long-term debt 272,505 270,558 Accrued expenses and taxes 182,185 254,589 Other liabilities 262,956 171,764 Total liabilities 34,864,953 33,528,771 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,115,504 1,098,139 Retained earnings 2,384,454 2,040,134 Accumulated other comprehensive (loss) income, net (564,803 ) 223,107 Treasury stock (347,324 ) (326,193 ) Total shareholders' equity 2,642,888 3,090,244 Total liabilities and shareholders' equity $ 37,507,841 $ 36,619,015 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 INTEREST INCOME Loans $ 169,919 $ 154,537 $ 319,389 $ 304,707 Securities: Taxable interest 47,295 29,780 90,677 56,942 Tax-exempt interest 23,538 24,743 47,393 49,707 Total securities income 70,833 54,523 138,070 106,649 Federal funds and resell agreements 3,497 2,552 5,947 5,373 Interest-bearing due from banks 4,207 833 6,664 1,536 Trading securities 114 189 299 348 Total interest income 248,570 212,634 470,369 418,613 INTEREST EXPENSE Deposits 15,439 6,574 21,612 13,372 Federal funds and repurchase agreements 4,998 1,779 7,146 3,665 Other 3,342 3,210 6,465 6,390 Total interest expense 23,779 11,563 35,223 23,427 Net interest income 224,791 201,071 435,146 395,186 Provision for credit losses 13,400 24,000 6,900 16,500 Net interest income after provision for credit losses 211,391 177,071 428,246 378,686 NONINTEREST INCOME Trust and securities processing 58,886 53,863 118,414 108,697 Trading and investment banking 7,123 8,670 12,563 18,026 Service charges on deposit accounts 20,835 22,592 45,477 44,568 Insurance fees and commissions 245 245 504 665 Brokerage fees 12,391 2,592 15,847 5,926 Bankcard fees 17,840 16,063 34,475 30,736 Investment securities gains, net 60,720 15,455 60,198 7,119 Other (1,705 ) 12,109 12,535 24,749 Total noninterest income 176,335 131,589 300,013 240,486 NONINTEREST EXPENSE Salaries and employee benefits 121,390 120,415 252,024 248,096 Occupancy, net 11,976 12,296 24,208 24,231 Equipment 18,315 19,196 36,479 38,811 Supplies and services 3,492 3,469 6,754 6,961 Marketing and business development 5,308 4,797 10,240 7,142 Processing fees 19,338 16,501 37,781 31,918 Legal and consulting 11,265 8,147 18,176 13,902 Bankcard 5,880 4,529 12,447 9,485 Amortization of other intangible assets 1,225 1,157 2,296 2,537 Regulatory fees 3,464 2,769 6,946 5,315 Other 12,474 8,062 21,554 13,886 Total noninterest expense 214,127 201,338 428,905 402,284 Income before income taxes 173,599 107,322 299,354 216,888 Income tax expense 36,043 19,910 55,835 36,833 NET INCOME $ 137,556 $ 87,412 $ 243,519 $ 180,055 PER SHARE DATA Net income – basic $ 2.85 $ 1.81 $ 5.03 $ 3.74 Net income – diluted 2.83 1.79 4.99 3.70 Dividends 0.37 0.32 0.74 0.64 Weighted average shares outstanding – basic 48,347,226 48,294,952 48,376,868 48,196,345 Weighted average shares outstanding – diluted 48,673,964 48,698,319 48,755,059 48,604,140 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 137,556 $ 87,412 $ 243,519 $ 180,055 Other comprehensive (loss) income, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (308,352 ) 76,335 (931,262 ) (122,703 ) Less: Reclassification adjustment for gains included in net income — (1,300 ) — (4,020 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 12,539 — 13,121 — Change in unrealized gains and losses on debt securities (295,813 ) 75,035 (918,141 ) (126,723 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,437 (3,422 ) 9,117 3,081 Less: Reclassification adjustment for gains included in net income (1,090 ) (877 ) (1,941 ) (1,719 ) Change in unrealized gains and losses on derivative hedges 3,347 (4,299 ) 7,176 1,362 Other comprehensive (loss) income, before tax (292,466 ) 70,736 (910,965 ) (125,361 ) Income tax benefit (expense) 70,791 (16,826 ) 219,848 30,128 Other comprehensive (loss) income (221,675 ) 53,910 (691,117 ) (95,233 ) Comprehensive (loss) income $ (84,119 ) $ 141,322 $ (447,598 ) $ 84,822 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 180,055 (95,233 ) — 84,822 Dividends ($0.64 per share) — — (31,167 ) — — (31,167 ) Purchase of treasury stock — — — — (4,088 ) (4,088 ) Issuances of equity awards, net of forfeitures — (4,122 ) — — 4,817 695 Recognition of equity-based compensation — 8,609 — — — 8,609 Sale of treasury stock — 148 — — 153 301 Exercise of stock options — 3,054 — — 11,070 14,124 Balance - June 30, 2021 $ 55,057 $ 1,098,139 $ 2,040,134 $ 223,107 $ (326,193 ) $ 3,090,244 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 243,519 (691,117 ) — (447,598 ) Dividends ($0.74 per share) — — (36,063 ) — — (36,063 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 11,223 — — — 11,223 Sale of treasury stock — 174 — — 111 285 Exercise of stock options — 217 — — 527 744 Balance - June 30, 2022 $ 55,057 $ 1,115,504 $ 2,384,454 $ (564,803 ) $ (347,324 ) $ 2,642,888 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,317,943 3.72 % $ 16,817,674 3.69 % Securities: Taxable 9,825,114 1.93 6,994,559 1.71 Tax-exempt 3,814,394 3.13 4,289,443 2.93 Total securities 13,639,508 2.27 11,284,002 2.17 Federal funds and resell agreements 1,100,918 1.27 1,110,433 0.92 Interest bearing due from banks 2,632,307 0.64 3,343,311 0.10 Trading securities 10,190 5.35 21,409 4.27 Total earning assets 35,700,866 2.86 32,576,829 2.70 Allowance for credit losses (182,118 ) (199,379 ) Other assets 2,043,977 1,886,774 Total assets $ 37,562,725 $ 34,264,224 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,379,810 0.36 % $ 17,080,970 0.15 % Federal funds and repurchase agreements 2,658,219 0.75 2,744,516 0.26 Borrowed funds 272,254 4.92 270,305 4.76 Total interest-bearing liabilities 20,310,283 0.47 20,095,791 0.23 Noninterest-bearing demand deposits 14,209,159 10,701,656 Other liabilities 394,923 398,319 Shareholders' equity 2,648,360 3,068,458 Total liabilities and shareholders' equity $ 37,562,725 $ 34,264,224 Net interest spread 2.39 % 2.47 % Net interest margin 2.60 2.56 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,842,153 3.61 % $ 16,533,463 3.72 % Securities: Taxable 9,644,345 1.90 6,698,020 1.71 Tax-exempt 3,926,444 3.08 4,295,317 2.95 Total securities 13,570,789 2.24 10,993,337 2.20 Federal funds and resell agreements 1,182,891 1.01 1,375,689 0.79 Interest bearing due from banks 3,965,267 0.34 3,079,684 0.10 Trading securities 15,484 4.70 19,485 4.28 Total earning assets 36,576,584 2.66 32,001,658 2.72 Allowance for credit losses (190,123 ) (209,469 ) Other assets 1,966,176 1,862,036 Total assets $ 38,352,637 $ 33,654,225 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,964,006 0.24 % $ 17,076,681 0.16 % Federal funds and repurchase agreements 2,815,130 0.51 2,632,567 0.28 Borrowed funds 271,994 4.79 269,942 4.77 Total interest-bearing liabilities 21,051,130 0.34 19,979,190 0.24 Noninterest-bearing demand deposits 14,117,879 10,230,287 Other liabilities 393,732 414,535 Shareholders' equity 2,789,896 3,030,213 Total liabilities and shareholders' equity $ 38,352,637 $ 33,654,225 Net interest spread 2.32 % 2.48 % Net interest margin 2.47 2.57 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,094 $ 34,981 $ 40,716 $ 224,791 Provision for credit losses 12,067 89 1,244 13,400 Noninterest income 56,894 81,082 38,359 176,335 Noninterest expense 79,521 76,511 58,095 214,127 Income before taxes 114,400 39,463 19,736 173,599 Income tax expense 23,752 8,193 4,098 36,043 Net income $ 90,648 $ 31,270 $ 15,638 $ 137,556 Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 142,878 $ 21,258 $ 36,935 $ 201,071 Provision for credit losses 21,993 147 1,860 24,000 Noninterest income 37,106 68,745 25,738 131,589 Noninterest expense 73,472 72,575 55,291 201,338 Income before taxes 84,519 17,281 5,522 107,322 Income tax expense 15,679 3,206 1,025 19,910 Net income $ 68,840 $ 14,075 $ 4,497 $ 87,412 Six Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 294,096 $ 61,233 $ 79,817 $ 435,146 Provision for credit losses 5,027 240 1,633 6,900 Noninterest income 83,594 154,354 62,065 300,013 Noninterest expense 159,110 152,112 117,683 428,905 Income before taxes 213,553 63,235 22,566 299,354 Income tax expense 39,831 11,795 4,209 55,835 Net income $ 173,722 $ 51,440 $ 18,357 $ 243,519 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 279,287 $ 43,397 $ 72,502 $ 395,186 Provision for credit losses 13,816 367 2,317 16,500 Noninterest income 45,281 137,166 58,039 240,486 Noninterest expense 143,196 143,857 115,231 402,284 Income before taxes 167,556 36,339 12,993 216,888 Income tax expense 28,455 6,171 2,207 36,833 Net income $ 139,101 $ 30,168 $ 10,786 $ 180,055 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at June 30, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income (GAAP) $ 137,556 $ 87,412 $ 243,519 $ 180,055 Adjustments: Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Tax-impact of adjustments (i) (12 ) (63 ) (47 ) (102 ) Total Non-GAAP adjustments (net of tax) 40 222 150 359 Net operating income (Non-GAAP) $ 137,596 $ 87,634 $ 243,669 $ 180,414 Earnings per share - diluted (GAAP) $ 2.83 $ 1.79 $ 4.99 $ 3.70 Acquisition expense — — — — Severance expense — — — — COVID-19 related expense — 0.01 — 0.01 Tax-impact of adjustments (i) — — — — Operating earnings per share - diluted (Non-GAAP) $ 2.83 $ 1.80 $ 4.99 $ 3.71 GAAP Return on average assets 1.47 % 1.02 % 1.28 % 1.08 % Return on average equity 20.83 11.43 17.60 11.98 Non-GAAP Operating return on average assets 1.47 % 1.03 % 1.28 % 1.08 % Operating return on average equity 20.84 11.46 17.61 12.01 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Total Non-GAAP adjustments (pre-tax) 52 285 197 461 Operating noninterest expense (Non-GAAP) $ 214,075 $ 201,053 $ 428,708 $ 401,823 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 212,902 $ 200,181 $ 426,609 $ 399,747 Operating noninterest expense $ 214,075 $ 201,053 $ 428,708 $ 401,823 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 212,850 $ 199,896 $ 426,412 $ 399,286 Net interest income $ 224,791 $ 201,071 $ 435,146 $ 395,186 Noninterest income 176,335 131,589 300,013 240,486 Less: Gains on sales of securities available for sale, net — 1,300 — 4,020 Total Non-GAAP Revenue (denominator A) $ 401,126 $ 331,360 $ 735,159 $ 631,652 Efficiency ratio (numerator A/denominator A) 53.08 % 60.41 % 58.03 % 63.29 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 53.06 60.33 58.00 63.21 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income (Non-GAAP) $ 187,051 $ 119,400 $ 131,607 $ 306,451 $ 233,849 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 3.84 $ 2.44 $ 2.71 $ 6.29 $ 4.81 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,278 6,399 6,629 12,677 13,307 Net interest income - FTE (Non-GAAP) $ 231,069 $ 216,754 $ 207,700 $ 447,823 $ 408,493 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 193,329 $ 125,799 $ 138,236 $ 319,128 $ 247,156 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Tax equivalent interest 0.13 0.13 0.13 0.26 0.28 Net interest income - FTE (Non-GAAP) 4.75 4.44 4.26 9.19 8.41 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 3.97 $ 2.57 $ 2.84 $ 6.55 $ 5.09 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2022 2021 Total shareholders' equity (GAAP) $ 2,642,888 $ 3,090,244 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Total intangibles, net 196,690 191,154 Total tangible shareholders' equity (Non-GAAP) $ 2,446,198 $ 2,899,090 Total shares outstanding 48,305,286 48,346,371 Ratio of total shareholders' equity (book value) per share $ 54.71 $ 63.92 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 50.64 59.96 View source version on businesswire.com: https://www.businesswire.com/news/home/20220726005061/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106
Second Quarter 2022 Financial Highlights GAAP net income of $137.6 million, or $2.83 per diluted share. Operating pre-tax, pre-provision income (Operating PTPP, a non-GAAP financial measure) of $187.1 million, an increase of 56.7% compared to the first quarter of 2022. Average loan balances increased $1.5 billion, or 8.9% compared to the second quarter of 2021. Excluding Paycheck Protection Program (PPP) balances, average loans increased 23.3% on a linked-quarter, annualized basis. Average deposits grew 13.7% compared to the second quarter of 2021. Net interest margin expanded 25 basis points from the linked quarter. Noninterest income increased 34.0% as compared to the second quarter of 2021, equal to 44.0% of total revenue.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2022 of $137.6 million, or $2.83 per diluted share, compared to $106.0 million, or $2.17 per diluted share, in the first quarter of 2022 (linked quarter) and $87.4 million, or $1.79 per diluted share, in the second quarter of 2021. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company’s entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company’s charitable foundation. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $137.6 million, or $2.83 per diluted share, for the second quarter of 2022, compared to $106.1 million, or $2.17 per diluted share, for the linked quarter and $87.6 million, or $1.80 per diluted share, for the second quarter of 2021. Operating PTPP, a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $187.1 million, or $3.84 per diluted share, for the second quarter of 2022, compared to $119.4 million, or $2.44 per diluted share, for the linked quarter, and $131.6 million, or $2.71 per diluted share, for the second quarter of 2021. These operating PTPP results represent increases of 56.7% on a linked-quarter basis and 42.1%, compared to the second quarter of 2021, and include the benefit from the aforementioned gain on the sale of the company’s Visa Inc. Class B common shares net of the contribution to the company’s charitable foundation. “Our strong financial results for the second quarter of 2022 were driven by a 23.3% linked-quarter annualized increase in average loans excluding PPP, strong net interest margin expansion, and continued momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Our strong loan growth, coupled with the benefits from higher short and long-term interest rates drove a 6.9% linked-quarter increase in net interest income. Our net charge-offs were elevated this quarter driven entirely by a $27.7 million write-down related to one commercial relationship. Nonperforming loans declined 83.6% from the prior quarter as the portfolio continues to perform well. During the quarter, we made a $5.0 million contribution to the UMB Financial Corporation Charitable Foundation to continue our support of diverse and impactful philanthropic organizations within the communities we serve.” Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q2 Q1 Q2 2022 2022 2021 Net income (GAAP) $ 137,556 $ 105,963 $ 87,412 Earnings per share (diluted) 2.83 2.17 1.79 Operating pre-tax, pre-provision income (Non-GAAP) 187,051 119,400 131,607 Operating pre-tax, pre-provision earnings per share (diluted) 3.84 2.44 2.71 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 193,329 125,799 138,236 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 3.97 2.57 2.84 Net operating income (Non-GAAP) 137,596 106,073 87,634 Operating earnings per share (diluted) 2.83 2.17 1.80 GAAP Return on average assets 1.47 % 1.10 % 1.02 % Return on average equity 20.83 14.65 11.43 Efficiency ratio 53.08 63.98 60.41 Non-GAAP Operating return on average assets 1.47 % 1.10 % 1.03 % Operating return on average equity 20.84 14.67 11.46 Operating efficiency ratio 53.06 63.93 60.33 Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June June YTD YTD 2022 2021 Net income (GAAP) $ 243,519 $ 180,055 Earnings per share (diluted) 4.99 3.70 Operating pre-tax, pre-provision income (Non-GAAP) 306,451 233,849 Operating pre-tax, pre-provision earnings per share (diluted) 6.29 4.81 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 319,128 247,156 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 6.55 5.09 Net operating income (Non-GAAP) 243,669 180,414 Operating earnings per share (diluted) 4.99 3.71 GAAP Return on average assets 1.28 % 1.08 % Return on average equity 17.60 11.98 Efficiency ratio 58.03 63.29 Non-GAAP Operating return on average assets 1.28 % 1.08 % Operating return on average equity 17.61 12.01 Operating efficiency ratio 58.00 63.21 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 224,791 $ 210,355 $ 201,071 $ 14,436 $ 23,720 Noninterest income: Trust and securities processing 58,886 59,528 53,863 (642 ) 5,023 Trading and investment banking 7,123 5,440 8,670 1,683 (1,547 ) Service charges on deposit accounts 20,835 24,642 22,592 (3,807 ) (1,757 ) Insurance fees and commissions 245 259 245 (14 ) — Brokerage fees 12,391 3,456 2,592 8,935 9,799 Bankcard fees 17,840 16,635 16,063 1,205 1,777 Investment securities gains (losses), net 60,720 (522 ) 15,455 61,242 45,265 Other (1,705 ) 14,240 12,109 (15,945 ) (13,814 ) Total noninterest income $ 176,335 $ 123,678 $ 131,589 $ 52,657 $ 44,746 Total revenue $ 401,126 $ 334,033 $ 332,660 $ 67,093 $ 68,466 Net interest income (FTE) $ 231,069 $ 216,754 $ 207,700 Net interest margin (FTE) 2.60 % 2.35 % 2.56 % Total noninterest income as a % of total revenue 44.0 37.0 39.6 Net interest income Net interest income totaled $224.8 million, an increase of $14.4 million, or 6.9% from the linked quarter, driven by an increase of $956.9 million in average loans and the impact from increased short-term and long-term interest rates. Average earning assets decreased $1.8 billion, or 4.7%, largely driven by a decrease of $2.7 billion in interest-bearing due from banks, partially offset by the increase of $956.9 million in average loans noted above. Average interest-bearing liabilities declined $1.5 billion, or 6.8%, primarily driven by a decrease of $1.2 billion in interest-bearing deposits. Net interest margin for the second quarter was 2.60%, an increase of 25 basis points from the linked quarter, driven by an increase in loan yields of 23 basis points. Earning asset yields increased 39 basis points from the linked quarter, driven by the recent increases in short-term and long-term interest rates, mix changes, and the benefit of free funds. The cost of interest-bearing liabilities increased 26 basis points to 0.47%. Net interest spread increased 13 basis points to 2.39% from the linked quarter but was eight basis points lower than the second quarter of 2021. On a year-over-year basis, net interest income increased $23.7 million, or 11.8%, driven by a $2.3 billion, or 20.7% increase in average securities, coupled with a $1.5 billion, or 8.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposit balances increased 1.3% on a linked-quarter basis and 32.8% compared to the second quarter of 2021. Noninterest income Second quarter 2022 noninterest income increased $52.7 million on a linked-quarter basis, largely due to: A gain of $66.2 million realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by a decline of $3.7 million in mark-to-market gains on marketable securities, both recorded in investment securities gains, net. An increase of $8.9 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. These increases were partially offset by decreases of $10.5 million in company-owned life insurance income and $4.2 million in derivative income, both recorded in other income, and a decrease of $3.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Compared to the prior year, noninterest income in the second quarter of 2022 increased $44.7 million, or 34.0%, primarily driven by: An increase of $45.3 million in investment securities gains, primarily due to the $66.2 million gain realized on the sale of the company’s Visa Inc. Class B common shares, partially offset by declines of $14.1 million and $5.5 million in mark-to-market gains on marketable securities and non-marketable securities, respectively. An increase of $9.8 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. Increases of $3.7 million and $1.7 million in fund services income and corporate trust income, respectively, both recorded in trust and securities processing. These increases were partially offset by decreases of $11.6 million in company-owned life insurance income and $2.6 million in derivative income, both recorded in other income, and a decrease of $1.8 million in service charges on deposits. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. The decrease in service charges on deposits was primarily due to lower healthcare income related to customer transfer and conversion fees. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 121,390 $ 130,634 $ 120,415 $ (9,244 ) $ 975 Occupancy, net 11,976 12,232 12,296 (256 ) (320 ) Equipment 18,315 18,164 19,196 151 (881 ) Supplies and services 3,492 3,262 3,469 230 23 Marketing and business development 5,308 4,932 4,797 376 511 Processing fees 19,338 18,443 16,501 895 2,837 Legal and consulting 11,265 6,911 8,147 4,354 3,118 Bankcard 5,880 6,567 4,529 (687 ) 1,351 Amortization of other intangible assets 1,225 1,071 1,157 154 68 Regulatory fees 3,464 3,482 2,769 (18 ) 695 Other 12,474 9,080 8,062 3,394 4,412 Total noninterest expense $ 214,127 $ 214,778 $ 201,338 $ (651 ) $ 12,789 Noninterest expense for the second quarter of 2022 was $214.1 million, a decrease of $0.7 million, or 0.3%, from the linked quarter and an increase of $12.8 million, or 6.4%, from the second quarter of 2021. The linked-quarter decrease in noninterest expense was driven by: A decrease of $16.4 million in employee benefits expense, recorded in salaries and employee benefits, driven primarily by a decrease of $10.7 million in deferred compensation expense and a seasonal decrease of $6.2 million in payroll taxes, insurance, and 401(k) expense recognized in the second quarter. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were offset by an increase of $7.2 million in bonus and salary expense, recorded in salaries and employee benefits, driven by increased company performance, an increase of $4.4 million in legal and consulting expense due to the timing of multiple projects, and an increase of $4.4 million in charitable contributions expense, recorded in other expense. The year-over-year increase in noninterest expense was driven by: An increase of $9.8 million in salaries and bonus expense, recorded in salaries and employee benefits, driven by increased company performance. An increase of $4.4 million in charitable contributions expense, recorded in other expense. Increases of $3.1 million in legal and consulting expense and $2.8 million in processing fees due to the timing of multiple projects. An increase of $1.4 million in bankcard expense primarily due to higher processing expense. These increases were partially offset by a decrease of $8.8 million in employee benefits expense, recorded in salaries and employee benefits, primarily due to a decrease of $10.4 million in deferred compensation expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. Income taxes The company’s effective tax rate was 18.7% for the six months ended June 30, 2022, compared to 17.0% for the same period in 2021. The increase in the effective rate in 2022 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the second quarter of 2022 were $37.6 billion compared to $39.2 billion for the linked quarter and $34.3 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 7,918,552 $ 7,409,623 $ 7,402,653 $ 508,929 $ 515,899 Specialty lending 518,575 463,793 505,687 54,782 12,888 Commercial real estate 6,569,784 6,338,160 6,165,780 231,624 404,004 Consumer real estate 2,458,815 2,339,050 2,068,663 119,765 390,152 Consumer 148,412 135,942 122,439 12,470 25,973 Credit cards 428,167 399,857 386,032 28,310 42,135 Leases and other 275,638 274,652 166,420 986 109,218 Total loans $ 18,317,943 $ 17,361,077 $ 16,817,674 $ 956,866 $ 1,500,269 Average loans for the second quarter of 2022 increased 5.5% on a linked-quarter basis and 8.9% compared to the second quarter of 2021. Excluding PPP balances, average loans increased 5.8% on a linked-quarter basis and 16.8% as compared to the second quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 639,161 $ 176,476 $ 40,013 $ 462,685 $ 599,148 U.S. Agencies 172,798 125,017 94,794 47,781 78,004 Mortgage-backed 4,764,452 7,317,968 6,096,099 (2,553,516 ) (1,331,647 ) State and political subdivisions 1,891,377 3,170,757 3,565,443 (1,279,380 ) (1,674,066 ) Corporates 377,586 337,526 127,581 40,060 250,005 Collateralized loan obligations 247,639 150,134 — 97,505 247,639 Total securities available for sale $ 8,093,013 $ 11,277,878 $ 9,923,930 $ (3,184,865 ) $ (1,830,917 ) Securities held to maturity: U.S. Agencies $ 65,964 $ 133 $ — $ 65,831 $ 65,964 Mortgage-backed 2,892,986 708,075 — 2,184,911 2,892,986 State and political subdivisions 2,240,018 1,185,609 1,057,091 1,054,409 1,182,927 Total securities held to maturity $ 5,198,968 $ 1,893,817 $ 1,057,091 $ 3,305,151 $ 4,141,877 Trading securities 10,190 20,836 21,409 (10,646 ) (11,219 ) Other securities 347,527 329,611 302,981 17,916 44,546 Total securities $ 13,649,698 $ 13,522,142 $ 11,305,411 $ 127,556 $ 2,344,287 Average total securities increased 0.9% on a linked-quarter basis and 20.7% compared to the second quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q2 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 14,209,159 $ 14,025,585 $ 10,701,656 $ 183,574 $ 3,507,503 Interest-bearing demand and savings 16,808,998 17,852,721 16,421,742 (1,043,723 ) 387,256 Time deposits 570,812 701,973 659,228 (131,161 ) (88,416 ) Total deposits $ 31,588,969 $ 32,580,279 $ 27,782,626 $ (991,310 ) $ 3,806,343 Noninterest bearing deposits as % of total 44.98 % 43.05 % 38.52 % Average deposits decreased 3.0% on a linked-quarter basis and increased 13.7% compared to the second quarter of 2021. Average noninterest-bearing demand deposits increased 1.3% on a linked-quarter basis to $14.2 billion. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) June 30, 2022 March 31, 2022 June 30, 2021 Total equity $ 2,642,888 $ 2,748,405 $ 3,090,244 Book value per common share 54.71 56.78 63.92 Tangible book value per common share (Non-GAAP) 50.64 52.69 59.96 Regulatory capital: Common equity Tier 1 capital $ 3,055,747 $ 2,938,100 $ 2,730,062 Tier 1 capital 3,055,747 2,938,100 2,730,062 Total capital 3,473,040 3,369,866 3,172,878 Regulatory capital ratios: Common equity Tier 1 capital ratio 11.44 % 11.81 % 11.91 % Tier 1 risk-based capital ratio 11.44 11.81 11.91 Total risk-based capital ratio 13.00 13.55 13.84 Tier 1 leverage ratio 8.17 7.53 8.00 At June 30, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q2 Q1 Q4 Q3 Q2 2022 2022 2021 2021 2021 Net charge-offs - Total loans $ 28,128 $ 8,378 $ 8,061 $ 3,127 $ 28,374 Net loan charge-offs as a % of total average loans 0.62 % 0.20 % 0.19 % 0.07 % 0.68 % Loans over 90 days past due $ 3,446 $ 3,600 $ 2,633 $ 2,319 $ 1,265 Loans over 90 days past due as a % of total loans 0.02 % 0.02 % 0.02 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 18,117 $ 110,356 $ 92,300 $ 96,536 $ 58,219 Nonaccrual and restructured loans as a % of total loans 0.10 % 0.62 % 0.54 % 0.59 % 0.34 % Provision for credit losses $ 13,400 $ (6,500 ) $ 8,500 $ (5,000 ) $ 24,000 Provision for credit losses for the second quarter increased $19.9 million from the linked quarter and decreased $10.6 million from the second quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. Net charge-offs for the second quarter totaled $28.1 million, or 0.62%, of average loans, compared to $8.4 million, or 0.20%, of average loans in the linked quarter, and $28.4 million, or 0.68%, of average loans for the second quarter of 2021. The increase in net charge-offs in the second quarter of 2022 is due to a $27.7 million write-down on a single commercial relationship. Nonaccrual loans decreased 83.6% from the linked quarter to 0.10% of total loans. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on October 3, 2022, to shareholders of record at the close of business on September 12, 2022. Conference Call The company plans to host a conference call to discuss its second quarter 2022 earnings results on Wednesday, July 27, 2022, at 9:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 636921. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 2Q 2022 Conference Call A replay of the conference call may be heard through August 10, 2022 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 826164. The call replay may also be accessed at investorrelations.umb.com. Non-GAAP Financial Information In this release, we may provide information about net operating income, operating earnings per share - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, and tangible book value per share – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, severance-, and COVID-19 related items that management does not believe reflect the company’s fundamental operating performance. COVID-19 related expense includes hazard pay for branch associates, computer hardware expense to support associates working remotely, and additional equipment, cleaning, and janitorial supplies to protect the well-being of our associates and customers while on the company’s premises. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, COVID-19 related expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and COVID-19 related expense. Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense and COVID-19 related expense. Tangible shareholders’ equity for the relevant period is defined as GAAP shareholders’ equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders’ equity divided by the Company’s total shares outstanding. Forward-Looking Statements: This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) June 30, 2022 2021 ASSETS Loans $ 18,972,158 $ 16,910,790 Allowance for credit losses on loans (164,346 ) (200,563 ) Net loans 18,807,812 16,710,227 Loans held for sale 750 5,303 Securities: Available for sale 7,739,216 10,347,531 Held to maturity, net of allowance for credit losses 5,707,282 1,081,173 Trading securities 9,646 40,552 Other securities 342,543 254,315 Total securities 13,798,687 11,723,571 Federal funds sold and resell agreements 1,055,459 1,146,521 Interest-bearing due from banks 1,825,295 5,059,098 Cash and due from banks 360,242 469,883 Premises and equipment, net 257,729 281,011 Accrued income 144,874 131,188 Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Other assets 1,060,303 901,059 Total assets $ 37,507,841 $ 36,619,015 LIABILITIES Deposits: Noninterest-bearing demand $ 14,925,555 $ 12,513,031 Interest-bearing demand and savings 16,007,087 16,857,127 Time deposits under $250,000 383,832 430,713 Time deposits of $250,000 or more 169,550 247,600 Total deposits 31,486,024 30,048,471 Federal funds purchased and repurchase agreements 2,661,283 2,783,389 Long-term debt 272,505 270,558 Accrued expenses and taxes 182,185 254,589 Other liabilities 262,956 171,764 Total liabilities 34,864,953 33,528,771 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,115,504 1,098,139 Retained earnings 2,384,454 2,040,134 Accumulated other comprehensive (loss) income, net (564,803 ) 223,107 Treasury stock (347,324 ) (326,193 ) Total shareholders' equity 2,642,888 3,090,244 Total liabilities and shareholders' equity $ 37,507,841 $ 36,619,015 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 INTEREST INCOME Loans $ 169,919 $ 154,537 $ 319,389 $ 304,707 Securities: Taxable interest 47,295 29,780 90,677 56,942 Tax-exempt interest 23,538 24,743 47,393 49,707 Total securities income 70,833 54,523 138,070 106,649 Federal funds and resell agreements 3,497 2,552 5,947 5,373 Interest-bearing due from banks 4,207 833 6,664 1,536 Trading securities 114 189 299 348 Total interest income 248,570 212,634 470,369 418,613 INTEREST EXPENSE Deposits 15,439 6,574 21,612 13,372 Federal funds and repurchase agreements 4,998 1,779 7,146 3,665 Other 3,342 3,210 6,465 6,390 Total interest expense 23,779 11,563 35,223 23,427 Net interest income 224,791 201,071 435,146 395,186 Provision for credit losses 13,400 24,000 6,900 16,500 Net interest income after provision for credit losses 211,391 177,071 428,246 378,686 NONINTEREST INCOME Trust and securities processing 58,886 53,863 118,414 108,697 Trading and investment banking 7,123 8,670 12,563 18,026 Service charges on deposit accounts 20,835 22,592 45,477 44,568 Insurance fees and commissions 245 245 504 665 Brokerage fees 12,391 2,592 15,847 5,926 Bankcard fees 17,840 16,063 34,475 30,736 Investment securities gains, net 60,720 15,455 60,198 7,119 Other (1,705 ) 12,109 12,535 24,749 Total noninterest income 176,335 131,589 300,013 240,486 NONINTEREST EXPENSE Salaries and employee benefits 121,390 120,415 252,024 248,096 Occupancy, net 11,976 12,296 24,208 24,231 Equipment 18,315 19,196 36,479 38,811 Supplies and services 3,492 3,469 6,754 6,961 Marketing and business development 5,308 4,797 10,240 7,142 Processing fees 19,338 16,501 37,781 31,918 Legal and consulting 11,265 8,147 18,176 13,902 Bankcard 5,880 4,529 12,447 9,485 Amortization of other intangible assets 1,225 1,157 2,296 2,537 Regulatory fees 3,464 2,769 6,946 5,315 Other 12,474 8,062 21,554 13,886 Total noninterest expense 214,127 201,338 428,905 402,284 Income before income taxes 173,599 107,322 299,354 216,888 Income tax expense 36,043 19,910 55,835 36,833 NET INCOME $ 137,556 $ 87,412 $ 243,519 $ 180,055 PER SHARE DATA Net income – basic $ 2.85 $ 1.81 $ 5.03 $ 3.74 Net income – diluted 2.83 1.79 4.99 3.70 Dividends 0.37 0.32 0.74 0.64 Weighted average shares outstanding – basic 48,347,226 48,294,952 48,376,868 48,196,345 Weighted average shares outstanding – diluted 48,673,964 48,698,319 48,755,059 48,604,140 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 137,556 $ 87,412 $ 243,519 $ 180,055 Other comprehensive (loss) income, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (308,352 ) 76,335 (931,262 ) (122,703 ) Less: Reclassification adjustment for gains included in net income — (1,300 ) — (4,020 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 12,539 — 13,121 — Change in unrealized gains and losses on debt securities (295,813 ) 75,035 (918,141 ) (126,723 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 4,437 (3,422 ) 9,117 3,081 Less: Reclassification adjustment for gains included in net income (1,090 ) (877 ) (1,941 ) (1,719 ) Change in unrealized gains and losses on derivative hedges 3,347 (4,299 ) 7,176 1,362 Other comprehensive (loss) income, before tax (292,466 ) 70,736 (910,965 ) (125,361 ) Income tax benefit (expense) 70,791 (16,826 ) 219,848 30,128 Other comprehensive (loss) income (221,675 ) 53,910 (691,117 ) (95,233 ) Comprehensive (loss) income $ (84,119 ) $ 141,322 $ (447,598 ) $ 84,822 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2021 $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 Total comprehensive income (loss) — — 180,055 (95,233 ) — 84,822 Dividends ($0.64 per share) — — (31,167 ) — — (31,167 ) Purchase of treasury stock — — — — (4,088 ) (4,088 ) Issuances of equity awards, net of forfeitures — (4,122 ) — — 4,817 695 Recognition of equity-based compensation — 8,609 — — — 8,609 Sale of treasury stock — 148 — — 153 301 Exercise of stock options — 3,054 — — 11,070 14,124 Balance - June 30, 2021 $ 55,057 $ 1,098,139 $ 2,040,134 $ 223,107 $ (326,193 ) $ 3,090,244 Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 243,519 (691,117 ) — (447,598 ) Dividends ($0.74 per share) — — (36,063 ) — — (36,063 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 11,223 — — — 11,223 Sale of treasury stock — 174 — — 111 285 Exercise of stock options — 217 — — 527 744 Balance - June 30, 2022 $ 55,057 $ 1,115,504 $ 2,384,454 $ (564,803 ) $ (347,324 ) $ 2,642,888 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,317,943 3.72 % $ 16,817,674 3.69 % Securities: Taxable 9,825,114 1.93 6,994,559 1.71 Tax-exempt 3,814,394 3.13 4,289,443 2.93 Total securities 13,639,508 2.27 11,284,002 2.17 Federal funds and resell agreements 1,100,918 1.27 1,110,433 0.92 Interest bearing due from banks 2,632,307 0.64 3,343,311 0.10 Trading securities 10,190 5.35 21,409 4.27 Total earning assets 35,700,866 2.86 32,576,829 2.70 Allowance for credit losses (182,118 ) (199,379 ) Other assets 2,043,977 1,886,774 Total assets $ 37,562,725 $ 34,264,224 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,379,810 0.36 % $ 17,080,970 0.15 % Federal funds and repurchase agreements 2,658,219 0.75 2,744,516 0.26 Borrowed funds 272,254 4.92 270,305 4.76 Total interest-bearing liabilities 20,310,283 0.47 20,095,791 0.23 Noninterest-bearing demand deposits 14,209,159 10,701,656 Other liabilities 394,923 398,319 Shareholders' equity 2,648,360 3,068,458 Total liabilities and shareholders' equity $ 37,562,725 $ 34,264,224 Net interest spread 2.39 % 2.47 % Net interest margin 2.60 2.56 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Six Months Ended June 30, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 17,842,153 3.61 % $ 16,533,463 3.72 % Securities: Taxable 9,644,345 1.90 6,698,020 1.71 Tax-exempt 3,926,444 3.08 4,295,317 2.95 Total securities 13,570,789 2.24 10,993,337 2.20 Federal funds and resell agreements 1,182,891 1.01 1,375,689 0.79 Interest bearing due from banks 3,965,267 0.34 3,079,684 0.10 Trading securities 15,484 4.70 19,485 4.28 Total earning assets 36,576,584 2.66 32,001,658 2.72 Allowance for credit losses (190,123 ) (209,469 ) Other assets 1,966,176 1,862,036 Total assets $ 38,352,637 $ 33,654,225 Liabilities and Shareholders' Equity Interest-bearing deposits $ 17,964,006 0.24 % $ 17,076,681 0.16 % Federal funds and repurchase agreements 2,815,130 0.51 2,632,567 0.28 Borrowed funds 271,994 4.79 269,942 4.77 Total interest-bearing liabilities 21,051,130 0.34 19,979,190 0.24 Noninterest-bearing demand deposits 14,117,879 10,230,287 Other liabilities 393,732 414,535 Shareholders' equity 2,789,896 3,030,213 Total liabilities and shareholders' equity $ 38,352,637 $ 33,654,225 Net interest spread 2.32 % 2.48 % Net interest margin 2.47 2.57 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,094 $ 34,981 $ 40,716 $ 224,791 Provision for credit losses 12,067 89 1,244 13,400 Noninterest income 56,894 81,082 38,359 176,335 Noninterest expense 79,521 76,511 58,095 214,127 Income before taxes 114,400 39,463 19,736 173,599 Income tax expense 23,752 8,193 4,098 36,043 Net income $ 90,648 $ 31,270 $ 15,638 $ 137,556 Three Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 142,878 $ 21,258 $ 36,935 $ 201,071 Provision for credit losses 21,993 147 1,860 24,000 Noninterest income 37,106 68,745 25,738 131,589 Noninterest expense 73,472 72,575 55,291 201,338 Income before taxes 84,519 17,281 5,522 107,322 Income tax expense 15,679 3,206 1,025 19,910 Net income $ 68,840 $ 14,075 $ 4,497 $ 87,412 Six Months Ended June 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 294,096 $ 61,233 $ 79,817 $ 435,146 Provision for credit losses 5,027 240 1,633 6,900 Noninterest income 83,594 154,354 62,065 300,013 Noninterest expense 159,110 152,112 117,683 428,905 Income before taxes 213,553 63,235 22,566 299,354 Income tax expense 39,831 11,795 4,209 55,835 Net income $ 173,722 $ 51,440 $ 18,357 $ 243,519 Six Months Ended June 30, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 279,287 $ 43,397 $ 72,502 $ 395,186 Provision for credit losses 13,816 367 2,317 16,500 Noninterest income 45,281 137,166 58,039 240,486 Noninterest expense 143,196 143,857 115,231 402,284 Income before taxes 167,556 36,339 12,993 216,888 Income tax expense 28,455 6,171 2,207 36,833 Net income $ 139,101 $ 30,168 $ 10,786 $ 180,055 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at June 30, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income (GAAP) $ 137,556 $ 87,412 $ 243,519 $ 180,055 Adjustments: Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Tax-impact of adjustments (i) (12 ) (63 ) (47 ) (102 ) Total Non-GAAP adjustments (net of tax) 40 222 150 359 Net operating income (Non-GAAP) $ 137,596 $ 87,634 $ 243,669 $ 180,414 Earnings per share - diluted (GAAP) $ 2.83 $ 1.79 $ 4.99 $ 3.70 Acquisition expense — — — — Severance expense — — — — COVID-19 related expense — 0.01 — 0.01 Tax-impact of adjustments (i) — — — — Operating earnings per share - diluted (Non-GAAP) $ 2.83 $ 1.80 $ 4.99 $ 3.71 GAAP Return on average assets 1.47 % 1.02 % 1.28 % 1.08 % Return on average equity 20.83 11.43 17.60 11.98 Non-GAAP Operating return on average assets 1.47 % 1.03 % 1.28 % 1.08 % Operating return on average equity 20.84 11.46 17.61 12.01 (i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense — — — — Severance expense 52 103 197 124 COVID-19 related expense — 182 — 337 Total Non-GAAP adjustments (pre-tax) 52 285 197 461 Operating noninterest expense (Non-GAAP) $ 214,075 $ 201,053 $ 428,708 $ 401,823 Noninterest expense $ 214,127 $ 201,338 $ 428,905 $ 402,284 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 212,902 $ 200,181 $ 426,609 $ 399,747 Operating noninterest expense $ 214,075 $ 201,053 $ 428,708 $ 401,823 Less: Amortization of other intangibles 1,225 1,157 2,296 2,537 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 212,850 $ 199,896 $ 426,412 $ 399,286 Net interest income $ 224,791 $ 201,071 $ 435,146 $ 395,186 Noninterest income 176,335 131,589 300,013 240,486 Less: Gains on sales of securities available for sale, net — 1,300 — 4,020 Total Non-GAAP Revenue (denominator A) $ 401,126 $ 331,360 $ 735,159 $ 631,652 Efficiency ratio (numerator A/denominator A) 53.08 % 60.41 % 58.03 % 63.29 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 53.06 60.33 58.00 63.21 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income (Non-GAAP) $ 187,051 $ 119,400 $ 131,607 $ 306,451 $ 233,849 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 3.84 $ 2.44 $ 2.71 $ 6.29 $ 4.81 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2022 2022 2021 2022 2021 Net interest income (GAAP) $ 224,791 $ 210,355 $ 201,071 $ 435,146 $ 395,186 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,278 6,399 6,629 12,677 13,307 Net interest income - FTE (Non-GAAP) $ 231,069 $ 216,754 $ 207,700 $ 447,823 $ 408,493 Noninterest income (GAAP) 176,335 123,678 131,589 300,013 240,486 Noninterest expense (GAAP) 214,127 214,778 201,338 428,905 402,284 Adjustments to arrive at operating noninterest expense: Acquisition expense — — — — — Severance expense 52 145 103 197 124 COVID-19 related expense — — 182 — 337 Total Non-GAAP adjustments 52 145 285 197 461 Operating noninterest expense (Non-GAAP) 214,075 214,633 201,053 428,708 401,823 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 193,329 $ 125,799 $ 138,236 $ 319,128 $ 247,156 Net interest income earnings per share - diluted (GAAP) $ 4.62 $ 4.31 $ 4.13 $ 8.93 $ 8.13 Tax equivalent interest 0.13 0.13 0.13 0.26 0.28 Net interest income - FTE (Non-GAAP) 4.75 4.44 4.26 9.19 8.41 Noninterest income (GAAP) 3.62 2.53 2.70 6.16 4.95 Noninterest expense (GAAP) 4.40 4.40 4.13 8.80 8.28 Acquisition expense — — — — — Severance expense — — — — — COVID-19 related expense — — 0.01 — 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 3.97 $ 2.57 $ 2.84 $ 6.55 $ 5.09 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of June 30, 2022 2021 Total shareholders' equity (GAAP) $ 2,642,888 $ 3,090,244 Less: Intangible assets Goodwill 182,225 174,518 Other intangibles, net 14,465 16,636 Total intangibles, net 196,690 191,154 Total tangible shareholders' equity (Non-GAAP) $ 2,446,198 $ 2,899,090 Total shares outstanding 48,305,286 48,346,371 Ratio of total shareholders' equity (book value) per share $ 54.71 $ 63.92 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 50.64 59.96 View source version on businesswire.com: https://www.businesswire.com/news/home/20220726005061/en/