US Mid-cap Banks 2Q26 Review: UMBF & PB

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US Mid-cap Banks

2Q26 Review: UMBF & PB

Price Objective Change

UMBF: Market share gains continue; raise ‘27E by 2%

UMBF reported 2Q26 core EPS of $3.29 vs. our/consensus $3.05/3.12 estimates. Beat

vs. us driven by higher revenue (NII +17c, fees +18c) and lower credit costs (+4c),

partially offset by higher opex (-15c). Core NIM (ex. PAA) increased 3bp QoQ to ~3.10%

due to strong b/s growth – average loans crossed $40bn for the first time and record

gross production. That said, interest expense increased QoQ due to deposit mix shift.

Management expects core NIM to remain relatively stable in 3Q26, as continued asset

growth and disciplined loan pricing are offset by deposit mix and liquidity. Loan growth

remains the primary positive. Average loans increased 13% annualized QoQ, driven by

growth in C&I, while record $2.6bn gross production more than offset normalization in

paydowns. Pipelines remain strong across markets and verticals 3QTD. Average deposits

were flat QoQ, reflecting seasonal public fund outflows and lower Investor Solutions

balances. 3Q26 is expected to represent the seasonal low point; management expressed

confidence in a rebound in 2H26. Trust and securities processing income increased by

4% QoQ. Management expects the current growth trajectory to continue with possible

upside, supported by strong fund services and corporate trust pipelines. Management

reiterated positive operating leverage for FY26 despite lower contractual accretion.

HS/LDD loan growth, stable core NIM, continued fee momentum and positive operating

leverage should drive upward EPS revisions. We raised our 2027E EPS by 2% to $13.93

(from $13.66) on stronger revenue growth assumptions. Raise PO to $171 (from $168).

Reiterate Buy rating.

PB: NIM up, loans stuck in “neutral;” raise ‘27E by 10%

PB reported 2Q26 core EPS of $1.61 vs. our/cons. $1.49/1.56 estimate. The beat vs. us

was driven by better-than-expected PPNR growth ($208mn vs. our $194mn estimate).

Excluding the $4mn one-time loan interest income from a NAL in 1Q26, NIM expanded

1bp QoQ to 3.47% in 2Q26. NIM continues to benefit from securities repricing (~$2bn

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