Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries UMB Financial Corporation Reports First Quarter Net Income of $92.4 Million By: UMB Financial Corporation via Business Wire April 25, 2023 at 16:05 PM EDT First Quarter 2023 Financial Highlights GAAP net income of $92.4 million, or $1.90 per diluted share. Average loans increased 19.3% on a linked-quarter, annualized basis. Average deposits grew 2.4% on a linked-quarter, annualized basis. Diverse deposit base with approximately 55% of deposit relationships spanning ten or more years. At March 31, 2023, uninsured deposits represented 66.6% of total deposits. When adjusted to exclude affiliate and collateralized deposits, uninsured deposits were 43.1% of total deposits. Within our commercial deposits, no one sector represents more than 5% of quarterly average deposits. Strong risk-based capital ratios and liquidity positions. Noninterest income increased 5.3% as compared to the first quarter of 2022, equal to 35.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.09% of average loans and nonperforming loans of 0.07% of total loans. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2023 of $92.4 million, or $1.90 per diluted share, compared to $100.2 million, or $2.06 per diluted share, in the fourth quarter of 2022 (linked quarter) and $106.0 million, or $2.17 per diluted share, in the first 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 $92.8 million, or $1.91 per diluted share, for the first quarter of 2023, compared to $101.1 million, or $2.07 per diluted share, for the linked quarter and $106.1 million, or $2.17 per diluted share, for the first 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 $135.4 million, or $2.78 per diluted share, for the first quarter of 2023, compared to $134.1 million, or $2.75 per diluted share, for the linked quarter, and $119.4 million, or $2.44 per diluted share, for the first quarter of 2022. These operating PTPP results represent increases of 1.0% on a linked-quarter basis and 13.4%, compared to the first quarter of 2022. “Comments made publicly about the health of the banking industry, driven by the mistaken presumption that the drivers of the failure of two banks would apply to other banks generally, did a great disservice not only to UMB, but to regional banks as a whole,” said Mariner Kemper, chairman, president and chief executive officer. “Despite the challenging environment resulting from this flawed and exaggerated crisis of confidence created by certain market participants, we had a strong first quarter, with average deposit growth of 2.4% and average loan growth of 19.3%, on a linked-quarter annualized basis. We had continued momentum in our fee businesses, and credit quality remains strong, with net charge offs of just 0.09% of average loans. Nonperforming loans further improved from year-end, and were just 0.07% of loans at March 31.” Mr. Kemper continued, “Our business model is built to withstand difficult economic environments and crises. Our deposit base is diverse across multiple lines of businesses and reflects long tenured and deeply entrenched relationships, with more than 55% of our customers having banked with us for ten years or more. Our regulatory capital ratios are above peer median, and our liquidity levels are strong, including many contingent sources. Despite conjectures in the aftermath of Silicon Valley Bank’s failure, not every bank, including UMB, needs to sell investment securities at a loss.” First Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2023 2022 2022 Net income (GAAP) $ 92,437 $ 100,173 $ 105,963 Earnings per share (diluted) 1.90 2.06 2.17 Operating pre-tax, pre-provision income (Non-GAAP) 135,369 134,054 119,400 Operating pre-tax, pre-provision earnings per share (diluted) 2.78 2.75 2.44 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 141,924 140,717 125,799 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.91 2.89 2.57 Net operating income (Non-GAAP) 92,836 101,092 106,073 Operating earnings per share (diluted) 1.91 2.07 2.17 GAAP Return on average assets 0.97 % 1.06 % 1.10 % Return on average equity 13.76 15.16 14.65 Efficiency ratio 63.12 63.72 63.98 Non-GAAP (i) Operating return on average assets 0.98 % 1.07 % 1.10 % Operating return on average equity 13.82 15.30 14.67 Operating return on average tangible equity excluding AOCI 12.21 12.85 14.99 Operating efficiency ratio 62.98 63.39 63.93 (i) See Non-GAAP reconciliation later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Net interest income $ 241,696 $ 245,166 $ 210,355 $ (3,470 ) $ 31,341 Noninterest income: Trust and securities processing 62,359 59,207 59,528 3,152 2,831 Trading and investment banking 5,308 5,251 5,440 57 (132 ) Service charges on deposit accounts 21,159 19,758 24,642 1,401 (3,483 ) Insurance fees and commissions 274 459 259 (185 ) 15 Brokerage fees 13,676 13,332 3,456 344 10,220 Bankcard fees 18,172 19,597 16,635 (1,425 ) 1,537 Investment securities losses, net (5,324 ) (409 ) (522 ) (4,915 ) (4,802 ) Other 14,576 8,302 14,240 6,274 336 Total noninterest income $ 130,200 $ 125,497 $ 123,678 $ 4,703 $ 6,522 Total revenue $ 371,896 $ 370,663 $ 334,033 $ 1,233 $ 37,863 Net interest income (FTE) $ 248,251 $ 251,829 $ 216,754 Net interest margin (FTE) 2.76 % 2.83 % 2.35 % Total noninterest income as a % of total revenue 35.0 33.9 37.0 Net interest income First quarter 2023 net interest income totaled $241.7 million, a decrease of $3.5 million, or 1.4% from the linked quarter, driven by the impact of fewer days in the first quarter, as well as higher interest costs primarily driven by unfavorable mix shift in the composition of liabilities, partially offset by continued growth in average loans. Average earning assets increased $1.2 billion, or 3.3% from the linked quarter, largely driven by an increase of $976.9 million in average loans, an increase of $398.3 million in interest-bearing due from banks, partially offset by a decrease of $204.9 million in federal funds sold and resell agreements. Average interest-bearing liabilities increased $1.6 billion, or 7.2% from the linked quarter, primarily driven by increases of $803.5 million in borrowed funds and $723.6 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $535.1 million, or 4.3% as compared to the linked quarter. Net interest margin for the first quarter was 2.76%, a decrease of seven basis points from the linked quarter, driven by increased cost of interest-bearing liabilities, partially offset by the benefit of free funds and earning asset mix changes. The cost of interest-bearing liabilities increased 69 basis points to 2.91%. Total cost of funds increased 51 basis points from the linked quarter to 1.92%. Average loan yields increased 53 basis points while earning asset yields increased 42 basis points from the linked quarter. On a year-over-year basis, net interest income increased $31.3 million, or 14.9%, driven by a $3.9 billion, or 22.5%, increase in average loans, favorable mix shift in earning assets, and benefit from higher interest rates, partially offset by higher cost of interest-bearing liabilities. Compared to the first quarter of 2022, average earning assets decreased $1.0 billion, or 2.7%, largely driven by a decrease of $3.8 billion in interest-bearing due from banks and a decrease of $814.6 million in federal funds sold and resell agreements, partially offset by the increase in average loans noted above. Average deposits decreased 3.1% compared to the first quarter of 2022. Average noninterest-bearing demand deposit balances decreased 15.0% compared to the first quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 37.8% of total deposits, compared to 39.7% in the linked quarter and 43.0% in the first quarter of 2022. Average borrowed funds increased $803.5 million as compared to the linked quarter and $928.6 million as compared to the first quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income First quarter 2023 noninterest income increased $4.7 million, or 3.7%, on a linked-quarter basis, largely due to: Increases of $4.0 million in company-owned life insurance income and $1.8 million in derivative income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $1.8 million in corporate trust income, $0.9 million in fund services income and $0.5 million in trust income, all recorded in trust and securities processing. These increases were partially offset by a decrease of $4.9 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter. Compared to the prior year, noninterest income in the first quarter of 2023 increased $6.5 million, or 5.3%, primarily driven by: An increase of $10.2 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $4.1 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $2.3 million in corporate trust income and $1.3 million in fund services income, both recorded in trust and securities processing. An increase of $1.5 million in bankcard income due to higher interchange revenue. These increases were partially offset by the following decreases: A decrease of $4.8 million in investment securities gains, driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter of 2023. A decrease of $3.5 million in service charges on deposits primarily due to decreased healthcare services income related to customer transfer and conversion fees recognized in the first quarter of 2022. A decrease of $2.4 million in other miscellaneous income, driven by the gain on sale of the company’s factoring loan portfolio recorded in the first quarter of 2022. A decrease of $2.1 million in derivative income, recorded in other income. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Salaries and employee benefits $ 142,498 $ 135,940 $ 130,634 $ 6,558 $ 11,864 Occupancy, net 12,177 12,409 12,232 (232 ) (55 ) Equipment 17,849 18,969 18,164 (1,120 ) (315 ) Supplies and services 3,875 3,697 3,262 178 613 Marketing and business development 5,335 8,788 4,932 (3,453 ) 403 Processing fees 23,240 23,545 18,443 (305 ) 4,797 Legal and consulting 7,285 10,664 6,911 (3,379 ) 374 Bankcard 7,133 7,369 6,567 (236 ) 566 Amortization of other intangible assets 2,298 1,649 1,071 649 1,227 Regulatory fees 5,551 4,232 3,482 1,319 2,069 Other 9,811 10,556 9,080 (745 ) 731 Total noninterest expense $ 237,052 $ 237,818 $ 214,778 $ (766 ) $ 22,274 Noninterest expense for the first quarter of 2023 was $237.1 million, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $22.3 million, or 10.4%, from the first quarter of 2022. The linked-quarter decrease in noninterest expense was driven by: A decrease of $6.6 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2022. Decreases of $3.5 million in marketing and business development expense and $3.4 million in legal and consulting expense due to the timing of multiple projects. The decrease in marketing and business development expense was also partially driven by a decrease in advertising for various projects and a decrease in travel and entertainment expense. A decrease of $1.1 million in equipment expense driven by reduced software expense. These decreases were partially offset by increases of $13.2 million in employee benefits expense driven by a seasonal increase of $11.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $2.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.3 million in regulatory fees expense driven by higher deposit insurance expense due to previously announced higher industry assessment rates. The year-over-year increase in noninterest expense was driven by: An increase of $11.9 million in salaries and employee benefits expense, driven primarily by increases of $11.0 million in salaries and wage expense and $4.7 million in employee benefits expense, primarily due to an increase of $3.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.7 million in deferred compensation expense. These increases were partially offset by a decrease of $3.8 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. An increase of $4.8 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. Increases of $2.1 million in regulatory fees expense driven by higher deposit insurance expense, $2.0 million in operational losses, recorded in other expense, and $1.2 million in intangible amortization expense. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. Income taxes The company’s effective tax rate was 17.2% for the three months ended March 31, 2023, compared to 15.7% for the same period in 2022. The effective tax rate increased primarily as a result of a decrease in excess tax benefits associated with stock compensation recorded in the first quarter of 2023 compared to the same period a year earlier. Balance sheet Average total assets for the first quarter of 2023 were $38.5 billion compared to $37.3 billion for the linked quarter and $39.2 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Commercial and industrial $ 9,287,319 $ 8,891,356 $ 7,409,623 $ 395,963 $ 1,877,696 Specialty lending 564,633 559,200 463,793 5,433 100,840 Commercial real estate 7,812,140 7,323,877 6,338,160 488,263 1,473,980 Consumer real estate 2,738,184 2,678,771 2,339,050 59,413 399,134 Consumer 136,571 145,811 135,942 (9,240 ) 629 Credit cards 453,704 457,043 399,857 (3,339 ) 53,847 Leases and other 279,049 238,603 274,652 40,446 4,397 Total loans $ 21,271,600 $ 20,294,661 $ 17,361,077 $ 976,939 $ 3,910,523 Average loans for the first quarter of 2023 increased $976.9 million, or 4.8%, on a linked-quarter basis and $3.9 billion, or 22.5%, compared to the first quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Securities available for sale: U.S. Treasury $ 783,170 $ 752,339 $ 176,476 $ 30,831 $ 606,694 U.S. Agencies 171,825 171,171 125,017 654 46,808 Mortgage-backed 3,938,137 4,027,120 7,317,968 (88,983 ) (3,379,831 ) State and political subdivisions 1,356,785 1,353,307 3,170,757 3,478 (1,813,972 ) Corporates 364,854 366,131 337,526 (1,277 ) 27,328 Collateralized loan obligations 348,477 328,475 150,134 20,002 198,343 Total securities available for sale $ 6,963,248 $ 6,998,543 $ 11,277,878 $ (35,295 ) $ (4,314,630 ) Securities held to maturity: U.S. Agencies $ 123,106 $ 123,077 $ 133 $ 29 $ 122,973 Mortgage-backed 2,934,113 2,983,489 708,075 (49,376 ) 2,226,038 State and political subdivisions 2,814,912 2,765,717 1,185,609 49,195 1,629,303 Total securities held to maturity $ 5,872,131 $ 5,872,283 $ 1,893,817 $ (152 ) $ 3,978,314 Trading securities 9,258 11,799 20,836 (2,541 ) (11,578 ) Other securities 359,238 315,748 329,611 43,490 29,627 Total securities $ 13,203,875 $ 13,198,373 $ 13,522,142 $ 5,502 $ (318,267 ) Average total securities remained flat on a linked-quarter basis and decreased 2.4% compared to the first quarter of 2022. At March 31, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio narrowed to $677.7 million, or 8.9% of the $7.6 billion amortized cost value, down from $771.6 million at December 31, 2022. At March 31, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity narrowed to $489.8 million, or 8.4% of amortized cost value, compared to $580.9 million at December 31, 2022. 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 $237.1 million as of March 31, 2023 and was included in the amortized cost balance of held-to-maturity securities. At March 31, 2023, an after-tax gain of $57.2 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, nine 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) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Deposits: Noninterest-bearing demand $ 11,919,277 $ 12,454,413 $ 14,025,585 $ (535,136 ) $ (2,106,308 ) Interest-bearing demand and savings 18,427,662 17,952,568 17,852,721 475,094 574,941 Time deposits 1,215,506 966,969 701,973 248,537 513,533 Total deposits $ 31,562,445 $ 31,373,950 $ 32,580,279 $ 188,495 $ (1,017,834 ) Noninterest bearing deposits as % of total 37.8 % 39.7 % 43.0 % Average deposits increased 0.6% on a linked-quarter basis and decreased 3.1% compared to the first quarter of 2022. As of March 31, 2023, the total estimated uninsured deposits were $21.3 billion or approximately 66.6% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.8 billion and represented approximately 43.1% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2023 December 31, 2022 March 31, 2022 Total equity $ 2,814,659 $ 2,667,093 $ 2,748,405 Accumulated other comprehensive (loss) income, net (626,776 ) (702,735 ) (343,128 ) Book value per common share 58.03 55.20 56.78 Tangible book value per common share (Non-GAAP) 52.17 49.28 52.69 Regulatory capital: Common equity Tier 1 capital $ 3,196,111 $ 3,129,030 $ 2,938,100 Tier 1 capital 3,196,111 3,129,030 2,938,100 Total capital 3,776,407 3,682,619 3,369,866 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.57 % 10.62 % 11.81 % Tier 1 risk-based capital ratio 10.57 10.62 11.81 Total risk-based capital ratio 12.49 12.50 13.55 Tier 1 leverage ratio 8.35 8.43 7.53 At March 31, 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) Q1 Q4 Q3 Q2 Q1 2023 2022 2022 2022 2022 Net charge-offs - total loans $ 4,643 $ 2,189 $ 1,173 $ 28,128 $ 8,378 Net loan charge-offs as a % of total average loans 0.09 % 0.04 % 0.02 % 0.62 % 0.20 % Loans over 90 days past due $ 1,723 $ 1,617 $ 2,513 $ 3,446 $ 3,600 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 15,480 $ 19,269 $ 19,817 $ 18,117 $ 110,356 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.10 % 0.10 % 0.62 % Provision for credit losses $ 23,250 $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) Provision for credit losses for the first quarter totaled $23.3 million, an increase of $14.3 million from the linked quarter and an increase of $29.8 million from the first quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the first quarter totaled $4.6 million, or 0.09%, of average loans, compared to $2.2 million, or 0.04%, of average loans in the linked quarter, and $8.4 million, or 0.20%, of average loans for the first quarter of 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on July 3, 2023, to shareholders of record at the close of business on June 12, 2023. Conference Call The company plans to host a conference call to discuss its first quarter 2023 earnings results on Wednesday, April 26, 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 443869. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2023 Conference Call A replay of the conference call may be heard through May 10, 2023, by calling (toll-free) 866-813-9403 or (international) 226-828-7578. The replay access code required for playback is 582627. 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) March 31, 2023 2022 ASSETS Loans $ 21,812,972 $ 17,731,700 Allowance for credit losses on loans (210,509 ) (179,288 ) Net loans 21,602,463 17,552,412 Loans held for sale 1,422 384 Securities: Available for sale 6,907,897 8,550,093 Held to maturity, net of allowance for credit losses 5,859,323 4,600,187 Trading securities 19,823 17,059 Other securities 416,337 332,123 Total securities 13,203,380 13,499,462 Federal funds sold and resell agreements 368,158 1,319,809 Interest-bearing due from banks 3,121,323 6,355,941 Cash and due from banks 472,248 357,772 Premises and equipment, net 260,623 264,519 Accrued income 181,586 127,139 Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Other assets 1,112,176 930,389 Total assets $ 40,607,190 $ 40,605,742 LIABILITIES Deposits: Noninterest-bearing demand $ 12,488,803 $ 15,946,738 Interest-bearing demand and savings 16,760,603 17,828,794 Time deposits under $250,000 456,129 399,467 Time deposits of $250,000 or more 2,226,369 187,566 Total deposits 31,931,904 34,362,565 Federal funds purchased and repurchase agreements 2,160,808 2,840,535 Short-term debt 2,800,000 — Long-term debt 381,796 272,036 Accrued expenses and taxes 207,633 178,130 Other liabilities 310,390 204,071 Total liabilities 37,792,531 37,857,337 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,120,877 1,109,585 Retained earnings 2,609,928 2,265,129 Accumulated other comprehensive loss, net (626,776 ) (343,128 ) Treasury stock (344,427 ) (338,238 ) Total shareholders' equity 2,814,659 2,748,405 Total liabilities and shareholders' equity $ 40,607,190 $ 40,605,742 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans $ 308,441 $ 149,470 Securities: Taxable interest 53,049 43,382 Tax-exempt interest 25,306 23,855 Total securities income 78,355 67,237 Federal funds and resell agreements 5,651 2,450 Interest-bearing due from banks 16,166 2,457 Trading securities 134 185 Total interest income 408,747 221,799 INTEREST EXPENSE Deposits 127,899 6,173 Federal funds and repurchase agreements 23,302 2,148 Other 15,850 3,123 Total interest expense 167,051 11,444 Net interest income 241,696 210,355 Provision for credit losses 23,250 (6,500 ) Net interest income after provision for credit losses 218,446 216,855 NONINTEREST INCOME Trust and securities processing 62,359 59,528 Trading and investment banking 5,308 5,440 Service charges on deposit accounts 21,159 24,642 Insurance fees and commissions 274 259 Brokerage fees 13,676 3,456 Bankcard fees 18,172 16,635 Investment securities losses, net (5,324 ) (522 ) Other 14,576 14,240 Total noninterest income 130,200 123,678 NONINTEREST EXPENSE Salaries and employee benefits 142,498 130,634 Occupancy, net 12,177 12,232 Equipment 17,849 18,164 Supplies and services 3,875 3,262 Marketing and business development 5,335 4,932 Processing fees 23,240 18,443 Legal and consulting 7,285 6,911 Bankcard 7,133 6,567 Amortization of other intangible assets 2,298 1,071 Regulatory fees 5,551 3,482 Other 9,811 9,080 Total noninterest expense 237,052 214,778 Income before income taxes 111,594 125,755 Income tax expense 19,157 19,792 NET INCOME $ 92,437 $ 105,963 PER SHARE DATA Net income – basic $ 1.91 $ 2.19 Net income – diluted 1.90 2.17 Dividends 0.38 0.37 Weighted average shares outstanding – basic 48,435,016 48,406,840 Weighted average shares outstanding – diluted 48,746,562 48,832,177 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Net income $ 92,437 $ 105,963 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 93,657 (622,910 ) Less: Reclassification adjustment for net losses included in net income 433 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 9,983 582 Change in unrealized gains and losses on debt securities 104,073 (622,328 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (1,527 ) 4,680 Less: Reclassification adjustment for net gains included in net income (2,561 ) (851 ) Change in unrealized gains and losses on derivative hedges (4,088 ) 3,829 Other comprehensive income (loss), before tax 99,985 (618,499 ) Income tax (expense) benefit (24,026 ) 149,057 Other comprehensive income (loss) 75,959 (469,442 ) Comprehensive income (loss) $ 168,396 $ (363,479 ) 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) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income — — 92,437 75,959 — 168,396 Dividends ($0.38 per share) — — (18,595 ) — — (18,595 ) Purchase of treasury stock — — — — (7,902 ) (7,902 ) Issuances of equity awards, net of forfeitures — (9,764 ) — — 10,483 719 Recognition of equity-based compensation — 4,516 — — — 4,516 Sale of treasury stock — 71 — — 56 127 Exercise of stock options — 105 — — 200 305 Balance - March 31, 2023 $ 55,057 $ 1,120,877 $ 2,609,928 $ (626,776 ) $ (344,427 ) $ 2,814,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 21,271,600 5.88 % $ 17,361,077 3.49 % Securities: Taxable 9,349,351 2.30 9,461,567 1.86 Tax-exempt 3,845,266 3.35 4,039,739 3.03 Total securities 13,194,617 2.61 13,501,306 2.21 Federal funds and resell agreements 451,188 5.08 1,265,776 0.78 Interest bearing due from banks 1,533,704 4.27 5,320,360 0.19 Trading securities 9,258 6.31 20,836 4.38 Total earning assets 36,460,367 4.62 37,469,355 2.47 Allowance for credit losses (196,128 ) (198,217 ) Other assets 2,239,140 1,882,376 Total assets $ 38,503,379 $ 39,153,514 Liabilities and Shareholders' Equity Interest-bearing deposits $ 19,643,168 2.64 % $ 18,554,694 0.13 % Federal funds and repurchase agreements 2,461,942 3.84 2,973,785 0.29 Borrowed funds 1,200,346 5.36 271,731 4.66 Total interest-bearing liabilities 23,305,456 2.91 21,800,210 0.21 Noninterest-bearing demand deposits 11,919,277 14,025,585 Other liabilities 554,211 394,714 Shareholders' equity 2,724,435 2,933,005 Total liabilities and shareholders' equity $ 38,503,379 $ 39,153,514 Net interest spread 1.71 % 2.26 % Net interest margin 2.76 2.35 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,027 $ 55,085 $ 35,584 $ 241,696 Provision for credit losses 21,045 96 2,109 23,250 Noninterest income 22,902 84,238 23,060 130,200 Noninterest expense 84,002 89,372 63,678 237,052 Income (loss) before taxes 68,882 49,855 (7,143 ) 111,594 Income tax expense (benefit) 11,825 8,558 (1,226 ) 19,157 Net income (loss) $ 57,057 $ 41,297 $ (5,917 ) $ 92,437 Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,700 73,272 23,706 123,678 Noninterest expense 79,589 75,602 59,587 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 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 March 31, 2023 2022 Net income (GAAP) $ 92,437 $ 105,963 Adjustments: Acquisition expense 39 — Severance expense 486 145 Tax-impact of adjustments (i) (126 ) (35 ) Total Non-GAAP adjustments (net of tax) 399 110 Net operating income (Non-GAAP) $ 92,836 $ 106,073 Earnings per share - diluted (GAAP) $ 1.90 $ 2.17 Acquisition expense — — Severance expense 0.01 — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 1.91 $ 2.17 GAAP Return on average assets 0.97 % 1.10 % Return on average equity 13.76 14.65 Non-GAAP Operating return on average assets 0.98 % 1.10 % Operating return on average equity 13.82 14.67 (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 March 31, 2023 2022 Noninterest expense $ 237,052 $ 214,778 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments (pre-tax) 525 145 Operating noninterest expense (Non-GAAP) $ 236,527 $ 214,633 Noninterest expense $ 237,052 $ 214,778 Less: Amortization of other intangibles 2,298 1,071 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 234,754 $ 213,707 Operating noninterest expense $ 236,527 $ 214,633 Less: Amortization of other intangibles 2,298 1,071 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,229 $ 213,562 Net interest income $ 241,696 $ 210,355 Noninterest income 130,200 123,678 Less: Losses on sales of securities available for sale, net (2 ) — Total Non-GAAP Revenue (denominator A) $ 371,898 $ 334,033 Efficiency ratio (numerator A/denominator A) 63.12 % 63.98 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 62.98 63.93 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income (Non-GAAP) $ 135,369 $ 119,400 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.78 $ 2.44 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,555 6,399 Net interest income - FTE (Non-GAAP) 248,251 216,754 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 141,924 $ 125,799 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Tax equivalent interest 0.13 0.13 Net interest income - FTE (Non-GAAP) 5.09 4.44 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.91 $ 2.57 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2023 2022 Total shareholders' equity (GAAP) $ 2,814,659 $ 2,748,405 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Total intangibles, net 283,811 197,915 Total tangible shareholders' equity (Non-GAAP) $ 2,530,848 $ 2,550,490 Total shares outstanding 48,507,116 48,403,262 Ratio of total shareholders' equity (book value) per share $ 58.03 $ 56.78 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.17 52.69 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Average total shareholders' equity (GAAP) $ 2,724,435 $ 2,621,693 $ 2,933,005 Less: Average intangible assets Average goodwill 207,385 194,805 174,689 Average other intangibles, net 77,575 46,243 14,105 Average total intangibles, net 284,960 241,049 188,794 Average total tangible shareholders' equity (Non-GAAP) 2,439,475 2,380,644 2,744,211 Less: Average accumulated other comprehensive (loss) income (AOCI) (643,559 ) (741,438 ) (126,392 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,083,034 $ 3,122,082 $ 2,870,603 Net operating income (Non-GAAP) $ 92,836 $ 101,092 $ 106,073 Non-GAAP Operating return on average tangible equity excluding AOCI 12.21 % 12.85 % 14.99 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230421005431/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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UMB Financial Corporation Reports First Quarter Net Income of $92.4 Million By: UMB Financial Corporation via Business Wire April 25, 2023 at 16:05 PM EDT First Quarter 2023 Financial Highlights GAAP net income of $92.4 million, or $1.90 per diluted share. Average loans increased 19.3% on a linked-quarter, annualized basis. Average deposits grew 2.4% on a linked-quarter, annualized basis. Diverse deposit base with approximately 55% of deposit relationships spanning ten or more years. At March 31, 2023, uninsured deposits represented 66.6% of total deposits. When adjusted to exclude affiliate and collateralized deposits, uninsured deposits were 43.1% of total deposits. Within our commercial deposits, no one sector represents more than 5% of quarterly average deposits. Strong risk-based capital ratios and liquidity positions. Noninterest income increased 5.3% as compared to the first quarter of 2022, equal to 35.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.09% of average loans and nonperforming loans of 0.07% of total loans. UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2023 of $92.4 million, or $1.90 per diluted share, compared to $100.2 million, or $2.06 per diluted share, in the fourth quarter of 2022 (linked quarter) and $106.0 million, or $2.17 per diluted share, in the first 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 $92.8 million, or $1.91 per diluted share, for the first quarter of 2023, compared to $101.1 million, or $2.07 per diluted share, for the linked quarter and $106.1 million, or $2.17 per diluted share, for the first 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 $135.4 million, or $2.78 per diluted share, for the first quarter of 2023, compared to $134.1 million, or $2.75 per diluted share, for the linked quarter, and $119.4 million, or $2.44 per diluted share, for the first quarter of 2022. These operating PTPP results represent increases of 1.0% on a linked-quarter basis and 13.4%, compared to the first quarter of 2022. “Comments made publicly about the health of the banking industry, driven by the mistaken presumption that the drivers of the failure of two banks would apply to other banks generally, did a great disservice not only to UMB, but to regional banks as a whole,” said Mariner Kemper, chairman, president and chief executive officer. “Despite the challenging environment resulting from this flawed and exaggerated crisis of confidence created by certain market participants, we had a strong first quarter, with average deposit growth of 2.4% and average loan growth of 19.3%, on a linked-quarter annualized basis. We had continued momentum in our fee businesses, and credit quality remains strong, with net charge offs of just 0.09% of average loans. Nonperforming loans further improved from year-end, and were just 0.07% of loans at March 31.” Mr. Kemper continued, “Our business model is built to withstand difficult economic environments and crises. Our deposit base is diverse across multiple lines of businesses and reflects long tenured and deeply entrenched relationships, with more than 55% of our customers having banked with us for ten years or more. Our regulatory capital ratios are above peer median, and our liquidity levels are strong, including many contingent sources. Despite conjectures in the aftermath of Silicon Valley Bank’s failure, not every bank, including UMB, needs to sell investment securities at a loss.” First Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2023 2022 2022 Net income (GAAP) $ 92,437 $ 100,173 $ 105,963 Earnings per share (diluted) 1.90 2.06 2.17 Operating pre-tax, pre-provision income (Non-GAAP) 135,369 134,054 119,400 Operating pre-tax, pre-provision earnings per share (diluted) 2.78 2.75 2.44 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 141,924 140,717 125,799 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.91 2.89 2.57 Net operating income (Non-GAAP) 92,836 101,092 106,073 Operating earnings per share (diluted) 1.91 2.07 2.17 GAAP Return on average assets 0.97 % 1.06 % 1.10 % Return on average equity 13.76 15.16 14.65 Efficiency ratio 63.12 63.72 63.98 Non-GAAP (i) Operating return on average assets 0.98 % 1.07 % 1.10 % Operating return on average equity 13.82 15.30 14.67 Operating return on average tangible equity excluding AOCI 12.21 12.85 14.99 Operating efficiency ratio 62.98 63.39 63.93 (i) See Non-GAAP reconciliation later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Net interest income $ 241,696 $ 245,166 $ 210,355 $ (3,470 ) $ 31,341 Noninterest income: Trust and securities processing 62,359 59,207 59,528 3,152 2,831 Trading and investment banking 5,308 5,251 5,440 57 (132 ) Service charges on deposit accounts 21,159 19,758 24,642 1,401 (3,483 ) Insurance fees and commissions 274 459 259 (185 ) 15 Brokerage fees 13,676 13,332 3,456 344 10,220 Bankcard fees 18,172 19,597 16,635 (1,425 ) 1,537 Investment securities losses, net (5,324 ) (409 ) (522 ) (4,915 ) (4,802 ) Other 14,576 8,302 14,240 6,274 336 Total noninterest income $ 130,200 $ 125,497 $ 123,678 $ 4,703 $ 6,522 Total revenue $ 371,896 $ 370,663 $ 334,033 $ 1,233 $ 37,863 Net interest income (FTE) $ 248,251 $ 251,829 $ 216,754 Net interest margin (FTE) 2.76 % 2.83 % 2.35 % Total noninterest income as a % of total revenue 35.0 33.9 37.0 Net interest income First quarter 2023 net interest income totaled $241.7 million, a decrease of $3.5 million, or 1.4% from the linked quarter, driven by the impact of fewer days in the first quarter, as well as higher interest costs primarily driven by unfavorable mix shift in the composition of liabilities, partially offset by continued growth in average loans. Average earning assets increased $1.2 billion, or 3.3% from the linked quarter, largely driven by an increase of $976.9 million in average loans, an increase of $398.3 million in interest-bearing due from banks, partially offset by a decrease of $204.9 million in federal funds sold and resell agreements. Average interest-bearing liabilities increased $1.6 billion, or 7.2% from the linked quarter, primarily driven by increases of $803.5 million in borrowed funds and $723.6 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $535.1 million, or 4.3% as compared to the linked quarter. Net interest margin for the first quarter was 2.76%, a decrease of seven basis points from the linked quarter, driven by increased cost of interest-bearing liabilities, partially offset by the benefit of free funds and earning asset mix changes. The cost of interest-bearing liabilities increased 69 basis points to 2.91%. Total cost of funds increased 51 basis points from the linked quarter to 1.92%. Average loan yields increased 53 basis points while earning asset yields increased 42 basis points from the linked quarter. On a year-over-year basis, net interest income increased $31.3 million, or 14.9%, driven by a $3.9 billion, or 22.5%, increase in average loans, favorable mix shift in earning assets, and benefit from higher interest rates, partially offset by higher cost of interest-bearing liabilities. Compared to the first quarter of 2022, average earning assets decreased $1.0 billion, or 2.7%, largely driven by a decrease of $3.8 billion in interest-bearing due from banks and a decrease of $814.6 million in federal funds sold and resell agreements, partially offset by the increase in average loans noted above. Average deposits decreased 3.1% compared to the first quarter of 2022. Average noninterest-bearing demand deposit balances decreased 15.0% compared to the first quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 37.8% of total deposits, compared to 39.7% in the linked quarter and 43.0% in the first quarter of 2022. Average borrowed funds increased $803.5 million as compared to the linked quarter and $928.6 million as compared to the first quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income First quarter 2023 noninterest income increased $4.7 million, or 3.7%, on a linked-quarter basis, largely due to: Increases of $4.0 million in company-owned life insurance income and $1.8 million in derivative income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $1.8 million in corporate trust income, $0.9 million in fund services income and $0.5 million in trust income, all recorded in trust and securities processing. These increases were partially offset by a decrease of $4.9 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter. Compared to the prior year, noninterest income in the first quarter of 2023 increased $6.5 million, or 5.3%, primarily driven by: An increase of $10.2 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $4.1 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $2.3 million in corporate trust income and $1.3 million in fund services income, both recorded in trust and securities processing. An increase of $1.5 million in bankcard income due to higher interchange revenue. These increases were partially offset by the following decreases: A decrease of $4.8 million in investment securities gains, driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter of 2023. A decrease of $3.5 million in service charges on deposits primarily due to decreased healthcare services income related to customer transfer and conversion fees recognized in the first quarter of 2022. A decrease of $2.4 million in other miscellaneous income, driven by the gain on sale of the company’s factoring loan portfolio recorded in the first quarter of 2022. A decrease of $2.1 million in derivative income, recorded in other income. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Salaries and employee benefits $ 142,498 $ 135,940 $ 130,634 $ 6,558 $ 11,864 Occupancy, net 12,177 12,409 12,232 (232 ) (55 ) Equipment 17,849 18,969 18,164 (1,120 ) (315 ) Supplies and services 3,875 3,697 3,262 178 613 Marketing and business development 5,335 8,788 4,932 (3,453 ) 403 Processing fees 23,240 23,545 18,443 (305 ) 4,797 Legal and consulting 7,285 10,664 6,911 (3,379 ) 374 Bankcard 7,133 7,369 6,567 (236 ) 566 Amortization of other intangible assets 2,298 1,649 1,071 649 1,227 Regulatory fees 5,551 4,232 3,482 1,319 2,069 Other 9,811 10,556 9,080 (745 ) 731 Total noninterest expense $ 237,052 $ 237,818 $ 214,778 $ (766 ) $ 22,274 Noninterest expense for the first quarter of 2023 was $237.1 million, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $22.3 million, or 10.4%, from the first quarter of 2022. The linked-quarter decrease in noninterest expense was driven by: A decrease of $6.6 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2022. Decreases of $3.5 million in marketing and business development expense and $3.4 million in legal and consulting expense due to the timing of multiple projects. The decrease in marketing and business development expense was also partially driven by a decrease in advertising for various projects and a decrease in travel and entertainment expense. A decrease of $1.1 million in equipment expense driven by reduced software expense. These decreases were partially offset by increases of $13.2 million in employee benefits expense driven by a seasonal increase of $11.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $2.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.3 million in regulatory fees expense driven by higher deposit insurance expense due to previously announced higher industry assessment rates. The year-over-year increase in noninterest expense was driven by: An increase of $11.9 million in salaries and employee benefits expense, driven primarily by increases of $11.0 million in salaries and wage expense and $4.7 million in employee benefits expense, primarily due to an increase of $3.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.7 million in deferred compensation expense. These increases were partially offset by a decrease of $3.8 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. An increase of $4.8 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. Increases of $2.1 million in regulatory fees expense driven by higher deposit insurance expense, $2.0 million in operational losses, recorded in other expense, and $1.2 million in intangible amortization expense. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. Income taxes The company’s effective tax rate was 17.2% for the three months ended March 31, 2023, compared to 15.7% for the same period in 2022. The effective tax rate increased primarily as a result of a decrease in excess tax benefits associated with stock compensation recorded in the first quarter of 2023 compared to the same period a year earlier. Balance sheet Average total assets for the first quarter of 2023 were $38.5 billion compared to $37.3 billion for the linked quarter and $39.2 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Commercial and industrial $ 9,287,319 $ 8,891,356 $ 7,409,623 $ 395,963 $ 1,877,696 Specialty lending 564,633 559,200 463,793 5,433 100,840 Commercial real estate 7,812,140 7,323,877 6,338,160 488,263 1,473,980 Consumer real estate 2,738,184 2,678,771 2,339,050 59,413 399,134 Consumer 136,571 145,811 135,942 (9,240 ) 629 Credit cards 453,704 457,043 399,857 (3,339 ) 53,847 Leases and other 279,049 238,603 274,652 40,446 4,397 Total loans $ 21,271,600 $ 20,294,661 $ 17,361,077 $ 976,939 $ 3,910,523 Average loans for the first quarter of 2023 increased $976.9 million, or 4.8%, on a linked-quarter basis and $3.9 billion, or 22.5%, compared to the first quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Securities available for sale: U.S. Treasury $ 783,170 $ 752,339 $ 176,476 $ 30,831 $ 606,694 U.S. Agencies 171,825 171,171 125,017 654 46,808 Mortgage-backed 3,938,137 4,027,120 7,317,968 (88,983 ) (3,379,831 ) State and political subdivisions 1,356,785 1,353,307 3,170,757 3,478 (1,813,972 ) Corporates 364,854 366,131 337,526 (1,277 ) 27,328 Collateralized loan obligations 348,477 328,475 150,134 20,002 198,343 Total securities available for sale $ 6,963,248 $ 6,998,543 $ 11,277,878 $ (35,295 ) $ (4,314,630 ) Securities held to maturity: U.S. Agencies $ 123,106 $ 123,077 $ 133 $ 29 $ 122,973 Mortgage-backed 2,934,113 2,983,489 708,075 (49,376 ) 2,226,038 State and political subdivisions 2,814,912 2,765,717 1,185,609 49,195 1,629,303 Total securities held to maturity $ 5,872,131 $ 5,872,283 $ 1,893,817 $ (152 ) $ 3,978,314 Trading securities 9,258 11,799 20,836 (2,541 ) (11,578 ) Other securities 359,238 315,748 329,611 43,490 29,627 Total securities $ 13,203,875 $ 13,198,373 $ 13,522,142 $ 5,502 $ (318,267 ) Average total securities remained flat on a linked-quarter basis and decreased 2.4% compared to the first quarter of 2022. At March 31, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio narrowed to $677.7 million, or 8.9% of the $7.6 billion amortized cost value, down from $771.6 million at December 31, 2022. At March 31, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity narrowed to $489.8 million, or 8.4% of amortized cost value, compared to $580.9 million at December 31, 2022. 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 $237.1 million as of March 31, 2023 and was included in the amortized cost balance of held-to-maturity securities. At March 31, 2023, an after-tax gain of $57.2 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, nine 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) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Deposits: Noninterest-bearing demand $ 11,919,277 $ 12,454,413 $ 14,025,585 $ (535,136 ) $ (2,106,308 ) Interest-bearing demand and savings 18,427,662 17,952,568 17,852,721 475,094 574,941 Time deposits 1,215,506 966,969 701,973 248,537 513,533 Total deposits $ 31,562,445 $ 31,373,950 $ 32,580,279 $ 188,495 $ (1,017,834 ) Noninterest bearing deposits as % of total 37.8 % 39.7 % 43.0 % Average deposits increased 0.6% on a linked-quarter basis and decreased 3.1% compared to the first quarter of 2022. As of March 31, 2023, the total estimated uninsured deposits were $21.3 billion or approximately 66.6% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.8 billion and represented approximately 43.1% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2023 December 31, 2022 March 31, 2022 Total equity $ 2,814,659 $ 2,667,093 $ 2,748,405 Accumulated other comprehensive (loss) income, net (626,776 ) (702,735 ) (343,128 ) Book value per common share 58.03 55.20 56.78 Tangible book value per common share (Non-GAAP) 52.17 49.28 52.69 Regulatory capital: Common equity Tier 1 capital $ 3,196,111 $ 3,129,030 $ 2,938,100 Tier 1 capital 3,196,111 3,129,030 2,938,100 Total capital 3,776,407 3,682,619 3,369,866 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.57 % 10.62 % 11.81 % Tier 1 risk-based capital ratio 10.57 10.62 11.81 Total risk-based capital ratio 12.49 12.50 13.55 Tier 1 leverage ratio 8.35 8.43 7.53 At March 31, 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) Q1 Q4 Q3 Q2 Q1 2023 2022 2022 2022 2022 Net charge-offs - total loans $ 4,643 $ 2,189 $ 1,173 $ 28,128 $ 8,378 Net loan charge-offs as a % of total average loans 0.09 % 0.04 % 0.02 % 0.62 % 0.20 % Loans over 90 days past due $ 1,723 $ 1,617 $ 2,513 $ 3,446 $ 3,600 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 15,480 $ 19,269 $ 19,817 $ 18,117 $ 110,356 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.10 % 0.10 % 0.62 % Provision for credit losses $ 23,250 $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) Provision for credit losses for the first quarter totaled $23.3 million, an increase of $14.3 million from the linked quarter and an increase of $29.8 million from the first quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the first quarter totaled $4.6 million, or 0.09%, of average loans, compared to $2.2 million, or 0.04%, of average loans in the linked quarter, and $8.4 million, or 0.20%, of average loans for the first quarter of 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on July 3, 2023, to shareholders of record at the close of business on June 12, 2023. Conference Call The company plans to host a conference call to discuss its first quarter 2023 earnings results on Wednesday, April 26, 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 443869. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2023 Conference Call A replay of the conference call may be heard through May 10, 2023, by calling (toll-free) 866-813-9403 or (international) 226-828-7578. The replay access code required for playback is 582627. 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) March 31, 2023 2022 ASSETS Loans $ 21,812,972 $ 17,731,700 Allowance for credit losses on loans (210,509 ) (179,288 ) Net loans 21,602,463 17,552,412 Loans held for sale 1,422 384 Securities: Available for sale 6,907,897 8,550,093 Held to maturity, net of allowance for credit losses 5,859,323 4,600,187 Trading securities 19,823 17,059 Other securities 416,337 332,123 Total securities 13,203,380 13,499,462 Federal funds sold and resell agreements 368,158 1,319,809 Interest-bearing due from banks 3,121,323 6,355,941 Cash and due from banks 472,248 357,772 Premises and equipment, net 260,623 264,519 Accrued income 181,586 127,139 Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Other assets 1,112,176 930,389 Total assets $ 40,607,190 $ 40,605,742 LIABILITIES Deposits: Noninterest-bearing demand $ 12,488,803 $ 15,946,738 Interest-bearing demand and savings 16,760,603 17,828,794 Time deposits under $250,000 456,129 399,467 Time deposits of $250,000 or more 2,226,369 187,566 Total deposits 31,931,904 34,362,565 Federal funds purchased and repurchase agreements 2,160,808 2,840,535 Short-term debt 2,800,000 — Long-term debt 381,796 272,036 Accrued expenses and taxes 207,633 178,130 Other liabilities 310,390 204,071 Total liabilities 37,792,531 37,857,337 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,120,877 1,109,585 Retained earnings 2,609,928 2,265,129 Accumulated other comprehensive loss, net (626,776 ) (343,128 ) Treasury stock (344,427 ) (338,238 ) Total shareholders' equity 2,814,659 2,748,405 Total liabilities and shareholders' equity $ 40,607,190 $ 40,605,742 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans $ 308,441 $ 149,470 Securities: Taxable interest 53,049 43,382 Tax-exempt interest 25,306 23,855 Total securities income 78,355 67,237 Federal funds and resell agreements 5,651 2,450 Interest-bearing due from banks 16,166 2,457 Trading securities 134 185 Total interest income 408,747 221,799 INTEREST EXPENSE Deposits 127,899 6,173 Federal funds and repurchase agreements 23,302 2,148 Other 15,850 3,123 Total interest expense 167,051 11,444 Net interest income 241,696 210,355 Provision for credit losses 23,250 (6,500 ) Net interest income after provision for credit losses 218,446 216,855 NONINTEREST INCOME Trust and securities processing 62,359 59,528 Trading and investment banking 5,308 5,440 Service charges on deposit accounts 21,159 24,642 Insurance fees and commissions 274 259 Brokerage fees 13,676 3,456 Bankcard fees 18,172 16,635 Investment securities losses, net (5,324 ) (522 ) Other 14,576 14,240 Total noninterest income 130,200 123,678 NONINTEREST EXPENSE Salaries and employee benefits 142,498 130,634 Occupancy, net 12,177 12,232 Equipment 17,849 18,164 Supplies and services 3,875 3,262 Marketing and business development 5,335 4,932 Processing fees 23,240 18,443 Legal and consulting 7,285 6,911 Bankcard 7,133 6,567 Amortization of other intangible assets 2,298 1,071 Regulatory fees 5,551 3,482 Other 9,811 9,080 Total noninterest expense 237,052 214,778 Income before income taxes 111,594 125,755 Income tax expense 19,157 19,792 NET INCOME $ 92,437 $ 105,963 PER SHARE DATA Net income – basic $ 1.91 $ 2.19 Net income – diluted 1.90 2.17 Dividends 0.38 0.37 Weighted average shares outstanding – basic 48,435,016 48,406,840 Weighted average shares outstanding – diluted 48,746,562 48,832,177 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Net income $ 92,437 $ 105,963 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 93,657 (622,910 ) Less: Reclassification adjustment for net losses included in net income 433 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 9,983 582 Change in unrealized gains and losses on debt securities 104,073 (622,328 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (1,527 ) 4,680 Less: Reclassification adjustment for net gains included in net income (2,561 ) (851 ) Change in unrealized gains and losses on derivative hedges (4,088 ) 3,829 Other comprehensive income (loss), before tax 99,985 (618,499 ) Income tax (expense) benefit (24,026 ) 149,057 Other comprehensive income (loss) 75,959 (469,442 ) Comprehensive income (loss) $ 168,396 $ (363,479 ) 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) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income — — 92,437 75,959 — 168,396 Dividends ($0.38 per share) — — (18,595 ) — — (18,595 ) Purchase of treasury stock — — — — (7,902 ) (7,902 ) Issuances of equity awards, net of forfeitures — (9,764 ) — — 10,483 719 Recognition of equity-based compensation — 4,516 — — — 4,516 Sale of treasury stock — 71 — — 56 127 Exercise of stock options — 105 — — 200 305 Balance - March 31, 2023 $ 55,057 $ 1,120,877 $ 2,609,928 $ (626,776 ) $ (344,427 ) $ 2,814,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 21,271,600 5.88 % $ 17,361,077 3.49 % Securities: Taxable 9,349,351 2.30 9,461,567 1.86 Tax-exempt 3,845,266 3.35 4,039,739 3.03 Total securities 13,194,617 2.61 13,501,306 2.21 Federal funds and resell agreements 451,188 5.08 1,265,776 0.78 Interest bearing due from banks 1,533,704 4.27 5,320,360 0.19 Trading securities 9,258 6.31 20,836 4.38 Total earning assets 36,460,367 4.62 37,469,355 2.47 Allowance for credit losses (196,128 ) (198,217 ) Other assets 2,239,140 1,882,376 Total assets $ 38,503,379 $ 39,153,514 Liabilities and Shareholders' Equity Interest-bearing deposits $ 19,643,168 2.64 % $ 18,554,694 0.13 % Federal funds and repurchase agreements 2,461,942 3.84 2,973,785 0.29 Borrowed funds 1,200,346 5.36 271,731 4.66 Total interest-bearing liabilities 23,305,456 2.91 21,800,210 0.21 Noninterest-bearing demand deposits 11,919,277 14,025,585 Other liabilities 554,211 394,714 Shareholders' equity 2,724,435 2,933,005 Total liabilities and shareholders' equity $ 38,503,379 $ 39,153,514 Net interest spread 1.71 % 2.26 % Net interest margin 2.76 2.35 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,027 $ 55,085 $ 35,584 $ 241,696 Provision for credit losses 21,045 96 2,109 23,250 Noninterest income 22,902 84,238 23,060 130,200 Noninterest expense 84,002 89,372 63,678 237,052 Income (loss) before taxes 68,882 49,855 (7,143 ) 111,594 Income tax expense (benefit) 11,825 8,558 (1,226 ) 19,157 Net income (loss) $ 57,057 $ 41,297 $ (5,917 ) $ 92,437 Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,700 73,272 23,706 123,678 Noninterest expense 79,589 75,602 59,587 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 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 March 31, 2023 2022 Net income (GAAP) $ 92,437 $ 105,963 Adjustments: Acquisition expense 39 — Severance expense 486 145 Tax-impact of adjustments (i) (126 ) (35 ) Total Non-GAAP adjustments (net of tax) 399 110 Net operating income (Non-GAAP) $ 92,836 $ 106,073 Earnings per share - diluted (GAAP) $ 1.90 $ 2.17 Acquisition expense — — Severance expense 0.01 — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 1.91 $ 2.17 GAAP Return on average assets 0.97 % 1.10 % Return on average equity 13.76 14.65 Non-GAAP Operating return on average assets 0.98 % 1.10 % Operating return on average equity 13.82 14.67 (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 March 31, 2023 2022 Noninterest expense $ 237,052 $ 214,778 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments (pre-tax) 525 145 Operating noninterest expense (Non-GAAP) $ 236,527 $ 214,633 Noninterest expense $ 237,052 $ 214,778 Less: Amortization of other intangibles 2,298 1,071 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 234,754 $ 213,707 Operating noninterest expense $ 236,527 $ 214,633 Less: Amortization of other intangibles 2,298 1,071 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,229 $ 213,562 Net interest income $ 241,696 $ 210,355 Noninterest income 130,200 123,678 Less: Losses on sales of securities available for sale, net (2 ) — Total Non-GAAP Revenue (denominator A) $ 371,898 $ 334,033 Efficiency ratio (numerator A/denominator A) 63.12 % 63.98 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 62.98 63.93 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income (Non-GAAP) $ 135,369 $ 119,400 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.78 $ 2.44 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,555 6,399 Net interest income - FTE (Non-GAAP) 248,251 216,754 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 141,924 $ 125,799 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Tax equivalent interest 0.13 0.13 Net interest income - FTE (Non-GAAP) 5.09 4.44 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.91 $ 2.57 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2023 2022 Total shareholders' equity (GAAP) $ 2,814,659 $ 2,748,405 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Total intangibles, net 283,811 197,915 Total tangible shareholders' equity (Non-GAAP) $ 2,530,848 $ 2,550,490 Total shares outstanding 48,507,116 48,403,262 Ratio of total shareholders' equity (book value) per share $ 58.03 $ 56.78 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.17 52.69 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Average total shareholders' equity (GAAP) $ 2,724,435 $ 2,621,693 $ 2,933,005 Less: Average intangible assets Average goodwill 207,385 194,805 174,689 Average other intangibles, net 77,575 46,243 14,105 Average total intangibles, net 284,960 241,049 188,794 Average total tangible shareholders' equity (Non-GAAP) 2,439,475 2,380,644 2,744,211 Less: Average accumulated other comprehensive (loss) income (AOCI) (643,559 ) (741,438 ) (126,392 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,083,034 $ 3,122,082 $ 2,870,603 Net operating income (Non-GAAP) $ 92,836 $ 101,092 $ 106,073 Non-GAAP Operating return on average tangible equity excluding AOCI 12.21 % 12.85 % 14.99 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230421005431/en/Contacts Media Contact: Stephanie Hague: 816.860.5088 Investor Relations Contact: Kay Gregory: 816.860.7106
First Quarter 2023 Financial Highlights GAAP net income of $92.4 million, or $1.90 per diluted share. Average loans increased 19.3% on a linked-quarter, annualized basis. Average deposits grew 2.4% on a linked-quarter, annualized basis. Diverse deposit base with approximately 55% of deposit relationships spanning ten or more years. At March 31, 2023, uninsured deposits represented 66.6% of total deposits. When adjusted to exclude affiliate and collateralized deposits, uninsured deposits were 43.1% of total deposits. Within our commercial deposits, no one sector represents more than 5% of quarterly average deposits. Strong risk-based capital ratios and liquidity positions. Noninterest income increased 5.3% as compared to the first quarter of 2022, equal to 35.0% of total revenue. Credit quality remained strong, with net charge-offs of just 0.09% of average loans and nonperforming loans of 0.07% of total loans.
UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2023 of $92.4 million, or $1.90 per diluted share, compared to $100.2 million, or $2.06 per diluted share, in the fourth quarter of 2022 (linked quarter) and $106.0 million, or $2.17 per diluted share, in the first 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 $92.8 million, or $1.91 per diluted share, for the first quarter of 2023, compared to $101.1 million, or $2.07 per diluted share, for the linked quarter and $106.1 million, or $2.17 per diluted share, for the first 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 $135.4 million, or $2.78 per diluted share, for the first quarter of 2023, compared to $134.1 million, or $2.75 per diluted share, for the linked quarter, and $119.4 million, or $2.44 per diluted share, for the first quarter of 2022. These operating PTPP results represent increases of 1.0% on a linked-quarter basis and 13.4%, compared to the first quarter of 2022. “Comments made publicly about the health of the banking industry, driven by the mistaken presumption that the drivers of the failure of two banks would apply to other banks generally, did a great disservice not only to UMB, but to regional banks as a whole,” said Mariner Kemper, chairman, president and chief executive officer. “Despite the challenging environment resulting from this flawed and exaggerated crisis of confidence created by certain market participants, we had a strong first quarter, with average deposit growth of 2.4% and average loan growth of 19.3%, on a linked-quarter annualized basis. We had continued momentum in our fee businesses, and credit quality remains strong, with net charge offs of just 0.09% of average loans. Nonperforming loans further improved from year-end, and were just 0.07% of loans at March 31.” Mr. Kemper continued, “Our business model is built to withstand difficult economic environments and crises. Our deposit base is diverse across multiple lines of businesses and reflects long tenured and deeply entrenched relationships, with more than 55% of our customers having banked with us for ten years or more. Our regulatory capital ratios are above peer median, and our liquidity levels are strong, including many contingent sources. Despite conjectures in the aftermath of Silicon Valley Bank’s failure, not every bank, including UMB, needs to sell investment securities at a loss.” First Quarter 2023 earnings discussion Summary of quarterly financial results UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Q1 Q4 Q1 2023 2022 2022 Net income (GAAP) $ 92,437 $ 100,173 $ 105,963 Earnings per share (diluted) 1.90 2.06 2.17 Operating pre-tax, pre-provision income (Non-GAAP) 135,369 134,054 119,400 Operating pre-tax, pre-provision earnings per share (diluted) 2.78 2.75 2.44 Operating pre-tax, pre-provision income - FTE (Non-GAAP) 141,924 140,717 125,799 Operating pre-tax, pre-provision earnings per share - FTE (diluted) 2.91 2.89 2.57 Net operating income (Non-GAAP) 92,836 101,092 106,073 Operating earnings per share (diluted) 1.91 2.07 2.17 GAAP Return on average assets 0.97 % 1.06 % 1.10 % Return on average equity 13.76 15.16 14.65 Efficiency ratio 63.12 63.72 63.98 Non-GAAP (i) Operating return on average assets 0.98 % 1.07 % 1.10 % Operating return on average equity 13.82 15.30 14.67 Operating return on average tangible equity excluding AOCI 12.21 12.85 14.99 Operating efficiency ratio 62.98 63.39 63.93 (i) See Non-GAAP reconciliation later in this release. Summary of revenue UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Net interest income $ 241,696 $ 245,166 $ 210,355 $ (3,470 ) $ 31,341 Noninterest income: Trust and securities processing 62,359 59,207 59,528 3,152 2,831 Trading and investment banking 5,308 5,251 5,440 57 (132 ) Service charges on deposit accounts 21,159 19,758 24,642 1,401 (3,483 ) Insurance fees and commissions 274 459 259 (185 ) 15 Brokerage fees 13,676 13,332 3,456 344 10,220 Bankcard fees 18,172 19,597 16,635 (1,425 ) 1,537 Investment securities losses, net (5,324 ) (409 ) (522 ) (4,915 ) (4,802 ) Other 14,576 8,302 14,240 6,274 336 Total noninterest income $ 130,200 $ 125,497 $ 123,678 $ 4,703 $ 6,522 Total revenue $ 371,896 $ 370,663 $ 334,033 $ 1,233 $ 37,863 Net interest income (FTE) $ 248,251 $ 251,829 $ 216,754 Net interest margin (FTE) 2.76 % 2.83 % 2.35 % Total noninterest income as a % of total revenue 35.0 33.9 37.0 Net interest income First quarter 2023 net interest income totaled $241.7 million, a decrease of $3.5 million, or 1.4% from the linked quarter, driven by the impact of fewer days in the first quarter, as well as higher interest costs primarily driven by unfavorable mix shift in the composition of liabilities, partially offset by continued growth in average loans. Average earning assets increased $1.2 billion, or 3.3% from the linked quarter, largely driven by an increase of $976.9 million in average loans, an increase of $398.3 million in interest-bearing due from banks, partially offset by a decrease of $204.9 million in federal funds sold and resell agreements. Average interest-bearing liabilities increased $1.6 billion, or 7.2% from the linked quarter, primarily driven by increases of $803.5 million in borrowed funds and $723.6 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $535.1 million, or 4.3% as compared to the linked quarter. Net interest margin for the first quarter was 2.76%, a decrease of seven basis points from the linked quarter, driven by increased cost of interest-bearing liabilities, partially offset by the benefit of free funds and earning asset mix changes. The cost of interest-bearing liabilities increased 69 basis points to 2.91%. Total cost of funds increased 51 basis points from the linked quarter to 1.92%. Average loan yields increased 53 basis points while earning asset yields increased 42 basis points from the linked quarter. On a year-over-year basis, net interest income increased $31.3 million, or 14.9%, driven by a $3.9 billion, or 22.5%, increase in average loans, favorable mix shift in earning assets, and benefit from higher interest rates, partially offset by higher cost of interest-bearing liabilities. Compared to the first quarter of 2022, average earning assets decreased $1.0 billion, or 2.7%, largely driven by a decrease of $3.8 billion in interest-bearing due from banks and a decrease of $814.6 million in federal funds sold and resell agreements, partially offset by the increase in average loans noted above. Average deposits decreased 3.1% compared to the first quarter of 2022. Average noninterest-bearing demand deposit balances decreased 15.0% compared to the first quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 37.8% of total deposits, compared to 39.7% in the linked quarter and 43.0% in the first quarter of 2022. Average borrowed funds increased $803.5 million as compared to the linked quarter and $928.6 million as compared to the first quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window. Noninterest income First quarter 2023 noninterest income increased $4.7 million, or 3.7%, on a linked-quarter basis, largely due to: Increases of $4.0 million in company-owned life insurance income and $1.8 million in derivative income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $1.8 million in corporate trust income, $0.9 million in fund services income and $0.5 million in trust income, all recorded in trust and securities processing. These increases were partially offset by a decrease of $4.9 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter. Compared to the prior year, noninterest income in the first quarter of 2023 increased $6.5 million, or 5.3%, primarily driven by: An increase of $10.2 million in brokerage income, largely driven by increases in 12b-1 fees and money market income. An increase of $4.1 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. Increases of $2.3 million in corporate trust income and $1.3 million in fund services income, both recorded in trust and securities processing. An increase of $1.5 million in bankcard income due to higher interchange revenue. These increases were partially offset by the following decreases: A decrease of $4.8 million in investment securities gains, driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter of 2023. A decrease of $3.5 million in service charges on deposits primarily due to decreased healthcare services income related to customer transfer and conversion fees recognized in the first quarter of 2022. A decrease of $2.4 million in other miscellaneous income, driven by the gain on sale of the company’s factoring loan portfolio recorded in the first quarter of 2022. A decrease of $2.1 million in derivative income, recorded in other income. Noninterest expense Summary of noninterest expense UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Salaries and employee benefits $ 142,498 $ 135,940 $ 130,634 $ 6,558 $ 11,864 Occupancy, net 12,177 12,409 12,232 (232 ) (55 ) Equipment 17,849 18,969 18,164 (1,120 ) (315 ) Supplies and services 3,875 3,697 3,262 178 613 Marketing and business development 5,335 8,788 4,932 (3,453 ) 403 Processing fees 23,240 23,545 18,443 (305 ) 4,797 Legal and consulting 7,285 10,664 6,911 (3,379 ) 374 Bankcard 7,133 7,369 6,567 (236 ) 566 Amortization of other intangible assets 2,298 1,649 1,071 649 1,227 Regulatory fees 5,551 4,232 3,482 1,319 2,069 Other 9,811 10,556 9,080 (745 ) 731 Total noninterest expense $ 237,052 $ 237,818 $ 214,778 $ (766 ) $ 22,274 Noninterest expense for the first quarter of 2023 was $237.1 million, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $22.3 million, or 10.4%, from the first quarter of 2022. The linked-quarter decrease in noninterest expense was driven by: A decrease of $6.6 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2022. Decreases of $3.5 million in marketing and business development expense and $3.4 million in legal and consulting expense due to the timing of multiple projects. The decrease in marketing and business development expense was also partially driven by a decrease in advertising for various projects and a decrease in travel and entertainment expense. A decrease of $1.1 million in equipment expense driven by reduced software expense. These decreases were partially offset by increases of $13.2 million in employee benefits expense driven by a seasonal increase of $11.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $2.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.3 million in regulatory fees expense driven by higher deposit insurance expense due to previously announced higher industry assessment rates. The year-over-year increase in noninterest expense was driven by: An increase of $11.9 million in salaries and employee benefits expense, driven primarily by increases of $11.0 million in salaries and wage expense and $4.7 million in employee benefits expense, primarily due to an increase of $3.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.7 million in deferred compensation expense. These increases were partially offset by a decrease of $3.8 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. An increase of $4.8 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects. Increases of $2.1 million in regulatory fees expense driven by higher deposit insurance expense, $2.0 million in operational losses, recorded in other expense, and $1.2 million in intangible amortization expense. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022. Income taxes The company’s effective tax rate was 17.2% for the three months ended March 31, 2023, compared to 15.7% for the same period in 2022. The effective tax rate increased primarily as a result of a decrease in excess tax benefits associated with stock compensation recorded in the first quarter of 2023 compared to the same period a year earlier. Balance sheet Average total assets for the first quarter of 2023 were $38.5 billion compared to $37.3 billion for the linked quarter and $39.2 billion for the same period in 2022. Summary of average loans and leases - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Commercial and industrial $ 9,287,319 $ 8,891,356 $ 7,409,623 $ 395,963 $ 1,877,696 Specialty lending 564,633 559,200 463,793 5,433 100,840 Commercial real estate 7,812,140 7,323,877 6,338,160 488,263 1,473,980 Consumer real estate 2,738,184 2,678,771 2,339,050 59,413 399,134 Consumer 136,571 145,811 135,942 (9,240 ) 629 Credit cards 453,704 457,043 399,857 (3,339 ) 53,847 Leases and other 279,049 238,603 274,652 40,446 4,397 Total loans $ 21,271,600 $ 20,294,661 $ 17,361,077 $ 976,939 $ 3,910,523 Average loans for the first quarter of 2023 increased $976.9 million, or 4.8%, on a linked-quarter basis and $3.9 billion, or 22.5%, compared to the first quarter of 2022. Summary of average securities - QTD Average UMB Financial Corporation (unaudited, dollars in thousands) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Securities available for sale: U.S. Treasury $ 783,170 $ 752,339 $ 176,476 $ 30,831 $ 606,694 U.S. Agencies 171,825 171,171 125,017 654 46,808 Mortgage-backed 3,938,137 4,027,120 7,317,968 (88,983 ) (3,379,831 ) State and political subdivisions 1,356,785 1,353,307 3,170,757 3,478 (1,813,972 ) Corporates 364,854 366,131 337,526 (1,277 ) 27,328 Collateralized loan obligations 348,477 328,475 150,134 20,002 198,343 Total securities available for sale $ 6,963,248 $ 6,998,543 $ 11,277,878 $ (35,295 ) $ (4,314,630 ) Securities held to maturity: U.S. Agencies $ 123,106 $ 123,077 $ 133 $ 29 $ 122,973 Mortgage-backed 2,934,113 2,983,489 708,075 (49,376 ) 2,226,038 State and political subdivisions 2,814,912 2,765,717 1,185,609 49,195 1,629,303 Total securities held to maturity $ 5,872,131 $ 5,872,283 $ 1,893,817 $ (152 ) $ 3,978,314 Trading securities 9,258 11,799 20,836 (2,541 ) (11,578 ) Other securities 359,238 315,748 329,611 43,490 29,627 Total securities $ 13,203,875 $ 13,198,373 $ 13,522,142 $ 5,502 $ (318,267 ) Average total securities remained flat on a linked-quarter basis and decreased 2.4% compared to the first quarter of 2022. At March 31, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio narrowed to $677.7 million, or 8.9% of the $7.6 billion amortized cost value, down from $771.6 million at December 31, 2022. At March 31, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity narrowed to $489.8 million, or 8.4% of amortized cost value, compared to $580.9 million at December 31, 2022. 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 $237.1 million as of March 31, 2023 and was included in the amortized cost balance of held-to-maturity securities. At March 31, 2023, an after-tax gain of $57.2 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, nine 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) Q1 Q4 Q1 CQ vs. CQ vs. 2023 2022 2022 LQ PY Deposits: Noninterest-bearing demand $ 11,919,277 $ 12,454,413 $ 14,025,585 $ (535,136 ) $ (2,106,308 ) Interest-bearing demand and savings 18,427,662 17,952,568 17,852,721 475,094 574,941 Time deposits 1,215,506 966,969 701,973 248,537 513,533 Total deposits $ 31,562,445 $ 31,373,950 $ 32,580,279 $ 188,495 $ (1,017,834 ) Noninterest bearing deposits as % of total 37.8 % 39.7 % 43.0 % Average deposits increased 0.6% on a linked-quarter basis and decreased 3.1% compared to the first quarter of 2022. As of March 31, 2023, the total estimated uninsured deposits were $21.3 billion or approximately 66.6% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.8 billion and represented approximately 43.1% of total deposits. Capital Capital information UMB Financial Corporation (unaudited, dollars in thousands, except per share data) March 31, 2023 December 31, 2022 March 31, 2022 Total equity $ 2,814,659 $ 2,667,093 $ 2,748,405 Accumulated other comprehensive (loss) income, net (626,776 ) (702,735 ) (343,128 ) Book value per common share 58.03 55.20 56.78 Tangible book value per common share (Non-GAAP) 52.17 49.28 52.69 Regulatory capital: Common equity Tier 1 capital $ 3,196,111 $ 3,129,030 $ 2,938,100 Tier 1 capital 3,196,111 3,129,030 2,938,100 Total capital 3,776,407 3,682,619 3,369,866 Regulatory capital ratios: Common equity Tier 1 capital ratio 10.57 % 10.62 % 11.81 % Tier 1 risk-based capital ratio 10.57 10.62 11.81 Total risk-based capital ratio 12.49 12.50 13.55 Tier 1 leverage ratio 8.35 8.43 7.53 At March 31, 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) Q1 Q4 Q3 Q2 Q1 2023 2022 2022 2022 2022 Net charge-offs - total loans $ 4,643 $ 2,189 $ 1,173 $ 28,128 $ 8,378 Net loan charge-offs as a % of total average loans 0.09 % 0.04 % 0.02 % 0.62 % 0.20 % Loans over 90 days past due $ 1,723 $ 1,617 $ 2,513 $ 3,446 $ 3,600 Loans over 90 days past due as a % of total loans 0.01 % 0.01 % 0.01 % 0.02 % 0.02 % Nonaccrual and restructured loans $ 15,480 $ 19,269 $ 19,817 $ 18,117 $ 110,356 Nonaccrual and restructured loans as a % of total loans 0.07 % 0.09 % 0.10 % 0.10 % 0.62 % Provision for credit losses $ 23,250 $ 9,000 $ 22,000 $ 13,400 $ (6,500 ) Provision for credit losses for the first quarter totaled $23.3 million, an increase of $14.3 million from the linked quarter and an increase of $29.8 million from the first quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic metrics in the current period as compared to the prior periods. Net charge-offs for the first quarter totaled $4.6 million, or 0.09%, of average loans, compared to $2.2 million, or 0.04%, of average loans in the linked quarter, and $8.4 million, or 0.20%, of average loans for the first quarter of 2022. Dividend Declaration At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on July 3, 2023, to shareholders of record at the close of business on June 12, 2023. Conference Call The company plans to host a conference call to discuss its first quarter 2023 earnings results on Wednesday, April 26, 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 443869. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link: UMB Financial 1Q 2023 Conference Call A replay of the conference call may be heard through May 10, 2023, by calling (toll-free) 866-813-9403 or (international) 226-828-7578. The replay access code required for playback is 582627. 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) March 31, 2023 2022 ASSETS Loans $ 21,812,972 $ 17,731,700 Allowance for credit losses on loans (210,509 ) (179,288 ) Net loans 21,602,463 17,552,412 Loans held for sale 1,422 384 Securities: Available for sale 6,907,897 8,550,093 Held to maturity, net of allowance for credit losses 5,859,323 4,600,187 Trading securities 19,823 17,059 Other securities 416,337 332,123 Total securities 13,203,380 13,499,462 Federal funds sold and resell agreements 368,158 1,319,809 Interest-bearing due from banks 3,121,323 6,355,941 Cash and due from banks 472,248 357,772 Premises and equipment, net 260,623 264,519 Accrued income 181,586 127,139 Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Other assets 1,112,176 930,389 Total assets $ 40,607,190 $ 40,605,742 LIABILITIES Deposits: Noninterest-bearing demand $ 12,488,803 $ 15,946,738 Interest-bearing demand and savings 16,760,603 17,828,794 Time deposits under $250,000 456,129 399,467 Time deposits of $250,000 or more 2,226,369 187,566 Total deposits 31,931,904 34,362,565 Federal funds purchased and repurchase agreements 2,160,808 2,840,535 Short-term debt 2,800,000 — Long-term debt 381,796 272,036 Accrued expenses and taxes 207,633 178,130 Other liabilities 310,390 204,071 Total liabilities 37,792,531 37,857,337 SHAREHOLDERS' EQUITY Common stock 55,057 55,057 Capital surplus 1,120,877 1,109,585 Retained earnings 2,609,928 2,265,129 Accumulated other comprehensive loss, net (626,776 ) (343,128 ) Treasury stock (344,427 ) (338,238 ) Total shareholders' equity 2,814,659 2,748,405 Total liabilities and shareholders' equity $ 40,607,190 $ 40,605,742 Consolidated Statements of Income UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans $ 308,441 $ 149,470 Securities: Taxable interest 53,049 43,382 Tax-exempt interest 25,306 23,855 Total securities income 78,355 67,237 Federal funds and resell agreements 5,651 2,450 Interest-bearing due from banks 16,166 2,457 Trading securities 134 185 Total interest income 408,747 221,799 INTEREST EXPENSE Deposits 127,899 6,173 Federal funds and repurchase agreements 23,302 2,148 Other 15,850 3,123 Total interest expense 167,051 11,444 Net interest income 241,696 210,355 Provision for credit losses 23,250 (6,500 ) Net interest income after provision for credit losses 218,446 216,855 NONINTEREST INCOME Trust and securities processing 62,359 59,528 Trading and investment banking 5,308 5,440 Service charges on deposit accounts 21,159 24,642 Insurance fees and commissions 274 259 Brokerage fees 13,676 3,456 Bankcard fees 18,172 16,635 Investment securities losses, net (5,324 ) (522 ) Other 14,576 14,240 Total noninterest income 130,200 123,678 NONINTEREST EXPENSE Salaries and employee benefits 142,498 130,634 Occupancy, net 12,177 12,232 Equipment 17,849 18,164 Supplies and services 3,875 3,262 Marketing and business development 5,335 4,932 Processing fees 23,240 18,443 Legal and consulting 7,285 6,911 Bankcard 7,133 6,567 Amortization of other intangible assets 2,298 1,071 Regulatory fees 5,551 3,482 Other 9,811 9,080 Total noninterest expense 237,052 214,778 Income before income taxes 111,594 125,755 Income tax expense 19,157 19,792 NET INCOME $ 92,437 $ 105,963 PER SHARE DATA Net income – basic $ 1.91 $ 2.19 Net income – diluted 1.90 2.17 Dividends 0.38 0.37 Weighted average shares outstanding – basic 48,435,016 48,406,840 Weighted average shares outstanding – diluted 48,746,562 48,832,177 Consolidated Statements of Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Net income $ 92,437 $ 105,963 Other comprehensive income (loss), before tax: Unrealized gains and losses on debt securities: Change in unrealized holding gains and losses, net 93,657 (622,910 ) Less: Reclassification adjustment for net losses included in net income 433 — Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 9,983 582 Change in unrealized gains and losses on debt securities 104,073 (622,328 ) Unrealized gains and losses on derivative hedges: Change in unrealized gains and losses on derivative hedges, net (1,527 ) 4,680 Less: Reclassification adjustment for net gains included in net income (2,561 ) (851 ) Change in unrealized gains and losses on derivative hedges (4,088 ) 3,829 Other comprehensive income (loss), before tax 99,985 (618,499 ) Income tax (expense) benefit (24,026 ) 149,057 Other comprehensive income (loss) 75,959 (469,442 ) Comprehensive income (loss) $ 168,396 $ (363,479 ) 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) — — 105,963 (469,442 ) — (363,479 ) Dividends ($0.37 per share) — — (17,832 ) — — (17,832 ) Purchase of treasury stock — — — — (22,487 ) (22,487 ) Issuances of equity awards, net of forfeitures — (6,630 ) — — 7,309 679 Recognition of equity-based compensation — 5,485 — — — 5,485 Sale of treasury stock — 84 — — 54 138 Exercise of stock options — 126 — — 351 477 Balance - March 31, 2022 $ 55,057 $ 1,109,585 $ 2,265,129 $ (343,128 ) $ (338,238 ) $ 2,748,405 Balance - January 1, 2023 $ 55,057 $ 1,125,949 $ 2,536,086 $ (702,735 ) $ (347,264 ) $ 2,667,093 Total comprehensive income — — 92,437 75,959 — 168,396 Dividends ($0.38 per share) — — (18,595 ) — — (18,595 ) Purchase of treasury stock — — — — (7,902 ) (7,902 ) Issuances of equity awards, net of forfeitures — (9,764 ) — — 10,483 719 Recognition of equity-based compensation — 4,516 — — — 4,516 Sale of treasury stock — 71 — — 56 127 Exercise of stock options — 105 — — 200 305 Balance - March 31, 2023 $ 55,057 $ 1,120,877 $ 2,609,928 $ (626,776 ) $ (344,427 ) $ 2,814,659 Average Balances / Yields and Rates UMB Financial Corporation (tax - equivalent basis) (unaudited, dollars in thousands) Three Months Ended March 31, 2023 2022 Average Average Average Average Balance Yield/Rate Balance Yield/Rate Assets Loans, net of unearned interest $ 21,271,600 5.88 % $ 17,361,077 3.49 % Securities: Taxable 9,349,351 2.30 9,461,567 1.86 Tax-exempt 3,845,266 3.35 4,039,739 3.03 Total securities 13,194,617 2.61 13,501,306 2.21 Federal funds and resell agreements 451,188 5.08 1,265,776 0.78 Interest bearing due from banks 1,533,704 4.27 5,320,360 0.19 Trading securities 9,258 6.31 20,836 4.38 Total earning assets 36,460,367 4.62 37,469,355 2.47 Allowance for credit losses (196,128 ) (198,217 ) Other assets 2,239,140 1,882,376 Total assets $ 38,503,379 $ 39,153,514 Liabilities and Shareholders' Equity Interest-bearing deposits $ 19,643,168 2.64 % $ 18,554,694 0.13 % Federal funds and repurchase agreements 2,461,942 3.84 2,973,785 0.29 Borrowed funds 1,200,346 5.36 271,731 4.66 Total interest-bearing liabilities 23,305,456 2.91 21,800,210 0.21 Noninterest-bearing demand deposits 11,919,277 14,025,585 Other liabilities 554,211 394,714 Shareholders' equity 2,724,435 2,933,005 Total liabilities and shareholders' equity $ 38,503,379 $ 39,153,514 Net interest spread 1.71 % 2.26 % Net interest margin 2.76 2.35 Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, 2023 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 151,027 $ 55,085 $ 35,584 $ 241,696 Provision for credit losses 21,045 96 2,109 23,250 Noninterest income 22,902 84,238 23,060 130,200 Noninterest expense 84,002 89,372 63,678 237,052 Income (loss) before taxes 68,882 49,855 (7,143 ) 111,594 Income tax expense (benefit) 11,825 8,558 (1,226 ) 19,157 Net income (loss) $ 57,057 $ 41,297 $ (5,917 ) $ 92,437 Three Months Ended March 31, 2022 Commercial Banking Institutional Banking Personal Banking Total Net interest income $ 145,002 $ 26,253 39,100 $ 210,355 Provision for credit losses (7,040 ) 151 389 (6,500 ) Noninterest income 26,700 73,272 23,706 123,678 Noninterest expense 79,589 75,602 59,587 214,778 Income before taxes 99,153 23,772 2,830 125,755 Income tax expense 15,606 3,741 445 19,792 Net income $ 83,547 $ 20,031 $ 2,385 $ 105,963 The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 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 March 31, 2023 2022 Net income (GAAP) $ 92,437 $ 105,963 Adjustments: Acquisition expense 39 — Severance expense 486 145 Tax-impact of adjustments (i) (126 ) (35 ) Total Non-GAAP adjustments (net of tax) 399 110 Net operating income (Non-GAAP) $ 92,836 $ 106,073 Earnings per share - diluted (GAAP) $ 1.90 $ 2.17 Acquisition expense — — Severance expense 0.01 — Tax-impact of adjustments (i) — — Operating earnings per share - diluted (Non-GAAP) $ 1.91 $ 2.17 GAAP Return on average assets 0.97 % 1.10 % Return on average equity 13.76 14.65 Non-GAAP Operating return on average assets 0.98 % 1.10 % Operating return on average equity 13.82 14.67 (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 March 31, 2023 2022 Noninterest expense $ 237,052 $ 214,778 Adjustments to arrive at operating noninterest expense (pre-tax): Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments (pre-tax) 525 145 Operating noninterest expense (Non-GAAP) $ 236,527 $ 214,633 Noninterest expense $ 237,052 $ 214,778 Less: Amortization of other intangibles 2,298 1,071 Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) $ 234,754 $ 213,707 Operating noninterest expense $ 236,527 $ 214,633 Less: Amortization of other intangibles 2,298 1,071 Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) $ 234,229 $ 213,562 Net interest income $ 241,696 $ 210,355 Noninterest income 130,200 123,678 Less: Losses on sales of securities available for sale, net (2 ) — Total Non-GAAP Revenue (denominator A) $ 371,898 $ 334,033 Efficiency ratio (numerator A/denominator A) 63.12 % 63.98 % Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) 62.98 63.93 Operating pre-tax, pre-provision income non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income (Non-GAAP) $ 135,369 $ 119,400 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) $ 2.78 $ 2.44 Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except per share data) Three Months Ended March 31, 2023 2022 Net interest income (GAAP) $ 241,696 $ 210,355 Adjustments to arrive at net interest income - FTE: Tax equivalent interest 6,555 6,399 Net interest income - FTE (Non-GAAP) 248,251 216,754 Noninterest income (GAAP) 130,200 123,678 Noninterest expense (GAAP) 237,052 214,778 Adjustments to arrive at operating noninterest expense: Acquisition expense 39 — Severance expense 486 145 Total Non-GAAP adjustments 525 145 Operating noninterest expense (Non-GAAP) 236,527 214,633 Operating pre-tax, pre-provision income - FTE (Non-GAAP) $ 141,924 $ 125,799 Net interest income earnings per share - diluted (GAAP) $ 4.96 $ 4.31 Tax equivalent interest 0.13 0.13 Net interest income - FTE (Non-GAAP) 5.09 4.44 Noninterest income (GAAP) 2.67 2.53 Noninterest expense (GAAP) 4.86 4.40 Acquisition expense — — Severance expense 0.01 — Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) $ 2.91 $ 2.57 Tangible book value non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) As of March 31, 2023 2022 Total shareholders' equity (GAAP) $ 2,814,659 $ 2,748,405 Less: Intangible assets Goodwill 207,385 182,225 Other intangibles, net 76,426 15,690 Total intangibles, net 283,811 197,915 Total tangible shareholders' equity (Non-GAAP) $ 2,530,848 $ 2,550,490 Total shares outstanding 48,507,116 48,403,262 Ratio of total shareholders' equity (book value) per share $ 58.03 $ 56.78 Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) 52.17 52.69 Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: UMB Financial Corporation (unaudited, dollars in thousands) Three Months Ended March 31, December 31, March 31, 2023 2022 2022 Average total shareholders' equity (GAAP) $ 2,724,435 $ 2,621,693 $ 2,933,005 Less: Average intangible assets Average goodwill 207,385 194,805 174,689 Average other intangibles, net 77,575 46,243 14,105 Average total intangibles, net 284,960 241,049 188,794 Average total tangible shareholders' equity (Non-GAAP) 2,439,475 2,380,644 2,744,211 Less: Average accumulated other comprehensive (loss) income (AOCI) (643,559 ) (741,438 ) (126,392 ) Average total tangible shareholders' equity excluding AOCI (Non-GAAP) $ 3,083,034 $ 3,122,082 $ 2,870,603 Net operating income (Non-GAAP) $ 92,836 $ 101,092 $ 106,073 Non-GAAP Operating return on average tangible equity excluding AOCI 12.21 % 12.85 % 14.99 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230421005431/en/