UMB Financial (UMBF) Q2 Revenue Up 77%

Key Points

• Non-GAAP earnings per share reached $2.96 in Q2 2025, exceeding the analyst estimate of $2.37, up 37.0% year over year.

• GAAP revenue surged to $689.2 million in Q2 2025, exceeding the analyst estimate by $53.34 million and rising 76.7% year over year.

• But one-time gains and integration risks remain key to monitor.

• These 10 stocks could mint the next wave of millionaires ›

UMB Financial (NASDAQ:UMBF), a diversified regional banking company, reported its second quarter 2025 earnings on July 29, 2025. The headline news was a broad-based earnings beat: Non-GAAP earnings per share reached $2.96, versus consensus of $2.37, and GAAP revenue climbed to $689.2 million, topping estimates by $53.3 million, driven by transformative growth following the acquisition of Heartland Financial USA, Inc. (HTLF). Management described the quarter as a standout, boosted by both organic trends and one-time income items.

Source: Analyst estimates for the quarter provided by FactSet.

What Is UMB Financial and How Does It Compete?

UMB Financial is a regional financial services company that operates mainly in the Midwest and Southwest United States. It provides commercial banking, institutional banking, and personal banking, with a focus on both lending and fee-based services such as trust, securities processing, and investment products. Its core business is gathering deposits and making loans, but it also has a broad suite of noninterest services including wealth management and corporate trust operations.

In recent years, UMB Financial has concentrated on expanding its footprint through acquisitions, investing in technology platforms, and maintaining capital strength. The integration of Heartland Financial USA, Inc. was a major move, doubling UMB’s branch network and deposit base across new states.

Quarter in Review: Unpacking the Results

The standout feature was the first full quarter of Heartland Financial’s impact, which contributed to significant loan and deposit growth. Loans grew 52.9% year over year to an average of $36.4 billion, and average deposits jumped 62.1% to $55.6 billion, but management also referenced steady momentum across UMB’s pre-existing footprint.

Revenue rose 76.7% year over year, but also helped by nonrecurring investment gains. Notably, the period saw $37.7 million in pre-tax gains from private investments, with $29.4 million coming from UMB’s position in Voyager Technologies, Inc, which went public in June 2025. This single event made up a significant portion of the increase in noninterest income, highlighting an area of results that will not be repeated every quarter. Excluding this, fee-based income still delivered solid growth in areas like trust and securities processing, which increased 18.9% year over year and brokerage fees increased 46.4% year over year.

Net interest income, the spread between interest earned on loans and paid on deposits, soared 90.5% year over year as the company absorbed Heartland’s large base of low-cost deposits and benefited from purchase accounting adjustments. Net interest margin, a key profitability metric measuring what the company makes for each dollar of assets, rose to 3.10 % from 2.51 % in the prior year. However, management cautioned this margin will gradually revert to a lower “core” level as temporary accounting boosts fade.

Cost control and improved efficiency also stood out. Despite GAAP noninterest expenses rising 57.9% year over year to $393.2 million, the operating efficiency ratio (expenses as a percentage of revenue) improved from 61.86% in Q2 2024 to 51.48% in Q2 2025. Much of the expense increase related to scaling up following the acquisition, but revenue gains outpaced costs, driving better efficiency. Management expects additional cost savings as final systems conversions conclude in October 2025.

With net charge-offs (loans that are not collectible) at 0.17% of average loans (GAAP), some elevated losses reflected acquired Heartland loans, a normal part of integration, but most credit metrics improved or held steady. Nonperforming loans stood at 0.26% of total loans. Management indicated loss levels for the combined company should align with long-term norms.

Each of UMB’s segments contributed to the results. Commercial banking net income (GAAP) nearly doubled from $71.7 million in Q2 2024 to $139.8 million in Q2 2025. Institutional banking net income rose 28% to $54.4 million. Personal banking swung from a loss in Q2 2024 to a $23.3 million profit (GAAP), reflecting increased scale and improved operations after the acquisition. Fee businesses in categories such as bankcard increased 29.9% year over year and brokerage increased 46.4% year over year also benefited from the larger client base.

The company’s balance sheet expanded significantly: total assets (GAAP) were $71.8 billion as of June 30, 2025, up 61.4% from a year earlier. Book value per share (GAAP) increased to $90.68, though tangible book value per share (non-GAAP) was $59.80, slipping due to higher goodwill and other intangible assets brought on by the Heartland transaction. UMB raised $294.1 million in new preferred stock to support its capital position.

Looking Ahead: Guidance and Risks

UMB Financial’s management did not provide formal financial guidance for upcoming quarters or for fiscal 2025. However, it commented that full cost and revenue synergies from the Heartland acquisition would not be realized until the fourth quarter and into 2026, once technical systems conversions are complete. Management expects the core net interest margin (non-GAAP) to move toward 2.75% to 2.80% as temporary effects fade.

Investors should watch for signs of sustainable growth now that the merger is complete. Key future developments include organic loan and deposit gains in the expanded footprint. Integration risks, such as operational disruption or customer attrition during systems conversions, remain an area to monitor. The company maintains a common equity tier 1 (CET1) capital ratio of 10.39% (GAAP) as of June 30, 2025, above regulatory requirements. The quarterly dividend remained unchanged at $0.40 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,039%* — a market-crushing outperformance compared to 182% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of July 29, 2025

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.