10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to ____

Commission file number 001-38481

UMB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


Missouri		43-0903811
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


1010 Grand Boulevard, Kansas City, Missouri		64106
(Address of principal executive offices)		(Zip Code)

(Registrant's telephone number, including area code): (816) 860-7000

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 Par Value	UMBF	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non- accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of October 28, 2024, UMB Financial Corporation had 48,798,443 shares of common stock outstanding.

UMB FINANCIAL CORPORATION

FORM 10-Q

INDEX


PART I – FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	3
CONSOLIDATED BALANCE SHEETS		3
CONSOLIDATED STATEMENTS OF INCOME		4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		5
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY		6
CONSOLIDATED STATEMENTS OF CASH FLOWS		7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	56
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	79
ITEM 4.	CONTROLS AND PROCEDURES	84

PART II - OTHER INFORMATION		85

ITEM 1.	LEGAL PROCEEDINGS	85
ITEM 1A.	RISK FACTORS	85
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	85
ITEM 5.	OTHER INFORMATION	85
ITEM 6.	EXHIBITS	87
SIGNATURES		88

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UMB FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, dollars in thousands, except share and per share data)


	September 30,			December 31,
	2024			2023
ASSETS
Loans	$	24,990,791		$	23,172,484
Allowance for credit losses on loans		(248,907	)		(219,738	)
Net loans		24,741,884			22,952,746
Loans held for sale		5,176			4,420
Securities:
Available for sale (amortized cost of $7,465,379 and $7,692,860, respectively)		7,015,998			7,068,613
Held to maturity, net of allowance for credit losses of $2,762 and $3,258, respectively (fair value of $4,913,972 and $5,183,367, respectively)		5,474,710			5,688,610
Trading securities		35,839			18,093
Other securities		465,477			492,935
Total securities		12,992,024			13,268,251
Federal funds sold and securities purchased under agreements to resell		399,234			245,344
Interest-bearing due from banks		6,601,866			5,159,802
Cash and due from banks		778,069			447,201
Premises and equipment, net		222,056			241,700
Accrued income		218,651			220,306
Goodwill		207,385			207,385
Other intangibles, net		65,564			71,012
Other assets		1,264,519			1,193,507
Total assets	$	47,496,428		$	44,011,674

LIABILITIES
Deposits:
Noninterest-bearing demand	$	12,840,940		$	12,130,662
Interest-bearing demand and savings		24,798,869			20,588,606
Time deposits under $250,000		1,245,532			2,292,899
Time deposits of $250,000 or more		817,251			780,692
Total deposits		39,702,592			35,792,859
Federal funds purchased and repurchase agreements		2,023,297			2,119,644
Short-term debt		1,050,000			1,800,000
Long-term debt		384,758			383,247
Accrued expenses and taxes		387,223			389,860
Other liabilities		413,069			425,645
Total liabilities		43,960,939			40,911,255

SHAREHOLDERS' EQUITY
Common stock, $1.00 par value; 80,000,000 shares authorized; 55,056,730 shares issued, 48,797,672 and 48,554,127 shares outstanding, respectively		55,057			55,057
Capital surplus		1,138,350			1,134,363
Retained earnings		3,074,617			2,810,824
Accumulated other comprehensive loss, net		(395,856	)		(556,935	)
Treasury stock, 6,259,058 and 6,502,603 shares, at cost, respectively		(336,679	)		(342,890	)
Total shareholders' equity		3,535,489			3,100,419
Total liabilities and shareholders' equity	$	47,496,428		$	44,011,674

See Notes to Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands, except share and per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
INTEREST INCOME
Loans	$	416,400	$	367,485	$	1,202,317	$	1,018,920
Securities:
Taxable interest		63,466		53,455		186,159		161,091
Tax-exempt interest		24,578		25,704		74,988		76,560
Total securities income		88,044		79,159		261,147		237,651
Federal funds and resell agreements		4,990		4,567		11,726		14,107
Interest-bearing due from banks		47,969		20,551		139,831		70,923
Trading securities		291		214		1,020		502
Total interest income		557,694		471,976		1,616,041		1,342,103
INTEREST EXPENSE
Deposits		262,599		191,919		726,999		490,368
Federal funds and repurchase agreements		27,070		23,076		82,813		71,123
Other		20,649		34,694		74,311		91,018
Total interest expense		310,318		249,689		884,123		652,509
Net interest income		247,376		222,287		731,918		689,594
Provision for credit losses		18,000		4,977		42,050		41,227
Net interest income after provision for credit losses		229,376		217,310		689,868		648,367
NONINTEREST INCOME
Trust and securities processing		74,222		66,668		213,710		190,616
Trading and investment banking		7,118		3,771		18,041		13,879
Service charges on deposit accounts		20,089		21,080		63,107		63,620
Insurance fees and commissions		282		272		832		771
Brokerage fees		15,749		13,400		42,929		40,680
Bankcard fees		22,394		19,296		66,708		56,047
Investment securities gains (losses), net		2,623		271		10,127		(4,153	)
Other		16,266		8,559		47,452		40,139
Total noninterest income		158,743		133,317		462,906		401,599
NONINTEREST EXPENSE
Salaries and employee benefits		146,984		133,380		432,851		419,190
Occupancy, net		12,274		12,283		36,267		36,206
Equipment		15,988		17,204		48,094		52,139
Supplies and services		4,967		3,213		11,672		11,283
Marketing and business development		6,817		6,631		19,440		19,090
Processing fees		29,697		26,016		87,334		75,828
Legal and consulting		9,518		7,230		33,978		21,574
Bankcard		12,482		8,852		34,867		24,292
Amortization of other intangible assets		1,917		2,124		5,788		6,539
Regulatory fees		4,686		6,153		26,649		17,827
Other		7,124		8,355		19,385		25,198
Total noninterest expense		252,454		231,441		756,325		709,166
Income before income taxes		135,665		119,186		396,449		340,800
Income tax expense		26,022		22,632		75,203		61,699
NET INCOME	$	109,643	$	96,554	$	321,246	$	279,101

PER SHARE DATA
Net income – basic	$	2.25	$	1.99	$	6.59	$	5.76
Net income – diluted		2.23		1.98		6.56		5.73
Dividends		0.39		0.38		1.17		1.14
Weighted average shares outstanding – basic		48,775,072		48,525,776		48,727,914		48,492,022
Weighted average shares outstanding – diluted		49,078,497		48,762,696		48,993,581		48,737,065

See Notes to Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, dollars in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Net income	$	109,643		$	96,554		$	321,246		$	279,101
Other comprehensive income (loss), before tax:
Unrealized gains and losses on debt securities:
Change in unrealized holding gains and losses, net		229,285			(151,753	)		175,005			(145,601	)
Less: Reclassification adjustment for net (gains) losses included in net income		—			(154	)		(139	)		279
Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity		9,618			10,268			27,345			30,563
Change in unrealized gains and losses on debt securities		238,903			(141,639	)		202,211			(114,759	)
Unrealized gains and losses on derivative hedges:
Change in unrealized gains and losses on derivative hedges, net		40,445			3,927			18,012			4,248
Less: Reclassification adjustment for net gains included in net income		(1,666	)		(2,844	)		(7,392	)		(8,065	)
Change in unrealized gains and losses on derivative hedges		38,779			1,083			10,620			(3,817	)
Other comprehensive income (loss), before tax		277,682			(140,556	)		212,831			(118,576	)
Income tax (expense) benefit		(67,904	)		34,016			(51,752	)		28,940
Other comprehensive income (loss)		209,778			(106,540	)		161,079			(89,636	)
Comprehensive income (loss)	$	319,421		$	(9,986	)	$	482,325		$	189,465

See Notes to Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(unaudited, dollars in thousands, except per share data)


	Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total
Balance – July 1, 2023	$	55,057	$	1,124,977		$	2,681,448		$	(685,831	)	$	(344,023	)	$	2,831,628
Total comprehensive income (loss)		—		—			96,554			(106,540	)		—			(9,986	)
Dividends ($0.38 per share)		—		—			(18,587	)		—			—			(18,587	)
Purchase of treasury stock		—		—			—			—			(194	)		(194	)
Issuances of equity awards, net of forfeitures		—		(351	)		—			—			351			—
Recognition of equity-based compensation		—		3,528			—			—			—			3,528
Sale of treasury stock		—		52			—			—			76			128
Exercise of stock options		—		33			—			—			109			142
Balance – September 30, 2023	$	55,057	$	1,128,239		$	2,759,415		$	(792,371	)	$	(343,681	)	$	2,806,659

Balance – July 1, 2024	$	55,057	$	1,132,301		$	2,984,152		$	(605,634	)	$	(338,529	)	$	3,227,347
Total comprehensive income		—		—			109,643			209,778			—