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 Fourth Quarter Net Income of $100.2 Million and Record Full-Year Earnings of $431.7 Million By: UMB Financial Corporation via Business Wire January 24, 2023 at 16:15 PM EST Fourth Quarter 2022 Financial Highlights GAAP net income of $100.2 million, or $2.06 per diluted share. Average loan balances increased $3.6 billion, or 21.6%, compared to the fourth quarter of 2021. Average loans increased 21.0% on a linked-quarter, annualized basis. Average deposits grew 21.2% on a linked-quarter, annualized basis. Net interest income increased 5.0% from the linked quarter. Noninterest income increased 5.7% as compared to the fourth quarter of 2021, equal to 33.9% of total revenue. Net interest margin expanded seven basis points from the linked quarter. Credit quality remained strong, with net charge-offs of just 0.04% of average loans. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the fourth quarter of 2022 of $100.2 million, or $2.06 per diluted share, compared to $88.0 million, or $1.81 per diluted share, in the third quarter of 2022 (linked quarter) and $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $101.1 million, or $2.07 per diluted share, for the fourth quarter of 2022, compared to $88.3 million, or $1.82 per diluted share, for the linked quarter and $78.9 million, or $1.62 per diluted share, for the fourth quarter of 2021. Operating pre-tax, pre-provision income (Operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $134.1 million, or $2.75 per diluted share, for the fourth quarter of 2022, compared to $131.2 million, or $2.70 per diluted share, for the linked quarter, and $107.4 million, or $2.20 per diluted share, for the fourth quarter of 2021. These operating PTPP results represent increases of 2.2% on a linked-quarter basis and 24.8%, compared to the fourth quarter of 2021. “As we enter the 110th year of business, our strong balance sheet and differentiated business mix position us well to deliver solid returns across all economic cycles, driven by our basic tenet of providing the Unparalleled Customer Experience to all our key constituents,” said Mariner Kemper, chairman, president and chief executive officer. “Our fourth quarter results capped off another year of record earnings, facilitated by strong balance sheet growth, stable credit metrics and contributions from our differentiated fee income sources. Revenue increased 14.4% over the prior year to $1.5 billion, driven by a 13.2% increase in average loans, 8.3% increase in average deposits, and an 18.6% percent increase in noninterest income. In 2022, we generated actual loan growth of nearly $4 billion, or more than three times the $1.1 billion we added in the prior calendar year. Our asset quality metrics remained solid as reflected in net loan charge-off rate of 21 basis points for the year. Nonperforming assets comprised a modest five basis points of total assets. We’ve long focused on operating leverage, and for the full year, we generated positive leverage of 6.7%.” Fourth Quarter 2022 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q4 Q3 Q4 2022 2022 2021 Net income (GAAP) $ 100,173 $ 87,990 $ 78,496 Earnings per share (diluted) 2.06 1.81 1.61 Operating pre-tax, pre-provision income (Non-GAAP) 134,054 131,166 107,415 Operating pre-tax, pre-provision earnings per share (diluted) 2.75 2.70 2.20 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 140,717 137,620 113,898 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.89 2.83 2.33 Net operating income (Non-GAAP) 101,092 88,259 78,921 Operating earnings per share (diluted) 2.07 1.82 1.62 GAAP Return on average assets 1.06 % 0.96 % 0.82 % Return on average equity 15.16 12.90 9.91 Efficiency ratio 63.72 63.58 67.78 Non-GAAP Operating return on average assets 1.07 % 0.96 % 0.82 % Operating return on average equity 15.30 12.94 9.97 Operating efficiency ratio 63.39 63.49 67.61 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 245,166 $ 233,485 $ 210,570 $ 11,681 $ 34,596 Noninterest income: Trust and securities processing 59,207 59,586 58,515 (379 ) 692 Trading and investment banking 5,251 5,387 6,977 (136 ) (1,726 ) Service charges on deposit accounts 19,758 19,932 21,607 (174 ) (1,849 ) Insurance fees and commissions 459 375 359 84 100 Brokerage fees 13,332 13,840 3,346 (508 ) 9,986 Bankcard fees 19,597 19,379 16,642 218 2,955 Investment securities (losses) gains, net (409 ) (1,345 ) 1,448 936 (1,857 ) Other 8,302 11,569 9,888 (3,267 ) (1,586 ) Total noninterest income $ 125,497 $ 128,723 $ 118,782 $ (3,226 ) $ 6,715 Total revenue $ 370,663 $ 362,208 $ 329,352 $ 8,455 $ 41,311 Net interest income (FTE) $ 251,829 $ 239,939 $ 217,053 Net interest margin (FTE) 2.83 % 2.76 % 2.37 % Total noninterest income as a % of total revenue 33.9 35.5 36.1 Net interest income Fourth quarter 2022 net interest income totaled $245.2 million, an increase of $11.7 million, or 5.0% from the linked quarter, driven by an increase of $1.0 billion in average loans and the impact from higher short-term and long-term interest rates. Average earning assets increased $831.6 million, or 2.4% from the linked quarter, largely driven by the increase in average loans noted above, an increase of $502.8 million in interest-bearing due from banks, partially offset by a decrease of $488.8 million in average securities. Average interest-bearing liabilities increased $987.5 million, or 4.8% from the linked quarter, primarily driven by an increase of $1.5 billion in interest-bearing deposits, partially offset by a decrease of $631.0 million in federal funds purchased and repurchase agreements. Net interest margin for the fourth quarter was 2.83%, an increase of seven basis points from the linked quarter, driven by benefits of higher short-term interest rates, loan fees, favorable earning asset mix changes, and the benefit of free funds, partially offset by increased cost of interest-bearing liabilities. Average loan yields increased 89 basis points while earning asset yields increased 67 basis points from the linked quarter. The cost of interest-bearing liabilities increased 94 basis points to 2.22%. On a year-over-year basis, net interest income increased $34.6 million, or 16.4%, driven by a $3.6 billion, or 21.6% increase in average loans, coupled with a $402.7 million, or 3.1% increase in average securities. These increases were driven by organic loan growth and a reduction in excess liquidity. Average earning assets decreased $1.0 billion, or 2.8%, largely driven by a decrease of $4.6 billion in interest-bearing due from banks, partially offset by the increases in average loans and securities noted above. Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Average noninterest-bearing demand deposit balances increased 0.5% on a linked-quarter basis and decreased 5.1% compared to the fourth quarter of 2021. Demand deposit balances comprised 39.7% of total deposits, compared to 41.6% in the linked quarter and 41.5% in the fourth quarter of 2021. Noninterest income Fourth quarter 2022 noninterest income decreased $3.2 million, or 2.5%, on a linked-quarter basis, largely due to: Decreases of $2.3 million in company-owned life insurance income and $0.9 million in derivative income, both recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $0.5 million in brokerage income, largely driven by a decrease in money market income. These decreases were partially offset by an increase of $0.9 million in investment securities gains. Compared to the prior year, noninterest income in the fourth quarter of 2022 increased $6.7 million, or 5.7%, primarily driven by: An increase of $10.0 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $3.0 million in bankcard income, driven by increased interchange income and reduced rewards expense. An increase of $1.0 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. These increases were partially offset by the following decreases: A decrease of $1.9 million in investment securities gains, largely driven by $2.7 million in gains on sales of available-for-sale securities in the prior year, offset by an increase of $0.9 million in the valuation of the company’s equity investments. A decrease of $1.8 million in service charges on deposits primarily due to reduced corporate service charge income and decreased healthcare services income related to customer transfer and conversion fees. Decreases of $2.0 million in derivative income, recorded in other income, and $1.7 million in trading and investment banking due to decreased trading volume. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 135,940 $ 136,467 $ 131,360 $ (527 ) $ 4,580 Occupancy, net 12,409 12,231 10,907 178 1,502 Equipment 18,969 18,811 19,886 158 (917 ) Supplies and services 3,697 3,139 4,646 558 (949 ) Marketing and business development 8,788 6,671 6,528 2,117 2,260 Processing fees 23,545 20,901 19,083 2,644 4,462 Legal and consulting 10,664 10,255 10,858 409 (194 ) Bankcard 7,369 6,551 4,865 818 2,504 Amortization of other intangible assets 1,649 1,092 1,110 557 539 Regulatory fees 4,232 4,200 3,393 32 839 Other 10,556 11,078 9,847 (522 ) 709 Total noninterest expense $ 237,818 $ 231,396 $ 222,483 $ 6,422 $ 15,335 Noninterest expense for the fourth quarter of 2022 was $237.8 million, an increase of $6.4 million, or 2.8%, from the linked quarter and an increase of $15.3 million, or 6.9%, from the fourth quarter of 2021. The linked-quarter increase in noninterest expense was driven by: Increases of $2.6 million in processing fees and $2.1 million in marketing and business development expense due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $0.8 million, $0.6 million, and $0.6 million in bankcard expense, supplies expense, and intangible amortization expense, respectively. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. These increases were partially offset by a decrease of $0.5 million in salaries and employee benefits expense. This decrease was driven by a decrease of $2.7 million in employee benefits expense, partially offset by an increase of $2.2 million in salaries and bonus expense. The decrease in employee benefits expense was driven by a $1.5 million decrease in deferred compensation expense and a $1.0 million decrease in payroll taxes, insurance, and 401(k) expense as employee maximums were reached during the quarter. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. The year-over-year increase in noninterest expense was driven by: An increase of $4.6 million in salaries and employee benefits expense, driven primarily by increases of $7.7 million in salaries and wage expense and $2.3 million in employee benefits expense, primarily due to an increase of $1.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $0.7 million in deferred compensation expense. These increases were partially offset by a decrease of $5.4 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Increases of $4.5 million and $2.3 million in processing fees and marketing and business development expense, respectively, due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $2.5 million and $1.5 million in bankcard expense and occupancy expense, respectively. Full year 2022 earnings discussion Net income for the year ended December 31, 2022 was $431.7 million, or $8.86 per diluted share, compared to $353.0 million, or $7.24 per diluted share in 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $433.0 million, or $8.88 per diluted share, compared to $354.4 million, or $7.27 per diluted share in 2021. These results represent increases of 22.3% and 22.2%, respectively. 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 $571.7 million, or $11.73 per diluted share, compared to $450.9 million, or $9.26 per diluted share, for 2021. These results represent an increase of 26.8% as compared to 2021. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December December YTD YTD 2022 2021 Net income (GAAP) $ 431,682 $ 353,018 Earnings per share (diluted) 8.86 7.24 Operating pre-tax, pre-provision income (Non-GAAP) 571,671 450,896 Operating pre-tax, pre-provision earnings per share (diluted) 11.73 9.26 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 597,465 477,230 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 12.26 9.79 Net operating income (Non-GAAP) 433,020 354,446 Operating earnings per share (diluted) 8.88 7.27 GAAP Return on average assets 1.15 % 1.00 % Return on average equity 15.83 11.43 Efficiency ratio 60.84 65.02 Non-GAAP Operating return on average assets 1.15 % 1.00 % Operating return on average equity 15.88 11.47 Operating efficiency ratio 60.72 64.87 Net interest income increased $98.3 million, or 12.1%, year-over-year due to a $2.1 billion increase in earning assets and the impact from increased short-term and long-term interest rates. The increase in earning assets was primarily driven by a $2.2 billion, or 13.2%, increase in average loans, and an increase of $1.8 billion, or 15.7% in average securities. This growth was partially offset by a decrease of $1.7 billion in interest-bearing due from banks. Average interest-bearing liabilities increased $583.1 million, while noninterest-bearing demand deposits increased $2.0 billion, or 17.9%. The yield on earning assets increased 62 basis points, while the cost of interest-bearing liabilities increased 84 basis points. Net interest margin for 2022 was 2.63%, an increase of 13 basis points from 2021. Full-year noninterest income increased $87.1 million, or 18.6%, due to: An increase of $53.4 million in investment securities gains, largely driven by the gain on the sale of the company’s Visa Inc. Class B common shares during the second quarter of 2022. An increase of $30.8 million in brokerage fees, primarily driven by higher 12b-1 and money market income. An increase of $13.1 million in trust and securities processing, due to increases of $12.9 million and $6.5 million in fund services income and corporate trust income, respectively, partially offset by a decrease of $6.3 million in trust income. These increases were partially offset by a decrease of $10.1 million in company-owned life insurance income, recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Full-year noninterest expense increased $64.5 million, or 7.7%, primarily due to: An increase of $20.0 million in salaries and employee benefits expense, driven by an increase of $21.8 million in salaries and bonus expense, partially offset by a decrease of $1.9 million in employee benefits expense. The increase in salaries and bonus expense was driven by higher salaries and improved company performance. The decrease in employee benefits expense was due to a decrease of $9.5 million in deferred compensation expense, partially offset by an increase of $5.0 million in payroll taxes, insurance, and 401(k) expense. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. An increase of $14.7 million in processing fees due to the ongoing modernization of the company’s core systems and timing of multiple projects. Increases of $7.2 million and $6.7 million in marketing and business development and legal and consulting expense, respectively, due to the timing of multiple projects. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. An increase of $7.2 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $6.1 million in operational losses and $2.4 million in charitable contributions, both recorded in other expense. Income taxes The company’s effective tax rate was 18.9% for the year ended December 31, 2022, compared to 17.7% 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 fourth quarter of 2022 were $37.3 billion compared to $36.3 billion for the linked quarter and $38.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 8,891,356 $ 8,417,174 $ 6,994,935 $ 474,182 $ 1,896,421 Specialty lending 559,200 559,797 484,552 (597 ) 74,648 Commercial real estate 7,323,877 6,892,484 6,218,138 431,393 1,105,739 Consumer real estate 2,678,771 2,574,926 2,272,498 103,845 406,273 Consumer 145,811 142,348 107,841 3,463 37,970 Credit cards 457,043 438,235 414,267 18,808 42,776 Leases and other 238,603 259,298 200,417 (20,695 ) 38,186 Total loans $ 20,294,661 $ 19,284,262 $ 16,692,648 $ 1,010,399 $ 3,602,013 Average loans for the fourth quarter of 2022 increased 5.2% on a linked-quarter basis and 21.6% compared to the fourth quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 752,339 $ 746,429 $ 69,398 $ 5,910 $ 682,941 U.S. Agencies 171,171 173,980 93,619 (2,809 ) 77,552 Mortgage-backed 4,027,120 4,363,838 7,395,528 (336,718 ) (3,368,408 ) State and political subdivisions 1,353,307 1,600,043 3,437,841 (246,736 ) (2,084,534 ) Corporates 366,131 381,151 236,743 (15,020 ) 129,388 Collateralized loan obligations 328,475 300,475 38,099 28,000 290,376 Total securities available for sale $ 6,998,543 $ 7,565,916 $ 11,271,228 $ (567,373 ) $ (4,272,685 ) Securities held to maturity: U.S. Agencies $ 123,077 $ 123,048 $ — $ 29 $ 123,077 Mortgage-backed 2,983,489 3,039,998 105,622 (56,509 ) 2,877,867 State and political subdivisions 2,765,717 2,621,633 1,089,587 144,084 1,676,130 Total securities held to maturity $ 5,872,283 $ 5,784,679 $ 1,195,209 $ 87,604 $ 4,677,074 Trading securities 11,799 5,651 29,426 6,148 (17,627 ) Other securities 315,748 330,950 299,829 (15,202 ) 15,919 Total securities $ 13,198,373 $ 13,687,196 $ 12,795,692 $ (488,823 ) $ 402,681 Average total securities decreased 3.6% on a linked-quarter basis and increased 3.1% compared to the fourth quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 12,454,413 $ 12,394,251 $ 13,124,918 $ 60,162 $ (670,505 ) Interest-bearing demand and savings 17,952,568 16,723,205 17,809,817 1,229,363 142,751 Time deposits 966,969 679,994 701,836 286,975 265,133 Total deposits $ 31,373,950 $ 29,797,450 $ 31,636,571 $ 1,576,500 $ (262,621 ) Noninterest bearing deposits as % of total 39.7 % 41.6 % 41.5 % Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December 31, 2022 September 30, 2022 December 31, 2021 Total equity $ 2,667,093 $ 2,523,545 $ 3,145,424 Book value per common share 55.20 52.24 64.95 Tangible book value per common share (Non-GAAP) 49.28 48.19 61.05 Regulatory capital: Common equity Tier 1 capital $ 3,129,030 $ 3,132,209 $ 2,885,576 Tier 1 capital 3,129,030 3,132,209 2,885,576 Total capital 3,682,619 3,679,116 3,324,284 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.62 % 11.18 % 12.05 % Tier 1 risk-based capital ratio 10.62 11.18 12.05 Total risk-based capital ratio 12.50 13.13 13.88 Tier 1 leverage ratio 8.43 8.66 7.61 At December 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q2 Q1 Q4 2022 2022 2022 2022 2021 Net charge-offs - total loans $ 2,189 $ 1,173 $ 28,128 $ 8,378 $ 8,061 Net loan charge-offs as a % of total average loans 0.04 % 0.02 % 0.62 % 0.20 % 0.19 % Loans over 90 days past due $ 1,617 $ 2,513 $ 3,446 $ 3,600 $ 2,633 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.02 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 19,269 $ 19,817 $ 18,117 $ 110,356 $ 92,300 Nonaccrual and restructured loans as a % of total loans 0.09 % 0.10 % 0.10 % 0.62 % 0.54 % Provision for credit losses $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) $ 8,500 Provision for credit losses for the fourth quarter decreased $13.0 million from the linked quarter and increased $0.5 million from the fourth quarter of 2021. These changes are driven by loan growth, portfolio credit metric changes, and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the fourth quarter totaled $2.2 million, or 0.04%, of average loans, compared to $1.2 million, or 0.02%, of average loans in the linked quarter, and $8.1 million, or 0.19%, of average loans for the fourth quarter of 2021. On a year-to-date basis, net charge-offs totaled $39.9 million, or 0.21%, of average loans, compared to $44.9 million, or 0.27%, of average loans, for the same period in 2021. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on April 3, 2023, to shareholders of record at the close of business on March 10, 2023. Conference Call The company plans to host a conference call to discuss its fourth quarter 2022 earnings results on Wednesday, January 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 646-904-5544 and requesting to join the UMB Financial call with access code 216125. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 4Q 2022 Conference Call A replay of the conference call may be heard through February 8, 2023 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 239596. 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; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (dollars in thousands) December 31, 2022 2021 (unaudited) (audited) ASSETS Loans $ 21,031,189 $ 17,170,871 Allowance for credit losses on loans (191,836 ) (194,771 ) Net loans 20,839,353 16,976,100 Loans held for sale 1,978 1,277 Securities: Available for sale 7,006,347 11,976,514 Held to maturity, net of allowance for credit losses 5,859,192 1,478,476 Trading securities 17,980 31,875 Other securities 349,758 327,098 Total securities 13,233,277 13,813,963 Federal funds sold and resell agreements 958,597 1,216,357 Interest-bearing due from banks 1,179,105 8,841,906 Cash and due from banks 500,682 413,821 Premises and equipment, net 263,649 270,933 Accrued income 189,231 131,102 Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Other assets 1,060,480 839,091 Total assets $ 38,512,461 $ 42,693,484 LIABILITIES Deposits: Noninterest-bearing demand $ 13,260,363 $ 16,342,642 Interest-bearing demand and savings 18,461,632 18,405,644 Time deposits under $250,000 379,087 403,660 Time deposits of $250,000 or more 538,051 447,981 Total deposits 32,639,133 35,599,927 Federal funds purchased and repurchase agreements 2,222,167 3,238,435 Long-term debt 381,311 271,544 Accrued expenses and taxes 239,624 249,492 Other liabilities 363,133 188,662 Total liabilities 35,845,368 39,548,060 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,125,949 1,110,520 Retained earnings 2,536,086 2,176,998 Accumulated other comprehensive (loss) income, net (702,735 ) 126,314 Treasury stock (347,264 ) (323,465 ) Total shareholders' equity 2,667,093 3,145,424 Total liabilities and shareholders' equity $ 38,512,461 $ 42,693,484 Consolidated Statements of Income UMB Financial Corporation (dollars in thousands except share and per share data) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) INTEREST INCOME Loans $ 273,648 $ 155,324 $ 810,007 $ 619,273 Securities: Taxable interest 51,441 37,376 192,121 127,625 Tax-exempt interest 25,105 24,140 97,190 98,305 Total securities income 76,546 61,516 289,311 225,930 Federal funds and resell agreements 7,106 2,286 19,109 10,048 Interest-bearing due from banks 9,373 2,182 18,582 5,417 Trading securities 139 275 511 854 Total interest income 366,812 221,583 1,137,520 861,522 INTEREST EXPENSE Deposits 97,484 6,299 167,553 26,412 Federal funds and repurchase agreements 18,848 1,673 40,703 6,934 Other 5,314 3,041 15,467 12,655 Total interest expense 121,646 11,013 223,723 46,001 Net interest income 245,166 210,570 913,797 815,521 Provision for credit losses 9,000 8,500 37,900 20,000 Net interest income after provision for credit losses 236,166 202,070 875,897 795,521 NONINTEREST INCOME Trust and securities processing 59,207 58,515 237,207 224,126 Trading and investment banking 5,251 6,977 23,201 30,939 Service charges on deposit accounts 19,758 21,607 85,167 86,056 Insurance fees and commissions 459 359 1,338 1,309 Brokerage fees 13,332 3,346 43,019 12,171 Bankcard fees 19,597 16,642 73,451 64,576 Investment securities (losses) gains, net (409 ) 1,448 58,444 5,057 Other 8,302 9,888 32,406 42,941 Total noninterest income 125,497 118,782 554,233 467,175 NONINTEREST EXPENSE Salaries and employee benefits 135,940 131,360 524,431 504,442 Occupancy, net 12,409 10,907 48,848 47,345 Equipment 18,969 19,886 74,259 78,398 Supplies and services 3,697 4,646 13,590 14,986 Marketing and business development 8,788 6,528 25,699 18,533 Processing fees 23,545 19,083 82,227 67,563 Legal and consulting 10,664 10,858 39,095 32,406 Bankcard 7,369 4,865 26,367 19,145 Amortization of other intangible assets 1,649 1,110 5,037 4,757 Regulatory fees 4,232 3,393 15,378 11,894 Other 10,556 9,847 43,188 34,167 Total noninterest expense 237,818 222,483 898,119 833,636 Income before income taxes 123,845 98,369 532,011 429,060 Income tax expense 23,672 19,873 100,329 76,042 NET INCOME $ 100,173 $ 78,496 $ 431,682 $ 353,018 PER SHARE DATA Net income – basic $ 2.07 $ 1.62 $ 8.93 $ 7.31 Net income – diluted 2.06 1.61 8.86 7.24 Dividends 0.38 0.37 1.49 1.38 Weighted average shares outstanding – basic 48,310,993 48,371,296 48,340,922 48,271,462 Weighted average shares outstanding – diluted 48,735,088 48,854,383 48,747,399 48,738,292 Consolidated Statements of Comprehensive Income UMB Financial Corporation (dollars in thousands) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) Net income $ 100,173 $ 78,496 $ 431,682 $ 353,018 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 64,924 (46,275 ) (1,137,417 ) (244,695 ) Less: Reclassification adjustment for gains included in net income — (2,739 ) — (7,817 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 11,186 — 36,894 — Change in unrealized gains and losses on debt securities 76,110 (49,014 ) (1,100,523 ) (252,512 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 170 (407 ) 12,608 3,106 Less: Reclassification adjustment for gains included in net income (1,942 ) (802 ) (5,353 ) (3,352 ) Change in unrealized gains and losses on derivative hedges (1,772 ) (1,209 ) 7,255 (246 ) Other comprehensive income (loss), before tax 74,338 (50,223 ) (1,093,268 ) (252,758 ) Income tax (expense) benefit (17,813 ) 12,230 264,219 60,732 Other comprehensive income (loss) 56,525 (37,993 ) (829,049 ) (192,026 ) Comprehensive income (loss) $ 156,698 $ 40,503 $ (397,367 ) $ 160,992 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (dollars in thousands except per share data) (audited) 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) — — 353,018 (192,026 ) — 160,992 Dividends ($1.38 per share) — — (67,266 ) — — (67,266 ) Purchase of treasury stock — — — — (5,506 ) (5,506 ) Issuances of equity awards, net of forfeitures — (4,605 ) — — 5,299 694 Recognition of equity-based compensation — 20,514 — — — 20,514 Sale of treasury stock — 316 — — 283 599 Exercise of stock options — 3,845 — — 14,604 18,449 Balance - December 31, 2021 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 (unaudited) Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 431,682 (829,049 ) — (397,367 ) Dividends ($1.49 per share) — — (72,594 ) — — (72,594 ) Purchase of treasury stock — — — — (31,997 ) (31,997 ) Issuances of equity awards, net of forfeitures — (6,143 ) — — 6,822 679 Recognition of equity-based compensation — 20,812 — — — 20,812 Sale of treasury stock — 351 — — 245 596 Exercise of stock options — 409 — — 1,131 1,540 Balance - December 31, 2022 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 20,294,661 5.35 % $ 16,692,648 3.69 % Securities: Taxable 9,382,837 2.18 8,607,960 1.72 Tax-exempt 3,803,737 3.31 4,158,306 2.92 Total securities 13,186,574 2.50 12,766,266 2.11 Federal funds and resell agreements 656,092 4.30 1,099,090 0.83 Interest bearing due from banks 1,135,356 3.28 5,712,993 0.15 Trading securities 11,799 5.31 29,426 4.41 Total earning assets 35,284,482 4.20 36,300,423 2.49 Allowance for credit losses (188,299 ) (196,891 ) Other assets 2,243,437 1,974,579 Total assets $ 37,339,620 $ 38,078,111 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,919,537 2.04 % $ 18,511,653 0.13 % Federal funds and repurchase agreements 2,424,171 3.08 2,611,151 0.25 Borrowed funds 396,874 5.31 271,296 4.45 Total interest-bearing liabilities 21,740,582 2.22 21,394,100 0.20 Noninterest-bearing demand deposits 12,454,413 13,124,918 Other liabilities 522,932 417,015 Shareholders' equity 2,621,693 3,142,078 Total liabilities and shareholders' equity $ 37,339,620 $ 38,078,111 Net interest spread 1.98 % 2.29 % Net interest margin 2.83 2.37 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Year Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,823,810 4.30 % $ 16,629,867 3.72 % Securities: Taxable 9,616,691 2.00 7,422,432 1.72 Tax-exempt 3,885,153 3.16 4,246,943 2.93 Total securities 13,501,844 2.33 11,669,375 2.16 Federal funds and resell agreements 965,911 1.98 1,234,533 0.81 Interest bearing due from banks 2,408,468 0.77 4,063,089 0.13 Trading securities 12,076 4.96 23,480 4.33 Total earning assets 35,712,109 3.26 33,620,344 2.64 Allowance for credit losses (184,072 ) (204,705 ) Other assets 2,050,976 1,912,911 Total assets $ 37,579,013 $ 35,328,550 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,063,498 0.93 % $ 17,678,122 0.15 % Federal funds and repurchase agreements 2,777,089 1.47 2,618,034 0.26 Borrowed funds 309,204 5.00 270,498 4.68 Total interest-bearing liabilities 21,149,791 1.06 20,566,654 0.22 Noninterest-bearing demand deposits 13,264,146 11,254,761 Other liabilities 438,772 418,021 Shareholders' equity 2,726,304 3,089,114 Total liabilities and shareholders' equity $ 37,579,013 $ 35,328,550 Net interest spread 2.20 % 2.42 % Net interest margin 2.63 2.50 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,856 $ 55,063 $ 38,247 $ 245,166 Provision for credit losses 7,668 93 1,239 9,000 Noninterest income 22,233 80,055 23,209 125,497 Noninterest expense 86,682 86,791 64,345 237,818 Income (loss) before taxes 79,739 48,234 (4,128 ) 123,845 Income tax expense (benefit) 15,242 9,219 (789 ) 23,672 Net income (loss) $ 64,497 $ 39,015 $ (3,339 ) $ 100,173 Three Months Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,834 $ 23,044 37,692 $ 210,570 Provision for credit losses 7,446 90 964 8,500 Noninterest income 22,110 70,713 25,959 118,782 Noninterest expense 84,541 74,885 63,057 222,483 Income (loss) before taxes 79,957 18,782 (370 ) 98,369 Income tax expense (benefit) 16,153 3,794 (74 ) 19,873 Net income (loss) $ 63,804 $ 14,988 $ (296 ) $ 78,496 Year Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 596,031 $ 159,679 $ 158,087 $ 913,797 Provision for credit losses 32,851 495 4,554 37,900 Noninterest income 122,614 323,794 107,825 554,233 Noninterest expense 332,912 320,976 244,231 898,119 Income before taxes 352,882 162,002 17,127 532,011 Income tax expense 66,548 30,551 3,230 100,329 Net income $ 286,334 $ 131,451 $ 13,897 $ 431,682 Year Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 579,992 $ 87,644 $ 147,885 $ 815,521 Provision for credit losses 15,543 630 3,827 20,000 Noninterest income 84,417 273,483 109,275 467,175 Noninterest expense 306,424 292,142 235,070 833,636 Income before taxes 342,442 68,355 18,263 429,060 Income tax expense 60,691 12,113 3,238 76,042 Net income $ 281,751 $ 56,242 $ 15,025 $ 353,018 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 December 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net income (GAAP) $ 100,173 $ 78,496 $ 431,682 $ 353,018 Adjustments: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Tax-impact of adjustments (i) (290 ) (121 ) (422 ) (408 ) Total Non-GAAP adjustments (net of tax) 919 425 1,338 1,428 Net operating income (Non-GAAP) $ 101,092 $ 78,921 $ 433,020 $ 354,446 Earnings per share - diluted (GAAP) $ 2.06 $ 1.61 $ 8.86 $ 7.24 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Tax-impact of adjustments (i) (0.02 ) — (0.02 ) (0.01 ) Operating earnings per share - diluted (Non-GAAP) $ 2.07 $ 1.62 $ 8.88 $ 7.27 GAAP Return on average assets 1.06 % 0.82 % 1.15 % 1.00 % Return on average equity 15.16 9.91 15.83 11.43 Non-GAAP Operating return on average assets 1.07 % 0.82 % 1.15 % 1.00 % Operating return on average equity 15.30 9.97 15.88 11.47 (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 December 31, Year Ended December 31, 2022 2021 2022 2021 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments (pre-tax) 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) $ 236,609 $ 221,937 $ 896,359 $ 831,800 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 236,169 $ 221,373 $ 893,082 $ 828,879 Operating noninterest expense $ 236,609 $ 221,937 $ 896,359 $ 831,800 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,960 $ 220,827 $ 891,322 $ 827,043 Net interest income $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income 125,497 118,782 554,233 467,175 Less: Gains on sales of securities available for sale, net — 2,739 — 7,817 Total Non-GAAP Revenue (denominator A) $ 370,663 $ 326,613 $ 1,468,030 $ 1,274,879 Efficiency ratio (numerator A/denominator A) 63.72 % 67.78 % 60.84 % 65.02 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.39 67.61 60.72 64.87 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income (Non-GAAP) $ 134,054 $ 107,415 $ 571,671 $ 450,896 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.75 $ 2.20 $ 11.73 $ 9.26 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,663 6,483 25,794 26,334 Net interest income - FTE (Non-GAAP) 251,829 217,053 939,591 841,855 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 140,717 $ 113,898 $ 597,465 $ 477,230 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Tax equivalent interest 0.14 0.13 0.53 0.53 Net interest income - FTE (Non-GAAP) 5.17 4.44 19.28 17.26 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.89 $ 2.33 $ 12.26 $ 9.79 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of December 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,667,093 $ 3,145,424 Less: Intangible assets Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Total intangibles, net 286,109 188,934 Total tangible shareholders' equity (Non-GAAP) $ 2,380,984 $ 2,956,490 Total shares outstanding 48,319,404 48,430,805 Ratio of total shareholders' equity (book value) per share $ 55.20 $ 64.95 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 49.28 61.05 View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005047/en/Contacts Media Contact: Kaele Palmer: 816.860.7315 Kaele.Palmer@umb.com 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 Fourth Quarter Net Income of $100.2 Million and Record Full-Year Earnings of $431.7 Million By: UMB Financial Corporation via Business Wire January 24, 2023 at 16:15 PM EST Fourth Quarter 2022 Financial Highlights GAAP net income of $100.2 million, or $2.06 per diluted share. Average loan balances increased $3.6 billion, or 21.6%, compared to the fourth quarter of 2021. Average loans increased 21.0% on a linked-quarter, annualized basis. Average deposits grew 21.2% on a linked-quarter, annualized basis. Net interest income increased 5.0% from the linked quarter. Noninterest income increased 5.7% as compared to the fourth quarter of 2021, equal to 33.9% of total revenue. Net interest margin expanded seven basis points from the linked quarter. Credit quality remained strong, with net charge-offs of just 0.04% of average loans. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the fourth quarter of 2022 of $100.2 million, or $2.06 per diluted share, compared to $88.0 million, or $1.81 per diluted share, in the third quarter of 2022 (linked quarter) and $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $101.1 million, or $2.07 per diluted share, for the fourth quarter of 2022, compared to $88.3 million, or $1.82 per diluted share, for the linked quarter and $78.9 million, or $1.62 per diluted share, for the fourth quarter of 2021. Operating pre-tax, pre-provision income (Operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $134.1 million, or $2.75 per diluted share, for the fourth quarter of 2022, compared to $131.2 million, or $2.70 per diluted share, for the linked quarter, and $107.4 million, or $2.20 per diluted share, for the fourth quarter of 2021. These operating PTPP results represent increases of 2.2% on a linked-quarter basis and 24.8%, compared to the fourth quarter of 2021. “As we enter the 110th year of business, our strong balance sheet and differentiated business mix position us well to deliver solid returns across all economic cycles, driven by our basic tenet of providing the Unparalleled Customer Experience to all our key constituents,” said Mariner Kemper, chairman, president and chief executive officer. “Our fourth quarter results capped off another year of record earnings, facilitated by strong balance sheet growth, stable credit metrics and contributions from our differentiated fee income sources. Revenue increased 14.4% over the prior year to $1.5 billion, driven by a 13.2% increase in average loans, 8.3% increase in average deposits, and an 18.6% percent increase in noninterest income. In 2022, we generated actual loan growth of nearly $4 billion, or more than three times the $1.1 billion we added in the prior calendar year. Our asset quality metrics remained solid as reflected in net loan charge-off rate of 21 basis points for the year. Nonperforming assets comprised a modest five basis points of total assets. We’ve long focused on operating leverage, and for the full year, we generated positive leverage of 6.7%.” Fourth Quarter 2022 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q4 Q3 Q4 2022 2022 2021 Net income (GAAP) $ 100,173 $ 87,990 $ 78,496 Earnings per share (diluted) 2.06 1.81 1.61 Operating pre-tax, pre-provision income (Non-GAAP) 134,054 131,166 107,415 Operating pre-tax, pre-provision earnings per share (diluted) 2.75 2.70 2.20 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 140,717 137,620 113,898 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.89 2.83 2.33 Net operating income (Non-GAAP) 101,092 88,259 78,921 Operating earnings per share (diluted) 2.07 1.82 1.62 GAAP Return on average assets 1.06 % 0.96 % 0.82 % Return on average equity 15.16 12.90 9.91 Efficiency ratio 63.72 63.58 67.78 Non-GAAP Operating return on average assets 1.07 % 0.96 % 0.82 % Operating return on average equity 15.30 12.94 9.97 Operating efficiency ratio 63.39 63.49 67.61 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 245,166 $ 233,485 $ 210,570 $ 11,681 $ 34,596 Noninterest income: Trust and securities processing 59,207 59,586 58,515 (379 ) 692 Trading and investment banking 5,251 5,387 6,977 (136 ) (1,726 ) Service charges on deposit accounts 19,758 19,932 21,607 (174 ) (1,849 ) Insurance fees and commissions 459 375 359 84 100 Brokerage fees 13,332 13,840 3,346 (508 ) 9,986 Bankcard fees 19,597 19,379 16,642 218 2,955 Investment securities (losses) gains, net (409 ) (1,345 ) 1,448 936 (1,857 ) Other 8,302 11,569 9,888 (3,267 ) (1,586 ) Total noninterest income $ 125,497 $ 128,723 $ 118,782 $ (3,226 ) $ 6,715 Total revenue $ 370,663 $ 362,208 $ 329,352 $ 8,455 $ 41,311 Net interest income (FTE) $ 251,829 $ 239,939 $ 217,053 Net interest margin (FTE) 2.83 % 2.76 % 2.37 % Total noninterest income as a % of total revenue 33.9 35.5 36.1 Net interest income Fourth quarter 2022 net interest income totaled $245.2 million, an increase of $11.7 million, or 5.0% from the linked quarter, driven by an increase of $1.0 billion in average loans and the impact from higher short-term and long-term interest rates. Average earning assets increased $831.6 million, or 2.4% from the linked quarter, largely driven by the increase in average loans noted above, an increase of $502.8 million in interest-bearing due from banks, partially offset by a decrease of $488.8 million in average securities. Average interest-bearing liabilities increased $987.5 million, or 4.8% from the linked quarter, primarily driven by an increase of $1.5 billion in interest-bearing deposits, partially offset by a decrease of $631.0 million in federal funds purchased and repurchase agreements. Net interest margin for the fourth quarter was 2.83%, an increase of seven basis points from the linked quarter, driven by benefits of higher short-term interest rates, loan fees, favorable earning asset mix changes, and the benefit of free funds, partially offset by increased cost of interest-bearing liabilities. Average loan yields increased 89 basis points while earning asset yields increased 67 basis points from the linked quarter. The cost of interest-bearing liabilities increased 94 basis points to 2.22%. On a year-over-year basis, net interest income increased $34.6 million, or 16.4%, driven by a $3.6 billion, or 21.6% increase in average loans, coupled with a $402.7 million, or 3.1% increase in average securities. These increases were driven by organic loan growth and a reduction in excess liquidity. Average earning assets decreased $1.0 billion, or 2.8%, largely driven by a decrease of $4.6 billion in interest-bearing due from banks, partially offset by the increases in average loans and securities noted above. Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Average noninterest-bearing demand deposit balances increased 0.5% on a linked-quarter basis and decreased 5.1% compared to the fourth quarter of 2021. Demand deposit balances comprised 39.7% of total deposits, compared to 41.6% in the linked quarter and 41.5% in the fourth quarter of 2021. Noninterest income Fourth quarter 2022 noninterest income decreased $3.2 million, or 2.5%, on a linked-quarter basis, largely due to: Decreases of $2.3 million in company-owned life insurance income and $0.9 million in derivative income, both recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $0.5 million in brokerage income, largely driven by a decrease in money market income. These decreases were partially offset by an increase of $0.9 million in investment securities gains. Compared to the prior year, noninterest income in the fourth quarter of 2022 increased $6.7 million, or 5.7%, primarily driven by: An increase of $10.0 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $3.0 million in bankcard income, driven by increased interchange income and reduced rewards expense. An increase of $1.0 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. These increases were partially offset by the following decreases: A decrease of $1.9 million in investment securities gains, largely driven by $2.7 million in gains on sales of available-for-sale securities in the prior year, offset by an increase of $0.9 million in the valuation of the company’s equity investments. A decrease of $1.8 million in service charges on deposits primarily due to reduced corporate service charge income and decreased healthcare services income related to customer transfer and conversion fees. Decreases of $2.0 million in derivative income, recorded in other income, and $1.7 million in trading and investment banking due to decreased trading volume. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 135,940 $ 136,467 $ 131,360 $ (527 ) $ 4,580 Occupancy, net 12,409 12,231 10,907 178 1,502 Equipment 18,969 18,811 19,886 158 (917 ) Supplies and services 3,697 3,139 4,646 558 (949 ) Marketing and business development 8,788 6,671 6,528 2,117 2,260 Processing fees 23,545 20,901 19,083 2,644 4,462 Legal and consulting 10,664 10,255 10,858 409 (194 ) Bankcard 7,369 6,551 4,865 818 2,504 Amortization of other intangible assets 1,649 1,092 1,110 557 539 Regulatory fees 4,232 4,200 3,393 32 839 Other 10,556 11,078 9,847 (522 ) 709 Total noninterest expense $ 237,818 $ 231,396 $ 222,483 $ 6,422 $ 15,335 Noninterest expense for the fourth quarter of 2022 was $237.8 million, an increase of $6.4 million, or 2.8%, from the linked quarter and an increase of $15.3 million, or 6.9%, from the fourth quarter of 2021. The linked-quarter increase in noninterest expense was driven by: Increases of $2.6 million in processing fees and $2.1 million in marketing and business development expense due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $0.8 million, $0.6 million, and $0.6 million in bankcard expense, supplies expense, and intangible amortization expense, respectively. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. These increases were partially offset by a decrease of $0.5 million in salaries and employee benefits expense. This decrease was driven by a decrease of $2.7 million in employee benefits expense, partially offset by an increase of $2.2 million in salaries and bonus expense. The decrease in employee benefits expense was driven by a $1.5 million decrease in deferred compensation expense and a $1.0 million decrease in payroll taxes, insurance, and 401(k) expense as employee maximums were reached during the quarter. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. The year-over-year increase in noninterest expense was driven by: An increase of $4.6 million in salaries and employee benefits expense, driven primarily by increases of $7.7 million in salaries and wage expense and $2.3 million in employee benefits expense, primarily due to an increase of $1.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $0.7 million in deferred compensation expense. These increases were partially offset by a decrease of $5.4 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Increases of $4.5 million and $2.3 million in processing fees and marketing and business development expense, respectively, due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $2.5 million and $1.5 million in bankcard expense and occupancy expense, respectively. Full year 2022 earnings discussion Net income for the year ended December 31, 2022 was $431.7 million, or $8.86 per diluted share, compared to $353.0 million, or $7.24 per diluted share in 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $433.0 million, or $8.88 per diluted share, compared to $354.4 million, or $7.27 per diluted share in 2021. These results represent increases of 22.3% and 22.2%, respectively. 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 $571.7 million, or $11.73 per diluted share, compared to $450.9 million, or $9.26 per diluted share, for 2021. These results represent an increase of 26.8% as compared to 2021. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December December YTD YTD 2022 2021 Net income (GAAP) $ 431,682 $ 353,018 Earnings per share (diluted) 8.86 7.24 Operating pre-tax, pre-provision income (Non-GAAP) 571,671 450,896 Operating pre-tax, pre-provision earnings per share (diluted) 11.73 9.26 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 597,465 477,230 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 12.26 9.79 Net operating income (Non-GAAP) 433,020 354,446 Operating earnings per share (diluted) 8.88 7.27 GAAP Return on average assets 1.15 % 1.00 % Return on average equity 15.83 11.43 Efficiency ratio 60.84 65.02 Non-GAAP Operating return on average assets 1.15 % 1.00 % Operating return on average equity 15.88 11.47 Operating efficiency ratio 60.72 64.87 Net interest income increased $98.3 million, or 12.1%, year-over-year due to a $2.1 billion increase in earning assets and the impact from increased short-term and long-term interest rates. The increase in earning assets was primarily driven by a $2.2 billion, or 13.2%, increase in average loans, and an increase of $1.8 billion, or 15.7% in average securities. This growth was partially offset by a decrease of $1.7 billion in interest-bearing due from banks. Average interest-bearing liabilities increased $583.1 million, while noninterest-bearing demand deposits increased $2.0 billion, or 17.9%. The yield on earning assets increased 62 basis points, while the cost of interest-bearing liabilities increased 84 basis points. Net interest margin for 2022 was 2.63%, an increase of 13 basis points from 2021. Full-year noninterest income increased $87.1 million, or 18.6%, due to: An increase of $53.4 million in investment securities gains, largely driven by the gain on the sale of the company’s Visa Inc. Class B common shares during the second quarter of 2022. An increase of $30.8 million in brokerage fees, primarily driven by higher 12b-1 and money market income. An increase of $13.1 million in trust and securities processing, due to increases of $12.9 million and $6.5 million in fund services income and corporate trust income, respectively, partially offset by a decrease of $6.3 million in trust income. These increases were partially offset by a decrease of $10.1 million in company-owned life insurance income, recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Full-year noninterest expense increased $64.5 million, or 7.7%, primarily due to: An increase of $20.0 million in salaries and employee benefits expense, driven by an increase of $21.8 million in salaries and bonus expense, partially offset by a decrease of $1.9 million in employee benefits expense. The increase in salaries and bonus expense was driven by higher salaries and improved company performance. The decrease in employee benefits expense was due to a decrease of $9.5 million in deferred compensation expense, partially offset by an increase of $5.0 million in payroll taxes, insurance, and 401(k) expense. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. An increase of $14.7 million in processing fees due to the ongoing modernization of the company’s core systems and timing of multiple projects. Increases of $7.2 million and $6.7 million in marketing and business development and legal and consulting expense, respectively, due to the timing of multiple projects. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. An increase of $7.2 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $6.1 million in operational losses and $2.4 million in charitable contributions, both recorded in other expense. Income taxes The company’s effective tax rate was 18.9% for the year ended December 31, 2022, compared to 17.7% 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 fourth quarter of 2022 were $37.3 billion compared to $36.3 billion for the linked quarter and $38.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 8,891,356 $ 8,417,174 $ 6,994,935 $ 474,182 $ 1,896,421 Specialty lending 559,200 559,797 484,552 (597 ) 74,648 Commercial real estate 7,323,877 6,892,484 6,218,138 431,393 1,105,739 Consumer real estate 2,678,771 2,574,926 2,272,498 103,845 406,273 Consumer 145,811 142,348 107,841 3,463 37,970 Credit cards 457,043 438,235 414,267 18,808 42,776 Leases and other 238,603 259,298 200,417 (20,695 ) 38,186 Total loans $ 20,294,661 $ 19,284,262 $ 16,692,648 $ 1,010,399 $ 3,602,013 Average loans for the fourth quarter of 2022 increased 5.2% on a linked-quarter basis and 21.6% compared to the fourth quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 752,339 $ 746,429 $ 69,398 $ 5,910 $ 682,941 U.S. Agencies 171,171 173,980 93,619 (2,809 ) 77,552 Mortgage-backed 4,027,120 4,363,838 7,395,528 (336,718 ) (3,368,408 ) State and political subdivisions 1,353,307 1,600,043 3,437,841 (246,736 ) (2,084,534 ) Corporates 366,131 381,151 236,743 (15,020 ) 129,388 Collateralized loan obligations 328,475 300,475 38,099 28,000 290,376 Total securities available for sale $ 6,998,543 $ 7,565,916 $ 11,271,228 $ (567,373 ) $ (4,272,685 ) Securities held to maturity: U.S. Agencies $ 123,077 $ 123,048 $ — $ 29 $ 123,077 Mortgage-backed 2,983,489 3,039,998 105,622 (56,509 ) 2,877,867 State and political subdivisions 2,765,717 2,621,633 1,089,587 144,084 1,676,130 Total securities held to maturity $ 5,872,283 $ 5,784,679 $ 1,195,209 $ 87,604 $ 4,677,074 Trading securities 11,799 5,651 29,426 6,148 (17,627 ) Other securities 315,748 330,950 299,829 (15,202 ) 15,919 Total securities $ 13,198,373 $ 13,687,196 $ 12,795,692 $ (488,823 ) $ 402,681 Average total securities decreased 3.6% on a linked-quarter basis and increased 3.1% compared to the fourth quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 12,454,413 $ 12,394,251 $ 13,124,918 $ 60,162 $ (670,505 ) Interest-bearing demand and savings 17,952,568 16,723,205 17,809,817 1,229,363 142,751 Time deposits 966,969 679,994 701,836 286,975 265,133 Total deposits $ 31,373,950 $ 29,797,450 $ 31,636,571 $ 1,576,500 $ (262,621 ) Noninterest bearing deposits as % of total 39.7 % 41.6 % 41.5 % Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December 31, 2022 September 30, 2022 December 31, 2021 Total equity $ 2,667,093 $ 2,523,545 $ 3,145,424 Book value per common share 55.20 52.24 64.95 Tangible book value per common share (Non-GAAP) 49.28 48.19 61.05 Regulatory capital: Common equity Tier 1 capital $ 3,129,030 $ 3,132,209 $ 2,885,576 Tier 1 capital 3,129,030 3,132,209 2,885,576 Total capital 3,682,619 3,679,116 3,324,284 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.62 % 11.18 % 12.05 % Tier 1 risk-based capital ratio 10.62 11.18 12.05 Total risk-based capital ratio 12.50 13.13 13.88 Tier 1 leverage ratio 8.43 8.66 7.61 At December 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q2 Q1 Q4 2022 2022 2022 2022 2021 Net charge-offs - total loans $ 2,189 $ 1,173 $ 28,128 $ 8,378 $ 8,061 Net loan charge-offs as a % of total average loans 0.04 % 0.02 % 0.62 % 0.20 % 0.19 % Loans over 90 days past due $ 1,617 $ 2,513 $ 3,446 $ 3,600 $ 2,633 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.02 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 19,269 $ 19,817 $ 18,117 $ 110,356 $ 92,300 Nonaccrual and restructured loans as a % of total loans 0.09 % 0.10 % 0.10 % 0.62 % 0.54 % Provision for credit losses $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) $ 8,500 Provision for credit losses for the fourth quarter decreased $13.0 million from the linked quarter and increased $0.5 million from the fourth quarter of 2021. These changes are driven by loan growth, portfolio credit metric changes, and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the fourth quarter totaled $2.2 million, or 0.04%, of average loans, compared to $1.2 million, or 0.02%, of average loans in the linked quarter, and $8.1 million, or 0.19%, of average loans for the fourth quarter of 2021. On a year-to-date basis, net charge-offs totaled $39.9 million, or 0.21%, of average loans, compared to $44.9 million, or 0.27%, of average loans, for the same period in 2021. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on April 3, 2023, to shareholders of record at the close of business on March 10, 2023. Conference Call The company plans to host a conference call to discuss its fourth quarter 2022 earnings results on Wednesday, January 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 646-904-5544 and requesting to join the UMB Financial call with access code 216125. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 4Q 2022 Conference Call A replay of the conference call may be heard through February 8, 2023 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 239596. 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; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (dollars in thousands) December 31, 2022 2021 (unaudited) (audited) ASSETS Loans $ 21,031,189 $ 17,170,871 Allowance for credit losses on loans (191,836 ) (194,771 ) Net loans 20,839,353 16,976,100 Loans held for sale 1,978 1,277 Securities: Available for sale 7,006,347 11,976,514 Held to maturity, net of allowance for credit losses 5,859,192 1,478,476 Trading securities 17,980 31,875 Other securities 349,758 327,098 Total securities 13,233,277 13,813,963 Federal funds sold and resell agreements 958,597 1,216,357 Interest-bearing due from banks 1,179,105 8,841,906 Cash and due from banks 500,682 413,821 Premises and equipment, net 263,649 270,933 Accrued income 189,231 131,102 Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Other assets 1,060,480 839,091 Total assets $ 38,512,461 $ 42,693,484 LIABILITIES Deposits: Noninterest-bearing demand $ 13,260,363 $ 16,342,642 Interest-bearing demand and savings 18,461,632 18,405,644 Time deposits under $250,000 379,087 403,660 Time deposits of $250,000 or more 538,051 447,981 Total deposits 32,639,133 35,599,927 Federal funds purchased and repurchase agreements 2,222,167 3,238,435 Long-term debt 381,311 271,544 Accrued expenses and taxes 239,624 249,492 Other liabilities 363,133 188,662 Total liabilities 35,845,368 39,548,060 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,125,949 1,110,520 Retained earnings 2,536,086 2,176,998 Accumulated other comprehensive (loss) income, net (702,735 ) 126,314 Treasury stock (347,264 ) (323,465 ) Total shareholders' equity 2,667,093 3,145,424 Total liabilities and shareholders' equity $ 38,512,461 $ 42,693,484 Consolidated Statements of Income UMB Financial Corporation (dollars in thousands except share and per share data) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) INTEREST INCOME Loans $ 273,648 $ 155,324 $ 810,007 $ 619,273 Securities: Taxable interest 51,441 37,376 192,121 127,625 Tax-exempt interest 25,105 24,140 97,190 98,305 Total securities income 76,546 61,516 289,311 225,930 Federal funds and resell agreements 7,106 2,286 19,109 10,048 Interest-bearing due from banks 9,373 2,182 18,582 5,417 Trading securities 139 275 511 854 Total interest income 366,812 221,583 1,137,520 861,522 INTEREST EXPENSE Deposits 97,484 6,299 167,553 26,412 Federal funds and repurchase agreements 18,848 1,673 40,703 6,934 Other 5,314 3,041 15,467 12,655 Total interest expense 121,646 11,013 223,723 46,001 Net interest income 245,166 210,570 913,797 815,521 Provision for credit losses 9,000 8,500 37,900 20,000 Net interest income after provision for credit losses 236,166 202,070 875,897 795,521 NONINTEREST INCOME Trust and securities processing 59,207 58,515 237,207 224,126 Trading and investment banking 5,251 6,977 23,201 30,939 Service charges on deposit accounts 19,758 21,607 85,167 86,056 Insurance fees and commissions 459 359 1,338 1,309 Brokerage fees 13,332 3,346 43,019 12,171 Bankcard fees 19,597 16,642 73,451 64,576 Investment securities (losses) gains, net (409 ) 1,448 58,444 5,057 Other 8,302 9,888 32,406 42,941 Total noninterest income 125,497 118,782 554,233 467,175 NONINTEREST EXPENSE Salaries and employee benefits 135,940 131,360 524,431 504,442 Occupancy, net 12,409 10,907 48,848 47,345 Equipment 18,969 19,886 74,259 78,398 Supplies and services 3,697 4,646 13,590 14,986 Marketing and business development 8,788 6,528 25,699 18,533 Processing fees 23,545 19,083 82,227 67,563 Legal and consulting 10,664 10,858 39,095 32,406 Bankcard 7,369 4,865 26,367 19,145 Amortization of other intangible assets 1,649 1,110 5,037 4,757 Regulatory fees 4,232 3,393 15,378 11,894 Other 10,556 9,847 43,188 34,167 Total noninterest expense 237,818 222,483 898,119 833,636 Income before income taxes 123,845 98,369 532,011 429,060 Income tax expense 23,672 19,873 100,329 76,042 NET INCOME $ 100,173 $ 78,496 $ 431,682 $ 353,018 PER SHARE DATA Net income – basic $ 2.07 $ 1.62 $ 8.93 $ 7.31 Net income – diluted 2.06 1.61 8.86 7.24 Dividends 0.38 0.37 1.49 1.38 Weighted average shares outstanding – basic 48,310,993 48,371,296 48,340,922 48,271,462 Weighted average shares outstanding – diluted 48,735,088 48,854,383 48,747,399 48,738,292 Consolidated Statements of Comprehensive Income UMB Financial Corporation (dollars in thousands) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) Net income $ 100,173 $ 78,496 $ 431,682 $ 353,018 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 64,924 (46,275 ) (1,137,417 ) (244,695 ) Less: Reclassification adjustment for gains included in net income — (2,739 ) — (7,817 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 11,186 — 36,894 — Change in unrealized gains and losses on debt securities 76,110 (49,014 ) (1,100,523 ) (252,512 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 170 (407 ) 12,608 3,106 Less: Reclassification adjustment for gains included in net income (1,942 ) (802 ) (5,353 ) (3,352 ) Change in unrealized gains and losses on derivative hedges (1,772 ) (1,209 ) 7,255 (246 ) Other comprehensive income (loss), before tax 74,338 (50,223 ) (1,093,268 ) (252,758 ) Income tax (expense) benefit (17,813 ) 12,230 264,219 60,732 Other comprehensive income (loss) 56,525 (37,993 ) (829,049 ) (192,026 ) Comprehensive income (loss) $ 156,698 $ 40,503 $ (397,367 ) $ 160,992 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (dollars in thousands except per share data) (audited) 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) — — 353,018 (192,026 ) — 160,992 Dividends ($1.38 per share) — — (67,266 ) — — (67,266 ) Purchase of treasury stock — — — — (5,506 ) (5,506 ) Issuances of equity awards, net of forfeitures — (4,605 ) — — 5,299 694 Recognition of equity-based compensation — 20,514 — — — 20,514 Sale of treasury stock — 316 — — 283 599 Exercise of stock options — 3,845 — — 14,604 18,449 Balance - December 31, 2021 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 (unaudited) Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 431,682 (829,049 ) — (397,367 ) Dividends ($1.49 per share) — — (72,594 ) — — (72,594 ) Purchase of treasury stock — — — — (31,997 ) (31,997 ) Issuances of equity awards, net of forfeitures — (6,143 ) — — 6,822 679 Recognition of equity-based compensation — 20,812 — — — 20,812 Sale of treasury stock — 351 — — 245 596 Exercise of stock options — 409 — — 1,131 1,540 Balance - December 31, 2022 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 20,294,661 5.35 % $ 16,692,648 3.69 % Securities: Taxable 9,382,837 2.18 8,607,960 1.72 Tax-exempt 3,803,737 3.31 4,158,306 2.92 Total securities 13,186,574 2.50 12,766,266 2.11 Federal funds and resell agreements 656,092 4.30 1,099,090 0.83 Interest bearing due from banks 1,135,356 3.28 5,712,993 0.15 Trading securities 11,799 5.31 29,426 4.41 Total earning assets 35,284,482 4.20 36,300,423 2.49 Allowance for credit losses (188,299 ) (196,891 ) Other assets 2,243,437 1,974,579 Total assets $ 37,339,620 $ 38,078,111 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,919,537 2.04 % $ 18,511,653 0.13 % Federal funds and repurchase agreements 2,424,171 3.08 2,611,151 0.25 Borrowed funds 396,874 5.31 271,296 4.45 Total interest-bearing liabilities 21,740,582 2.22 21,394,100 0.20 Noninterest-bearing demand deposits 12,454,413 13,124,918 Other liabilities 522,932 417,015 Shareholders' equity 2,621,693 3,142,078 Total liabilities and shareholders' equity $ 37,339,620 $ 38,078,111 Net interest spread 1.98 % 2.29 % Net interest margin 2.83 2.37 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Year Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,823,810 4.30 % $ 16,629,867 3.72 % Securities: Taxable 9,616,691 2.00 7,422,432 1.72 Tax-exempt 3,885,153 3.16 4,246,943 2.93 Total securities 13,501,844 2.33 11,669,375 2.16 Federal funds and resell agreements 965,911 1.98 1,234,533 0.81 Interest bearing due from banks 2,408,468 0.77 4,063,089 0.13 Trading securities 12,076 4.96 23,480 4.33 Total earning assets 35,712,109 3.26 33,620,344 2.64 Allowance for credit losses (184,072 ) (204,705 ) Other assets 2,050,976 1,912,911 Total assets $ 37,579,013 $ 35,328,550 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,063,498 0.93 % $ 17,678,122 0.15 % Federal funds and repurchase agreements 2,777,089 1.47 2,618,034 0.26 Borrowed funds 309,204 5.00 270,498 4.68 Total interest-bearing liabilities 21,149,791 1.06 20,566,654 0.22 Noninterest-bearing demand deposits 13,264,146 11,254,761 Other liabilities 438,772 418,021 Shareholders' equity 2,726,304 3,089,114 Total liabilities and shareholders' equity $ 37,579,013 $ 35,328,550 Net interest spread 2.20 % 2.42 % Net interest margin 2.63 2.50 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,856 $ 55,063 $ 38,247 $ 245,166 Provision for credit losses 7,668 93 1,239 9,000 Noninterest income 22,233 80,055 23,209 125,497 Noninterest expense 86,682 86,791 64,345 237,818 Income (loss) before taxes 79,739 48,234 (4,128 ) 123,845 Income tax expense (benefit) 15,242 9,219 (789 ) 23,672 Net income (loss) $ 64,497 $ 39,015 $ (3,339 ) $ 100,173 Three Months Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,834 $ 23,044 37,692 $ 210,570 Provision for credit losses 7,446 90 964 8,500 Noninterest income 22,110 70,713 25,959 118,782 Noninterest expense 84,541 74,885 63,057 222,483 Income (loss) before taxes 79,957 18,782 (370 ) 98,369 Income tax expense (benefit) 16,153 3,794 (74 ) 19,873 Net income (loss) $ 63,804 $ 14,988 $ (296 ) $ 78,496 Year Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 596,031 $ 159,679 $ 158,087 $ 913,797 Provision for credit losses 32,851 495 4,554 37,900 Noninterest income 122,614 323,794 107,825 554,233 Noninterest expense 332,912 320,976 244,231 898,119 Income before taxes 352,882 162,002 17,127 532,011 Income tax expense 66,548 30,551 3,230 100,329 Net income $ 286,334 $ 131,451 $ 13,897 $ 431,682 Year Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 579,992 $ 87,644 $ 147,885 $ 815,521 Provision for credit losses 15,543 630 3,827 20,000 Noninterest income 84,417 273,483 109,275 467,175 Noninterest expense 306,424 292,142 235,070 833,636 Income before taxes 342,442 68,355 18,263 429,060 Income tax expense 60,691 12,113 3,238 76,042 Net income $ 281,751 $ 56,242 $ 15,025 $ 353,018 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 December 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net income (GAAP) $ 100,173 $ 78,496 $ 431,682 $ 353,018 Adjustments: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Tax-impact of adjustments (i) (290 ) (121 ) (422 ) (408 ) Total Non-GAAP adjustments (net of tax) 919 425 1,338 1,428 Net operating income (Non-GAAP) $ 101,092 $ 78,921 $ 433,020 $ 354,446 Earnings per share - diluted (GAAP) $ 2.06 $ 1.61 $ 8.86 $ 7.24 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Tax-impact of adjustments (i) (0.02 ) — (0.02 ) (0.01 ) Operating earnings per share - diluted (Non-GAAP) $ 2.07 $ 1.62 $ 8.88 $ 7.27 GAAP Return on average assets 1.06 % 0.82 % 1.15 % 1.00 % Return on average equity 15.16 9.91 15.83 11.43 Non-GAAP Operating return on average assets 1.07 % 0.82 % 1.15 % 1.00 % Operating return on average equity 15.30 9.97 15.88 11.47 (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 December 31, Year Ended December 31, 2022 2021 2022 2021 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments (pre-tax) 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) $ 236,609 $ 221,937 $ 896,359 $ 831,800 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 236,169 $ 221,373 $ 893,082 $ 828,879 Operating noninterest expense $ 236,609 $ 221,937 $ 896,359 $ 831,800 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,960 $ 220,827 $ 891,322 $ 827,043 Net interest income $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income 125,497 118,782 554,233 467,175 Less: Gains on sales of securities available for sale, net — 2,739 — 7,817 Total Non-GAAP Revenue (denominator A) $ 370,663 $ 326,613 $ 1,468,030 $ 1,274,879 Efficiency ratio (numerator A/denominator A) 63.72 % 67.78 % 60.84 % 65.02 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.39 67.61 60.72 64.87 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income (Non-GAAP) $ 134,054 $ 107,415 $ 571,671 $ 450,896 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.75 $ 2.20 $ 11.73 $ 9.26 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,663 6,483 25,794 26,334 Net interest income - FTE (Non-GAAP) 251,829 217,053 939,591 841,855 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 140,717 $ 113,898 $ 597,465 $ 477,230 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Tax equivalent interest 0.14 0.13 0.53 0.53 Net interest income - FTE (Non-GAAP) 5.17 4.44 19.28 17.26 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.89 $ 2.33 $ 12.26 $ 9.79 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of December 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,667,093 $ 3,145,424 Less: Intangible assets Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Total intangibles, net 286,109 188,934 Total tangible shareholders' equity (Non-GAAP) $ 2,380,984 $ 2,956,490 Total shares outstanding 48,319,404 48,430,805 Ratio of total shareholders' equity (book value) per share $ 55.20 $ 64.95 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 49.28 61.05 View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005047/en/Contacts Media Contact: Kaele Palmer: 816.860.7315 Kaele.Palmer@umb.com Investor Relations Contact: Kay Gregory: 816.860.7106
Fourth Quarter 2022 Financial Highlights GAAP net income of $100.2 million, or $2.06 per diluted share. Average loan balances increased $3.6 billion, or 21.6%, compared to the fourth quarter of 2021. Average loans increased 21.0% on a linked-quarter, annualized basis. Average deposits grew 21.2% on a linked-quarter, annualized basis. Net interest income increased 5.0% from the linked quarter. Noninterest income increased 5.7% as compared to the fourth quarter of 2021, equal to 33.9% of total revenue. Net interest margin expanded seven basis points from the linked quarter. Credit quality remained strong, with net charge-offs of just 0.04% of average loans.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the fourth quarter of 2022 of $100.2 million, or $2.06 per diluted share, compared to $88.0 million, or $1.81 per diluted share, in the third quarter of 2022 (linked quarter) and $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $101.1 million, or $2.07 per diluted share, for the fourth quarter of 2022, compared to $88.3 million, or $1.82 per diluted share, for the linked quarter and $78.9 million, or $1.62 per diluted share, for the fourth quarter of 2021. Operating pre-tax, pre-provision income (Operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $134.1 million, or $2.75 per diluted share, for the fourth quarter of 2022, compared to $131.2 million, or $2.70 per diluted share, for the linked quarter, and $107.4 million, or $2.20 per diluted share, for the fourth quarter of 2021. These operating PTPP results represent increases of 2.2% on a linked-quarter basis and 24.8%, compared to the fourth quarter of 2021. “As we enter the 110th year of business, our strong balance sheet and differentiated business mix position us well to deliver solid returns across all economic cycles, driven by our basic tenet of providing the Unparalleled Customer Experience to all our key constituents,” said Mariner Kemper, chairman, president and chief executive officer. “Our fourth quarter results capped off another year of record earnings, facilitated by strong balance sheet growth, stable credit metrics and contributions from our differentiated fee income sources. Revenue increased 14.4% over the prior year to $1.5 billion, driven by a 13.2% increase in average loans, 8.3% increase in average deposits, and an 18.6% percent increase in noninterest income. In 2022, we generated actual loan growth of nearly $4 billion, or more than three times the $1.1 billion we added in the prior calendar year. Our asset quality metrics remained solid as reflected in net loan charge-off rate of 21 basis points for the year. Nonperforming assets comprised a modest five basis points of total assets. We’ve long focused on operating leverage, and for the full year, we generated positive leverage of 6.7%.” Fourth Quarter 2022 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q4 Q3 Q4 2022 2022 2021 Net income (GAAP) $ 100,173 $ 87,990 $ 78,496 Earnings per share (diluted) 2.06 1.81 1.61 Operating pre-tax, pre-provision income (Non-GAAP) 134,054 131,166 107,415 Operating pre-tax, pre-provision earnings per share (diluted) 2.75 2.70 2.20 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 140,717 137,620 113,898 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.89 2.83 2.33 Net operating income (Non-GAAP) 101,092 88,259 78,921 Operating earnings per share (diluted) 2.07 1.82 1.62 GAAP Return on average assets 1.06 % 0.96 % 0.82 % Return on average equity 15.16 12.90 9.91 Efficiency ratio 63.72 63.58 67.78 Non-GAAP Operating return on average assets 1.07 % 0.96 % 0.82 % Operating return on average equity 15.30 12.94 9.97 Operating efficiency ratio 63.39 63.49 67.61 Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Net interest income $ 245,166 $ 233,485 $ 210,570 $ 11,681 $ 34,596 Noninterest income: Trust and securities processing 59,207 59,586 58,515 (379 ) 692 Trading and investment banking 5,251 5,387 6,977 (136 ) (1,726 ) Service charges on deposit accounts 19,758 19,932 21,607 (174 ) (1,849 ) Insurance fees and commissions 459 375 359 84 100 Brokerage fees 13,332 13,840 3,346 (508 ) 9,986 Bankcard fees 19,597 19,379 16,642 218 2,955 Investment securities (losses) gains, net (409 ) (1,345 ) 1,448 936 (1,857 ) Other 8,302 11,569 9,888 (3,267 ) (1,586 ) Total noninterest income $ 125,497 $ 128,723 $ 118,782 $ (3,226 ) $ 6,715 Total revenue $ 370,663 $ 362,208 $ 329,352 $ 8,455 $ 41,311 Net interest income (FTE) $ 251,829 $ 239,939 $ 217,053 Net interest margin (FTE) 2.83 % 2.76 % 2.37 % Total noninterest income as a % of total revenue 33.9 35.5 36.1 Net interest income Fourth quarter 2022 net interest income totaled $245.2 million, an increase of $11.7 million, or 5.0% from the linked quarter, driven by an increase of $1.0 billion in average loans and the impact from higher short-term and long-term interest rates. Average earning assets increased $831.6 million, or 2.4% from the linked quarter, largely driven by the increase in average loans noted above, an increase of $502.8 million in interest-bearing due from banks, partially offset by a decrease of $488.8 million in average securities. Average interest-bearing liabilities increased $987.5 million, or 4.8% from the linked quarter, primarily driven by an increase of $1.5 billion in interest-bearing deposits, partially offset by a decrease of $631.0 million in federal funds purchased and repurchase agreements. Net interest margin for the fourth quarter was 2.83%, an increase of seven basis points from the linked quarter, driven by benefits of higher short-term interest rates, loan fees, favorable earning asset mix changes, and the benefit of free funds, partially offset by increased cost of interest-bearing liabilities. Average loan yields increased 89 basis points while earning asset yields increased 67 basis points from the linked quarter. The cost of interest-bearing liabilities increased 94 basis points to 2.22%. On a year-over-year basis, net interest income increased $34.6 million, or 16.4%, driven by a $3.6 billion, or 21.6% increase in average loans, coupled with a $402.7 million, or 3.1% increase in average securities. These increases were driven by organic loan growth and a reduction in excess liquidity. Average earning assets decreased $1.0 billion, or 2.8%, largely driven by a decrease of $4.6 billion in interest-bearing due from banks, partially offset by the increases in average loans and securities noted above. Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Average noninterest-bearing demand deposit balances increased 0.5% on a linked-quarter basis and decreased 5.1% compared to the fourth quarter of 2021. Demand deposit balances comprised 39.7% of total deposits, compared to 41.6% in the linked quarter and 41.5% in the fourth quarter of 2021. Noninterest income Fourth quarter 2022 noninterest income decreased $3.2 million, or 2.5%, on a linked-quarter basis, largely due to: Decreases of $2.3 million in company-owned life insurance income and $0.9 million in derivative income, both recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $0.5 million in brokerage income, largely driven by a decrease in money market income. These decreases were partially offset by an increase of $0.9 million in investment securities gains. Compared to the prior year, noninterest income in the fourth quarter of 2022 increased $6.7 million, or 5.7%, primarily driven by: An increase of $10.0 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $3.0 million in bankcard income, driven by increased interchange income and reduced rewards expense. An increase of $1.0 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. These increases were partially offset by the following decreases: A decrease of $1.9 million in investment securities gains, largely driven by $2.7 million in gains on sales of available-for-sale securities in the prior year, offset by an increase of $0.9 million in the valuation of the company’s equity investments. A decrease of $1.8 million in service charges on deposits primarily due to reduced corporate service charge income and decreased healthcare services income related to customer transfer and conversion fees. Decreases of $2.0 million in derivative income, recorded in other income, and $1.7 million in trading and investment banking due to decreased trading volume. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Salaries and employee benefits $ 135,940 $ 136,467 $ 131,360 $ (527 ) $ 4,580 Occupancy, net 12,409 12,231 10,907 178 1,502 Equipment 18,969 18,811 19,886 158 (917 ) Supplies and services 3,697 3,139 4,646 558 (949 ) Marketing and business development 8,788 6,671 6,528 2,117 2,260 Processing fees 23,545 20,901 19,083 2,644 4,462 Legal and consulting 10,664 10,255 10,858 409 (194 ) Bankcard 7,369 6,551 4,865 818 2,504 Amortization of other intangible assets 1,649 1,092 1,110 557 539 Regulatory fees 4,232 4,200 3,393 32 839 Other 10,556 11,078 9,847 (522 ) 709 Total noninterest expense $ 237,818 $ 231,396 $ 222,483 $ 6,422 $ 15,335 Noninterest expense for the fourth quarter of 2022 was $237.8 million, an increase of $6.4 million, or 2.8%, from the linked quarter and an increase of $15.3 million, or 6.9%, from the fourth quarter of 2021. The linked-quarter increase in noninterest expense was driven by: Increases of $2.6 million in processing fees and $2.1 million in marketing and business development expense due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $0.8 million, $0.6 million, and $0.6 million in bankcard expense, supplies expense, and intangible amortization expense, respectively. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. These increases were partially offset by a decrease of $0.5 million in salaries and employee benefits expense. This decrease was driven by a decrease of $2.7 million in employee benefits expense, partially offset by an increase of $2.2 million in salaries and bonus expense. The decrease in employee benefits expense was driven by a $1.5 million decrease in deferred compensation expense and a $1.0 million decrease in payroll taxes, insurance, and 401(k) expense as employee maximums were reached during the quarter. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. The year-over-year increase in noninterest expense was driven by: An increase of $4.6 million in salaries and employee benefits expense, driven primarily by increases of $7.7 million in salaries and wage expense and $2.3 million in employee benefits expense, primarily due to an increase of $1.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $0.7 million in deferred compensation expense. These increases were partially offset by a decrease of $5.4 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Increases of $4.5 million and $2.3 million in processing fees and marketing and business development expense, respectively, due to the ongoing modernization of the company’s core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. Increases of $2.5 million and $1.5 million in bankcard expense and occupancy expense, respectively. Full year 2022 earnings discussion Net income for the year ended December 31, 2022 was $431.7 million, or $8.86 per diluted share, compared to $353.0 million, or $7.24 per diluted share in 2021. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $433.0 million, or $8.88 per diluted share, compared to $354.4 million, or $7.27 per diluted share in 2021. These results represent increases of 22.3% and 22.2%, respectively. 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 $571.7 million, or $11.73 per diluted share, compared to $450.9 million, or $9.26 per diluted share, for 2021. These results represent an increase of 26.8% as compared to 2021. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December December YTD YTD 2022 2021 Net income (GAAP) $ 431,682 $ 353,018 Earnings per share (diluted) 8.86 7.24 Operating pre-tax, pre-provision income (Non-GAAP) 571,671 450,896 Operating pre-tax, pre-provision earnings per share (diluted) 11.73 9.26 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 597,465 477,230 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 12.26 9.79 Net operating income (Non-GAAP) 433,020 354,446 Operating earnings per share (diluted) 8.88 7.27 GAAP Return on average assets 1.15 % 1.00 % Return on average equity 15.83 11.43 Efficiency ratio 60.84 65.02 Non-GAAP Operating return on average assets 1.15 % 1.00 % Operating return on average equity 15.88 11.47 Operating efficiency ratio 60.72 64.87 Net interest income increased $98.3 million, or 12.1%, year-over-year due to a $2.1 billion increase in earning assets and the impact from increased short-term and long-term interest rates. The increase in earning assets was primarily driven by a $2.2 billion, or 13.2%, increase in average loans, and an increase of $1.8 billion, or 15.7% in average securities. This growth was partially offset by a decrease of $1.7 billion in interest-bearing due from banks. Average interest-bearing liabilities increased $583.1 million, while noninterest-bearing demand deposits increased $2.0 billion, or 17.9%. The yield on earning assets increased 62 basis points, while the cost of interest-bearing liabilities increased 84 basis points. Net interest margin for 2022 was 2.63%, an increase of 13 basis points from 2021. Full-year noninterest income increased $87.1 million, or 18.6%, due to: An increase of $53.4 million in investment securities gains, largely driven by the gain on the sale of the company’s Visa Inc. Class B common shares during the second quarter of 2022. An increase of $30.8 million in brokerage fees, primarily driven by higher 12b-1 and money market income. An increase of $13.1 million in trust and securities processing, due to increases of $12.9 million and $6.5 million in fund services income and corporate trust income, respectively, partially offset by a decrease of $6.3 million in trust income. These increases were partially offset by a decrease of $10.1 million in company-owned life insurance income, recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. Full-year noninterest expense increased $64.5 million, or 7.7%, primarily due to: An increase of $20.0 million in salaries and employee benefits expense, driven by an increase of $21.8 million in salaries and bonus expense, partially offset by a decrease of $1.9 million in employee benefits expense. The increase in salaries and bonus expense was driven by higher salaries and improved company performance. The decrease in employee benefits expense was due to a decrease of $9.5 million in deferred compensation expense, partially offset by an increase of $5.0 million in payroll taxes, insurance, and 401(k) expense. This decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. An increase of $14.7 million in processing fees due to the ongoing modernization of the company’s core systems and timing of multiple projects. Increases of $7.2 million and $6.7 million in marketing and business development and legal and consulting expense, respectively, due to the timing of multiple projects. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense. An increase of $7.2 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. Increases of $6.1 million in operational losses and $2.4 million in charitable contributions, both recorded in other expense. Income taxes The company’s effective tax rate was 18.9% for the year ended December 31, 2022, compared to 17.7% 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 fourth quarter of 2022 were $37.3 billion compared to $36.3 billion for the linked quarter and $38.1 billion for the same period in 2021. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Commercial and industrial $ 8,891,356 $ 8,417,174 $ 6,994,935 $ 474,182 $ 1,896,421 Specialty lending 559,200 559,797 484,552 (597 ) 74,648 Commercial real estate 7,323,877 6,892,484 6,218,138 431,393 1,105,739 Consumer real estate 2,678,771 2,574,926 2,272,498 103,845 406,273 Consumer 145,811 142,348 107,841 3,463 37,970 Credit cards 457,043 438,235 414,267 18,808 42,776 Leases and other 238,603 259,298 200,417 (20,695 ) 38,186 Total loans $ 20,294,661 $ 19,284,262 $ 16,692,648 $ 1,010,399 $ 3,602,013 Average loans for the fourth quarter of 2022 increased 5.2% on a linked-quarter basis and 21.6% compared to the fourth quarter of 2021. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Securities available for sale: U.S. Treasury $ 752,339 $ 746,429 $ 69,398 $ 5,910 $ 682,941 U.S. Agencies 171,171 173,980 93,619 (2,809 ) 77,552 Mortgage-backed 4,027,120 4,363,838 7,395,528 (336,718 ) (3,368,408 ) State and political subdivisions 1,353,307 1,600,043 3,437,841 (246,736 ) (2,084,534 ) Corporates 366,131 381,151 236,743 (15,020 ) 129,388 Collateralized loan obligations 328,475 300,475 38,099 28,000 290,376 Total securities available for sale $ 6,998,543 $ 7,565,916 $ 11,271,228 $ (567,373 ) $ (4,272,685 ) Securities held to maturity: U.S. Agencies $ 123,077 $ 123,048 $ — $ 29 $ 123,077 Mortgage-backed 2,983,489 3,039,998 105,622 (56,509 ) 2,877,867 State and political subdivisions 2,765,717 2,621,633 1,089,587 144,084 1,676,130 Total securities held to maturity $ 5,872,283 $ 5,784,679 $ 1,195,209 $ 87,604 $ 4,677,074 Trading securities 11,799 5,651 29,426 6,148 (17,627 ) Other securities 315,748 330,950 299,829 (15,202 ) 15,919 Total securities $ 13,198,373 $ 13,687,196 $ 12,795,692 $ (488,823 ) $ 402,681 Average total securities decreased 3.6% on a linked-quarter basis and increased 3.1% compared to the fourth quarter of 2021. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q4 CQ vs. CQ vs. 2022 2022 2021 LQ PY Deposits: Noninterest-bearing demand $ 12,454,413 $ 12,394,251 $ 13,124,918 $ 60,162 $ (670,505 ) Interest-bearing demand and savings 17,952,568 16,723,205 17,809,817 1,229,363 142,751 Time deposits 966,969 679,994 701,836 286,975 265,133 Total deposits $ 31,373,950 $ 29,797,450 $ 31,636,571 $ 1,576,500 $ (262,621 ) Noninterest bearing deposits as % of total 39.7 % 41.6 % 41.5 % Average deposits increased 5.3% on a linked-quarter basis and decreased 0.8% compared to the fourth quarter of 2021. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) December 31, 2022 September 30, 2022 December 31, 2021 Total equity $ 2,667,093 $ 2,523,545 $ 3,145,424 Book value per common share 55.20 52.24 64.95 Tangible book value per common share (Non-GAAP) 49.28 48.19 61.05 Regulatory capital: Common equity Tier 1 capital $ 3,129,030 $ 3,132,209 $ 2,885,576 Tier 1 capital 3,129,030 3,132,209 2,885,576 Total capital 3,682,619 3,679,116 3,324,284 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.62 % 11.18 % 12.05 % Tier 1 risk-based capital ratio 10.62 11.18 12.05 Total risk-based capital ratio 12.50 13.13 13.88 Tier 1 leverage ratio 8.43 8.66 7.61 At December 31, 2022, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. Asset Quality Credit quality UMB Financial Corporation (unaudited, dollars in thousands) Q4 Q3 Q2 Q1 Q4 2022 2022 2022 2022 2021 Net charge-offs - total loans $ 2,189 $ 1,173 $ 28,128 $ 8,378 $ 8,061 Net loan charge-offs as a % of total average loans 0.04 % 0.02 % 0.62 % 0.20 % 0.19 % Loans over 90 days past due $ 1,617 $ 2,513 $ 3,446 $ 3,600 $ 2,633 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.02 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 19,269 $ 19,817 $ 18,117 $ 110,356 $ 92,300 Nonaccrual and restructured loans as a % of total loans 0.09 % 0.10 % 0.10 % 0.62 % 0.54 % Provision for credit losses $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) $ 8,500 Provision for credit losses for the fourth quarter decreased $13.0 million from the linked quarter and increased $0.5 million from the fourth quarter of 2021. These changes are driven by loan growth, portfolio credit metric changes, and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the fourth quarter totaled $2.2 million, or 0.04%, of average loans, compared to $1.2 million, or 0.02%, of average loans in the linked quarter, and $8.1 million, or 0.19%, of average loans for the fourth quarter of 2021. On a year-to-date basis, net charge-offs totaled $39.9 million, or 0.21%, of average loans, compared to $44.9 million, or 0.27%, of average loans, for the same period in 2021. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on April 3, 2023, to shareholders of record at the close of business on March 10, 2023. Conference Call The company plans to host a conference call to discuss its fourth quarter 2022 earnings results on Wednesday, January 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 646-904-5544 and requesting to join the UMB Financial call with access code 216125. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 4Q 2022 Conference Call A replay of the conference call may be heard through February 8, 2023 by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 239596. 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; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (dollars in thousands) December 31, 2022 2021 (unaudited) (audited) ASSETS Loans $ 21,031,189 $ 17,170,871 Allowance for credit losses on loans (191,836 ) (194,771 ) Net loans 20,839,353 16,976,100 Loans held for sale 1,978 1,277 Securities: Available for sale 7,006,347 11,976,514 Held to maturity, net of allowance for credit losses 5,859,192 1,478,476 Trading securities 17,980 31,875 Other securities 349,758 327,098 Total securities 13,233,277 13,813,963 Federal funds sold and resell agreements 958,597 1,216,357 Interest-bearing due from banks 1,179,105 8,841,906 Cash and due from banks 500,682 413,821 Premises and equipment, net 263,649 270,933 Accrued income 189,231 131,102 Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Other assets 1,060,480 839,091 Total assets $ 38,512,461 $ 42,693,484 LIABILITIES Deposits: Noninterest-bearing demand $ 13,260,363 $ 16,342,642 Interest-bearing demand and savings 18,461,632 18,405,644 Time deposits under $250,000 379,087 403,660 Time deposits of $250,000 or more 538,051 447,981 Total deposits 32,639,133 35,599,927 Federal funds purchased and repurchase agreements 2,222,167 3,238,435 Long-term debt 381,311 271,544 Accrued expenses and taxes 239,624 249,492 Other liabilities 363,133 188,662 Total liabilities 35,845,368 39,548,060 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,125,949 1,110,520 Retained earnings 2,536,086 2,176,998 Accumulated other comprehensive (loss) income, net (702,735 ) 126,314 Treasury stock (347,264 ) (323,465 ) Total shareholders' equity 2,667,093 3,145,424 Total liabilities and shareholders' equity $ 38,512,461 $ 42,693,484 Consolidated Statements of Income UMB Financial Corporation (dollars in thousands except share and per share data) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) INTEREST INCOME Loans $ 273,648 $ 155,324 $ 810,007 $ 619,273 Securities: Taxable interest 51,441 37,376 192,121 127,625 Tax-exempt interest 25,105 24,140 97,190 98,305 Total securities income 76,546 61,516 289,311 225,930 Federal funds and resell agreements 7,106 2,286 19,109 10,048 Interest-bearing due from banks 9,373 2,182 18,582 5,417 Trading securities 139 275 511 854 Total interest income 366,812 221,583 1,137,520 861,522 INTEREST EXPENSE Deposits 97,484 6,299 167,553 26,412 Federal funds and repurchase agreements 18,848 1,673 40,703 6,934 Other 5,314 3,041 15,467 12,655 Total interest expense 121,646 11,013 223,723 46,001 Net interest income 245,166 210,570 913,797 815,521 Provision for credit losses 9,000 8,500 37,900 20,000 Net interest income after provision for credit losses 236,166 202,070 875,897 795,521 NONINTEREST INCOME Trust and securities processing 59,207 58,515 237,207 224,126 Trading and investment banking 5,251 6,977 23,201 30,939 Service charges on deposit accounts 19,758 21,607 85,167 86,056 Insurance fees and commissions 459 359 1,338 1,309 Brokerage fees 13,332 3,346 43,019 12,171 Bankcard fees 19,597 16,642 73,451 64,576 Investment securities (losses) gains, net (409 ) 1,448 58,444 5,057 Other 8,302 9,888 32,406 42,941 Total noninterest income 125,497 118,782 554,233 467,175 NONINTEREST EXPENSE Salaries and employee benefits 135,940 131,360 524,431 504,442 Occupancy, net 12,409 10,907 48,848 47,345 Equipment 18,969 19,886 74,259 78,398 Supplies and services 3,697 4,646 13,590 14,986 Marketing and business development 8,788 6,528 25,699 18,533 Processing fees 23,545 19,083 82,227 67,563 Legal and consulting 10,664 10,858 39,095 32,406 Bankcard 7,369 4,865 26,367 19,145 Amortization of other intangible assets 1,649 1,110 5,037 4,757 Regulatory fees 4,232 3,393 15,378 11,894 Other 10,556 9,847 43,188 34,167 Total noninterest expense 237,818 222,483 898,119 833,636 Income before income taxes 123,845 98,369 532,011 429,060 Income tax expense 23,672 19,873 100,329 76,042 NET INCOME $ 100,173 $ 78,496 $ 431,682 $ 353,018 PER SHARE DATA Net income – basic $ 2.07 $ 1.62 $ 8.93 $ 7.31 Net income – diluted 2.06 1.61 8.86 7.24 Dividends 0.38 0.37 1.49 1.38 Weighted average shares outstanding – basic 48,310,993 48,371,296 48,340,922 48,271,462 Weighted average shares outstanding – diluted 48,735,088 48,854,383 48,747,399 48,738,292 Consolidated Statements of Comprehensive Income UMB Financial Corporation (dollars in thousands) Three Months Ended Year Ended December 31, December 31, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (audited) Net income $ 100,173 $ 78,496 $ 431,682 $ 353,018 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 64,924 (46,275 ) (1,137,417 ) (244,695 ) Less: Reclassification adjustment for gains included in net income — (2,739 ) — (7,817 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 11,186 — 36,894 — Change in unrealized gains and losses on debt securities 76,110 (49,014 ) (1,100,523 ) (252,512 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 170 (407 ) 12,608 3,106 Less: Reclassification adjustment for gains included in net income (1,942 ) (802 ) (5,353 ) (3,352 ) Change in unrealized gains and losses on derivative hedges (1,772 ) (1,209 ) 7,255 (246 ) Other comprehensive income (loss), before tax 74,338 (50,223 ) (1,093,268 ) (252,758 ) Income tax (expense) benefit (17,813 ) 12,230 264,219 60,732 Other comprehensive income (loss) 56,525 (37,993 ) (829,049 ) (192,026 ) Comprehensive income (loss) $ 156,698 $ 40,503 $ (397,367 ) $ 160,992 Consolidated Statements of Shareholders' Equity UMB Financial Corporation (dollars in thousands except per share data) (audited) 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) — — 353,018 (192,026 ) — 160,992 Dividends ($1.38 per share) — — (67,266 ) — — (67,266 ) Purchase of treasury stock — — — — (5,506 ) (5,506 ) Issuances of equity awards, net of forfeitures — (4,605 ) — — 5,299 694 Recognition of equity-based compensation — 20,514 — — — 20,514 Sale of treasury stock — 316 — — 283 599 Exercise of stock options — 3,845 — — 14,604 18,449 Balance - December 31, 2021 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 (unaudited) Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 431,682 (829,049 ) — (397,367 ) Dividends ($1.49 per share) — — (72,594 ) — — (72,594 ) Purchase of treasury stock — — — — (31,997 ) (31,997 ) Issuances of equity awards, net of forfeitures — (6,143 ) — — 6,822 679 Recognition of equity-based compensation — 20,812 — — — 20,812 Sale of treasury stock — 351 — — 245 596 Exercise of stock options — 409 — — 1,131 1,540 Balance - December 31, 2022 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 20,294,661 5.35 % $ 16,692,648 3.69 % Securities: Taxable 9,382,837 2.18 8,607,960 1.72 Tax-exempt 3,803,737 3.31 4,158,306 2.92 Total securities 13,186,574 2.50 12,766,266 2.11 Federal funds and resell agreements 656,092 4.30 1,099,090 0.83 Interest bearing due from banks 1,135,356 3.28 5,712,993 0.15 Trading securities 11,799 5.31 29,426 4.41 Total earning assets 35,284,482 4.20 36,300,423 2.49 Allowance for credit losses (188,299 ) (196,891 ) Other assets 2,243,437 1,974,579 Total assets $ 37,339,620 $ 38,078,111 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,919,537 2.04 % $ 18,511,653 0.13 % Federal funds and repurchase agreements 2,424,171 3.08 2,611,151 0.25 Borrowed funds 396,874 5.31 271,296 4.45 Total interest-bearing liabilities 21,740,582 2.22 21,394,100 0.20 Noninterest-bearing demand deposits 12,454,413 13,124,918 Other liabilities 522,932 417,015 Shareholders' equity 2,621,693 3,142,078 Total liabilities and shareholders' equity $ 37,339,620 $ 38,078,111 Net interest spread 1.98 % 2.29 % Net interest margin 2.83 2.37 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Year Ended December 31, 2022 2021 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 18,823,810 4.30 % $ 16,629,867 3.72 % Securities: Taxable 9,616,691 2.00 7,422,432 1.72 Tax-exempt 3,885,153 3.16 4,246,943 2.93 Total securities 13,501,844 2.33 11,669,375 2.16 Federal funds and resell agreements 965,911 1.98 1,234,533 0.81 Interest bearing due from banks 2,408,468 0.77 4,063,089 0.13 Trading securities 12,076 4.96 23,480 4.33 Total earning assets 35,712,109 3.26 33,620,344 2.64 Allowance for credit losses (184,072 ) (204,705 ) Other assets 2,050,976 1,912,911 Total assets $ 37,579,013 $ 35,328,550 Liabilities and Shareholders' Equity Interest-bearing deposits $ 18,063,498 0.93 % $ 17,678,122 0.15 % Federal funds and repurchase agreements 2,777,089 1.47 2,618,034 0.26 Borrowed funds 309,204 5.00 270,498 4.68 Total interest-bearing liabilities 21,149,791 1.06 20,566,654 0.22 Noninterest-bearing demand deposits 13,264,146 11,254,761 Other liabilities 438,772 418,021 Shareholders' equity 2,726,304 3,089,114 Total liabilities and shareholders' equity $ 37,579,013 $ 35,328,550 Net interest spread 2.20 % 2.42 % Net interest margin 2.63 2.50 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,856 $ 55,063 $ 38,247 $ 245,166 Provision for credit losses 7,668 93 1,239 9,000 Noninterest income 22,233 80,055 23,209 125,497 Noninterest expense 86,682 86,791 64,345 237,818 Income (loss) before taxes 79,739 48,234 (4,128 ) 123,845 Income tax expense (benefit) 15,242 9,219 (789 ) 23,672 Net income (loss) $ 64,497 $ 39,015 $ (3,339 ) $ 100,173 Three Months Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 149,834 $ 23,044 37,692 $ 210,570 Provision for credit losses 7,446 90 964 8,500 Noninterest income 22,110 70,713 25,959 118,782 Noninterest expense 84,541 74,885 63,057 222,483 Income (loss) before taxes 79,957 18,782 (370 ) 98,369 Income tax expense (benefit) 16,153 3,794 (74 ) 19,873 Net income (loss) $ 63,804 $ 14,988 $ (296 ) $ 78,496 Year Ended December 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 596,031 $ 159,679 $ 158,087 $ 913,797 Provision for credit losses 32,851 495 4,554 37,900 Noninterest income 122,614 323,794 107,825 554,233 Noninterest expense 332,912 320,976 244,231 898,119 Income before taxes 352,882 162,002 17,127 532,011 Income tax expense 66,548 30,551 3,230 100,329 Net income $ 286,334 $ 131,451 $ 13,897 $ 431,682 Year Ended December 31, 2021 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 579,992 $ 87,644 $ 147,885 $ 815,521 Provision for credit losses 15,543 630 3,827 20,000 Noninterest income 84,417 273,483 109,275 467,175 Noninterest expense 306,424 292,142 235,070 833,636 Income before taxes 342,442 68,355 18,263 429,060 Income tax expense 60,691 12,113 3,238 76,042 Net income $ 281,751 $ 56,242 $ 15,025 $ 353,018 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 December 31, 2022. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net income (GAAP) $ 100,173 $ 78,496 $ 431,682 $ 353,018 Adjustments: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Tax-impact of adjustments (i) (290 ) (121 ) (422 ) (408 ) Total Non-GAAP adjustments (net of tax) 919 425 1,338 1,428 Net operating income (Non-GAAP) $ 101,092 $ 78,921 $ 433,020 $ 354,446 Earnings per share - diluted (GAAP) $ 2.06 $ 1.61 $ 8.86 $ 7.24 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Tax-impact of adjustments (i) (0.02 ) — (0.02 ) (0.01 ) Operating earnings per share - diluted (Non-GAAP) $ 2.07 $ 1.62 $ 8.88 $ 7.27 GAAP Return on average assets 1.06 % 0.82 % 1.15 % 1.00 % Return on average equity 15.16 9.91 15.83 11.43 Non-GAAP Operating return on average assets 1.07 % 0.82 % 1.15 % 1.00 % Operating return on average equity 15.30 9.97 15.88 11.47 (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 December 31, Year Ended December 31, 2022 2021 2022 2021 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments (pre-tax) 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) $ 236,609 $ 221,937 $ 896,359 $ 831,800 Noninterest expense $ 237,818 $ 222,483 $ 898,119 $ 833,636 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 236,169 $ 221,373 $ 893,082 $ 828,879 Operating noninterest expense $ 236,609 $ 221,937 $ 896,359 $ 831,800 Less: Amortization of other intangibles 1,649 1,110 5,037 4,757 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,960 $ 220,827 $ 891,322 $ 827,043 Net interest income $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income 125,497 118,782 554,233 467,175 Less: Gains on sales of securities available for sale, net — 2,739 — 7,817 Total Non-GAAP Revenue (denominator A) $ 370,663 $ 326,613 $ 1,468,030 $ 1,274,879 Efficiency ratio (numerator A/denominator A) 63.72 % 67.78 % 60.84 % 65.02 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.39 67.61 60.72 64.87 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income (Non-GAAP) $ 134,054 $ 107,415 $ 571,671 $ 450,896 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.75 $ 2.20 $ 11.73 $ 9.26 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Net interest income (GAAP) $ 245,166 $ 210,570 $ 913,797 $ 815,521 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,663 6,483 25,794 26,334 Net interest income - FTE (Non-GAAP) 251,829 217,053 939,591 841,855 Noninterest income (GAAP) 125,497 118,782 554,233 467,175 Noninterest expense (GAAP) 237,818 222,483 898,119 833,636 Adjustments to arrive at operating noninterest expense: Acquisition expense 851 18 922 18 Severance expense 358 359 838 1,122 COVID-19 related expense — 169 — 696 Total Non-GAAP adjustments 1,209 546 1,760 1,836 Operating noninterest expense (Non-GAAP) 236,609 221,937 896,359 831,800 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 140,717 $ 113,898 $ 597,465 $ 477,230 Net interest income earnings per share - diluted (GAAP) $ 5.03 $ 4.31 $ 18.75 $ 16.73 Tax equivalent interest 0.14 0.13 0.53 0.53 Net interest income - FTE (Non-GAAP) 5.17 4.44 19.28 17.26 Noninterest income (GAAP) 2.57 2.43 11.37 9.59 Noninterest expense (GAAP) 4.88 4.55 18.43 17.10 Acquisition expense 0.02 — 0.02 — Severance expense 0.01 0.01 0.02 0.02 COVID-19 related expense — — — 0.02 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.89 $ 2.33 $ 12.26 $ 9.79 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of December 31, 2022 2021 Total shareholders' equity (GAAP) $ 2,667,093 $ 3,145,424 Less: Intangible assets Goodwill 207,385 174,518 Other intangibles, net 78,724 14,416 Total intangibles, net 286,109 188,934 Total tangible shareholders' equity (Non-GAAP) $ 2,380,984 $ 2,956,490 Total shares outstanding 48,319,404 48,430,805 Ratio of total shareholders' equity (book value) per share $ 55.20 $ 64.95 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 49.28 61.05 View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005047/en/
Media Contact: Kaele Palmer: 816.860.7315 Kaele.Palmer@umb.com Investor Relations Contact: Kay Gregory: 816.860.7106