• Annual Operating Income: $461.7 million for 2024.
• Net Interest Income: Surpassed $1 billion for 2024; $269 million for Q4, an 8.7% increase from Q3.
• Fee Income: $628.1 million for 2024.
• GAAP Earnings: $120 million for Q4, or $2.44 per share.
• Operating Earnings: $2.49 per share for Q4.
• Net Interest Margin: Increased by 11 basis points to 2.57% in Q4.
• Average Loan Balances: Increased by 14.8% on a linked quarter annualized basis.
• Net Charge-Offs: 14 basis points for Q4; 10 basis points for the full year.
• Nonperforming Loan Ratio: 8 basis points for Q4.
• Average Total Deposits: Grew by $2.7 billion or nearly 31% on a linked quarter annualized basis.
• Average DDA Balances: Increased by 48% linked quarter annualized to $10.6 billion.
• Private Wealth Net New Assets: $1.3 billion in 2024, a 75% increase over 2023.
• Institutional Assets Under Administration: Up 18% year-over-year to $526 million.
• Corporate Trust Assets: $42.4 billion, with a CAGR of 14% over the past 10 years.
• HSA Accounts: Grew to more than 1.6 million accounts by the end of 2024, with a CAGR of 11% since 2014.
• CET1 Ratio: 11.9% at the end of Q4, an increase of 7 basis points from Q3.

• Warning! GuruFocus has detected 5 Warning Sign with UMBF.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UMB Financial Corp (NASDAQ:UMBF) reported a record-setting annual operating income of $461.7 million for 2024.
• The company achieved a significant increase in net interest income, surpassing $1 billion, and fee income of $628.1 million.
• UMB Financial Corp (NASDAQ:UMBF) experienced strong balance sheet growth, with a 14.8% linked quarter annualized increase in average loan balances.
• The acquisition of HTLF is expected to enhance UMB Financial Corp (NASDAQ:UMBF)'s strategic, financial, and cultural fit, with anticipated benefits in 2025 and beyond.
• The company's capital levels continue to build, with a CET1 ratio of 11.9%, reflecting a strong capital position.

Negative Points

• Heartland's fourth-quarter results showed lower loan balances and higher levels of net charge-offs, impacting the overall financial performance.
• There is an expectation of slowing loan growth from Heartland in 2025 due to customer wait times for conversion.
• UMB Financial Corp (NASDAQ:UMBF) anticipates some elevated expenses in the first quarter of 2025 due to seasonal resets and integration costs.
• The integration of Heartland may result in some noise in charge-offs as the company aligns its credit processes.
• The company faces challenges in maintaining its loan growth momentum amidst the integration of Heartland and potential market uncertainties.

Q & A Highlights

Q: Can you discuss the impact of the Heartland deal on your fourth-quarter results and any changes in nonperformers? A: We remain excited about the Heartland acquisition. The major drivers of the transaction, such as capital levels and customer deposits, remain intact. Nonperforming loans will be down by the time we close the deal.

Q: What is the expected expense run rate for 2025, and how should we think about incentive accruals? A: The normalized fourth-quarter run rate is $250 million. In the first quarter, expenses might be slightly higher due to seasonal resets like FICA and payroll taxes.

Q: How does the current interest rate environment affect your net interest margin (NIM) outlook? A: A higher-for-longer rate environment is favorable for us. We have $1.5 billion of securities rolling off at lower yields, which will be reinvested at higher rates, supporting NIM growth.

Q: Are there any headwinds expected in your fee-based businesses as you enter 2025? A: No significant headwinds are anticipated. Our fee-based businesses, such as fund services and corporate trust, have strong growth profiles and are not heavily correlated with public market fluctuations.

Q: What are your initial priorities following the Heartland acquisition? A: Our primary focus is on cultural integration and risk management alignment. We aim to assimilate teams, optimize the branch network, and leverage our sales force to drive growth across the expanded footprint.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.