Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 232

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 232
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15
    %

    31.89
    %

    40.78
    %

    Tax-equivalent yield on earning assets

    5.37
    %

    4.96
    %

    3.26
    %

    Cost of interest-bearing liabilities

    4.03

    3.59

    1.06

    Net interest spread

    1.34
    %

    1.37
    %

    2.20
    %

    Benefit of interest-free funds

    1.17

    1.15

    0.43

    Net interest margin

    2.51
    %

    2.52
    %

    2.63
    %

The Company experienced an increase in net interest income of $80.8 million, or 8.8%, for the year ended December 31, 2024, compared to 2023.  This follows an increase of $6.3 million, or 0.7%, for the year ended December 31, 2023, compared to 2022.  Average earning assets for the year ended December 31, 2024 increased by $3.3 billion, or 8.9%, compared to the same period in 2023.  Net interest margin, on a tax-equivalent basis, decreased to 2.51% for 2024 compared to 2.52% in 2023.     

The Company funds a significant portion of its balance sheet with noninterest-bearing demand deposits.  Noninterest-bearing demand deposits represented 31.6%, 33.9% and 40.6% of total outstanding deposits as of December 31, 2024, 2023 and 2022, respectively.  The decrease in 2024 is driven by the increase in short-term interest rates. As illustrated in Table 3, the impact from these interest-free funds was 117 basis points in 2024, as compared to 115 basis points in 2023 and 43 basis points in 2022. 

The Company experienced an increase in net interest income during 2024 due to a volume variance of $88.5 million, offset by a negative rate variance of $7.7 million.  The average rate on earning assets during 2024 increased by 41 basis points, while the average rate on interest-bearing liabilities increased by 44 basis points, resulting