Asked for expectations on fee income for the rest of the year, building on the strong Q1 performance.

Mariner Kemper stated that while no specific guidance can be given, the company expects continued strong performance from Fund Services, Corporate Trust, and the private investment group, with robust pipelines and ongoing share acquisition. “We continue to expect the same kind of performance from the team and the pipelines across all those businesses remain very strong to include the 2 that drive it really for our business and have for some time, which would be fund services. and Corporate Trust.”

Asked for an early read on updated capital rules, their impact on approaching $100 billion in assets, and the increased buyback activity.

Ram Shankar indicated a preliminary net positive read on updated capital rules due to RWA relief, despite AOCI inclusion. Mariner Kemper highlighted strong capital accretion and flexibility, positioning them well for approaching $100 billion. They opportunistically repurchased 178,000 shares in March. “Obviously, a lot of relief from risk-weighted assets. We're still studying it on going from 100% to 95% on some of the commercial relationships and LTV-based assignments on residential mortgages. And the negative is just the inclusion of AOCI. So I still think it's a net positive for us in terms of what it means to our CET1, our total capital ratios.”

Inquired about using buybacks as a continuous tool for managing excess capital, given strong internal generation and exceeding CET1 targets.

Mariner Kemper reiterated the philosophy: first priority is investing in loans due to strong pipelines and market opportunities. Next are tuck-in acquisitions for low-cost deposits. Buybacks and dividends are third, with buybacks being opportunistic and an expected dividend increase this year. “the first and highest best use of our capital is to put it into loans, and we're very successful at it. We don't see that fading away.”

UMBF

UMB Financial (UMBF) Q1 FY26 earnings call: guidance and Q&A

Q: Inquired about the sustainability of the $2.3 billion gross loan production and potential impacts from geopolitical risks or higher energy costs.

Mariner Kemper stated that strong pipelines are consistent with historical trends, not seasonal, and driven by strategy, officer capability, and market share opportunities across their footprint, including new markets. No impact from geopolitical risks or energy costs was noted. “I said the same thing every quarter for 22 years, which is the next quarter looks pretty good, and it is not seasonal at all.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 29, 2026

Source: earnings call transcript

Executive summary

UMB Financial Q1 FY26 — Strong Loan Growth, Margin Expansion, and Capital Build

UMB Financial delivered a strong Q1 FY26, marked by robust loan growth and significant core margin expansion, alongside continued capital build. The company addressed concerns regarding private credit exposure, clarifying its negligible direct lending risk and diversified asset servicing. Management emphasized its long-term strategy of organic growth, opportunistic capital returns, and leveraging technology for efficiency, expecting continued positive operating leverage.

Highlights

10.8% linked quarter annualized loan growth, boosted by $2.3 billion in gross production.
9 basis points of core margin expansion, driven by a 24 basis point decrease in the cost of interest-bearing deposits.
Assets under administration increased nearly $20 billion from the prior quarter to $565 billion.
Common equity Tier 1 ratio improved by 20 basis points to 11.16%.
Positive operating leverage of 6.4% on a linked-quarter basis and an operating efficiency ratio of 47.6%.

Concerns

Provision for credit losses of $27 million, driven mostly by the $1.4 billion increase in period-end loan balances.
Net charge-offs of 19 basis points.
Contractual accretion benefits expected to be lower, with $71 million for the remainder of 2026 and $79 million for 2027, compared to $51 million in Q1 FY26.

Guidance & targets

Category	Target	Timeline	Confidence
Operating leverage	Positive operating leverage high materiality	Full year 2026 · FY26	High
Operating expense	$383 million medium materiality	Q2 · FY26	Medium
Core net interest margin	Relatively flat high materiality	Q2 · FY26	Medium
Effective tax rate	Between 20% and 22% medium materiality	Full year 2026 · FY26	High
Dividend	Increase in dividend high materiality	This year · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Fund Services Strong performance and continued momentum. Assets Under Administration: $565 billionAUA change from prior quarter: Up nearly $20 billion	—	—	—	—
Private Credit (AUA) Represents a small portion of total AUA and fee income, with immaterial deposit impact. Beneficiary of capital movement within the private investing universe. Assets Under Administration: $43 billionPercentage of total AUA: 7.6%AUA change from prior quarter: Increased nearly 5%Annual fee income: $13 millionPercentage of annualized Q1 fee income: 1.6%	—	—	—	—

UMBF operating KPIs by quarter

UMBF operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Common equity tier 1 ratio (CET1)	11.16% Moving on, our capital levels continue to build with March 31 common equity Tier 1 ratio of 11.16%, a 20 basis point improvement from December. Source: earnings call transcript	11.45% On the capital front, levels continue to build with June 30 common equity Tier 1 ratio of 11.45%, a 29 basis point increase from March. Source: earnings call transcript	+0.3 pt
Net interest margin	3.38% Reported net interest margin for the first quarter was 3.38%. Source: earnings call transcript	3.32% Reported net interest margin for the second quarter was 3.32% excluding the 23 basis points contribution from purchase accounting adjustments, core margin was 3.09%, increasing 4 basis points sequentially. Source: earnings call transcript	-0.1 pt
Net interest margin Core	3.05% Excluding the 33 basis points contribution from purchase accounting adjustments, core margin was 3.05%, increasing 9 basis points sequentially. Source: earnings call transcript	3.09% Reported net interest margin for the second quarter was 3.32% excluding the 23 basis points contribution from purchase accounting adjustments, core margin was 3.09%, increasing 4 basis points sequentially. Source: earnings call transcript	0 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Risks & headwinds

Lower contractual accretion benefits Remainder of 2026, 2027

$71 million for remainder of 2026 and $79 million for 2027

Mitigation:Offset by strong operating leverage and balance sheet growth.

Private credit industry headlines exaggerating exposures and risks at regional banks Ongoing

Negligible direct lending exposure; $2.6 billion (6.6% of total loans) NDFI lending exposure, $300 million (<1% of loans) subscription lines; $43 billion (7.6% of AUA) related to private credit, generating $13 million (1.6% of Q1 fee income) annually.

Mitigation:Exposure is to high-quality and experienced operators with diversified holdings, strong credit structures, low leverage, and low loan-to-value metrics. Added disclosures to IR deck to clarify.

What to watch in Q2 FY26

Second quarter operating expense

Q2 FY26

Current $375.4M (Q1 operating noninterest expense, adjusted to $378M baseline)

Target In line with current consensus expectations of $383M

Why it matters

Expense discipline and operating leverage are key to profitability.

Looking ahead, we would expect second quarter operating expense to be in line with the current consensus expectations of $383 million.

Find out whether UMBF delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the sustainability of the $2.3 billion gross loan production and potential impacts from geopolitical risks or higher energy costs.

Mariner Kemper stated that strong pipelines are consistent with historical trends, not seasonal, and driven by strategy, officer capability, and market share opportunities across their footprint, including new markets. No impact from geopolitical risks or energy costs was noted.

“I said the same thing every quarter for 22 years, which is the next quarter looks pretty good, and it is not seasonal at all.”

asked by Jon Arfstrom · answered by J. Kemper

2 min read 6 chapters

Detailed narrative

Private Credit Exposure Clarification

Management proactively addressed market concerns regarding private credit, detailing that NDFI lending exposure is $2.6 billion, representing 6.6% of total loans. Only $300 million, or less than 1% of total loans, are in lower-risk subscription lines. Asset servicing related to private credit is $43 billion, which is 7.6% of total Assets Under Administration (AUA), generating $13 million in annual fee income, or 1.6% of Q1 fee income.

The company emphasized minimal risk due to high-quality operators, diversified holdings, strong credit structures, and low leverage at the fund level.

Capital Management and Flexibility

UMB's Common Equity Tier 1 (CET1) ratio improved by 20 basis points to 11.16% as of March 31. Management noted a preliminary positive read on updated capital rules, anticipating relief from risk-weighted assets. This strong capital position, coupled with rapid capital accretion, provides flexibility for organic growth, tuck-in acquisitions, and capital returns.

The company opportunistically repurchased approximately 178,000 shares in March and expects a dividend increase this year.

Robust Loan Growth and Pipeline Strength

The company reported 10.8% linked-quarter annualized loan growth, driven by $2.3 billion in gross production. Average Commercial & Industrial (C&I) balances saw 22% annualized growth, with strong activity noted in Texas and new markets such as California and Utah. The loan pipeline remains robust, and new money loan yields are between 6% and 6.25%, contributing positively to the core Net Interest Margin (NIM).

Deposit Dynamics and Funding Costs

Average deposits were essentially flat in Q1 FY26, with a 10.4% linked-quarter annualized increase in Demand Deposit Accounts (DDAs) largely offsetting lower interest-bearing balances. The cost of total deposits decreased by 19 basis points to 2.06%, and interest-bearing deposits declined by 24 basis points to 2.79%.

This improvement was driven by a favorable mix shift and continued outperformance in pricing soft index deposits. Management highlighted the importance of long-term average growth due to episodic client activity.

Fee Income Momentum

Fee businesses, particularly Fund Services and Corporate Trust, demonstrated strong performance. Assets Under Administration (AUA) increased by nearly $20 billion from the prior quarter, reaching $565 billion. Investment banking revenue, including a 39% increase in municipal trading income from Q4 FY25, also contributed significantly to a 3.2% increase in noninterest income, totaling $204.8 million for the quarter.

Efficiency and Operating Leverage

UMB achieved positive operating leverage of 6.4% on a linked-quarter basis and an operating efficiency ratio of 47.6%. The operating Return on Tangible Common Equity (ROTCE) improved by 155 basis points linked-quarter. Management expects to maintain positive operating leverage for the full year 2026, driven by strategic scale building, selective market expansion, and continuous investment in technology to enhance operational efficiency.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.