UMB FINANCIAL CORP

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations highlights the material changes in the results of operations and changes in financial condition of the Company for the three-month period ended March 31, 2025. It should be read in conjunction with the accompanying Consolidated Financial Statements, Notes to Consolidated Financial Statements and other financial information appearing elsewhere in this Form 10-Q and the Form 10-K. Results of operations for the periods included in this review are not necessarily indicative of results to be attained during any future period.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations highlights the material changes in the results of operations and changes in financial condition of the Company for the three and six months ended June 30, 2025. It should be read in conjunction with the accompanying Consolidated Financial Statements, Notes to Consolidated Financial Statements and other financial information appearing elsewhere in this Form 10-Q and the Form 10-K. Results of operations for the periods included in this review are not necessarily indicative of results to be attained during any future period.

Previous wording

the Company’s ability to promptly and effectively integrate the merger with HTLF;

Current wording

the Company’s ability to promptly and effectively integrate the merger of HTLF;

Previous wording

macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies and reputational harm to the U.S. banking system; or

Current wording

macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies and reputational harm to the U.S. banking system;

Previous wording

On January 31, 2025, UMBF completed its previously announced acquisition of Heartland Financial, USA, Inc. (HTLF). The acquisition added assets with a fair value of approximately $17.9 billion, $9.8 billion of loans, net of the allowance for credit losses, and $14.3 billion of deposits. The combined company retains its #1 deposit market share in Missouri and now ranks in the top 10 in Colorado, New Mexico, Kansas, and Arizona. The impacts of the acquisition are significant drivers in the first quarter results.

Current wording

On January 31, 2025, UMBF completed its previously announced acquisition of Heartland Financial, USA, Inc. (HTLF). The acquisition added assets with a fair value of approximately $16.1 billion, $9.7 billion of loans, net of the allowance for credit losses, and $14.3 billion of deposits. The combined company retains its #1 deposit market share in Missouri and now ranks in the top 10 in Colorado, New Mexico, Kansas, and Arizona. The impacts of the acquisition are significant drivers in the results for the first six months of 2025.

Previous wording

The first financial objective is to continuously improve operating efficiencies. The Company has focused on identifying efficiencies that simplify our organizational and reporting structures, streamline back-office functions, and take advantage of synergies and newer technologies among various platforms and distribution networks. The acquisition of HTLF will be integral in improving operational efficiency. 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. During the first quarter of 2025, total revenue increased $165.2 million, or 41.4%, as compared to the first quarter of 2024, while noninterest expense increased $130.0 million, or 51.0%, for the same period. Included in the first quarter noninterest expense is $53.2 million in acquisition-related expense. Revenue is also impacted by accretion and amortization of the fair value adjustments discussed in Note 13, “Acquisition” above. As part of the initiative to improve operating efficiencies, 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 our organizational and reporting structures, streamline back-office functions, and take advantage of synergies and newer technologies among various platforms and distribution networks. The acquisition of HTLF will be integral in improving operational efficiency. 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. During the second quarter of 2025, total revenue increased $299.2 million, or 76.7%, as compared to the second quarter of 2024, while noninterest expense increased $144.1 million, or 57.9%, for the same period. Included in the second quarter noninterest expense is $13.5 million in acquisition-related expense. Revenue is also impacted by accretion and amortization of the fair value adjustments discussed in Note 13, “Acquisition” above. As part of the initiative to improve operating efficiencies, 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. During the first quarter of 2025, the Company had an increase in net interest income of $158.2 million, or 66.1%, from the same period in 2024. The change in net interest income was primarily driven by rate and mix changes related to the HTLF acquisition. The increase in interest income was driven by a $9.0 billion, or 38.3%, increase in average loans, a $3.5 billion, or 106.1%, increase in average interest-bearing due from banks, and a $2.9 billion, or 21.9%, increase in total securities. The funding for these assets was driven primarily by a 43.1% increase in average interest-bearing liabilities, including an increase in average interest-bearing deposits of $13.4 billion compared to the same period in 2024. Net interest margin, on a tax-equivalent basis, increased 48 basis points compared to the same period in 2024, primarily due to cost and mix changes of loan balances and interest-bearing liabilities. Net interest spread increased 72 basis points during the same period. The Company expects to see continued volatility in the economic markets resulting from governmental responses to inflation and recessionary signs in the economy, as well as uncertainty about the impacts of recent tariffs. These changing conditions could have impacts on the balance sheet and income statement of the Company for the remainder of the year.

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. During the second quarter of 2025, the Company had an increase in net interest income of $221.9 million, or 90.5%, from the same period in 2024. The change in net interest income was primarily driven by rate and mix changes related to the HTLF acquisition. Interest income increased $312.3 million, or 58.0%, while interest expense increased $90.3 million, or 30.8%. The increase in interest income was driven by a $12.6 billion, or 52.9%, increase in average loans, a $3.2 billion, or 91.0%, increase in average interest-bearing due from banks, and a $5.0 billion, or 39.4%, increase in total securities. The funding for these assets was driven primarily by a 57.3% increase in average interest-bearing liabilities, including an increase in average interest-bearing deposits of $17.0 billion compared to the same period in 2024. Net interest margin, on a tax-equivalent basis, increased 59 basis points compared to the same period in 2024, primarily due to cost and mix changes of loan balances and interest-bearing liabilities. Net interest spread increased 88 basis points during the same period. The Company expects to see continued volatility in the economic markets resulting from governmental responses to inflation and recessionary signs in the economy, as well as uncertainty about the impacts of recent tariffs. These changing conditions could have impacts on the balance sheet and income statement of the Company for the remainder of the year.

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 increased $7.0 million, or 4.4%, to $166.2 million for the three months ended March 31, 2025, compared to the same period in 2024. This change is primarily due to HTLF-related fee income from trust income, deposit service charges, and bankcard fees. These are partially offset by investment securities losses and lower company-owned life insurance income. See greater detail below under Noninterest Income. The Company continues to emphasize its asset management, brokerage, bankcard services, healthcare services, and treasury management businesses. For the three-month period ended March 31, 2025, noninterest income represented 29.5% of total revenues, compared to 39.9% for the same period in 2024. The recent economic changes have impacted fee income, especially those with assets tied to market values and interest rates.

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 $77.3 million, or 53.3%, to $222.2 million for the three months ended June 30, 2025, compared to the same period in 2024. This change is due to HTLF-related fee income from trust income, deposit service charges, and bankcard fees, coupled with an increase of $39.6 million in investment securities gains, primarily driven by the pre-tax gain of $29.4 million on the Company’s investment in Voyager Technologies, Inc. and a $10.0 million increase in valuation in the Company’s non-marketable securities. See greater detail below under Noninterest Income. The Company continues to emphasize its asset management, brokerage, bankcard services, healthcare services, and treasury management businesses. For the three months ended June 30, 2025, noninterest income represented 32.2% of total revenue, compared to 37.2% for the same period in

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 March 31, 2025, the Company had $6.7 billion in total shareholders’ equity. This is an increase of $3.6 billion, or 114.0%, compared to total shareholders’ equity at March 31, 2024. At March 31, 2025, the Company had a total risk-based capital ratio of 12.54%. The first quarter of 2025 includes the issuance of 23.6 million shares of UMBF common stock, or $2.8 billion and the issuance of 4.6 million depositary shares, each representing a 1/400 th interest in a share of the Company’s 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A (the Series A Preferred Stock), or $115.2 million, in exchange for all of the outstanding common and preferred stock of HTLF as consideration for the acquisition. The Company also settled the previously announced forward contract which added 3.2 million common shares, or $235.1 million in equity. The Company did not repurchase shares of common stock during the first quarter of 2025, except for shares acquired pursuant to the Company's share-based incentive programs.

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 June 30, 2025, the Company had $7.3 billion in total shareholders’ equity. This is an increase of $4.1 billion, or 125.8%, compared to total shareholders’ equity at June 30, 2024. At June 30, 2025, the Company had a total risk-based capital ratio of 13.46%. The Company did not repurchase shares of common stock during the second quarter of 2025, except for shares acquired pursuant to the Company's share-based incentive programs. The second quarter of 2025 includes the issuance of 12.0 million depositary shares, each representing a 1/400 th interest in a share of the Company’s 7.75% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the Series B Preferred Stock).

Previous wording

The following is a summary regarding the Company’s earnings for the first quarter of 2025. The changes identified in the summary are explained in greater detail below. The Company recorded net income available to common shareholders of $79.3 million for the three-month period ended March 31, 2025, compared to $110.3 million for the same period a year earlier. Basic earnings per common share for the first quarter of 2025 was $1.22 per common share ($1.21 per common share fully-diluted) compared to basic earnings per common share of $2.27 per common share ($2.25 per common share fully-diluted) for the first quarter of 2024. Return on average assets and return on average common shareholders’ equity for the three-month period ended March 31, 2025 were 0.54% and 5.86%, respectively, compared to 1.06% and 14.11%, respectively, for the three-month period ended March 31, 2024.

Current wording

The following is a summary regarding the Company’s earnings for the second quarter of 2025. The changes identified in the summary are explained in greater detail below. The Company recorded net income available to common shareholders of $215.4 million for the three-month period ended June 30, 2025, compared to net income available to common shareholders of $101.3 million for the same period a year earlier. Basic earnings per common share for the second quarter of 2025 were $2.84 per share ($2.82 per share fully-diluted) compared to $2.08 per common share ($2.07 per share fully-diluted) for the second quarter of 2024. Return on average assets and return on average common shareholders’ equity for the three-month period ended June 30, 2025 were 1.29% and 12.72%, respectively, compared to 0.96% and 12.73%, respectively, for the three-month period ended June 30, 2024.

Previous wording

Net interest income for the three-month period ended March 31, 2025 increased $158.2 million, or 66.1%, compared to the same period in 2024. For the three-month period ended March 31, 2025, average earning assets increased $15.7 billion, or 39.3%, compared to the same period in 2024. Net interest margin, on a tax-equivalent basis, increased to 2.96% for the three-month period ended March 31, 2025, compared to 2.48% for the same period in 2024.

Current wording

Net interest income for the three and six-month periods ended June 30, 2025 increased $221.9 million, or 90.5%, and increased $380.1 million, or 78.4%, respectively, compared to the same periods in 2024. For the three-month period ended June 30, 2025, average earning assets increased by $21.2 billion, or 52.7%, and for the six-month period ended June 30, 2025, they increased by $18.4 billion, or 46.0%, compared to the same periods in 2024. Net interest margin, on a tax-equivalent basis, increased to 3.10% and 3.04% for the three and six-month periods ended June 30, 2025, respectively, compared to 2.51% and 2.50% for the same periods in 2024.

Previous wording

The provision for credit losses increased by $76.0 million for the three-month period ended March 31, 2025, as compared to the same period in 2024. Provision expense included $62.0 million to establish an allowance for credit losses on the acquired loans designated as non-PCD loans at the close of the transaction. See Note 13, “Acquisition” above. Provision expense for both periods is primarily impacted by macro-economic data and portfolio credit metrics. The Company’s nonperforming loans increased $83.1 million to $100.9 million at March 31, 2025, compared to March 31, 2024. This includes $80.8 million in nonperforming loans related to HTLF. The ACL on loans as a percentage of total loans increased to 1.03% as of March 31, 2025, compared to 0.96% at March 31, 2024. For a description of the Company’s methodology for computing the ACL, please see the summary discussion in the “Provision and Allowance for Credit Losses” section included below.

Current wording

The provision for credit losses increased by $7.0 million for the three-month period ended June 30, 2025 and increased by $83.0 million for the six-month period ended June 30, 2025, as compared to the same periods in 2024. Provision expense for the six-month period included $62.0 million to establish an allowance for credit losses on the acquired loans designated as non-PCD loans at the close of the transaction. See Note 13, “Acquisition” above. The remainder of the increase in provision was driven by loan growth, portfolio credit metric changes, and changes in macro-economic metrics in the current period as compared to the prior periods. The Company’s nonperforming loans increased $83.3 million to $97.0 million at June 30, 2025, compared to June 30, 2024. This includes $69.8 million in nonperforming loans related to HTLF. The ACL on loans as a percentage of total loans increased seven basis points to 1.06% as of June 30, 2025, compared to June 30, 2024. For a description of the Company’s methodology for computing the ACL, please see the summary discussion in the “Provision and Allowance for Credit Losses” section included below.

Previous wording

Noninterest income increased by $7.0 million, or 4.4%, for the three-month period ended March 31, 2025, compared to the same period in 2024. These changes are discussed in greater detail below under Noninterest Income.

Current wording

Noninterest income increased by $77.3 million, or 53.3%, for the three-month period ended June 30, 2025, and increased by $84.2 million, or 27.7%, for the six-month period ended June 30, 2025, compared to the same periods in 2024. These changes are discussed in greater detail below under Noninterest Income.

Previous wording

Noninterest expense increased by $130.0 million, or 51.0%, for the three-month period ended March 31, 2025, compared to the same period in 2024. These changes are discussed in greater detail below under Noninterest Expense.

Current wording

Noninterest expense increased by $144.1 million, or 57.9%, for the three-month period ended June 30, 2025, and increased by $274.1 million, or 54.4%, for the six-month period ended June 30, 2025, compared to the same periods in 2024. These changes are discussed in greater detail below under Noninterest Expense.

Previous wording

Net interest income is a significant source of the Company’s earnings and represents the amount by which interest income on earning assets exceeds the interest expense paid on liabilities. The volume of interest-earning assets and the related funding sources, the overall mix of these assets and liabilities, and the rates paid on each affect net interest income. Net interest income for the three-month period ended March 31, 2025 increased $158.2 million, or 66.1%, compared to the same period in 2024. This increase is primarily driven by rate and mix changes related to the HTLF acquisition. Margin included $28.6 million of net accretion related to the fair value adjustments discussed in Note 13, “Acquisition” above.

Current wording

Net interest income is a significant source of the Company’s earnings and represents the amount by which interest income on earning assets exceeds the interest expense paid on liabilities. The volume of interest-earning assets and the related funding sources, the overall mix of these assets and liabilities, and the rates paid on each affect net interest income. Net interest income for the three and six-month periods ended June 30, 2025 increased $221.9 million, or 90.5%, and increased $380.1 million, or 78.4%, compared to the same periods in 2024. This increase is primarily driven by rate and mix changes related to the HTLF acquisition. For the three-month period ended June 30, 2025, margin included $42.2 million of net accretion related to the fair value adjustments discussed in Note 13, “Acquisition” above.

Previous wording

Table 1 shows the impact of earning asset rate changes compared to changes in the cost of interest-bearing liabilities. As illustrated in this table, net interest spread for the three months ended March 31, 2025 increased 72 basis points as compared to the same period in 2024. Net interest margin for the three months ended March 31, 2025 increased 48 basis points compared to the same period in 2024. The changes are driven by rate and balance sheet mix changes from the acquired HTLF balance sheet. The cost of interest-bearing liabilities decreased 59 basis points from the first quarter of 2024 while the yield on earning assets increased 13 basis points compared to the same period. Earning asset balance increases have been primarily driven by higher average loan, interest-bearing due from bank, and securities balances. These variances have led to an increase in the Company’s net interest income during 2025, as compared to results for the same period in 2024. The Company expects to see continued volatility in the economic markets and governmental responses to changes in the economy. These changing conditions could have impacts on the balance sheet and income statement of the Company the remainder of the year. For the impact of the contribution from free funds, see the Analysis of Net Interest Margin within Table 2 below. Table 2 also illustrates how the changes in volume and interest rates have resulted in an increase in net interest income.

Current wording

Table 1 shows the impact of earning asset rate changes compared to changes in the cost of interest-bearing liabilities. As illustrated in this table, net interest spread for the three months ended June 30, 2025 increased 88 basis points as compared to the same period in 2024. Net interest margin for the three months ended June 30, 2025 increased 59 basis points compared to the same period in 2024. Net interest spread for the six-month period ended June 30, 2025 increased by 80 basis points as compared to the same period in 2024. Net interest margin for the six-month period ended June 30, 2025 increased by 54 basis points compared to the same period in 2024. The changes for both periods are driven by rate and balance sheet mix changes from the acquired HTLF balance sheet creating very favorable volume and rate variances. The cost of interest-bearing liabilities decreased 71 basis points from the second quarter of 2024 while the yield on earning assets increased 17 basis points compared to the same period. The cost of interest-bearing liabilities decreased 65 basis points for the six-month period ended June 30, 2025 as compared to the same period in 2024 while the yield on earning assets increased 15 basis points compared to the same period. Earning asset balance increases have been primarily driven by higher average loans, increased interest-bearing due from banks balances, and increased securities balances. These variances have led to an increase in the Company’s net interest income during 2025, as compared to results for the same periods in 2024. The Company expects to see continued volatility in the economic markets and governmental responses to changes in the economy. These changing conditions could have impacts on the balance sheet and income statement of the Company for the remainder of the year. For the impact of the contribution from free funds, see the Analysis of Net Interest Margin within Table 2 below. Table 2 also illustrates how the changes in volume and interest rates have resulted in an increase in net interest income.

Previous wording

The following table presents, for the periods indicated, the average earning assets and resulting yields, as well as the average interest-bearing liabilities and resulting yields, expressed in both dollars and rates. All average balances are daily average balances. The average yield on earning assets without the tax-equivalent basis adjustment would have been 5.39% for the three-month period ended March 31, 2025, and 5.25% for the same period in 2024.

Current wording

The following table presents, for the periods indicated, the average earning assets and resulting yields, as well as the average interest-bearing liabilities and resulting yields, expressed in both dollars and rates. All average balances are daily average balances. The average yield on earning assets without the tax-equivalent basis adjustment would have been 5.55% for the three-month period ended June 30, 2025, and 5.38% for the same period in 2024. The average yield on earning assets without the tax-equivalent basis adjustment would have been 5.48% for the six-month period ended June 30, 2025, and 5.31% for the same period in 2024.

Previous wording

Table 2 presents the dollar amount of change in net interest income and margin due to volume and rate. Table 2 also reflects the effect that interest-free funds have on net interest margin. The average balance of interest-free funds (total earning assets less interest-bearing liabilities) increased $3.6 billion for the three-month period ended March 31, 2025, compared to the same period in 2024. The benefit from interest-free funds decreased 24 basis points in the three-month period ended March 31, 2025 compared to the same period in 2024.

Current wording

Table 2 presents the dollar amount of change in net interest income and margin due to volume and rate. Table 2 also reflects the effect that interest-free funds have on net interest margin. The average balance of interest-free funds (total earning assets less interest-bearing liabilities) increased $4.9 billion and increased $4.2 billion for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. The benefit from interest-free funds decreased 29 basis points and 26 basis points in the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024.

Previous wording

A mathematical calculation of an estimate is made to assist in determining the adequacy and reasonableness of management’s recorded ACL. To develop the estimate, the Company follows the guidelines in ASC 326, Financial Instruments – Credit Losses. The estimate reserves for assets held at amortized cost and any related credit deterioration in the Company’s available-for-sale debt security portfolio. Assets held at amortized cost include the Company’s loan book and held-to-maturity security portfolio.

Current wording

Instruments – Credit Losses. The estimate reserves for assets held at amortized cost and any related credit deterioration in the Company’s available-for-sale debt security portfolio. Assets held at amortized cost include the Company’s loan book and held-to-maturity security portfolio.

Previous wording

Based on the factors above, management of the Company recorded $86.0 million as provision for credit losses for the three-month period ended March 31, 2025, compared to $10.0 million for the same period in 2024. As noted above, $62.0 million was recorded to establish an allowance for credit losses on the acquired loans designated as non-PCD loans at the close of the HTLF acquisition. See Note 13, “Acquisition” above. The remaining $24.0 million was recorded from applying the methodology for computing the allowance for credit losses, coupled with the impacts of the current and forecasted economic environment. As illustrated in Table 3 below, the ACL on loans increased to 1.03% of total loans as of March 31, 2025, compared to 0.96% of total loans as of March 31, 2024.

Current wording

Based on the factors above, management of the Company recorded $21.0 million as provision for credit losses for the three-month period ended June 30, 2025, as compared to $14.1 million for the same period in 2024. For the six-month period ended June 30, 2025, management of the Company recorded $107.0 million as provision for credit losses, as compared to $24.1 million for the same period in 2024. As noted above, $62.0 million was recorded to establish an allowance for credit losses on the acquired loans designated as non-PCD loans at the close of the HTLF acquisition. See Note 13, “Acquisition” above. The increase in the three-month period and the remaining $21.0 million increase in provision in the six-month period is the result of applying the methodology for computing the ACL, coupled with the impacts of the current and forecasted economic environment. As illustrated in Table 3 below, the ACL on loans increased seven basis points to 1.06% of total loans as of June 30, 2025, compared to June 30, 2024.

Previous wording

Table 3 presents a summary of the Company’s ACL for the three-month periods ended March 31, 2025 and 2024, and for the year ended December 31, 2024. Net charge-offs were $35.9 million, or 0.45% of average loans for the three-month period ended March 31, 2025, compared to $3.0 million, or 0.05% for the same period in 2024. Approximately $29.7 million of the net charge-offs were related to acquired loans. See “Credit Risk Management” under “Item 3. Quantitative and Qualitative Disclosures About Market Risk” in this report for information relating to nonaccrual loans, past due loans, restructured loans and other credit risk matters.

Current wording

Table 3 presents a summary of the Company’s ACL for the six -month periods ended June 30, 2025 and 2024, and for the year ended December 31, 2024. Net charge-offs were $51.3 million for the six-month period ended June 30, 2025, compared to $5.9 million for the same period in 2024. Approximately $36.2 million of the net charge-offs were related to loans acquired from HTLF. See “Credit Risk Management” under “Item 3. Quantitative and Qualitative Disclosures About Market Risk” in this report for information relating to nonaccrual loans, past due loans, restructured loans and other credit risk matters.

Previous wording

Noninterest income increased by $7.0 million, or 4.4%, during the three-month period ended March 31, 2025, compared to the same period in 2024. Table 4 above summarizes the components of noninterest income and the respective year-over-year comparison for each category.

Current wording

Noninterest income increased by $77.3 million, or 53.3%, during the three-month period ended June 30, 2025, and increased $84.2 million, or 27.7%, during the six-month period ended June 30, 2025, compared to the same periods in 2024. Table 4 above summarizes the components of noninterest income and the respective year-over-year comparison for each category.

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, mutual fund assets, and alternative asset servicing. The increase in these fees for the three-month period ended March 31, 2025, compared to the same period in 2024, was primarily due to an increase in trust services income primarily related to HTLF, and increases in fund services revenue and corporate trust revenue. For the three-month period ended March 31, 2025, trust services income increased $4.4 million, or 29.4%, fund services revenue increased $3.6 million, or 9.0%, and corporate trust revenue increased $2.4 million, or 15.7%, in each case compared to the same period in 2024. 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 for the remainder of the year 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, mutual fund assets, and alternative asset servicing. The increase in these fees for the three and six-month periods ended June 30, 2025, compared to the same periods in 2024, was primarily due to an increase in trust services income primarily related to HTLF, and increases in fund services revenue and corporate trust revenue. For the three-month period ended June 30, 2025, trust income increased $5.0 million, or 33.2%, fund services revenue increased $4.9 million, or 12.2%, and corporate trust revenue increased $3.3 million, or 22.7%, compared to the same period in 2024. For the six-month period ended June 30, 2025, trust services revenue increased $9.4 million, or 31.4%, fund services revenue increased $8.5 million, or 10.6%, and corporate trust revenue increased $5.7 million, or 19.2%, compared to the same period in 2024. 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 for the remainder of the year 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

Service charges on deposits for the three-month period ended March 31, 2025 increased $6.7 million, or 32.3%, compared to the same period in 2024. This increase was largely driven by the HTLF acquisition and increased corporate service charges income.

Current wording

Service charges on deposit accounts for the three-month period ended June 30, 2025 increased $6.6 million, or 29.7%, and increased $13.3 million, or 30.9%, for the six-month period ended June 30, 2025. This increase was largely driven by the HTLF acquisition and increased service charge income from acquired deposit accounts.

Previous wording

Brokerage fees for the three-month period ended March 31, 2025 increased $4.9 million, or 37.6%, compared to the same period in 2024. This increase was driven by increased 12b-1 fees and money market share revenue.

Current wording

The changes in the three-month and six-month periods were driven by 12b-1 fees and money market share revenue.

Previous wording

Bankcard fees for the three-month period ended March 31, 2025 increased $4.3 million, or 19.7%, compared to the same period in 2024. This increase was driven by higher interchange income, partially offset by higher rebate and reward costs primarily related to purchase volume from the HTLF acquisition.

Current wording

Bankcard fees for the three and six-month periods ended June 30, 2025 increased $6.7 million, or 29.9%, and increased $11.0 million, or 24.8%, respectively, as compared to the same periods in 2024. This increase was driven by higher interchange income, partially offset by higher rebate and reward costs primarily related to purchase volume from the HTLF acquisition.

Previous wording

Investment securities gains, net for the three-month period ended March 31, 2025 decreased by $14.2 million, or 151.0%, compared to the same period in 2024. This decrease was primarily driven by a net $8.6 million gain on disposition of two of the Company’s non-marketable securities in the first quarter of 2024, coupled with $5.3 million in decreased valuation in the Company’s non-marketable securities during the first quarter of 2025. The income in this category is highly correlated to the change in market value of the assets, and the related income for the remainder of the year will be affected by changes in the securities markets. The Company’s investment portfolio is continually evaluated for opportunities to improve its performance and risk profile relative to market conditions and the Company’s interest rate expectations. This can result in differences from quarter to quarter in the amount of realized gains or losses on this portfolio.

Current wording

Investment securities gains, net for the three and six-month periods ended June 30, 2025 increased $39.6 million, or 2,118.5%, and increased $25.4 million, or 338.5%, respectively, compared to the same periods in 2024. The increase for the three-month period ended June 30, 2025, was primarily driven by the pre-tax gain of $29.4 million on the Company’s investment in Voyager Technologies, Inc., which completed its initial public offering in June 2025, coupled with pre-tax gains of $8.2 million on the sale of two non-marketable investments in the second quarter. The increase for the six-month period was driven by the gains noted above in the second quarter, partially offset by a $4.5 million decrease in valuation in the Company’s non-marketable securities as compared to the six-month period ended June 30, 2024. The income in this category is highly correlated to the change in market value of the assets, and the related income for the remainder of the year will be affected by changes in the securities markets. The Company’s investment portfolio is continually evaluated for opportunities to improve its performance and risk profile relative to market conditions and the Company’s interest rate expectations. This can result in differences from quarter to quarter in the amount of realized gains or losses on this portfolio.

Previous wording

Noninterest expense increased by $130.0 million, or 51.0%, for the three-month period ended March 31, 2025, compared to the same period in 2024. Table 5 above summarizes the components of noninterest expense and the respective year-over-year comparison for each category. First quarter 2025 noninterest expense included $53.2 million in total acquisition-related and other nonrecurring costs, compared to $0.4 million in the same period in 2024. It also includes $15.6 million in other intangible amortization expense related to the HTLF acquisition.

Current wording

Noninterest expense increased $144.1 million, or 57.9%, and increased $274.1 million, or 54.4%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. Table 5 above summarizes the components of noninterest expense and the respective year-over-year comparison for each category. For the first six months of 2025, noninterest expense included $66.7 million in total acquisition-related and other nonrecurring costs, compared to $10.0 million in the same period in 2024. It also includes $39.0 million in other intangible amortization expense related to the HTLF acquisition.

Previous wording

Salaries and employee benefits increased by $78.4 million, or 54.8%, for the three-month period ended March 31, 2025, compared to the same period in 2024. Salaries and wages expense increased $25.0 million, or 29.2%, and bonus and commission expense increased $46.7 million, or 179.5%, for the three-month period ended March 31, 2025, as compared to the same period in 2024. Employee benefits expense increased $6.7 million, or 21.4%, for the three-month period ended March 31, 2025 compared to the same period in 2024. The variances in salaries and employee benefits are primarily driven by increased severance, retention bonuses, and change in control payments made to HTLF associates, as well as higher bonus expense due to higher company performance for legacy-UMB associates.

Current wording

Salaries and employee benefits increased by $70.7 million, or 49.5%, and increased $149.1 million, or 52.2%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. Salaries and wages expense increased $39.5 million, or 45.0%, and increased $64.4 million, or 37.2%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. Bonus and commission expense increased $22.4 million, or 71.5%, and increased $69.1 million, or 120.5%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. Employee benefits expense increased $8.8 million, or 37.2%, and increased $15.6 million, or 28.2%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. The variances in salaries and employee benefits are primarily driven by increased severance, retention bonuses, and change in control payments made to HTLF associates, as well as higher bonus expense due to higher company performance. In the six-month period, these increases are partially offset by lower deferred compensation expense.

Previous wording

Occupancy expense increased $3.8 million, or 31.0%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily due to higher volume of activity from the HTLF acquisition.

Current wording

Occupancy expense increased $6.8 million, or 58.4%, and $10.6 million, or 44.4%, for the three and six-month period ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to higher volume of activity from the HTLF acquisition.

Previous wording

Bankcard expense increased $2.2 million, or 21.2%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily driven by higher volume of activity from the HTLF acquisition.

Current wording

Marketing and business development expense increased $4.7 million, or 71.9%, and $6.7 million, or 53.2%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to higher volume of activity from the HTLF acquisition.

Previous wording

Processing fees increased $12.9 million, or 46.2%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily due to increased software subscription costs, of which $6.2 million was driven by legacy-HTLF software subscriptions.

Current wording

Processing fees increased $13.9 million, or 46.9%, and $26.9 million, or 46.6%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to increased software subscription costs driven by legacy-HTLF software subscriptions.

Previous wording

Legal and Consulting expense increased $20.7 million, or 262.4%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily due to $19.0 million of non-recurring transaction costs associated with the acquisition in the first quarter of 2025.

Current wording

Legal and consulting expense increased $1.9 million, or 11.5%, and $22.6 million, or 92.5%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to $26.5 million of year-to-date non-recurring transaction costs associated with the acquisition in the six-month period.

Previous wording

Amortization of other intangible assets increased $15.5 million, or 791.9%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily due to amortization of the core deposit intangible, customer list and purchased credit card relationship intangibles recognized in the first quarter from the HTLF acquisition.

Current wording

Amortization of other intangible assets increased $23.4 million, or 1,222.2%, and $38.9 million, or 1,004.4%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024, primarily due to amortization of the core deposit intangible, customer list and purchased credit card relationship intangibles recognized from the HTLF acquisition.

Previous wording

Other expense increased $3.7 million, or 61.7%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily due to higher operational losses coupled with increased expenses related to the HTLF acquisition for property taxes and insurance.

Current wording

Other expense increased $11.6 million, or 183.4%, and $15.3 million, or 124.4%, for the three and six-month periods ended June 30, 2025, respectively, compared to the same periods in 2024. For both periods, these increases were primarily due to increased charitable contributions in 2025 as compared to 2024, coupled with higher operational losses and increased expenses related to the HTLF acquisition for property taxes and insurance.

Previous wording

For the three-month period ended March 31, 2025, Commercial Banking net income decreased $19.8 million to $62.4 million, as compared to the same period in 2024. Net interest income increased $115.9 million, or 73.4%, for the three-month period ended March 31, 2025, compared to the same period in 2024, primarily driven by the acquisition of HTLF, as well as organic legacy-UMB loan growth, and earning asset mix changes. Provision for credit losses increased $59.0 million for the period, driven by the acquisition of HTLF as well as portfolio metric changes and changes in macro-economic metrics in 2025 as compared to 2024. Noninterest income decreased $6.8 million, or 15.4%, compared to the same period in 2024, primarily due to a decrease of $10.7 million in investment securities gains, partially offset by an increase of $4.2 million in deposit service charges. Noninterest expense increased $77.8 million, or 81.6%, to $173.0 million for the three-month period ended March 31, 2025, compared to the same period in 2024. This increase was driven by an increase of $46.7 million in technology, service, and overhead expenses and an increase of $26.4 million in salaries and employee benefits expense, both driven by the HTLF acquisition. There were additional increases of $1.6 million in marketing and business development expense and $1.5 million in processing fees.

Current wording

For the six-month period ended June 30, 2025, Commercial Banking net income increased $47.6 million, or 31.0%, to $201.5 million, as compared to the same period in 2024. Net interest income increased $277.4 million, or 86.9%, for the six-month period ended June 30, 2025, compared to the same period in 2024, primarily driven by the acquisition of HTLF, as well as organic legacy-UMB loan growth, and earning asset mix changes. Provision for credit losses increased $65.3 million for the period, driven by the acquisition of HTLF as well as portfolio metric changes and changes in macro-economic metrics in 2025 as compared to 2024. Noninterest income increased $7.7 million, or 10.6%, compared to the same period in 2024, primarily due to increases of $9.9 million in deposit service charges, $6.3 million in bankcard fees, and $2.6 million in other income driven by increased syndication and derivative income. These increases were partially offset by a decrease of $10.7 million in investment security gains. Noninterest expense increased $159.8 million, or 86.9%, to $343.7 million for the six-month period ended June 30, 2025, compared to the same period in 2024. This increase was driven by an increase of $94.0 million in technology, service, and overhead expenses, and an increase of $53.3 million in salaries and employee benefit expense, both driven by the acquisition. Additionally, there were increases of $4.0 million and marketing and business development, $3.0 million in regulatory fees, and $2.9 million in processing fees.

Previous wording

For the three-month period ended March 31, 2025, Institutional Banking net income increased $14.7 million, or 41.7%, compared to the same period last year. Net interest income increased $12.0 million, or 24.5%, compared to the same period last year, due to an increase in funds transfer pricing due to higher deposit balances. Noninterest income increased $12.1 million, or 13.2%, primarily due to increases of $6.0 million in trust and securities processing income driven by higher fund services and corporate trust revenue, $4.0 million in brokerage fees and $1.8 million in deposit service charges. Noninterest expense increased $9.7 million, or 10.0%, primarily driven by increases of $7.4 million in salaries and employee benefits expense, $3.8 million in processing fees, and $1.5 million in bankcard expense. These increases were partially offset by a decrease of $3.1 million in technology, service, and overhead expenses.

Current wording

For the six-month period ended June 30, 2025, Institutional Banking net income increased $24.5 million, or 31.5%, to $102.3 million, as compared to the same period last year. Net interest income increased $27.5 million, or 27.6%, compared to the same period last year, due to an increase in funds transfer pricing due to higher deposit balances. Provision for credit losses increased $0.4 million for the period, driven by portfolio metric changes and changes in macro-economic metrics in 2025 as compared to 2024. Noninterest income increased $26.1 million, or 14.0%, primarily due to increases of $14.3 million in trust and securities processing income driven by higher fund services and corporate trust revenue, $9.5 million in brokerage income due to increased 12b-1 and money market revenue, $1.5 million in deposit service charges, and $1.1 million in bond trading income. Noninterest expense increased $22.1 million, or 11.6%, primarily driven by increases of $14.0 million in salaries and employee benefits expense, $6.0 million in processing fees, $1.5 million in bankcard expense, and $1.0 million in marketing and business development.

Previous wording

For the three-month period ended March 31, 2025, Personal Banking net income decreased $23.9 million to a net loss of $31.1 million, as compared to the same period in 2024. Net interest income increased $30.2 million, or 93.5%, compared to the same period last year driven by the acquisition of HTLF, as well as organic legacy-UMB loan growth, and earning asset mix change. Provision for credit losses increased $16.8 million for the period driven by the acquisition of HTLF as well as by portfolio metric changes and changes in macro-economic metrics in 2025 as compared to 2024. Noninterest income increased $1.6 million, or 6.9%, for the same period driven by an increase of $3.8 million in trust and securities processing income, an increase of $1.3 million in bankcard fees, and an increase of $0.9 million in brokerage income. These increases were partially offset by a decrease of $4.1 million in investment securities gains. Noninterest expense increased $42.5 million, or 68.5%, primarily due to an increase of

Current wording

For the six-month period ended June 30, 2025, Personal Banking net loss improved $15.0 million, or 75.0%, to a net loss of $5.0 million, as compared to the same period in 2024. Net interest income increased $75.2 million, or 114.9%, compared to the same period last year driven by the acquisition of HTLF, as well as organic legacy-UMB loan growth, and earning asset mix change. Provision for credit losses increased $17.3 million for the period, driven by the acquisition of HTLF as well as by portfolio metric changes and changes in macro-economic metrics in 2025 as compared to 2024. Noninterest income increased $50.5 million, or 110.5%, for the same period primarily driven by increases of $35.8 million in investment securities gains, $8.1 million in trust and securities processing income, $3.3 million in bankcard fees, $1.9 million in brokerage income, and $1.8 million in deposit service charges. Noninterest expense increased $92.1 million, or 71.0%, primarily due to increases of $43.8 million in technology, service, and overhead expenses, and an increase of $30.5 million in salaries and employee benefits expense, both driven by the HTLF acquisition. Additionally, there were increases of $7.7 million in other expense driven by increased charitable contributions, $3.1 million in processing fees, $1.7 million in supplies, $1.5 million in regulatory fees, $1.4 million in marketing and business development, and $1.2 million in equipment.

Previous wording

Total assets of the Company increased $24.0 billion, or 52.9%, as of March 31, 2025, compared to March 31, 2024, primarily due to an increase of $12.3 billion, or 52.0%, in loan balances, an increase of $4.4 billion, or 66.6%, in securities available for sale, and an increase of $3.2 billion, or 47.0%, in interest-bearing due from banks.

Current wording

Total assets of the Company increased $21.4 billion, or 42.4%, as of June 30, 2025, compared to December 31, 2024, primarily due to an increase of $11.2 billion, or 43.5%, in loan balances, an increase of $4.4 billion, or 56.4% in securities available for sale, an increase of $2.0 billion, or 25.5%, in interest-bearing due from banks, and an increase of $1.6 billion in goodwill.

Previous wording

Total assets of the Company increased $18.9 billion, or 37.6%, as of March 31, 2025, compared to December 31, 2024, primarily due to an increase of $10.3 billion, or 40.1% in loan balances, an increase of $3.1 billion, or 40.1%, in securities available for sale, and an increase of $1.8 billion, or 22.9%, in interest-bearing due from banks.

Current wording

Total assets of the Company increased $27.3 billion, or 61.4%, as of June 30, 2025, compared to June 30, 2024, primarily due to an increase of $12.6 billion, or 52.1%, in loan balances, an increase of $5.4 billion, or 116.1%, in interest-bearing due from bank, an increase of $5.1 billion, or 71.1%, in securities available for sale, and an increase of $1.6 billion in goodwill.

Previous wording

The overall increase in total assets from March 31, 2024 and December 31, 2024 to March 31, 2025 is directly related to the acquisition of HTLF. The HTLF acquisition added total assets with an acquired fair value of $16.3 billion, including $9.8 billion in loan balances and $3.7 billion in securities balances at January 31, 2025.

Current wording

The overall increase in total assets from June 30, 2024 and December 31, 2024 to June 30, 2025 is directly related to the acquisition of HTLF. The HTLF acquisition added total assets with an acquired fair value of $16.1 billion, including $9.7 billion in loan balances and $3.7 billion in securities balances at January 31, 2025. $1.6 billion of preliminary goodwill was recognized as a result of the acquisition. See further information in Note 13, “Acquisition” in the Notes to Consolidated Financial Statements.