UMB Financial Corporation (NASDAQ:UMBF) Q3 2022 Earnings Conference Call October 26, 2022 9:30 AM ET

Company Participants

Kay Gregory – UMB Investor Relations

Mariner Kemper – President and Chief Executive Officer

Ram Shankar – Chief Financial Officer

Conference Call Participants

Jared Shaw – Wells Fargo

Chris McGratty – KBW

Nathan Race – Piper Sandler

John Rodis – Janney

David Long – Raymond James

Operator

Good morning. Thank you for attending today’s UMB Financial Third Quarter 2022 Results Conference Call. My name is Forum [ph] and I will be your moderator for today’s call. All lines will remain muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

It is now my pleasure to pass the call over to our host, Kay Gregory, UMB Investor Relations.

Kay Gregory

Good morning, and welcome to our third quarter 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 43 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, Kay, and thanks, everyone for joining us today. Yesterday afternoon we reported our third quarter results reflecting positive momentum across our business lines. Highlights include robust loan growth coupled with strong asset quality and solid core revenue growth.

Net income for the third quarter was $88 million or $1.81 per share. Operating pre-tax, pre-provision income was $131.2 million or $2.70 per share. Net interest income increased 3.9% sequentially driven by a nearly $1 billion increase in average loans, positive asset mix and the impact of rising rates.

This was partially negated by increased deposit costs, largely driven by a transition from DDAs to rate bearing accounts, which is typical in an interest rate cycle such as the one we’re seeing today. The timing of deposit initiatives to attract new to bank customers and each of our business lines, the availability of attractive short tenure investment options and the impact of clients reacting to typical market pressures in a rising rate environment, particularly on our rate sensitive institutional businesses.