UMB Financial Corporation Reports Second Quarter 2025 Results

Second Quarter 2025 Financial Highlights

• GAAP net income available to common shareholders of $215.4 million, or $2.82 per diluted common share, an increase of 112.5% as compared to the second quarter of 2024.
• Net operating income available to common shareholders⁽ⁱ⁾ of $225.4 million, or $2.96 per diluted common share, an increase of 112.9% as compared to the second quarter of 2024.
• Operating pre-tax, pre-provision (operating PTPP)⁽ⁱ⁾ income of $309.2 million, compared to $233.3 million in the first quarter of 2025.
• Second quarter 2025 return on average assets of 1.29% and return on average common equity of 12.7%.
• Efficiency ratio improved to 53.4% as compared to 63.4% in the second quarter of 2024.
• Net interest margin on a fully taxable equivalent basis of 3.10%, up 14 basis points from the linked quarter.
• Average loans increased 12.7% on a linked-quarter basis to $36.4 billion; average loans increased $12.6 billion, or 52.9% as compared to the second quarter of 2024.
• Net interest income of $467.0 million, an increase of 17.4% on a linked-quarter basis.
• Noninterest income of $222.2 million, an increase of 33.7% from the linked quarter.
• Noninterest income included approximately $37.7 million in pre-tax gains from the company's investments in successful private entities, including $29.4 million from the company's investment in Voyager Technologies, Inc. (VOYG), which went public in June 2025.
• Expenses of $393.2 million included $13.5 million in acquisition-related costs, as well as $8.3 million of charitable contribution expense.
• End-of-period loans were $36.8 billion at June 30, 2025.
• Average deposits increased 10.7% on a linked-quarter basis to $55.6 billion.
• End-of-period deposits were $60.0 billion at June 30, 2025.
• Total assets at June 30, 2025 were $71.8 billion, up 61.4% from $44.5 billion as of June 30, 2024.
• Second quarter net charge-offs improved to 17 basis points of average loans; nonperforming loans improved to 26 basis points of total loans, from 28 basis points at March 31, 2025.
• Completed an underwritten public offering of Series B non-cumulative perpetual preferred stock during the second quarter that netted approximately $294.1 million in Tier 1 regulatory capital.
• Successfully integrated the acquired Heartland Financial, USA, Inc. (HTLF) Minnesota franchise to core UMB systems in mid-July; on track to convert the remaining HTLF franchises in October 2025.

(i) A non-GAAP financial measure reconciled later in this release to the nearest comparable GAAP measure.

UMB Financial Corporation (NASDAQ:UMBF), a financial services company, announced net income available to common shareholders for the second quarter of 2025 of $215.4 million, or $2.82 per diluted share, compared to $79.3 million, or $1.21 per diluted share, in the first quarter (linked quarter) and $101.3 million, or $2.07 per diluted share, in the second quarter of 2024.

Net operating income available to common shareholders, a non-GAAP financial measure reconciled later in this release to net income available to common shareholders, the nearest comparable GAAP measure, was $225.4 million, or $2.96 per diluted share, for the second quarter of 2025, compared to $168.9 million, or $2.58 per diluted share, for the linked quarter and $105.9 million, or $2.16 per diluted share, for the second quarter of 2024. 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 $309.2 million, or $4.06 per diluted share, for the second quarter of 2025, compared to $233.3 million, or $3.57 per diluted share, for the linked quarter, and $146.8 million, or $3.00 per diluted share, for the second quarter of 2024. These operating PTPP results represent increases of 32.5% on a linked-quarter basis and 110.6% compared to the second quarter of 2024.

"Our strong second quarter financial results were once again facilitated by strong growth on both sides of our balance sheet, outsized fee income gains, improved asset quality metrics and improved operating leverage," said Mariner Kemper, UMB Financial Corporation chairman and chief executive officer. "Total revenues of $689.2 million in the second quarter represented a 22.2% increase from the prior quarter, driven both by organic growth from legacy UMB operations as well as the continued benefits of the acquired Heartland franchise. On a linked quarter basis, average loans increased 12.7% to $36.4 billion while average deposits increased 10.7% to $55.6 billion. On an operating basis, net operating income available to common shareholders more than doubled to $225.4 million from the year-ago quarter and increased 33.5% from the linked quarter. Net interest margin expanded 14 basis points sequentially to 3.10%, driven by the benefits of Heartland's granular core deposit base. Fee income benefited primarily from net increases in the value of the portfolio investments managed by UMB Capital Corporation as well as other private investments. We have a successful track record of investing in and financing emerging businesses, and we had yet another successful outcome with our investment in Voyager Technologies, Inc. which went public in June resulting in a pre-tax gain of $29.4 million in the second quarter. Net charge-offs for the second quarter improved to $15.5 million or 17 basis points of average loans which included $6.5 million in losses related to the acquired Heartland loan portfolio."

Kemper continued, "I am extremely proud of the teams that continue to work tirelessly to deliver a seamless transition to our customers from the Heartland acquisition. In July, we successfully converted the Minnesota franchise of Heartland to the core UMB platform and remain on track to convert the rest of the acquired operations in October."

Second Quarter 2025 earnings discussion

Note: The acquisition of HTLF closed on January 31, 2025; as such, financial results for the second quarter of 2025 include three months of impact from the acquired operations, compared to two months of impact in the first quarter of 2025. Financial results in the second quarter of 2024 were impacted by $9.6 million in acquisition-related expense and do not include any impact of the acquired operations of HTLF.

Net interest income

• Second quarter 2025 net interest income totaled $467.0 million, an increase of $69.4 million, or 17.4%, from the linked quarter, driven primarily by continued organic growth in average loans, and one additional month of benefit from the acquired HTLF franchise, including the favorable impact of purchase accounting accretion attributable to the acquisition. These increases were partially offset by higher interest expense driven by strong deposit growth.
• Average earning assets increased $5.9 billion, or 10.6%, from the linked quarter, largely driven by an increase of $4.1 billion in average loans and an increase of $1.8 billion in average securities.
• Average interest-bearing liabilities increased $4.5 billion, or 11.3%, from the linked quarter, primarily driven by an increase of $4.4 billion, or 11.9%, in interest-bearing deposits. Average non-interest bearing deposits increased $975.0 million, or 7.3%, as compared to the linked quarter.
• Net interest margin for the second quarter was 3.10%, an increase of 14 basis points from the linked quarter, due to higher yields on loans and securities driven in large part by the net impact of purchase accounting accretion income on acquired assets and liabilities from HTLF, and earning asset mix changes. Average loan yields increased 13 basis points and total earning asset yields increased 17 basis points from the linked quarter. Total cost of funds increased two basis points from the linked quarter to 2.60%.
• On a year-over-year basis, net interest income increased $221.9 million, or 90.5%, driven by a $21.2 billion, or 52.7%, increase in average earning assets, primarily due to rate and mix changes related to the acquisition of HTLF. Average loans increased $12.6 billion, average securities increased $5.0 billion, and average interest bearing due from banks increased $3.2 billion.
• Average deposits increased 62.1% compared to the second quarter of 2024, reflecting strong organic growth as well as the impact of acquired HTLF balances, partially offset by intentional decline in brokered certificate of deposit balances. Average interest-bearing deposits increased 70.2%, and noninterest-bearing demand deposit balances increased 42.6% compared to the second quarter of 2024. Average demand deposit balances comprised 25.9% of total deposits, compared to 26.7% in the linked quarter and 29.4% in the second quarter of 2024.
• Average borrowed funds increased $85.1 million as compared to the linked quarter and decreased $1.1 billion as compared to the second quarter of 2024, driven by the acquisition of HTLF and the repayment of borrowings under the BTFP and FHLB advances, respectively.

Noninterest income

• Second quarter 2025 noninterest income increased $56.0 million, or 33.7%, on a linked-quarter basis, largely due to:
  • An increase of $42.5 million in investment securities gains, primarily driven by the pre-tax gain of $29.4 million on the company's investment in Voyager Technologies, Inc., which completed its initial public offering in June 2025, coupled with pre-tax gains of $8.2 million on the sale of two non-marketable investments in the second quarter, as compared to $5.3 million in net losses on the company's non-marketable securities during the linked quarter.
  • An increase of $3.5 million in trust and securities processing, primarily due to increases of $2.1 million in fund services income, $0.8 million in trust income, and $0.6 million in corporate trust income.
  • Increases of $2.7 million in bankcard income due to increased interchange income, partially offset by increased rebates expense, and $2.4 million in brokerage income due to higher 12b-1 fees and money market income.
  • Increases of $1.9 million and $1.6 million in company-owned life insurance income and derivative income, respectively, both recorded in other income. The increase in company-owned life insurance was offset by a proportionate increase in deferred compensation expense as noted below.
• Compared to the prior year, noninterest income in the second quarter of 2025 increased $77.3 million, or 53.3%, primarily driven by:
  • An increase of $39.6 million in investment securities gains, primarily driven by the pre-tax gain of $29.4 million on the company's investment in Voyager Technologies, Inc., coupled with pre-tax gains of $8.2 million on the sale of two non-marketable investments, both recorded in the second quarter of 2025, as compared to $1.8 million in net losses on the company's non-marketable securities during the second quarter of 2024.
  • An increase of $13.3 million in trust and securities processing driven by increases of $5.0 million in trust income, $4.9 million in fund services income, and $3.3 million in corporate trust income.
  • Increases of $6.7 million in bankcard income due to increased interchange income, partially offset by increased rebates expense, and $6.5 million in brokerage income due to higher 12b-1 fees and money market income.
  • An increase of $6.6 million in service charges on deposit accounts, primarily driven by increased service charge income on interest-bearing checking accounts, largely due to the HTLF acquisition and increased corporate service charges income.
  • An increase of $4.0 million in other income, primarily driven by $1.3 million in recoveries of loans previously charged off by HTLF recorded in the second quarter of 2025, and an increase of $1.1 million in loan syndication income.

Noninterest expense

• GAAP noninterest expense for the second quarter of 2025 was $393.2 million, an increase of $8.4 million, or 2.2%, from the linked quarter and $144.1 million, or 57.9% from the second quarter of 2024. Second quarter 2025 expenses included $13.5 million in total acquisition-related and other nonrecurring costs, compared to $53.2 million in the linked quarter and $9.6 million in the second quarter of 2024. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $380.0 million for the second quarter of 2025, an increase of $49.5 million, or 15.0%, from the linked quarter and an increase of $136.8 million, or 56.3%, from the second quarter of 2024. Noninterest expense in the second quarter of 2025 also included $8.3 million in charitable contribution expenses, compared to $0.5 million in the linked quarter and $0.3 million in the second quarter of 2024.
• The linked-quarter increase in GAAP noninterest expense was driven by:
  • Increases of $16.8 million in salary and wage expense and $0.9 million in deferred compensation expense, recorded in salaries and employee benefits. The increase in salary and wage expense is driven by a full quarter of expense for associates added as a result of the HTLF acquisition, compared to only two months of expense for these associates in the first quarter. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
  • Increases of $7.8 million in amortization of intangibles driven by the acquisition, $7.7 million in charitable contribution expense, recorded in other expense, and $3.3 million in marketing and business development driven by timing of multiple advertising campaigns and increased travel and entertainment expense. Amortization of intangibles includes amortization of the core deposit intangible, customer list, and purchased credit card relationship intangibles recognized from the HTLF acquisition.
  • An increase of $2.8 million in processing fees due to increased software subscription costs and an increase of $2.5 million in occupancy expense, both driven by additional expense related to the acquisition.
  • Increases of $1.6 million in supplies and services expense due to purchases of hardware during the second quarter and $1.0 million in regulatory fees driven by the increase in the FDIC assessment base as a result of the acquisition.
  • These increases were partially offset by the following decreases:
    • Decreases of $19.0 million in bonus and commission expense, and $8.3 million in payroll taxes and 401(k) expense, both recorded in salaries and employee benefits, driven by severance, retention bonuses, and change in control payments made to HTLF associates in the first quarter. Non-recurring acquisition costs of $4.3 million were included in salaries and employee benefits expense in the second quarter of 2025, as compared to $33.3 million in the linked quarter. This decrease in non-recurring costs was partially offset by higher incentive compensation accruals tied to company performance during the second quarter.
    • A decrease of $10.1 million in legal and consulting expense, driven by the significant expense recorded in the first quarter of 2025 related to the acquisition. In the first quarter of 2025, $19.0 million of non-recurring transaction costs were recorded in legal and consulting expense, compared to $7.5 million in the second quarter.
• The year-over-year increase in GAAP noninterest expense was driven by:
  • Increases of $70.7 million in salaries and employee benefits expense, driven by the additional associates added as part of the HTLF acquisition, and $23.4 million in amortization of intangibles. Amortization of intangibles includes amortization of the core deposit intangible, customer list, and purchased credit card relationship intangibles recognized from the HTLF acquisition.
  • Increases of $13.9 million in processing fees, driven by increased software subscription costs, and $11.6 million in other expense, primarily due to higher charitable contributions and operational losses during the second quarter of 2025.
  • Increases of $6.8 million in occupancy expense due to branch buildings and office locations added to the company's footprint related to the HTLF acquisition, and $6.7 million in regulatory fees driven by the increase in the FDIC assessment base as a result of the acquisition. Additionally, the second quarter of 2024 included a $3.8 million reduction in the FDIC special assessment as compared to a reduction of $0.7 million in the second quarter of 2025.
  • Increases of $4.7 million in marketing and business development driven by timing of multiple advertising campaigns and increased travel and entertainment expense, $3.0 million in supplies and services due to increased computer hardware costs in 2025, and $1.9 million in legal and consulting expense due to the timing of multiple projects.
• Second quarter 2025 noninterest expense included $13.5 million in total acquisition-related and other nonrecurring costs, compared to $53.2 million in the linked quarter, and $9.6 million in the second quarter of 2024. During the second quarter of 2025, this expense was composed primarily of $7.5 million in legal and consulting expense, $4.3 million in salaries and employee benefits, and $1.1 million in supplies and services expense. During the linked quarter, the $53.2 million in acquisition-related expense was primarily composed of $33.3 million in salaries and employee benefits expense and $19.0 million in legal and consulting expense. During the second quarter of 2024, acquisition-related expense was primarily composed of $9.4 million in legal and consulting expense.

Income taxes

• The company's effective tax rate was 18.8% for the six months ended June 30, 2025, compared to 18.9% for the same period in 2024.

Balance sheet

• Average total assets for the second quarter of 2025 were $66.9 billion compared to $60.0 billion for the linked quarter and $42.5 billion for the same period in 2024.

• Average loans for the second quarter of 2025 increased $4.1 billion, or 12.7%, on a linked-quarter basis and $12.6 billion, or 52.9%, compared to the second quarter of 2024. These increases reflect continued organic momentum across legacy UMB geographies, as well as the impact of acquired HTLF balances.

• Average total securities increased 11.5% on a linked-quarter basis and 39.4% compared to the second quarter of 2024.

• Average deposits increased 10.7% on a linked-quarter basis and 62.1% compared to the second quarter of 2024. These increases reflect continued organic momentum across legacy UMB geographies as well as the impact of acquired HTLF balances.

Capital

• At June 30, 2025, the regulatory capital ratios presented in the foregoing table exceeded all "well-capitalized" regulatory thresholds.
• During the second quarter, the company completed an underwritten public offering of Series B non-cumulative perpetual preferred stock that netted approximately $294.1 million in Tier 1 regulatory capital.
• In June 2025, the company announced the redemption of $115.0 million in outstanding Series A non-cumulative perpetual preferred stock. This redemption was completed in mid-July 2025.

Asset Quality

• Provision for credit losses for the second quarter decreased $65.0 million from the linked quarter and increased $7.0 million from the second quarter of 2024. Provision in the first quarter of 2025 included $62.0 million for Day 1 provision expense to establish an allowance for credit losses on acquired HTLF loans that were designated as non-purchase credit deteriorated (non-PCD) at the close of the transaction. The remainder of the change in provision expense is driven by ongoing recalibrations of econometric loss models and general portfolio trends in the current periods as compared to the prior periods.
• Net charge-offs for the second quarter totaled $15.5 million, or 0.17% of average loans, compared to $35.9 million, or 0.45% of average loans in the linked quarter, and $2.9 million, or 0.05% of average loans for the second quarter of 2024. Approximately $6.5 million of the net charge-offs in the second quarter of 2025 were related to loans acquired from HTLF as compared to $29.7 million of the net charge-offs in the first quarter of 2025.

Dividend Declaration

At the company's quarterly board meeting, the Board of Directors declared a $0.40 per share quarterly cash dividend, payable on October 1, 2025, to stockholders of record of the company's common stock at the close of business on September 10, 2025. Additionally, the Board of Directors declared a dividend of $264.79 per share of the Company's Series B 7.75% preferred stock, which results in a dividend of $0.66 per depositary share. The preferred stock dividend is payable on October 15, 2025, to stockholders of record of the preferred stock as of the close of business on September 30, 2025.

Conference Call

The company will host a conference call to discuss its second quarter 2025 earnings results on Wednesday, July 30, 2025, 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 601688. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 2Q 2025 Conference Call

A replay of the conference call may be heard through August 13, 2025, by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 929563. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we provide information about net operating income available to common shareholders, operating earnings per share – diluted (operating EPS), operating return on average common 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 common shareholders' equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income available to common shareholders, 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 common shareholders' equity, and tangible book value per share – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items, and the FDIC special assessment that management does not believe reflect the company's fundamental operating performance.

Net operating income available to common shareholders for the relevant period is defined as GAAP net income available to common shareholders, adjusted to reflect the impact of excluding expenses related to Day 1 acquisition provision expense, acquisitions, severance expense, the FDIC special assessment, 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 available to common shareholders, divided by the company's average total common shareholders' equity for the relevant period. Operating ROA is calculated as net operating income available to common shareholders, 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, and the FDIC special assessment.

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, and the FDIC special assessment.

Tangible common shareholders' equity for the relevant period is defined as GAAP common shareholders' equity, net of intangible assets. Tangible book value per share is defined as tangible common shareholders' equity divided by the Company's total common shares outstanding.

Forward-Looking Statements:

This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2024, 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 instability in the Middle East and 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, Mo. UMB offers commercial banking, which includes comprehensive deposit, lending, investment and retirement plan services; personal banking, which includes comprehensive deposit, lending, 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, Arizona, California, Colorado, Iowa, Kansas, Illinois, Minnesota, Nebraska, New Mexico, Oklahoma, Texas, and Wisconsin. 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.