What factors have contributed to the growth and success of the St. Louis region?

First and foremost, our people are the reason we had so much success this year. We recently achieved a milestone of $3.44 billion in average loans as of December 31, 2023 — which includes $691.7 million in new local commercial loans for the year.

Our sales associates were on the front line connecting with our current clients and prospective clients to ensure we were helping our clients navigate a difficult year. Additionally, our operations teams have worked tirelessly to make sure loan closings and processes went smoothly and helped advise clients on how to best operate in a rapidly changing environment. We have a wonderful team in St. Louis and without them, this success would not be possible.

Additionally, we had tremendous growth across many of our verticals, and our diverse business model allowed us to lean into the emerging markets and forge ahead with business as usual while remaining relatively steady without the wild swings other organizations experienced.

We’ve also been able to build on the momentum we created over the past 10-plus years as a relationship-based bank for middle market and private companies in St. Louis. Our dedicated sales and marketing efforts combined with our strong foundation —especially during such unpredictable times—continue to resonate with our customers and the trust they give us with their business.

How is UMB positioned to tackle the continued challenges in 2024?

Throughout our history, UMB has remained ready to handle the unique challenges of every economic cycle, and this one is no different. While many regional banks are heavy on the CRE side and therefore exposed to the current risk of that market, UMB’s portfolio is well diversified, investment CRE (non-owner occupied) at UMB is roughly 27% of total loans, which reduces the bank’s level of overall risk. We focus largely on industrial and multifamily projects, which make up 8% and 5% of total UMB loans, respectively.

Additionally, our liquidity is as strong as it’s ever been, which means we have the capital needed not only to continue lending, but also to meet all the needs of current and future customers. With a 70% loan-to-deposit ratio, strong capital ratios, and a high-quality loan portfolio, we have the liquidity to grow with our clients’ businesses—now and five years from now.

Our strength is further underscored by the recent announcement of UMB’s agreement to acquire Heartland Financial. We are incredibly excited about what this means for us, our customers and our ability to serve them with even more locations and services. It will increase UMB’s assets to roughly $64.5 billion, elevating UMB to the top 5% of the 616 publicly traded banks in the U.S. This merger increases our footprint while giving us more resources and expanding our core services—truly providing clients the resources of a national bank while remaining true to our history of service as a regional financial institution.

What are the top things you have been advising your clients on so far this year?

It will come as a surprise to no one that interest rates and whether we will slip into a recession remain on the minds of many clients. While many experts have been predicting a slowdown, we just aren’t seeing it so far—we haven’t fallen off the so-called cliff, and many sectors remain strong. The attention has now turned to when the Fed will cut rates and how to operate in the anticipated declining or stagnant rate environment.

The biggest trend we’re seeing in St. Louis right now is the continuing interest in private equity and direct investing, although momentum has begun to slow this year. Additionally, it’s a seller’s market right now. We are seeing businesses that previously wouldn’t have likely sold, selling to private equity buyers with a lot of cash to deploy.

Any words of advice as market conditions continue to fluctuate?

While many predictions for the economy and recession did not play out in 2023, it’s important to remember that no one can predict what the Fed will do. We are advising clients to take advantage of ways to streamline their services and operations to create efficiencies through payables and cash optimization, as well as emphasizing the importance of knowing your banker. When your bank knows you and your business, it allows your financial support to be tailored to your industry, needs and future outlook.

We are embedded in the St. Louis community, and we remain ready to serve our customers, clients and associates. We believe in the strength of our team, both locally and nationally, and we are optimistic that the rest of 2024 will see continued growth for the bank and for our customers.

What are you most looking forward to as we look toward 2025?

Like many, I’m very much hoping for a sense of normalcy as it pertains to the rate environment, but there are also many other factors—such as 2024 being an election year—that will impact the economy and the market. Though many things are yet to be determined, what I do know is that UMB is well positioned to handle the challenges and remains open for business. I look forward to building and deepening our client relationships and creating customized banking solutions for each one.

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