Executive Summary

Q4 2024 delivered strong sequential and year-over-year improvement: total revenue rose to $434.2M, GAAP diluted EPS to $2.44, and operating EPS to $2.49; net interest margin expanded 11 bps to 2.57% and fee income increased 4.1% sequentially .
Deposits and loans accelerated: average deposits rose to $38.0B (+7.7% q/q; +16.3% y/y) and average loans reached $25.3B (+3.7% q/q; +9.4% y/y), with top-line loan production of $1.6B, another record quarter .
Credit quality remained solid: net charge-offs were 0.14% of average loans; provision increased to $19.0M reflecting loan growth and portfolio trends; CET1 ratio rose to 11.29% .
HTLF acquisition closed Jan 31, 2025, expanding assets to ~$68B and footprint to 13 states; management reiterated targeted cost saves (27.5% total; ~40% in 2025) and expects the full synergy ramp post Q4 2025 conversion, with 2026 the primary EPS accretion year .
Wall Street consensus (S&P Global) was unavailable due to access limitations; estimate beat/miss assessments could not be made (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

Net interest margin and net interest income improved: NIM rose to 2.57% (+11bps q/q) and NII increased 8.7% q/q to $269.0M, aided by lower deposit costs, mix shift, and earning asset growth . “Net interest income increased 8.7%… driven by both an 11-basis-point increase in net interest margin and a 15.6% linked-quarter annualized increase in average earning assets” — CEO Mariner Kemper .
Broad-based fee momentum: noninterest income rose 4.1% q/q (+$6.5M), led by trust & securities processing (+$2.6M), brokerage (+$2.9M), derivative income (+$1.7M), and a $4.1M gain on sale of UMB Distribution Services .
Strong deposit and loan growth: average deposits up 7.7% q/q to $38.0B, average loans up 3.7% q/q to $25.3B; DDA % improved to 28.0% (from 26.9%) . “Balance sheet growth included a very strong 14.8% linked quarter annualized increase in average loan balances… record top line loan production of $1.6 billion” — CEO .

What Went Wrong

Operating expenses increased: GAAP noninterest expense rose $17.9M q/q (+7.1%) to $270.4M, driven by bonuses (+$15.4M), operational losses (+$4.5M), and legal/consulting tied to HTLF . CFO noted normalized UMB standalone expense run-rate ~$250M, with Q1 seasonally higher from payroll taxes .
Investment gains and COLI income decreased: investment securities gains fell $2.0M q/q and COLI income decreased $2.0M, partially offset by deferred comp expense reductions .
Continued provision build with growth: provision increased to $19.0M (from $18.0M in Q3; versus $0 in Q4’23), reflecting loan growth and portfolio trends .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Millions)	$370.8	$406.1	$434.2
GAAP Diluted EPS ($USD)	$1.45	$2.23	$2.44
Operating EPS ($USD)	$2.29	$2.25	$2.49
Net Interest Income ($USD Millions)	$230.5	$247.4	$269.0
Noninterest Income ($USD Millions)	$140.3	$158.7	$165.2
Net Interest Margin (FTE, %)	2.46%	2.46%	2.57%
Efficiency Ratio (%)	77.65%	61.69%	61.83%
Operating Efficiency Ratio (%)	63.06%	61.46%	61.12%

Segment breakdown (Net income by segment):

Segment Net Income ($USD Millions)	Q4 2023	Q4 2024
Commercial Banking	$62.8	$83.5
Institutional Banking	$16.7	$43.8
Personal Banking	($8.5)	($7.3)

Key KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
Average Loans ($USD Billions)	$23.11	$24.39	$25.29
Average Deposits ($USD Billions)	$32.68	$35.29	$38.02
DDA % of Deposits	31.0%	26.9%	28.0%
Provision for Credit Losses ($USD Millions)	$0.0	$18.0	$19.0
Net Loan Charge-offs (% of avg. loans)	0.02%	0.14%	0.14%
CET1 Ratio (%)	10.94%	11.22%	11.29%

Non-GAAP adjustments (Q4 2024): Acquisition expense $3.658M, severance $0.245M, FDIC special assessment ($0.826M), tax impact ($0.497M); net operating income $122.6M and operating EPS $2.49 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (UMB standalone)	Q1 2025	N/A	“Relatively flat to Q4’24 levels”	Maintained
Effective Tax Rate	FY 2025	N/A	20%–24%	Raised vs 2024 actual (18.5%)
Core Noninterest Expense (UMB standalone)	Q1 2025	~$250M normalized run-rate (Q4)	Q1 seasonally higher by ~$8–$10M due to payroll tax resets	Seasonal increase
HTLF Cost Saves	2025	Target 27.5% total; plan 40% in 2025	Reiterated; tracking to plan	Maintained
Common Dividend	Q1 2025	$0.39 (Q4 declared for Jan 2)	$0.40 declared, payable Apr 1, 2025	Raised
Preferred Dividends (HTLF)	Q1 2025	N/A	~$2M expected in Q1	New item

No explicit revenue, margin %, OpEx dollar guidance beyond commentary; management emphasized synergy timing (systems conversion in Q4 2025) and full EPS accretion in 2026 .

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous Mentions)	Q3 2024 (Previous Mentions)	Q4 2024 (Current Period)	Trend
Macro/rates & NIM	NIM up 3 bps to 2.51%; loan yields +13 bps; deposit cost up; liability cost beta rising	NIM down 5 bps to 2.46% on mix; DDA down; earning asset yields slightly up	NIM up 11 bps to 2.57%; deposit costs down; mix improved	Improving as funding costs fall
Deposits mix/DDA	DDA 29.4% of deposits	DDA 26.9%; seasonal corporate trust flows cited	DDA 28.0%; seasonal inflows/outflows noted	Volatile but improving
Fee businesses	Fund services, trust, brokerage growth	Fee income +9.5% q/q; investment gains recovery	Fee income +4.1% q/q; trust/brokerage/derivatives up; $4.1M gain on sale	Strengthening
HTLF acquisition	Pending; integration prep	“On track”; legal day-one prep	Regulatory approvals; closed Jan 31; cost saves cadence reiterated	Completed; integration execution
Credit quality/CRE	NCO 0.05%; NPL 0.06%	NCO 0.14%; provision up with growth	NCO 0.14%; C&I NCO 3 bps FY; non-owner CRE near-zero charge-offs for 4 years	Stable/strong
Hedges & rate sensitivity	—	—	$3B notional hedges (floors/spreads); neutral pro forma sensitivity; modest NII impact absent further cuts	Protective positioning
Capital & uses	—	CET1 11.22%; TBV growth; AOCI improved	CET1 11.29%; rebuild capital post-close; no bond portfolio repositioning; buybacks deferred	Build capital; conservative

Management Commentary

“We set new company records with annual net income of $441.2 million, net operating income of $461.7 million, net interest income that surpassed $1.0 billion, and noninterest income of $628.1 million” — CEO Mariner Kemper .
“Net interest income increased 8.7% sequentially driven by both an 11-basis-point increase in net interest margin and a 15.6% linked-quarter annualized increase in average earning assets” — CEO .
“Average DDA balances increased 48% linked quarter annualized to $10.6 billion” — CEO (diversified financial model and deposit growth) .
“Net interest margin… increase… driven by decreased cost of interest-bearing liabilities… and a favorable mix shift” — Press release .
“Based on our outlook for no additional rate cuts this quarter, we expect UMB stand-alone core margin to be relatively flat to fourth quarter '24 levels” — CFO Ram Shankar .
“We are ready and excited to help our customers… this acquisition… expands our geographic footprint… and significantly expands its retail deposit base” — acquisition close release .

Q&A Highlights

Heartland impact and marks: Management reiterated the April pro forma assumptions (sell ~$2B of HTLF securities; capital levels ~10%+) and noted identified credits were addressed in Q3/Q4; conservative credit mark will be applied at close .
Expense run-rate: UMB standalone normalized run-rate ~$250M; Q1 typically higher by $8–$10M due to payroll taxes; Heartland preferred dividends ~$2M in Q1 .
NIM scenarios: “Higher for longer is a good environment” with $1.5B securities rolling off at ~2.62% and reinvestment ~4.54%; pro forma rate sensitivity broadly neutral .
Loan growth outlook: Management expects UMB’s “market penetration” engine to remain strong; HTLF growth may slow in 2025 pre-conversion, with combined acceleration in 2026 .
Fee businesses: No headwinds expected; fund services alternatives growth, corporate trust positioned for infrastructure work, aviation/CLO momentum; continued investment in systems .
Capital uses: Rebuild capital post-close; no bond portfolio repositioning or buyback near term; comfortable with portfolio .

Estimates Context

S&P Global consensus for EPS and revenue (quarterly) was unavailable due to access limitations at the time of analysis. As a result, we cannot classify Q4 2024 as a beat or miss versus Wall Street expectations. When available, compare GAAP EPS ($2.44) and operating EPS ($2.49) to consensus and update models accordingly . (S&P Global data unavailable)

Key Takeaways for Investors

Core earnings power improving: sequential NIM expansion (+11 bps) and 8.7% q/q NII growth signal positive spread momentum as funding costs decline and asset yields stabilize .
Growth engine intact: strong average loan and deposit growth (q/q and y/y), with diversified fee businesses providing resilience; watch DDA mix (seasonal volatility) and deposit betas .
Credit benign: NCOs remain low and provision is growth-driven; management’s long track record and conservative underwriting (non-owner CRE charge-offs near zero over 4 years) are supportive of cycle durability .
HTLF integration is the 2025–2026 story: near-term focus on systems conversion (Q4 2025), cost saves ramp (40% in 2025, 27.5% total), and capital build; combined earnings accretion expected to show most in 2026 .
Operating leverage watch: Q4 expense step-up (bonuses, operational losses) should normalize; use ~$250M core run-rate as baseline for UMB standalone; model seasonal Q1 uptick .
Rate stance hedged: $3B floors/spreads provide downside protection; absent further cuts, hedge impact modest; higher-for-longer scenario supports NII via reinvestment gap .
Dividend progression: common dividend raised to $0.40; preferred dividends from HTLF add ~$2M in Q1; consider capital trajectory and AOCI when assessing buyback timing post-close .

Appendix: Additional Data Points

Total revenue composition: NII $269.0M; noninterest income $165.2M .
Trust & securities processing income: $76.9M (+$2.6M q/q; +$10.3M y/y) .
Brokerage fees: $18.6M (+$2.9M q/q; +$5.2M y/y) .
Securities portfolio unrealized losses: AFS pre-tax net loss $633.3M (7.5% of $8.4B amortized cost); HTM pre-tax net loss $630.0M (11.7% of $5.4B amortized cost) .
Capital ratios: CET1 11.29%, Total risk-based 13.21% (well-capitalized) .

UMB FINANCIAL CORP (UMBF)·Q4 2024 Earnings Summary