Oct 28, 2026 earnings call — Acquisition of Eldorado Savings Bank
UMB reported net income of $272.3 million and announced the acquisition of Eldorado with $2.1 billion in deposits.
Revenue $0.8B (est $0.7B) · EPS $3.56 (est $3.22)
Key quotes
"I am very excited to report both our strong third quarter results and the acquisition of Placerville, California based Eldorado Savings Bank."
"A few highlights from the quarter include record top line loan production of $3.1 billion driving $1.1 billion or 11.1% linked quarter annualized growth average loan balance"
"Specifically, fund services contribution to trust and securities processing income grew 8.8% compared to the second quarter and more than 22% year-to-date."
Analyst Q&A 13
Net interest margin drivers
Q (Autonomous): Analyst wanted to know drivers of core NIM being flat, specifically new loan yields vs 6.09% and expected cumulative beta this up cycle versus prior cycle.
A: Management said core NIM should stay consistent in Q4. They cited fixed asset repricing, securities repricing, higher new money yield near 5.60%, and deposit indexing (52% indexed) with about 90% beta on hard index and 65%–70% on soft index.
"We have more than $3 billion of loans priced at 5.25%, that are going to reset about 100 basis points based on that." — Ram Shankar (CFO)
Fee income and paydown trends
Q (Jared Shaw · Barclays Capital): Analyst asked how to think about fee income growth from new initiatives and whether Q3 paydowns were unusual.
A: Management said their strategy is working and fund services pipeline is very strong, including ETF business and corporate trust wins; they expect continued strong fee growth. On paydowns, they think Q3 payoffs were slightly larger than future average and the baseline will likely reset over the next few quarters as Heartland integration matures.
"Our fund services team is on fire." — J. Mariner Kemper (CEO·CHAIR)
Loan production sustainability
Q (John Arfstrom · RBC): Analyst asked if the over $3 billion production quarter had any standout drivers and about plans in Eldorado markets and M&A appetite.
A: Management said Q3 was strong and likely a bit larger than their sustainable run rate, expecting normalization toward a 3-quarter average. On Eldorado, they plan to do no harm, leverage the franchise in Sacramento and Nevada, expand corporate/commercial banking there, and said the deal improves deposit metrics and is accretive in 2027 and beyond.
"We will and then, you know, the other thing that is really neat is the Nevada part of that is newer." — J. Mariner Kemper (CEO·CHAIR)
Deposit beta and Eldorado impact
Q (TD Cowen): Analyst asked whether the beta discussion included Eldorado's $2 billion low-cost deposits and how combined beta on interest-bearing deposits could change.
A: Management said the beta numbers presented were for core UMB and that Eldorado's $2 billion will not materially change those numbers; Eldorado's deposit cost was 88 basis points this quarter. They expect continued institutional and commercial deposit growth and are running deposit campaigns to support mix and growth.
"The numbers I gave you are just core UMB." — Ram Shankar (CFO)
M&A focus and Eldorado deposit cost
Q (Timur Braziler · UBS): Analyst asked about future M&A focus (retail vs larger deals) and whether Eldorado's low-cost deposits will stay low as they are lent out.
A: Management said organic investment comes first and they will consider ‘tuck-in’ deals that retain control and fit strategically, often favoring quality core deposit franchises. On Eldorado deposits they do not expect change other than normal market pressures and think expanding small business and commercial activity there would not materially raise deposit costs short term.
"We use. We. I used the definition of tuck in and I would say the." — J. Mariner Kemper (CEO·CHAIR)
Noninterest bearing deposits and market share
Q (Brian Wilczynski · Morgan Stanley): Analyst asked whether higher rates will reduce NIB growth in Q4 and what drives UMB's incremental loan market share.
A: Management said Q3 is the seasonal low for DDAs and those balances are operating dollars, so they expect normal seasonal DDA growth in Q4 and did not see rate-driven loss. On share gains, they said success comes from bottoms-up budgeting, regional teams, experienced bankers, flexibility on terms (not credit quality), and strong people retention rather than being the cheapest lender.
"The averages are more important than, you know, end of period." — J. Mariner Kemper (CEO·CHAIR)
Capital impact of Eldorado
Q (Stephens): Analyst wanted modeling guideposts for capital impact of Eldorado: TBV dilution or CET1 effect.
A: Management said the deal will be about 15 to 20 basis points dilutive to CET1 at close, but capital generation between now and close will bring CET1 back up; they cited current CET1 around 11 and a half percent. They view the impact as not material.
"It will be about 15 to 20 basis points dilutive to CET1 and close, but given the pace of our capital generation between now and close, we will be right back where we are mean, we are at 11 and a half percent CET1, for instance, at 39 and we will be north of that post deal as well." — Ram Shankar (CFO)
How far to push loan-to-deposit
Q (Brendan Nosal · Hovde Group): Analyst asked how much further UMB can or will push balance sheet capacity to keep a richer, more utilized loan-to-deposit mix.
A: Management said they are comfortable with current cash and a 69% loan-to-deposit ratio, noting peak prior levels around 74 or 75 but they do not intentionally push L/D higher. They expect deposits to keep pace with loan growth via multiple deposit sources and prefer funding with deposits rather than buying money.
"We fully expect to fund our business with our deposits." — J. Mariner Kemper (CEO·CHAIR)
Fund services growth and AI efficiency
Q (Nathan Race · Piper Sandler): Analyst asked what drove strong fund services growth and whether AI can accelerate operating leverage next year.
A: Management said fund services is hitting its stride with a broad pipeline, larger clients, ETF launch, and broader custody sales across verticals, so they expect growth to continue. On AI, they are deploying it across credit admin and fraud detection, see many small wins and some bigger ones, but it is too early to quantify impact and they are proceeding carefully with governance.
"We are using it everywhere plan to deploy it everywhere and in every way and make ourselves more efficient, take tasks repeatable tasks out of human hands, take friction out, take human error, you know, reduce human error, and to me, more importantly than all this, is allow our people to do more as opposed to focusing on reducing staffing levels." — J. Mariner Kemper (CEO·CHAIR)
NDFI loan growth drivers
Q (Wells Fargo): Analyst asked which NDFI verticals drove the $400 million increase and how sustainable that growth is.
A: Management said the increase was broad based and mostly existing customers using their lines, not new clients, and that NDFI is largely a government reclassification of existing lending activity. They indicated there was nothing notable in new NDFI growth on their balance sheet.
"Most of it would be. We studied it. it is just current customers using their lines and borrowing money." — J. Mariner Kemper (CEO·CHAIR)
Credit watch and using Eldorado liquidity
Q (Raymond James): Analyst asked if management is watching any portfolio areas more closely and how they will use Eldorado's excess liquidity after close.
A: Management said they are cautious and proactive, quick to identify issues and keep charge-offs low by managing a watch list; they underwrite assuming the worst to protect recovery. Regarding Eldorado, management said they intend to deploy the excess liquidity to help customers in those communities and noted the acquired securities are high quality mortgage-backed securities that will be marked to market to current yields.
"We are always worried." — J. Mariner Kemper (CEO·CHAIR)
What lifted NIM above flat
Q (Benjamin Gerlinger · Citi): Analyst asked what factors over the past year caused NIM guidance to bias upward rather than flat.
A: Management said the biggest driver was asset mix favoring C&I and less cash, noting core loan yields rose 5 basis points and cash yields are low so replacing cash with loans helps margin. They added fixed asset and bond repricing matter and timing of any FOMC moves affects outcomes, so outperformance would stem from deposit growth and timing.
"It was probably the mix of assets within loan book in favor of C&I and then less cash." — Ram Shankar (CFO)
Q4 loan growth outlook and M&A during Eldorado close
Q (JPMorgan): Analyst asked how to think about net loan growth in Q4 given guidance of moderating production and whether further M&A is off while closing Eldorado.
A: Management said their Q4 loan growth guide looks at the next 90 days and expects Q4 loan growth to more closely resemble Q1 and Q2 than Q3, not a macro-driven call. On M&A, they said Eldorado is small and integration is manageable, so additional M&A is not off the table if the right deal appears.
"We are looking at this more like a branch deal." — J. Mariner Kemper (CEO·CHAIR)