UMB FINANCIAL CORP
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 27, 2025
UMBF$133.77-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-22.
0000950170-24-018456
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0000950170-25-028420
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 186 previous paragraphs and 195 current paragraphs.
116 unchanged; 65 reworded; 13 added; 5 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 30 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
the Company’s ability to complete the planned issuance of shares of the Company’s common stock in connection with the forward sale agreements;
Current report
the Company’s ability to manage the expenses associated with the merger with HTLF and the impact these expenses may have on the Company’s financial results;
Current report
the benefits from the merger with HTLF may not be fully realized or may take longer to realize than expected;
Current report
the Company’s ability to promptly and effectively integrate the merger of HTLF;
Current report
For the year ended December 31, 2024, Commercial Banking net income increased $69.2 million, or 27.8%, to $318.2 million compared to the same period in 2023. Net interest income increased $67.2 million, or 11.2%, for the year ended December 31, 2024, compared to the same period last year, driven by strong loan growth, earning asset mix changes and the increase in short-term interest rates. Provision for credit losses increased $17.0 million, or 51.1%, as compared to 2023, driven by loan growth, portfolio metric changes, and changes in macro-economic metrics in 2024 as compared to 2023. Noninterest income increased $32.6 million, or 33.4%, over the same period in 2023. This increase was primarily due to increases of $11.0 million in investment security gains, $7.4 million in bankcard income, $5.8 million in other income driven by a legal settlement in the first quarter of 2024 and increased life insurance income, and $4.0 million in service charges on deposit accounts. Noninterest expense decreased $9.7 million, or 2.7%, as compared to the same period in 2023. This decrease was driven by a decrease of $20.8 million in technology, service, and overhead expenses, partially offset by increases of $7.0 million in salaries and employee benefits expense, $2.1 million in marketing and business development, $1.6 million in processing fees and $1.6 million in bankcard expense.
Current report
For the year ended December 31, 2024, Personal Banking net income decreased $2.0 million, or 6.9%, to a net loss of $30.9 million as compared to the same period last year. Net interest income increased $6.5 million, or 5.0%, compared to the same period last year due to loan growth and the increase in short-term interest rates. Provision for credit losses increased $1.5 million, or 22.3%, for the period, driven by loan growth, portfolio metric changes, and changes in macro-economic metrics in 2024 as compared to 2023. Noninterest income increased $3.3 million, or 3.4%, for the same period primarily driven by an increase of $5.0 million in trust and securities processing income, and $2.9 million in life insurance income, partially offset by a decrease of $3.2 million in investment securities gains. Noninterest expense increased $11.7 million, or 4.7%, primarily due to increases of $6.4 million in technology, service, and overhead expenses, $5.2 million in salaries and employee benefits, and $1.0 million in bankcard expense, partially offset by a decrease of $1.7 million in operational losses.
Current report
As a percentage of total loans, commercial real estate comprises 39.5% of total loans compared to 38.4% in 2023. Commercial real estate loans increased $1.2 billion, or 13.9%, compared to 2023. Commercial real estate loans generally involve a greater degree of credit risk than consumer real estate loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulations. In recent years, commercial real estate markets have been particularly impacted by the economic disruption resulting from the COVID-19 pandemic. The COVID-19 pandemic has also been a catalyst for the evolution of various remote work options, which could impact the long-term performance of some types of office properties within our commercial real estate portfolio. Due to these risks, the Company is actively monitoring its exposure to commercial real estate.
Current report
The following table presents the Company’s investment CRE (which includes non-owner occupied and construction loans) by industry. The table separately discloses the top five industries as a percentage of the Company’s loan portfolio as of either period presented, while the remainder are included in “Other.”
Current report
The following table presents the Company’s investment CRE (which includes non-owner occupied and construction loans) by state. The table separately discloses all states that represent at least 5.0% of the Company’s investment CRE portfolio as of either period presented, while the remainder are included in “All Others.”
Current report
The shift to work-from-home and hybrid work environments has caused a decreased utilization of, and demand for, office space. The Company is actively monitoring its exposure to office space in its non-owner occupied commercial real estate portfolio. The average loan size in the Company’s office portfolio was approximately $8.9 million and $9.2 million as of December 31, 2024 and December 31, 2023, respectively. The average loan-to-value of the office portfolio was 63% and 64% as of December 31, 2024 and December 31, 2023, respectively, and 84% are recourse loans as of the end of both periods. Further, only 18% and 30% of the Company’s office portfolio as of December 31, 2024 and December 31, 2023, respectively, is in central business districts, which have been more heavily impacted by the shift to remote work. The remainder of the Company’s office portfolio is in suburban or medical properties.
Current report
The table below presents the Company’s portfolio of office commercial real estate by the metropolitan statistical area (MSAs) in which the loan collateral is located. The table separately discloses all MSAs that represent at least 5.0% of the Company's office commercial real estate portfolio as of either period presented, while the remainder are included in “All Others.”
Current report
On April 28, 2024, the Company entered into the Merger Agreement with HTLF, a Delaware corporation and Blue Sky Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of the Company. The Merger Agreement and the merger were unanimously approved by the boards of directors of the Company and HTLF. Pending regulatory approval and approval by the shareholders of the Company and HTLF, and the merger closed on January 31, 2025. Under the terms of the Merger Agreement, HTLF stockholders received a fixed exchange ratio of 0.55 shares of the Company’s common stock for each share of HTLF stock, with a total market value of approximately $2.8 billion.
Current report
Additionally, on April 29, 2024, the Company also announced that in connection with the execution of the Merger Agreement, it entered into a forward sale agreement with BofA Securities, Inc. or its affiliate to issue 2.8 million shares of its common stock. The underwriters were granted an option to purchase up to an additional 420 thousand shares of the Company's common stock exercisable within 30 days of April 28, 2024. The underwriters exercised this option in full on April 30, 2024, upon which the Company entered into an additional forward sale agreement relating to the 420 thousand shares of the Company's common stock. The forward sale agreements are classified as an equity instrument under ASC 815-40, Contracts in Entity’s Own Equity. The Company expects to receive net proceeds of approximately $231.8 million from the sale of shares of common stock and settlement of the forward sale agreements.
Removed paragraphs (5)
Previous report
The rapid rise in interest rates during 2022 and 2023, the resulting industry-wide reduction in the fair value of securities portfolios, and the recent bank runs that led to the failures of some financial institutions in March of 2023, among other events, have resulted in significant volatility in the U.S. banking sector and heightened focus on liquidity, uninsured deposits, deposit composition, unrecognized investment losses, and capital.
Previous report
During November 2023, the FDIC approved a final rule to implement a special assessment to recover the losses to the DIF associated with protecting uninsured depositors following the closures of certain financial institutions in early 2023. The assessment base for the special assessment is equal to an insured depository institution’s uninsured deposits as of December 31, 2022, adjusted to exclude the first $5 billion, and will be collected at an annual rate of 13.4 basis points for eight quarterly assessment periods. The Company’s portion of this special assessment was $52.8 million and was recognized in noninterest expense during the fourth quarter of 2023 and its impacts are discussed below.
Previous report
For the year ended December 31, 2023, Commercial Banking net income decreased $37.2 million, or 13.0%, to $248.5 million compared to the same period in 2022. Net interest income increased $2.3 million, or 0.4%, for the year ended December 31, 2023, compared to the same period last year, driven by strong loan growth and increased earning asset yields, partially offset by increased interest expense due to higher interest rates and unfavorable changes in the mix of interest-bearing liabilities. Provision for credit losses increased $0.3 million, or 1.0%, as compared to 2022, driven by loan growth, portfolio metric changes, and changes in macro-economic metrics in 2023 as compared to 2022. Noninterest income decreased $25.0 million, or 20.4%, over the same period in 2022. This decrease was primarily due to an allocated portion of the gain on the sale of Visa Inc. Class B common shares recorded during 2022, coupled with a decrease of $5.3 million in other income due to reduced derivative income and the gain on the sale of the Company's factoring loan portfolio recorded in the first quarter of 2022. Noninterest expense increased $32.9 million, or 9.9%, as compared to the same period in 2022. This increase was driven by the allocation of $28.5 million of the $52.8 million FDIC special assessment recorded in 2023, coupled with increases of $2.8 million in salaries and employee benefits expense, $2.5 million in operational losses, $2.3 million in processing fees, and $1.2 million in bankcard expense. These increases were partially offset by a decrease of $4.3 million in legal and professional fees as compared to 2022.
Previous report
For the year ended December 31, 2023, Personal Banking net income decreased $44.0 million, or 278.3%, as compared to the same period last year. Net interest income decreased $29.1 million, or 18.4%, compared to the same period last year due to higher deposit interest expense driven by the increase in short-term interest rates. Provision for credit losses increased $2.1 million, or 45.7%, for the period, driven by loan growth, portfolio metric changes, and changes in macro-economic metrics in 2023 as compared to 2022. Noninterest income decreased $11.5 million, or 10.7%, primarily due to an allocated portion of the gain on the sale of Visa Inc. Class B common shares recorded in 2022, coupled with decreases of $2.4 million in bankcard income and $1.6 million in service charges on deposits. These decreases were partially offset by an increase of $2.7 million in other income driven by the gain on the sale of other assets during the second quarter of 2023, and an increase of $2.0 million in the valuation of the Company's non-marketable securities. Noninterest expense increased $6.3 million, or 2.6%, primarily due to increases of $2.3 million in operational losses, $2.1 million in regulatory fees, $1.9 million in salaries and employee benefits, and $1.2 million in bankcard expense. These increases were partially offset by a decrease of $1.0 million in technology, service, and overhead expenses.
Previous report
To enhance general working capital needs, the Company has a revolving line of credit with Wells Fargo Bank, N.A. which allows the Company to borrow up to $30.0 million for general working capital purposes. The interest rate applied to borrowed balances will be at the Company’s option, either 1.40% above SOFR or 1.75% below the prime rate on the date of an advance. The Company pays a 0.4% unused commitment fee for unused portions of the line of credit. The Company had no advances outstanding at December 31, 2023.
Reworded paragraphs (65)
Previous wording
The first financial objective is to continuously improve operating efficiencies. The Company has focused on identifying efficiencies that simplify its organizational and reporting structures, streamline back-office functions and take advantage of synergies and newer technologies among various platforms and distribution networks. The Company has identified and expects to continue identifying ongoing efficiencies through the normal course of business that, when combined with increased revenue, will contribute to improved operating leverage. For 2023, total revenue decreased 0.4%, and noninterest expense increased 11.2%, as compared to the previous year. Revenue for 2022 included a $66.2 million gain realized on the sale of the Company’s Visa Inc. Class B common shares. Noninterest expense for 2023 included the special FDIC assessment of $52.8 million as discussed above. The Company continues to invest in technological advances that it believes will help management drive operating leverage in the future through improved data analysis and automation. The Company also continues to evaluate core systems and will invest in enhancements that it believes will yield operating efficiencies.
Current wording
The first financial objective is to continuously improve operating efficiencies. The Company has focused on identifying efficiencies that simplify its organizational and reporting structures, streamline back-office functions and take advantage of synergies and newer technologies among various platforms and distribution networks. The Company has identified and expects to continue identifying ongoing efficiencies through the normal course of business that, when combined with increased revenue, will contribute to improved operating leverage. For 2024, total revenue increased 11.4%, and noninterest expense increased 2.8%, as compared to the previous year. The Company continues to invest in technological advances that it believes will help management drive operating leverage in the future through improved data analysis and automation. The Company also continues to evaluate core systems and will invest in enhancements that it believes will yield operating efficiencies.
Previous wording
The second financial objective is to increase net interest income through profitable loan and deposit growth and the optimization of the balance sheet. For 2023, net interest income increased $6.3 million, or 0.7%, as compared to the previous year. The Company has shown increased net interest income through the effects of increased volume and mix of average earning assets, coupled with higher interest rates. This increase was partially offset by higher interest-bearing deposit rates and increased borrowed funds. Average earning assets increased $1.9 billion, or 5.3%, compared to 2022. Average loan balances increased $3.5 billion, partially offset by a decrease in average federal funds and resell agreements of $649.8 million, a decrease in average securities of $613.8 million, and a decrease in average interest-bearing due from banks of $362.1 million from the prior year. The funding for these assets was driven primarily by a 16.9% increase in average interest-bearing deposits, and a 647.5% increase in average borrowed funds, partially offset by a decrease of 19.8% in noninterest-bearing deposits. Net interest margin, on a fully tax-equivalent (FTE) basis, decreased 11 basis points compared to the same period in 2022 in large part due to repricing and mix changes of interest-bearing liabilities with the increase in short-term interest rates, partially offset by an increase in the benefit of free funds and the repricing of earning assets. Net interest spread contracted by 83 basis points during the same period.
Current wording
The second financial objective is to increase net interest income through profitable loan and deposit growth and the optimization of the balance sheet. For 2024, net interest income increased $80.8 million, or 8.8%, as compared to the previous year. The Company has shown increased net interest income through the effects of increased volume and mix of average earning assets, coupled with higher interest rates. This increase was partially offset by higher interest-bearing deposit rates. Average earning assets increased $3.3 billion, or 8.9%, compared to 2023. Average loan balances increased $1.9 billion, coupled with an increase in average interest-bearing due from banks of $1.4 billion from the prior year. The funding for these assets was driven primarily by a 19.4% increase in average interest-bearing deposits, partially offset by a 37.4% decrease in average borrowed funds and a decrease of 5.3% in noninterest-bearing deposits. Net interest margin, on a fully tax-equivalent (FTE) basis, decreased one basis point compared to the same period in 2023 in large part due to repricing and mix changes of interest-bearing liabilities with the changes in short-term interest rates, partially offset by the repricing of earning assets. Net interest spread contracted by three basis points during the same period.
Previous wording
The third financial objective is to grow the Company’s revenue from noninterest sources. The Company seeks to grow noninterest revenues throughout all economic and interest rate cycles, while positioning itself to benefit in periods of economic growth. Noninterest income decreased $12.4 million, or 2.2%, to $541.9 million for the year ended December 31, 2023, compared to the same period in 2022. The decrease in 2023 was driven by a $66.2 million gain realized on the sale of the Company’s Visa Inc. Class B common shares in 2022. These changes are discussed in greater detail below under Noninterest income. For the year ended December 31, 2023, noninterest income represented 37.1% of total revenues, as compared to 37.8% for 2022.
Current wording
The third financial objective is to grow the Company’s revenue from noninterest sources. The Company seeks to grow noninterest revenues throughout all economic and interest rate cycles, while positioning itself to benefit in periods of economic growth. Noninterest income increased $86.3 million, or 15.9%, to $628.1 million for the year ended December 31, 2024, compared to the same period in 2023. The increase in 2024 was driven by increased trust and securities processing income, other miscellaneous income, investment securities gains, net, and bankcard income. These changes are discussed in greater detail below under Noninterest income. For the year ended December 31, 2024, noninterest income represented 38.6% of total revenues, as compared to 37.1% for 2023.
Previous wording
The fourth financial objective is effective capital management. The Company places a significant emphasis on maintaining a strong capital position, which management believes promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and acquisition opportunities. The Company continues to maximize shareholder value through a mix of reinvesting in organic growth, evaluating acquisition opportunities that complement the Company’s strategies, increasing dividends over time, and appropriately utilizing a share repurchase program. At December 31, 2023, the Company had a total risk-based capital ratio of 12.85% and $3.1 billion in total shareholders’ equity, an increase of $433.3 million, or 16.2%, compared to total shareholders’ equity at December 31, 2022. The Company did not repurchase shares of common stock during 2023 except for shares acquired pursuant to the Company's share-based incentive programs. In 2023, the Company declared $75.3 million in dividends, which represents a 3.7% increase compared to dividends declared during 2022.
Current wording
The fourth financial objective is effective capital management. The Company places a significant emphasis on maintaining a strong capital position, which management believes promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and acquisition opportunities. The Company continues to maximize shareholder value through a mix of reinvesting in organic growth, evaluating acquisition opportunities that complement the Company’s strategies, increasing dividends over time, and appropriately utilizing a share repurchase program. At December 31, 2024, the Company had a total risk-based capital ratio of 13.21% and $3.5 billion in total shareholders’ equity, an increase of $366.1 million, or 11.8%, compared to total shareholders’ equity at December 31, 2023. The Company did not repurchase shares of common stock during 2024 except for shares acquired pursuant to the Company's share-based incentive programs. In 2024, the Company declared $77.1 million in dividends, which represents a 2.4% increase compared to dividends declared during 2023.
Previous wording
The Company recorded consolidated net income of $350.0 million for the year ended December 31, 2023. This represents an 18.9% decrease over 2022. Net income for 2022 was $431.7 million, or an increase of 22.3% compared to 2021. Basic earnings per share for the year ended December 31, 2023, were $7.22 per share compared to $8.93 per share in 2022, a decrease of 19.1%. Basic earnings per share were $7.31 per share in 2021, or an increase of 22.2% from 2021 to 2022. Fully diluted earnings per share decreased 19.0% from 2022 to 2023 and increased 22.4% from 2021 to 2022. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2023 were 0.88% and 12.23%, respectively, compared to 1.15% and 15.83%, respectively, for the year ended December 31, 2022. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2021 were 1.00% and 11.43%, respectively.
Current wording
The Company recorded consolidated net income of $441.2 million for the year ended December 31, 2024. This represents a 26.1% increase over 2023. Net income for 2023 was $350.0 million, or a decrease of 18.9% compared to 2022. Basic earnings per share for the year ended December 31, 2024, were $9.05 per share compared to $7.22 per share in 2023, an increase of 25.3%. Basic earnings per share were $8.93 per share in 2022, or a decrease of 19.1% from 2022 to 2023. Fully diluted earnings per share increased 25.2% from 2023 to 2024 and decreased 19.0% from 2022 to 2023. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2024 were 1.02% and 13.24%, respectively, compared to 0.88% and 12.23%, respectively, for the year ended December 31, 2023. Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2022 were 1.15% and 15.83%, respectively.
Previous wording
The Company’s net interest income increased to $920.1 million in 2023 compared to $913.8 million in 2022 and $815.5 million in 2021. In total, net interest income increased $6.3 million, as compared to 2022, primarily driven by a favorable volume variance of $7.8 million, offset by a $1.5 million rate variance. See Table 2. The favorable volume variance on earning assets was predominantly driven by an increase of $1.9 billion, or 5.3%, in average earning assets. In 2023, average loan balances increased $3.5 billion, partially offset by a decrease in average federal funds and resell agreements of $649.8 million, a decrease in average securities balances of $613.8 million, and a decrease in interest-bearing due from banks of $362.1 million as compared to 2022. Net interest margin, on an FTE basis, decreased to 2.52% for 2023, compared to 2.63% for the same period in 2022, driven by repricing and mix changes of interest-bearing liabilities with the increase in short-term interest rates, partially offset by an increase in the benefit of free funds and the repricing of earning assets. Net interest spread contracted by 83 basis points during the same period. The Company has seen an increase in the benefit from interest-free funds as compared to 2022 driven by the increase in short-term interest rates. The impact of this benefit increased 72 basis points compared to 2022 and is illustrated on Table 3. The magnitude and duration of this impact will be largely dependent upon the FRB’s policy decisions and market movements. See Table 18 in Item 7A for an illustration of the impact of an interest rate increase or decrease on net interest income as of December 31, 2023.
Current wording
The Company’s net interest income increased to $1.0 billion in 2024 compared to $920.1 million in 2023 and $913.8 million in 2022. In total, net interest income increased $80.8 million, as compared to 2023, primarily driven by a favorable volume variance of $88.5 million, offset by a $7.7 million rate variance. See Table 2. The favorable volume variance on earning assets was predominantly driven by an increase of $3.3 billion, or 8.9%, in average earning assets. In 2024, average loan balances increased $1.9 billion, coupled with an increase in average interest-bearing due from banks of $1.4 billion as compared to 2023. Net interest margin, on an FTE basis, decreased to 2.51% for 2024, compared to 2.52% for the same period in 2023, driven by repricing and mix changes of interest-bearing liabilities with the changes in short-term interest rates, partially offset by the repricing of earning assets. Net interest spread contracted by three basis points during the same period. The Company has seen a small increase in the benefit from interest-free funds as compared to 2023 driven by the changes in short-term interest rates. The impact of this benefit increased two basis points compared to 2023 and is illustrated on Table 3. The magnitude and duration of this impact will be largely dependent upon the FRB’s policy decisions and market movements. See Table 21 in Item 7A for an illustration of the impact of an interest rate increase or decrease on net interest income as of December 31, 2024.
Previous wording
The provision for credit losses totaled $41.2 million for the year ended December 31, 2023, which is an increase of $3.3 million, or 8.8%, compared to the same period in 2022. This change is the result of applying the CECL methodology for computing the allowance for credit losses, coupled with the impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to the prior period. See further discussion in “Provision and Allowance for Credit Losses” in this report.
Current wording
The provision for credit losses totaled $61.1 million for the year ended December 31, 2024, which is an increase of $19.8 million, or 48.1%, compared to the same period in 2023. This change is driven by impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to the prior period. See further discussion in “Provision and Allowance for Credit Losses” in this report.
Previous wording
The Company had a decrease of $12.4 million, or 2.2%, in noninterest income in 2023, as compared to 2022, and an increase of $87.1 million, or 18.6%, in 2022, compared to 2021. The decrease in 2023 is primarily driven by decreased investment securities gains, net of $61.6 million, partially offset by an increase in trust and securities processing of $20.0 million and other income of $21.0 million. The increase in 2022 is primarily driven by increased investment securities gains, net of $53.4 million and brokerage fees of $30.8 million. The change in noninterest income in 2023 from 2022, and 2022 from 2021 is illustrated in Table 6.
Current wording
The Company had an increase of $86.3 million, or 15.9%, in noninterest income in 2024, as compared to 2023, and a decrease of $12.4 million, or 2.2%, in 2023, compared to 2022. The increase in 2024 is primarily driven by increased trust and securities processing of $33.4 million, increased other income of $14.1 million, increased investment securities gains, net of $13.9 million, and increased bankcard fees of $13.1 million. The decrease in 2023 is primarily driven by decreased investment securities gains, net of $61.6 million, partially offset by an increase in trust and securities processing of $20.0 million and other income of $21.0 million. The change in noninterest income in 2024 from 2023, and 2023 from 2022 is illustrated in Table 6.
Previous wording
Noninterest expense increased in 2023 by $101.0 million, or 11.2%, compared to 2022 and increased by $64.5 million, or 7.7%, in 2022 compared to 2021. The increase in 2023 is primarily driven by the FDIC special assessment of $52.8 million, and increases in salaries and employee benefits expense and processing fees. The increase in 2022 is primarily driven by increases in salaries and employee benefit expense, processing fees, other miscellaneous expense, bankcard expense, marketing and business development expense, and legal and consulting expense. The increase in noninterest expense in 2023 from 2022, and 2022 from 2021 is illustrated in Table 7 and below under Noninterest Expense.
Current wording
Noninterest expense increased in 2024 by $27.5 million, or 2.8%, compared to 2023 and increased by $101.0 million, or 11.2%, in 2023 compared to 2022. The increase in 2024 is primarily driven by increases in salaries and employee benefit expense of $40.5 million, increased legal and consulting fees of $16.2 million, increased processing fees of $14.8 million, and increased bankcard expense of $11.3 million, partially offset by decreased regulatory fees of $45.1 million related to the FDIC special assessment. The increase in 2023 is primarily driven by the FDIC special assessment of $52.8 million, and increases in salaries and employee benefits expense and processing fees. The increase in noninterest expense in 2024 from 2023, and 2023 from 2022 is illustrated in Table 7 and below under Noninterest Expense.
Previous wording
Interest income and yields are stated on an FTE basis, using a marginal tax rate of 21% for 2023, 2022, and 2021. The tax-equivalent interest income and yields give effect to tax-exempt interest income net of the disallowance of interest expense, for federal income tax purposes related to certain tax-free assets. Rates earned/paid may not compute to the rates shown due to presentation in millions. The tax-equivalent interest income totaled $26.4 million, $25.8 million, and $26.3 million in 2023, 2022, and 2021, respectively.
Current wording
Interest income and yields are stated on an FTE basis, using a federal income tax rate of 21% for 2024, 2023, and 2022. The tax-equivalent interest income and yields give effect to tax-exempt interest income net of the disallowance of interest expense, for federal income tax purposes related to certain tax-free assets. Rates earned/paid may not compute to the rates shown due to presentation in millions. The tax-equivalent interest income totaled $25.9 million, $26.4 million, and $25.8 million in 2024, 2023, and 2022, respectively.
Previous wording
Loan fees are included in interest income. Such fees totaled $17.7 million, $18.2 million, and $17.1 million in 2023, 2022, and 2021, respectively.
Current wording
Loan fees are included in interest income. Such fees totaled $21.4 million, $17.7 million, and $18.2 million in 2024, 2023, and 2022, respectively.
Previous wording
The Company experienced an increase in net interest income of $6.3 million, or 0.7%, for the year ended December 31, 2023, compared to 2022. This follows an increase of $98.3 million, or 12.1%, for the year ended December 31, 2022, compared to 2021. Average earning assets for the year ended December 31, 2023 increased by $1.9 billion, or 5.3%, compared to the same period in 2022. Net interest margin, on a tax-equivalent basis, decreased to 2.52% for 2023 compared to 2.63% in 2022.
Current wording
The Company experienced an increase in net interest income of $80.8 million, or 8.8%, for the year ended December 31, 2024, compared to 2023. This follows an increase of $6.3 million, or 0.7%, for the year ended December 31, 2023, compared to 2022. Average earning assets for the year ended December 31, 2024 increased by $3.3 billion, or 8.9%, compared to the same period in 2023. Net interest margin, on a tax-equivalent basis, decreased to 2.51% for 2024 compared to 2.52% in 2023.
Previous wording
The Company funds a significant portion of its balance sheet with noninterest-bearing demand deposits. Noninterest-bearing demand deposits represented 33.9%, 40.6% and 45.9% of total outstanding deposits as of December 31, 2023, 2022 and 2021, respectively. The decrease in 2023 is driven by the increase in short-term interest rates. As illustrated in Table 3, the impact from these interest-free funds was 115 basis points in 2023, as compared to 43 basis points in 2022 and eight basis points in 2021.
Current wording
The Company funds a significant portion of its balance sheet with noninterest-bearing demand deposits. Noninterest-bearing demand deposits represented 31.6%, 33.9% and 40.6% of total outstanding deposits as of December 31, 2024, 2023 and 2022, respectively. The decrease in 2024 is driven by the increase in short-term interest rates. As illustrated in Table 3, the impact from these interest-free funds was 117 basis points in 2024, as compared to 115 basis points in 2023 and 43 basis points in 2022.
Previous wording
The Company experienced an increase in net interest income during 2023 due to a volume variance of $7.8 million, offset by a negative rate variance of $1.5 million. The average rate on earning assets during 2023 has increased by 170 basis points, while the average rate on interest-bearing liabilities increased by 253 basis points, resulting in a 83 basis-point decrease in spread. The volume of loans has increased from an average of $18.8 billion in 2022 to an average of $22.3 billion in 2023, driven by organic loan growth. The volume of interest-bearing liabilities increased from $21.1 billion in 2022 to $25.6 billion in 2023. The Company expects to see continued volatility in the economic markets and governmental responses to inflation, geopolitical tensions, and supply chain constraints. These changing economic conditions and governmental responses could have impacts on the balance sheet and income statement of the Company in 2024. Loan-related earning assets tend to generate a higher spread than those earned in the Company’s investment portfolio. By design, the Company’s investment portfolio is moderate in duration and liquid in its composition of assets.
Current wording
The Company experienced an increase in net interest income during 2024 due to a volume variance of $88.5 million, offset by a negative rate variance of $7.7 million. The average rate on earning assets during 2024 increased by 41 basis points, while the average rate on interest-bearing liabilities increased by 44 basis points, resulting in a three basis-point decrease in spread. The volume of loans increased from an average of $22.3 billion in 2023 to an average of $24.2 billion in 2024, driven by organic loan growth. The volume of interest-bearing liabilities increased from $25.6 billion in 2023 to $29.0 billion in 2024. The Company expects to see continued volatility in the economic markets and governmental responses to inflation, geopolitical tensions, and supply chain constraints. These changing economic conditions and governmental responses could have impacts on the balance sheet and income statement of the Company in 2025. Loan-related earning assets tend to generate a higher spread than those earned in the Company’s investment portfolio. By design, the Company’s investment portfolio is moderate in duration and liquid in its composition of assets.
Previous wording
During 2024, approximately $2.1 billion of available-for-sale securities are expected to have principal repayments. This includes approximately $1.1 billion that will have principal repayments during the first quarter of 2024. The available-for-sale investment portfolio had an average life of 52.6 months, 62.3 months, and 67.6 months as of December 31, 2023, 2022, and 2021, respectively.
Current wording
During 2025, approximately $1.5 billion of available-for-sale securities are expected to have principal repayments. This includes approximately $317 million that will have principal repayments during the first quarter of 2025. The available-for-sale investment portfolio had an average life of 56.0 months, 52.6 months, and 62.3 months as of December 31, 2024, 2023, and 2022, respectively.
Previous wording
As illustrated in Table 5 below, the ACL increased as a percentage of total loans to 0.95% as of December 31, 2023, compared to 0.91% as of December 31, 2022. The provision for credit losses, including provision for off-balance sheet credit exposures, totaled $41.2 million for the year ended December 31, 2023, which is an increase of $3.3 million, or 8.8%, compared to the same period in 2022. The provision for credit losses, including provision for off-balance sheet credit exposures, totaled $37.9 million for the year ended December 31, 2022. This increase is the result of the impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to the prior period.
Current wording
As illustrated in Table 5 below, the ACL increased as a percentage of total loans to 1.01% as of December 31, 2024, compared to 0.95% as of December 31, 2023. The provision for credit losses, including provision for off-balance sheet credit exposures, totaled $61.1 million for the year ended December 31, 2024, which is an increase of $19.8 million, or 48.1%, compared to the same period in 2023. The provision for credit losses, including provision for off-balance sheet credit exposures, totaled $41.2 million for the year ended December 31, 2023. This increase is the result of the impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to the prior period.
Previous wording
A key objective of the Company is the growth of noninterest income to provide a diverse source of revenue not directly tied to interest rates. Fee-based services are typically non-credit related and are not generally affected by fluctuations in interest rates. Noninterest income decreased in 2023 by $12.4 million, or 2.2%, compared to 2022 and increased in 2022 by $87.1 million, or 18.6%, compared to 2021. The decrease in 2023 is primarily driven by decreased investment securities gains, net, partially offset by an increase in other miscellaneous income and trust and securities processing income. The increase in 2022 is primarily attributable to an increase in investment securities gains, net, coupled with an increase in brokerage fee income and trust and securities processing income. These were partially offset by a decrease in other miscellaneous income. Changes in Noninterest income are presented in Table 6 below.
Current wording
A key objective of the Company is the growth of noninterest income to provide a diverse source of revenue not directly tied to interest rates. Fee-based services are typically non-credit related and are not generally affected by fluctuations in interest rates. Noninterest income increased in 2024 by $86.3 million, or 15.9%, compared to 2023 and decreased in 2023 by $12.4 million, or 2.2%, compared to 2022. The increase in 2024 is primarily driven by increased trust and securities processing income, other miscellaneous income, investment securities gains, net, and bankcard income. The decrease in 2023 is primarily attributable to a decrease in investment securities gains, net, partially offset by an increase in other miscellaneous income and trust securities processing income. Changes in Noninterest income are presented in Table 6 below.
Previous wording
Trust and securities processing income consists of fees earned on personal and corporate trust accounts, custody of securities services, trust investments and wealth management services, and mutual fund assets servicing. This income category increased by $20.0 million, or 8.4% in 2023, compared to 2022, and increased by $13.1 million, or 5.8%, in 2022, compared to 2021. During 2023, fund services income increased $12.2 million and corporate trust income increased $7.7 million. During 2022, fund services income increased $12.9 million and corporate trust income increased $6.5 million, partially offset by a decrease in wealth management income of $6.3 million. The recent volatile markets have impacted the income in this category. Since trust and securities processing fees are primarily asset-based, which are highly correlated to the change in market value of the assets, the related income will be affected by changes in the securities markets. Management continues to emphasize sales of services to both new and existing clients as well as increasing and improving the distribution channels.
Current wording
Trust and securities processing income consists of fees earned on personal and corporate trust accounts, custody of securities services, trust investments and wealth management services, and mutual fund assets servicing. This income category increased by $33.4 million, or 13.0% in 2024, compared to 2023, and increased by $20.0 million, or 8.4%, in 2023, compared to 2022. During 2024, fund services income increased $20.5 million, corporate trust income increased $7.7 million and wealth management services increased $5.1 million. During 2023, fund services income increased $12.2 million and corporate trust income increased $7.7 million. The recent volatile markets have impacted the income in this category. Since trust and securities processing fees are primarily asset-based, which are highly correlated to the change in market value of the assets, the related income will be affected by changes in the securities markets. Management continues to emphasize sales of services to both new and existing clients as well as increasing and improving the distribution channels.
Previous wording
Trading and investment banking income decreased $3.6 million, or 15.4%, in 2023 compared to 2022 and decreased $7.7 million, or 25.0%, in 2022 compared to 2021. These decreases were driven by lower trading volume and lower market values.
Current wording
Trading and investment banking income increased $4.6 million, or 23.4%, in 2024 compared to 2023 and decreased $3.6 million, or 15.4%, in 2023 compared to 2022. The increase in 2024 compared to 2023 and the decrease in 2023 compared to 2022 was driven by increased and decreased bond trading income, respectively.
Previous wording
Service charges on deposits income decreased $0.2 million, or 0.3%, in 2023 compared to 2022 and decreased $0.9 million, or 1.0%, in 2022 compared to 2021. The decrease in 2023 compared to 2022 was driven by decreased healthcare services income, offset by increased commercial service charge income. The decrease in 2022 compared to 2021 was driven by decreased healthcare services income, partially offset by increased consumer service charge income.
Current wording
Service charges on deposits income decreased $0.4 million, or 0.5%, in 2024 compared to 2023 and decreased $0.2 million, or 0.3%, in 2023 compared to 2022. The decrease in both years was driven by decreased healthcare services income, offset by increased commercial service charge income.
Previous wording
Brokerage fees increased $11.1 million, or 25.8%, in 2023 compared to 2022 and increased $30.8 million, or 253.5%, in 2022 compared to 2021. The increase in both years was driven by increased 12b-1 and money market fees driven by the increase in short-term interest rates.
Current wording
Brokerage fees increased $7.4 million, or 13.8%, in 2024 compared to 2023 and increased $11.1 million, or 25.8%, in 2023 compared to 2022. The increase in both years was driven by increased 12b-1 and money market fees driven by the increase in short-term interest rates.
Previous wording
Bankcard fees increased $1.3 million, or 1.7%, in 2023 compared to 2022, and increased $8.9 million, or 13.7%, in 2022 compared to 2021. These increases were primarily driven by increased interchange income, partially offset by increased rewards and rebate expense.
Current wording
Bankcard fees increased $13.1 million, or 17.5%, in 2024 compared to 2023, and increased $1.3 million, or 1.7%, in 2023 compared to 2022. These increases were primarily driven by increased interchange income.
Previous wording
Investment securities gains, net decreased $61.6 million in 2023 compared to 2022 and increased $53.4 million in 2022 compared to 2021. The decrease in 2023 and increase in 2022 was primarily driven by a $66.2 million gain realized on the sale of the Company’s Visa Inc. Class B common shares in 2022.
Current wording
Investment securities gains, net increased $13.9 million in 2024 compared to 2023 and decreased $61.6 million in 2023 compared to 2022. The increase in 2024 was primarily driven by gain on sale of one of the Company's securities without readily determinable fair value in 2024, coupled with the impairment of one available-for-sale debt security in 2023. The decrease in 2023 was primarily driven by a $66.2 million gain realized on the sale of the Company’s Visa Inc. Class B common shares in 2022.
Previous wording
Other noninterest income increased $21.0 million, or 64.7%, in 2023 compared to 2022 and decreased $10.5 million, or 24.5%, in 2022 compared to 2021. The increase in 2023 and decrease in 2022 was primarily driven by market value changes in company-owned life insurance income.
Current wording
Other noninterest income increased $14.1 million, or 26.4%, in 2024 compared to 2023 and increased $21.0 million, or 64.7%, in 2023 compared to 2022. The increase in 2024 was primarily driven by the gain on the sale of UMB Distribution Services, LLC, a legal settlement, and gains on the sale of other assets during 2024, coupled with increased bank-owned life insurance income. The increase in 2023 was primarily driven by market value changes in company-owned life insurance income.
Previous wording
Noninterest expense increased in 2023 by $101.0 million, or 11.2%, compared to 2022 and increased in 2022 by $64.5 million, or 7.7%, compared to 2021. From 2022 to 2023 the increase was driven by a $52.8 million FDIC special assessment, increases in salaries and employee benefits expense and processing fees, and partially offset by a decrease in other miscellaneous expense. From 2021 to 2022 the increase was driven by increases in salaries and employee benefits expense, processing fees, other miscellaneous expense, bankcard expense, and marketing and business development expense. Table 7 below summarizes the components of noninterest expense and the respective year-over-year changes for each category.
Current wording
Noninterest expense increased in 2024 by $27.5 million, or 2.8%, compared to 2023 and increased in 2023 by $101.0 million, or 11.2%, compared to 2022. From 2023 to 2024 the increase was driven primarily by increased salaries and employee benefits expense, legal and consulting expense, and processing fees, partially offset by a decrease in regulatory fees. From 2022 to 2023 the increase was driven by the $52.8 million FDIC special assessment, increases in salaries and employee benefits expense and processing fees, and partially offset by a decrease in other miscellaneous expense. Table 7 below summarizes the components of noninterest expense and the respective year-over-year changes for each category.
Previous wording
Salaries and employee benefits expense increased $29.0 million, or 5.5%, in 2023 compared to 2022 and $20.0 million, or 4.0%, in 2022 compared to 2021. In 2023, salaries and wage expense increased $23.8 million, or 7.5% and employee benefits expense of $20.5 million, or 26.0%. These increases were offset by a decrease in bonus and commission expense of $15.3 million, or 11.8%. In 2022, salaries and wage expense increased $17.5 million, or 5.9% and bonus and commission expense increased $4.4 million, or 3.5%, driven by business volumes and revenue growth, and higher company performance. These increases were offset by a decrease in employee benefits expense of $1.9 million, or 2.3%.
Current wording
Salaries and employee benefits expense increased $40.5 million, or 7.3%, in 2024 compared to 2023 and $29.0 million, or 5.5%, in 2023 compared to 2022. In 2024, bonus and commission expense increased $22.4 million, or 19.5%, salaries and wage expense increased $14.0 million, or 4.1% and employee benefits expense increased $4.1 million, or 4.1%. In 2023, salaries and wage expense increased $23.8 million, or 7.5% and employee benefits expense increased $20.5 million, or 26.0%. These increases were offset by a decrease in bonus and commission expense of $15.3 million, or 11.8%.
Previous wording
Equipment expense decreased $5.5 million, or 7.5%, in 2023 compared to 2022, and decreased $4.1 million, or 5.3%, from 2021 to 2022. The decreases in both years were driven by lower software expense related to a transition to cloud-based computing solutions.
Current wording
Equipment expense decreased $5.3 million, or 7.7%, in 2024 compared to 2023, and decreased $5.5 million, or 7.5%, from 2022 to 2023. The decreases in both years were driven by lower software expense related to a transition to cloud-based computing solutions.
Previous wording
Marketing and business development expense was flat in 2023 compared to 2022, and increased $7.2 million, or 38.7%, in 2022 compared to 2021. The increase in 2022 was driven by the timing of advertising and business development projects and higher travel expenses as compared to the prior year.
Current wording
Marketing and business development expense increased $2.7 million, or 10.4%, in 2024 compared to 2023, and was flat in 2023 compared to 2022. The increase in 2024 was driven by the timing of advertising and business development projects and higher travel expenses as compared to the prior year.
Previous wording
Processing fees expense increased $20.9 million, or 25.4%, in 2023 compared to 2022, and increased $14.7 million, or 21.7%, in 2022 compared to 2021. The increases in 2023 and 2022 were primarily driven by the transition to cloud computing solutions and ongoing investments in digital channel and integrated platform solutions to support business growth and the continued modernization of core systems.
Current wording
Processing fees expense increased $14.8 million, or 14.4%, in 2024 compared to 2023, and increased $20.9 million, or 25.4%, in 2023 compared to 2022. The increases in 2024 and 2023 were primarily driven by higher software subscription costs due to the transition to cloud computing solutions and ongoing investments in digital channel and integrated platform solutions to support business growth.
Previous wording
Legal and consulting expense decreased $9.1 million, or 23.3%, in 2023 compared to 2022 and increased $6.7 million, or 20.6%, in 2022 compared to 2021. The decrease in 2023 and the increase in 2022 were primarily driven by fluctuations in legal and consulting expense due to the timing of multiple projects between years.
Current wording
Legal and consulting expense increased $16.2 million, or 54.0%, in 2024 compared to 2023 and decreased $9.1 million, or 23.3%, in 2023 compared to 2022. The increase in 2024 was driven by expenses incurred related to the announced acquisition of HTLF. The decrease in 2023 was primarily driven by fluctuations in legal and consulting expense due to the timing of multiple projects between years.
Previous wording
Bankcard expense increased $6.6 million, or 25.0%, in 2023 compared to 2022 and increased $7.2 million, or 37.7%, in 2022 compared to 2021. These increases were driven by higher card administration costs coupled with higher fraud losses.
Current wording
Bankcard expense increased $11.3 million, or 34.3%, in 2024 compared to 2023 and increased $6.6 million, or 25.0%, in 2023 compared to 2022. These increases in both years were driven by higher card administration costs coupled with higher fraud losses.
Previous wording
Regulatory fees increased $61.6 million, or 400.8%, in 2023 compared to 2022 and increased $3.5 million, or 29.3%, in 2022 compared to 2021. The increase in 2023 compared to 2022 was driven by the FDIC special assessment of $52.8 million. The increase in 2022 was driven by a higher assessment base.
Current wording
Regulatory fees decreased $45.1 million, or 58.6%, in 2024 compared to 2023 and increased $61.6 million, or 400.8%, in 2023 compared to 2022. The decrease in 2024 and the increase in 2023 was driven by the FDIC special assessment of $52.8 million recorded in 2023.
Previous wording
Other noninterest expense decreased $8.9 million, or 20.7%, in 2023 compared to 2022 and increased $9.0 million, or 26.4%, in 2022 compared to 2021. The decrease in 2023 was driven by lower charitable contribution expenses and operational losses. The increase in 2022 was driven by higher operational losses and increased charitable contributions expense.
Current wording
Other noninterest expense decreased $3.7 million, or 10.8%, in 2024 compared to 2023 and decreased $8.9 million, or 20.7%, in 2023 compared to 2022. The decreases in both 2024 and 2023 were driven by lower charitable contribution expenses and operational losses.
Previous wording
Income tax expense totaled $71.6 million, $100.3 million, and $76.0 million in 2023, 2022, and 2021 respectively. These amounts equate to effective tax rates of 17.0%, 18.9%, and 17.7% for 2023, 2022 and 2021, respectively. The decrease in the effective tax rate from 2022 to 2023 is primarily attributable to a larger portion of pre-tax income being earned from tax-exempt municipal securities and excludable life insurance policy gains. The increase in the effective tax rate from 2021 to 2022 is primarily attributable to a smaller portion of pre-tax income being earned from tax-exempt municipal securities.
Current wording
Income tax expense totaled $100.0 million, $71.6 million, and $100.3 million in 2024, 2023, and 2022 respectively. These amounts equate to effective tax rates of 18.5%, 17.0%, and 18.9% for 2024, 2023 and 2022, respectively. The increase in the effective tax rate from 2023 to 2024 is primarily attributable to a smaller portion of pre-tax income being earned from tax-exempt municipal securities and higher non-deductible acquisition costs in 2024. These increases were partially offset by an increase in federal tax credits, net of related amortization. The decrease in the effective tax rate from 2022 to 2023 is primarily attributable to a larger portion of pre-tax income being earned from tax-exempt municipal securities and excludable life insurance policy gains.
Previous wording
For the year ended December 31, 2023, Institutional Banking net income decreased $0.4 million, or 0.3%, compared to the same period last year. Net interest income increased $33.1 million, or 20.7%, compared to the same period last year, due to an increase in funds transfer pricing due to the increase in interest rates. Provision for credit losses increased $0.9 million as compared to 2022, driven by loan growth, portfolio metric changes, and changes in the macro-economic metrics in 2023 as compared to 2022. Noninterest income increased $24.1 million, or 7.5%, primarily due to increases of $20.2 million in trust and securities processing, $11.3 million in brokerage fees, and $4.8 million in bankcard income, partially offset by a decrease in income related to the allocated portion of the gain on the sale of Visa Inc. Class B common shares during 2022 and a decrease of $3.9 million in trading and investment banking income. Noninterest expense increased $61.8 million, or 19.3% as compared to 2022, primarily driven by an allocation of $24.3 million of the $52.8 million FDIC special assessment recorded in 2023. This increase was coupled with increases of $19.4 million in salaries and employee benefits expense, $3.9 million in bankcard expense, $3.9 million in operational losses, $3.6 million in software expense, $3.6 million in intangible amortization, and $2.6 million in processing fees.
Current wording
For the year ended December 31, 2024, Institutional Banking net income increased $24.0 million, or 18.5%, to $153.9 million compared to the same period last year. Net interest income increased $7.1 million, or 3.7%, compared to the same period last year, due to an increase in funds transfer pricing due to the increase in interest rates. Provision for credit losses increased $1.4 million as compared to 2023, driven by loan growth, portfolio metric changes, and changes in the macro-economic metrics in 2024 as compared to 2023. Noninterest income increased $50.4 million, or 14.5%, primarily due to increases of $28.4 million in trust and securities processing income driven by higher fund services and corporate trust revenue, an increase of $7.1 million in brokerage income, $6.5 million in bankcard income, an increase of $4.7 million in bond trading income, and an increase of $4.0 million in other income driven by the gain on the sale of UMB Distribution Services, LLC during the fourth quarter. These increases were partially offset by a decrease of $3.9 million in service charges on deposit accounts. Noninterest expense increased $25.6 million, or 6.7% as compared to 2023, primarily driven by increases of $18.0 million in salaries and employee benefits expense, $8.6 million in bankcard expense, $6.1 million in processing fees, $1.7 million in legal and consulting expense, and $1.2 million in equipment expense. These increases were partially offset by a decrease of $11.1 million in technology, service, and overhead expenses.
Previous wording
Loans represent the Company’s largest source of interest income. Loan balances held for investment increased by $2.1 billion, or 10.2%, in 2023. This increase was primarily driven by an increase of $1.3 billion, or 16.8%, in commercial real estate loans, $723.9 million, or 7.9%, in commercial and industrial loans, and $237.4 million, or 8.7% in consumer real estate loans.
Current wording
Loans represent the Company’s largest source of interest income. Loan balances held for investment increased by $2.5 billion, or 10.7%, in 2024. This increase was primarily driven by an increase of $1.2 billion, or 13.9%, in commercial real estate loans, $971.6 million, or 9.8%, in commercial and industrial loans, and $226.5 million, or 7.7% in consumer real estate loans.
Previous wording
Commercial and industrial loans and commercial real estate loans continue to represent the largest segments of the Company’s loan portfolio, comprising approximately 42.8% and 38.4%, respectively, of total loans and loans held for sale at the end of 2023 and 43.8% and 36.2%, respectively, of total loans and loans held for sale at the end of 2022.
Current wording
Commercial and industrial loans and commercial real estate loans continue to represent the largest segments of the Company’s loan portfolio, comprising approximately 42.5% and 39.5%, respectively, of total loans and loans held for sale at the end of 2024 and 42.8% and 38.4%, respectively, of total loans and loans held for sale at the end of 2023.
Previous wording
Commercial and industrial loans represent the largest percent of total loans. Commercial and industrial loans at December 31, 2023 increased $723.9 million, or 7.9%, as compared to December 31, 2022, to 42.8% of total loans. Commercial and industrial loans represented 43.8% of total loans at December 31, 2022.
Current wording
Commercial and industrial loans represent the largest percent of total loans. Commercial and industrial loans at December 31, 2024 increased $971.6 million, or 9.8%, as compared to December 31, 2023.
Previous wording
As a percentage of total loans, commercial real estate comprises 38.4% of total loans compared to 36.2% in 2022. Commercial real estate loans increased $1.3 billion, or 16.8%, compared to 2022. Generally, these loans are made for investment and real estate development or working capital and business expansion purposes and are primarily secured by real estate with a maximum loan-to-value of 80%. Most of these properties are non-owner occupied and have guarantees as additional security. The properties securing the commercial real estate portfolio are diverse in terms of type and geographic location. This diversity helps reduce exposure to adverse economic events that affect any single market or industry. Notwithstanding, commercial real estate loans, in general, may be more adversely impacted by conditions in the real estate market or the economy.
Current wording
Generally, these loans are made for investment and real estate development or working capital and business expansion purposes and are primarily secured by real estate with a maximum loan-to-value of 80%. Most of these properties are non-owner occupied and have guarantees as additional security. The Company’s investment CRE portfolio (which includes non-owner occupied and construction loans) totaled 28.5% and 26.5% of total Company loans as of December 31, 2024 and December 31, 2023, respectively. The average investment CRE loan was approximately $7.2 million and $5.8 million, as of December 31, 2024 and December 31, 2023, respectively, and 90% are recourse loans as of both December 31, 2024 and December 31, 2023. These loans have an average loan-to-value of 57% as of both December 31, 2024 and December 31, 2023.
Previous wording
Consumer real estate loans increased $237.4 million, or 8.7%, compared to 2022. These loans represented 12.8% of total loans as of December 31, 2023, compared to 12.9% as of December 31, 2022.
Current wording
Consumer real estate loans increased $226.5 million, or 7.7%, compared to 2023. These loans represented 12.4% of total loans as of December 31, 2024, compared to 12.8% as of December 31, 2023.
Showing the first 40 of 65 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
The properties securing the commercial real estate portfolio are diverse in terms of type and geographic location. This diversity helps reduce exposure to adverse economic events that affect any single market or industry. Notwithstanding, commercial real estate loans, in general, may be more adversely impacted by conditions in the real estate market or the economy.