UMB Financial (UMBF) Q4 2023 earnings summary

Executive summary

• Q4’23 revenue was $370.8M; GAAP net income was $70.9M, or $1.45 per diluted share, including a $52.8M pre-tax FDIC assessment.

• Adjusted net operating income was $112.0M, or $2.29 per diluted share, up from $101.1M in Q4’22 and $98.4M in Q3’23.

• FY 2023 GAAP net income was $350.0M; adjusted net operating income was $397.1M.

Financial highlights

• Net interest income was $230.5M, up 3.7% QoQ and down 6.0% YoY; FTE net interest margin was 2.46%, up 3 bps QoQ.

• Noninterest income was $140.3M, up 5.2% QoQ and 11.8% YoY; it represented 37.8% of revenue.

• Operating PTPP was $134.9M, up 6.6% QoQ and 0.6% YoY; adjusted diluted EPS was $2.29.

• GAAP noninterest expense was $290.0M, including the FDIC assessment; operating expense excluding specified assessment, acquisition and severance costs was $235.9M.

• FY 2023 diluted EPS was $7.18 GAAP and $8.14 adjusted, versus $8.86 and $8.88, respectively, in 2022.

Outlook and guidance

• 2024 outlook cited a muted but resilient macro environment; positioning included a 70.7% average loan-to-deposit ratio, strong capital and a high-quality loan portfolio.

• Growth opportunities included market-share gains, specialized lending team expansion and loan growth supported by capital and liquidity.

• More than $1.6B of securities cash flow was expected within 12 months; 31% of average deposits were noninterest-bearing.

• 64% of end-period loans ($14.8B) were variable-rate and 71% were due to reprice within 12 months; variable-loan indices were 70% SOFR, 26% Prime and 4% other.