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 Third Quarter Net Income of $96.6 Million By: UMB Financial Corporation via Business Wire October 24, 2023 at 16:00 PM EDT Third Quarter 2023 Financial Highlights GAAP net income of $96.6 million, or $1.98 per diluted share. Net operating income(i) of $98.4 million, or $2.02 per diluted share. Average loans increased 10.1% on a linked-quarter, annualized basis, to $22.8 billion, or an 18.0% increase as compared to the third quarter of 2022. Deposit balances at September 30, 2023 totaled $33.4 billion, up from $31.8 billion at September 30, 2022, and consistent with June 30, 2023 balances. Average deposit balances of $31.3 billion, increased 5.1% as compared to the third quarter of 2022. Net interest margin of 2.43%, consistent with the linked quarter. Credit quality remained strong, with net charge-offs of just 0.08% of total loans and non-performing loans representing 0.07% of total loans, compared to 0.09% as of June 30, 2023. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the third quarter of 2023 of $96.6 million, or $1.98 per diluted share, compared to $90.1 million, or $1.85 per diluted share, in the second quarter of 2023 (linked quarter) and $88.0 million, or $1.81 per diluted share, in the third quarter of 2022. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $98.4 million, or $2.02 per diluted share, for the third quarter of 2023, compared to $93.8 million, or $1.93 per diluted share, for the linked quarter and $88.3 million, or $1.82 per diluted share, for the third quarter of 2022. 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 $126.6 million, or $2.60 per diluted share, for the third quarter of 2023, compared to $127.9 million, or $2.63 per diluted share, for the linked quarter, and $131.2 million, or $2.70 per diluted share, for the third quarter of 2022. These operating PTPP results represent decreases of 1.0% on a linked-quarter basis and 3.5%, compared to the third quarter of 2022. “Our third quarter results demonstrated strong loan growth, stable deposits, continued momentum in many of our fee generating businesses, and solid asset quality,” said Mariner Kemper, chairman, president and chief executive officer. “Average loan balances increased more than 10% on a linked-quarter, annualized basis, driven primarily by construction draws and commercial & industrial loan growth. While net interest income for the industry continues to be impacted by higher interest costs paid to deposit clients, our net interest margin in the third quarter was essentially flat on a linked-quarter basis. Our loan portfolio, predominantly indexed to short-term interest rates, continues to reprice in the current interest rate environment as evidenced by the 21 basis points increase in loan yields as compared to the second quarter. Client sentiment remains cautiously optimistic amidst an uncertain geopolitical and interest rate environment. At UMB, our overall portfolio health remains solid as evidenced by a low loan loss ratio of just 0.08% of average loans and nonperforming loans comprising just 0.07% of total loans.” (i) A non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure. Third Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q3 Q2 Q3 2023 2023 2022 Net income (GAAP) $ 96,554 $ 90,110 $ 87,990 Earnings per share (diluted) 1.98 1.85 1.81 Operating pre-tax, pre-provision income (Non-GAAP)(i) 126,592 127,929 131,166 Operating pre-tax, pre-provision earnings per share (diluted) 2.60 2.63 2.70 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 133,151 134,504 137,620 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.73 2.77 2.83 Net operating income (Non-GAAP)(i) 98,400 93,841 88,259 Operating earnings per share (diluted) 2.02 1.93 1.82 GAAP Return on average assets 0.97 % 0.90 % 0.96 % Return on average equity 13.25 12.56 12.90 Efficiency ratio 64.51 65.59 63.58 Non-GAAP (i) Operating return on average assets 0.99 % 0.93 % 0.96 % Operating return on average equity 13.50 13.08 12.94 Operating return on average tangible equity excluding AOCI 11.77 11.63 11.34 Operating efficiency ratio 63.83 64.24 63.49 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September September YTD YTD 2023 2022 Net income (GAAP) $ 279,101 $ 331,509 Earnings per share (diluted) 5.73 6.80 Operating pre-tax, pre-provision income (Non-GAAP)(i) 389,890 437,617 Operating pre-tax, pre-provision earnings per share (diluted) 8.00 8.98 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 409,579 456,748 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 8.40 9.37 Net operating income (Non-GAAP)(i) 285,077 331,928 Operating earnings per share (diluted) 5.85 6.81 GAAP Return on average assets 0.95 % 1.18 % Return on average equity 13.18 16.05 Efficiency ratio 64.40 59.86 Non-GAAP (i) Operating return on average assets 0.97 % 1.18 % Operating return on average equity 13.46 16.07 Operating return on average tangible equity excluding AOCI 11.86 14.93 Operating efficiency ratio 63.68 59.81 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Net interest income $ 222,287 $ 225,611 $ 233,485 $ (3,324 ) $ (11,198 ) Noninterest income: Trust and securities processing 66,668 61,589 59,586 5,079 7,082 Trading and investment banking 3,771 4,800 5,387 (1,029 ) (1,616 ) Service charges on deposit accounts 21,080 21,381 19,932 (301 ) 1,148 Insurance fees and commissions 272 225 375 47 (103 ) Brokerage fees 13,400 13,604 13,840 (204 ) (440 ) Bankcard fees 19,296 18,579 19,379 717 (83 ) Investment securities gains (losses), net 271 900 (1,345 ) (629 ) 1,616 Other 8,559 17,004 11,569 (8,445 ) (3,010 ) Total noninterest income $ 133,317 $ 138,082 $ 128,723 $ (4,765 ) $ 4,594 Total revenue $ 355,604 $ 363,693 $ 362,208 $ (8,089 ) $ (6,604 ) Net interest income (FTE) $ 228,846 $ 232,186 $ 239,939 Net interest margin (FTE) 2.43 % 2.44 % 2.76 % Total noninterest income as a % of total revenue 37.5 38.0 35.5 Net interest income Third quarter 2023 net interest income totaled $222.3 million, a decrease of $3.3 million, or 1.5%, from the linked quarter, driven by higher interest expense due primarily to unfavorable mix shift in the composition of liabilities, combined with the impact of higher short-term interest rates. This decrease was partially offset by continued growth in average loans, coupled with increased loan yields. Average earning assets decreased $866.4 million, or 2.3%, from the linked quarter, largely driven by decreases of $1.2 billion in interest-bearing due from banks and $299.6 million in average securities, partially offset by an increase of $559.9 million in average loans. Average interest-bearing liabilities decreased $464.8 million, or 1.8%, from the linked quarter, primarily driven by decreases of $531.4 million in borrowed funds, mostly short-term borrowings, and $309.5 million in federal funds and repurchase agreements. These decreases were partially offset by an increase of $376.1 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $520.6 million, or 4.9%, as compared to the linked quarter. Net interest margin for the third quarter was 2.43%, a decrease of one basis point from the linked quarter, driven by increased cost and mix of interest-bearing liabilities, partially offset by improved loan yields, the benefit of free funds, and earning asset mix changes. The cost of interest-bearing liabilities increased 24 basis points to 3.82%. Total cost of funds increased 19 basis points from the linked quarter to 2.75%. Average loan yields increased 21 basis points while earning asset yields increased 17 basis points from the linked quarter. On a year-over-year basis, net interest income decreased $11.2 million, or 4.8%, driven by higher interest expense primarily due to unfavorable mix shift in the composition of liabilities, as well as the impact of higher short-term interest rates. This decrease was partially offset by a $3.5 billion, or 18.0%, increase in average loans. Compared to the third quarter of 2022, average earning assets increased $2.9 billion, or 8.5%, largely driven by the increase in average loans noted above, partially offset by a decrease of $933.2 million in average securities. Average deposits increased 5.1% compared to the third quarter of 2022. Average noninterest-bearing demand deposit balances decreased 19.2% compared to the third quarter of 2022, driven by migration to rate-bearing deposit categories, as expected in a higher interest rate environment. Average demand deposit balances comprised 32.0% of total deposits, compared to 33.5% in the linked quarter and 41.6% in the third quarter of 2022. Average borrowed funds decreased $531.4 million as compared to the linked quarter and increased $2.3 billion as compared to the third quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income Third quarter 2023 noninterest income decreased $4.8 million, or 3.5%, on a linked-quarter basis, largely due to: A decrease of $8.4 million in other income, primarily related to a $4.0 million gain on sale of other assets recorded in the second quarter, coupled with decreases of $3.5 million in company-owned life insurance income and $0.9 million in derivative income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $1.0 million in trading and investment banking due to decreased trading volume. These decreases were partially offset by increases of $3.2 million in fund services income, $1.3 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. Compared to the prior year, noninterest income in the third quarter of 2023 increased $4.6 million, or 3.6%, primarily driven by: Increases of $4.1 million in fund services income, $2.4 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. An increase of $1.6 million in investment securities gains, primarily driven by increased valuations in the company's marketable securities. An increase of $0.5 million in bank-owned life insurance income, recorded in other income. These increases were partially offset by decreases of $2.7 million in company-owned life insurance income and $1.3 million in derivative income, both recorded in other income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Salaries and employee benefits $ 133,380 $ 143,312 $ 136,467 $ (9,932 ) $ (3,087 ) Occupancy, net 12,283 11,746 12,231 537 52 Equipment 17,204 17,086 18,811 118 (1,607 ) Supplies and services 3,213 4,195 3,139 (982 ) 74 Marketing and business development 6,631 7,124 6,671 (493 ) (40 ) Processing fees 26,016 26,572 20,901 (556 ) 5,115 Legal and consulting 7,230 7,059 10,255 171 (3,025 ) Bankcard 8,852 8,307 6,551 545 2,301 Amortization of other intangible assets 2,124 2,117 1,092 7 1,032 Regulatory fees 6,153 6,123 4,200 30 1,953 Other 8,355 7,032 11,078 1,323 (2,723 ) Total noninterest expense $ 231,441 $ 240,673 $ 231,396 $ (9,232 ) $ 45 Noninterest expense for the third quarter of 2023 was $231.4 million, a decrease of $9.2 million, or 3.8%, from the linked quarter and an increase of $0.1 million from the third quarter of 2022. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $229.0 million for the third quarter of 2023, a decrease of $6.8 million, or 2.9%, from the linked quarter and a decrease of $2.0 million, or 0.9%, from the third quarter of 2022. The linked-quarter decrease in GAAP noninterest expense was driven by: A decrease of $9.9 million in salaries and employee benefits expense driven by decreases of $5.3 million in employee benefits expense and $4.6 million in salaries and bonus expense. The decrease in employee benefits was driven by a decrease in deferred compensation expense of $2.8 million and a decrease of $1.3 million in other employee benefits. The decrease in salaries and bonus expense was due to a decrease of $2.5 million in severance expense and a decrease of $1.6 million in salary and wage expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were partially offset by an increase of $1.3 million in operational losses as compared to the linked quarter. The year-over-year increase in GAAP noninterest expense was driven by: An increase of $5.1 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. This increase was partially offset by the following decreases: A decrease of $3.1 million in salaries and employee benefits expense, driven primarily by decreases of $1.6 million in salaries and bonus expense and $1.5 million in employee benefits expense. The decrease in salaries and wage expense is primarily due to a decrease in bonus and commission expense. The decrease in employee benefits expense is due to a decrease of $1.9 million in deferred compensation plan expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $3.0 million in legal and consulting expense due to the timing of multiple projects. Income taxes The company’s effective tax rate was 18.1% for the nine months ended September 30, 2023, compared to 18.8% for the same period in 2022. The decrease in the effective tax rate in 2023 is primarily attributable to a larger portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the third quarter of 2023 were $39.5 billion compared to $40.4 billion for the linked quarter and $36.3 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Commercial and industrial $ 9,852,335 $ 9,724,300 $ 8,417,174 $ 128,035 $ 1,435,161 Specialty lending 526,711 574,220 559,797 (47,509 ) (33,086 ) Commercial real estate 8,545,206 8,178,463 6,892,484 366,743 1,652,722 Consumer real estate 2,922,753 2,833,739 2,574,926 89,014 347,827 Consumer 139,384 139,705 142,348 (321 ) (2,964 ) Credit cards 477,904 485,749 438,235 (7,845 ) 39,669 Leases and other 287,174 255,425 259,298 31,749 27,876 Total loans $ 22,751,467 $ 22,191,601 $ 19,284,262 $ 559,866 $ 3,467,205 Average loans for the third quarter of 2023 increased $559.9 million, or 2.5%, on a linked-quarter basis and $3.5 billion, or 18.0%, compared to the third quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Securities available for sale: U.S. Treasury $ 786,136 $ 797,104 $ 746,429 $ (10,968 ) $ 39,707 U.S. Agencies 172,832 189,091 173,980 (16,259 ) (1,148 ) Mortgage-backed 3,611,305 3,813,234 4,363,838 (201,929 ) (752,533 ) State and political subdivisions 1,275,591 1,319,398 1,600,043 (43,807 ) (324,452 ) Corporates 345,026 349,318 381,151 (4,292 ) (36,125 ) Collateralized loan obligations 346,426 348,078 300,475 (1,652 ) 45,951 Total securities available for sale $ 6,537,316 $ 6,816,223 $ 7,565,916 $ (278,907 ) $ (1,028,600 ) Securities held to maturity: U.S. Agencies $ 123,165 $ 123,135 $ 123,048 $ 30 $ 117 Mortgage-backed 2,814,467 2,878,657 3,039,998 (64,190 ) (225,531 ) State and political subdivisions 2,828,029 2,822,218 2,621,633 5,811 206,396 Total securities held to maturity $ 5,765,661 $ 5,824,010 $ 5,784,679 $ (58,349 ) $ (19,018 ) Trading securities $ 17,327 $ 12,538 $ 5,651 $ 4,789 $ 11,676 Other securities 445,380 407,754 330,950 37,626 114,430 Total securities $ 12,765,684 $ 13,060,525 $ 13,687,196 $ (294,841 ) $ (921,512 ) Average total securities decreased 2.3% on a linked-quarter basis and decreased 6.7% compared to the third quarter of 2022. At September 30, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio was $917.8 million, or 12.7% of the $7.2 billion amortized cost value. At September 30, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity was $876.1 million, or 15.3% of the $5.7 billion amortized cost value. During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $216.5 million as of September 30, 2023 and was included in the amortized cost balance of held-to-maturity securities. At September 30, 2023, an after-tax gain of $55.9 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, all of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Deposits: Noninterest-bearing demand $ 10,014,686 $ 10,535,325 $ 12,394,251 $ (520,639 ) $ (2,379,565 ) Interest-bearing demand and savings 18,142,212 17,463,022 16,723,205 679,190 1,419,007 Time deposits 3,173,549 3,476,616 679,994 (303,067 ) 2,493,555 Total deposits $ 31,330,447 $ 31,474,963 $ 29,797,450 $ (144,516 ) $ 1,532,997 Noninterest bearing deposits as % of total 32.0 % 33.5 % 41.6 % Average deposits decreased 0.5% on a linked-quarter basis and increased 5.1% compared to the third quarter of 2022. As of September 30, 2023, the total estimated uninsured deposits were $20.7 billion, or approximately 62.0% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $14.2 billion, and represented approximately 42.6% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September 30, 2023 June 30, 2023 September 30, 2022 Total equity $ 2,806,659 $ 2,831,628 $ 2,523,545 Accumulated other comprehensive loss, net (792,371 ) (685,831 ) (759,260 ) Book value per common share 57.83 58.36 52.24 Tangible book value per common share (Non-GAAP)(i) 52.06 52.54 48.19 Regulatory capital: Common equity Tier 1 capital $ 3,357,986 $ 3,273,841 $ 3,132,209 Tier 1 capital 3,357,986 3,273,841 3,132,209 Total capital 3,955,093 3,870,101 3,679,116 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.77 % 10.65 % 11.18 % Tier 1 risk-based capital ratio 10.77 10.65 11.18 Total risk-based capital ratio 12.68 12.59 13.13 Tier 1 leverage ratio 8.55 8.16 8.66 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. At September 30, 2023, 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) Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 Net charge-offs (recoveries) - total loans $ 4,618 $ (139 ) $ 4,643 $ 2,189 $ 1,173 Net loan charge-offs (recoveries) as a % of total average loans 0.08 % (0.00 )% 0.09 % 0.04 % 0.02 % Loans over 90 days past due $ 3,044 $ 10,675 $ 1,723 $ 1,617 $ 2,513 Loans over 90 days past due as a % of total loans 0.01 % 0.05 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 17,042 $ 19,347 $ 15,480 $ 19,269 $ 19,817 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.07 % 0.09 % 0.10 % Provision for credit losses $ 4,977 $ 13,000 $ 23,250 $ 9,000 $ 22,000 Provision for credit losses for the third quarter totaled $5.0 million, a decrease of $8.0 million from the linked quarter and a decrease of $17.0 million from the third quarter of 2022. These changes are driven largely by changes in macro-economic variables in the current period as compared to the prior periods. Net charge-offs for the third quarter totaled $4.6 million, or 0.08% of average loans, compared to net recoveries of $0.1 million in the linked quarter, and net charge-offs of $1.2 million, or 0.02% of average loans, for the third quarter of 2022. On a year-to-date basis, net charge-offs totaled $9.1 million, or 0.06% of average loans, compared to $37.7 million, or 0.27% of average loans, for the same period in 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors approved a 2.6% increase in the quarterly cash dividend to $0.39 per share. The cash dividend will be payable on January 2, 2024, to shareholders of record at the close of business on December 11, 2023. Conference Call The company plans to host a conference call to discuss its third quarter 2023 earnings results on Wednesday, October 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 879142. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 3Q 2023 Conference Call A replay of the conference call may be heard through November 8, 2023, by calling (toll-free) 866-813-9403 or (international) 204-525-0658. The replay access code required for playback is 504739. 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, tangible book value per share, and operating return on average tangible equity excluding AOCI, 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, tangible book value per share, and operating return on average tangible equity excluding AOCI – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items that management does not believe reflect the company’s fundamental operating performance. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance 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 and severance 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. Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company’s average tangible shareholders’ equity exclusive of AOCI for the relevant period. 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, 2022, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) September 30, 2023 2022 ASSETS Loans $ 22,881,689 $ 19,883,573 Allowance for credit losses on loans (221,462 ) (184,913 ) Net loans 22,660,227 19,698,660 Loans held for sale 2,824 2,870 Securities: Available for sale 6,330,699 7,128,277 Held to maturity, net of allowance for credit losses 5,729,697 5,835,187 Trading securities 24,509 14,390 Other securities 473,255 333,732 Total securities 12,558,160 13,311,586 Federal funds sold and resell agreements 248,203 716,549 Interest-bearing due from banks 3,556,076 1,768,008 Cash and due from banks 454,705 371,336 Premises and equipment, net 249,037 260,685 Accrued income 208,594 153,759 Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Other assets 1,246,411 1,102,011 Total assets $ 41,464,682 $ 37,581,062 LIABILITIES Deposits: Noninterest-bearing demand $ 11,254,885 $ 13,876,929 Interest-bearing demand and savings 18,833,614 17,059,492 Time deposits under $250,000 2,834,181 365,644 Time deposits of $250,000 or more 509,072 504,323 Total deposits 33,431,752 31,806,388 Federal funds purchased and repurchase agreements 1,757,602 2,314,168 Short-term debt 2,300,000 — Long-term debt 382,768 381,543 Accrued expenses and taxes 319,283 211,465 Other liabilities 466,618 343,953 Total liabilities 38,658,023 35,057,517 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,128,239 1,120,489 Retained earnings 2,759,415 2,454,422 Accumulated other comprehensive loss, net (792,371 ) (759,260 ) Treasury stock (343,681 ) (347,163 ) Total shareholders' equity 2,806,659 2,523,545 Total liabilities and shareholders' equity $ 41,464,682 $ 37,581,062 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 INTEREST INCOME Loans $ 367,485 $ 216,970 $ 1,018,920 $ 536,359 Securities: Taxable interest 53,455 50,003 161,091 140,680 Tax-exempt interest 25,704 24,692 76,560 72,085 Total securities income 79,159 74,695 237,651 212,765 Federal funds and resell agreements 4,567 6,056 14,107 12,003 Interest-bearing due from banks 20,551 2,545 70,923 9,209 Trading securities 214 73 502 372 Total interest income 471,976 300,339 1,342,103 770,708 INTEREST EXPENSE Deposits 191,919 48,457 490,368 70,069 Federal funds and repurchase agreements 23,076 14,709 71,123 21,855 Other 34,694 3,688 91,018 10,153 Total interest expense 249,689 66,854 652,509 102,077 Net interest income 222,287 233,485 689,594 668,631 Provision for credit losses 4,977 22,000 41,227 28,900 Net interest income after provision for credit losses 217,310 211,485 648,367 639,731 NONINTEREST INCOME Trust and securities processing 66,668 59,586 190,616 178,000 Trading and investment banking 3,771 5,387 13,879 17,950 Service charges on deposit accounts 21,080 19,932 63,620 65,409 Insurance fees and commissions 272 375 771 879 Brokerage fees 13,400 13,840 40,680 29,687 Bankcard fees 19,296 19,379 56,047 53,854 Investment securities gains (losses), net 271 (1,345 ) (4,153 ) 58,853 Other 8,559 11,569 40,139 24,104 Total noninterest income 133,317 128,723 401,599 428,736 NONINTEREST EXPENSE Salaries and employee benefits 133,380 136,467 419,190 388,491 Occupancy, net 12,283 12,231 36,206 36,439 Equipment 17,204 18,811 52,139 55,290 Supplies and services 3,213 3,139 11,283 9,893 Marketing and business development 6,631 6,671 19,090 16,911 Processing fees 26,016 20,901 75,828 58,682 Legal and consulting 7,230 10,255 21,574 28,431 Bankcard 8,852 6,551 24,292 18,998 Amortization of other intangible assets 2,124 1,092 6,539 3,388 Regulatory fees 6,153 4,200 17,827 11,146 Other 8,355 11,078 25,198 32,632 Total noninterest expense 231,441 231,396 709,166 660,301 Income before income taxes 119,186 108,812 340,800 408,166 Income tax expense 22,632 20,822 61,699 76,657 NET INCOME $ 96,554 $ 87,990 $ 279,101 $ 331,509 PER SHARE DATA Net income – basic $ 1.99 $ 1.82 $ 5.76 $ 6.86 Net income – diluted 1.98 1.81 5.73 6.80 Dividends 0.38 0.37 1.14 1.11 Weighted average shares outstanding – basic 48,525,776 48,300,129 48,492,022 48,351,007 Weighted average shares outstanding – diluted 48,762,696 48,648,804 48,737,065 48,723,572 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 96,554 $ 87,990 $ 279,101 $ 331,509 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (151,753 ) (271,079 ) (145,601 ) (1,202,341 ) Less: Reclassification adjustment for net (gains) losses included in net income (154 ) — 279 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 10,268 12,587 30,563 25,708 Change in unrealized gains and losses on debt securities (141,639 ) (258,492 ) (114,759 ) (1,176,633 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 3,927 3,321 4,248 12,438 Less: Reclassification adjustment for net gains included in net income (2,844 ) (1,470 ) (8,065 ) (3,411 ) Change in unrealized gains and losses on derivative hedges 1,083 1,851 (3,817 ) 9,027 Other comprehensive loss, before tax (140,556 ) (256,641 ) (118,576 ) (1,167,606 ) Income tax benefit 34,016 62,184 28,940 282,032 Other comprehensive loss (106,540 ) (194,457 ) (89,636 ) (885,574 ) Comprehensive (loss) income $ (9,986 ) $ (106,467 ) $ 189,465 $ (554,065 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 331,509 (885,574 ) — (554,065 ) Dividends ($1.11 per share) — — (54,085 ) — — (54,085 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 16,062 — — — 16,062 Sale of treasury stock — 257 — — 172 429 Exercise of stock options — 280 — — 627 907 Balance - September 30, 2022 $ 55,057 $ 1,120,489 $ 2,454,422 $ (759,260 ) $ (347,163 ) $ 2,523,545 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income (loss) — — 279,101 (89,636 ) — 189,465 Dividends ($1.14 per share) — — (55,772 ) — — (55,772 ) Purchase of treasury stock — — — — (8,096 ) (8,096 ) Issuances of equity awards, net of forfeitures — (10,115 ) — — 10,834 719 Recognition of equity-based compensation — 11,983 — — — 11,983 Sale of treasury stock — 167 — — 216 383 Exercise of stock options — 255 — — 629 884 Balance - September 30, 2023 $ 55,057 $ 1,128,239 $ 2,759,415 $ (792,371 ) $ (343,681 ) $ 2,806,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,751,467 6.41 % $ 19,284,262 4.46 % Securities: Taxable 8,964,467 2.37 9,796,212 2.03 Tax-exempt 3,783,890 3.37 3,885,333 3.18 Total securities 12,748,357 2.66 13,681,545 2.35 Federal funds and resell agreements 303,864 5.96 848,844 2.83 Interest bearing due from banks 1,548,867 5.26 632,595 1.60 Trading securities 17,327 5.31 5,651 5.69 Total earning assets 37,369,882 5.08 34,452,897 3.53 Allowance for credit losses (227,878 ) (167,939 ) Other assets 2,381,496 2,025,193 Total assets $ 39,523,500 $ 36,310,151 Liabilities and Shareholders' Equity Interest-bearing deposits $ 21,315,761 3.57 % $ 17,403,199 1.10 % Federal funds and repurchase agreements 2,027,382 4.52 3,055,164 1.91 Borrowed funds 2,605,897 5.28 294,739 4.96 Total interest-bearing liabilities 25,949,040 3.82 20,753,102 1.28 Noninterest-bearing demand deposits 10,014,686 12,394,251 Other liabilities 667,920 456,992 Shareholders' equity 2,891,854 2,705,806 Total liabilities and shareholders' equity $ 39,523,500 $ 36,310,151 Net interest spread 1.26 % 2.25 % Net interest margin 2.43 2.76 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Nine Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,076,977 6.17 % $ 18,328,139 3.91 % Securities: Taxable 9,179,230 2.35 9,695,499 1.94 Tax-exempt 3,816,122 3.36 3,912,590 3.11 Total securities 12,995,352 2.64 13,608,089 2.28 Federal funds and resell agreements 343,297 5.49 1,070,319 1.50 Interest bearing due from banks 1,935,029 4.90 2,841,510 0.43 Trading securities 13,071 5.56 12,170 4.86 Total earning assets 37,363,726 4.87 35,860,227 2.94 Allowance for credit losses (213,744 ) (182,647 ) Other assets 2,322,171 1,988,189 Total assets $ 39,472,153 $ 37,665,769 Liabilities and Shareholders' Equity Interest-bearing deposits $ 20,638,982 3.18 % $ 17,775,016 0.53 % Federal funds and repurchase agreements 2,273,826 4.18 2,896,021 1.01 Borrowed funds 2,319,652 5.25 279,659 4.85 Total interest-bearing liabilities 25,232,460 3.46 20,950,696 0.65 Noninterest-bearing demand deposits 10,816,120 13,537,023 Other liabilities 591,919 416,492 Shareholders' equity 2,831,654 2,761,558 Total liabilities and shareholders' equity $ 39,472,153 $ 37,665,769 Net interest spread 1.41 % 2.29 % Net interest margin 2.54 2.56 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 148,666 $ 43,133 $ 30,488 $ 222,287 Provision for credit losses 3,010 423 1,544 4,977 Noninterest income 23,091 86,521 23,705 133,317 Noninterest expense 81,767 87,502 62,172 231,441 Income (loss) before taxes 86,980 41,729 (9,523 ) 119,186 Income tax expense (benefit) 16,311 7,866 (1,545 ) 22,632 Net income (loss) $ 70,669 $ 33,863 $ (7,978 ) $ 96,554 Three Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 150,080 $ 43,382 40,023 $ 233,485 Provision for credit losses 20,156 162 1,682 22,000 Noninterest income 16,785 89,386 22,552 128,723 Noninterest expense 87,120 82,073 62,203 231,396 Income (loss) before taxes 59,589 50,533 (1,310 ) 108,812 Income tax expense 12,859 7,735 228 20,822 Net income (loss) $ 46,730 $ 42,798 $ (1,538 ) $ 87,990 Nine Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,083 $ 148,615 $ 96,896 $ 689,594 Provision for credit losses 35,110 754 5,363 41,227 Noninterest income 71,658 257,573 72,368 401,599 Noninterest expense 251,667 268,464 189,035 709,166 Income (loss) before taxes 228,964 136,970 (25,134 ) 340,800 Income tax expense (benefit) 41,114 24,558 (3,973 ) 61,699 Net income (loss) $ 187,850 $ 112,412 $ (21,161 ) $ 279,101 Nine Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,176 $ 104,615 $ 119,840 $ 668,631 Provision for credit losses 25,183 402 3,315 28,900 Noninterest income 100,379 243,740 84,617 428,736 Noninterest expense 246,230 234,185 179,886 660,301 Income before taxes 273,142 113,768 21,256 408,166 Income tax expense 52,001 22,353 2,303 76,657 Net income $ 221,141 $ 91,415 $ 18,953 $ 331,509 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 September 30, 2023. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (GAAP) $ 96,554 $ 87,990 $ 279,101 $ 331,509 Adjustments: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Tax-impact of adjustments (i) (583 ) (85 ) (1,887 ) (132 ) Total Non-GAAP adjustments (net of tax) 1,846 269 5,976 419 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Earnings per share - diluted (GAAP) $ 1.98 $ 1.81 $ 5.73 $ 6.80 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Tax-impact of adjustments (i) (0.01 ) — (0.04 ) — Operating earnings per share - diluted (Non-GAAP) $ 2.02 $ 1.82 $ 5.85 $ 6.81 GAAP Return on average assets 0.97 % 0.96 % 0.95 % 1.18 % Return on average equity 13.25 12.90 13.18 16.05 Non-GAAP Operating return on average assets 0.99 % 0.96 % 0.97 % 1.18 % Operating return on average equity 13.50 12.94 13.46 16.07 (i) Calculated using the company’s marginal tax rate of 24.0%. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments (pre-tax) 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) $ 229,012 $ 231,042 $ 701,303 $ 659,750 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 229,317 $ 230,304 $ 702,627 $ 656,913 Operating noninterest expense $ 229,012 $ 231,042 $ 701,303 $ 659,750 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 226,888 $ 229,950 $ 694,764 $ 656,362 Net interest income $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income 133,317 128,723 401,599 428,736 Less: Gains on sales of securities available for sale, net 154 — 152 — Total Non-GAAP Revenue (denominator A) $ 355,450 $ 362,208 $ 1,091,041 $ 1,097,367 Efficiency ratio (numerator A/denominator A) 64.51 % 63.58 % 64.40 % 59.86 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.83 63.49 63.68 59.81 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income (Non-GAAP) $ 126,592 $ 131,166 $ 389,890 $ 437,617 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.60 $ 2.70 $ 8.00 $ 8.98 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,559 6,454 19,689 19,131 Net interest income - FTE (Non-GAAP) 228,846 239,939 709,283 687,762 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 133,151 $ 137,620 $ 409,579 $ 456,748 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Tax equivalent interest 0.13 0.13 0.40 0.39 Net interest income - FTE (Non-GAAP) 4.69 4.93 14.55 14.11 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.73 $ 2.83 $ 8.40 $ 9.37 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of September 30, 2023 2022 Total shareholders' equity (GAAP) $ 2,806,659 $ 2,523,545 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Total intangibles, net 280,445 195,598 Total tangible shareholders' equity (Non-GAAP) $ 2,526,214 $ 2,327,947 Total shares outstanding 48,529,097 48,309,638 Ratio of total shareholders' equity (book value) per share $ 57.83 $ 52.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.06 48.19 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Average total shareholders' equity (GAAP) $ 2,891,854 $ 2,705,806 $ 2,831,654 $ 2,761,558 Less: Average intangible assets Average goodwill 207,385 182,225 207,385 179,741 Average other intangibles, net 74,444 14,061 75,892 14,476 Average total intangibles, net 281,829 196,286 283,277 194,216 Average total tangible shareholders' equity (Non-GAAP) 2,610,025 2,509,520 2,548,377 2,567,342 Less: Average accumulated other comprehensive loss (AOCI) (706,062 ) (576,947 ) (664,770 ) (405,343 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,316,087 $ 3,086,467 $ 3,213,147 $ 2,972,685 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Non-GAAP Operating return on average tangible equity excluding AOCI 11.77 % 11.34 % 11.86 % 14.93 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231018691354/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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UMB Financial Corporation Reports Third Quarter Net Income of $96.6 Million By: UMB Financial Corporation via Business Wire October 24, 2023 at 16:00 PM EDT Third Quarter 2023 Financial Highlights GAAP net income of $96.6 million, or $1.98 per diluted share. Net operating income(i) of $98.4 million, or $2.02 per diluted share. Average loans increased 10.1% on a linked-quarter, annualized basis, to $22.8 billion, or an 18.0% increase as compared to the third quarter of 2022. Deposit balances at September 30, 2023 totaled $33.4 billion, up from $31.8 billion at September 30, 2022, and consistent with June 30, 2023 balances. Average deposit balances of $31.3 billion, increased 5.1% as compared to the third quarter of 2022. Net interest margin of 2.43%, consistent with the linked quarter. Credit quality remained strong, with net charge-offs of just 0.08% of total loans and non-performing loans representing 0.07% of total loans, compared to 0.09% as of June 30, 2023. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the third quarter of 2023 of $96.6 million, or $1.98 per diluted share, compared to $90.1 million, or $1.85 per diluted share, in the second quarter of 2023 (linked quarter) and $88.0 million, or $1.81 per diluted share, in the third quarter of 2022. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $98.4 million, or $2.02 per diluted share, for the third quarter of 2023, compared to $93.8 million, or $1.93 per diluted share, for the linked quarter and $88.3 million, or $1.82 per diluted share, for the third quarter of 2022. 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 $126.6 million, or $2.60 per diluted share, for the third quarter of 2023, compared to $127.9 million, or $2.63 per diluted share, for the linked quarter, and $131.2 million, or $2.70 per diluted share, for the third quarter of 2022. These operating PTPP results represent decreases of 1.0% on a linked-quarter basis and 3.5%, compared to the third quarter of 2022. “Our third quarter results demonstrated strong loan growth, stable deposits, continued momentum in many of our fee generating businesses, and solid asset quality,” said Mariner Kemper, chairman, president and chief executive officer. “Average loan balances increased more than 10% on a linked-quarter, annualized basis, driven primarily by construction draws and commercial & industrial loan growth. While net interest income for the industry continues to be impacted by higher interest costs paid to deposit clients, our net interest margin in the third quarter was essentially flat on a linked-quarter basis. Our loan portfolio, predominantly indexed to short-term interest rates, continues to reprice in the current interest rate environment as evidenced by the 21 basis points increase in loan yields as compared to the second quarter. Client sentiment remains cautiously optimistic amidst an uncertain geopolitical and interest rate environment. At UMB, our overall portfolio health remains solid as evidenced by a low loan loss ratio of just 0.08% of average loans and nonperforming loans comprising just 0.07% of total loans.” (i) A non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure. Third Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q3 Q2 Q3 2023 2023 2022 Net income (GAAP) $ 96,554 $ 90,110 $ 87,990 Earnings per share (diluted) 1.98 1.85 1.81 Operating pre-tax, pre-provision income (Non-GAAP)(i) 126,592 127,929 131,166 Operating pre-tax, pre-provision earnings per share (diluted) 2.60 2.63 2.70 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 133,151 134,504 137,620 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.73 2.77 2.83 Net operating income (Non-GAAP)(i) 98,400 93,841 88,259 Operating earnings per share (diluted) 2.02 1.93 1.82 GAAP Return on average assets 0.97 % 0.90 % 0.96 % Return on average equity 13.25 12.56 12.90 Efficiency ratio 64.51 65.59 63.58 Non-GAAP (i) Operating return on average assets 0.99 % 0.93 % 0.96 % Operating return on average equity 13.50 13.08 12.94 Operating return on average tangible equity excluding AOCI 11.77 11.63 11.34 Operating efficiency ratio 63.83 64.24 63.49 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September September YTD YTD 2023 2022 Net income (GAAP) $ 279,101 $ 331,509 Earnings per share (diluted) 5.73 6.80 Operating pre-tax, pre-provision income (Non-GAAP)(i) 389,890 437,617 Operating pre-tax, pre-provision earnings per share (diluted) 8.00 8.98 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 409,579 456,748 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 8.40 9.37 Net operating income (Non-GAAP)(i) 285,077 331,928 Operating earnings per share (diluted) 5.85 6.81 GAAP Return on average assets 0.95 % 1.18 % Return on average equity 13.18 16.05 Efficiency ratio 64.40 59.86 Non-GAAP (i) Operating return on average assets 0.97 % 1.18 % Operating return on average equity 13.46 16.07 Operating return on average tangible equity excluding AOCI 11.86 14.93 Operating efficiency ratio 63.68 59.81 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Net interest income $ 222,287 $ 225,611 $ 233,485 $ (3,324 ) $ (11,198 ) Noninterest income: Trust and securities processing 66,668 61,589 59,586 5,079 7,082 Trading and investment banking 3,771 4,800 5,387 (1,029 ) (1,616 ) Service charges on deposit accounts 21,080 21,381 19,932 (301 ) 1,148 Insurance fees and commissions 272 225 375 47 (103 ) Brokerage fees 13,400 13,604 13,840 (204 ) (440 ) Bankcard fees 19,296 18,579 19,379 717 (83 ) Investment securities gains (losses), net 271 900 (1,345 ) (629 ) 1,616 Other 8,559 17,004 11,569 (8,445 ) (3,010 ) Total noninterest income $ 133,317 $ 138,082 $ 128,723 $ (4,765 ) $ 4,594 Total revenue $ 355,604 $ 363,693 $ 362,208 $ (8,089 ) $ (6,604 ) Net interest income (FTE) $ 228,846 $ 232,186 $ 239,939 Net interest margin (FTE) 2.43 % 2.44 % 2.76 % Total noninterest income as a % of total revenue 37.5 38.0 35.5 Net interest income Third quarter 2023 net interest income totaled $222.3 million, a decrease of $3.3 million, or 1.5%, from the linked quarter, driven by higher interest expense due primarily to unfavorable mix shift in the composition of liabilities, combined with the impact of higher short-term interest rates. This decrease was partially offset by continued growth in average loans, coupled with increased loan yields. Average earning assets decreased $866.4 million, or 2.3%, from the linked quarter, largely driven by decreases of $1.2 billion in interest-bearing due from banks and $299.6 million in average securities, partially offset by an increase of $559.9 million in average loans. Average interest-bearing liabilities decreased $464.8 million, or 1.8%, from the linked quarter, primarily driven by decreases of $531.4 million in borrowed funds, mostly short-term borrowings, and $309.5 million in federal funds and repurchase agreements. These decreases were partially offset by an increase of $376.1 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $520.6 million, or 4.9%, as compared to the linked quarter. Net interest margin for the third quarter was 2.43%, a decrease of one basis point from the linked quarter, driven by increased cost and mix of interest-bearing liabilities, partially offset by improved loan yields, the benefit of free funds, and earning asset mix changes. The cost of interest-bearing liabilities increased 24 basis points to 3.82%. Total cost of funds increased 19 basis points from the linked quarter to 2.75%. Average loan yields increased 21 basis points while earning asset yields increased 17 basis points from the linked quarter. On a year-over-year basis, net interest income decreased $11.2 million, or 4.8%, driven by higher interest expense primarily due to unfavorable mix shift in the composition of liabilities, as well as the impact of higher short-term interest rates. This decrease was partially offset by a $3.5 billion, or 18.0%, increase in average loans. Compared to the third quarter of 2022, average earning assets increased $2.9 billion, or 8.5%, largely driven by the increase in average loans noted above, partially offset by a decrease of $933.2 million in average securities. Average deposits increased 5.1% compared to the third quarter of 2022. Average noninterest-bearing demand deposit balances decreased 19.2% compared to the third quarter of 2022, driven by migration to rate-bearing deposit categories, as expected in a higher interest rate environment. Average demand deposit balances comprised 32.0% of total deposits, compared to 33.5% in the linked quarter and 41.6% in the third quarter of 2022. Average borrowed funds decreased $531.4 million as compared to the linked quarter and increased $2.3 billion as compared to the third quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income Third quarter 2023 noninterest income decreased $4.8 million, or 3.5%, on a linked-quarter basis, largely due to: A decrease of $8.4 million in other income, primarily related to a $4.0 million gain on sale of other assets recorded in the second quarter, coupled with decreases of $3.5 million in company-owned life insurance income and $0.9 million in derivative income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $1.0 million in trading and investment banking due to decreased trading volume. These decreases were partially offset by increases of $3.2 million in fund services income, $1.3 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. Compared to the prior year, noninterest income in the third quarter of 2023 increased $4.6 million, or 3.6%, primarily driven by: Increases of $4.1 million in fund services income, $2.4 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. An increase of $1.6 million in investment securities gains, primarily driven by increased valuations in the company's marketable securities. An increase of $0.5 million in bank-owned life insurance income, recorded in other income. These increases were partially offset by decreases of $2.7 million in company-owned life insurance income and $1.3 million in derivative income, both recorded in other income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Salaries and employee benefits $ 133,380 $ 143,312 $ 136,467 $ (9,932 ) $ (3,087 ) Occupancy, net 12,283 11,746 12,231 537 52 Equipment 17,204 17,086 18,811 118 (1,607 ) Supplies and services 3,213 4,195 3,139 (982 ) 74 Marketing and business development 6,631 7,124 6,671 (493 ) (40 ) Processing fees 26,016 26,572 20,901 (556 ) 5,115 Legal and consulting 7,230 7,059 10,255 171 (3,025 ) Bankcard 8,852 8,307 6,551 545 2,301 Amortization of other intangible assets 2,124 2,117 1,092 7 1,032 Regulatory fees 6,153 6,123 4,200 30 1,953 Other 8,355 7,032 11,078 1,323 (2,723 ) Total noninterest expense $ 231,441 $ 240,673 $ 231,396 $ (9,232 ) $ 45 Noninterest expense for the third quarter of 2023 was $231.4 million, a decrease of $9.2 million, or 3.8%, from the linked quarter and an increase of $0.1 million from the third quarter of 2022. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $229.0 million for the third quarter of 2023, a decrease of $6.8 million, or 2.9%, from the linked quarter and a decrease of $2.0 million, or 0.9%, from the third quarter of 2022. The linked-quarter decrease in GAAP noninterest expense was driven by: A decrease of $9.9 million in salaries and employee benefits expense driven by decreases of $5.3 million in employee benefits expense and $4.6 million in salaries and bonus expense. The decrease in employee benefits was driven by a decrease in deferred compensation expense of $2.8 million and a decrease of $1.3 million in other employee benefits. The decrease in salaries and bonus expense was due to a decrease of $2.5 million in severance expense and a decrease of $1.6 million in salary and wage expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were partially offset by an increase of $1.3 million in operational losses as compared to the linked quarter. The year-over-year increase in GAAP noninterest expense was driven by: An increase of $5.1 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. This increase was partially offset by the following decreases: A decrease of $3.1 million in salaries and employee benefits expense, driven primarily by decreases of $1.6 million in salaries and bonus expense and $1.5 million in employee benefits expense. The decrease in salaries and wage expense is primarily due to a decrease in bonus and commission expense. The decrease in employee benefits expense is due to a decrease of $1.9 million in deferred compensation plan expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $3.0 million in legal and consulting expense due to the timing of multiple projects. Income taxes The company’s effective tax rate was 18.1% for the nine months ended September 30, 2023, compared to 18.8% for the same period in 2022. The decrease in the effective tax rate in 2023 is primarily attributable to a larger portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the third quarter of 2023 were $39.5 billion compared to $40.4 billion for the linked quarter and $36.3 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Commercial and industrial $ 9,852,335 $ 9,724,300 $ 8,417,174 $ 128,035 $ 1,435,161 Specialty lending 526,711 574,220 559,797 (47,509 ) (33,086 ) Commercial real estate 8,545,206 8,178,463 6,892,484 366,743 1,652,722 Consumer real estate 2,922,753 2,833,739 2,574,926 89,014 347,827 Consumer 139,384 139,705 142,348 (321 ) (2,964 ) Credit cards 477,904 485,749 438,235 (7,845 ) 39,669 Leases and other 287,174 255,425 259,298 31,749 27,876 Total loans $ 22,751,467 $ 22,191,601 $ 19,284,262 $ 559,866 $ 3,467,205 Average loans for the third quarter of 2023 increased $559.9 million, or 2.5%, on a linked-quarter basis and $3.5 billion, or 18.0%, compared to the third quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Securities available for sale: U.S. Treasury $ 786,136 $ 797,104 $ 746,429 $ (10,968 ) $ 39,707 U.S. Agencies 172,832 189,091 173,980 (16,259 ) (1,148 ) Mortgage-backed 3,611,305 3,813,234 4,363,838 (201,929 ) (752,533 ) State and political subdivisions 1,275,591 1,319,398 1,600,043 (43,807 ) (324,452 ) Corporates 345,026 349,318 381,151 (4,292 ) (36,125 ) Collateralized loan obligations 346,426 348,078 300,475 (1,652 ) 45,951 Total securities available for sale $ 6,537,316 $ 6,816,223 $ 7,565,916 $ (278,907 ) $ (1,028,600 ) Securities held to maturity: U.S. Agencies $ 123,165 $ 123,135 $ 123,048 $ 30 $ 117 Mortgage-backed 2,814,467 2,878,657 3,039,998 (64,190 ) (225,531 ) State and political subdivisions 2,828,029 2,822,218 2,621,633 5,811 206,396 Total securities held to maturity $ 5,765,661 $ 5,824,010 $ 5,784,679 $ (58,349 ) $ (19,018 ) Trading securities $ 17,327 $ 12,538 $ 5,651 $ 4,789 $ 11,676 Other securities 445,380 407,754 330,950 37,626 114,430 Total securities $ 12,765,684 $ 13,060,525 $ 13,687,196 $ (294,841 ) $ (921,512 ) Average total securities decreased 2.3% on a linked-quarter basis and decreased 6.7% compared to the third quarter of 2022. At September 30, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio was $917.8 million, or 12.7% of the $7.2 billion amortized cost value. At September 30, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity was $876.1 million, or 15.3% of the $5.7 billion amortized cost value. During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $216.5 million as of September 30, 2023 and was included in the amortized cost balance of held-to-maturity securities. At September 30, 2023, an after-tax gain of $55.9 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, all of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Deposits: Noninterest-bearing demand $ 10,014,686 $ 10,535,325 $ 12,394,251 $ (520,639 ) $ (2,379,565 ) Interest-bearing demand and savings 18,142,212 17,463,022 16,723,205 679,190 1,419,007 Time deposits 3,173,549 3,476,616 679,994 (303,067 ) 2,493,555 Total deposits $ 31,330,447 $ 31,474,963 $ 29,797,450 $ (144,516 ) $ 1,532,997 Noninterest bearing deposits as % of total 32.0 % 33.5 % 41.6 % Average deposits decreased 0.5% on a linked-quarter basis and increased 5.1% compared to the third quarter of 2022. As of September 30, 2023, the total estimated uninsured deposits were $20.7 billion, or approximately 62.0% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $14.2 billion, and represented approximately 42.6% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September 30, 2023 June 30, 2023 September 30, 2022 Total equity $ 2,806,659 $ 2,831,628 $ 2,523,545 Accumulated other comprehensive loss, net (792,371 ) (685,831 ) (759,260 ) Book value per common share 57.83 58.36 52.24 Tangible book value per common share (Non-GAAP)(i) 52.06 52.54 48.19 Regulatory capital: Common equity Tier 1 capital $ 3,357,986 $ 3,273,841 $ 3,132,209 Tier 1 capital 3,357,986 3,273,841 3,132,209 Total capital 3,955,093 3,870,101 3,679,116 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.77 % 10.65 % 11.18 % Tier 1 risk-based capital ratio 10.77 10.65 11.18 Total risk-based capital ratio 12.68 12.59 13.13 Tier 1 leverage ratio 8.55 8.16 8.66 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. At September 30, 2023, 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) Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 Net charge-offs (recoveries) - total loans $ 4,618 $ (139 ) $ 4,643 $ 2,189 $ 1,173 Net loan charge-offs (recoveries) as a % of total average loans 0.08 % (0.00 )% 0.09 % 0.04 % 0.02 % Loans over 90 days past due $ 3,044 $ 10,675 $ 1,723 $ 1,617 $ 2,513 Loans over 90 days past due as a % of total loans 0.01 % 0.05 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 17,042 $ 19,347 $ 15,480 $ 19,269 $ 19,817 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.07 % 0.09 % 0.10 % Provision for credit losses $ 4,977 $ 13,000 $ 23,250 $ 9,000 $ 22,000 Provision for credit losses for the third quarter totaled $5.0 million, a decrease of $8.0 million from the linked quarter and a decrease of $17.0 million from the third quarter of 2022. These changes are driven largely by changes in macro-economic variables in the current period as compared to the prior periods. Net charge-offs for the third quarter totaled $4.6 million, or 0.08% of average loans, compared to net recoveries of $0.1 million in the linked quarter, and net charge-offs of $1.2 million, or 0.02% of average loans, for the third quarter of 2022. On a year-to-date basis, net charge-offs totaled $9.1 million, or 0.06% of average loans, compared to $37.7 million, or 0.27% of average loans, for the same period in 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors approved a 2.6% increase in the quarterly cash dividend to $0.39 per share. The cash dividend will be payable on January 2, 2024, to shareholders of record at the close of business on December 11, 2023. Conference Call The company plans to host a conference call to discuss its third quarter 2023 earnings results on Wednesday, October 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 879142. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 3Q 2023 Conference Call A replay of the conference call may be heard through November 8, 2023, by calling (toll-free) 866-813-9403 or (international) 204-525-0658. The replay access code required for playback is 504739. 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, tangible book value per share, and operating return on average tangible equity excluding AOCI, 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, tangible book value per share, and operating return on average tangible equity excluding AOCI – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items that management does not believe reflect the company’s fundamental operating performance. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance 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 and severance 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. Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company’s average tangible shareholders’ equity exclusive of AOCI for the relevant period. 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, 2022, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) September 30, 2023 2022 ASSETS Loans $ 22,881,689 $ 19,883,573 Allowance for credit losses on loans (221,462 ) (184,913 ) Net loans 22,660,227 19,698,660 Loans held for sale 2,824 2,870 Securities: Available for sale 6,330,699 7,128,277 Held to maturity, net of allowance for credit losses 5,729,697 5,835,187 Trading securities 24,509 14,390 Other securities 473,255 333,732 Total securities 12,558,160 13,311,586 Federal funds sold and resell agreements 248,203 716,549 Interest-bearing due from banks 3,556,076 1,768,008 Cash and due from banks 454,705 371,336 Premises and equipment, net 249,037 260,685 Accrued income 208,594 153,759 Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Other assets 1,246,411 1,102,011 Total assets $ 41,464,682 $ 37,581,062 LIABILITIES Deposits: Noninterest-bearing demand $ 11,254,885 $ 13,876,929 Interest-bearing demand and savings 18,833,614 17,059,492 Time deposits under $250,000 2,834,181 365,644 Time deposits of $250,000 or more 509,072 504,323 Total deposits 33,431,752 31,806,388 Federal funds purchased and repurchase agreements 1,757,602 2,314,168 Short-term debt 2,300,000 — Long-term debt 382,768 381,543 Accrued expenses and taxes 319,283 211,465 Other liabilities 466,618 343,953 Total liabilities 38,658,023 35,057,517 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,128,239 1,120,489 Retained earnings 2,759,415 2,454,422 Accumulated other comprehensive loss, net (792,371 ) (759,260 ) Treasury stock (343,681 ) (347,163 ) Total shareholders' equity 2,806,659 2,523,545 Total liabilities and shareholders' equity $ 41,464,682 $ 37,581,062 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 INTEREST INCOME Loans $ 367,485 $ 216,970 $ 1,018,920 $ 536,359 Securities: Taxable interest 53,455 50,003 161,091 140,680 Tax-exempt interest 25,704 24,692 76,560 72,085 Total securities income 79,159 74,695 237,651 212,765 Federal funds and resell agreements 4,567 6,056 14,107 12,003 Interest-bearing due from banks 20,551 2,545 70,923 9,209 Trading securities 214 73 502 372 Total interest income 471,976 300,339 1,342,103 770,708 INTEREST EXPENSE Deposits 191,919 48,457 490,368 70,069 Federal funds and repurchase agreements 23,076 14,709 71,123 21,855 Other 34,694 3,688 91,018 10,153 Total interest expense 249,689 66,854 652,509 102,077 Net interest income 222,287 233,485 689,594 668,631 Provision for credit losses 4,977 22,000 41,227 28,900 Net interest income after provision for credit losses 217,310 211,485 648,367 639,731 NONINTEREST INCOME Trust and securities processing 66,668 59,586 190,616 178,000 Trading and investment banking 3,771 5,387 13,879 17,950 Service charges on deposit accounts 21,080 19,932 63,620 65,409 Insurance fees and commissions 272 375 771 879 Brokerage fees 13,400 13,840 40,680 29,687 Bankcard fees 19,296 19,379 56,047 53,854 Investment securities gains (losses), net 271 (1,345 ) (4,153 ) 58,853 Other 8,559 11,569 40,139 24,104 Total noninterest income 133,317 128,723 401,599 428,736 NONINTEREST EXPENSE Salaries and employee benefits 133,380 136,467 419,190 388,491 Occupancy, net 12,283 12,231 36,206 36,439 Equipment 17,204 18,811 52,139 55,290 Supplies and services 3,213 3,139 11,283 9,893 Marketing and business development 6,631 6,671 19,090 16,911 Processing fees 26,016 20,901 75,828 58,682 Legal and consulting 7,230 10,255 21,574 28,431 Bankcard 8,852 6,551 24,292 18,998 Amortization of other intangible assets 2,124 1,092 6,539 3,388 Regulatory fees 6,153 4,200 17,827 11,146 Other 8,355 11,078 25,198 32,632 Total noninterest expense 231,441 231,396 709,166 660,301 Income before income taxes 119,186 108,812 340,800 408,166 Income tax expense 22,632 20,822 61,699 76,657 NET INCOME $ 96,554 $ 87,990 $ 279,101 $ 331,509 PER SHARE DATA Net income – basic $ 1.99 $ 1.82 $ 5.76 $ 6.86 Net income – diluted 1.98 1.81 5.73 6.80 Dividends 0.38 0.37 1.14 1.11 Weighted average shares outstanding – basic 48,525,776 48,300,129 48,492,022 48,351,007 Weighted average shares outstanding – diluted 48,762,696 48,648,804 48,737,065 48,723,572 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 96,554 $ 87,990 $ 279,101 $ 331,509 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (151,753 ) (271,079 ) (145,601 ) (1,202,341 ) Less: Reclassification adjustment for net (gains) losses included in net income (154 ) — 279 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 10,268 12,587 30,563 25,708 Change in unrealized gains and losses on debt securities (141,639 ) (258,492 ) (114,759 ) (1,176,633 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 3,927 3,321 4,248 12,438 Less: Reclassification adjustment for net gains included in net income (2,844 ) (1,470 ) (8,065 ) (3,411 ) Change in unrealized gains and losses on derivative hedges 1,083 1,851 (3,817 ) 9,027 Other comprehensive loss, before tax (140,556 ) (256,641 ) (118,576 ) (1,167,606 ) Income tax benefit 34,016 62,184 28,940 282,032 Other comprehensive loss (106,540 ) (194,457 ) (89,636 ) (885,574 ) Comprehensive (loss) income $ (9,986 ) $ (106,467 ) $ 189,465 $ (554,065 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 331,509 (885,574 ) — (554,065 ) Dividends ($1.11 per share) — — (54,085 ) — — (54,085 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 16,062 — — — 16,062 Sale of treasury stock — 257 — — 172 429 Exercise of stock options — 280 — — 627 907 Balance - September 30, 2022 $ 55,057 $ 1,120,489 $ 2,454,422 $ (759,260 ) $ (347,163 ) $ 2,523,545 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income (loss) — — 279,101 (89,636 ) — 189,465 Dividends ($1.14 per share) — — (55,772 ) — — (55,772 ) Purchase of treasury stock — — — — (8,096 ) (8,096 ) Issuances of equity awards, net of forfeitures — (10,115 ) — — 10,834 719 Recognition of equity-based compensation — 11,983 — — — 11,983 Sale of treasury stock — 167 — — 216 383 Exercise of stock options — 255 — — 629 884 Balance - September 30, 2023 $ 55,057 $ 1,128,239 $ 2,759,415 $ (792,371 ) $ (343,681 ) $ 2,806,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,751,467 6.41 % $ 19,284,262 4.46 % Securities: Taxable 8,964,467 2.37 9,796,212 2.03 Tax-exempt 3,783,890 3.37 3,885,333 3.18 Total securities 12,748,357 2.66 13,681,545 2.35 Federal funds and resell agreements 303,864 5.96 848,844 2.83 Interest bearing due from banks 1,548,867 5.26 632,595 1.60 Trading securities 17,327 5.31 5,651 5.69 Total earning assets 37,369,882 5.08 34,452,897 3.53 Allowance for credit losses (227,878 ) (167,939 ) Other assets 2,381,496 2,025,193 Total assets $ 39,523,500 $ 36,310,151 Liabilities and Shareholders' Equity Interest-bearing deposits $ 21,315,761 3.57 % $ 17,403,199 1.10 % Federal funds and repurchase agreements 2,027,382 4.52 3,055,164 1.91 Borrowed funds 2,605,897 5.28 294,739 4.96 Total interest-bearing liabilities 25,949,040 3.82 20,753,102 1.28 Noninterest-bearing demand deposits 10,014,686 12,394,251 Other liabilities 667,920 456,992 Shareholders' equity 2,891,854 2,705,806 Total liabilities and shareholders' equity $ 39,523,500 $ 36,310,151 Net interest spread 1.26 % 2.25 % Net interest margin 2.43 2.76 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Nine Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,076,977 6.17 % $ 18,328,139 3.91 % Securities: Taxable 9,179,230 2.35 9,695,499 1.94 Tax-exempt 3,816,122 3.36 3,912,590 3.11 Total securities 12,995,352 2.64 13,608,089 2.28 Federal funds and resell agreements 343,297 5.49 1,070,319 1.50 Interest bearing due from banks 1,935,029 4.90 2,841,510 0.43 Trading securities 13,071 5.56 12,170 4.86 Total earning assets 37,363,726 4.87 35,860,227 2.94 Allowance for credit losses (213,744 ) (182,647 ) Other assets 2,322,171 1,988,189 Total assets $ 39,472,153 $ 37,665,769 Liabilities and Shareholders' Equity Interest-bearing deposits $ 20,638,982 3.18 % $ 17,775,016 0.53 % Federal funds and repurchase agreements 2,273,826 4.18 2,896,021 1.01 Borrowed funds 2,319,652 5.25 279,659 4.85 Total interest-bearing liabilities 25,232,460 3.46 20,950,696 0.65 Noninterest-bearing demand deposits 10,816,120 13,537,023 Other liabilities 591,919 416,492 Shareholders' equity 2,831,654 2,761,558 Total liabilities and shareholders' equity $ 39,472,153 $ 37,665,769 Net interest spread 1.41 % 2.29 % Net interest margin 2.54 2.56 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 148,666 $ 43,133 $ 30,488 $ 222,287 Provision for credit losses 3,010 423 1,544 4,977 Noninterest income 23,091 86,521 23,705 133,317 Noninterest expense 81,767 87,502 62,172 231,441 Income (loss) before taxes 86,980 41,729 (9,523 ) 119,186 Income tax expense (benefit) 16,311 7,866 (1,545 ) 22,632 Net income (loss) $ 70,669 $ 33,863 $ (7,978 ) $ 96,554 Three Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 150,080 $ 43,382 40,023 $ 233,485 Provision for credit losses 20,156 162 1,682 22,000 Noninterest income 16,785 89,386 22,552 128,723 Noninterest expense 87,120 82,073 62,203 231,396 Income (loss) before taxes 59,589 50,533 (1,310 ) 108,812 Income tax expense 12,859 7,735 228 20,822 Net income (loss) $ 46,730 $ 42,798 $ (1,538 ) $ 87,990 Nine Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,083 $ 148,615 $ 96,896 $ 689,594 Provision for credit losses 35,110 754 5,363 41,227 Noninterest income 71,658 257,573 72,368 401,599 Noninterest expense 251,667 268,464 189,035 709,166 Income (loss) before taxes 228,964 136,970 (25,134 ) 340,800 Income tax expense (benefit) 41,114 24,558 (3,973 ) 61,699 Net income (loss) $ 187,850 $ 112,412 $ (21,161 ) $ 279,101 Nine Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,176 $ 104,615 $ 119,840 $ 668,631 Provision for credit losses 25,183 402 3,315 28,900 Noninterest income 100,379 243,740 84,617 428,736 Noninterest expense 246,230 234,185 179,886 660,301 Income before taxes 273,142 113,768 21,256 408,166 Income tax expense 52,001 22,353 2,303 76,657 Net income $ 221,141 $ 91,415 $ 18,953 $ 331,509 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 September 30, 2023. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (GAAP) $ 96,554 $ 87,990 $ 279,101 $ 331,509 Adjustments: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Tax-impact of adjustments (i) (583 ) (85 ) (1,887 ) (132 ) Total Non-GAAP adjustments (net of tax) 1,846 269 5,976 419 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Earnings per share - diluted (GAAP) $ 1.98 $ 1.81 $ 5.73 $ 6.80 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Tax-impact of adjustments (i) (0.01 ) — (0.04 ) — Operating earnings per share - diluted (Non-GAAP) $ 2.02 $ 1.82 $ 5.85 $ 6.81 GAAP Return on average assets 0.97 % 0.96 % 0.95 % 1.18 % Return on average equity 13.25 12.90 13.18 16.05 Non-GAAP Operating return on average assets 0.99 % 0.96 % 0.97 % 1.18 % Operating return on average equity 13.50 12.94 13.46 16.07 (i) Calculated using the company’s marginal tax rate of 24.0%. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments (pre-tax) 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) $ 229,012 $ 231,042 $ 701,303 $ 659,750 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 229,317 $ 230,304 $ 702,627 $ 656,913 Operating noninterest expense $ 229,012 $ 231,042 $ 701,303 $ 659,750 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 226,888 $ 229,950 $ 694,764 $ 656,362 Net interest income $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income 133,317 128,723 401,599 428,736 Less: Gains on sales of securities available for sale, net 154 — 152 — Total Non-GAAP Revenue (denominator A) $ 355,450 $ 362,208 $ 1,091,041 $ 1,097,367 Efficiency ratio (numerator A/denominator A) 64.51 % 63.58 % 64.40 % 59.86 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.83 63.49 63.68 59.81 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income (Non-GAAP) $ 126,592 $ 131,166 $ 389,890 $ 437,617 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.60 $ 2.70 $ 8.00 $ 8.98 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,559 6,454 19,689 19,131 Net interest income - FTE (Non-GAAP) 228,846 239,939 709,283 687,762 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 133,151 $ 137,620 $ 409,579 $ 456,748 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Tax equivalent interest 0.13 0.13 0.40 0.39 Net interest income - FTE (Non-GAAP) 4.69 4.93 14.55 14.11 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.73 $ 2.83 $ 8.40 $ 9.37 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of September 30, 2023 2022 Total shareholders' equity (GAAP) $ 2,806,659 $ 2,523,545 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Total intangibles, net 280,445 195,598 Total tangible shareholders' equity (Non-GAAP) $ 2,526,214 $ 2,327,947 Total shares outstanding 48,529,097 48,309,638 Ratio of total shareholders' equity (book value) per share $ 57.83 $ 52.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.06 48.19 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Average total shareholders' equity (GAAP) $ 2,891,854 $ 2,705,806 $ 2,831,654 $ 2,761,558 Less: Average intangible assets Average goodwill 207,385 182,225 207,385 179,741 Average other intangibles, net 74,444 14,061 75,892 14,476 Average total intangibles, net 281,829 196,286 283,277 194,216 Average total tangible shareholders' equity (Non-GAAP) 2,610,025 2,509,520 2,548,377 2,567,342 Less: Average accumulated other comprehensive loss (AOCI) (706,062 ) (576,947 ) (664,770 ) (405,343 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,316,087 $ 3,086,467 $ 3,213,147 $ 2,972,685 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Non-GAAP Operating return on average tangible equity excluding AOCI 11.77 % 11.34 % 11.86 % 14.93 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231018691354/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106
Third Quarter 2023 Financial Highlights GAAP net income of $96.6 million, or $1.98 per diluted share. Net operating income(i) of $98.4 million, or $2.02 per diluted share. Average loans increased 10.1% on a linked-quarter, annualized basis, to $22.8 billion, or an 18.0% increase as compared to the third quarter of 2022. Deposit balances at September 30, 2023 totaled $33.4 billion, up from $31.8 billion at September 30, 2022, and consistent with June 30, 2023 balances. Average deposit balances of $31.3 billion, increased 5.1% as compared to the third quarter of 2022. Net interest margin of 2.43%, consistent with the linked quarter. Credit quality remained strong, with net charge-offs of just 0.08% of total loans and non-performing loans representing 0.07% of total loans, compared to 0.09% as of June 30, 2023.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the third quarter of 2023 of $96.6 million, or $1.98 per diluted share, compared to $90.1 million, or $1.85 per diluted share, in the second quarter of 2023 (linked quarter) and $88.0 million, or $1.81 per diluted share, in the third quarter of 2022. Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $98.4 million, or $2.02 per diluted share, for the third quarter of 2023, compared to $93.8 million, or $1.93 per diluted share, for the linked quarter and $88.3 million, or $1.82 per diluted share, for the third quarter of 2022. 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 $126.6 million, or $2.60 per diluted share, for the third quarter of 2023, compared to $127.9 million, or $2.63 per diluted share, for the linked quarter, and $131.2 million, or $2.70 per diluted share, for the third quarter of 2022. These operating PTPP results represent decreases of 1.0% on a linked-quarter basis and 3.5%, compared to the third quarter of 2022. “Our third quarter results demonstrated strong loan growth, stable deposits, continued momentum in many of our fee generating businesses, and solid asset quality,” said Mariner Kemper, chairman, president and chief executive officer. “Average loan balances increased more than 10% on a linked-quarter, annualized basis, driven primarily by construction draws and commercial & industrial loan growth. While net interest income for the industry continues to be impacted by higher interest costs paid to deposit clients, our net interest margin in the third quarter was essentially flat on a linked-quarter basis. Our loan portfolio, predominantly indexed to short-term interest rates, continues to reprice in the current interest rate environment as evidenced by the 21 basis points increase in loan yields as compared to the second quarter. Client sentiment remains cautiously optimistic amidst an uncertain geopolitical and interest rate environment. At UMB, our overall portfolio health remains solid as evidenced by a low loan loss ratio of just 0.08% of average loans and nonperforming loans comprising just 0.07% of total loans.” (i) A non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure. Third Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q3 Q2 Q3 2023 2023 2022 Net income (GAAP) $ 96,554 $ 90,110 $ 87,990 Earnings per share (diluted) 1.98 1.85 1.81 Operating pre-tax, pre-provision income (Non-GAAP)(i) 126,592 127,929 131,166 Operating pre-tax, pre-provision earnings per share (diluted) 2.60 2.63 2.70 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 133,151 134,504 137,620 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.73 2.77 2.83 Net operating income (Non-GAAP)(i) 98,400 93,841 88,259 Operating earnings per share (diluted) 2.02 1.93 1.82 GAAP Return on average assets 0.97 % 0.90 % 0.96 % Return on average equity 13.25 12.56 12.90 Efficiency ratio 64.51 65.59 63.58 Non-GAAP (i) Operating return on average assets 0.99 % 0.93 % 0.96 % Operating return on average equity 13.50 13.08 12.94 Operating return on average tangible equity excluding AOCI 11.77 11.63 11.34 Operating efficiency ratio 63.83 64.24 63.49 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of year-to-date financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September September YTD YTD 2023 2022 Net income (GAAP) $ 279,101 $ 331,509 Earnings per share (diluted) 5.73 6.80 Operating pre-tax, pre-provision income (Non-GAAP)(i) 389,890 437,617 Operating pre-tax, pre-provision earnings per share (diluted) 8.00 8.98 Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i) 409,579 456,748 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 8.40 9.37 Net operating income (Non-GAAP)(i) 285,077 331,928 Operating earnings per share (diluted) 5.85 6.81 GAAP Return on average assets 0.95 % 1.18 % Return on average equity 13.18 16.05 Efficiency ratio 64.40 59.86 Non-GAAP (i) Operating return on average assets 0.97 % 1.18 % Operating return on average equity 13.46 16.07 Operating return on average tangible equity excluding AOCI 11.86 14.93 Operating efficiency ratio 63.68 59.81 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Net interest income $ 222,287 $ 225,611 $ 233,485 $ (3,324 ) $ (11,198 ) Noninterest income: Trust and securities processing 66,668 61,589 59,586 5,079 7,082 Trading and investment banking 3,771 4,800 5,387 (1,029 ) (1,616 ) Service charges on deposit accounts 21,080 21,381 19,932 (301 ) 1,148 Insurance fees and commissions 272 225 375 47 (103 ) Brokerage fees 13,400 13,604 13,840 (204 ) (440 ) Bankcard fees 19,296 18,579 19,379 717 (83 ) Investment securities gains (losses), net 271 900 (1,345 ) (629 ) 1,616 Other 8,559 17,004 11,569 (8,445 ) (3,010 ) Total noninterest income $ 133,317 $ 138,082 $ 128,723 $ (4,765 ) $ 4,594 Total revenue $ 355,604 $ 363,693 $ 362,208 $ (8,089 ) $ (6,604 ) Net interest income (FTE) $ 228,846 $ 232,186 $ 239,939 Net interest margin (FTE) 2.43 % 2.44 % 2.76 % Total noninterest income as a % of total revenue 37.5 38.0 35.5 Net interest income Third quarter 2023 net interest income totaled $222.3 million, a decrease of $3.3 million, or 1.5%, from the linked quarter, driven by higher interest expense due primarily to unfavorable mix shift in the composition of liabilities, combined with the impact of higher short-term interest rates. This decrease was partially offset by continued growth in average loans, coupled with increased loan yields. Average earning assets decreased $866.4 million, or 2.3%, from the linked quarter, largely driven by decreases of $1.2 billion in interest-bearing due from banks and $299.6 million in average securities, partially offset by an increase of $559.9 million in average loans. Average interest-bearing liabilities decreased $464.8 million, or 1.8%, from the linked quarter, primarily driven by decreases of $531.4 million in borrowed funds, mostly short-term borrowings, and $309.5 million in federal funds and repurchase agreements. These decreases were partially offset by an increase of $376.1 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $520.6 million, or 4.9%, as compared to the linked quarter. Net interest margin for the third quarter was 2.43%, a decrease of one basis point from the linked quarter, driven by increased cost and mix of interest-bearing liabilities, partially offset by improved loan yields, the benefit of free funds, and earning asset mix changes. The cost of interest-bearing liabilities increased 24 basis points to 3.82%. Total cost of funds increased 19 basis points from the linked quarter to 2.75%. Average loan yields increased 21 basis points while earning asset yields increased 17 basis points from the linked quarter. On a year-over-year basis, net interest income decreased $11.2 million, or 4.8%, driven by higher interest expense primarily due to unfavorable mix shift in the composition of liabilities, as well as the impact of higher short-term interest rates. This decrease was partially offset by a $3.5 billion, or 18.0%, increase in average loans. Compared to the third quarter of 2022, average earning assets increased $2.9 billion, or 8.5%, largely driven by the increase in average loans noted above, partially offset by a decrease of $933.2 million in average securities. Average deposits increased 5.1% compared to the third quarter of 2022. Average noninterest-bearing demand deposit balances decreased 19.2% compared to the third quarter of 2022, driven by migration to rate-bearing deposit categories, as expected in a higher interest rate environment. Average demand deposit balances comprised 32.0% of total deposits, compared to 33.5% in the linked quarter and 41.6% in the third quarter of 2022. Average borrowed funds decreased $531.4 million as compared to the linked quarter and increased $2.3 billion as compared to the third quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income Third quarter 2023 noninterest income decreased $4.8 million, or 3.5%, on a linked-quarter basis, largely due to: A decrease of $8.4 million in other income, primarily related to a $4.0 million gain on sale of other assets recorded in the second quarter, coupled with decreases of $3.5 million in company-owned life insurance income and $0.9 million in derivative income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. A decrease of $1.0 million in trading and investment banking due to decreased trading volume. These decreases were partially offset by increases of $3.2 million in fund services income, $1.3 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. Compared to the prior year, noninterest income in the third quarter of 2023 increased $4.6 million, or 3.6%, primarily driven by: Increases of $4.1 million in fund services income, $2.4 million in corporate trust income, and $0.6 million in trust servicing income, all recorded in trust and securities processing. An increase of $1.6 million in investment securities gains, primarily driven by increased valuations in the company's marketable securities. An increase of $0.5 million in bank-owned life insurance income, recorded in other income. These increases were partially offset by decreases of $2.7 million in company-owned life insurance income and $1.3 million in derivative income, both recorded in other income. The decrease in company-owned life insurance was offset by a proportionate decrease in deferred compensation expense as noted below. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Salaries and employee benefits $ 133,380 $ 143,312 $ 136,467 $ (9,932 ) $ (3,087 ) Occupancy, net 12,283 11,746 12,231 537 52 Equipment 17,204 17,086 18,811 118 (1,607 ) Supplies and services 3,213 4,195 3,139 (982 ) 74 Marketing and business development 6,631 7,124 6,671 (493 ) (40 ) Processing fees 26,016 26,572 20,901 (556 ) 5,115 Legal and consulting 7,230 7,059 10,255 171 (3,025 ) Bankcard 8,852 8,307 6,551 545 2,301 Amortization of other intangible assets 2,124 2,117 1,092 7 1,032 Regulatory fees 6,153 6,123 4,200 30 1,953 Other 8,355 7,032 11,078 1,323 (2,723 ) Total noninterest expense $ 231,441 $ 240,673 $ 231,396 $ (9,232 ) $ 45 Noninterest expense for the third quarter of 2023 was $231.4 million, a decrease of $9.2 million, or 3.8%, from the linked quarter and an increase of $0.1 million from the third quarter of 2022. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $229.0 million for the third quarter of 2023, a decrease of $6.8 million, or 2.9%, from the linked quarter and a decrease of $2.0 million, or 0.9%, from the third quarter of 2022. The linked-quarter decrease in GAAP noninterest expense was driven by: A decrease of $9.9 million in salaries and employee benefits expense driven by decreases of $5.3 million in employee benefits expense and $4.6 million in salaries and bonus expense. The decrease in employee benefits was driven by a decrease in deferred compensation expense of $2.8 million and a decrease of $1.3 million in other employee benefits. The decrease in salaries and bonus expense was due to a decrease of $2.5 million in severance expense and a decrease of $1.6 million in salary and wage expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. These decreases were partially offset by an increase of $1.3 million in operational losses as compared to the linked quarter. The year-over-year increase in GAAP noninterest expense was driven by: An increase of $5.1 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. This increase was partially offset by the following decreases: A decrease of $3.1 million in salaries and employee benefits expense, driven primarily by decreases of $1.6 million in salaries and bonus expense and $1.5 million in employee benefits expense. The decrease in salaries and wage expense is primarily due to a decrease in bonus and commission expense. The decrease in employee benefits expense is due to a decrease of $1.9 million in deferred compensation plan expense. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. A decrease of $3.0 million in legal and consulting expense due to the timing of multiple projects. Income taxes The company’s effective tax rate was 18.1% for the nine months ended September 30, 2023, compared to 18.8% for the same period in 2022. The decrease in the effective tax rate in 2023 is primarily attributable to a larger portion of income being earned from tax-exempt municipal securities. Balance sheet Average total assets for the third quarter of 2023 were $39.5 billion compared to $40.4 billion for the linked quarter and $36.3 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Commercial and industrial $ 9,852,335 $ 9,724,300 $ 8,417,174 $ 128,035 $ 1,435,161 Specialty lending 526,711 574,220 559,797 (47,509 ) (33,086 ) Commercial real estate 8,545,206 8,178,463 6,892,484 366,743 1,652,722 Consumer real estate 2,922,753 2,833,739 2,574,926 89,014 347,827 Consumer 139,384 139,705 142,348 (321 ) (2,964 ) Credit cards 477,904 485,749 438,235 (7,845 ) 39,669 Leases and other 287,174 255,425 259,298 31,749 27,876 Total loans $ 22,751,467 $ 22,191,601 $ 19,284,262 $ 559,866 $ 3,467,205 Average loans for the third quarter of 2023 increased $559.9 million, or 2.5%, on a linked-quarter basis and $3.5 billion, or 18.0%, compared to the third quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Securities available for sale: U.S. Treasury $ 786,136 $ 797,104 $ 746,429 $ (10,968 ) $ 39,707 U.S. Agencies 172,832 189,091 173,980 (16,259 ) (1,148 ) Mortgage-backed 3,611,305 3,813,234 4,363,838 (201,929 ) (752,533 ) State and political subdivisions 1,275,591 1,319,398 1,600,043 (43,807 ) (324,452 ) Corporates 345,026 349,318 381,151 (4,292 ) (36,125 ) Collateralized loan obligations 346,426 348,078 300,475 (1,652 ) 45,951 Total securities available for sale $ 6,537,316 $ 6,816,223 $ 7,565,916 $ (278,907 ) $ (1,028,600 ) Securities held to maturity: U.S. Agencies $ 123,165 $ 123,135 $ 123,048 $ 30 $ 117 Mortgage-backed 2,814,467 2,878,657 3,039,998 (64,190 ) (225,531 ) State and political subdivisions 2,828,029 2,822,218 2,621,633 5,811 206,396 Total securities held to maturity $ 5,765,661 $ 5,824,010 $ 5,784,679 $ (58,349 ) $ (19,018 ) Trading securities $ 17,327 $ 12,538 $ 5,651 $ 4,789 $ 11,676 Other securities 445,380 407,754 330,950 37,626 114,430 Total securities $ 12,765,684 $ 13,060,525 $ 13,687,196 $ (294,841 ) $ (921,512 ) Average total securities decreased 2.3% on a linked-quarter basis and decreased 6.7% compared to the third quarter of 2022. At September 30, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio was $917.8 million, or 12.7% of the $7.2 billion amortized cost value. At September 30, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity was $876.1 million, or 15.3% of the $5.7 billion amortized cost value. During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $216.5 million as of September 30, 2023 and was included in the amortized cost balance of held-to-maturity securities. At September 30, 2023, an after-tax gain of $55.9 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, all of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds. Summary of average deposits - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q3 Q2 Q3 CQ vs. CQ vs. 2023 2023 2022 LQ PY Deposits: Noninterest-bearing demand $ 10,014,686 $ 10,535,325 $ 12,394,251 $ (520,639 ) $ (2,379,565 ) Interest-bearing demand and savings 18,142,212 17,463,022 16,723,205 679,190 1,419,007 Time deposits 3,173,549 3,476,616 679,994 (303,067 ) 2,493,555 Total deposits $ 31,330,447 $ 31,474,963 $ 29,797,450 $ (144,516 ) $ 1,532,997 Noninterest bearing deposits as % of total 32.0 % 33.5 % 41.6 % Average deposits decreased 0.5% on a linked-quarter basis and increased 5.1% compared to the third quarter of 2022. As of September 30, 2023, the total estimated uninsured deposits were $20.7 billion, or approximately 62.0% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $14.2 billion, and represented approximately 42.6% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) September 30, 2023 June 30, 2023 September 30, 2022 Total equity $ 2,806,659 $ 2,831,628 $ 2,523,545 Accumulated other comprehensive loss, net (792,371 ) (685,831 ) (759,260 ) Book value per common share 57.83 58.36 52.24 Tangible book value per common share (Non-GAAP)(i) 52.06 52.54 48.19 Regulatory capital: Common equity Tier 1 capital $ 3,357,986 $ 3,273,841 $ 3,132,209 Tier 1 capital 3,357,986 3,273,841 3,132,209 Total capital 3,955,093 3,870,101 3,679,116 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.77 % 10.65 % 11.18 % Tier 1 risk-based capital ratio 10.77 10.65 11.18 Total risk-based capital ratio 12.68 12.59 13.13 Tier 1 leverage ratio 8.55 8.16 8.66 (i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release. At September 30, 2023, 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) Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 Net charge-offs (recoveries) - total loans $ 4,618 $ (139 ) $ 4,643 $ 2,189 $ 1,173 Net loan charge-offs (recoveries) as a % of total average loans 0.08 % (0.00 )% 0.09 % 0.04 % 0.02 % Loans over 90 days past due $ 3,044 $ 10,675 $ 1,723 $ 1,617 $ 2,513 Loans over 90 days past due as a % of total loans 0.01 % 0.05 % 0.01 % 0.01 % 0.01 % Nonaccrual and restructured loans $ 17,042 $ 19,347 $ 15,480 $ 19,269 $ 19,817 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.07 % 0.09 % 0.10 % Provision for credit losses $ 4,977 $ 13,000 $ 23,250 $ 9,000 $ 22,000 Provision for credit losses for the third quarter totaled $5.0 million, a decrease of $8.0 million from the linked quarter and a decrease of $17.0 million from the third quarter of 2022. These changes are driven largely by changes in macro-economic variables in the current period as compared to the prior periods. Net charge-offs for the third quarter totaled $4.6 million, or 0.08% of average loans, compared to net recoveries of $0.1 million in the linked quarter, and net charge-offs of $1.2 million, or 0.02% of average loans, for the third quarter of 2022. On a year-to-date basis, net charge-offs totaled $9.1 million, or 0.06% of average loans, compared to $37.7 million, or 0.27% of average loans, for the same period in 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors approved a 2.6% increase in the quarterly cash dividend to $0.39 per share. The cash dividend will be payable on January 2, 2024, to shareholders of record at the close of business on December 11, 2023. Conference Call The company plans to host a conference call to discuss its third quarter 2023 earnings results on Wednesday, October 25, 2023, at 8:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 879142. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 3Q 2023 Conference Call A replay of the conference call may be heard through November 8, 2023, by calling (toll-free) 866-813-9403 or (international) 204-525-0658. The replay access code required for playback is 504739. 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, tangible book value per share, and operating return on average tangible equity excluding AOCI, 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, tangible book value per share, and operating return on average tangible equity excluding AOCI – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items that management does not believe reflect the company’s fundamental operating performance. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, and the cumulative tax impact of these adjustments. Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net). Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance 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 and severance 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. Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company’s average tangible shareholders’ equity exclusive of AOCI for the relevant period. 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, 2022, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. About UMB: UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn. Consolidated Balance Sheets UMB Financial Corporation (unaudited, dollars in thousands) September 30, 2023 2022 ASSETS Loans $ 22,881,689 $ 19,883,573 Allowance for credit losses on loans (221,462 ) (184,913 ) Net loans 22,660,227 19,698,660 Loans held for sale 2,824 2,870 Securities: Available for sale 6,330,699 7,128,277 Held to maturity, net of allowance for credit losses 5,729,697 5,835,187 Trading securities 24,509 14,390 Other securities 473,255 333,732 Total securities 12,558,160 13,311,586 Federal funds sold and resell agreements 248,203 716,549 Interest-bearing due from banks 3,556,076 1,768,008 Cash and due from banks 454,705 371,336 Premises and equipment, net 249,037 260,685 Accrued income 208,594 153,759 Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Other assets 1,246,411 1,102,011 Total assets $ 41,464,682 $ 37,581,062 LIABILITIES Deposits: Noninterest-bearing demand $ 11,254,885 $ 13,876,929 Interest-bearing demand and savings 18,833,614 17,059,492 Time deposits under $250,000 2,834,181 365,644 Time deposits of $250,000 or more 509,072 504,323 Total deposits 33,431,752 31,806,388 Federal funds purchased and repurchase agreements 1,757,602 2,314,168 Short-term debt 2,300,000 — Long-term debt 382,768 381,543 Accrued expenses and taxes 319,283 211,465 Other liabilities 466,618 343,953 Total liabilities 38,658,023 35,057,517 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,128,239 1,120,489 Retained earnings 2,759,415 2,454,422 Accumulated other comprehensive loss, net (792,371 ) (759,260 ) Treasury stock (343,681 ) (347,163 ) Total shareholders' equity 2,806,659 2,523,545 Total liabilities and shareholders' equity $ 41,464,682 $ 37,581,062 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 INTEREST INCOME Loans $ 367,485 $ 216,970 $ 1,018,920 $ 536,359 Securities: Taxable interest 53,455 50,003 161,091 140,680 Tax-exempt interest 25,704 24,692 76,560 72,085 Total securities income 79,159 74,695 237,651 212,765 Federal funds and resell agreements 4,567 6,056 14,107 12,003 Interest-bearing due from banks 20,551 2,545 70,923 9,209 Trading securities 214 73 502 372 Total interest income 471,976 300,339 1,342,103 770,708 INTEREST EXPENSE Deposits 191,919 48,457 490,368 70,069 Federal funds and repurchase agreements 23,076 14,709 71,123 21,855 Other 34,694 3,688 91,018 10,153 Total interest expense 249,689 66,854 652,509 102,077 Net interest income 222,287 233,485 689,594 668,631 Provision for credit losses 4,977 22,000 41,227 28,900 Net interest income after provision for credit losses 217,310 211,485 648,367 639,731 NONINTEREST INCOME Trust and securities processing 66,668 59,586 190,616 178,000 Trading and investment banking 3,771 5,387 13,879 17,950 Service charges on deposit accounts 21,080 19,932 63,620 65,409 Insurance fees and commissions 272 375 771 879 Brokerage fees 13,400 13,840 40,680 29,687 Bankcard fees 19,296 19,379 56,047 53,854 Investment securities gains (losses), net 271 (1,345 ) (4,153 ) 58,853 Other 8,559 11,569 40,139 24,104 Total noninterest income 133,317 128,723 401,599 428,736 NONINTEREST EXPENSE Salaries and employee benefits 133,380 136,467 419,190 388,491 Occupancy, net 12,283 12,231 36,206 36,439 Equipment 17,204 18,811 52,139 55,290 Supplies and services 3,213 3,139 11,283 9,893 Marketing and business development 6,631 6,671 19,090 16,911 Processing fees 26,016 20,901 75,828 58,682 Legal and consulting 7,230 10,255 21,574 28,431 Bankcard 8,852 6,551 24,292 18,998 Amortization of other intangible assets 2,124 1,092 6,539 3,388 Regulatory fees 6,153 4,200 17,827 11,146 Other 8,355 11,078 25,198 32,632 Total noninterest expense 231,441 231,396 709,166 660,301 Income before income taxes 119,186 108,812 340,800 408,166 Income tax expense 22,632 20,822 61,699 76,657 NET INCOME $ 96,554 $ 87,990 $ 279,101 $ 331,509 PER SHARE DATA Net income – basic $ 1.99 $ 1.82 $ 5.76 $ 6.86 Net income – diluted 1.98 1.81 5.73 6.80 Dividends 0.38 0.37 1.14 1.11 Weighted average shares outstanding – basic 48,525,776 48,300,129 48,492,022 48,351,007 Weighted average shares outstanding – diluted 48,762,696 48,648,804 48,737,065 48,723,572 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 96,554 $ 87,990 $ 279,101 $ 331,509 Other comprehensive loss, before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net (151,753 ) (271,079 ) (145,601 ) (1,202,341 ) Less: Reclassification adjustment for net (gains) losses included in net income (154 ) — 279 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 10,268 12,587 30,563 25,708 Change in unrealized gains and losses on debt securities (141,639 ) (258,492 ) (114,759 ) (1,176,633 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net 3,927 3,321 4,248 12,438 Less: Reclassification adjustment for net gains included in net income (2,844 ) (1,470 ) (8,065 ) (3,411 ) Change in unrealized gains and losses on derivative hedges 1,083 1,851 (3,817 ) 9,027 Other comprehensive loss, before tax (140,556 ) (256,641 ) (118,576 ) (1,167,606 ) Income tax benefit 34,016 62,184 28,940 282,032 Other comprehensive loss (106,540 ) (194,457 ) (89,636 ) (885,574 ) Comprehensive (loss) income $ (9,986 ) $ (106,467 ) $ 189,465 $ (554,065 ) Consolidated Statements of Shareholders' Equity UMB Financial Corporation (unaudited, dollars in thousands except per share data) Common Stock Capital Surplus Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Balance - January 1, 2022 $ 55,057 $ 1,110,520 $ 2,176,998 $ 126,314 $ (323,465 ) $ 3,145,424 Total comprehensive income (loss) — — 331,509 (885,574 ) — (554,065 ) Dividends ($1.11 per share) — — (54,085 ) — — (54,085 ) Purchase of treasury stock — — — — (31,806 ) (31,806 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 16,062 — — — 16,062 Sale of treasury stock — 257 — — 172 429 Exercise of stock options — 280 — — 627 907 Balance - September 30, 2022 $ 55,057 $ 1,120,489 $ 2,454,422 $ (759,260 ) $ (347,163 ) $ 2,523,545 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income (loss) — — 279,101 (89,636 ) — 189,465 Dividends ($1.14 per share) — — (55,772 ) — — (55,772 ) Purchase of treasury stock — — — — (8,096 ) (8,096 ) Issuances of equity awards, net of forfeitures — (10,115 ) — — 10,834 719 Recognition of equity-based compensation — 11,983 — — — 11,983 Sale of treasury stock — 167 — — 216 383 Exercise of stock options — 255 — — 629 884 Balance - September 30, 2023 $ 55,057 $ 1,128,239 $ 2,759,415 $ (792,371 ) $ (343,681 ) $ 2,806,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,751,467 6.41 % $ 19,284,262 4.46 % Securities: Taxable 8,964,467 2.37 9,796,212 2.03 Tax-exempt 3,783,890 3.37 3,885,333 3.18 Total securities 12,748,357 2.66 13,681,545 2.35 Federal funds and resell agreements 303,864 5.96 848,844 2.83 Interest bearing due from banks 1,548,867 5.26 632,595 1.60 Trading securities 17,327 5.31 5,651 5.69 Total earning assets 37,369,882 5.08 34,452,897 3.53 Allowance for credit losses (227,878 ) (167,939 ) Other assets 2,381,496 2,025,193 Total assets $ 39,523,500 $ 36,310,151 Liabilities and Shareholders' Equity Interest-bearing deposits $ 21,315,761 3.57 % $ 17,403,199 1.10 % Federal funds and repurchase agreements 2,027,382 4.52 3,055,164 1.91 Borrowed funds 2,605,897 5.28 294,739 4.96 Total interest-bearing liabilities 25,949,040 3.82 20,753,102 1.28 Noninterest-bearing demand deposits 10,014,686 12,394,251 Other liabilities 667,920 456,992 Shareholders' equity 2,891,854 2,705,806 Total liabilities and shareholders' equity $ 39,523,500 $ 36,310,151 Net interest spread 1.26 % 2.25 % Net interest margin 2.43 2.76 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Nine Months Ended September 30, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 22,076,977 6.17 % $ 18,328,139 3.91 % Securities: Taxable 9,179,230 2.35 9,695,499 1.94 Tax-exempt 3,816,122 3.36 3,912,590 3.11 Total securities 12,995,352 2.64 13,608,089 2.28 Federal funds and resell agreements 343,297 5.49 1,070,319 1.50 Interest bearing due from banks 1,935,029 4.90 2,841,510 0.43 Trading securities 13,071 5.56 12,170 4.86 Total earning assets 37,363,726 4.87 35,860,227 2.94 Allowance for credit losses (213,744 ) (182,647 ) Other assets 2,322,171 1,988,189 Total assets $ 39,472,153 $ 37,665,769 Liabilities and Shareholders' Equity Interest-bearing deposits $ 20,638,982 3.18 % $ 17,775,016 0.53 % Federal funds and repurchase agreements 2,273,826 4.18 2,896,021 1.01 Borrowed funds 2,319,652 5.25 279,659 4.85 Total interest-bearing liabilities 25,232,460 3.46 20,950,696 0.65 Noninterest-bearing demand deposits 10,816,120 13,537,023 Other liabilities 591,919 416,492 Shareholders' equity 2,831,654 2,761,558 Total liabilities and shareholders' equity $ 39,472,153 $ 37,665,769 Net interest spread 1.41 % 2.29 % Net interest margin 2.54 2.56 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 148,666 $ 43,133 $ 30,488 $ 222,287 Provision for credit losses 3,010 423 1,544 4,977 Noninterest income 23,091 86,521 23,705 133,317 Noninterest expense 81,767 87,502 62,172 231,441 Income (loss) before taxes 86,980 41,729 (9,523 ) 119,186 Income tax expense (benefit) 16,311 7,866 (1,545 ) 22,632 Net income (loss) $ 70,669 $ 33,863 $ (7,978 ) $ 96,554 Three Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 150,080 $ 43,382 40,023 $ 233,485 Provision for credit losses 20,156 162 1,682 22,000 Noninterest income 16,785 89,386 22,552 128,723 Noninterest expense 87,120 82,073 62,203 231,396 Income (loss) before taxes 59,589 50,533 (1,310 ) 108,812 Income tax expense 12,859 7,735 228 20,822 Net income (loss) $ 46,730 $ 42,798 $ (1,538 ) $ 87,990 Nine Months Ended September 30, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,083 $ 148,615 $ 96,896 $ 689,594 Provision for credit losses 35,110 754 5,363 41,227 Noninterest income 71,658 257,573 72,368 401,599 Noninterest expense 251,667 268,464 189,035 709,166 Income (loss) before taxes 228,964 136,970 (25,134 ) 340,800 Income tax expense (benefit) 41,114 24,558 (3,973 ) 61,699 Net income (loss) $ 187,850 $ 112,412 $ (21,161 ) $ 279,101 Nine Months Ended September 30, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 444,176 $ 104,615 $ 119,840 $ 668,631 Provision for credit losses 25,183 402 3,315 28,900 Noninterest income 100,379 243,740 84,617 428,736 Noninterest expense 246,230 234,185 179,886 660,301 Income before taxes 273,142 113,768 21,256 408,166 Income tax expense 52,001 22,353 2,303 76,657 Net income $ 221,141 $ 91,415 $ 18,953 $ 331,509 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 September 30, 2023. Non-GAAP Financial Measures Net operating income Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (GAAP) $ 96,554 $ 87,990 $ 279,101 $ 331,509 Adjustments: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Tax-impact of adjustments (i) (583 ) (85 ) (1,887 ) (132 ) Total Non-GAAP adjustments (net of tax) 1,846 269 5,976 419 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Earnings per share - diluted (GAAP) $ 1.98 $ 1.81 $ 5.73 $ 6.80 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Tax-impact of adjustments (i) (0.01 ) — (0.04 ) — Operating earnings per share - diluted (Non-GAAP) $ 2.02 $ 1.82 $ 5.85 $ 6.81 GAAP Return on average assets 0.97 % 0.96 % 0.95 % 1.18 % Return on average equity 13.25 12.90 13.18 16.05 Non-GAAP Operating return on average assets 0.99 % 0.96 % 0.97 % 1.18 % Operating return on average equity 13.50 12.94 13.46 16.07 (i) Calculated using the company’s marginal tax rate of 24.0%. Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments (pre-tax) 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) $ 229,012 $ 231,042 $ 701,303 $ 659,750 Noninterest expense $ 231,441 $ 231,396 $ 709,166 $ 660,301 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 229,317 $ 230,304 $ 702,627 $ 656,913 Operating noninterest expense $ 229,012 $ 231,042 $ 701,303 $ 659,750 Less: Amortization of other intangibles 2,124 1,092 6,539 3,388 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 226,888 $ 229,950 $ 694,764 $ 656,362 Net interest income $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income 133,317 128,723 401,599 428,736 Less: Gains on sales of securities available for sale, net 154 — 152 — Total Non-GAAP Revenue (denominator A) $ 355,450 $ 362,208 $ 1,091,041 $ 1,097,367 Efficiency ratio (numerator A/denominator A) 64.51 % 63.58 % 64.40 % 59.86 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 63.83 63.49 63.68 59.81 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income (Non-GAAP) $ 126,592 $ 131,166 $ 389,890 $ 437,617 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.60 $ 2.70 $ 8.00 $ 8.98 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income (GAAP) $ 222,287 $ 233,485 $ 689,594 $ 668,631 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,559 6,454 19,689 19,131 Net interest income - FTE (Non-GAAP) 228,846 239,939 709,283 687,762 Noninterest income (GAAP) 133,317 128,723 401,599 428,736 Noninterest expense (GAAP) 231,441 231,396 709,166 660,301 Adjustments to arrive at operating noninterest expense: Acquisition expense 70 71 127 71 Severance expense 2,359 283 7,736 480 Total Non-GAAP adjustments 2,429 354 7,863 551 Operating noninterest expense (Non-GAAP) 229,012 231,042 701,303 659,750 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 133,151 $ 137,620 $ 409,579 $ 456,748 Net interest income earnings per share - diluted (GAAP) $ 4.56 $ 4.80 $ 14.15 $ 13.72 Tax equivalent interest 0.13 0.13 0.40 0.39 Net interest income - FTE (Non-GAAP) 4.69 4.93 14.55 14.11 Noninterest income (GAAP) 2.73 2.65 8.24 8.80 Noninterest expense (GAAP) 4.74 4.76 14.55 13.55 Acquisition expense — — — — Severance expense 0.05 0.01 0.16 0.01 Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.73 $ 2.83 $ 8.40 $ 9.37 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of September 30, 2023 2022 Total shareholders' equity (GAAP) $ 2,806,659 $ 2,523,545 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 73,060 13,373 Total intangibles, net 280,445 195,598 Total tangible shareholders' equity (Non-GAAP) $ 2,526,214 $ 2,327,947 Total shares outstanding 48,529,097 48,309,638 Ratio of total shareholders' equity (book value) per share $ 57.83 $ 52.24 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.06 48.19 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Average total shareholders' equity (GAAP) $ 2,891,854 $ 2,705,806 $ 2,831,654 $ 2,761,558 Less: Average intangible assets Average goodwill 207,385 182,225 207,385 179,741 Average other intangibles, net 74,444 14,061 75,892 14,476 Average total intangibles, net 281,829 196,286 283,277 194,216 Average total tangible shareholders' equity (Non-GAAP) 2,610,025 2,509,520 2,548,377 2,567,342 Less: Average accumulated other comprehensive loss (AOCI) (706,062 ) (576,947 ) (664,770 ) (405,343 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,316,087 $ 3,086,467 $ 3,213,147 $ 2,972,685 Net operating income (Non-GAAP) $ 98,400 $ 88,259 $ 285,077 $ 331,928 Non-GAAP Operating return on average tangible equity excluding AOCI 11.77 % 11.34 % 11.86 % 14.93 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231018691354/en/