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UMB Financial Corp. UMBF reported first-quarter 2025 operating earnings per share of $2.58, which beat the Zacks Consensus Estimate of $2.21. The bottom line also compared favorably with $2.47 in the year-ago quarter.
The rise in net interest income (NII) and non-interest income benefited the results. Rising loan and deposit balances were other positives. However, weak asset quality and higher non-interest expense acted as spoilsports.
Net income (GAAP basis) for UMBF was $81.3 million in the first quarter, down 26.2% year over year.
UMB Financial’s Revenues & Expenses Rise
Quarterly revenues were $571.3 million, up 41% year over year. Also, the top line beat the Zacks Consensus Estimate of 2.9%.
NII on an FTE basis was $405.1 million, an increase of 64.7% from the prior-year quarter. On an FTE basis, the net interest margin (NIM) was 2.96% compared with 2.48% in the prior-year quarter.
Non-interest income was $166.2 million, up 4.4% year over year. The rise was primarily driven by an increase in trust and securities processing, service charges on deposit accounts and brokerage income.
Non-interest expenses were $384.8 million, up 51% year over year. The increase was due to a rise in salaries and bonus expenses, an increase in legal and consulting expenses, and amortization of intangibles. Operating non-interest expenses (adjusted basis) were $330.5 million, up 37% year over year.
The efficiency ratio was 65.19%, down from the prior-year quarter’s 63.44%. An increase in the efficiency ratio indicates a decrease in profitability.
UMBF’s Loans & Deposit Balances Rise
As of March 31, 2025, average loans and leases were $32.3 billion, up 27.8% sequentially. Also, average deposits increased 32.3% year over year to $50.3 billion.
UMB Financial’s Credit Quality Deteriorates
The ratio of net charge-offs to average loans was 0.45% in the reported quarter compared with 0.05% in the prior-year quarter.
Total non-accrual and restructured loans were $100.9 million compared with $17.8 million in the prior-year quarter.
The provision for credit losses was $86 million in the first quarter of 2025 compared with $10 million reported in the prior-year quarter.
UMBF’s Capital Ratios: Mixed Bag
As of March 31, 2025, the Tier 1 risk-based capital ratio was 10.35% compared with 11.09% as of March 31, 2024. The Tier 1 leverage ratio was 8.47% compared with 8.39% in the prior-year quarter. The total risk-based capital ratio was 12.54% compared with 13.03% in the year-ago quarter.