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1. Company Snapshot

1.a. Company Description

UMB Financial Corporation operates as the bank holding company for the UMB Bank that provides various banking and other financial services.The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, accounts receivable financing, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service.The Institutional Banking segment offers asset management and healthcare service provided to institutional client; and fund administration and accounting, investor service and transfer agency, marketing and distribution, custody, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service.


This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions.The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, and small business loan, as well as internet banking, ATM network, private banking, brokerage and insurance service, and advisory and trust service.It operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Iowa, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, and Wisconsin.


The company was founded in 1913 and is headquartered in Kansas City, Missouri.

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1.b. Last Insights on UMBF

UMB Financial Corporation's recent performance was driven by transformative growth following its acquisition of Heartland Financial USA, Inc. The company's Q2 2025 earnings beat estimates, with non-GAAP EPS of $2.96 and revenue of $689.2 million. The acquisition expanded UMB's footprint to 13 states and increased assets to $71.8 billion. Additionally, UMB recognized a pre-tax gain of $29.4 million from its investment in Voyager Technologies Inc.'s IPO. The company has also completed its systems and brand conversion following the acquisition.

1.c. Company Highlights

2. UMB Financial's Strong Q3 Earnings Driven by Loan Growth and Fee Income

UMB Financial reported net income available to common shareholders of $180.4 million, with earnings per share (EPS) of $2.70, beating analyst estimates of $2.48. Revenue growth was driven by a strong increase in net interest income, which rose 1.7% to $475 million, and fee income, which grew 12.4% on a linked-quarter basis. The company's net interest margin (NIM) was 3.04%, with a core margin of 2.78% excluding the impact of purchase accounting adjustments.

Publication Date: Nov -01

📋 Highlights
  • Record Loan Growth:: Quarterly loan production surpassed $2 billion with 8% linked-quarter growth, outpacing peer banks' 5.5% median increase.
  • Fee Income Surge:: Fee income rose 12.4% sequentially, excluding equity valuation impacts, driven by trust and securities processing.
  • Capital Strengthening:: Common equity Tier 1 ratio climbed to 10.70%, +31 bps from Q2, nearing pre-acquisition levels.
  • Acquisition Integration:: $40.7 million net accretion from Heartland boosted NIM to 3.04%, with $30 million in remaining cost synergies expected by Q1 2025.
  • Dividend Growth:: Quarterly dividend increased 7.5% to $0.43 per share, reflecting confidence in capital generation and operating leverage.

Loan Growth Momentum Continues

UMB Financial's loan growth remained strong, with average loans increasing 8% on an annualized basis, outpacing the median growth rate of 5.5% for peer banks. The company's loan production reached a record $2 billion in the third quarter, driven by organic growth and the continued success of its acquired markets. Management attributed the strong loan growth to its bottoms-up approach to lending, with a focus on local market opportunities and the capabilities of its officer core.

Credit Quality Remains Strong

The company's credit quality remained strong, with total net charge-offs of 20 basis points, and net charge-offs on legacy UMB loans of just 8 basis points. The allowance for loan losses increased to 1.07% of total loans, and management expressed confidence in its charge-off rate comments despite the deterioration of two legacy HTLF loans.

Valuation and Dividend Yield

UMB Financial's Price-to-Tangible Book Value (P/TBV) ratio is around 1.08, indicating a relatively reasonable valuation. The company's dividend yield is 1.5%, providing a stable source of return for investors. With a strong track record of capital management, UMB Financial's common equity Tier 1 ratio stood at 10.70%, a 31-basis point increase from the prior quarter.

Outlook and Guidance

Management guided to operating expenses of $375 million to $380 million in the fourth quarter, and expects to achieve cost synergies from the Heartland acquisition by the end of the first quarter. The company's effective tax rate is expected to be between 19% and 22% for the full year 2025. With a strong momentum in loan growth and fee income, UMB Financial is well-positioned for continued success.

3. NewsRoom

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Edgestream Partners L.P. Sells 61,222 Shares of UMB Financial Corporation $UMBF

Dec -04

Source: defenseworld.net

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Fisher Asset Management LLC Trims Holdings in UMB Financial Corporation $UMBF

Dec -03

Source: defenseworld.net

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UMB Financial Corporation $UMBF Shares Sold by Bank of Montreal Can

Nov -16

Source: defenseworld.net

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Wall Street Analysts See a 26.43% Upside in UMB (UMBF): Can the Stock Really Move This High?

Nov -14

Source: zacks.com

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UMB Financial Corporation $UMBF Shares Sold by Accredited Investors Inc.

Nov -12

Source: defenseworld.net

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Teacher Retirement System of Texas Sells 481 Shares of UMB Financial Corporation $UMBF

Nov -05

Source: defenseworld.net

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UMB Financial Corporation (UMBF) Q3 2025 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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UMBF Beats Q3 Earnings on Strong NII & Fee Income, Ups Dividend

Oct -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Commercial Banking

Expected Growth: 4.77%

UMB Financial Corporation's Commercial Banking segment growth of 4.77% is driven by increased loan demand from small to medium-sized businesses, expansion of commercial real estate lending, and growth in treasury management services. Additionally, strategic investments in digital banking platforms and targeted hiring of experienced commercial bankers have contributed to the segment's growth.

Institutional Banking

Expected Growth: 6.47%

UMB Financial Corporation's Institutional Banking segment growth of 6.47% is driven by strong commercial loan growth, increased treasury management fees, and expansion of its asset-based lending business. Additionally, strategic acquisitions and investments in digital capabilities have enhanced the segment's competitiveness, contributing to its growth momentum.

Personal Banking

Expected Growth: 5.4%

UMB Financial Corporation's 5.4% growth in Personal Banking is driven by increasing demand for digital banking services, expansion of branch network, and strategic partnerships. Additionally, the corporation's focus on customer experience, competitive pricing, and innovative product offerings have contributed to the growth. Furthermore, the rising adoption of mobile banking and online banking platforms has also fueled the segment's growth.

7. Detailed Products

Commercial Banking

UMB Financial Corporation provides commercial banking services to businesses, including cash management, lending, and treasury management solutions.

Consumer Banking

UMB Financial Corporation offers consumer banking services, including checking and savings accounts, credit cards, and personal loans.

Institutional Banking

UMB Financial Corporation provides institutional banking services, including custody, investment management, and trust services.

Healthcare Services

UMB Financial Corporation offers healthcare services, including healthcare payment solutions and healthcare consulting.

Scout Investments

UMB Financial Corporation offers investment management services through Scout Investments, including equity and fixed income investment strategies.

UMB Fund Services

UMB Financial Corporation offers fund services, including mutual fund administration, accounting, and compliance services.

8. UMB Financial Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for UMB Financial Corporation is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of concentration of buyers and the presence of multiple financial institutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of financial services and technology.

Threat Of New Entrants

The threat of new entrants is high due to the low barriers to entry and the increasing trend of fintech companies.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple financial institutions and the increasing competition in the financial services industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 58.12%
Debt Cost 8.15%
Equity Weight 41.88%
Equity Cost 8.15%
WACC 8.15%
Leverage 138.78%

11. Quality Control: UMB Financial Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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UMB

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

114.94$

Current Price

114.94$

Potential

-0.00%

Expected Cash-Flows