Ram Shankar, UMB chief financial officer, provides an overview of the first quarter 2022 earnings highlights. For more information, please review the full investor presentation given on April 27, 2022.

First quarter 2022 earnings summary

Highlights for this quarter include 19.1% linked-quarter annualized growth in average loans, and strong fee income combined with expense levels that moderated from the previous quarter.

Additionally, we reduced our provision for credit losses by $6.5 million. This provision is set aside to cover any potential losses in our loan portfolio, and the reduction reflects the strong asset quality in our loan book, along with favorable macroeconomic factors.

For the first quarter 2022, we earned $106 million, or $2.17 per share, compared to $1.91 per share in the first quarter of last year. The equity analysts who cover our company had predicted that we would earn just $1.67 per share.

Balance sheet highlights

Net interest income

Net interest income, which is what we earn on loans and other assets, offset by what we pay for deposits and other funds, was $210.4 million for the first quarter. This is in line with the 2021 fourth quarter levels.

Our strong asset growth, in both loans and in our securities portfolio, helped drive higher income levels. Additionally, we actively manage our balance sheet as economic conditions change. However, positive impacts from growth and some balance sheet moves we made, were partially offset by the sale of our factoring portfolio and the continued runoff of Paycheck Protection Program (PPP) balances, along with fewer days in the quarter.

As I’ve discussed in recent quarters, the banking industry continues to have high levels of cash, built up due to stimulus programs and customer behavior through the pandemic. Our lenders work hard to deploy those balances into loans, and we put some of them to work in our investment portfolio, which is up more than $2.5 billion from last year.

Our excess liquidity balances remain elevated compared to pre-pandemic levels.

Noninterest income

The other component of our revenue, noninterest income, or “fee income”, increased $4.9 million from fourth quarter 2021 to $123.7 million. Some of the larger drivers of this growth included higher income from client conversion fees in our healthcare business, a small gain on the sale of our previously announced factoring business, and strong performance in several of our businesses.

These positives were offset by lower gains in our investment securities positions and lower investment banking income. The current rate environment and volatility in the bond markets led to lower trading volumes and market-related adjustments.

Last quarter’s higher-than-typical expenses moderated in Q1, and we saw a $7.7 million reduction in total expenses.

Some variable costs, such as incentive compensation, were lower in the first quarter. And we also saw reduced legal, consulting and marketing expense. These were partially offset by the typical seasonal reset of payroll taxes and medical insurance, along with higher bankcard expense. This is also seasonal as our volume-based incentives from Mastercard and Visa reset at year-end.

Deposit growth and composition

Deposits help fund our asset growth, and our unique mix of businesses, such as corporate trust, aviation trust and asset servicing, provide strong deposit inflows. Our average loan-to-deposit ratio was just 53% for the first quarter, compared to an industry average of about 72%. This provides us with flexibility to deploy funds to support the growth opportunities we see in our markets.

Average deposits for the first quarter increased by 11.9% from the fourth quarter on an annualized basis, to $32.6 billion. Our steady loan growth over time has stood out, as many in the industry have experienced slower growth.


Average loans for the first quarter of 2022, excluding PPP balances, increased 15.6% year-over-year and more than 19% on a linked-quarter annualized basis. We saw phenomenal growth in commercial and industrial (C&I) balances, which increased 35% on a linked-quarter annualized basis, as we continue to take market share in underpenetrated regions. Demand is strong in several other categories, including commercial real estate and residential mortgages.

Fee income business performance

The fee income I mentioned above is driven by several different lines of business, and we saw positive results across the company. A few examples include:

  • In Consumer Banking, mortgage balances increased 28% year-over-year, and we implemented a new down payment assistance program that brought in 11 new applications in the first quarter.
  • Private Wealth Management posted strong new asset growth, with $258 million coming in during the quarter. And the UMB Family Wealth team is actively bringing in new commitments.
  • Fund Services continues to grow, although asset levels have been impacted by volatile markets. Assets under administration are 18% ahead of first quarter 2021.
  • In corporate trust, we remain the number-three-ranked municipal trustee and paying agent in the U.S., and our teams saw a 46% increase in new business Q1 2022.
  • Our agribusiness vertical in Commercial Banking continues to grow and we are ranked among the top farm lenders in the U.S.

There were many other successes across the company during the quarter, which can be found in more detail in our first quarter investor presentation.

Market strength

In 2021, our stock price increased approximately 54% compared to 34% median for our peer group. By comparison, the S&P 500 Index was up 29%.

More recently, bank stocks and the equity markets in general have been impacted by the current environment, with high inflation, the outlook for higher interest rates, and, of course, geopolitical concerns, including the war in Ukraine. As it relates to banks, some experts feel it is a favorable environment for banks, despite the volatility in the markets, and that the fundamentals are poised to improve meaningfully as the Federal Reserve increases interest rates.

To conclude, our strong first quarter results position us well for the rest of the year, and we are encouraged by the activity we’ve seen so far in second quarter.

I look forward to updating you again in July with our second quarter 2022 results.

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