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2 Reasons to Watch UMBF and 1 to Stay Cautious

By: StockStory

October 07, 2025 at 00:00 AM EDT

UMBF Cover Image

Over the past six months, UMB Financial has been a great trade, beating the S&P 500 by 5.4%. Its stock price has climbed to $120, representing a healthy 38.6% increase. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.

Is it too late to buy UMBF? Find out in our full research report, it’s free for active Edge members.

Why Does UMB Financial Spark Debate?

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

Two Things to Like:

1. Net Interest Income Skyrockets, Fueling Growth Opportunities

Markets consistently prioritize net interest income over non-recurring fees, recognizing its superior quality compared to the more unpredictable revenue streams.

UMB Financial’s net interest income has grown at a 19.7% annualized rate over the last five years, much better than the broader banking industry and faster than its total revenue.

UMB Financial Trailing 12-Month Net Interest Income

2. Forecasted Efficiency Ratio Shows Stronger Profits Ahead

Topline growth carries importance, but the overall profitability behind this expansion determines true value creation. For banks, the efficiency ratio captures this relationship by measuring non-interest expenses, including salaries, facilities, technology, and marketing, against total revenue.

Markets understand that a bank’s expense base depends on its revenue mix and what mostly drives share price performance is the change in this ratio, rather than its absolute value. It’s somewhat counterintuitive, but a lower efficiency ratio is better.

For the next 12 months, Wall Street expects UMB Financial to rein in some of its expenses as it anticipates an efficiency ratio of 54.9% compared to 61% over the past year.

UMB Financial Trailing 12-Month Efficiency Ratio

One Reason to be Careful:

Low Net Interest Margin Reveals Weak Loan Book Profitability

The net interest margin (NIM) is a key profitability indicator that measures the difference between what a bank earns on its loans and what it pays on its deposits. This metric measures how efficiently one can generate income from its core lending activities.

Over the past two years, we can see that UMB Financial’s net interest margin averaged a poor 2.7%, reflecting its high servicing and capital costs.

UMB Financial Trailing 12-Month Net Interest Margin

Final Judgment

UMB Financial has huge potential even though it has some open questions, and with its shares beating the market recently, the stock trades at 1.3× forward P/B (or $120 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

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