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It has been about a month since the last earnings report for UMB Financial (UMBF - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is UMB due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for UMB Financial Corporation before we dive into how investors and analysts have reacted as of late.

UMB Financial Q2 Earnings Beat on Y/Y Rise in NII, Expenses IncreaseUMB Financial reported second-quarter 2026 adjusted operating earnings per share of $3.57, beating the Zacks Consensus Estimate of $3.08. The bottom line also increased from $2.96 in the year-ago quarter.

The company delivered a strong quarterly performance, supported by solid growth in net interest income, higher non-interest income and continued loan growth. Improved efficiency and strong credit quality further supported the results.

Results include certain non-recurring items. After considering those, net income (GAAP basis) available to common shareholders was $271.8 million in the second quarter, up 26.2% from the year-ago quarter.

Revenues & Expenses Rise

Quarterly revenues were $786.9 million, rising 14.2% year over year. The metric beat the Zacks Consensus Estimate by 8.4%.

NII was $532.5 million, up 14% from the prior-year quarter.

On a fully-taxable-equivalent basis, the net interest margin was 3.32%, up 22 basis points year over year. The increase was primarily driven by favorable deposit repricing following lower short-term interest rates and growth in average loans and securities.

Non-interest income was $245.5 million, up 10.5% year over year. The increase was primarily driven by higher trust and securities processing income, other income, and brokerage income. These increases were partially offset by lower investment securities gains.

Non-interest expenses were $399.6 million, up 1.6% year over year. Second-quarter 2026 expenses included $1.7 million in total acquisition-related and other non-recurring costs. Operating non-interest expenses (adjusted basis) were $398 million, up 4.7% year over year.

The efficiency ratio declined to 48.4% from the prior-year quarter’s 53.4%. A decline in the efficiency ratio indicates an increase in profitability.

Loans & Deposit Balances Rise

Average loans for the second quarter were $40.6 billion, up 3.2% sequentially and 11.6% from the prior-year quarter. End-of-period loans stood at $41.1 billion as of June 30, 2026.

Average deposits remained flat sequentially and increased 3.5% year over year to $57.6 billion. Average interest-bearing deposits increased 3.9%, while non-interest-bearing demand deposit balances rose 2.1% from the prior-year quarter.

Credit Quality Deteriorates

Net charge-offs totaled $15.9 million, or 0.16% of average loans, compared with $15.5 million, or 0.17%, in the year-ago quarter.

Total non-accrual and restructured loans were $127.5 million compared with $97 million in the year-ago quarter.

The provision for credit losses was $28 million in the second quarter of 2026, up from $21 million in the prior-year quarter.

Capital Ratios Improve

As of June 30, 2026, the Tier 1 risk-based capital ratio was 12.02% compared with 11.24% as of June 30, 2025. The Tier 1 leverage ratio was 9.11% compared with 8.34% in the year-ago quarter. The total risk-based capital ratio was 13.80%, up from 13.46% a year ago.

In the second quarter of 2026, the company repurchased 38,158 common shares at a weighted average price of $132.10 for a total repurchase of $5 million.

Profitability Ratios Improve

Return on average assets at the second-quarter end was 1.55% compared with the year-ago quarter’s 1.29%.

Return on average common equity was 14.16% compared with 12.72% in the year-ago quarter.

OutlookThird Quarter 2026

Core net interest margin is expected to remain relatively flat from the second quarter adjusted level of 3.09%.

Operating noninterest expense is expected to be approximately $390 million.

Management expects deposit pipelines to remain healthy, although the deposit environment is expected to face seasonal pressure in the third quarter.

Loan growth pipelines are expected to remain strong, led by C&I lending across the company’s footprint.

2026

The effective tax rate is expected to remain between 20% and 22%.

Management expects positive operating leverage for 2026, even as contractual purchase accounting accretion is expected to be approximately $46 million for the remainder of the year.

How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.

VGM ScoresCurrently, UMB has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, UMB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerUMB belongs to the Zacks Banks - Midwest industry. Another stock from the same industry, Huntington Bancshares (HBAN - Free Report) , has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Huntington Bancshares reported revenues of $2.86 billion in the last reported quarter, representing a year-over-year change of +42%. EPS of $0.39 for the same period compares with $0.38 a year ago.

Huntington Bancshares is expected to post earnings of $0.40 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -1.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Huntington Bancshares. Also, the stock has a VGM Score of D.

S&P Downgrades 5 Banks: What Does It Mean For The Market?UMB Financial NASDAQ: UMBF reported second-quarter 2026 net income of $271.8 million, or $3.56 per diluted share, as loan growth, fee income expansion and investment gains supported results. The company posted an operating return on tangible common equity of 20.3% and an operating efficiency ratio of 48.1%.

Chairman and CEO Mariner Kemper said average loan balances increased at a 12.6% annualized rate from the first quarter, supported by a record $2.6 billion in gross loan production. Commercial and industrial loan balances grew at a nearly 22% annualized pace, with activity led by markets including St. Louis, Utah, Texas and Arizona.

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Kemper said the company’s loan momentum reflected market-share gains more than changes in the broader economy. “It’s business as usual,” he said, adding that growth was occurring across regions and verticals and that the next 90 days appeared similar to the prior 90 days.

Credit Quality and Margin Performance Credit metrics remained strong during the quarter. Net charge-offs were 16 basis points of average loans, while nonperforming loans declined to 31 basis points of loans from 38 basis points in the first quarter.

Reported net interest margin was 3.32%, including a 23-basis-point benefit from purchase-accounting adjustments. Excluding that impact, core net interest margin was 3.09%, up four basis points sequentially. Chief Financial Officer Ram Shankar attributed the improvement primarily to a favorable shift in earning-asset mix toward loans and changes in liquidity levels.

The company recorded $35.9 million of net interest income from purchase-accounting adjustments, including $10.9 million of accelerated accretion tied to early payoffs of acquired loans. UMB expects approximately $46 million of contractual accretion during the remainder of 2026 and $77 million in 2027.

For the third quarter, Shankar said UMB expects core margin to remain relatively flat compared with the second-quarter adjusted margin. The outlook will depend on demand deposit account growth, excess liquidity, SOFR movements and lending and funding mix shifts.

Deposit Trends and Balance-Sheet Flexibility Average deposits were flat from the first quarter. Growth in commercial and asset-servicing deposits was offset by seasonal declines in public funds and lower investor-solutions balances. The average cost of interest-bearing deposits was also roughly unchanged.

Kemper said the third quarter is typically a seasonal low point for deposits, particularly because of public-fund flows, but management expects stronger activity in the second half of the year. He emphasized that the company views deposits over longer periods rather than focusing on quarterly changes because institutional client activity can create episodic swings.

UMB’s off-balance-sheet deposits increased 3.6% sequentially to $23.7 billion. Kemper said the company could bring a portion of those client deposits onto the balance sheet at market rates if needed, without affecting fee income. The company also had nearly $1.5 billion of excess cash and $2.3 billion of securities scheduled to mature or roll off over the next 12 months.

Management did not provide a target for its loan-to-deposit ratio, instead pointing to the company’s historical ability to produce steady deposit growth. Kemper said core deposits remain central to the company’s balance-sheet value and have remained a priority throughout his tenure as CEO.

Fee Income Gains and Expense Outlook Noninterest income rose $40.7 million, or nearly 20%, from the first quarter to $245.5 million. The increase included $27.1 million in net gains from private investment holdings, primarily related to Beacon Communications and SpaceX Technologies, as well as higher 12b-1 and money-market income and continued strength in fund services and corporate trust.

Total fee income from institutional banking businesses increased 6% sequentially and 19.6% from a year earlier. Asset servicing and corporate trust each posted fee-income growth of more than 20% year over year. Excluding investment gains and mark-to-market effects related to company-owned life insurance, core fee income was about $210 million.

Kemper said UMB expects trust and securities-processing revenue to maintain its general growth rate, potentially with upside, citing strong pipelines and market-share gains. He said fund services has shifted over the past decade toward larger and more complex client relationships, while the company has also benefited from platforms expanding access to alternative investments.

Operating noninterest expense totaled $398 million, up 6% from the first quarter. The increase included merit-related salary and benefit expenses, higher deferred compensation expense and $4.1 million of operational losses. Shankar said UMB expects third-quarter operating expenses of approximately $390 million, in line with consensus expectations.

Capital Actions and Outlook UMB’s common equity Tier 1 ratio increased 29 basis points during the quarter to 11.45% as of June 30. The company raised its quarterly common dividend 16.3% to $0.50 per share and repurchased approximately 38,000 shares for $5 million.

Management said its first capital priority remains supporting organic loan growth. Shankar said a preliminary assessment of potential new capital rules suggests a possible net benefit of 50 to 60 basis points after including accumulated other comprehensive income, depending on changes to risk-weighted assets.

The company expects to maintain positive operating leverage for full-year 2026, despite the effect of lower expected contractual accretion income. Its effective tax rate was 20.8% in the second quarter, and management expects a 2026 tax rate between 20% and 22%.

About UMB Financial (NASDAQ:UMBF)UMB Financial Corporation NASDAQ: UMBF is a diversified financial services holding company headquartered in Kansas City, Missouri. Through its principal banking subsidiary, UMB Bank, N.A., the company provides a full suite of commercial and consumer banking services. Key offerings include deposit accounts, commercial and consumer lending, treasury and cash management, as well as online and mobile banking solutions designed to serve businesses, individuals and municipalities.

In addition to its core banking operations, UMB Financial delivers wealth management and trust services, investment advisory, asset management and retirement planning to high-net-worth individuals, families and institutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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