Business Wire | Jan 26, 2021 05:00PM EST

UMB Financial Corporation Reports Fourth Quarter Net Income of $156.3 Million and Record Full-Year Earnings of $286.5 Million

Jan. 26, 2021

KANSAS CITY, Mo.--(BUSINESS WIRE)--Jan. 26, 2021--UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the fourth quarter of 2020 of $156.3 million, or $3.24 per diluted share, compared to $73.1 million, or $1.52 per diluted share, in the third quarter of 2020 (linked quarter) and $66.5 million, or $1.35 per diluted share, in the fourth quarter of 2019. For the year ended December 31, 2020, net income was $286.5 million, or $5.93 per diluted share, which is an increase of 17.6% compared to $243.6 million, or $4.96 per diluted share, for the year ended December 31, 2019. Results for the fourth quarter and full-year 2020 include a pre-tax gain of $108.8 million on the company's investment in Tattooed Chef, Inc.

Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $157.4 million, or $3.26 per diluted share, for the fourth quarter of 2020, compared to $76.4 million, or $1.59 per diluted share, for the linked quarter and $67.0 million, or $1.36 per diluted share, for the fourth quarter of 2019. Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), a non-GAAP measure reconciled to the components of net income before taxes, the nearest comparable GAAP measure, later in this release, was $202.9 million, or $4.20 per diluted share, for the fourth quarter of 2020, compared to $106.2 million, or $2.21 per diluted share, for the linked quarter, and $85.7 million, or $1.74 per diluted share, for the fourth quarter of 2019. These PTPP-FTE results represent increases of 91.1% on a linked-quarter basis and 136.7% compared to the fourth quarter of 2019.

Summary of quarterly financial results UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

Q4 Q3 Q4

2020 2020 2019

Net income (GAAP) $ 156,320 $ 73,092 $ 66,515

Earnings per share (diluted) 3.24 1.52 1.35



Pre-tax, pre-provision income (Non-GAAP) 196,107 99,385 79,268

Pre-tax, pre-provision earnings per share 4.06 2.07 1.61 (diluted)



Pre-tax, pre-provision income - FTE 202,946 106,182 85,723 (Non-GAAP)

Pre-tax, pre-provision earnings per share 4.20 2.21 1.74 - FTE (diluted)



Net operating income (Non-GAAP) 157,405 76,434 67,038

Operating earnings per share (diluted) 3.26 1.59 1.36



GAAP

Return on average assets 2.03 % 0.99 % 1.05 %

Return on average equity 21.18 10.23 10.15

Efficiency ratio 53.44 66.14 71.59



Non-GAAP

Operating return on average assets 2.05 % 1.03 % 1.06 %

Operating return on average equity 21.33 10.70 10.23

Operating efficiency ratio 53.11 64.69 71.35

Summary of year-to-date financial results

UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

December

December

YTD

YTD

2020

2019

Net income (GAAP)

$

286,502

$

243,600

Earnings per share (diluted)

5.93

4.96

Pre-tax, pre-provision income (Non-GAAP)

469,390

318,815

Pre-tax, pre-provision earnings per share (diluted)

9.71

6.49

Pre-tax, pre-provision income - FTE (Non-GAAP)

496,108

342,791

Pre-tax, pre-provision earnings per share - FTE (diluted)

10.26

6.98

Net operating income (Non-GAAP)

295,793

245,016

Operating earnings per share (diluted)

6.12

4.99

GAAP

Return on average assets

1.00

%

1.02

%

Return on average equity

10.21

9.94

Efficiency ratio

63.49

70.66

Non-GAAP

Operating return on average assets

1.04

%

1.03

%

Operating return on average equity

10.55

9.99

Operating efficiency ratio

62.56

70.49

"2020 was a testament to the spirit of UMB's consistent priorities-delivering the Unparalleled Customer Experience (TUCE), caring for our communities and managing through the adversity of an uncertain and unprecedented operating environment," said Mariner Kemper, chairman, president and chief executive officer. "Credit quality remains solid, with net charge-offs of just 0.13% of average loans for 2020, while average loan balances, excluding Paycheck Protection Program (PPP) loans, increased 10.4% from 2019. For the full year, our pre-tax, pre-provision income was $469.4 million, an increase of 47.2% compared to 2019. The biggest driver of this outperformance was a gain of $108.8 million in the fourth quarter from our successful investment in Tattooed Chef, Inc."

Fourth Quarter 2020 earnings discussion

Summary of year-to-date financial results UMB Financial Corporation

(unaudited, dollars in thousands, except per share December December data)

YTD YTD

2020 2019

Net income (GAAP) $ 286,502 $ 243,600

Earnings per share (diluted) 5.93 4.96



Pre-tax, pre-provision income (Non-GAAP) 469,390 318,815

Pre-tax, pre-provision earnings per share (diluted) 9.71 6.49



Pre-tax, pre-provision income - FTE (Non-GAAP) 496,108 342,791

Pre-tax, pre-provision earnings per share - FTE 10.26 6.98 (diluted)



Net operating income (Non-GAAP) 295,793 245,016

Operating earnings per share (diluted) 6.12 4.99



GAAP

Return on average assets 1.00 % 1.02 %

Return on average equity 10.21 9.94

Efficiency ratio 63.49 70.66



Non-GAAP

Operating return on average assets 1.04 % 1.03 %

Operating return on average equity 10.55 9.99

Operating efficiency ratio 62.56 70.49

"2020 was a testament to the spirit of UMB's consistent priorities-delivering the Unparalleled Customer Experience (TUCE), caring for our communities and managing through the adversity of an uncertain and unprecedented operating environment," said Mariner Kemper, chairman, president and chief executive officer. "Credit quality remains solid, with net charge-offs of just 0.13% of average loans for 2020, while average loan balances, excluding Paycheck Protection Program (PPP) loans, increased 10.4% from 2019. For the full year, our pre-tax, pre-provision income was $469.4 million, an increase of 47.2% compared to 2019. The biggest driver of this outperformance was a gain of $108.8 million in the fourth quarter from our successful investment in Tattooed Chef, Inc."

Fourth Quarter 2020 earnings discussion

Summary of UMB Financial Corporation revenue

(unaudited,dollars in thousands)

Q4 Q3 Q4 CQ vs. CQ vs.

2020 2020 2019 LQ PY

Netinterest $ 194,675 $ 184,384 $ 172,363 $ 10,291 $ 22,312 income

Noninterest income:

Trust andsecurities 50,773 50,552 46,835 221 3,938 processing

Trading andinvestment 9,693 8,678 6,720 1,015 2,973 banking

Servicecharges on 20,074 19,650 20,100 424 (26 )depositaccounts

Insurancefees and 318 259 511 59 (193 )commissions

Brokerage 3,918 4,819 8,839 (901 ) (4,921 )fees

Bankcard 15,788 15,295 16,326 493 (538 )fees

Investmentsecuritiesgains 113,010 (475 ) (308 ) 113,485 113,318 (losses),net

Other 14,716 14,218 11,332 498 3,384

Totalnoninterest $ 228,290 $ 112,996 $ 110,355 $ 115,294 $ 117,935 income

Total $ 422,965 $ 297,380 $ 282,718 $ 125,585 $ 140,247 revenue

Netinterest $ 201,514 $ 191,181 $ 178,818 income(FTE)

Netinterest 2.78 % 2.73 % 3.02 % margin(FTE)

Totalnoninterestincome as a 53.97 38.00 39.03 % of totalrevenue

Net interest income

* Net interest income totaled $194.7 million, an increase of $10.3 million, or 5.6%, from the linked quarter, driven by an increase of $1.0 billion, or 3.7%, in average earning assets and the acceleration of PPP loan origination fees from payoffs. The increase in average earning assets was driven by an increase of $356 million in investment securities and an increase of $309 million in loan balances. * Net interest margin for the fourth quarter was 2.78%, an increase of five basis points from the linked quarter. Earning asset yields increased four basis points from the linked quarter, driven by origination fee income from the payoff of PPP loan balances during the fourth quarter. The cost of interest-bearing liabilities decreased one basis point to 0.27%, driven by a three-basis-point decline in the cost of interest-bearing deposits and lower borrowing costs. Net interest spread increased five basis points to 2.68% from the linked quarter and was two basis points higher than the fourth quarter of 2019. * On a year-over-year basis, net interest income increased $22.3 million, or 12.9%, driven by a $2.8 billion, or 21.2%, increase in average loans, and a $1.5 billion, or 17.6%, increase in average securities. These increases were driven by organic loan growth, excess liquidity, and the company's PPP participation. * Average deposits increased 3.5% on a linked-quarter basis and 22.5% compared to the fourth quarter of 2019. Average noninterest-bearing demand deposit balances increased 8.3% on a linked-quarter basis and 39.8% compared to the fourth quarter of 2019.

Noninterest income

* Fourth quarter 2020 noninterest income increased $115.3 million, or 102.0%, on a linked-quarter basis, largely due to: An increase of $113.5 million in investment securities gains, primarily due to the $108.8 million gain on the company's investment in Tattooed Chef, Inc., recorded in the fourth quarter of 2020, an increase of $2.4 million in equity earnings on alternative investments, and an increase of $1.1 million in gains on sales of available for sale securities.

* Compared to the prior year, noninterest income in the fourth quarter of 2020 increased $117.9 million, or 106.9%, primarily driven by: An increase of $113.3 million in investment securities gains, primarily due to the $108.8 million gain on the company's investment in Tattooed Chef, Inc., an increase of $1.1 million in equity earnings on alternative investments, and an increase of $0.7 million on sales of available for sale securities. Increases of $2.5 million in fund services income and $1.4 million in corporate trust revenue, both recorded in trust and securities processing. An increase of $3.0 million in trading and investment banking due to increased trading volume. Increases of $2.8 million in company-owned life insurance and $0.5 million in bank-owned life insurance, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. These increases were partially offset by a decrease of $4.9 million in brokerage fees, primarily driven by lower 12b-1 income.

Noninterest expense

Summary ofnoninterest UMB Financial Corporation expense

(unaudited,dollars in thousands)

Q4 Q3 Q4 CQ vs. CQ vs.

2020 2020 2019 LQ PY

Salaries andemployee $ 129,272 $ 124,194 $ 120,806 $ 5,078 $ 8,466 benefits

Occupancy, 11,858 12,027 12,249 (169 ) (391 )net

Equipment 22,008 20,968 20,803 1,040 1,205

Supplies and 4,125 3,442 6,280 683 (2,155 )services

Marketingand business 3,717 3,038 8,385 679 (4,668 )development

Processing 14,408 12,812 13,351 1,596 1,057 fees

Legal and 10,191 7,244 10,001 2,947 190 consulting

Bankcard 4,711 4,834 4,061 (123 ) 650

Amortizationof other 1,601 1,524 1,593 77 8 intangibleassets

Regulatory 2,393 2,309 2,940 84 (547 )fees

Other 22,574 5,603 2,981 16,971 19,593

Totalnoninterest $ 226,858 $ 197,995 $ 203,450 $ 28,863 $ 23,408 expense

* GAAP noninterest expense for the fourth quarter of 2020 was $226.9 million, an increase of $28.9 million, or 14.6%, from the linked quarter and an increase of $23.4 million, or 11.5%, from the fourth quarter of 2019. * The linked-quarter increase in noninterest expense was driven by: Increases of $14.3 million in operational losses, $1.2 million in charitable contributions expense, and $0.9 million in losses on other real estate owned, all recorded in other noninterest expense. An increase of $5.1 million in salaries and employee benefits, largely driven by increased bonus expense due to higher company performance. Increases of $1.8 million in consulting expense and $1.1 million in legal expense, both recorded in legal and professional expense, due to timing of multiple technology initiatives and legal work performed on various matters. An increase of $1.6 million in processing fees, $1.0 million in equipment expense, and $0.7 million in supplies and services expense, due to investments in the digital channel and integrated platform solutions to support business growth and the ongoing modernization of the company's core systems. * The year-over-year increase in noninterest expense was driven by: A $13.1 million increase in operational losses, $1.2 million in charitable contributions expense, and $4.4 million in derivative expense, all recorded in other noninterest expense. An $8.5 million increase in salaries and employee benefits, primarily due to increased bonus expense due to higher company performance and an increase of $1.8 million in deferred compensation expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. These increases were partially offset by a decrease of $4.7 million in marketing and development expense, primarily due to a decline in travel and entertainment expense due to the pandemic.

Full year 2020 earnings discussion

* Net interest income increased $60.3 million, or 9.0%, year-over-year due to a $4.7 billion increase in earning assets, primarily driven by organic loan growth and the company's PPP participation, partially offset by the impact of lower short-term and long-term interest rates. In 2020, average loan balances increased $2.4 billion and average securities increased $1.2 billion. Average interest-bearing liabilities increased $2.6 billion, while the cost of interest-bearing liabilities declined 85 basis points. * Full-year noninterest income increased $133.4 million, or 31.3%, due to: An increase of $118.4 million in investment securities gains, primarily driven by the $108.8 million gain on the company's investment in Tattooed Chef, Inc., an increase in gains on sales of available for sale securities of $3.8 million, and a $3.1 million increase in equity earnings on alternative investments. Increases of $10.6 million in fund services income and $7.2 million in corporate trust revenue, both recorded in trust and securities processing. An increase of $9.5 million in trading and investment banking due to increased trading volume. These increases were partially offset by the following decreases: A $6.9 million decline in brokerage fees, primarily driven by lower 12b-1 income. A $6.2 million decrease in bankcard income, due to lower interchange revenue. * Full-year noninterest expense increased $43.1 million, or 5.5%, primarily due to: A $34.0 million increase in salary and employee benefit expense driven primarily by increased bonus and sales commission expense tied to business volumes, revenue growth, and overall company performance, as well as increased compensation expense tied to the company's COVID-19 response. A $12.9 million increase in operational losses, an increase of $1.3 million in charitable contributions expense, and an increase of $1.2 million in derivative expense, all recorded in other noninterest expense. An increase of $6.6 million in equipment expense, primarily due to investments in digital channel and integrated platform solutions to support business growth and the ongoing modernization of the company's core systems. These increases were partially offset by a decrease of $11.6 million in marketing and development expense primarily due to a decline in travel and entertainment expense due to the pandemic.

Income taxes

* The company's effective tax rate was 15.5% for the year ended December 31, 2020, compared to 14.8% for the same period in 2019. The increase in the effective tax rate for 2020 is primarily attributable to a smaller portion of pre-tax income being earned from tax-exempt municipal securities.

Balance sheet

* Average total assets for the fourth quarter of 2020 were $30.6 billion compared to $29.5 billion for the linked quarter and $25.1 billion for the same period in 2019.

Summary of average loans and leases - QTD UMB Financial Corporation Average

(unaudited,dollars in thousands)

Q4 Q3 Q4 CQ vs. CQ vs.

2020 2020 2019 LQ PY

Commercialand $ 7,079,646 $ 7,043,780 $ 5,451,880 $ 35,866 $ 1,627,766 industrial

Specialty 506,225 456,847 576,091 49,378 (69,866 )lending

Commercial 5,847,439 5,744,344 5,121,794 103,095 725,645 real estate

Consumer 1,903,892 1,755,249 1,353,544 148,643 550,348 real estate

Consumer 128,350 150,814 135,526 (22,464 ) (7,176 )

Credit 382,166 371,444 438,473 10,722 (56,307 )cards

Leases and 193,363 209,238 154,576 (15,875 ) 38,787 other

Total loans $ 16,041,081 $ 15,731,716 $ 13,231,884 $ 309,365 $ 2,809,197

* Average loans for the fourth quarter of 2020 increased 2.0% on a linked-quarter basis and 21.2% compared to the fourth quarter of 2019 due to increased commercial real estate and consumer real estate loans and the company's PPP participation, which had an average balance of $1.4 billion in the fourth quarter.

Summary ofaverage UMB Financial Corporation securities - QTDAverage

(unaudited,dollars in thousands)

Q4 Q3 Q4 CQ vs. CQ vs.

2020 2020 2019 LQ PY

Securitiesavailable for sale:

U.S. Treasury $ 30,778 $ 30,881 $ 220,830 $ (103 ) $ (190,052 )

U.S. Agencies 96,082 242,504 93,258 (146,422 ) 2,824

Mortgage-backed 5,053,821 4,829,586 3,967,051 224,235 1,086,770

State andpolitical 3,600,704 3,407,508 2,968,305 193,196 632,399 subdivisions

Commercial Paper - 3,478 - (3,478 ) -

Corporates 76,870 58,866 184,503 18,004 (107,633 )

Total securitiesavailable for $ 8,858,255 $ 8,572,823 $ 7,433,947 $ 285,432 $ 1,424,308 sale

Securities held to maturity:

State andpolitical $ 1,045,640 $ 1,085,297 $ 1,117,268 $ (39,657 ) $ (71,628 )subdivisions

Trading 29,659 32,894 56,653 (3,235 ) (26,994 )securities

Other securities 267,445 156,816 96,994 110,629 170,451

Total securities $ 10,200,999 $ 9,847,830 $ 8,704,862 $ 353,169 $ 1,496,137

* Average securities available for sale increased 3.3% on a linked-quarter basis and 19.2% compared to the fourth quarter of 2019.

Summary of average deposits - QTD Average UMB Financial Corporation

(unaudited, dollars in thousands)

Q4 Q3 Q4 CQ vs. CQ vs.

2020 2020 2019 LQ PY

Deposits:

Noninterest-bearing $ 8,947,389 $ 8,260,170 $ 6,398,309 $ 687,219 $ 2,549,080 demand

Interest-bearing demand 15,250,236 15,125,267 12,959,948 124,969 2,290,288 and savings

Time deposits 767,755 741,750 1,028,293 26,005 (260,538 )

Total deposits $ 24,965,380 $ 24,127,187 $ 20,386,550 $ 838,193 $ 4,578,830

Noninterest bearing 35.84 % 34.24 % 31.38 % deposits as % of total

* Average deposits increased 3.5% on a linked-quarter basis and 22.5% compared to the fourth quarter of 2019. * Average noninterest-bearing demand deposits increased 8.3% on a linked-quarter basis to $8.9 billion.

Capital

Capital information UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

December September December 31, 30, 31, 2020 2020 2019

Total equity $ 3,016,948 $ 2,854,180 $ 2,606,440

Book value per common share 62.84 59.43 53.09

Tangible book value per common 58.64 55.19 48.84 share



Regulatory capital:

Common equity Tier 1 capital $ 2,547,634 $ 2,402,785 $ 2,330,533

Tier 1 capital 2,547,634 2,402,785 2,330,533

Total capital 3,002,545 2,854,598 2,505,397



Regulatory capital ratios:

Common equity Tier 1 capital 12.10 % 11.93 % 12.33 %ratio

Tier 1 risk-based capital ratio 12.10 11.93 12.33

Total risk-based capital ratio 14.26 14.17 13.26

Tier 1 leverage ratio 8.37 8.19 9.37

* At December 31, 2020, the regulatory capital ratios presented in the foregoing table exceeded all "well-capitalized" regulatory thresholds.

Asset Quality

Credit quality UMB Financial Corporation

(unaudited,dollars in thousands)

Q4 Q3 Q2 Q1 Q4

2020 2020 2020 2020 2019

Net charge-offs $ 1,801 $ 5,111 $ 5,541 $ 7,672 $ 7,618 - Total loans

Net loancharge-offs as a 0.04 % 0.13 % 0.15 % 0.23 % 0.23 %% of totalaverage loans

Loans over 90 $ 1,952 $ 1,372 $ 4,588 $ 2,211 $ 2,069 days past due

Loans over 90days past due as 0.01 % 0.01 % 0.03 % 0.02 % 0.02 %a % of totalloans

Nonaccrual andrestructured $ 87,823 $ 93,695 $ 82,245 $ 97,029 $ 56,347 loans

Nonaccrual andrestructured 0.55 % 0.59 % 0.54 % 0.70 % 0.42 %loans as a % oftotal loans

Provision for $ 5,000 $ 16,000 $ 21,500 $ 88,000 $ 2,000 credit losses

* Provision for credit losses for the fourth quarter totaled $5.0 million, a decrease of $11.0 million from the linked quarter, and an increase of $3.0 million from the fourth quarter of 2019. * Net charge-offs for the fourth quarter totaled $1.8 million, or 0.04%, of average loans, compared to $5.1 million, or 0.13%, of average loans in the linked quarter.

Dividend Declaration

At the company's quarterly board meeting, the Board of Directors declared a $0.32 per share quarterly cash dividend, payable on April 1, 2021, to shareholders of record at the close of business on March 10, 2021.

Conference Call

The company plans to host a conference call to discuss its fourth quarter and full-year 2020 earnings results on Wednesday, January 27, 2021, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 4Q 2020 Conference Call

A replay of the conference call may be heard through February 10, 2021 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10150814. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we provide information about net operating income, operating earnings per share - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, pre-tax, pre-provision income, pre-tax, pre-provision earnings per share - diluted (PTPP EPS), pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE), pre-tax, pre-provision FTE earnings per share - diluted (PTPP-FTE EPS), tangible shareholders' equity, and tangible book value per share, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures - net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, PTPP, PTPP EPS, PTPP-FTE, PTPP-FTE EPS, tangible shareholders' equity, and tangible book value per share - and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, severance-, and COVID-19 related items that management does not believe reflect the company's fundamental operating performance. COVID-19 related expense includes hazard pay for branch associates, computer hardware expense to support associates working remotely, and additional equipment, cleaning, and janitorial supplies to protect the well-being of our associates and customers while on the company's premises.

Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, COVID-19 related expense, and the cumulative tax impact of these adjustments.

Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income from continuing operations, divided by the company's average total shareholders' equity for the relevant period. Operating ROA is calculated as net operating income from continuing operations, divided by the company's average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company's operating noninterest expense, net of amortization of other intangibles, divided by the company's total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net).

Pre-tax, pre-provision income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses.

Pre-tax, pre-provision income on a fully tax equivalent basis for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus noninterest income, less noninterest expense.

Tangible shareholders' equity for the relevant period is defined as GAAP shareholders' equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders' equity divided by the Company's total shares outstanding.

Forward-Looking Statements:

This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2019, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously, the COVID-19 pandemic (the pandemic) may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. The pandemic has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. It is currently adversely affecting the company and its customers, counterparties, employees, and fourth-party service providers, and the continued adverse impacts on our business, financial position, results of operations, and prospects could be significant. We are not able to accurately predict the extent of the impact of the pandemic on our capital, liquidity, and other financial positions and on our business, results of operations, and prospects at this time, and we believe it will depend on a number of evolving factors, including: (i) the duration, extent and severity of the pandemic; (ii) the response of governmental and non-governmental authorities to the pandemic, which is rapidly changing and not always coordinated or consistent across jurisdictions; (iii) the effect of the pandemic on our customers, counterparties, employees and fourth-party service providers, which may vary widely, and which is generally expected to increase our credit, counterparty, operational, and other risks; and (iv) the effect of the pandemic on economies and markets, which in turn could adversely affect, among other things, the origination of new loans and the performance of our existing loans. The pandemic is also expected to have a significant impact on our CECL calculation and related provision under a new accounting standard that we were required to adopt in January 2020. The CECL calculation includes periodic estimates of the net amount expected to be collected over the contractual term of certain financial assets, and requires us to take into account, among other things, economic conditions forecasted over the life of the financial asset, including the current and anticipated effects of the pandemic. Any forward-looking statement should be evaluated in light of these considerations. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB's operations, approach and relief measures during the COVID-19 pandemic, please visit umb.com/COVID-19.

Consolidated Balance Sheets UMB Financial Corporation

(dollars in thousands)

December 31,

2020 2019

(unaudited) (audited)

ASSETS

Loans $ 16,103,651 $ 13,431,722

Allowance for credit losses on loans (215,973 ) (101,788 )

Net loans 15,887,678 13,329,934

Loans held for sale 6,708 7,803

Securities:

Available for sale 9,299,688 7,447,362

Held to maturity, net of allowance for credit 1,012,004 1,116,102 losses

Trading securities 35,020 45,618

Other securities 296,053 108,420

Total securities 10,642,765 8,717,502

Federal funds sold and resell agreements 1,650,335 1,578,345

Interest-bearing due from banks 3,110,042 1,225,491

Cash and due from banks 430,638 472,958

Premises and equipment, net 293,095 300,334

Accrued income 139,892 124,508

Goodwill 180,867 180,867

Other intangibles, net 21,056 27,597

Other assets 764,428 596,016

Total assets $ 33,127,504 $ 26,561,355



LIABILITIES

Deposits:

Noninterest-bearing demand $ 9,879,970 $ 6,944,465

Interest-bearing demand and savings 16,295,186 13,432,415

Time deposits under $250,000 477,748 611,587

Time deposits of $250,000 or more 398,347 614,777

Total deposits 27,051,251 21,603,244

Federal funds purchased and repurchase 2,315,497 1,896,508 agreements

Long-term debt 269,595 70,372

Accrued expenses and taxes 319,676 232,200

Other liabilities 154,537 152,591

Total liabilities 30,110,556 23,954,915



SHAREHOLDERS' EQUITY

Common stock 55,057 55,057

Capital surplus 1,090,450 1,073,764

Retained earnings 1,891,246 1,672,438

Accumulated other comprehensive income, net 318,340 83,180

Treasury stock (338,145 ) (277,999 )

Total shareholders' equity 3,016,948 2,606,440

Total liabilities and shareholders' equity $ 33,127,504 $ 26,561,355

Consolidated Statements of Income

UMB Financial Corporation

(dollars in thousands except share and per share data)

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

(unaudited)

(unaudited)

(unaudited)

(audited)

INTEREST INCOME

Loans

$

152,486

$

156,503

$

585,957

$

637,845

Securities:

Taxable interest

26,226

26,996

105,701

106,053

Tax-exempt interest

25,427

24,177

99,820

90,064

Total securities income

51,653

51,173

205,521

196,117

Federal funds and resell agreements

2,567

4,875

11,840

13,843

Interest-bearing due from banks

384

2,765

3,744

12,882

Trading securities

202

504

1,427

2,205

Total interest income

207,292

215,820

808,489

862,892

INTEREST EXPENSE

Deposits

7,955

35,698

58,214

154,192

Federal funds and repurchase agreements

1,726

6,629

11,787

32,553

Other

2,936

1,130

7,259

5,242

Total interest expense

12,617

43,457

77,260

191,987

Net interest income

194,675

172,363

731,229

670,905

Provision for credit losses

5,000

2,000

130,500

32,850

Net interest income after provision for credit losses

189,675

170,363

600,729

638,055

NONINTEREST INCOME

Trust and securities processing

50,773

46,835

194,646

176,913

Trading and investment banking

9,693

6,720

32,945

23,466

Service charges on deposit accounts

20,074

20,100

83,879

82,748

Insurance fees and commissions

318

511

1,369

1,634

Brokerage fees

3,918

8,839

24,350

31,261

Bankcard fees

15,788

16,326

60,544

66,727

Investment securities gains (losses), net

113,010

(308

)

120,634

2,245

Other

14,716

11,332

41,799

41,776

Total noninterest income

228,290

110,355

560,166

426,770

NONINTEREST EXPENSE

Salaries and employee benefits

129,272

120,806

495,464

461,445

Occupancy, net

11,858

12,249

47,476

47,771

Equipment

22,008

20,803

85,719

79,086

Supplies and services

4,125

6,280

15,537

18,699

Marketing and business development

3,717

8,385

14,679

26,257

Processing fees

14,408

13,351

54,213

52,198

Legal and consulting

10,191

10,001

29,765

31,504

Bankcard

4,711

4,061

18,954

17,750

Amortization of other intangible assets

1,601

1,593

6,517

5,506

Regulatory fees

2,393

2,940

10,279

11,489

Other

22,574

2,981

43,402

27,155

Total noninterest expense

226,858

203,450

822,005

778,860

Income before income taxes

191,107

77,268

338,890

285,965

Income tax expense

34,787

10,753

52,388

42,365

NET INCOME

$

156,320

$

66,515

$

286,502

$

243,600

PER SHARE DATA

Net income - basic

$

3.26

$

1.36

$

5.95

$

4.99

Net income - diluted

3.24

1.35

5.93

4.96

Dividends

0.32

0.31

1.25

1.21

Weighted average shares outstanding - basic

47,927,358

48,828,509

48,137,791

48,779,263

Weighted average shares outstanding - diluted

48,264,097

49,187,291

48,343,750

49,089,877

ConsolidatedStatements of UMB Financial Corporation Income

(dollars in thousands except share and per share data)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

(unaudited) (unaudited) (unaudited) (audited)

INTEREST INCOME

Loans $ 152,486 $ 156,503 $ 585,957 $ 637,845

Securities:

Taxable interest 26,226 26,996 105,701 106,053

Tax-exempt 25,427 24,177 99,820 90,064 interest

Total securities 51,653 51,173 205,521 196,117 income

Federal fundsand resell 2,567 4,875 11,840 13,843 agreements

Interest-bearing 384 2,765 3,744 12,882 due from banks

Trading 202 504 1,427 2,205 securities

Total interest 207,292 215,820 808,489 862,892 income

INTEREST EXPENSE

Deposits 7,955 35,698 58,214 154,192

Federal fundsand repurchase 1,726 6,629 11,787 32,553 agreements

Other 2,936 1,130 7,259 5,242

Total interest 12,617 43,457 77,260 191,987 expense

Net interest 194,675 172,363 731,229 670,905 income

Provision for 5,000 2,000 130,500 32,850 credit losses

Net interestincome after 189,675 170,363 600,729 638,055 provision forcredit losses

NONINTEREST INCOME

Trust andsecurities 50,773 46,835 194,646 176,913 processing

Trading andinvestment 9,693 6,720 32,945 23,466 banking

Service chargeson deposit 20,074 20,100 83,879 82,748 accounts

Insurance fees 318 511 1,369 1,634 and commissions

Brokerage fees 3,918 8,839 24,350 31,261

Bankcard fees 15,788 16,326 60,544 66,727

Investmentsecurities gains 113,010 (308 ) 120,634 2,245 (losses), net

Other 14,716 11,332 41,799 41,776

Totalnoninterest 228,290 110,355 560,166 426,770 income

NONINTEREST EXPENSE

Salaries andemployee 129,272 120,806 495,464 461,445 benefits

Occupancy, net 11,858 12,249 47,476 47,771

Equipment 22,008 20,803 85,719 79,086

Supplies and 4,125 6,280 15,537 18,699 services

Marketing andbusiness 3,717 8,385 14,679 26,257 development

Processing fees 14,408 13,351 54,213 52,198

Legal and 10,191 10,001 29,765 31,504 consulting

Bankcard 4,711 4,061 18,954 17,750

Amortization ofother intangible 1,601 1,593 6,517 5,506 assets

Regulatory fees 2,393 2,940 10,279 11,489

Other 22,574 2,981 43,402 27,155

Totalnoninterest 226,858 203,450 822,005 778,860 expense

Income before 191,107 77,268 338,890 285,965 income taxes

Income tax 34,787 10,753 52,388 42,365 expense

NET INCOME $ 156,320 $ 66,515 $ 286,502 $ 243,600



PER SHARE DATA

Net income - $ 3.26 $ 1.36 $ 5.95 $ 4.99 basic

Net income - 3.24 1.35 5.93 4.96 diluted

Dividends 0.32 0.31 1.25 1.21

Weighted averageshares 47,927,358 48,828,509 48,137,791 48,779,263 outstanding -basic

Weighted averageshares 48,264,097 49,187,291 48,343,750 49,089,877 outstanding -diluted

Consolidated Statements of Comprehensive Income

UMB Financial Corporation

(dollars in thousands)

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

(unaudited)

(unaudited)

(unaudited)

(audited)

Net income

$

156,320

$

66,515

$

286,502

$

243,600

Other comprehensive income (loss), before tax:

Unrealized gains and losses on debt securities:

Change in unrealized holding gains and losses, net

25,576

(14,209

)

295,552

253,891

Less: Reclassification adjustment for gains included in net income

(1,436

)

(755

)

(6,980

)

(3,218

)

Change in unrealized gains and losses on debt securities

24,140

(14,964

)

288,572

250,673

Unrealized gains and losses on derivative hedges:

Change in unrealized gains and losses on derivative hedges, net

1,964

(2,700

)

20,979

(15,318

)

Less: Reclassification adjustment for (gains) losses included in net income

(1,036

)

728

(1,905

)

1,023

Change in unrealized gains and losses on derivative hedges

928

(1,972

)

19,074

(14,295

)

Other comprehensive income (loss), before tax

25,068

(16,936

)

307,646

236,378

Income tax (expense) benefit

(5,831

)

4,095

(72,486

)

(57,416

)

Other comprehensive income (loss)

19,237

(12,841

)

235,160

178,962

Comprehensive income

$

175,557

$

53,674

$

521,662

$

422,562

ConsolidatedStatements of UMB Financial Corporation ComprehensiveIncome

(dollars in thousands)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

(unaudited) (unaudited) (unaudited) (audited)

Net income $ 156,320 $ 66,515 $ 286,502 $ 243,600

Othercomprehensive income (loss),before tax:

Unrealized gainsand losses on debt securities:

Change inunrealized 25,576 (14,209 ) 295,552 253,891 holding gains andlosses, net

Less:Reclassificationadjustment for (1,436 ) (755 ) (6,980 ) (3,218 )gains included innet income

Change inunrealized gains 24,140 (14,964 ) 288,572 250,673 and losses ondebt securities

Unrealized gainsand losses on derivativehedges:

Change inunrealized gainsand losses on 1,964 (2,700 ) 20,979 (15,318 )derivativehedges, net

Less:Reclassificationadjustment for (1,036 ) 728 (1,905 ) 1,023 (gains) lossesincluded in netincome

Change inunrealized gains 928 (1,972 ) 19,074 (14,295 )and losses onderivative hedges

Othercomprehensive 25,068 (16,936 ) 307,646 236,378 income (loss),before tax

Income tax (5,831 ) 4,095 (72,486 ) (57,416 )(expense) benefit

Othercomprehensive 19,237 (12,841 ) 235,160 178,962 income (loss)

Comprehensive $ 175,557 $ 53,674 $ 521,662 $ 422,562 income

Consolidated Statements of Shareholders' Equity

UMB Financial Corporation

(dollars in thousands except per share data)

(audited)

Common

Stock

Capital

Surplus

Retained

Earnings

Accumulated Other Comprehensive (Loss) Income

Treasury

Stock

Total

Balance - January 1, 2019

$

55,057

$

1,054,601

$

1,488,421

$

(95,782

)

$

(273,827

)

$

2,228,470

Total comprehensive income

-

-

243,600

178,962

-

422,562

Dividends ($1.21 per share)

-

-

(59,583

)

-

-

(59,583

)

Purchase of treasury stock

-

-

-

-

(4,496

)

(4,496

)

Forfeitures of equity awards, net of issuances

-

3,820

-

-

(3,204

)

616

Recognition of equity-based compensation

-

14,234

-

-

-

14,234

Sale of treasury stock

-

344

-

-

487

831

Exercise of stock options

-

765

-

-

3,041

3,806

Balance - December 31, 2019

$

55,057

$

1,073,764

$

1,672,438

$

83,180

$

(277,999

)

$

2,606,440

(unaudited)

Balance - January 1, 2020

$

55,057

$

1,073,764

$

1,672,438

$

83,180

$

(277,999

)

$

2,606,440

Total comprehensive income

-

-

286,502

235,160

-

521,662

Dividends ($1.25 per share)

-

-

(60,655

)

-

-

(60,655

)

Purchase of treasury stock

-

616

-

-

(64,382

)

(63,766

)

Forfeitures of equity awards, net of issuances

-

624

-

-

(16

)

608

Recognition of equity-based compensation

-

14,512

-

-

-

14,512

Sale of treasury stock

-

201

-

-

414

615

Exercise of stock options

-

733

-

-

3,838

4,571

Cumulative effect adjustment

-

-

(7,039

)

-

-

(7,039

)

Balance - December 31, 2020

$

55,057

$

1,090,450

$

1,891,246

$

318,340

$

(338,145

)

$

3,016,948

Consolidated Statements of UMB Financial Corporation Shareholders' Equity

(dollars in thousands except per share data)

Common Capital Retained Accumulated Treasury(audited) Other Total Stock Surplus Earnings Comprehensive Stock (Loss) Income

Balance -January 1, $ 55,057 $ 1,054,601 $ 1,488,421 $ (95,782 ) $ (273,827 ) $ 2,228,470 2019

Totalcomprehensive - - 243,600 178,962 - 422,562 income

Dividends($1.21 per - - (59,583 ) - - (59,583 )share)

Purchase oftreasury - - - - (4,496 ) (4,496 )stock

Forfeituresof equity - 3,820 - - (3,204 ) 616 awards, netof issuances

Recognitionof - 14,234 - - - 14,234 equity-basedcompensation

Sale oftreasury - 344 - - 487 831 stock

Exercise of - 765 - - 3,041 3,806 stock options

Balance -December 31, $ 55,057 $ 1,073,764 $ 1,672,438 $ 83,180 $ (277,999 ) $ 2,606,440 2019



(unaudited)

Balance -January 1, $ 55,057 $ 1,073,764 $ 1,672,438 $ 83,180 $ (277,999 ) $ 2,606,440 2020

Totalcomprehensive - - 286,502 235,160 - 521,662 income

Dividends($1.25 per - - (60,655 ) - - (60,655 )share)

Purchase oftreasury - 616 - - (64,382 ) (63,766 )stock

Forfeituresof equity - 624 - - (16 ) 608 awards, netof issuances

Recognitionof - 14,512 - - - 14,512 equity-basedcompensation

Sale oftreasury - 201 - - 414 615 stock

Exercise of - 733 - - 3,838 4,571 stock options

Cumulativeeffect - - (7,039 ) - - (7,039 )adjustment

Balance -December 31, $ 55,057 $ 1,090,450 $ 1,891,246 $ 318,340 $ (338,145 ) $ 3,016,948 2020

Average Balances / Yields and Rates

UMB Financial Corporation

(tax - equivalent basis)

(unaudited, dollars in thousands)

Three Months Ended December 31,

2020

2019

Average

Average

Average

Average

Balance

Yield/Rate

Balance

Yield/Rate

Assets

Loans, net of unearned interest

$

16,041,081

3.78

%

$

13,231,884

4.69

%

Securities:

Taxable

5,776,606

1.81

4,654,669

2.30

Tax-exempt

4,394,734

2.91

3,993,540

3.04

Total securities

10,171,340

2.28

8,648,209

2.64

Federal funds and resell agreements

1,186,939

0.86

893,954

2.16

Interest bearing due from banks

1,443,979

0.11

633,328

1.73

Trading securities

29,659

3.21

56,653

4.09

Total earning assets

28,872,998

2.95

23,464,028

3.76

Allowance for credit losses

(217,923

)

(109,967

)

Other assets

1,930,559

1,716,962

Total assets

$

30,585,634

$

25,071,023

Liabilities and Shareholders' Equity

Interest-bearing deposits

$

16,017,991

0.20

%

$

13,988,241

1.01

%

Federal funds and repurchase agreements

1,963,865

0.35

1,661,285

1.58

Borrowed funds

274,279

4.26

70,225

6.38

Total interest-bearing liabilities

18,256,135

0.27

15,719,751

1.10

Noninterest-bearing demand deposits

8,947,389

6,398,309

Other liabilities

446,572

353,848

Shareholders' equity

2,935,538

2,599,115

Total liabilities and shareholders' equity

$

30,585,634

$

25,071,023

Net interest spread

2.68

%

2.66

%

Net interest margin

2.78

3.02

Average Balances / UMB Financial Corporation Yields and Rates

(tax - equivalent basis)

(unaudited, dollars in thousands)

Three Months Ended December 31,

2020 2019

Average Average Average Average

Balance Yield/ Balance Yield/ Rate Rate

Assets

Loans, net of $ 16,041,081 3.78 % $ 13,231,884 4.69 %unearned interest

Securities:

Taxable 5,776,606 1.81 4,654,669 2.30

Tax-exempt 4,394,734 2.91 3,993,540 3.04

Total securities 10,171,340 2.28 8,648,209 2.64

Federal funds and 1,186,939 0.86 893,954 2.16 resell agreements

Interest bearing due 1,443,979 0.11 633,328 1.73 from banks

Trading securities 29,659 3.21 56,653 4.09

Total earning assets 28,872,998 2.95 23,464,028 3.76

Allowance for credit (217,923 ) (109,967 ) losses

Other assets 1,930,559 1,716,962

Total assets $ 30,585,634 $ 25,071,023



Liabilities and Shareholders' Equity

Interest-bearing $ 16,017,991 0.20 % $ 13,988,241 1.01 %deposits

Federal funds and 1,963,865 0.35 1,661,285 1.58 repurchase agreements

Borrowed funds 274,279 4.26 70,225 6.38

Totalinterest-bearing 18,256,135 0.27 15,719,751 1.10 liabilities

Noninterest-bearing 8,947,389 6,398,309 demand deposits

Other liabilities 446,572 353,848

Shareholders' equity 2,935,538 2,599,115

Total liabilities and $ 30,585,634 $ 25,071,023 shareholders' equity

Net interest spread 2.68 % 2.66 %

Net interest margin 2.78 3.02

Average Balances / Yields and Rates

UMB Financial Corporation

(tax - equivalent basis)

(unaudited, dollars in thousands)

Year Ended December 31,

2020

2019

Average

Average

Average

Average

Balance

Yield/Rate

Balance

Yield/Rate

Assets

Loans, net of unearned interest

$

15,126,110

3.87

%

$

12,764,623

5.00

%

Securities:

Taxable

5,256,715

2.01

4,524,955

2.34

Tax-exempt

4,226,363

2.99

3,796,983

3.00

Total securities

9,483,078

2.45

8,321,938

2.64

Federal funds and resell agreements

1,099,447

1.08

535,393

2.59

Interest bearing due from banks

1,218,919

0.31

584,756

2.20

Trading securities

37,086

4.28

52,306

4.79

Total earning assets

26,964,640

3.10

22,259,016

3.98

Allowance for credit losses

(184,482

)

(107,422

)

Other assets

1,787,979

1,633,031

Total assets

$

28,568,137

$

23,784,625

Liabilities and Shareholders' Equity

Interest-bearing deposits

$

15,336,492

0.38

%

$

13,172,181

1.17

%

Federal funds and repurchase agreements

2,023,813

0.58

1,657,283

1.96

Borrowed funds

136,957

5.30

69,809

7.51

Total interest-bearing liabilities

17,497,262

0.44

14,899,273

1.29

Noninterest-bearing demand deposits

7,845,667

6,132,187

Other liabilities

420,247

301,318

Shareholders' equity

2,804,961

2,451,847

Total liabilities and shareholders' equity

$

28,568,137

$

23,784,625

Net interest spread

2.66

%

2.69

%

Net interest margin

2.81

3.12

Average Balances / UMB Financial Corporation Yields and Rates

(tax - equivalent basis)

(unaudited, dollars in thousands)

Year Ended December 31,

2020 2019

Average Average Average Average

Balance Yield/ Balance Yield/ Rate Rate

Assets

Loans, net of $ 15,126,110 3.87 % $ 12,764,623 5.00 %unearned interest

Securities:

Taxable 5,256,715 2.01 4,524,955 2.34

Tax-exempt 4,226,363 2.99 3,796,983 3.00

Total securities 9,483,078 2.45 8,321,938 2.64

Federal funds and 1,099,447 1.08 535,393 2.59 resell agreements

Interest bearing due 1,218,919 0.31 584,756 2.20 from banks

Trading securities 37,086 4.28 52,306 4.79

Total earning assets 26,964,640 3.10 22,259,016 3.98

Allowance for credit (184,482 ) (107,422 ) losses

Other assets 1,787,979 1,633,031

Total assets $ 28,568,137 $ 23,784,625



Liabilities and Shareholders' Equity

Interest-bearing $ 15,336,492 0.38 % $ 13,172,181 1.17 %deposits

Federal funds and 2,023,813 0.58 1,657,283 1.96 repurchase agreements

Borrowed funds 136,957 5.30 69,809 7.51

Totalinterest-bearing 17,497,262 0.44 14,899,273 1.29 liabilities

Noninterest-bearing 7,845,667 6,132,187 demand deposits

Other liabilities 420,247 301,318

Shareholders' equity 2,804,961 2,451,847

Total liabilities and $ 28,568,137 $ 23,784,625 shareholders' equity

Net interest spread 2.66 % 2.69 %

Net interest margin 2.81 3.12

Business Segment Information

UMB Financial Corporation

(unaudited, dollars in thousands)

Three Months Ended December 31, 2020

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

$

133,019

$

22,322

$

39,334

$

194,675

Provision for credit losses

3,891

116

993

5,000

Noninterest income

131,630

63,746

32,914

228,290

Noninterest expense

85,942

71,562

69,354

226,858

Income before taxes

174,816

14,390

1,901

191,107

Income tax expense

31,821

2,620

346

34,787

Net income

$

142,995

$

11,770

$

1,555

$

156,320

Three Months Ended December 31, 2019

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

$

105,479

$

33,734

$

33,150

$

172,363

Provision for credit losses

558

251

1,191

2,000

Noninterest income

19,167

62,326

28,862

110,355

Noninterest expense

65,567

71,552

66,331

203,450

Income (loss) before taxes

58,521

24,257

(5,510

)

77,268

Income tax expense (benefit)

8,144

3,376

(767

)

10,753

Net income (loss)

$

50,377

$

20,881

$

(4,743

)

$

66,515

Year Ended December 31, 2020

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

$

475,425

$

106,856

$

148,948

$

731,229

Provision for credit losses

119,424

882

10,194

130,500

Noninterest income

189,412

254,874

115,880

560,166

Noninterest expense

272,283

286,635

263,087

822,005

Income (loss) before taxes

273,130

74,213

(8,453

)

338,890

Income tax expense (benefit)

42,223

11,472

(1,307

)

52,388

Net income (loss)

$

230,907

$

62,741

$

(7,146

)

$

286,502

Year Ended December 31, 2019

Commercial Banking

Institutional Banking

Personal Banking

Total

Net interest income

$

412,232

$

126,591

$

132,082

$

670,905

Provision for credit losses

26,159

975

5,716

32,850

Noninterest income

81,609

232,444

112,717

426,770

Noninterest expense

267,345

268,423

243,092

778,860

Income (loss) before taxes

200,337

89,637

(4,009

)

285,965

Income tax expense (benefit)

29,679

13,280

(594

)

42,365

Net income (loss)

$

170,658

$

76,357

$

(3,415

)

$

243,600

The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company's internal reporting system in deciding how to allocate resources and assess performance for individual business segments. Prior to 2020, the company had the following four business segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services. The company's reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at December 31, 2020.

Non-GAAP Financial Measures

Business Segment UMB Financial Corporation Information

(unaudited, dollars in thousands)

Three Months Ended December 31, 2020

Commercial Institutional Personal Total Banking Banking Banking

Net interest income $ 133,019 $ 22,322 $ 39,334 $ 194,675

Provision for credit 3,891 116 993 5,000 losses

Noninterest income 131,630 63,746 32,914 228,290

Noninterest expense 85,942 71,562 69,354 226,858

Income before taxes 174,816 14,390 1,901 191,107

Income tax expense 31,821 2,620 346 34,787

Net income $ 142,995 $ 11,770 $ 1,555 $ 156,320



Three Months Ended December 31, 2019

Commercial Institutional Personal Total Banking Banking Banking

Net interest income $ 105,479 $ 33,734 $ 33,150 $ 172,363

Provision for credit 558 251 1,191 2,000 losses

Noninterest income 19,167 62,326 28,862 110,355

Noninterest expense 65,567 71,552 66,331 203,450

Income (loss) before 58,521 24,257 (5,510 ) 77,268 taxes

Income tax expense 8,144 3,376 (767 ) 10,753 (benefit)

Net income (loss) $ 50,377 $ 20,881 $ (4,743 ) $ 66,515



Year Ended December 31, 2020

Commercial Institutional Personal Total Banking Banking Banking

Net interest income $ 475,425 $ 106,856 $ 148,948 $ 731,229

Provision for credit 119,424 882 10,194 130,500 losses

Noninterest income 189,412 254,874 115,880 560,166

Noninterest expense 272,283 286,635 263,087 822,005

Income (loss) before 273,130 74,213 (8,453 ) 338,890 taxes

Income tax expense 42,223 11,472 (1,307 ) 52,388 (benefit)

Net income (loss) $ 230,907 $ 62,741 $ (7,146 ) $ 286,502



Year Ended December 31, 2019

Commercial Institutional Personal Total Banking Banking Banking

Net interest income $ 412,232 $ 126,591 $ 132,082 $ 670,905

Provision for credit 26,159 975 5,716 32,850 losses

Noninterest income 81,609 232,444 112,717 426,770

Noninterest expense 267,345 268,423 243,092 778,860

Income (loss) before 200,337 89,637 (4,009 ) 285,965 taxes

Income tax expense 29,679 13,280 (594 ) 42,365 (benefit)

Net income (loss) $ 170,658 $ 76,357 $ (3,415 ) $ 243,600

The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. Senior executive officers regularly evaluate business segment financial results produced by the company's internal reporting system in deciding how to allocate resources and assess performance for individual business segments. Prior to 2020, the company had the following four business segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services. The company's reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at December 31, 2020.

Non-GAAP Financial Measures

Net operating incomeNon-GAAP UMB Financial Corporation reconciliations:

(unaudited, dollars inthousands except per share data)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Net income (GAAP) $ 156,320 $ 66,515 $ 286,502 $ 243,600

Adjustments:

Acquisition expense - 100 324 268

Severance expense 109 572 4,757 1,552

COVID-19 related expense 1,286 - 6,861 -

Tax-impact of (310 ) (149 ) (2,651 ) (404 )adjustments (i)

Total Non-GAAP 1,085 523 9,291 1,416 adjustments (net of tax)

Net operating income $ 157,405 $ 67,038 $ 295,793 $ 245,016 (Non-GAAP)



Earnings per share - $ 3.24 $ 1.35 $ 5.93 $ 4.96 diluted (GAAP)

Acquisition expense - - 0.01 -

Severance expense - 0.01 0.10 0.03

COVID-19 related expense 0.03 - 0.14 -

Tax-impact of (0.01 ) - (0.06 ) - adjustments (i)

Operating earnings pershare - diluted $ 3.26 $ 1.36 $ 6.12 $ 4.99 (Non-GAAP)



GAAP

Return on average assets 2.03 % 1.05 % 1.00 % 1.02 %

Return on average equity 21.18 10.15 10.21 9.94



Non-GAAP

Operating return on 2.05 % 1.06 % 1.04 % 1.03 %average assets

Operating return on 21.33 10.23 10.55 9.99 average equity

(i) Calculated using thecompany's marginal taxrate of 22.2%.

Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

Noninterest expense

$

226,858

$

203,450

$

822,005

$

778,860

Adjustments to arrive at operating noninterest expense (pre-tax):

Acquisition expense

-

100

324

268

Severance expense

109

572

4,757

1,552

COVID-19 related expense

1,286

-

6,861

-

Total Non-GAAP adjustments (pre-tax)

1,395

672

11,942

1,820

Operating noninterest expense (Non-GAAP)

$

225,463

$

202,778

$

810,063

$

777,040

Noninterest expense

$

226,858

$

203,450

$

822,005

$

778,860

Less: Amortization of other intangibles

1,601

1,593

6,517

5,506

Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)

$

225,257

$

201,857

$

815,488

$

773,354

Operating noninterest expense

$

225,463

$

202,778

$

810,063

$

777,040

Less: Amortization of other intangibles

1,601

1,593

6,517

5,506

Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)

$

223,862

$

201,185

$

803,546

$

771,534

Net interest income

$

194,675

$

172,363

$

731,229

$

670,905

Noninterest income

228,290

110,355

560,166

426,770

Less: Gains on sales of securities available for sale, net

1,436

755

6,980

3,218

Total Non-GAAP Revenue (denominator A)

$

421,529

$

281,963

$

1,284,415

$

1,094,457

Efficiency ratio (numerator A/denominator A)

53.44

%

71.59

%

63.49

%

70.66

%

Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)

53.11

71.35

62.56

70.49

Operatingnoninterest expenseand operating UMB Financial Corporation efficiency ratioNon-GAAPreconciliations:

(unaudited, dollars in thousands)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Noninterest expense $ 226,858 $ 203,450 $ 822,005 $ 778,860

Adjustments toarrive at operating noninterest expense(pre-tax):

Acquisition expense - 100 324 268

Severance expense 109 572 4,757 1,552

COVID-19 related 1,286 - 6,861 - expense

Total Non-GAAPadjustments 1,395 672 11,942 1,820 (pre-tax)

Operatingnoninterest expense $ 225,463 $ 202,778 $ 810,063 $ 777,040 (Non-GAAP)



Noninterest expense $ 226,858 $ 203,450 $ 822,005 $ 778,860

Less: Amortizationof other 1,601 1,593 6,517 5,506 intangibles

Noninterestexpense, net ofamortization of $ 225,257 $ 201,857 $ 815,488 $ 773,354 other intangibles(Non-GAAP)(numerator A)



Operating $ 225,463 $ 202,778 $ 810,063 $ 777,040 noninterest expense

Less: Amortizationof other 1,601 1,593 6,517 5,506 intangibles

Operating expense,net of amortizationof other $ 223,862 $ 201,185 $ 803,546 $ 771,534 intangibles(Non-GAAP)(numerator B)



Net interest income $ 194,675 $ 172,363 $ 731,229 $ 670,905

Noninterest income 228,290 110,355 560,166 426,770

Less: Gains onsales of securities 1,436 755 6,980 3,218 available for sale,net

Total Non-GAAPRevenue $ 421,529 $ 281,963 $ 1,284,415 $ 1,094,457 (denominator A)



Efficiency ratio(numerator A/ 53.44 % 71.59 % 63.49 % 70.66 %denominator A)

Operatingefficiency ratio(Non-GAAP) 53.11 71.35 62.56 70.49 (numerator B/denominator A)

Pre-tax, pre-provision income non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

Net income before taxes (GAAP)

$

191,107

$

77,268

$

338,890

$

285,965

Adjustments:

Provision for credit losses

5,000

2,000

130,500

32,850

Pre-tax, pre-provision income (Non-GAAP)

$

196,107

$

79,268

$

469,390

$

318,815

Pre-tax earnings per share - diluted (GAAP)

$

3.96

$

1.57

$

7.01

$

5.82

Provision for credit losses

0.10

0.04

2.70

0.67

Pre-tax, pre-provision earnings per share - diluted (Non-GAAP)

$

4.06

$

1.61

$

9.71

$

6.49

Pre-tax, pre-provisionincome non-GAAP UMB Financial Corporation reconciliations:

(unaudited, dollars inthousands except per share data)

Three Months Ended Year Ended December 31, December 31,

2020 2019 2020 2019

Net income before taxes $ 191,107 $ 77,268 $ 338,890 $ 285,965 (GAAP)

Adjustments:

Provision for credit 5,000 2,000 130,500 32,850 losses

Pre-tax, pre-provision $ 196,107 $ 79,268 $ 469,390 $ 318,815 income (Non-GAAP)



Pre-tax earnings per $ 3.96 $ 1.57 $ 7.01 $ 5.82 share - diluted (GAAP)

Provision for credit 0.10 0.04 2.70 0.67 losses

Pre-tax, pre-provisionearnings per share - $ 4.06 $ 1.61 $ 9.71 $ 6.49 diluted (Non-GAAP)

Pre-tax, pre-provision income - FTE Non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

Three Months Ended

December 31,

September 30,

December 31,

Year Ended December 31,

2020

2020

2019

2020

2019

Net interest income

$

194,675

$

184,384

$

172,363

$

731,229

$

670,905

Adjustments to arrive at net interest income - FTE:

Tax equivalent interest

6,839

6,797

6,455

26,718

23,976

Net interest income - FTE

$

201,514

$

191,181

$

178,818

$

757,947

$

694,881

Noninterest income

228,290

112,996

110,355

560,166

426,770

Less: Noninterest expense

226,858

197,995

203,450

822,005

778,860

Pre-tax, pre-provision income - FTE (Non-GAAP)

$

202,946

$

106,182

$

85,723

$

496,108

$

342,791

Net interest income earnings per share - diluted

$

4.03

$

3.84

$

3.51

$

15.12

$

13.67

Tax equivalent interest

0.14

0.14

0.13

0.55

0.49

Net interest income - FTE

4.17

3.98

3.64

15.67

14.16

Noninterest income

4.73

2.35

2.24

11.59

8.69

Less: Noninterest expense

4.70

4.12

4.14

17.00

15.87

Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP)

$

4.20

$

2.21

$

1.74

$

10.26

$

6.98

Pre-tax,pre-provisionincome - FTE UMB Financial Corporation Non-GAAPreconciliations:

(unaudited,dollars in thousands exceptper share data)

Three Months Ended

December September December Year Ended December 31, 31, 30, 31,

2020 2020 2019 2020 2019

Net interest $ 194,675 $ 184,384 $ 172,363 $ 731,229 $ 670,905 income

Adjustments toarrive at net interest income- FTE:

Tax equivalent 6,839 6,797 6,455 26,718 23,976 interest

Net interest $ 201,514 $ 191,181 $ 178,818 $ 757,947 $ 694,881 income - FTE

Noninterest 228,290 112,996 110,355 560,166 426,770 income

Less:Noninterest 226,858 197,995 203,450 822,005 778,860 expense

Pre-tax,pre-provision $ 202,946 $ 106,182 $ 85,723 $ 496,108 $ 342,791 income - FTE(Non-GAAP)



Net interestincome earnings $ 4.03 $ 3.84 $ 3.51 $ 15.12 $ 13.67 per share -diluted

Tax equivalent 0.14 0.14 0.13 0.55 0.49 interest

Net interest 4.17 3.98 3.64 15.67 14.16 income - FTE

Noninterest 4.73 2.35 2.24 11.59 8.69 income

Less:Noninterest 4.70 4.12 4.14 17.00 15.87 expense

Pre-tax,pre-provisionincome - FTE $ 4.20 $ 2.21 $ 1.74 $ 10.26 $ 6.98 earnings pershare - diluted(Non-GAAP)

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

(unaudited, dollars in thousands except share and per share data)

As of

December 31, 2020

December 31, 2019

Total shareholders' equity (GAAP)

$

3,016,948

$

2,606,440

Less: Intangible assets

Goodwill

180,867

180,867

Other intangibles, net

21,056

27,597

Total intangibles, net

201,923

208,464

Total tangible shareholders' equity (Non-GAAP)

$

2,815,025

$

2,397,976

Total shares outstanding

48,006,386

49,097,606

Ratio of total shareholders' equity (book value) per share

$

62.84

$

53.09

Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP)

58.64

48.84

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