UMB Financial Corporation (NASDAQ:UMBF) Q4 2022 Earnings Conference Call January 25, 2023 9:30 AM ET

Company Participants

Kay Gregory - Investor Relations

Mariner Kemper - President and 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

Hello, everyone, and welcome to the UMB Financial Fourth Quarter 2022 Financial Results Call. My name is Davey, and I'll be coordinating your call today. [Operator Instructions]

I would now like to hand the call over to your host, Kay Gregory with Investor Relations to begin. So, Kay, please go ahead.

Kay Gregory

Good morning, and welcome to our fourth quarter and year-end 2022 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 42 of our presentation.

Actual results may differ from those set forth in 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, Kaye, and Happy New Year, everyone. Thanks for joining us today. I'll make some brief comments about our quarter and 2022 and then turn the call over to Ram for a review of our results in more detail before we take your questions.

Our fourth quarter results closed out another record year of earnings driven by strong balance sheet growth, solid credit metrics [Technical Difficulty] from our differentiated fee income sources. Net income for the fourth quarter was $100.2 million or $2.06 per share. For the full-year 2022, net income of $431.7 million or $8.86 per share, an increase of 22.3%, compared to 2021.

Operating pre-tax, pre-provision EPS for the year was $11.73 per share, compared to $9.26 per share for the prior year. Net interest income for the fourth quarter increased 5% sequentially. This was driven largely by an over $1 billion increase in average loans, which is a 21% increase on an annualized basis, the impact of rising rates, positive asset mix shift and loan fees. This is partially negated by an increase in deposit costs, largely driven by deposit initiatives to attract new to bank customers, particularly in our commercial business. Additionally, we saw some continued market pressures in our rate sensitive institutional business.