Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 74

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1B
Chunk 74
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 guide its efforts to achieve its vision, to deliver the Unparalleled Customer Experience, all while seeking to improve net income and strengthen the balance sheet while undertaking prudent risk management.

The first financial objective is to continuously improve operating efficiencies. The Company has focused on identifying efficiencies that simplify its organizational and reporting structures, streamline back-office functions and take advantage of synergies and newer technologies among various platforms and distribution networks.  The Company has identified and expects to continue identifying ongoing efficiencies through the normal course of business that, when combined with increased revenue, will contribute to improved operating leverage.  For 2024, total revenue increased 11.4%, and noninterest expense increased 2.8%, as compared to the previous year.  The Company continues to invest in technological advances that it believes will help management drive operating leverage in the future through improved data analysis and automation. The Company also continues to evaluate core systems and will invest in enhancements that it believes will yield operating efficiencies.

The second financial objective is to increase net interest income through profitable loan and deposit growth and the optimization of the balance sheet.  For 2024, net interest income increased $80.8 million, or 8.8%, as compared to the previous year. The Company has shown increased net interest income through the effects of increased volume and mix of average earning assets, coupled with higher interest rates.  This increase was partially offset by higher interest-bearing deposit rates.  Average earning assets increased $3.3 billion, or 8.9%, compared to 2023.  Average loan balances increased $1.9 billion, coupled with an increase in average interest-bearing due from banks of $1.4 billion from the prior year.  The funding for these assets was driven primarily by a 19.4% increase in average interest-bearing deposits, partially offset by a 37.4% decrease in average borrowed funds and a decrease of 5.3% in noninterest-bearing deposits.  Net interest margin, on a fully tax-equivalent (FTE) basis, decreased one basis point compared to the same period in 2023 in large part due to repricing and mix changes of interest-bearing liabilities with the changes in short-term interest rates, partially offset by the repricing of earning assets.  Net interest spread contracted by three basis points during the same period.

The third financial objective is to grow the Company’s revenue from noninterest sources.  The Company seeks to grow noninterest revenues throughout all economic and interest rate cycles, while positioning itself to benefit in periods of