10-Q – 2026-04-30 – umbf-20260331.htm

The Company’s HTM securities portfolio consists of U.S. Treasury securities, U.S. agency-backed securities, mortgage-backed securities, general obligation bonds, and private placement bonds. The HTM portfolio, net of the ACL, totaled $5.7 billion at both March 31, 2026 and December 31, 2025. The average life of the HTM portfolio was 8.6 years at March 31, 2026, compared to 8.5 years at December 31, 2025, and 8.7 years at March 31, 2025.
The securities portfolio generates the Company’s second largest component of interest income. The securities portfolio achieved an average yield on a tax-equivalent basis of 3.82% for the three-month period ended March 31, 2026, compared to 3.48% for the same period in 2025.
At March 31, 2026, the unrealized pre-tax net loss on the AFS securities portfolio was $376.6 million, or 2.7% of the $14.0 billion amortized cost value, compared to $290.8 million at December 31, 2025. At March 31, 2026, the unrealized pre-tax net loss on the securities designated as HTM was $530.7 million, or 9.3% of the $5.7 billion amortized cost value, compared to $473.8 million at December 31, 2025. During 2022, the Company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the AFS category to the HTM category. The transfer of securities was made at fair value at the time of transfer. The remaining balance of unrealized pre-tax losses related to transferred securities was $132.1 million as of March 31, 2026, and $139.2 million as of December 31, 2025, and was included in the amortized cost balance of HTM securities. See further information in Note 5, “Securities” in the Notes to Consolidated Financial Statements.
Deposits and Borrowed Funds
Deposits decreased $676.0 million, or 1.1%, from December 31, 2025 to March 31, 2026 and increased $1.5 billion, or 2.5%, from March 31, 2025 to March 31, 2026. Total interest-bearing balances decreased $574.4 million and noninterest-bearing deposits decreased $101.6 million from December 31, 2025 to March 31, 2026. Total interest-bearing deposits increased $2.8 billion and noninterest-bearing deposits decreased $1.4 billion from March 31, 2025 to March 31, 2026. Noninterest-bearing deposits were 28.4%, 28.3%, and 31.5% of total deposits at March 31, 2026, December 31, 2025, and March 31, 2025, respectively.
Deposits represent the Company’s primary funding source for its asset base. In addition to the core deposits garnered by the Company’s retail branch structure, the Company continues to focus on its cash management services, as well as its trust and investment company servicing businesses, in order to attract and retain additional deposits. Management believes a strong core deposit composition is one of the Company’s key strengths given its competitive product mix.
As of March 31, 2026, there were an estimated $39.1 billion of uninsured deposits, a decrease of $621.9 million as compared to December 31, 2025, and an increase of $1.5 billion as compared to March 31, 2025. Estimated uninsured deposits comprised approximately 65.1%, 65.4%, and 64.2% of total deposits as of March 31, 2026, December 31, 2025, and March 31, 2025, respectively. A portion of these uninsured deposits represent affiliate deposits and collateralized deposits. Affiliate deposits represent deposit accounts owned by the wholly owned subsidiaries of UMB Financial Corporation that are on deposit at UMB Bank, n.a. Collateralized deposits are public fund deposits or corporate trust deposits that are collateralized by high quality securities within the investment portfolio. Excluding affiliate deposits of $2.8 billion and collateralized deposits of $7.1 billion, the adjusted estimated uninsured deposits were $29.2 billion as of March 31, 2026. The adjusted ratio of estimated uninsured deposits, excluding affiliate and collateralized deposits, as a percentage of total deposits was approximately 48.7% as of March 31, 2026. The adjusted ratio of estimated uninsured deposits, excluding affiliate and collateralized deposits, as a percentage of total deposits was approximately 48.1% as of December 31, 2025, and 50.2% as of March 31, 2025.
The Company participates in the IntraFi Cash Service program, which allows its customers to place deposits into the program to receive reciprocal FDIC insurance coverage. The Company had $3.6 billion, $3.5 billion, and $3.4 billion of deposits in the program as of March 31, 2026, December 31, 2025, and March 31, 2025, respectively.
Long-term debt totaled $477.2 million as of March 31, 2026, compared to $474.2 million as of December 31, 2025, and $654.4 million as of March 31, 2025.
In September 2022, the Company issued $110.0 million in aggregate subordinated notes due in September 2032. The Company received $107.9 million, after deducting underwriting discounts and commissions and offering

 
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expenses, and used the proceeds from the offering for general corporate purposes, including, among other uses, contributing Tier 1 capital into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of 6.25% and an effective rate of 6.64%, due to issuance costs, with an interest rate reset date of September 2027.
As part of the acquisition of HTLF, the Company acquired $150.0 million in aggregate subordinated notes due in September 2031. The subordinated notes have a fixed interest rate of 2.75% until September 2026, at which time the interest rate will reset quarterly. The subordinated notes had an acquired fair value of $138.8 million as of January 31, 2025.
The remainder of the Company’s long-term debt was assumed from the acquisitions of Marquette Financial Companies in 2015 and HTLF in 2025 and consists of debt obligations payable to 19 unconsolidated trusts that previously issued trust preferred securities. These long-term debt obligations have an aggregate contractual balance of $262.9 million and had a carrying value of $221.2 million as of March 31, 2026 and $220.0 million at December 31, 2025. Interest rates on trust preferred securities are tied to the three-month term SOFR rate with spreads ranging from 133 basis points to 365 basis points and reset quarterly. The trust preferred securities have maturity dates ranging from September 2032 to September 2037.
Federal funds purchased and securities sold under agreements to repurchase totaled $3.6 billion as of March 31, 2026, $3.3 billion at December 31, 2025, and $2.6 billion at March 31, 2025. Repurchase agreements are transactions involving the exchange of investment funds by the customer for securities by the Company under an agreement to repurchase the same or similar issues at an agreed-upon price and date.
Capital and Liquidity
The Company places a significant emphasis on the maintenance of a strong capital position, which promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and acquisition opportunities. Higher levels of liquidity, however, bear corresponding costs, measured in terms of lower yields on short-term, more liquid earning assets and higher expenses for extended liability maturities. The Company manages capital for each subsidiary based upon the subsidiary’s respective risks and growth opportunities as well as regulatory requirements.
 
Total shareholders’ equity was $7.8 billion at March 31, 2026, a $133.4 million increase as compared to December 31, 2025, and a $1.1 billion increase compared to March 31, 2025. Total common shareholders’ equity was $7.5 billion as of March 31, 2026 compared to $7.4 billion at December 31, 2025 and $6.6 billion at March 31, 2025. Total accumulated other comprehensive loss was $331.4 million at March 31, 2026. This is a decline of $69.8 million as compared to December 31, 2025, and an improvement of $161.3 million as compared to March 31, 2025.
The Company’s Board of Directors authorized, at its April 28, 2026 meeting, the repurchase of up to two million shares of the Company's common stock during the twelve months following the meeting (a Repurchase Authorization). On April 29, 2025 and April 30, 2024, the Board authorized the repurchase of up to one million shares during the twelve months following each meeting. During the three-month period ended March 31, 2026, the Company repurchased 178,249 shares pursuant to the 2025 Repurchase Authorization, and also acquired shares pursuant to the Company's share-based incentive programs. During the three-month period ended March 31, 2025, the Company did not repurchase shares of common stock pursuant to any of its announced Repurchase Authorizations, but did acquire shares pursuant to the Company's share-based incentive programs.
At the Company’s quarterly board meeting, the Board of Directors declared a $0.43 per common share quarterly cash dividend payable on July 1, 2026, to common shareholders of record at the close of business on June 10, 2026. Additionally, the Board of Directors declared a dividend of $193.75 per share of the Company’s Series B Preferred Stock, which results in a dividend of $0.484375 per depositary share. The Series B Preferred Stock dividend is payable on July 15, 2026 to stockholders of record of the Series B Preferred Stock as of the close of business on June 30, 2026.
The Company is a member bank of the FHLB and through this relationship, the Company owns FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s borrowing

 
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capacity is dependent upon the amount of collateral the Company places at the FHLB. As of both March 31, 2026 and December 31, 2025, the Company owned $10.3 million of FHLB stock. As of March 31, 2026, the Company had four letters of credit outstanding with the FHLB of Des Moines to secure deposits. These letters of credit have an aggregate amount of $210.0 million and have various maturity dates through August 31, 2026. The Company’s remaining borrowing capacity with the FHLB was $2.3 billion as of March 31, 2026. The Company had no outstanding FHLB advances at the FHLB of Des Moines as of March 31, 2026.
In addition to the borrowing capacity with the FHLB as described above, the Company had additional liquidity of $35.4 billion available via cash, unpledged bond collateral, the federal funds market, the Federal Reserve Discount Window, and the IntraFi Cash Service program as of March 31, 2026.
Risk-based capital guidelines established by regulatory agencies set minimum capital standards based on the level of risk associated with a financial institution’s assets. The Company has implemented the Basel III regulatory capital rules adopted by the FRB. Basel III capital rules include a minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5% and a minimum tier 1 risk-based capital ratio of 6%. A financial institution’s total capital is also required to equal at least 8% of risk-weighted assets.
The risk-based capital guidelines indicate the specific risk weightings by type of asset. Certain off-balance sheet items (such as standby letters of credit and binding loan commitments) are multiplied by credit conversion factors to translate them into balance sheet equivalents before assigning them specific risk weightings. The Company is also required to maintain a leverage ratio equal to or greater than 4%. The leverage ratio is calculated as the ratio of tier 1 core capital to total average assets, less goodwill and intangibles.
The Company's capital position as of March 31, 2026 is summarized in the table below and exceeded regulatory requirements.
Table 12
 

 

 

Three Months Ended

 

 

 

March 31,

 

RATIOS

 

2026

 

 

2025

 

Common equity tier 1 capital ratio

 

 

11.16

%

 

 

10.11

%

Tier 1 risk-based capital ratio

 

 

11.74

 

 

 

10.35

 

Total risk-based capital ratio

 

 

13.53

 

 

 

12.54

 

Leverage ratio

 

 

8.73

 

 

 

8.47

 

Return on average assets

 

 

1.47

 

 

 

0.54

 

Return on average common equity

 

 

13.70

 

 

 

5.86

 

Average common equity to assets

 

 

10.74

 

 

 

9.16

 

 
The Company's per common share data is summarized in the table below.

 

 

Three Months Ended

 

 

 

March 31,

 

Per Share Data

 

2026

 

 

2025

 

Earnings per common share – basic

 

$

3.36

 

 

$

1.22

 

Earnings per common share – diluted

 

 

3.35

 

 

 

1.21

 

Cash dividends per common share

 

 

0.43

 

 

 

0.40

 

Dividend payout ratio

 

 

12.8

%

 

 

32.8

%

Book value per common share

 

$

99.22

 

 

$

87.43

 

 
Off-balance Sheet Arrangements
The Company’s main off-balance sheet arrangements are loan commitments, commercial and standby letters of credit, futures contracts and forward exchange contracts, which have maturity dates rather than payment due dates. See Note 10, “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial

 
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Statements for detailed information on these arrangements. The level of the outstanding commitments could be impacted by volatility in the economic markets and governmental responses to inflation, geopolitical tensions, and supply chain constraints. These changing conditions could have impacts on the consolidated balance sheets of the Company for the remainder of the year.
Critical Accounting Policies and Estimates
The preparation of these Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to customers and suppliers, allowance for credit losses, bad debts, investments, financing operations, long-lived assets, taxes, other contingencies, and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which have formed the basis for making such judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Under different assumptions or conditions, actual results may differ from the recorded estimates.
A summary of critical accounting policies is listed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Form 10-K.
 
ITEM 3. QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK
Risk Management
Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange prices, commodity prices, or equity prices. Financial instruments that are subject to market risk can be classified either as held for trading or held for purposes other than trading.
The Company is subject to market risk primarily through the effect of changes in interest rates of its assets held for purposes other than trading. The following discussion of interest rate risk, however, combines instruments held for trading and instruments held for purposes other than trading because the instruments held for trading represent such a small portion of the Company’s portfolio that the interest rate risk associated with them is immaterial.
Interest Rate Risk
In the banking industry, a major risk exposure is changing interest rates. To minimize the effect of interest rate changes to net interest income and exposure levels to economic losses, the Company manages its exposure to changes in interest rates through asset and liability management within guidelines established by its Asset Liability Committee (ALCO) and approved by the Board. The ALCO is responsible for approving and ensuring compliance with asset/liability management policies, including interest rate exposure. The Company’s primary method for measuring and analyzing consolidated interest rate risk is the Net Interest Income Simulation Analysis. The Company also uses a Net Portfolio Value model to measure market value risk under various rate change scenarios and a gap analysis to measure maturity and repricing relationships between interest-earning assets and interest-bearing liabilities at specific points in time. On a limited basis, the Company uses hedges such as swaps, rate floors, floor spreads, and futures contracts to manage interest rate risk on certain loans, securities, and trust preferred securities. See further information in Note 11 “Derivatives and Hedging Activities” in the Notes to the Consolidated Financial Statements.
Overall, the Company manages interest rate risk by positioning the balance sheet to maximize net interest income while maintaining an acceptable level of interest rate and credit risk, remaining mindful of the relationship among profitability, liquidity, interest rate risk, and credit risk.

 
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Net Interest Income Modeling
The Company’s primary interest rate risk tool, the Net Interest Income Simulation Analysis, measures interest rate risk and the effect of interest rate changes on net interest income and net interest margin. This analysis incorporates all of the Company’s assets and liabilities together with assumptions that reflect the current interest rate environment. Through these simulations, management estimates the impact on net interest income of a 200-basis-point upward or a 300-basis-point downward gradual change (e.g. ramp) and immediate change (e.g. shock) of market interest rates over a two year period. In ramp scenarios, rates change gradually for a one-year period and remain constant in year two. In shock scenarios, rates change immediately and the change is sustained for the remainder of the two-year scenario horizon. Assumptions are made to project rates for new loans and deposits based on historical analysis, management outlook and repricing strategies. Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other market changes. The results of these simulations can be significantly influenced by assumptions utilized and management evaluates the sensitivity of the simulation results on a regular basis.
Table 13 shows the net interest income increase or decrease over the next two years as of March 31, 2026 and 2025 based on hypothetical changes in interest rates and a constant sized balance sheet with runoff being replaced.
Table 13
MARKET RISK (unaudited)

 

 

Hypothetical change in interest rate – Rate Ramp

 

 

 

Year One

 

 

Year Two

 

 

 

March 31, 2026

 

 

March 31, 2025

 

 

March 31, 2026

 

 

March 31, 2025

 

Change in basis points

 

Percentage
change

 

 

Percentage
change

 

 

Percentage
change

 

 

Percentage
change

 

200

 

 

(1.1

)%

 

 

0.1

%

 

 

3.9

%

 

 

7.1

%

100

 

 

(0.6

)

 

 

(0.2

)

 

 

1.4

 

 

 

3.0

 

Static

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

(100)

 

 

1.6

 

 

 

0.6

 

 

 

(0.9

)

 

 

(2.6

)

(200)

 

 

3.1

 

 

 

1.4

 

 

 

(2.4

)

 

 

(5.1

)

(300)

 

 

4.8

 

 

 

2.2

 

 

 

(3.9

)

 

 

(7.7

)

 

 

Hypothetical change in interest rate – Rate Shock

 

 

 

Year One

 

 

Year Two

 

 

 

March 31, 2026

 

 

March 31, 2025

 

 

March 31, 2026

 

 

March 31, 2025

 

Change in basis points

 

Percentage
change

 

 

Percentage
change

 

 

Percentage
change

 

 

Percentage
change

 

200

 

 

0.8

%

 

 

3.9

%

 

 

5.1

%

 

 

8.5

%

100

 

 

(0.2

)

 

 

1.2

 

 

 

2.1

 

 

 

3.7

 

Static

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

(100)

 

 

1.3

 

 

 

(0.7

)

 

 

(1.9

)

 

 

(3.6

)

(200)

 

 

2.0

 

 

 

(1.1

)

 

 

(4.6

)

 

 

(7.3

)

(300)

 

 

3.0

 

 

 

(1.8

)

 

 

(7.6

)

 

 

(11.2

)

The Company is positioned relatively neutral to changes in interest rates in the next year. In year one, net interest income is predicted to decrease in all upward rate scenarios, except for 200bps rate shock scenario. In down rate scenarios, net interest income is predicted to increase in all scenarios. In year two, net interest income is predicted to increase in rising rate scenarios and decrease in falling rate scenarios. The Company’s ability to price deposits consistent with its historical approach is a key assumption in these scenarios.

 
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Trading Account
The Company carries securities in a trading account that is maintained according to Board-approved policy and procedures. The policy limits the amount and type of securities that can be carried in the trading account, requires compliance with any limits under applicable law and regulations, and mandates the use of a value-at-risk methodology to manage price volatility risks within financial parameters. The risk associated with the carrying of trading securities is offset by utilizing financial instruments including exchange-traded financial futures as well as short sales of U.S. Treasury and Corporate securities. The trading securities and related hedging instruments are marked-to-market daily. The trading account had a balance of $24.2 million as of March 31, 2026, $22.3 million as of December 31, 2025, and $35.5 million as of March 31, 2025. Securities sold not yet purchased (i.e., short positions) totaled $8.3 million at March 31, 2026, $4.1 million as of December 31, 2025, and $11.9 million at March 31, 2025 and are classified within the Other liabilities line of the Company’s Consolidated Balance Sheets.
The Company is subject to market risk primarily through the effect of changes in interest rates of its assets held for purposes other than trading. The discussion in Table 13 above of interest rate risk, however, combines instruments held for trading and instruments held for purposes other than trading, because the instruments held for trading represent such a small portion of the Company’s portfolio that the interest rate risk associated with them is immaterial.
Other Market Risk
The Company has minimal foreign currency risk as a result of foreign exchange contracts. See Note 10 “Commitments, Contingencies and Guarantees” in the notes to the Consolidated Financial Statements.
Credit Risk Management
Credit risk represents the risk that a customer or counterparty may not perform in accordance with contractual terms. The Company utilizes a centralized credit administration function, which provides information on the Bank’s risk levels, delinquencies, an internal ranking system and overall credit exposure. Loan requests are centrally reviewed to ensure the consistent application of the loan policy and standards. In addition, the Company has an internal loan review staff that operates independently of the Bank. This review team performs periodic examinations of the Bank’s loans for credit quality, documentation and loan administration. The respective regulatory authorities governing the Bank also review loan portfolios.
A primary indicator of credit quality and risk management is the level of nonperforming loans. Nonperforming loans include both nonaccrual loans and restructured loans on nonaccrual. The Company’s nonperforming loans increased $50.4 million to $151.3 million at March 31, 2026, compared to March 31, 2025, and increased $6.6 million, compared to December 31, 2025. The increase compared to March 31, 2025 is attributable to additional non-performing loans related to the acquisition of HTLF.
The Company had $4.9 million, $4.8 million, and $4.2 million of other real estate owned as of March 31, 2026, December 31, 2025, and March 31, 2025, respectively. Other repossessed assets totaled $26.8 million as of March 31, 2025. Loans past due more than 90 days and still accruing interest totaled $14.9 million as of March 31, 2026, compared to $6.3 million at March 31, 2025 and $18.4 million as of December 31, 2025.
A loan is generally placed on nonaccrual status when payments are past due 90 days or more and/or when management has considerable doubt about the borrower’s ability to repay on the terms originally contracted. The accrual of interest is discontinued and recorded thereafter only when received in cash.
Certain loans are restructured to provide a reduction or deferral of interest or principal due to deterioration in the financial condition of the respective borrowers. The Company had $163 thousand of restructured loans at March 31, 2026, $189 thousand at March 31, 2025, and $169 thousand at December 31, 2025.

 
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Table 14
LOAN QUALITY (unaudited, dollars in thousands)

 

 

March 31,

 

 

December 31,

 

 

 

2026

 

 

2025

 

 

2025

 

Nonaccrual loans

 

$

151,227

 

 

$

100,848

 

 

$

144,640

 

Restructured loans on nonaccrual

 

 

23

 

 

 

37

 

 

 

26

 

Total nonperforming loans

 

 

151,250

 

 

 

100,885

 

 

 

144,666

 

Other real estate owned

 

 

4,877

 

 

 

4,225

 

 

 

4,800

 

Other repossessed assets

 

 

—

 

 

 

26,789

 

 

 

—

 

Total nonperforming assets

 

$

156,127

 

 

$

131,899

 

 

$

149,466

 

Loans past due 90 days or more

 

$

14,924

 

 

$

6,346

 

 

$

18,403

 

Restructured loans accruing

 

 

140

 

 

 

152

 

 

 

143

 

Allowance for credit losses on loans

 

 

425,876

 

 

 

368,922

 

 

 

419,478

 

Ratios:

 

 

 

 

 

 

 

 

 

Nonperforming loans as a percent of loans

 

 

0.38

%

 

 

0.28

%

 

 

0.37

%

Nonperforming assets as a percent of loans plus other real estate owned

 

 

0.39

 

 

 

0.37

 

 

 

0.39

 

Nonperforming assets as a percent of total assets

 

 

0.21

 

 

 

0.19

 

 

 

0.20

 

Loans past due 90 days or more as a percent of loans

 

 

0.04

 

 

 

0.02

 

 

 

0.05

 

Allowance for credit losses on loans as a percent of loans

 

 

1.06

 

 

 

1.03

 

 

 

1.08

 

Allowance for credit losses on loans as a multiple of nonperforming loans

 

2.82x

 

 

3.66x

 

 

2.90x

 

Liquidity Risk
Liquidity represents the Company’s ability to meet financial commitments through the maturity and sale of existing assets or availability of additional funds. The Company believes that the most important factor in the preservation of liquidity is maintaining public confidence that facilitates the retention and growth of a large, stable supply of core deposits and wholesale funds. Ultimately, the Company believes public confidence is generated through profitable operations, sound credit quality and a strong capital position. The primary source of liquidity for the Company is regularly scheduled payments on and maturity of assets, which include $13.7 billion of high-quality securities available for sale as of March 31, 2026. The liquidity of the Company and the Bank is also enhanced by its activity in the federal funds market and by its core deposits. Additionally, management believes it can raise debt or equity capital in the future, should the need arise.
Another factor affecting liquidity is the amount of deposits and customer repurchase agreements that have pledging requirements. All customer repurchase agreements require collateral in the form of a security. The U.S. Government, other public entities, and certain trust depositors require the Company to pledge securities if their deposit balances are greater than the FDIC-insured deposit limitations. These pledging requirements affect liquidity risk in that the related security cannot otherwise be disposed of due to the pledging restriction. There were $12.7 billion and $13.4 billion of securities pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase agreements at March 31, 2026 and December 31, 2025, respectively.
The Company also has other commercial commitments that may impact liquidity. These commitments include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The total amount of these commercial commitments at March 31, 2026 was $24.6 billion. Since many of these commitments expire without being drawn upon, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Company.
The Company’s cash requirements consist primarily of dividends to shareholders, debt service, operating expenses, and treasury stock purchases. Management fees and dividends received from bank and non-bank subsidiaries traditionally have been sufficient to satisfy these requirements and are expected to be sufficient in the future. The Bank is subject to various rules regarding payment of dividends to the Company. For the most part, the Bank can pay dividends at least equal to its current year’s earnings without seeking prior regulatory approval. The

 
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Company also uses cash to inject capital into its bank and non-bank subsidiaries to maintain adequate capital as well as fund strategic initiatives.
In September 2022, the Company issued $110.0 million in aggregate subordinated notes due in September 2032. The Company received $107.9 million, after deducting underwriting discounts and commissions and offering expenses, and used the proceeds from the offering for general corporate purposes, including, among other uses, contributing Tier 1 capital into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of 6.25% and an effective rate of 6.64%, due to issuance costs, with an interest rate reset date of September 2027.
As part of the acquisition of HTLF, the Company acquired $150.0 million in aggregate subordinated notes due September 2031. The subordinated notes have a fixed interest rate of 2.75% until September 2026, at which time the interest rate will reset quarterly. The subordinated notes had an acquired fair value of $138.8 million as of January 31, 2025.
The Company is a member bank of the FHLB. The Company owns $10.3 million of FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. As of March 31, 2026 the Company has four letters of credit outstanding with the FHLB of Des Moines to secure deposits. These letters of credit have an aggregate amount of $210.0 million and have various maturity dates through August 31, 2026. The Company’s remaining borrowing capacity with the FHLB was $2.3 billion as of March 31, 2026. The Company had no outstanding FHLB advances at the FHLB of Des Moines as of March 31, 2026.
In addition to borrowing capacity with the FHLB as described above, the Company had additional liquidity of $35.4 billion available via cash, unpledged bond collateral, the federal funds market, the Federal Reserve Discount Window, and the IntraFi Cash Service program as of March 31, 2026.
Operational Risk
Operational risk generally refers to the risk of loss resulting from the Company’s operations, including those operations performed for the Company by third parties. This would include but is not limited to the risk of fraud by employees or persons outside the Company, the execution of unauthorized transactions by employees or others, errors relating to transaction processing, breaches of the internal control system and compliance requirements, and unplanned interruptions in service. This risk of loss also includes the potential legal or regulatory actions that could arise as a result of an operational deficiency, or as a result of noncompliance with applicable regulatory standards. The Company must comply with a number of legal and regulatory requirements.
The Company operates in many markets and relies on the ability of its employees and systems to properly process a high number of transactions. In the event of a breakdown in internal control systems, improper operation of systems or improper employee actions, the Company could suffer financial loss, face regulatory action and suffer damage to its reputation. In order to address this risk, management maintains a system of internal controls with the objective of providing proper transaction authorization and execution, safeguarding of assets from misuse or theft, and ensuring the reliability of financial and other data.
The Company maintains systems of internal controls that provide management with timely and accurate information about the Company’s operations. These systems have been designed to manage operational risk at appropriate levels given the Company’s financial strength, the environment in which it operates, and considering factors such as competition and regulation. The Company has also established procedures that are designed to ensure that policies relating to conduct, ethics, and business practices are followed on a uniform basis. In certain cases, the Company has experienced losses from operational risk. Such losses have included the effects of operational errors that the Company has discovered and included as expense in the statement of income. While there can be no assurance that the Company will not suffer such losses in the future, management continually monitors and works to improve its internal controls, systems, and corporate-wide processes and procedures.

 
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ITEM 4. CONTROLS AND PROCEDURES
The Sarbanes-Oxley Act of 2002, as amended, requires the Chief Executive Officer and the Chief Financial Officer to make certain certifications under this Form 10-Q with respect to the Company’s disclosure controls and procedures and internal control over financial reporting. The Company has a Code of Ethics that expresses the values that drive employee behavior and maintains the Company’s commitment to the highest standards of ethics.
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this Form 10-Q. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Form 10-Q, the Company’s disclosure controls and procedures were effective for ensuring that the Company’s SEC filings are recorded, processed, summarized, and reported within the time period required and that information required to be disclosed by the Company is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting .

 
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PART II – OTHE R INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the normal course of business, the Company and its subsidiaries are named defendants in various legal proceedings. In the opinion of management, after consultation with legal counsel, none of these lawsuits are expected to have a materially adverse effect on the financial position, results of operations, or cash flows of the Company.
ITEM 1A. RI SK FACTORS
There were no material changes to the risk factors as previously disclosed in response to Item 1A to Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or in response to Item 1A to Part II of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2026.
ITEM 2. UNREGISTERED SALES OF EQU ITY SECURITIES AND USE OF PROCEEDS
The table below sets forth the information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock during the three-month period ended March 31, 2026.
ISSUER PURCHASE OF EQUITY SECURITIES

Period

 

Total Number of Shares (or Units) Purchased (1)

 

 

Average Price Paid per Share (or Unit)

 

 

Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)

 

 

Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs

 

January 1 - January 31, 2026

 

 

20,541

 

 

$

115.04

 

 

 

—

 

 

 

1,000,000

 

February 1 - February 28, 2026

 

 

71,117

 

 

 

133.69

 

 

 

—

 

 

 

1,000,000

 

March 1 - March 31, 2026

 

 

187,827

 

 

 

111.50

 

 

 

178,249

 

 

 

821,751

 

Total

 

 

279,485

 

 

$

117.41

 

 

 

178,249

 

 

 

 

(1) Includes shares acquired pursuant to the Company's share-based incentive programs. Under the terms of the Company's share-based incentive programs, the Company accepts previously owned shares of common stock surrendered to satisfy tax withholding obligations associated with equity compensation. These purchases do not count against the maximum value of shares remaining available for purchase under Repurchase Authorizations.
(2) Includes shares acquired under the Board of Directors approved Repurchase Authorization(s).
On April 29, 2025, the Company announced a plan to repurchase up to one million shares of common stock, which terminated on April 28, 2026. On April 28, 2026, the Company announced a plan to repurchase up to two million shares of common stock, which will terminate on April 27, 2027. The Company has not made any repurchases other than through the Repurchase Authorizations, but did acquire shares pursuant to the Company's share-based incentive programs. All share purchases pursuant to the Repurchase Authorizations are intended to be within the scope of Rule 10b-18 promulgated under the Exchange Act. Rule 10b-18 provides a safe harbor for purchases in a given day if the Company satisfies the manner, timing and volume conditions of the rule when purchasing its own shares of common stock.

 
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ITEM 6. EXHIBITS
 

 

 

 

3.1

 

Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and filed with the Commission on May 9, 2006).

 

 

 

3.2

 

Amendment of Articles of Incorporation, dated as of January 31, 2025 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated January 31, 2025 and filed with the Commission on February 3, 2025).

 

 

 

3.3

 

Bylaws, amended as of April 13, 2023 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated April 13, 2023 and filed with the Commission on April 13, 2023).

 

 

 

31.1

 

CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act filed herewith.

 

 

 

31.2

 

CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act filed herewith.

 

 

 

32.1

 

CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act filed herewith.

 

 

 

32.2

 

CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act filed herewith.

 

 

 

101.INS

 

XBRL Instance Document – The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

 

 

 

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document filed herewith.

 

 

 

104

 

The cover page of our Form 10-Q for the quarter ended March 31, 2026, formatted in iXBRL.

 

 
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SIGNAT URES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

UMB FINANCIAL CORPORATION

 

/s/ David C. Odgers

David C. Odgers

Chief Accounting Officer

 

Date: April 30, 2026

 

 
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