Executive Summary

Strong quarter with operating EPS of $2.96 and GAAP EPS of $2.82, driven by 14 bps NIM expansion to 3.10%, revenue growth to $689.2M, and lower provision as Day 1 HTLF provisioning rolled off; noninterest income also benefited from $37.7M in pre-tax gains, including $29.4M from Voyager Technologies’ IPO .
UMBF beat S&P Global consensus: Primary EPS $2.96 vs $2.37* and revenue $665.7M vs $635.9M*; beats were supported by purchase accounting accretion ($42.2M to NII, incl. $13.1M accelerated) and outsized fee gains, partially offset by higher acquisition-related amortization and charitable contributions .
Credit improved: NCOs fell to 0.17% from 0.45% in Q1; nonaccruals declined to 0.26% of loans; management expects charge-offs to remain near or below historical averages in 2H25 .
Integration on track: Minnesota pilot conversion completed in mid-July; remaining HTLF conversions slated for October; CET1 rose to 10.39% aided by $294.1M Series B preferred issuance and redemption of $115M Series A in July .

What Went Well and What Went Wrong

What Went Well
- NIM expansion and revenue growth: NIM (FTE) rose to 3.10% (+14 bps q/q) and total revenue increased 22% q/q to $689.2M, driven by loan/securities yield expansion, mix, and HTLF accretion .
- Fee upside from investments and fund services: $37.7M pre-tax gains (incl. $29.4M Voyager IPO); trust & securities processing +$3.5M q/q; AUA in fund services reached $543B (per CFO prepared remarks) .
- Asset quality improvement: NCOs improved to 0.17% (from 0.45%) and NPL ratio declined to 0.26%; mgmt guided to near/below historical charge-offs in 2H25 .
What Went Wrong
- Expense pressure: GAAP noninterest expense rose to $393.2M (+2.2% q/q), with $13.5M acquisition-related and $8.3M charitable expenses; operating noninterest expense rose 15% q/q to $380.0M .
- Mix-driven deposit costs: Interest-bearing deposit costs stayed flat at 3.34% as robust growth skewed to higher-priced business/institutional balances, limiting cost relief despite HTLF’s core deposit benefits .
- Fee volatility risk: Voyager equity mark and other private investment gains lifted noninterest income this quarter and will be marked to market each quarter until exited, introducing potential variability (904k VOYG shares owned) .

Financial Results

Headline metrics vs prior periods

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($USD Millions)	$390.0	$563.8	$689.2
Net Interest Income ($USD Millions)	$245.1	$397.6	$467.0
Noninterest Income ($USD Millions)	$144.9	$166.2	$222.2
GAAP Diluted EPS ($)	$2.07	$1.21	$2.82
Operating Diluted EPS ($)	$2.16	$2.58	$2.96
NIM (FTE) (%)	2.51%	2.96%	3.10%
Efficiency Ratio (%)	63.37%	65.19%	53.38%
Operating Efficiency Ratio (%)	61.86%	55.56%	51.48%
Provision for Credit Losses ($USD Millions)	$14.1	$86.0	$21.0
Net Charge-offs ($USD Millions)	$2.9	$35.9	$15.5
NCOs (% of Avg Loans)	0.05%	0.45%	0.17%

S&P Global estimates vs actuals (Q2 2025)

Metric	Consensus*	Actual (S&P-defined)*	Surprise
Primary EPS ($)	2.375	2.96	+0.585 (+24.6%)
Revenue ($USD Millions)	635.9	665.7	+29.8 (+4.7%)
# of Estimates (EPS/Revenue)	11 / 7	—	—

Values retrieved from S&P Global.
Note: Company-reported total revenue was $689.2M; S&P’s revenue definition differs from company-reported “total revenue” .

Segment results (Q2 2025 vs Q2 2024)

Segment	Net Interest Income (Q2’24 → Q2’25)	Noninterest Income (Q2’24 → Q2’25)	Noninterest Expense (Q2’24 → Q2’25)	Income Before Taxes (Q2’24 → Q2’25)
Commercial Banking ($M)	161.2 → 322.6	28.8 → 43.2	88.6 → 170.6	89.3 → 176.9
Institutional Banking ($M)	50.8 → 66.3	94.0 → 108.0	92.7 → 105.1	51.9 → 68.8
Personal Banking ($M)	33.1 → 78.1	22.1 → 71.0	67.8 → 117.4	(14.3) → 29.4

Key banking KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Avg Loans ($USD Billions)	$23.81	$32.31	$36.41
Avg Deposits ($USD Billions)	$34.34	$50.28	$55.65
DDA as % of Deposits	29.4%	26.7%	25.9%
ROAA (GAAP)	0.96%	0.54%	1.29%
ROACE (GAAP)	12.73%	5.86%	12.72%
CET1 Ratio	11.14%	10.11%	10.39%
Book Value/Share ($)	66.21	87.43	90.68
Tangible BV/Share ($)	60.58	56.40	59.80

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (FTE)	Q3 2025	N/A	“Essentially flat” vs Q2	Maintained flat
Operating Noninterest Expense	Q3 2025	N/A	$380–$385M	New
Preferred Dividends	Q3 2025	N/A	~$7.9M in Q3 (stub period); ~$5.8M/quarter thereafter	New
Effective Tax Rate	FY 2025	N/A	19–21%	New
DDA Seasonality	Q3 2025	N/A	Mid-single-digit contraction expected	New
HTLF Integration Timeline	2H 2025	N/A	Minnesota pilot completed mid-July; remaining conversions mid-October	On track
Cost Saves (HTLF)	Through Q1 2026	$124M target (at announcement)	~$17M realized quarterly run-rate to date; bulk in Q4’25–Q1’26	Reaffirmed, timing clarified

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 / Q1’25)	Current Period (Q2’25)	Trend
HTLF Integration & Cost Saves	Q4’24: Deal approvals; Q1’25: Close 1/31, integration on track	Minnesota pilot conversion complete; full conversion mid-October; $124M saves intact, $17M run-rate realized	Progressing/on track
NIM & Deposit Costs	Q4’24: NIM +11 bps, cost of IB liabilities fell 39 bps ; Q1’25: NIM +39 bps aided by HTLF	NIM (FTE) 3.10%; Q3 NIM “flat”; IB deposit costs stable at 3.34% amid mix shift	Stabilizing near-term
Fee Income & Private Investments	Q4’24: fee growth; gain on sale items ; Q1’25: stable noninterest income	$37.7M gains incl. $29.4M Voyager; future mark-to-market on 904k shares	Positive but volatile
Credit Quality	Q4’24: NCOs 0.14% ; Q1’25: elevated on acquired loans	NCOs 0.17%; NPLs 0.26%; mgmt expects near/below historical averages 2H25	Improving
Capital Actions	Q4’24: strong ratios	$294.1M Series B preferred issued; CET1 10.39%; $115M Series A redeemed in July	Capital build
Deposit Trends/Seasonality	Q4’24 DDA 28.0% ; Q1’25 26.7%	Q2’25 DDA 25.9%; Q3 DDA contraction mid-single digits expected	Seasonal dip
HSA Regulatory Changes	—	Opportunity is marginal (≈7M newly eligible), requires education	Modest tailwind

Management Commentary

“Total revenues of $689.2 million in the second quarter represented a 22.2% increase from the prior quarter… Net interest margin expanded 14 basis points sequentially to 3.10%… 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.” — Mariner Kemper, CEO .
“Our second quarter results included $42.2 million in net accretion to net interest income, $13.1 million of which was related to accelerated accretion from early payoffs of acquired loans… Our third quarter fee income will be impacted by changes in market value… of our 904,000 share ownership in Voyager Technologies stock.” — Ram Shankar, CFO .
“We successfully executed our pilot conversion of Heartland’s Minnesota franchise… This initial conversion… positions us well for the full conversion slated for mid-October.” — Mariner Kemper, CEO .

Q&A Highlights

Loan growth and portfolio alignment: ~$1.9B top-line quarterly production; strong activity across C&I, CRE, and residential mortgage; ongoing realignment of select HTLF credits with immaterial payoff impact to combined balances .
Expense path and cost saves: ~$124M targeted cost saves; ~$17M quarterly run-rate realized; majority of remaining saves to come with vendor consolidation and conversion in Q4’25–Q1’26 .
Margin/Deposits: Q3 NIM guide “essentially flat”; IB deposit costs stable at 3.34%; DDA typically troughs in Q3 with mid-single-digit contraction; deposit growth skewed to higher-priced commercial/institutional balances .
Securities/liquidity deployment: ~"$10B of cash" at 2Q-end (now ~$5B) being deployed; bond portfolio expected around $17B with $6–7B excess liquidity; reinvestment tailwind as bonds and fixed-rate loans reprice higher .
Deposit competition: Growth driven by volume/mix rather than pricing defense; consumer/small business deposit growth targeted via expanded branch footprint and campaigns .

Estimates Context

Q2 2025 results vs S&P Global consensus: Primary EPS $2.96 vs $2.37*; revenue $665.7M vs $635.9M* — both beats. Q1 2025 also exceeded Primary EPS consensus ($2.58 vs $2.19*), while revenue came in below S&P’s consensus definition ($477.8M vs $559.0M*) .
Values retrieved from S&P Global.

Key Takeaways for Investors

Core profitability improving: Operating EPS $2.96 and efficiency ratio down to 51.5% on operating basis, with NIM expanding to 3.10% and lower provisioning q/q as Day 1 HTLF provisioning rolled off .
Integration executing to plan: Pilot conversion complete; full conversion in October should unlock the next slug of cost saves and support continued positive operating leverage into 2026 .
Revenue durability vs volatility: Durable drivers include NIM/mix and fund services momentum; however, quarterly variability from private investment marks (Voyager stake) will impact noninterest income until monetized .
Credit risk trending better: NCOs improved to 0.17%; NPLs at 0.26%; mgmt expects near/below historical loss rates in 2H25, reducing tail risk from the acquired portfolio .
Near-term modeling: Assume flat NIM in Q3, operating expenses $380–$385M, preferred dividends step-up ($7.9M in Q3, $5.8M thereafter), and a 19–21% 2025 tax rate; model mid-single-digit DDA contraction in Q3 .
Capital path supportive: CET1 10.39% and preferred capital actions provide flexibility while integration completes; book value per share up to $90.68 .
Watchlist: Q3 seasonality (DDA), deposit mix/costs, conversion execution in October, realized investment gains/marks, and pace of cost saves realization .

Additional Context and Press Releases (Q2 2025)

Announced Series A preferred redemption (completed mid-July) .
Voyager Technologies IPO-related gain ($29.4M pre-tax) highlighted in a dedicated release .
UMB participation in $80M Guzman Energy revolver (institutional banking activity) .
Q1 2025 baseline (for trend): NIM 2.96%, operating EPS $2.58, higher Day 1 ACL provision ($62M), and elevated NCOs due to acquired loans .

Notes:

Company totals and ratios are per UMBF press release/8-K unless otherwise noted.
Asterisks denote S&P Global estimate data; Values retrieved from S&P Global.

UMB FINANCIAL CORP (UMBF)·Q2 2025 Earnings Summary