UMBF Beats Q3 Earnings on Strong NII & Fee Income, Ups Dividend

UMB Financial Corp. UMBF reported third-quarter 2025 operating earnings per share of $2.70, which beat the Zacks Consensus Estimate of $2.48. The bottom line also compared favorably with $2.25 in the year-ago quarter.

The company delivered a strong quarterly performance, supported by organic growth within its legacy UMBF operations and the integration benefits of its January 2025 acquisition of Heartland Financial USA, Inc. The results were further bolstered by increases in net interest income (NII) and non-interest income. However, the overall performance was partially offset by deteriorating asset quality and elevated non-interest expenses.

Net income (GAAP basis) for UMBF was $180.4 million in the third quarter, soaring 64.5% from the year-ago quarter.

UMB Financial’s Revenues & Expenses Rise

Quarterly revenues (FTE) were $686.7 million, surging 66.4% year over year. Also, the top line beat the Zacks Consensus Estimate by 4.2%.

NII on an FTE basis was $483.4 million, a jump of 90.3% from the prior-year quarter. On an FTE basis, the net interest margin was 3.04%, up 58 bps year over year.  The increase was primarily driven by a rise in average earning assets due to rate and mix changes related to the acquisition of Heartland Financial.

Non-interest income was $203.3 million, up 28.1% year over year. The rise was primarily driven by an increase in trust and securities processing, and service charges on deposit accounts.

Non-interest expenses were $419.3 million, surging 66.1% year over year. Third-quarter 2025 expenses included $35.6 million in total acquisition-related and other non-recurring costs. Operating non-interest expenses (adjusted basis) were $385 million, up 53% year over year.

The efficiency ratio was 58.1%, up from the prior-year quarter’s 61.7%. A decline in the efficiency ratio indicates an increase in profitability.

UMBF’s Loans & Deposit Balances Rise

As of Sept. 30, 2025, average loans and leases were $37.1 billion, up 2% sequentially. Also, average deposits increased 2% year over year to $56.7 billion.

UMB Financial’s Credit Quality Deteriorates

The ratio of net charge-offs to average loans was 0.20% in the reported quarter compared with 0.14% in the prior-year quarter. 
 
Total non-accrual and restructured loans were $131.9 million compared with $19.3 million in the prior-year quarter. 
 
The provision for credit losses was $22.5 million in the third quarter of 2025 compared with $18 million in the prior-year quarter.

UMBF’s Capital Ratios: Mixed Bag

As of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 11.3% compared with 11.2% as of Sept. 30, 2024. The Tier 1 leverage ratio was 8.3% compared with 8.6% in the prior-year quarter. The total risk-based capital ratio was 13.1%, relatively unchanged from the year-ago quarter.

UMB Financial’s Profitability Ratios: Mixed Bag

Return on average assets at the third-quarter end was 1.04% compared with the year-ago quarter’s 1.01%.

The operating return on average common equity was 11.6% compared with 12.7% in the year-ago quarter.

UMBF Dividend Update

The company announced a quarterly dividend of 43 cents per share, representing an increase of 7.5% from the prior quarter and marking the 23rd dividend increase in the past 20 years. The dividend is payable Jan. 2, 2026, to shareholders of record as of Dec. 10, 2025.

Our Take on UMBF

UMB Financial posted robust third-quarter 2025 results, driven by solid NII and non-interest income growth, along with improving margins. The acquisition of Heartland Financial continues to provide meaningful scale, contributing to solid loan and deposit growth. While elevated expenses and weakening credit quality pose challenges, the company’s improved efficiency and profitability metrics underscore its ability to navigate a changing operating environment. Looking forward, the continued integration of Heartland Financial and prudent risk management will be the key to sustaining the performance momentum.

UMB Financial Corporation Price, Consensus and EPS Surprise

UMB Financial Corporation price-consensus-eps-surprise-chart | UMB Financial Corporation Quote

UMBF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Banks

Hancock Whitney Corp.’s HWC third-quarter 2025 earnings per share of $1.49 exceeded the Zacks Consensus Estimate of $1.41. Further, the bottom line rose 12% from the prior-year quarter.

HWC's results benefited from an increase in non-interest income and net interest income alongside lower provisions. Higher loans were another positive. However, higher adjusted expenses, alongside lower deposit balances, were headwinds. 

Popular, Inc. BPOP reported third-quarter 2025 earnings per share of $3.14, which surpassed the Zacks Consensus Estimate of $3.04. The bottom line compared favorably with $2.16 reported in the year-ago quarter.

BPOP's results benefited from a rise in net interest incom, fee income and loan balances. However, lower deposit balance, elevated operating expenses and higher provisions are headwinds.

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This article originally published on Zacks Investment Research (zacks.com).

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