UMB Financial (NASDAQ:UMBF) Reports Upbeat Q2

Regional banking company UMB Financial (NASDAQ:UMBF) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 76.7% year on year to $689.2 million. Its non-GAAP profit of $2.96 per share was 24.7% above analysts’ consensus estimates.

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“Our strong second quarter financial results were once again facilitated by strong growth on both sides of our balance sheet, outsized fee income gains, improved asset quality metrics and improved operating leverage,” said Mariner Kemper, UMB Financial Corporation chairman and chief executive officer.

Company Overview

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ:UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

Sales Growth

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.

Thankfully, UMB Financial’s 13.2% annualized revenue growth over the last five years was exceptional. Its growth beat the average bank company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. UMB Financial’s annualized revenue growth of 19.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, UMB Financial reported magnificent year-on-year revenue growth of 76.7%, and its $689.2 million of revenue beat Wall Street’s estimates by 8.6%. The growth this quarter was largely due to the "continued benefits of the acquired Heartland franchise".

Net interest income made up 62.4% of the company’s total revenue during the last five years, meaning lending operations are UMB Financial’s largest source of revenue.

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

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Tangible Book Value Per Share (TBVPS)

Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.

UMB Financial’s TBVPS grew at a sluggish 2.2% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 6.7% annually over the last two years from $52.54 to $59.80 per share.

Over the next 12 months, Consensus estimates call for UMB Financial’s TBVPS to grow by 12.7% to $67.38, top-notch growth rate.

Key Takeaways from UMB Financial’s Q2 Results

We were impressed by how significantly UMB Financial blew past analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 2.9% to $112.97 immediately after reporting.

UMB Financial may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.