UMB Financial Corporation Reports Second Quarter Net Income of $90.1 Million

Second Quarter 2023 Financial Highlights

• GAAP net income of $90.1 million, or $1.85 per diluted share.
• Net operating income of $93.8 million, or $1.93 per diluted share.
• Average loans increased 17.3% on a linked-quarter, annualized basis.
• Deposit balances at June 30, 2023 totaled $33.5 billion, up from $31.9 billion at March 31, 2023.
• At June 30, 2023, total estimated uninsured deposits represented approximately 65.5% of total deposits. When adjusted to exclude affiliate (company-owned) and collateralized deposits, estimated uninsured deposits were approximately 40.9% of total deposits.
• Noninterest income increased 6.1% as compared to the linked quarter, equal to 38.0% of total revenue.
• Credit quality remained strong, with net recoveries of $0.1 million and nonperforming loans of 0.09% of total loans.

KANSAS CITY, Mo.--(BUSINESS WIRE)--UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the second quarter of 2023 of $90.1 million, or $1.85 per diluted share, compared to $92.4 million, or $1.90 per diluted share, in the first quarter of 2023 (linked quarter) and $137.6 million, or $2.83 per diluted share, in the second quarter of 2022. The results for the second quarter of 2022 include a pre-tax gain of $66.2 million on the sale of the company's entire investment in Visa Inc. Class B common shares, and a pre-tax $5.0 million contribution to the company's charitable foundation.

Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $93.8 million, or $1.93 per diluted share, for the second quarter of 2023, compared to $92.8 million, or $1.91 per diluted share, for the linked quarter and $137.6 million, or $2.83 per diluted share, for the second quarter of 2022. Operating pre-tax, pre-provision income (operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $127.9 million, or $2.63 per diluted share, for the second quarter of 2023, compared to $135.4 million, or $2.78 per diluted share, for the linked quarter, and $187.1 million, or $3.84 per diluted share, for the second quarter of 2022. These operating PTPP results represent decreases of 5.5% on a linked-quarter basis and 31.6%, compared to the second quarter of 2022.

“In the second quarter of 2023, the positive impacts of fee income trends, a double-digit annualized increase in average loan balances, excellent asset quality metrics and expense management were masked by higher interest expense driven by the Federal Reserve’s monetary tightening actions as well as expected increases in funding costs in this high interest rate environment,” said Mariner Kemper, chairman, president and chief executive officer. “Average loans increased 17.3% on a linked-quarter annualized basis with nearly half of the increase driven by commercial & industrial loan balances. Credit metrics remain strong as evidenced by net recoveries this quarter and nine basis points of non-performing loans to total loans. Noninterest income was $138.1 million for the quarter. It's important to note that noninterest income for the same quarter in 2022 included a pre-tax gain of $66.2 million on the sale of our Visa Inc. Class B common shares. Finally, period-end deposit balances at quarter end were $33.5 billion, an increase of $1.6 billion, or 5.0%, as compared to March 31, 2023.”

Second Quarter 2023 earnings discussion

Summary of quarterly financial results	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
	Q2			Q1			Q2
	2023			2023			2022
Net income (GAAP)	$	90,110		$	92,437		$	137,556
Earnings per share (diluted)		1.85			1.90			2.83
Operating pre-tax, pre-provision income (Non-GAAP)(i)		127,929			135,369			187,051
Operating pre-tax, pre-provision earnings per share (diluted)		2.63			2.78			3.84
Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i)		134,504			141,924			193,329
Operating pre-tax, pre-provision earnings per share - FTE (diluted)		2.77			2.91			3.97
Net operating income (Non-GAAP)(i)		93,841			92,836			137,596
Operating earnings per share (diluted)		1.93			1.91			2.83
GAAP
Return on average assets		0.90	%		0.97	%		1.47	%
Return on average equity		12.56			13.76			20.83
Efficiency ratio		65.59			63.12			53.08
Non-GAAP (i)
Operating return on average assets		0.93	%		0.98	%		1.47	%
Operating return on average equity		13.08			13.82			20.84
Operating return on average tangible equity excluding AOCI		11.63			12.21			18.65
Operating efficiency ratio		64.24			62.98			53.06

(i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release.

Summary of year-to-date financial results	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)	June			June
	YTD			YTD
	2023			2022
Net income (GAAP)	$	182,547		$	243,519
Earnings per share (diluted)		3.75			4.99
Operating pre-tax, pre-provision income (Non-GAAP)(i)		263,298			306,451
Operating pre-tax, pre-provision earnings per share (diluted)		5.41			6.29
Operating pre-tax, pre-provision income - FTE (Non-GAAP)(i)		276,428			319,128
Operating pre-tax, pre-provision earnings per share - FTE (diluted)		5.68			6.55
Net operating income (Non-GAAP)(i)		186,677			243,669
Operating earnings per share (diluted)		3.83			4.99
GAAP
Return on average assets		0.93	%		1.28	%
Return on average equity		13.14			17.60
Efficiency ratio		64.34			58.03
Non-GAAP (i)
Operating return on average assets		0.95	%		1.28	%
Operating return on average equity		13.44			17.61
Operating return on average tangible equity excluding AOCI		11.91			16.86
Operating efficiency ratio		63.61			58.00

(i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release.

Summary of revenue	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q2			Q1			Q2			CQ vs.			CQ vs.
	2023			2023			2022			LQ			PY
Net interest income	$	225,611		$	241,696		$	224,791		$	(16,085	)	$	820
Noninterest income:
Trust and securities processing		61,589			62,359			58,886			(770	)		2,703
Trading and investment banking		4,800			5,308			7,123			(508	)		(2,323	)
Service charges on deposit accounts		21,381			21,159			20,835			222			546
Insurance fees and commissions		225			274			245			(49	)		(20	)
Brokerage fees		13,604			13,676			12,391			(72	)		1,213
Bankcard fees		18,579			18,172			17,840			407			739
Investment securities gains (losses), net		900			(5,324	)		60,720			6,224			(59,820	)
Other		17,004			14,576			(1,705	)		2,428			18,709
Total noninterest income	$	138,082		$	130,200		$	176,335		$	7,882		$	(38,253	)
Total revenue	$	363,693		$	371,896		$	401,126		$	(8,203	)	$	(37,433	)
Net interest income (FTE)	$	232,186		$	248,251		$	231,069
Net interest margin (FTE)		2.44	%		2.76	%		2.60	%
Total noninterest income as a % of total revenue		38.0			35.0			44.0

Net interest income

• Second quarter 2023 net interest income totaled $225.6 million, a decrease of $16.1 million, or 6.7% from the linked quarter, driven by higher interest expense primarily due to unfavorable mix shift in the composition of liabilities, combined with higher interest rates. This decrease was partially offset by continued growth in average loans and higher liquidity balances, coupled with increased yields.
• Average earning assets increased $1.8 billion, or 4.9% from the linked quarter, largely driven by an increase of $1.2 billion in interest-bearing due from banks and an increase of $920.0 million in average loans, partially offset by decreases of $174.7 million in federal funds sold and resell agreements and $143.4 million in average securities.
• Average interest-bearing liabilities increased $3.1 billion, or 13.3% from the linked quarter, primarily driven by increases of $1.9 billion in borrowed funds, primarily short-term borrowings, and $1.3 billion in interest-bearing deposits. Average noninterest-bearing deposits decreased $1.4 billion, or 11.6% as compared to the linked quarter.
• Net interest margin for the second quarter was 2.44%, a decrease of 32 basis points from the linked quarter, driven by increased cost and mix of interest-bearing liabilities, partially offset by improved loan yields, the benefit of free funds, and earning asset mix changes. The cost of interest-bearing liabilities increased 67 basis points to 3.58%. Total cost of funds increased 64 basis points from the linked quarter to 2.56%. Average loan yields increased 32 basis points while earning asset yields increased 29 basis points from the linked quarter.
• On a year-over-year basis, net interest income increased $0.8 million, or 0.4%, driven by a $3.9 billion, or 21.1%, increase in average loans, partially offset by higher interest costs due to unfavorable mix shift in the composition of liabilities as well as the impact of higher short-term interest rates.
• Compared to the second quarter of 2022, average earning assets increased $2.5 billion, or 7.1%, largely driven by the increase in average loans noted above, partially offset by a decrease of $824.5 million in federal funds sold and resell agreements and a decrease of $589.2 million in average securities.
• Average deposits decreased 0.4% compared to the second quarter of 2022. Average noninterest-bearing demand deposit balances decreased 25.9% compared to the second quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 33.5% of total deposits, compared to 37.8% in the linked quarter and 45.0% in the second quarter of 2022.
• Average borrowed funds increased $1.9 billion as compared to the linked quarter and $2.9 billion as compared to the second quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window.

Noninterest income

• Second quarter 2023 noninterest income increased $7.9 million, or 6.1%, on a linked-quarter basis, largely due to:
  • An increase of $6.2 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter and increased valuation of the company's equity investments in the second quarter.
  • An increase of $2.4 million in other income, primarily related to a $4.0 million gain on sale of other assets recorded in the second quarter, partially offset by a decrease of $1.3 million in derivative income.
  • These increases were partially offset by a decrease of $0.9 million in corporate trust income, recorded in trust and securities processing.
• Compared to the prior year, noninterest income in the second quarter of 2023 decreased $38.3 million, or 21.7%, primarily driven by:
  • A decrease of $59.8 million in investment securities gains, primarily driven by the $66.2 million gain on sale of the company's investment in Visa Inc. Class B common shares in the second quarter of 2022. This was partially offset by an increase of $5.3 million in the valuation of the company's marketable securities.
  • A decrease of $2.3 million in trading and investment banking due to decreased trading volume.
  • These decreases were partially offset by the following increases:
    • An increase of $18.7 million in other income, driven by an increase of $13.8 million in company-owned life insurance income and a gain of $4.0 million on the sale of other assets recorded in the second quarter of 2023. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below.
    • Increases of $1.9 million and $1.1 million in fund services income and corporate trust income, both recorded in trust and securities processing.
    • An increase of $1.2 million in brokerage income, largely driven by increased 12b-1 fee income.

Noninterest expense

Summary of noninterest expense	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q2		Q1		Q2		CQ vs.			CQ vs.
	2023		2023		2022		LQ			PY
Salaries and employee benefits	$	143,312	$	142,498	$	121,390	$	814		$	21,922
Occupancy, net		11,746		12,177		11,976		(431	)		(230	)
Equipment		17,086		17,849		18,315		(763	)		(1,229	)
Supplies and services		4,195		3,875		3,492		320			703
Marketing and business development		7,124		5,335		5,308		1,789			1,816
Processing fees		26,572		23,240		19,338		3,332			7,234
Legal and consulting		7,059		7,285		11,265		(226	)		(4,206	)
Bankcard		8,307		7,133		5,880		1,174			2,427
Amortization of other intangible assets		2,117		2,298		1,225		(181	)		892
Regulatory fees		6,123		5,551		3,464		572			2,659
Other		7,032		9,811		12,474		(2,779	)		(5,442	)
Total noninterest expense	$	240,673	$	237,052	$	214,127	$	3,621		$	26,546

• Noninterest expense for the second quarter of 2023 was $240.7 million, an increase of $3.6 million, or 1.5%, from the linked quarter and an increase of $26.5 million, or 12.4%, from the second quarter of 2022. Operating noninterest expense, a non-GAAP financial measure reconciled later in this release to noninterest expense, the nearest comparable GAAP measure, was $235.8 million for the second quarter of 2023, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $21.7 million, or 10.1%, from the second quarter of 2022.
• The linked-quarter increase in GAAP noninterest expense was driven by:
  • Increases of $3.3 million in processing fees and $1.8 million in marketing and business development expense due to the ongoing modernization of the company's core systems and timing of multiple projects, respectively. The increase in marketing and business development expense was also partially driven by an increase in advertising for various projects and an increase in travel and entertainment expense.
  • An increase of $0.8 million in salaries and employee benefits expense driven by an increase of $7.4 million in salary and bonus expense, partially offset by a decrease of $6.6 million in employee benefits. The increase in salary and bonus expense was due to an increase of $4.4 million in severance expense and higher salary expense related to annual merit increases beginning in the second quarter. The decrease in employee benefits was driven by the seasonal decrease of $8.0 million in payroll taxes, insurance, and 401(k) expense, offset by an increase in other employee benefits recorded in the second quarter.
  • These increases were partially offset by a decrease of $2.0 million in operational losses as compared to the linked quarter.
• The year-over-year increase in GAAP noninterest expense was driven by:
  • An increase of $21.9 million in salaries and employee benefits expense, driven primarily by increases of $14.5 in employee benefits expense and $7.4 million in salaries and bonus expense. The increase in employee benefits expense is due to increases of $12.5 million in deferred compensation plan expense and $1.3 million in payroll taxes, insurance, and 401(k) expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. The increase in salaries and bonus expense is due to an increase of $4.8 million in severance expense and higher employee salaries as compared to the second quarter of 2022.
  • An increase of $7.2 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects.
  • An increase of $2.7 million in regulatory fees expense driven by higher deposit insurance expense.
  • These increases were offset by a decrease of $5.4 million in other expense primarily due to the $5.0 million charitable contribution recorded in the second quarter of 2022 mentioned above.

Income taxes

• The company’s effective tax rate was 17.6% for the six months ended June 30, 2023, compared to 18.7% for the same period in 2022. The decrease in the effective tax rate in 2023 is primarily attributable to a larger portion of income being earned from tax-exempt municipal securities.

Balance sheet

• Average total assets for the second quarter of 2023 were $40.4 billion compared to $38.5 billion for the linked quarter and $37.6 billion for the same period in 2022.

Summary of average loans and leases - QTD Average					UMB Financial Corporation
(unaudited, dollars in thousands)
	Q2		Q1		Q2		CQ vs.			CQ vs.
	2023		2023		2022		LQ			PY
Commercial and industrial	$	9,724,300	$	9,287,319	$	7,918,552	$	436,981		$	1,805,748
Specialty lending		574,220		564,633		518,575		9,587			55,645
Commercial real estate		8,178,463		7,812,140		6,569,784		366,323			1,608,679
Consumer real estate		2,833,739		2,738,184		2,458,815		95,555			374,924
Consumer		139,705		136,571		148,412		3,134			(8,707	)
Credit cards		485,749		453,704		428,167		32,045			57,582
Leases and other		255,425		279,049		275,638		(23,624	)		(20,213	)
Total loans	$	22,191,601	$	21,271,600	$	18,317,943	$	920,001		$	3,873,658

• Average loans for the second quarter of 2023 increased $920.0 million, or 4.3%, on a linked-quarter basis and $3.9 billion, or 21.1%, compared to the second quarter of 2022.

Summary of average securities - QTD Average	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q2		Q1		Q2		CQ vs.			CQ vs.
	2023		2023		2022		LQ			PY
Securities available for sale:
U.S. Treasury	$	797,104	$	783,170	$	639,161	$	13,934		$	157,943
U.S. Agencies		189,091		171,825		172,798		17,266			16,293
Mortgage-backed		3,813,234		3,938,137		4,764,452		(124,903	)		(951,218	)
State and political subdivisions		1,319,398		1,356,785		1,891,377		(37,387	)		(571,979	)
Corporates		349,318		364,854		377,586		(15,536	)		(28,268	)
Collateralized loan obligations		348,078		348,477		247,639		(399	)		100,439
Total securities available for sale	$	6,816,223	$	6,963,248	$	8,093,013	$	(147,025	)	$	(1,276,790	)
Securities held to maturity:
U.S. Agencies	$	123,135	$	123,106	$	65,964	$	29		$	57,171
Mortgage-backed		2,878,657		2,934,113		2,892,986		(55,456	)		(14,329	)
State and political subdivisions		2,822,218		2,814,912		2,240,018		7,306			582,200
Total securities held to maturity	$	5,824,010	$	5,872,131	$	5,198,968	$	(48,121	)	$	625,042
Trading securities	$	12,538	$	9,258	$	10,190	$	3,280		$	2,348
Other securities		407,754		359,238		347,527		48,516			60,227
Total securities	$	13,060,525	$	13,203,875	$	13,649,698	$	(143,350	)	$	(589,173	)

• Average total securities decreased 1.1% on a linked-quarter basis and decreased 4.3% compared to the second quarter of 2022.
• At June 30, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio was $765.9 million, or 10.3% of the $7.4 billion amortized cost value. At June 30, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity was $576.4 million, or 9.9% of the $5.8 billion amortized cost value.
• During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $226.7 million as of June 30, 2023 and was included in the amortized cost balance of held-to-maturity securities.
• At June 30, 2023, an after-tax gain of $56.9 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, nine of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds.

Summary of average deposits - QTD Average				UMB Financial Corporation
(unaudited, dollars in thousands)
	Q2			Q1			Q2			CQ vs.			CQ vs.
	2023			2023			2022			LQ			PY
Deposits:
Noninterest-bearing demand	$	10,535,325		$	11,919,277		$	14,209,159		$	(1,383,952	)	$	(3,673,834	)
Interest-bearing demand and savings		17,463,022			18,427,662			16,808,998			(964,640	)		654,024
Time deposits		3,476,616			1,215,506			570,812			2,261,110			2,905,804
Total deposits	$	31,474,963		$	31,562,445		$	31,588,969		$	(87,482	)	$	(114,006	)
Noninterest bearing deposits as % of total		33.5	%		37.8	%		45.0	%

• Average deposits decreased 0.3% on a linked-quarter basis and decreased 0.4% compared to the second quarter of 2022.
• As of June 30, 2023, the total estimated uninsured deposits were $22.0 billion or approximately 65.5% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.7 billion and represented approximately 40.9% of total deposits.

Capital

Capital information	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
	June 30, 2023			March 31, 2023			June 30, 2022
Total equity	$	2,831,628		$	2,814,659		$	2,642,888
Accumulated other comprehensive loss, net		(685,831	)		(626,776	)		(564,803	)
Book value per common share		58.36			58.03			54.71
Tangible book value per common share (Non-GAAP)(i)		52.54			52.17			50.64
Regulatory capital:
Common equity Tier 1 capital	$	3,273,841		$	3,196,111		$	3,055,747
Tier 1 capital		3,273,841			3,196,111			3,055,747
Total capital		3,870,101			3,776,407			3,473,040
Regulatory capital ratios:
Common equity Tier 1 capital ratio		10.65	%		10.57	%		11.44	%
Tier 1 risk-based capital ratio		10.65			10.57			11.44
Total risk-based capital ratio		12.59			12.49			13.00
Tier 1 leverage ratio		8.16			8.35			8.17

(i) See reconciliation of Non-GAAP measures to their nearest comparable GAAP measures later in this release.

• At June 30, 2023, 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)
	Q2			Q1			Q4			Q3			Q2
	2023			2023			2022			2022			2022
Net (recoveries) charge-offs - total loans	$	(139	)	$	4,643		$	2,189		$	1,173		$	28,128
Net loan (recoveries) charge-offs as a % of total average loans		(0.00	)%		0.09	%		0.04	%		0.02	%		0.62	%
Loans over 90 days past due	$	10,861		$	1,723		$	1,617		$	2,513		$	3,446
Loans over 90 days past due as a % of total loans		0.05	%		0.01	%		0.01	%		0.01	%		0.02	%
Nonaccrual and restructured loans	$	19,347		$	15,480		$	19,269		$	19,817		$	18,117
Nonaccrual and restructured loans as a % of total loans		0.09	%		0.07	%		0.09	%		0.10	%		0.10	%
Provision for credit losses	$	13,000		$	23,250		$	9,000		$	22,000		$	13,400

• Provision for credit losses for the second quarter totaled $13.0 million, a decrease of $10.3 million from the linked quarter and a decrease of $0.4 million from the second quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic variables in the current period as compared to the prior periods.
• Net recoveries for the second quarter totaled $0.1 million, compared to net charge-offs of $4.6 million, or 0.09%, of average loans in the linked quarter, and $28.1 million, or 0.62%, of average loans for the second quarter of 2022.

Dividend Declaration and Share Repurchase Authorization

At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on October 2, 2023, to shareholders of record at the close of business on September 11, 2023.

The Board also approved the repurchase of up to 1,000,000 shares of the company's common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2024 annual meeting of the company’s shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management.

Conference Call

The company plans to host a conference call to discuss its second quarter 2023 earnings results on Wednesday, July 26, 2023, at 9:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 835446. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 2Q 2023 Conference Call

A replay of the conference call may be heard through August 9, 2023, by calling (toll-free) 866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 506453. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we may 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, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, tangible book value per share, and operating return on average tangible equity excluding AOCI, 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, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, tangible book value per share, and operating return on average tangible equity excluding AOCI – 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- and severance-related items that management does not believe reflect the company’s fundamental operating performance.

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, 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, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, 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).

Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance expense.

Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance 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.

Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company’s average tangible shareholders’ equity exclusive of AOCI for the relevant period.

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, 2022, 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: 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; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. 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. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn.

Consolidated Balance Sheets	UMB Financial Corporation
(unaudited, dollars in thousands)
	June 30,
	2023			2022
ASSETS
Loans	$	22,483,542		$	18,972,158
Allowance for credit losses on loans		(222,161	)		(164,346	)
Net loans		22,261,381			18,807,812
Loans held for sale		3,819			750
Securities:
Available for sale		6,668,615			7,739,216
Held to maturity, net of allowance for credit losses		5,807,763			5,707,282
Trading securities		28,887			9,646
Other securities		428,149			342,543
Total securities		12,933,414			13,798,687
Federal funds sold and resell agreements		319,838			1,055,459
Interest-bearing due from banks		3,369,911			1,825,295
Cash and due from banks		431,527			360,242
Premises and equipment, net		255,127			257,729
Accrued income		190,387			144,874
Goodwill		207,385			182,225
Other intangibles, net		75,184			14,465
Other assets		1,195,069			1,060,303
Total assets	$	41,243,042		$	37,507,841
LIABILITIES
Deposits:
Noninterest-bearing demand	$	12,142,906		$	14,925,555
Interest-bearing demand and savings		18,184,063			16,007,087
Time deposits under $250,000		2,665,166			383,832
Time deposits of $250,000 or more		528,326			169,550
Total deposits		33,520,461			31,486,024
Federal funds purchased and repurchase agreements		2,050,583			2,661,283
Short-term debt		1,800,000			—
Long-term debt		382,280			272,505
Accrued expenses and taxes		256,845			182,185
Other liabilities		401,245			262,956
Total liabilities		38,411,414			34,864,953
SHAREHOLDERS' EQUITY
Common stock		55,057			55,057
Capital surplus		1,124,977			1,115,504
Retained earnings		2,681,448			2,384,454
Accumulated other comprehensive loss, net		(685,831	)		(564,803	)
Treasury stock		(344,023	)		(347,324	)
Total shareholders' equity		2,831,628			2,642,888
Total liabilities and shareholders' equity	$	41,243,042		$	37,507,841

Consolidated Statements of Income	UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2023		2022			2023			2022
INTEREST INCOME
Loans	$	342,994	$	169,919		$	651,435		$	319,389
Securities:
Taxable interest		54,587		47,295			107,636			90,677
Tax-exempt interest		25,550		23,538			50,856			47,393
Total securities income		80,137		70,833			158,492			138,070
Federal funds and resell agreements		3,889		3,497			9,540			5,947
Interest-bearing due from banks		34,206		4,207			50,372			6,664
Trading securities		154		114			288			299
Total interest income		461,380		248,570			870,127			470,369
INTEREST EXPENSE
Deposits		170,550		15,439			298,449			21,612
Federal funds and repurchase agreements		24,745		4,998			48,047			7,146
Other		40,474		3,342			56,324			6,465
Total interest expense		235,769		23,779			402,820			35,223
Net interest income		225,611		224,791			467,307			435,146
Provision for credit losses		13,000		13,400			36,250			6,900
Net interest income after provision for credit losses		212,611		211,391			431,057			428,246
NONINTEREST INCOME
Trust and securities processing		61,589		58,886			123,948			118,414
Trading and investment banking		4,800		7,123			10,108			12,563
Service charges on deposit accounts		21,381		20,835			42,540			45,477
Insurance fees and commissions		225		245			499			504
Brokerage fees		13,604		12,391			27,280			15,847
Bankcard fees		18,579		17,840			36,751			34,475
Investment securities gains (losses), net		900		60,720			(4,424	)		60,198
Other		17,004		(1,705	)		31,580			12,535
Total noninterest income		138,082		176,335			268,282			300,013
NONINTEREST EXPENSE
Salaries and employee benefits		143,312		121,390			285,810			252,024
Occupancy, net		11,746		11,976			23,923			24,208
Equipment		17,086		18,315			34,935			36,479
Supplies and services		4,195		3,492			8,070			6,754
Marketing and business development		7,124		5,308			12,459			10,240
Processing fees		26,572		19,338			49,812			37,781
Legal and consulting		7,059		11,265			14,344			18,176
Bankcard		8,307		5,880			15,440			12,447
Amortization of other intangible assets		2,117		1,225			4,415			2,296
Regulatory fees		6,123		3,464			11,674			6,946
Other		7,032		12,474			16,843			21,554
Total noninterest expense		240,673		214,127			477,725			428,905
Income before income taxes		110,020		173,599			221,614			299,354
Income tax expense		19,910		36,043			39,067			55,835
NET INCOME	$	90,110	$	137,556		$	182,547		$	243,519
PER SHARE DATA
Net income – basic	$	1.86	$	2.85		$	3.77		$	5.03
Net income – diluted		1.85		2.83			3.75			4.99
Dividends		0.38		0.37			0.76			0.74
Weighted average shares outstanding – basic		48,514,277		48,347,226			48,474,865			48,376,868
Weighted average shares outstanding – diluted		48,668,413		48,673,964			48,707,487			48,755,059

Consolidated Statements of Comprehensive Income	UMB Financial Corporation
(unaudited, dollars in thousands)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Net income	$	90,110		$	137,556		$	182,547		$	243,519
Other comprehensive (loss) income, before tax:
Unrealized gains and losses on debt securities:
Change in unrealized holding gains and losses, net		(87,505	)		(308,352	)		6,152			(931,262	)
Less: Reclassification adjustment for net losses included in net income		—			—			433			—
Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity		10,312			12,539			20,295			13,121
Change in unrealized gains and losses on debt securities		(77,193	)		(295,813	)		26,880			(918,141	)
Unrealized gains and losses on derivative hedges:
Change in unrealized gains and losses on derivative hedges, net		1,848			4,437			321			9,117
Less: Reclassification adjustment for net gains included in net income		(2,660	)		(1,090	)		(5,221	)		(1,941	)
Change in unrealized gains and losses on derivative hedges		(812	)		3,347			(4,900	)		7,176
Other comprehensive (loss) income, before tax		(78,005	)		(292,466	)		21,980			(910,965	)
Income tax benefit (expense)		18,950			70,791			(5,076	)		219,848
Other comprehensive (loss) income		(59,055	)		(221,675	)		16,904			(691,117	)
Comprehensive income (loss)	$	31,055		$	(84,119	)	$	199,451		$	(447,598	)

Consolidated Statements of Shareholders' Equity			UMB Financial Corporation
(unaudited, dollars in thousands except per share data)
	Common Stock		Capital Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance - January 1, 2022	$	55,057	$	1,110,520		$	2,176,998		$	126,314		$	(323,465	)	$	3,145,424
Total comprehensive income (loss)		—		—			243,519			(691,117	)		—			(447,598	)
Dividends ($0.74 per share)		—		—			(36,063	)		—			—			(36,063	)
Purchase of treasury stock		—		—			—			—			(31,806	)		(31,806	)
Issuances of equity awards, net of forfeitures		—		(6,630	)		—			—			7,309			679
Recognition of equity-based compensation		—		11,223			—			—			—			11,223
Sale of treasury stock		—		174			—			—			111			285
Exercise of stock options		—		217			—			—			527			744
Balance - June 30, 2022	$	55,057	$	1,115,504		$	2,384,454		$	(564,803	)	$	(347,324	)	$	2,642,888
Balance - January 1, 2023	$	55,057	$	1,125,949		$	2,536,086		$	(702,735	)	$	(347,264	)	$	2,667,093
Total comprehensive income		—		—			182,547			16,904			—			199,451
Dividends ($0.76 per share)		—		—			(37,185	)		—			—			(37,185	)
Purchase of treasury stock		—		—			—			—			(7,902	)		(7,902	)
Issuances of equity awards, net of forfeitures		—		(9,764	)		—			—			10,483			719
Recognition of equity-based compensation		—		8,455			—			—			—			8,455
Sale of treasury stock		—		115			—			—			140			255
Exercise of stock options		—		222			—			—			520			742
Balance - June 30, 2023	$	55,057	$	1,124,977		$	2,681,448		$	(685,831	)	$	(344,023	)	$	2,831,628

Average Balances / Yields and Rates	UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
	Three Months Ended June 30,
	2023						2022
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
Assets
Loans, net of unearned interest	$	22,191,601			6.20	%	$	18,317,943			3.72	%
Securities:
Taxable		9,228,103			2.37			9,825,114			1.93
Tax-exempt		3,819,884			3.36			3,814,394			3.13
Total securities		13,047,987			2.66			13,639,508			2.27
Federal funds and resell agreements		276,459			5.64			1,100,918			1.27
Interest bearing due from banks		2,707,740			5.07			2,632,307			0.64
Trading securities		12,538			5.37			10,190			5.35
Total earning assets		38,236,325			4.91			35,700,866			2.86
Allowance for credit losses		(216,876	)					(182,118	)
Other assets		2,345,714						2,043,977
Total assets	$	40,365,163					$	37,562,725
Liabilities and Shareholders' Equity
Interest-bearing deposits	$	20,939,638			3.27	%	$	17,379,810			0.36	%
Federal funds and repurchase agreements		2,336,929			4.25			2,658,219			0.75
Borrowed funds		3,137,267			5.17			272,254			4.92
Total interest-bearing liabilities		26,413,834			3.58			20,310,283			0.47
Noninterest-bearing demand deposits		10,535,325						14,209,159
Other liabilities		539,172						394,923
Shareholders' equity		2,876,832						2,648,360
Total liabilities and shareholders' equity	$	40,365,163					$	37,562,725
Net interest spread					1.33	%					2.39	%
Net interest margin					2.44						2.60

Average Balances / Yields and Rates	UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
	Six Months Ended June 30,
	2023						2022
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
Assets
Loans, net of unearned interest	$	21,734,142			6.05	%	$	17,842,153			3.61	%
Securities:
Taxable		9,288,392			2.34			9,644,345			1.90
Tax-exempt		3,832,505			3.36			3,926,444			3.08
Total securities		13,120,897			2.64			13,570,789			2.24
Federal funds and resell agreements		363,341			5.29			1,182,891			1.01
Interest bearing due from banks		2,127,343			4.77			3,965,267			0.34
Trading securities		10,907			5.77			15,484			4.70
Total earning assets		37,356,630			4.77			36,576,584			2.66
Allowance for credit losses		(206,559	)					(190,123	)
Other assets		2,292,479						1,966,176
Total assets	$	39,442,550					$	38,352,637
Liabilities and Shareholders' Equity
Interest-bearing deposits	$	20,294,984			2.97	%	$	17,964,006			0.24	%
Federal funds and repurchase agreements		2,399,090			4.04			2,815,130			0.51
Borrowed funds		2,174,157			5.22			271,994			4.79
Total interest-bearing liabilities		24,868,231			3.27			21,051,130			0.34
Noninterest-bearing demand deposits		11,223,478						14,117,879
Other liabilities		549,787						393,732
Shareholders' equity		2,801,054						2,789,896
Total liabilities and shareholders' equity	$	39,442,550					$	38,352,637
Net interest spread					1.50	%					2.32	%
Net interest margin					2.59						2.47

Business Segment Information	UMB Financial Corporation
(unaudited, dollars in thousands)
	Three Months Ended June 30, 2023
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	144,389	$	50,397	$	30,825		$	225,611
Provision for credit losses		11,055		234		1,711			13,000
Noninterest income		25,666		86,813		25,603			138,082
Noninterest expense		85,896		91,591		63,186			240,673
Income (loss) before taxes		73,104		45,385		(8,469	)		110,020
Income tax expense (benefit)		13,230		8,213		(1,533	)		19,910
Net income (loss)	$	59,874	$	37,172	$	(6,936	)	$	90,110
	Three Months Ended June 30, 2022
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	149,094	$	34,981		40,716		$	224,791
Provision for credit losses		12,067		89		1,244			13,400
Noninterest income		56,894		81,082		38,359			176,335
Noninterest expense		79,521		76,511		58,095			214,127
Income before taxes		114,400		39,463		19,736			173,599
Income tax expense		23,752		8,193		4,098			36,043
Net income	$	90,648	$	31,270	$	15,638		$	137,556
	Six Months Ended June 30, 2023
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	295,416	$	105,482	$	66,409		$	467,307
Provision for credit losses		32,099		331		3,820			36,250
Noninterest income		48,568		171,051		48,663			268,282
Noninterest expense		169,900		180,962		126,863			477,725
Income (loss) before taxes		141,985		95,240		(15,611	)		221,614
Income tax expense (benefit)		25,030		16,789		(2,752	)		39,067
Net income (loss)	$	116,955	$	78,451	$	(12,859	)	$	182,547
	Six Months Ended June 30, 2022
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	294,096	$	61,233	$	79,817		$	435,146
Provision for credit losses		5,027		240		1,633			6,900
Noninterest income		83,594		154,354		62,065			300,013
Noninterest expense		159,110		152,112		117,683			428,905
Income before taxes		213,553		63,235		22,566			299,354
Income tax expense		39,831		11,795		4,209			55,835
Net income	$	173,722	$	51,440	$	18,357		$	243,519

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. 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 June 30, 2023.

Non-GAAP Financial Measures

Net operating income Non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income (GAAP)	$	90,110		$	137,556		$	182,547		$	243,519
Adjustments:
Acquisition expense		18			—			57			—
Severance expense		4,891			52			5,377			197
Tax-impact of adjustments (i)		(1,178	)		(12	)		(1,304	)		(47	)
Total Non-GAAP adjustments (net of tax)		3,731			40			4,130			150
Net operating income (Non-GAAP)	$	93,841		$	137,596		$	186,677		$	243,669
Earnings per share - diluted (GAAP)	$	1.85		$	2.83		$	3.75		$	4.99
Acquisition expense		—			—			—			—
Severance expense		0.10			—			0.11			—
Tax-impact of adjustments (i)		(0.02	)		—			(0.03	)		—
Operating earnings per share - diluted (Non-GAAP)	$	1.93		$	2.83		$	3.83		$	4.99
GAAP
Return on average assets		0.90	%		1.47	%		0.93	%		1.28	%
Return on average equity		12.56			20.83			13.14			17.60
Non-GAAP
Operating return on average assets		0.93	%		1.47	%		0.95	%		1.28	%
Operating return on average equity		13.08			20.84			13.44			17.61

(i) Calculated using the company’s marginal tax rate of 24.0%.

Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Noninterest expense	$	240,673		$	214,127		$	477,725		$	428,905
Adjustments to arrive at operating noninterest expense (pre-tax):
Acquisition expense		18			—			57			—
Severance expense		4,891			52			5,377			197
Total Non-GAAP adjustments (pre-tax)		4,909			52			5,434			197
Operating noninterest expense (Non-GAAP)	$	235,764		$	214,075		$	472,291		$	428,708
Noninterest expense	$	240,673		$	214,127		$	477,725		$	428,905
Less: Amortization of other intangibles		2,117			1,225			4,415			2,296
Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)	$	238,556		$	212,902		$	473,310		$	426,609
Operating noninterest expense	$	235,764		$	214,075		$	472,291		$	428,708
Less: Amortization of other intangibles		2,117			1,225			4,415			2,296
Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)	$	233,647		$	212,850		$	467,876		$	426,412
Net interest income	$	225,611		$	224,791		$	467,307		$	435,146
Noninterest income		138,082			176,335			268,282			300,013
Less: Losses on sales of securities available for sale, net		—			—			(2	)		—
Total Non-GAAP Revenue (denominator A)	$	363,693		$	401,126		$	735,591		$	735,159
Efficiency ratio (numerator A/denominator A)		65.59	%		53.08	%		64.34	%		58.03	%
Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)		64.24			53.06			63.61			58.00

Operating pre-tax, pre-provision income non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands except per share data)
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net interest income (GAAP)	$	225,611	$	224,791	$	467,307	$	435,146
Noninterest income (GAAP)		138,082		176,335		268,282		300,013
Noninterest expense (GAAP)		240,673		214,127		477,725		428,905
Adjustments to arrive at operating noninterest expense:
Acquisition expense		18		—		57		—
Severance expense		4,891		52		5,377		197
Total Non-GAAP adjustments		4,909		52		5,434		197
Operating noninterest expense (Non-GAAP)		235,764		214,075		472,291		428,708
Operating pre-tax, pre-provision income (Non-GAAP)	$	127,929	$	187,051	$	263,298	$	306,451
Net interest income earnings per share - diluted (GAAP)	$	4.64	$	4.62	$	9.60	$	8.93
Noninterest income (GAAP)		2.84		3.62		5.51		6.16
Noninterest expense (GAAP)		4.95		4.40		9.81		8.80
Acquisition expense		—		—		—		—
Severance expense		0.10		—		0.11		—
Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP)	$	2.63	$	3.84	$	5.41	$	6.29

Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands except per share data)
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net interest income (GAAP)	$	225,611	$	224,791	$	467,307	$	435,146
Adjustments to arrive at net interest income - FTE:
Tax equivalent interest		6,575		6,278		13,130		12,677
Net interest income - FTE (Non-GAAP)		232,186		231,069		480,437		447,823
Noninterest income (GAAP)		138,082		176,335		268,282		300,013
Noninterest expense (GAAP)		240,673		214,127		477,725		428,905
Adjustments to arrive at operating noninterest expense:
Acquisition expense		18		—		57		—
Severance expense		4,891		52		5,377		197
Total Non-GAAP adjustments		4,909		52		5,434		197
Operating noninterest expense (Non-GAAP)		235,764		214,075		472,291		428,708
Operating pre-tax, pre-provision income - FTE (Non-GAAP)	$	134,504	$	193,329	$	276,428	$	319,128
Net interest income earnings per share - diluted (GAAP)	$	4.64	$	4.62	$	9.60	$	8.93
Tax equivalent interest		0.14		0.13		0.27		0.26
Net interest income - FTE (Non-GAAP)		4.78		4.75		9.87		9.19
Noninterest income (GAAP)		2.84		3.62		5.51		6.16
Noninterest expense (GAAP)		4.95		4.40		9.81		8.80
Acquisition expense		—		—		—		—
Severance expense		0.10		—		0.11		—
Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP)	$	2.77	$	3.97	$	5.68	$	6.55

Tangible book value non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)
	As of June 30,
	2023		2022
Total shareholders' equity (GAAP)	$	2,831,628	$	2,642,888
Less: Intangible assets
Goodwill		207,385		182,225
Other intangibles, net		75,184		14,465
Total intangibles, net		282,569		196,690
Total tangible shareholders' equity (Non-GAAP)	$	2,549,059	$	2,446,198
Total shares outstanding		48,517,750		48,305,286
Ratio of total shareholders' equity (book value) per share	$	58.36	$	54.71
Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP)		52.54		50.64

Operating return on average tangible equity excluding AOCI non-GAAP reconciliations:	UMB Financial Corporation
(unaudited, dollars in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Average total shareholders' equity (GAAP)	$	2,876,832		$	2,648,360		$	2,801,054		$	2,789,896
Less: Average intangible assets
Average goodwill		207,385			182,225			207,385			178,478
Average other intangibles, net		75,685			15,261			76,954			14,686
Average total intangibles, net		283,070			197,486			284,339			193,164
Average total tangible shareholders' equity (Non-GAAP)		2,593,762			2,450,874			2,516,715			2,596,732
Less: Average accumulated other comprehensive loss (AOCI)		(644,003	)		(507,740	)		(643,782	)		(318,119	)
Average total tangible shareholders' equity excluding AOCI (Non-GAAP)	$	3,237,765		$	2,958,614		$	3,160,497		$	2,914,851
Net operating income (Non-GAAP)	$	93,841		$	137,596		$	186,677		$	243,669
Non-GAAP
Operating return on average tangible equity excluding AOCI		11.63	%		18.65	%		11.91	%		16.86	%