UMB Financial Corporation (NASDAQ:UMBF) Q2 2023 Earnings Conference Call July 26, 2023 10:30 AM ET

Company Participants

Kay Gregory - Senior Vice President and Director, Investor Relations

Mariner Kemper - President & Chief Executive Officer

Ram Shankar - Chief Financial Officer

Jim Rine - Chief Executive Officer-UMB Bank

Conference Call Participants

Chris McGratty - KBW

Nathan Race - Piper Sandler

Operator

Good morning, or good afternoon all, and welcome to the UMB Financial Second Quarter Investor Call. My name is Adam, and I'll be your operator for today. [Operator Instructions]

I would now hand the floor to Kay Gregory, SVP and Director of Investor Relations to begin. So, Kay, please go ahead when you're ready.

Kay Gregory

Good morning, and welcome to our second quarter 2023 call. Mariner Kemper, President and CEO; and Ram Shankar, CFO, will share a few comments about our results. Jim Rine, CEO of UMB Bank; and Tom Terry, Chief Credit Officer, will also be available for the question-and-answer session.

Before we begin, let me remind you that today's presentation contains forward-looking statements, which are subject to assumptions, risks and uncertainties. These risks are included in our SEC filings and are summarized on Slide 47 of our presentation. Actual results may differ from those set forth in any forward-looking statements, which speak only as of today. We undertake no obligation to update them, except to the extent required by securities laws. All earnings per share metrics discussed on this call are on a diluted share basis. Our presentation materials and press release are available online at investorrelations.umb.com.

Now, I'll turn the call over to Mariner Kemper.

Mariner Kemper

Thank you, Kay, and good morning. Thanks, everyone, for joining us today. Despite the exaggerated noise from the recent crisis that is largely subsided, our second quarter results reflect strong trends highlighted by strong asset quality and overall portfolio health, strong and consistent fee income that helps us navigate this elevated interest rate environment, continue to get prudent opportunities in loan growth, particularly in commercial and industrial lending, strong client engagement and traction across our diverse lines of business. These solid results in several areas were masked by higher interest expense, driven by the Federal Reserve monetary tightening actions and the resulting increases in funding costs and the interest rate environment we live with today.

As noted in our last call, the deposit pricing pressures the industry is experiencing is not dissimilar to the price of commodity or raw materials for other industries. As other industries would, we are reacting to our cost of raw material by pricing our products for this environment. As we have noted, 62% of our existing loans also reprice with movements in rates.