UMB Financial Corporation

Thank you for standing by. My name is Rebecca and I will be your conference operator today. At this time, I would like to welcome everyone to the UMB Financial First Quarter 2026 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, Simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Kay Gregory, Investor Relations. Please go ahead.

Good morning and welcome to our first quarter 2026 call. Mariner Kemper, Chairman and CEO, and Ram Shankar, CFO, will share a few comments about our results. Then we'll open the call for questions from equity research analysts. Jim Rine, President of the Holding Company and CEO of UMB Bank, along with Tom Terry, Chief Credit Officer, will be available for the question and answer session. Before we begin, let me remind you that today's presentation contains forward-looking statements, including the discussion of future financial and operating results, as well as other opportunities management foresees. Forward-looking statements and any pro forma metrics are subject to assumptions, risks, and uncertainties, as outlined in our SEC filings and summarized in our presentation on slide 50. Actual results may differ from those set forth in forward-looking statements, which speak only as of today. We undertake no obligation to update them except to the extent required by securities laws. Presentation materials are available online at investorrelations.umb.com and include reconciliations of non-GAAP financial measures. All per share metrics refer to common shares and are on a diluted share basis. Now, I'll turn the call over to Mariner Kemper.

Thank you, Kay, and good morning, everyone. We'll share some brief comments and open it up for questions. We reported another strong quarter with results well ahead of expectations. We had 10.8% linked quarter annualized loan growth boosted by $2.3 billion in gross production. nine basis points of core margin expansion driven by a 24 basis point decrease in the cost of interest-bearing deposits, high-quality credit metrics, including 19 basis points of net charge-off, and provision of $27 million, driven mostly by the $1.4 billion increase in period and loan balances. And finally, continued momentum in our fee businesses, with strong contributions from corporate trusts, investment banking, and fund services, where assets under administration increased nearly $20 billion from the prior quarter and stands at $565 billion. I'll let Ram get into more detail around our results in a moment, but first I'd like to address some of the headlines around the private credit industry, which appear to exaggerate exposures and risks at regional banks. Private credit has been around for years and has been and will continue to be an important part of capital formation on a global basis. We have heard some concern that due to our varied lines of business, we may have some outsized exposures and could impact our performance. The fact is that we have negligible exposure to the private credit industry, and what exposure we do have is to high-quality and experienced operators that have diversified holdings, strong credit structures, and low leverage at the fund level, all underwritten to low loan-to-value metrics. We are proud to partner with a few of the strongest players by providing asset servicing solutions to their funds. This quarter, we've added additional disclosures to our IR deck to explain what private credit means to us, and more importantly, what it doesn't. First, on slide 31, we have outlined our total NDFI lending exposure, providing additional color to the standard call report categories. As you can see, our total NDFI exposure is $2.6 billion, or just 6.6% of total loans. Within that total, approximately $300 million, or less than 1% of the loans, are subscription lines which carry an even lower level of risk. As I noted earlier, these private credit funds are primarily secured by diversified holdings of seniors' tiered loans, have strong borrowing bases, minimal exposure to at-risk industries, low leverage, and they have continued to see strong gross inflows. Just under $1 billion of our NDFI loans are to private equity funds, with the largest portion of these being subscription lines, also known as capital call lines. As you can see from the definition included on page 31, subscription lines inherently carry even lower risk to lenders as they are short-term lines that are repaid with funds received on capital calls made to investors who are contractually obligated to contribute the capital to the fund upon request. The slide gives other detail and characteristics of our high-quality portfolio, including the fact that over 98% of NDFI balances are pass-rated. As you have heard us say before, lending to NDFIs is not a new phenomenon and has long been a part of our CNI portfolio, with minimal historic losses. Turning to our fee income exposure to private credit funds, we've added some additional detail on asset servicing and custody slide on page 36. Approximately $43 billion of our more than $565 billion in asset center administration is related to private credit, representing just 7.6% of the total. More significantly, the AUA tied to private credit funds increased nearly 5% from the end of the prior quarter. The related annual fee income totals approximately $13 million, or just 1.6% of annualized first quarter fee income. And similarly, any deposit impact from these funds is immaterial. Moving on, our capital levels continue to build with March 31 common equity Tier 1 ratio of 11.16%, a 20 basis point improvement from December. While our capital priorities remain the same, With organic growth at the top of our list, our board approved an increased share repurchase authorization, and as you can see in our earnings release, we opportunistically repurchased approximately 178,000 shares in March. We will continue to remain opportunistic in the second quarter. Finally, our results this quarter drove positive operating leverage of 6.4% on a link quarter basis, a 155 basis point improvement in operating ROCCE, and an operating efficiency ratio of 47.6%. We continue to expect positive operating leverage for the full year of 2026, even with the impact of lower expected contractual accretion benefits. I'm extremely pleased with the performance of our newer markets, and I'm excited to continue the momentum throughout the remainder of this year. And now I'll turn it over to Ram for some additional detail on the drivers of our first quarter results. Ram?