tiprankstipranks
Trending News
More News >
UMB Financial Corp (UMBF)
NASDAQ:UMBF

UMB Financial (UMBF) AI Stock Analysis

Compare
91 Followers

Top Page

UM

UMB Financial

(NASDAQ:UMBF)

Rating:72Outperform
Price Target:
UMB Financial's overall stock score reflects its solid financial management and strategic growth through acquisitions, evidenced by the successful integration of Heartland. While technical indicators suggest caution due to potential overbought conditions, the company's reasonable valuation and positive earnings outlook provide a balanced investment case. Investors should monitor ongoing integration costs and economic conditions which could impact future performance.
Positive Factors
Financial Performance
Loan growth continues to outperform peers and expectations, with average loan balances up 3.7%.
Risk Management
UMBF's prudent risk management and high-quality credit culture provide downside support, especially amid recession fears.
Valuation
UMBF is trading at a 9% discount to peers, highlighting a potential undervaluation.
Negative Factors
Acquisition Concerns
Concerns exist that the acquisition of Heartland Financial will be less accretive than originally advertised.
Credit Risk
Heartland Financial update showed an increase in net charge offs, raising concerns about credit risk.
Earnings Outlook
The EPS outlook has been lowered modestly, driven by the waning HTLF balance sheet and increased proforma expense base.

UMB Financial (UMBF) vs. SPDR S&P 500 ETF (SPY)

UMB Financial Business Overview & Revenue Model

Company DescriptionUMB Financial Corporation operates as the bank holding company for the UMB Bank that provides various banking and other financial services. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, accounts receivable financing, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers asset management and healthcare service provided to institutional client; and fund administration and accounting, investor service and transfer agency, marketing and distribution, custody, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, and small business loan, as well as internet banking, ATM network, private banking, brokerage and insurance service, and advisory and trust service. It operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Iowa, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, and Wisconsin. The company was founded in 1913 and is headquartered in Kansas City, Missouri.
How the Company Makes MoneyUMB Financial makes money through multiple revenue streams driven by its diverse range of financial services. Its primary source of income is net interest income, generated from the difference between the interest earned on loans and the interest paid on deposits. Additionally, the company earns non-interest income from service charges on deposit accounts, trust and securities processing fees, and investment management fees. UMB Financial also benefits from its asset management and advisory services, which provide fee-based revenue. It maintains significant partnerships with various business and institutional clients, which contribute to its earnings. The company's strategic focus on cross-selling its diverse products to existing clients and expanding its client base further supports its revenue growth.

UMB Financial Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 7.66%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong growth in loans, deposits, and fee income following the Heartland acquisition. However, there are concerns related to merger-related expenses and the uncertain economic environment.
Q1-2025 Updates
Positive Updates
Successful Acquisition of Heartland
UMB Financial completed the acquisition of Heartland on January 31, adding over $14 billion in deposits and doubling its branch presence across 13 states.
Improvement in Key Financial Metrics
Operating efficiency ratio improved to 55.6% and operating ROA to 1.14%. Average loans increased by 27.8% to $32.3 billion, and average deposits increased by 32.3% to $50.3 billion on a linked quarter basis.
Strong Loan and Deposit Growth
Legacy UMB saw an 8.3% linked quarter annualized increase in loan balances and a 27.3% linked quarter annualized increase in total deposits.
Robust Fee Income Growth
Credit and debit card purchase volume reached $5.4 billion in the first quarter, up 18.6% year-over-year. Assets under administration increased 16% year-over-year to $559 billion.
Positive Momentum in Institutional Businesses
Corporate trust AUA grew 25% over the last twelve months to $48.6 billion, and strong pipeline opportunities exist in CLO Trustee and loan administration businesses.
Negative Updates
Significant Merger-Related Expenses
First quarter earnings included $62.1 million in day one provisioning and $54.2 million in merger-related and other non-recurring charges.
Impact from Tariffs and Economic Uncertainty
There is uncertainty related to tariffs and economic conditions, which could impact future financial performance.
Equity Investment Loss
Reported fee income was impacted by $5.2 million in mark-to-market losses on certain equity investments.
Company Guidance
In the first quarter of 2025, UMB Financial reported strong results, driven in part by the completion of their acquisition of Heartland. This acquisition added over $14 billion in deposits, doubling their branch presence across 13 states, and contributed to a 32.3% increase in average deposits to $50.3 billion. The cost synergies from the acquisition were on track, improving the operating efficiency ratio to 55.6% and the operating return on assets (ROA) to 1.14%. Excluding acquisition-related and non-recurring charges, net operating income available to common shareholders was $168.9 million, or $2.58 per share. Average loans grew by 27.8% to $32.3 billion, with legacy UMB loans increasing by 8.3% on a linked quarter basis. The company's net interest margin expanded, and they reported $62.1 million in day-one provisioning and $54.2 million in merger-related charges. Looking forward, UMB expects strong loan growth and continued integration benefits from Heartland, while maintaining asset quality, as evidenced by a low non-performing loans ratio of 8 basis points.

UMB Financial Financial Statement Overview

Summary
UMB Financial demonstrates strengths in cost management and a stable balance sheet with low leverage. However, challenges include inconsistent revenue growth and free cash flow, impacting the company's financial flexibility. Continued focus on improving profitability margins and cash flow conversion will be crucial for future stability and growth.
Income Statement
70
Positive
UMB Financial shows a strong gross profit margin indicating effective cost management, but the net profit margin has been fluctuating due to varying net income. The revenue growth rate is inconsistent, with a recent decline in TTM revenues compared to the previous annual report, which needs monitoring. EBIT and EBITDA margins have been absent or inconsistent, impacting profitability analysis.
Balance Sheet
75
Positive
The company maintains a relatively low debt-to-equity ratio, suggesting prudent financial leverage. Return on equity is satisfactory, but improvement is needed to enhance shareholder value. The equity ratio indicates a stable asset base relative to equity, although there could be potential risks if liabilities increase significantly.
Cash Flow
65
Positive
The cash flow statement reveals inconsistent free cash flow growth, with a recent decrease in free cash flow. The operating cash flow to net income ratio is relatively healthy, but the free cash flow to net income ratio indicates the need for improved cash flow conversion. Attention is needed to ensure healthy cash flow growth and liquidity.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.75B2.80B1.42B221.92M1.20B1.22B
Gross Profit
1.61B1.57B1.33B221.92M1.20B1.22B
EBIT
967.15M2.14B0.00750.71M429.06M338.89M
EBITDA
288.81M0.000.00586.03M487.57M401.69M
Net Income Common Stockholders
412.32M441.24M350.02M431.68M353.02M286.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
12.68B573.17M25.13B420.00K21.23B12.84B
Total Assets
44.01B50.41B44.01B38.51B42.69B33.13B
Total Debt
4.30B385.29M1.38B381.31M271.54M269.60M
Net Debt
-1.30B-187.88M-4.22B-1.30B-8.98B-3.27B
Total Liabilities
40.91B46.94B40.91B381.31M271.54M269.60M
Stockholders Equity
3.10B3.47B3.10B2.67B3.15B3.02B
Cash FlowFree Cash Flow
147.31M201.08M445.69M717.84M500.39M313.38M
Operating Cash Flow
532.16M225.29M472.60M769.55M534.08M373.60M
Investing Cash Flow
-3.42B-3.26B-1.27B-3.85B-4.24B-4.49B
Financing Cash Flow
4.76B5.96B4.77B-4.58B9.42B5.95B

UMB Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price105.31
Price Trends
50DMA
98.84
Positive
100DMA
105.20
Positive
200DMA
107.39
Negative
Market Momentum
MACD
1.81
Positive
RSI
57.98
Neutral
STOCH
31.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UMBF, the sentiment is Positive. The current price of 105.31 is above the 20-day moving average (MA) of 102.97, above the 50-day MA of 98.84, and below the 200-day MA of 107.39, indicating a neutral trend. The MACD of 1.81 indicates Positive momentum. The RSI at 57.98 is Neutral, neither overbought nor oversold. The STOCH value of 31.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UMBF.

UMB Financial Risk Analysis

UMB Financial disclosed 35 risk factors in its most recent earnings report. UMB Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The market price for the Company's common stock following the acquisition of HTLF may be affected by factors different from those that historically have affected the Company's common stock. Q4, 2024
2.
The dilution caused by the issuance of shares of the Company's common stock in connection with the merger may adversely affect the market price of the Company's common stock. Q4, 2024
3.
The Company has incurred, and expects to continue to incur, significant transaction and acquisition-related costs in connection with the acquisition of HTLF. Q4, 2024

UMB Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$8.39B17.487.77%0.85%8.09%-11.31%
78
Outperform
$6.87B9.0713.06%3.61%4.84%28.90%
PBPB
76
Outperform
$6.65B13.336.83%3.27%9.02%20.88%
75
Outperform
$7.91B11.6911.58%1.57%6.79%4.65%
CMCMA
75
Outperform
$7.38B10.6511.11%5.05%-9.81%5.22%
72
Outperform
$7.99B13.248.33%1.56%20.50%5.69%
64
Neutral
$12.67B9.747.58%17015.08%12.21%-6.96%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UMBF
UMB Financial
105.31
25.99
32.77%
CMA
Comerica
57.39
9.42
19.64%
PNFP
Pinnacle Financial Partners
108.15
29.76
37.96%
PB
Prosperity Bancshares
70.73
11.13
18.67%
WTFC
Wintrust Financial
121.18
25.33
26.43%
ZION
Zions Bancorporation National Association
47.71
6.56
15.94%

UMB Financial Corporate Events

M&A TransactionsDividends
UMB Financial Announces Dividend on Preferred Stock
Neutral
Mar 12, 2025

On March 12, 2025, UMB Financial Corporation announced that its Board of Directors approved a dividend of $175 per share on its Series A 7.00% Preferred Stock, equating to $0.4375 per depositary share, payable on April 15, 2025, to stockholders of record as of March 31, 2025. Additionally, following UMB Financial’s acquisition of Heartland Financial on January 31, 2025, shares of Heartland’s Series E Preferred Stock were converted to UMB’s Preferred Stock, maintaining the same terms for stockholders.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.