Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 226

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 226
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31, 2023.  Return on average assets and return on average common shareholder’s equity for the year ended December 31, 2022 were 1.15% and 15.83%, respectively.

The Company’s net interest income increased to $1.0 billion in 2024 compared to $920.1 million in 2023 and $913.8 million in 2022.  In total, net interest income increased $80.8 million, as compared to 2023, primarily driven by a favorable volume variance of $88.5 million, offset by a $7.7 million rate variance.  See Table 2.  The favorable volume variance on earning assets was predominantly driven by an increase of $3.3 billion, or 8.9%, in average earning assets.  In 2024, average loan balances increased $1.9 billion, coupled with an increase in average interest-bearing due from banks of $1.4 billion as compared to 2023.  Net interest margin, on an FTE basis, decreased to 2.51% for 2024, compared to 2.52% for the same period in 2023, driven by 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 Company has seen a small increase in the benefit from interest-free funds as compared to 2023 driven by the changes in short-term interest rates. The impact of this benefit increased two basis points compared to 2023 and is illustrated on Table 3.  The magnitude and duration of this impact will be largely dependent upon the FRB’s policy decisions and market movements. See Table 21 in Item 7A for an illustration of the impact of an interest rate increase or decrease on net interest income as of December 31, 2024.

The provision for credit losses totaled $61.1 million for the year ended December 31, 2024, which is an increase of $19.8 million, or 48.1%, compared to the same period in 2023.  This change is driven by impacts of loan growth, portfolio metric changes, and changes in macro-economic metrics in the current period as compared to the prior period. See further discussion in “Provision and Allowance for Credit Losses” in this report.   

The Company had an increase of $86