UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition
On October 29, 2019, UMB Financial Corporation (the “Company”) issued a press release announcing the financial results for the Company for the quarter and period ended September 30, 2019. A copy of the press release is attached as Exhibit 99.1 and the information is hereby incorporated by reference herein.
The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” with the Securities and Exchange Commission (“SEC”) for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report on Form 8-K in such a filing.
Item 7.01 Regulation FD Disclosure
On October 29, 2019, the Company announced in the same press release that the Board of Directors of the Company (the “Board”) had declared a quarterly dividend of $0.31 per share that is payable on January 2, 2020 to shareholders of record of the Company as of the close of business on December 10, 2019. This press release is attached as Exhibit 99.1, and the information included in the press release is hereby incorporated herein by reference.
The Company is furnishing a copy of materials that will be used in the Company’s shareholder conference call at 8:30 a.m. (CT) on October 30, 2019. A copy of the materials is attached as Exhibit 99.2 and will be available on the Company’s website at www.umb.com. The materials are dated October 29, 2019, and the Company disclaims any obligation to correct or update any of the materials in the future.
The information provided under Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, is being furnished and is not deemed to be “filed” with the SEC for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report on Form 8-K in such a filing.
Item 9.01 Financial Statements and Exhibits
99.1 |
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99.2 |
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104 |
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UMB FINANCIAL CORPORATION |
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By: |
/s/ Ram Shankar |
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Ram Shankar Chief Financial Officer |
Date: October 29, 2019
Exhibit 99.1
UMB Financial Corporation News Release
1010 Grand Boulevard
Kansas City, MO 64106
816.860.7000
umb.com
//FOR IMMEDIATE RELEASE//
Media Contact: Stephanie Hague: 816.860.5088
Investor Relations Contact: Kay Gregory: 816.860.7106
UMB Financial Corporation Reports Third Quarter Income from Continuing Operations of $62.4 Million, or $1.27 per Diluted Share
KANSAS CITY, Mo. (October 29, 2019) – UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced income from continuing operations for the third quarter of 2019 of $62.4 million, or $1.27 per diluted share, compared to $57.0 million, or $1.16 per diluted share, in the second quarter of 2019 (linked quarter) and $57.8 million, or $1.16 per diluted share, in the third quarter of 2018. The reported GAAP income from continuing operations represents an increase of 9.5 percent on a linked-quarter basis and an increase of 7.8 percent compared to the third quarter of 2018.
Net operating income from continuing operations, a non-GAAP financial measure reconciled to income from continuing operations, the nearest comparable GAAP measure, later in this release, was $62.5 million, or $1.27 per diluted share, for the third quarter of 2019, compared to $57.2 million, or $1.17 per diluted share, for the linked quarter and $58.0 million, or $1.16 per diluted share, for the third quarter of 2018. These results represent an increase of 9.2 percent on a linked-quarter basis and an increase of 7.8 percent compared to the third quarter of 2018.
Summary of quarterly financial results |
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UMB Financial Corporation |
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(unaudited, dollars in thousands, except per share data) |
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Q3 |
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Q2 |
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Q3 |
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2019 |
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2019 |
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2018 |
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Income from continuing operations |
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$ |
62,382 |
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$ |
56,959 |
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$ |
57,849 |
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Loss from discontinued operations |
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— |
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— |
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— |
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Net income |
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62,382 |
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56,959 |
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57,849 |
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Earnings per share from continuing operations (diluted) |
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1.27 |
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1.16 |
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1.16 |
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Losses per share from discontinued operations (diluted) |
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— |
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— |
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— |
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Earnings per share (diluted) |
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1.27 |
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1.16 |
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1.16 |
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Net operating income from continuing operations |
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62,525 |
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57,245 |
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58,024 |
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Operating earnings per share from continuing operations (diluted) |
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1.27 |
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1.17 |
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1.16 |
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GAAP - continuing operations |
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Return on average assets |
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1.03 |
% |
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0.98 |
% |
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1.11 |
% |
Return on average equity |
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9.69 |
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9.46 |
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10.32 |
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Efficiency ratio |
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70.70 |
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70.32 |
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71.27 |
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Non-GAAP - continuing operations |
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Operating return on average assets |
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1.04 |
% |
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0.99 |
% |
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1.11 |
% |
Operating return on average equity |
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9.72 |
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9.51 |
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10.35 |
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Operating efficiency ratio |
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70.63 |
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70.19 |
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71.18 |
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Summary of year-to-date financial results |
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UMB Financial Corporation |
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(unaudited, dollars in thousands, except per share data) |
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September |
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September |
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YTD |
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YTD |
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2019 |
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2018 |
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Income from continuing operations |
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$ |
177,085 |
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$ |
170,806 |
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Loss from discontinued operations |
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— |
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(747 |
) |
Net income |
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177,085 |
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170,059 |
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Earnings per share from continuing operations (diluted) |
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3.61 |
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3.41 |
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Losses per share from discontinued operations (diluted) |
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— |
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(0.01 |
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Earnings per share (diluted) |
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3.61 |
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3.40 |
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Net operating income from continuing operations |
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177,978 |
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173,165 |
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Operating earnings per share from continuing operations (diluted) |
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3.63 |
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3.47 |
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GAAP - continuing operations |
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Return on average assets |
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1.01 |
% |
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1.10 |
% |
Return on average equity |
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9.86 |
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10.43 |
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Efficiency ratio |
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70.34 |
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70.09 |
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Non-GAAP - continuing operations |
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Operating return on average assets |
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1.02 |
% |
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1.12 |
% |
Operating return on average equity |
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9.91 |
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10.57 |
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Operating efficiency ratio |
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70.20 |
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69.69 |
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“For the third quarter, revenues increased 8.2 percent over the prior year period, driven by an 11.8 percent increase in net interest income,” said Mariner Kemper, chairman, president and chief executive officer. “We are pleased with our reported average loan growth of 10.0 percent over the same period, which is more than double the 4.7 percent growth estimated for the industry as a whole, as reported by the Federal Reserve. Additionally, net charge-offs were just 0.07 percent of average loans for the quarter and 0.29 percent on a year-to-date basis, in line with our long-term historical performance. While the shape of the yield curve and low and declining interest rates pose challenges, strong loan pipelines coupled with our focus on diversified fee income sources will help mitigate some of these headwinds.”
Discussion of results from continuing operations
Summary of revenue |
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UMB Financial Corporation |
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(unaudited, dollars in thousands) |
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Q3 |
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Q2 |
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Q3 |
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CQ vs. |
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CQ vs. |
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2019 |
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2019 |
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2018 |
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LQ |
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PY |
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Net interest income |
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$ |
168,260 |
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$ |
166,414 |
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$ |
150,490 |
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$ |
1,846 |
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$ |
17,770 |
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Noninterest income: |
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Trust and securities processing |
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45,218 |
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42,903 |
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43,425 |
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2,315 |
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1,793 |
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Trading and investment banking |
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5,712 |
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5,453 |
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3,711 |
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259 |
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2,001 |
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Service charges on deposit accounts |
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20,620 |
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20,747 |
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20,927 |
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(127 |
) |
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(307 |
) |
Insurance fees and commissions |
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320 |
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465 |
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339 |
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(145 |
) |
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(19 |
) |
Brokerage fees |
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8,102 |
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7,077 |
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6,402 |
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1,025 |
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1,700 |
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Bankcard fees |
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16,895 |
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16,439 |
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16,838 |
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456 |
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57 |
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Gains (losses) on sales of securities available for sale, net |
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3,057 |
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(1,403 |
) |
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211 |
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4,460 |
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|
2,846 |
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Other |
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3,711 |
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13,717 |
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9,032 |
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(10,006 |
) |
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(5,321 |
) |
Total noninterest income |
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$ |
103,635 |
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$ |
105,398 |
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$ |
100,885 |
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$ |
(1,763 |
) |
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$ |
2,750 |
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Total revenue |
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$ |
271,895 |
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$ |
271,812 |
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|
$ |
251,375 |
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|
$ |
83 |
|
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$ |
20,520 |
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Net interest margin |
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|
3.09 |
% |
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|
3.19 |
% |
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|
3.18 |
% |
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Total noninterest income as a % of total revenue |
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38.12 |
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38.78 |
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40.13 |
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• |
Net interest income totaled $168.3 million, an increase of $1.8 million, or 1.1 percent, from linked quarter levels, impacted by a $269.9 million, or 2.1 percent, increase in average loans, a $249.9 million, or 3.0 percent, increase in average securities and one additional day in the third quarter. These benefits were offset by the impact of recent reductions in short-term interest rates on net interest margin. |
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• |
Net interest margin for the third quarter was 3.09 percent, down 10 basis points from the linked quarter, in large part due to lower short-term interest rates. Earning asset yields declined 12 basis points from the linked quarter, in part driven by declining yields in the loan portfolio due to recent reductions in short-term interest rates. The cost of interest-bearing liabilities decreased five basis points to 1.34 percent, driven by a two-basis-point decline in cost of interest-bearing deposits and lower borrowing costs. Net interest margin was also adversely impacted by a slight reduction in the benefit of interest-free funds and the impact of a $750 million cash flow hedge executed in late August. |
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• |
On a year-over-year basis, the increase in net interest income was driven by a 10.0 percent, or $1.2 billion, increase in average loans, as well as higher average loan yields, which increased 12 basis points compared to 2018. |
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• |
For the third quarter of 2019, earning assets averaged $22.4 billion, an increase of 15.5 percent over the third quarter of 2018. |
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• |
Third quarter 2019 noninterest income decreased $1.8 million, or 1.7 percent, on a linked-quarter basis, largely due to: |
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o |
Decreases of $3.7 million in equity earnings on alternative investments, $2.3 million in company-owned life insurance income, and $1.5 million in derivative income, all recorded in other income. The decrease in company-owned life insurance income is offset by a proportionate decrease in deferred compensation expense noted below. |
|
o |
These decreases were partially offset by the following increases: |
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▪ |
An increase of $4.5 million in gains on sales of available-for-sale securities. |
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▪ |
Increases of $1.1 million in fund servicing revenue, $0.6 million in trust services income and $0.6 million in corporate trust income, all recorded in trust and securities processing. |
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▪ |
An increase of $1.0 million in brokerage fees, primarily driven by higher 12b-1 income. |
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• |
Compared to the prior year, noninterest income in the third quarter of 2019 increased $2.8 million, or 2.7 percent, primarily driven by: |
|
o |
An increase of $2.8 million in gains on sales of available-for-sale securities. |
|
o |
A $2.0 million increase in trading and investment banking income due to increased trading volume. |
|
o |
An increase of $2.0 million in corporate trust income, recorded in trust and securities processing. |
|
o |
An increase of $1.7 million in brokerage fees, primarily driven by higher 12b-1 and money market income. |
|
o |
These increases were partially offset by decreases of $2.0 million in company-owned life insurance income, $1.9 million in equity earnings on alternative investments, and $1.0 million in derivative income, all recorded in other income. The decrease in company-owned life insurance income is offset by a proportionate decrease in deferred compensation expense noted below. |
Summary of noninterest expense |
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UMB Financial Corporation |
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(unaudited, dollars in thousands) |
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|
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|
|
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|
Q3 |
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|
Q2 |
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|
Q3 |
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CQ vs. |
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CQ vs. |
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|||||
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2019 |
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2019 |
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2018 |
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LQ |
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PY |
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|||||
Salaries and employee benefits |
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$ |
110,153 |
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$ |
114,454 |
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$ |
102,956 |
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$ |
(4,301 |
) |
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$ |
7,197 |
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Occupancy, net |
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12,240 |
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|
|
11,539 |
|
|
|
11,628 |
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|
|
701 |
|
|
|
612 |
|
Equipment |
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|
19,775 |
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|
|
18,824 |
|
|
|
18,533 |
|
|
|
951 |
|
|
|
1,242 |
|
Supplies and services |
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|
4,261 |
|
|
|
4,285 |
|
|
|
4,528 |
|
|
|
(24 |
) |
|
|
(267 |
) |
Marketing and business development |
|
|
5,655 |
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|
|
7,304 |
|
|
|
6,671 |
|
|
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(1,649 |
) |
|
|
(1,016 |
) |
Processing fees |
|
|
13,619 |
|
|
|
13,096 |
|
|
|
12,331 |
|
|
|
523 |
|
|
|
1,288 |
|
Legal and consulting |
|
|
8,374 |
|
|
|
7,496 |
|
|
|
8,470 |
|
|
|
878 |
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|
|
(96 |
) |
Bankcard |
|
|
4,643 |
|
|
|
4,701 |
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|
|
4,407 |
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|
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(58 |
) |
|
|
236 |
|
Amortization of other intangible assets |
|
|
1,335 |
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|
|
1,251 |
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|
|
1,385 |
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|
|
84 |
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|
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(50 |
) |
Regulatory fees |
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|
2,749 |
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|
|
2,910 |
|
|
|
3,337 |
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|
|
(161 |
) |
|
|
(588 |
) |
Other |
|
|
8,593 |
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|
|
7,527 |
|
|
|
6,139 |
|
|
|
1,066 |
|
|
|
2,454 |
|
Total noninterest expense |
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$ |
191,397 |
|
|
$ |
193,387 |
|
|
$ |
180,385 |
|
|
$ |
(1,990 |
) |
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$ |
11,012 |
|
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• |
GAAP noninterest expense for the third quarter of 2019 was $191.4 million, a decrease of $2.0 million, or 1.0 percent, from the linked quarter and an increase of $11.0 million, or 6.1 percent, from the third quarter of 2018. |
|
• |
On a non-GAAP basis, operating noninterest expense (as reconciled later in this release) was $191.2 million for the third quarter of 2019, a decrease of $1.8 million, or 0.9 percent, compared to the linked quarter and an increase of $11.1 million, or 6.1 percent, compared to the third quarter of 2018. |
|
• |
The linked quarter decrease in noninterest expense was driven by: |
|
o |
A decrease of $4.3 million in salaries and employee benefits, largely driven by a $3.0 million decrease in lower bonus and commission expense and a $1.7 million decrease in deferred compensation expense, which is offset by the decrease in company-owned life insurance income noted above. |
|
o |
A $1.6 million decrease in marketing and business development expense, primarily driven by a decrease of $0.9 million in travel expense and $0.5 million in advertising and business development due to the timing of multiple product initiatives. |
|
o |
These decreases were partially offset by an increase in other expense driven by a $1.3 million fee paid to partially terminate a building lease, increased software equipment expense of $1.2 million, and increased occupancy and legal and consulting expense, due to the timing of multiple technology initiatives. |
|
• |
The year-over-year increase in noninterest expense was driven by: |
|
o |
A $7.2 million increase in salaries and employee benefits, primarily due to increases in salaries and wages expense, bonus and commission expense, and higher benefits expense, partially offset by a decrease of $1.6 million in deferred compensation expense, which is offset by the increase in company-owned life insurance income noted above. |
|
o |
A $1.3 million increase in processing fees expense due to investments in digital channel and integrated platform solutions to support business growth and the ongoing modernization of the company’s core systems. |
|
o |
An increase of $2.5 million in other noninterest expense, driven by a $1.3 million fee paid to partially terminate a building lease in the third quarter of 2019 and an increase of $1.2 million in derivative expense. |
|
• |
The company’s effective tax rate was 15.1 percent for the nine months ended September 30, 2019, compared to 14.2 percent for the same period in 2018. |
Balance sheet
|
• |
Average total assets for the third quarter of 2019 were $23.9 billion compared to $23.3 billion for the linked quarter and $20.7 billion for the same period in 2018. |
Summary of average loans and leases - QTD Average |
UMB Financial Corporation |
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(unaudited, dollars in thousands) |
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|
Q3 |
|
|
Q2 |
|
|
Q3 |
|
|
CQ vs. |
|
|
CQ vs. |
|
|||||
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
LQ |
|
|
PY |
|
|||||
Commercial |
|
$ |
5,443,718 |
|
|
$ |
5,427,498 |
|
|
$ |
4,717,530 |
|
|
$ |
16,220 |
|
|
$ |
726,188 |
|
Asset-based loans |
|
|
372,938 |
|
|
|
387,983 |
|
|
|
382,672 |
|
|
|
(15,045 |
) |
|
|
(9,734 |
) |
Factoring loans |
|
|
221,862 |
|
|
|
261,041 |
|
|
|
264,414 |
|
|
|
(39,179 |
) |
|
|
(42,552 |
) |
Commercial credit card |
|
|
204,905 |
|
|
|
196,313 |
|
|
|
199,730 |
|
|
|
8,592 |
|
|
|
5,175 |
|
Real estate - construction |
|
|
819,926 |
|
|
|
889,233 |
|
|
|
814,053 |
|
|
|
(69,307 |
) |
|
|
5,873 |
|
Real estate - commercial |
|
|
4,164,477 |
|
|
|
3,831,818 |
|
|
|
3,701,072 |
|
|
|
332,659 |
|
|
|
463,405 |
|
Real estate - residential |
|
|
805,994 |
|
|
|
744,750 |
|
|
|
688,097 |
|
|
|
61,244 |
|
|
|
117,897 |
|
Real estate - HELOC |
|
|
498,460 |
|
|
|
514,044 |
|
|
|
566,460 |
|
|
|
(15,584 |
) |
|
|
(68,000 |
) |
Consumer credit card |
|
|
220,363 |
|
|
|
230,863 |
|
|
|
222,223 |
|
|
|
(10,500 |
) |
|
|
(1,860 |
) |
Consumer other |
|
|
136,117 |
|
|
|
132,662 |
|
|
|
152,894 |
|
|
|
3,455 |
|
|
|
(16,777 |
) |
Leases |
|
|
2,118 |
|
|
|
4,776 |
|
|
|
9,407 |
|
|
|
(2,658 |
) |
|
|
(7,289 |
) |
Total loans |
|
$ |
12,890,878 |
|
|
$ |
12,620,981 |
|
|
$ |
11,718,552 |
|
|
$ |
269,897 |
|
|
$ |
1,172,326 |
|
|
• |
Average loans for the third quarter of 2019 increased 2.1 percent on a linked-quarter basis and 10.0 percent compared to the third quarter of 2018. |
Summary of average securities - QTD Average |
|
UMB Financial Corporation |
|
|||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 |
|
|
Q2 |
|
|
Q3 |
|
|
CQ vs. |
|
|
CQ vs. |
|
|||||
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
LQ |
|
|
PY |
|
|||||
Securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury |
|
$ |
250,552 |
|
|
$ |
256,949 |
|
|
$ |
38,044 |
|
|
$ |
(6,397 |
) |
|
$ |
212,508 |
|
U.S. Agencies |
|
|
93,440 |
|
|
|
91,822 |
|
|
|
198 |
|
|
|
1,618 |
|
|
|
93,242 |
|
Mortgage-backed |
|
|
3,987,463 |
|
|
|
3,926,164 |
|
|
|
3,590,703 |
|
|
|
61,299 |
|
|
|
396,760 |
|
State and political subdivisions |
|
|
2,795,210 |
|
|
|
2,659,397 |
|
|
|
2,290,906 |
|
|
|
135,813 |
|
|
|
504,304 |
|
Corporates |
|
|
155,656 |
|
|
|
84,910 |
|
|
|
718 |
|
|
|
70,746 |
|
|
|
154,938 |
|
Total securities available for sale |
|
$ |
7,282,321 |
|
|
$ |
7,019,242 |
|
|
$ |
5,920,569 |
|
|
$ |
263,079 |
|
|
$ |
1,361,752 |
|
Securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and political subdivisions |
|
$ |
1,105,397 |
|
|
$ |
1,128,526 |
|
|
$ |
1,205,007 |
|
|
$ |
(23,129 |
) |
|
$ |
(99,610 |
) |
Trading securities |
|
|
44,571 |
|
|
|
61,565 |
|
|
|
45,476 |
|
|
|
(16,994 |
) |
|
|
(905 |
) |
Other securities |
|
|
90,008 |
|
|
|
80,097 |
|
|
|
65,962 |
|
|
|
9,911 |
|
|
|
24,046 |
|
Total securities |
|
$ |
8,522,297 |
|
|
$ |
8,289,430 |
|
|
$ |
7,237,014 |
|
|
$ |
232,867 |
|
|
$ |
1,285,283 |
|
|
• |
Average securities available for sale increased 3.7 percent on a linked-quarter basis and increased 23.0 percent compared to the third quarter of 2018. |
Summary of average deposits - QTD Average |
UMB Financial Corporation |
|
||||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 |
|
|
Q2 |
|
|
Q3 |
|
|
CQ vs. |
|
|
CQ vs. |
|
|||||
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
LQ |
|
|
PY |
|
|||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
6,082,498 |
|
|
$ |
6,078,520 |
|
|
$ |
5,547,880 |
|
|
$ |
3,978 |
|
|
$ |
534,618 |
|
Interest-bearing demand and savings |
|
|
12,214,570 |
|
|
|
11,740,634 |
|
|
|
9,954,008 |
|
|
|
473,936 |
|
|
|
2,260,562 |
|
Time deposits |
|
|
1,011,862 |
|
|
|
966,719 |
|
|
|
1,030,411 |
|
|
|
45,143 |
|
|
|
(18,549 |
) |
Total deposits |
|
$ |
19,308,930 |
|
|
$ |
18,785,873 |
|
|
$ |
16,532,299 |
|
|
$ |
523,057 |
|
|
$ |
2,776,631 |
|
Noninterest bearing deposits as % of total |
|
|
31.50 |
% |
|
|
32.36 |
% |
|
|
33.56 |
% |
|
|
|
|
|
|
|
|
|
• |
Average deposits increased 2.8 percent on a linked-quarter basis and 16.8 percent compared to the third quarter of 2018. |
Capital
Capital information |
|
UMB Financial Corporation |
|
|||||||||
(unaudited, dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
September 30, 2018 |
|
|||
Total equity |
|
$ |
2,563,866 |
|
|
$ |
2,477,790 |
|
|
$ |
2,203,464 |
|
Book value per common share |
|
|
52.23 |
|
|
|
50.50 |
|
|
|
44.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory capital: |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital |
|
$ |
2,284,417 |
|
|
$ |
2,236,930 |
|
|
$ |
2,175,700 |
|
Tier 1 capital |
|
|
2,284,417 |
|
|
|
2,236,930 |
|
|
|
2,175,700 |
|
Total capital |
|
|
2,464,698 |
|
|
|
2,411,510 |
|
|
|
2,348,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital ratio |
|
|
12.53 |
% |
|
|
12.65 |
% |
|
|
13.47 |
% |
Tier 1 risk-based capital ratio |
|
|
12.53 |
|
|
|
12.65 |
|
|
|
13.47 |
|
Total risk-based capital ratio |
|
|
13.51 |
|
|
|
13.63 |
|
|
|
14.54 |
|
Tier 1 leverage ratio |
|
|
9.62 |
|
|
|
9.69 |
|
|
|
10.58 |
|
|
• |
At September 30, 2019, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds. |
Asset Quality
Credit quality |
|
UMB Financial Corporation |
|
|||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 |
|
|
Q2 |
|
|
Q1 |
|
|
Q4 |
|
|
Q3 |
|
|||||
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|||||
Net charge-offs - Commercial loans |
|
$ |
568 |
|
|
$ |
11,790 |
|
|
$ |
10,537 |
|
|
$ |
44,010 |
|
|
$ |
624 |
|
Net charge-offs (recoveries) - Real estate loans |
|
|
161 |
|
|
|
(714 |
) |
|
|
41 |
|
|
|
28 |
|
|
|
408 |
|
Net charge-offs - Consumer credit card loans |
|
|
1,377 |
|
|
|
1,336 |
|
|
|
1,676 |
|
|
|
1,606 |
|
|
|
1,632 |
|
Net charge-offs - Consumer other loans |
|
|
80 |
|
|
|
157 |
|
|
|
70 |
|
|
|
23 |
|
|
|
82 |
|
Net charge-offs - Total loans |
|
|
2,186 |
|
|
|
12,569 |
|
|
|
12,324 |
|
|
|
45,667 |
|
|
|
2,746 |
|
Net loan charge-offs as a % of total average loans |
|
|
0.07 |
% |
|
|
0.40 |
% |
|
|
0.41 |
% |
|
|
1.51 |
% |
|
|
0.09 |
% |
Loans over 90 days past due |
|
$ |
2,466 |
|
|
$ |
1,825 |
|
|
$ |
1,874 |
|
|
$ |
6,009 |
|
|
$ |
1,927 |
|
Loans over 90 days past due as a % of total loans |
|
|
0.02 |
% |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.05 |
% |
|
|
0.02 |
% |
Nonaccrual and restructured loans |
|
$ |
71,838 |
|
|
$ |
53,395 |
|
|
$ |
63,270 |
|
|
$ |
43,018 |
|
|
$ |
50,568 |
|
Nonaccrual and restructured loans as a % of total loans |
|
|
0.55 |
% |
|
|
0.41 |
% |
|
|
0.50 |
% |
|
|
0.35 |
% |
|
|
0.42 |
% |
Provision for loan losses |
|
$ |
7,500 |
|
|
$ |
11,000 |
|
|
$ |
12,350 |
|
|
$ |
48,000 |
|
|
$ |
5,750 |
|
|
• |
Provision for loan losses totaled $7.5 million, a decrease of $3.5 million from the linked quarter, and an increase of $1.8 million from the third quarter of 2018. |
|
• |
Net charge-offs totaled $2.2 million, or 0.07 percent, of average loans, compared to $12.6 million, or 0.40 percent, of average loans in the linked quarter. |
Dividend Declaration
At the company’s quarterly board meeting, the Board of Directors declared a $0.31 per share quarterly cash dividend, an increase of 3.3 percent, or $0.01 per share. The cash dividend will be payable on January 2, 2020, to shareholders of record at the close of business on December 10, 2019.
Conference Call
The company plans to host a conference call to discuss its third quarter of 2019 earnings results on Wednesday, October 30, 2019, at 8:30 a.m. (CT).
Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:
UMB Financial 3Q 2019 Conference Call
A replay of the conference call may be heard through November 13, 2019 by calling (toll-free)
877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10135206. The call replay may also be accessed at investorrelations.umb.com.
Non-GAAP Financial Information
In this release, we provide information about net operating income from continuing operations (net operating income), operating earnings per share from continuing operations - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, and operating efficiency ratio, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, and operating efficiency ratio – and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, divestiture-, and severance-related items that management does not believe reflect the company’s fundamental operating performance.
Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions and divestitures, severance expense, and the cumulative tax impact of these adjustments.
Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income from continuing operations, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income from continuing operations, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net).
Forward-Looking Statements:
This press release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be
identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.
About UMB:
UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Mo. UMB offers personal banking, commercial banking, healthcare services and institutional banking, which includes services to mutual funds and alternative-investment entities and registered investment advisors. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. For more information, visit UMB.com, UMB Blog or follow us on Twitter at @UMBBank, UMB Facebook and UMB LinkedIn.
Consolidated Balance Sheets |
|
UMB Financial Corporation |
|
|||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Loans |
|
$ |
13,043,840 |
|
|
$ |
11,964,724 |
|
Allowance for loan losses |
|
|
(107,406 |
) |
|
|
(101,302 |
) |
Net loans |
|
|
12,936,434 |
|
|
|
11,863,422 |
|
Loans held for sale |
|
|
11,025 |
|
|
|
2,222 |
|
Securities: |
|
|
|
|
|
|
|
|
Available for sale |
|
|
7,411,908 |
|
|
|
5,932,741 |
|
Held to maturity |
|
|
1,102,005 |
|
|
|
1,199,114 |
|
Trading securities |
|
|
86,074 |
|
|
|
81,159 |
|
Other securities |
|
|
88,176 |
|
|
|
65,252 |
|
Total securities |
|
|
8,688,163 |
|
|
|
7,278,266 |
|
Federal funds sold and resell agreements |
|
|
463,392 |
|
|
|
206,412 |
|
Interest-bearing due from banks |
|
|
158,339 |
|
|
|
668,990 |
|
Cash and due from banks |
|
|
658,198 |
|
|
|
348,700 |
|
Premises and equipment, net |
|
|
290,273 |
|
|
|
277,123 |
|
Accrued income |
|
|
119,024 |
|
|
|
104,012 |
|
Goodwill |
|
|
180,867 |
|
|
|
180,867 |
|
Other intangibles, net |
|
|
17,190 |
|
|
|
16,335 |
|
Other assets |
|
|
620,187 |
|
|
|
516,011 |
|
Total assets |
|
$ |
24,143,092 |
|
|
$ |
21,462,360 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
6,652,887 |
|
|
$ |
5,757,353 |
|
Interest-bearing demand and savings |
|
|
11,689,871 |
|
|
|
10,938,839 |
|
Time deposits under $250,000 |
|
|
618,301 |
|
|
|
594,705 |
|
Time deposits of $250,000 or more |
|
|
348,286 |
|
|
|
445,807 |
|
Total deposits |
|
|
19,309,345 |
|
|
|
17,736,704 |
|
Federal funds purchased and repurchase agreements |
|
|
1,791,000 |
|
|
|
1,192,985 |
|
Long-term debt |
|
|
86,951 |
|
|
|
78,523 |
|
Accrued expenses and taxes |
|
|
223,210 |
|
|
|
171,548 |
|
Other liabilities |
|
|
168,720 |
|
|
|
79,136 |
|
Total liabilities |
|
|
21,579,226 |
|
|
|
19,258,896 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Common stock |
|
|
55,057 |
|
|
|
55,057 |
|
Capital surplus |
|
|
1,069,510 |
|
|
|
1,054,801 |
|
Retained earnings |
|
|
1,621,198 |
|
|
|
1,477,732 |
|
Accumulated other comprehensive income (loss), net |
|
|
96,021 |
|
|
|
(155,641 |
) |
Treasury stock |
|
|
(277,920 |
) |
|
|
(228,485 |
) |
Total shareholders' equity |
|
|
2,563,866 |
|
|
|
2,203,464 |
|
Total liabilities and shareholders' equity |
|
$ |
24,143,092 |
|
|
$ |
21,462,360 |
|
Consolidated Statements of Income |
|
UMB Financial Corporation |
|
|||||||||||||
(unaudited, dollars in thousands except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
162,243 |
|
|
$ |
143,947 |
|
|
$ |
481,342 |
|
|
$ |
405,231 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable interest |
|
|
26,966 |
|
|
|
20,263 |
|
|
|
79,057 |
|
|
|
60,566 |
|
Tax-exempt interest |
|
|
23,202 |
|
|
|
18,281 |
|
|
|
65,887 |
|
|
|
55,274 |
|
Total securities income |
|
|
50,168 |
|
|
|
38,544 |
|
|
|
144,944 |
|
|
|
115,840 |
|
Federal funds and resell agreements |
|
|
2,817 |
|
|
|
665 |
|
|
|
8,968 |
|
|
|
2,455 |
|
Interest-bearing due from banks |
|
|
3,450 |
|
|
|
1,513 |
|
|
|
10,117 |
|
|
|
4,149 |
|
Trading securities |
|
|
425 |
|
|
|
428 |
|
|
|
1,701 |
|
|
|
1,567 |
|
Total interest income |
|
|
219,103 |
|
|
|
185,097 |
|
|
|
647,072 |
|
|
|
529,242 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
41,144 |
|
|
|
25,792 |
|
|
|
118,494 |
|
|
|
57,961 |
|
Federal funds and repurchase agreements |
|
|
8,313 |
|
|
|
7,524 |
|
|
|
25,924 |
|
|
|
18,922 |
|
Other |
|
|
1,386 |
|
|
|
1,291 |
|
|
|
4,112 |
|
|
|
3,721 |
|
Total interest expense |
|
|
50,843 |
|
|
|
34,607 |
|
|
|
148,530 |
|
|
|
80,604 |
|
Net interest income |
|
|
168,260 |
|
|
|
150,490 |
|
|
|
498,542 |
|
|
|
448,638 |
|
Provision for loan losses |
|
|
7,500 |
|
|
|
5,750 |
|
|
|
30,850 |
|
|
|
22,750 |
|
Net interest income after provision for loan losses |
|
|
160,760 |
|
|
|
144,740 |
|
|
|
467,692 |
|
|
|
425,888 |
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and securities processing |
|
|
45,218 |
|
|
|
43,425 |
|
|
|
130,078 |
|
|
|
130,272 |
|
Trading and investment banking |
|
|
5,712 |
|
|
|
3,711 |
|
|
|
16,746 |
|
|
|
12,465 |
|
Service charges on deposit accounts |
|
|
20,620 |
|
|
|
20,927 |
|
|
|
62,648 |
|
|
|
63,554 |
|
Insurance fees and commissions |
|
|
320 |
|
|
|
339 |
|
|
|
1,123 |
|
|
|
980 |
|
Brokerage fees |
|
|
8,102 |
|
|
|
6,402 |
|
|
|
22,422 |
|
|
|
19,046 |
|
Bankcard fees |
|
|
16,895 |
|
|
|
16,838 |
|
|
|
50,401 |
|
|
|
52,145 |
|
Gains on sales of securities available for sale, net |
|
|
3,057 |
|
|
|
211 |
|
|
|
2,463 |
|
|
|
578 |
|
Other |
|
|
3,711 |
|
|
|
9,032 |
|
|
|
30,534 |
|
|
|
27,659 |
|
Total noninterest income |
|
|
103,635 |
|
|
|
100,885 |
|
|
|
316,415 |
|
|
|
306,699 |
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
110,153 |
|
|
|
102,956 |
|
|
|
340,639 |
|
|
|
315,099 |
|
Occupancy, net |
|
|
12,240 |
|
|
|
11,628 |
|
|
|
35,522 |
|
|
|
33,394 |
|
Equipment |
|
|
19,775 |
|
|
|
18,533 |
|
|
|
58,283 |
|
|
|
56,201 |
|
Supplies and services |
|
|
4,261 |
|
|
|
4,528 |
|
|
|
12,419 |
|
|
|
12,434 |
|
Marketing and business development |
|
|
5,655 |
|
|
|
6,671 |
|
|
|
17,872 |
|
|
|
17,889 |
|
Processing fees |
|
|
13,619 |
|
|
|
12,331 |
|
|
|
38,847 |
|
|
|
35,029 |
|
Legal and consulting |
|
|
8,374 |
|
|
|
8,470 |
|
|
|
21,503 |
|
|
|
18,774 |
|
Bankcard |
|
|
4,643 |
|
|
|
4,407 |
|
|
|
13,689 |
|
|
|
13,198 |
|
Amortization of other intangible assets |
|
|
1,335 |
|
|
|
1,385 |
|
|
|
3,913 |
|
|
|
4,432 |
|
Regulatory fees |
|
|
2,749 |
|
|
|
3,337 |
|
|
|
8,549 |
|
|
|
10,014 |
|
Other |
|
|
8,593 |
|
|
|
6,139 |
|
|
|
24,174 |
|
|
|
17,015 |
|
Total noninterest expense |
|
|
191,397 |
|
|
|
180,385 |
|
|
|
575,410 |
|
|
|
533,479 |
|
Income before income taxes |
|
|
72,998 |
|
|
|
65,240 |
|
|
|
208,697 |
|
|
|
199,108 |
|
Income tax expense |
|
|
10,616 |
|
|
|
7,391 |
|
|
|
31,612 |
|
|
|
28,302 |
|
Income from continuing operations |
|
|
62,382 |
|
|
|
57,849 |
|
|
|
177,085 |
|
|
|
170,806 |
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(917 |
) |
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(170 |
) |
Loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(747 |
) |
NET INCOME |
|
$ |
62,382 |
|
|
$ |
57,849 |
|
|
$ |
177,085 |
|
|
$ |
170,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
1.28 |
|
|
$ |
1.17 |
|
|
$ |
3.63 |
|
|
$ |
3.45 |
|
Loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Net income – basic |
|
|
1.28 |
|
|
|
1.17 |
|
|
|
3.63 |
|
|
|
3.44 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
1.27 |
|
|
|
1.16 |
|
|
|
3.61 |
|
|
|
3.41 |
|
Loss from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Net income – diluted |
|
|
1.27 |
|
|
|
1.16 |
|
|
|
3.61 |
|
|
|
3.40 |
|
Dividends |
|
|
0.30 |
|
|
|
0.29 |
|
|
|
0.90 |
|
|
|
0.87 |
|
Weighted average shares outstanding – basic |
|
|
48,797,182 |
|
|
|
49,473,157 |
|
|
|
48,762,667 |
|
|
|
49,482,087 |
|
Weighted average shares outstanding – diluted |
|
|
49,096,196 |
|
|
|
49,912,084 |
|
|
|
49,052,329 |
|
|
|
49,952,984 |
|
Consolidated Statements of Comprehensive Income |
|
UMB Financial Corporation |
|
|||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Net income |
|
$ |
62,382 |
|
|
$ |
57,849 |
|
|
$ |
177,085 |
|
|
$ |
170,059 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains and losses on debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized holding gains and losses, net |
|
|
54,182 |
|
|
|
(36,331 |
) |
|
|
268,100 |
|
|
|
(133,013 |
) |
Less: Reclassification adjustment for gains included in net income |
|
|
(3,057 |
) |
|
|
(211 |
) |
|
|
(2,463 |
) |
|
|
(578 |
) |
Change in unrealized gains and losses on debt securities during the period |
|
|
51,125 |
|
|
|
(36,542 |
) |
|
|
265,637 |
|
|
|
(133,591 |
) |
Change in unrealized gains and losses on derivative hedges |
|
|
(7,189 |
) |
|
|
1,162 |
|
|
|
(12,323 |
) |
|
|
4,274 |
|
Income tax (expense) benefit |
|
|
(10,532 |
) |
|
|
8,698 |
|
|
|
(61,511 |
) |
|
|
32,250 |
|
Other comprehensive income (loss) before reclassifications |
|
|
33,404 |
|
|
|
(26,682 |
) |
|
|
191,803 |
|
|
|
(97,067 |
) |
Amounts reclassified from accumulated other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13,049 |
) |
Net current-period other comprehensive income (loss) |
|
|
33,404 |
|
|
|
(26,682 |
) |
|
|
191,803 |
|
|
|
(110,116 |
) |
Comprehensive income |
|
$ |
95,786 |
|
|
$ |
31,167 |
|
|
$ |
368,888 |
|
|
$ |
59,943 |
|
Consolidated Statements of Shareholders' Equity |
UMB Financial Corporation |
|
||||||||||||||||||||||
(unaudited, dollars in thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Common Stock |
|
|
Capital Surplus |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive (Loss) Income |
|
|
Treasury Stock |
|
|
Total |
|
||||||
Balance - January 1, 2018 |
|
$ |
55,057 |
|
|
$ |
1,046,095 |
|
|
$ |
1,338,110 |
|
|
$ |
(45,525 |
) |
|
$ |
(212,206 |
) |
|
$ |
2,181,531 |
|
Total comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
170,059 |
|
|
|
(110,116 |
) |
|
|
— |
|
|
|
59,943 |
|
Reclassification of certain tax effects |
|
|
— |
|
|
|
— |
|
|
|
12,917 |
|
|
|
— |
|
|
|
— |
|
|
|
12,917 |
|
Dividends ($0.87 per share) |
|
|
— |
|
|
|
— |
|
|
|
(43,499 |
) |
|
|
— |
|
|
|
— |
|
|
|
(43,499 |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(26,417 |
) |
|
|
(26,417 |
) |
Issuances of equity awards, net of forfeitures |
|
|
— |
|
|
|
(2,004 |
) |
|
|
— |
|
|
|
— |
|
|
|
2,499 |
|
|
|
495 |
|
Recognition of equity-based compensation |
|
|
— |
|
|
|
8,469 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,469 |
|
Sale of treasury stock |
|
|
— |
|
|
|
409 |
|
|
|
— |
|
|
|
— |
|
|
|
406 |
|
|
|
815 |
|
Exercise of stock options |
|
|
— |
|
|
|
1,832 |
|
|
|
— |
|
|
|
— |
|
|
|
7,233 |
|
|
|
9,065 |
|
Cumulative effect adjustments |
|
|
— |
|
|
|
— |
|
|
|
145 |
|
|
|
— |
|
|
|
— |
|
|
|
145 |
|
Balance - September 30, 2018 |
|
$ |
55,057 |
|
|
$ |
1,054,801 |
|
|
$ |
1,477,732 |
|
|
$ |
(155,641 |
) |
|
$ |
(228,485 |
) |
|
$ |
2,203,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - January 1, 2019 |
|
$ |
55,057 |
|
|
$ |
1,054,601 |
|
|
$ |
1,488,421 |
|
|
$ |
(95,782 |
) |
|
$ |
(273,827 |
) |
|
$ |
2,228,470 |
|
Total comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
177,085 |
|
|
|
191,803 |
|
|
|
— |
|
|
|
368,888 |
|
Dividends ($0.90 per share) |
|
|
— |
|
|
|
— |
|
|
|
(44,308 |
) |
|
|
— |
|
|
|
— |
|
|
|
(44,308 |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,335 |
) |
|
|
(4,335 |
) |
Forfeitures of equity awards, net of issuances |
|
|
— |
|
|
|
3,113 |
|
|
|
— |
|
|
|
— |
|
|
|
(2,497 |
) |
|
|
616 |
|
Recognition of equity-based compensation |
|
|
— |
|
|
|
10,918 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,918 |
|
Sale of treasury stock |
|
|
— |
|
|
|
265 |
|
|
|
— |
|
|
|
— |
|
|
|
380 |
|
|
|
645 |
|
Exercise of stock options |
|
|
— |
|
|
|
613 |
|
|
|
— |
|
|
|
— |
|
|
|
2,359 |
|
|
|
2,972 |
|
Balance - September 30, 2019 |
|
$ |
55,057 |
|
|
$ |
1,069,510 |
|
|
$ |
1,621,198 |
|
|
$ |
96,021 |
|
|
$ |
(277,920 |
) |
|
$ |
2,563,866 |
|
Average Balances / Yields and Rates |
|
UMB Financial Corporation |
|
|||||||||||||
(tax - equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|||||||||||||
|
|
2019 |
|
|
2018 |
|
||||||||||
|
|
Average |
|
|
Average |
|
|
Average |
|
|
Average |
|
||||
|
|
Balance |
|
|
Yield/Rate |
|
|
Balance |
|
|
Yield/Rate |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net of unearned interest |
|
$ |
12,890,878 |
|
|
|
4.99 |
% |
|
$ |
11,718,552 |
|
|
|
4.87 |
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
4,636,243 |
|
|
|
2.31 |
|
|
|
3,760,332 |
|
|
|
2.14 |
|
Tax-exempt |
|
|
3,841,483 |
|
|
|
3.03 |
|
|
|
3,431,206 |
|
|
|
2.67 |
|
Total securities |
|
|
8,477,726 |
|
|
|
2.63 |
|
|
|
7,191,538 |
|
|
|
2.39 |
|
Federal funds and resell agreements |
|
|
394,587 |
|
|
|
2.83 |
|
|
|
101,223 |
|
|
|
2.61 |
|
Interest bearing due from banks |
|
|
582,116 |
|
|
|
2.35 |
|
|
|
322,882 |
|
|
|
1.86 |
|
Trading securities |
|
|
44,571 |
|
|
|
4.32 |
|
|
|
45,476 |
|
|
|
4.35 |
|
Total earning assets |
|
|
22,389,878 |
|
|
|
3.99 |
|
|
|
19,379,671 |
|
|
|
3.89 |
|
Allowance for loan losses |
|
|
(104,795 |
) |
|
|
|
|
|
|
(99,289 |
) |
|
|
|
|
Other assets |
|
|
1,652,033 |
|
|
|
|
|
|
|
1,469,283 |
|
|
|
|
|
Total assets |
|
$ |
23,937,116 |
|
|
|
|
|
|
$ |
20,749,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
13,226,432 |
|
|
|
1.23 |
% |
|
$ |
10,984,419 |
|
|
|
0.93 |
% |
Federal funds and repurchase agreements |
|
|
1,683,072 |
|
|
|
1.96 |
|
|
|
1,733,884 |
|
|
|
1.72 |
|
Borrowed funds |
|
|
88,100 |
|
|
|
6.24 |
|
|
|
78,764 |
|
|
|
6.50 |
|
Total interest-bearing liabilities |
|
|
14,997,604 |
|
|
|
1.34 |
|
|
|
12,797,067 |
|
|
|
1.07 |
|
Noninterest-bearing demand deposits |
|
|
6,082,498 |
|
|
|
|
|
|
|
5,547,880 |
|
|
|
|
|
Other liabilities |
|
|
303,736 |
|
|
|
|
|
|
|
179,775 |
|
|
|
|
|
Shareholders' equity |
|
|
2,553,278 |
|
|
|
|
|
|
|
2,224,943 |
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
23,937,116 |
|
|
|
|
|
|
$ |
20,749,665 |
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
2.65 |
% |
|
|
|
|
|
|
2.82 |
% |
Net interest margin |
|
|
|
|
|
|
3.09 |
|
|
|
|
|
|
|
3.18 |
|
Average Balances / Yields and Rates |
|
UMB Financial Corporation |
|
|||||||||||||
(tax - equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|||||||||||||
|
|
2019 |
|
|
2018 |
|
||||||||||
|
|
Average |
|
|
Average |
|
|
Average |
|
|
Average |
|
||||
|
|
Balance |
|
|
Yield/Rate |
|
|
Balance |
|
|
Yield/Rate |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net of unearned interest |
|
$ |
12,607,157 |
|
|
|
5.10 |
% |
|
$ |
11,484,757 |
|
|
|
4.72 |
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
4,481,242 |
|
|
|
2.36 |
|
|
|
3,830,164 |
|
|
|
2.11 |
|
Tax-exempt |
|
|
3,730,744 |
|
|
|
2.98 |
|
|
|
3,519,060 |
|
|
|
2.66 |
|
Total securities |
|
|
8,211,986 |
|
|
|
2.64 |
|
|
|
7,349,224 |
|
|
|
2.37 |
|
Federal funds and resell agreements |
|
|
414,560 |
|
|
|
2.89 |
|
|
|
122,961 |
|
|
|
2.67 |
|
Interest bearing due from banks |
|
|
563,810 |
|
|
|
2.40 |
|
|
|
336,144 |
|
|
|
1.65 |
|
Trading securities |
|
|
50,841 |
|
|
|
5.05 |
|
|
|
45,206 |
|
|
|
5.21 |
|
Total earning assets |
|
|
21,848,354 |
|
|
|
4.07 |
|
|
|
19,338,292 |
|
|
|
3.76 |
|
Allowance for loan losses |
|
|
(106,565 |
) |
|
|
|
|
|
|
(100,856 |
) |
|
|
|
|
Other assets |
|
|
1,607,087 |
|
|
|
|
|
|
|
1,467,036 |
|
|
|
|
|
Total assets |
|
$ |
23,348,876 |
|
|
|
|
|
|
$ |
20,704,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
12,897,172 |
|
|
|
1.23 |
% |
|
$ |
10,831,775 |
|
|
|
0.72 |
% |
Federal funds and repurchase agreements |
|
|
1,655,934 |
|
|
|
2.09 |
|
|
|
1,678,108 |
|
|
|
1.51 |
|
Borrowed funds |
|
|
84,107 |
|
|
|
6.54 |
|
|
|
78,770 |
|
|
|
6.32 |
|
Total interest-bearing liabilities |
|
|
14,637,213 |
|
|
|
1.36 |
|
|
|
12,588,653 |
|
|
|
0.86 |
|
Noninterest-bearing demand deposits |
|
|
6,040,019 |
|
|
|
|
|
|
|
5,753,237 |
|
|
|
|
|
Other liabilities |
|
|
269,425 |
|
|
|
|
|
|
|
172,560 |
|
|
|
|
|
Shareholders' equity |
|
|
2,402,219 |
|
|
|
|
|
|
|
2,190,022 |
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
23,348,876 |
|
|
|
|
|
|
$ |
20,704,472 |
|
|
|
|
|
Net interest spread |
|
|
|
|
|
|
2.71 |
% |
|
|
|
|
|
|
2.90 |
% |
Net interest margin |
|
|
|
|
|
|
3.16 |
|
|
|
|
|
|
|
3.20 |
|
Business Segment Information |
|
UMB Financial Corporation |
|
|||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
|||||||||||||||||
|
|
Commercial Banking |
|
|
Institutional Banking |
|
|
Personal Banking |
|
|
Healthcare Services |
|
|
Total |
|
|||||
Net interest income |
|
$ |
104,360 |
|
|
$ |
18,726 |
|
|
$ |
33,296 |
|
|
$ |
11,878 |
|
|
$ |
168,260 |
|
Provision for loan losses |
|
|
5,966 |
|
|
|
256 |
|
|
|
1,278 |
|
|
|
— |
|
|
|
7,500 |
|
Noninterest income |
|
|
18,874 |
|
|
|
49,806 |
|
|
|
26,118 |
|
|
|
8,837 |
|
|
|
103,635 |
|
Noninterest expense |
|
|
66,447 |
|
|
|
55,280 |
|
|
|
58,328 |
|
|
|
11,342 |
|
|
|
191,397 |
|
Income (loss) before taxes |
|
|
50,821 |
|
|
|
12,996 |
|
|
|
(192 |
) |
|
|
9,373 |
|
|
|
72,998 |
|
Income tax expense (benefit) |
|
|
7,390 |
|
|
|
1,891 |
|
|
|
(28 |
) |
|
|
1,363 |
|
|
|
10,616 |
|
Income (loss) from continuing operations |
|
$ |
43,431 |
|
|
$ |
11,105 |
|
|
$ |
(164 |
) |
|
$ |
8,010 |
|
|
$ |
62,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018 |
|
|||||||||||||||||
|
|
Commercial Banking |
|
|
Institutional Banking |
|
|
Personal Banking |
|
|
Healthcare Services |
|
|
Total |
|
|||||
Net interest income |
|
$ |
94,782 |
|
|
$ |
15,235 |
|
|
$ |
31,069 |
|
|
$ |
9,404 |
|
|
$ |
150,490 |
|
Provision for loan losses |
|
|
4,063 |
|
|
|
354 |
|
|
|
1,333 |
|
|
|
— |
|
|
|
5,750 |
|
Noninterest income |
|
|
20,825 |
|
|
|
43,171 |
|
|
|
28,269 |
|
|
|
8,620 |
|
|
|
100,885 |
|
Noninterest expense |
|
|
64,076 |
|
|
|
47,083 |
|
|
|
56,651 |
|
|
|
12,575 |
|
|
|
180,385 |
|
Income before taxes |
|
|
47,468 |
|
|
|
10,969 |
|
|
|
1,354 |
|
|
|
5,449 |
|
|
|
65,240 |
|
Income tax expense |
|
|
5,378 |
|
|
|
1,243 |
|
|
|
153 |
|
|
|
617 |
|
|
|
7,391 |
|
Income from continuing operations |
|
$ |
42,090 |
|
|
$ |
9,726 |
|
|
$ |
1,201 |
|
|
$ |
4,832 |
|
|
$ |
57,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2019 |
|
|||||||||||||||||
|
|
Commercial Banking |
|
|
Institutional Banking |
|
|
Personal Banking |
|
|
Healthcare Services |
|
|
Total |
|
|||||
Net interest income |
|
$ |
306,752 |
|
|
$ |
58,599 |
|
|
$ |
98,933 |
|
|
$ |
34,258 |
|
|
$ |
498,542 |
|
Provision for loan losses |
|
|
25,602 |
|
|
|
723 |
|
|
|
4,525 |
|
|
|
— |
|
|
|
30,850 |
|
Noninterest income |
|
|
62,442 |
|
|
|
142,370 |
|
|
|
83,855 |
|
|
|
27,748 |
|
|
|
316,415 |
|
Noninterest expense |
|
|
201,777 |
|
|
|
160,308 |
|
|
|
176,762 |
|
|
|
36,563 |
|
|
|
575,410 |
|
Income before taxes |
|
|
141,815 |
|
|
|
39,938 |
|
|
|
1,501 |
|
|
|
25,443 |
|
|
|
208,697 |
|
Income tax expense |
|
|
21,482 |
|
|
|
6,049 |
|
|
|
227 |
|
|
|
3,854 |
|
|
|
31,612 |
|
Income from continuing operations |
|
$ |
120,333 |
|
|
$ |
33,889 |
|
|
$ |
1,274 |
|
|
$ |
21,589 |
|
|
$ |
177,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018 |
|
|||||||||||||||||
|
|
Commercial Banking |
|
|
Institutional Banking |
|
|
Personal Banking |
|
|
Healthcare Services |
|
|
Total |
|
|||||
Net interest income |
|
$ |
279,842 |
|
|
$ |
47,225 |
|
|
$ |
93,057 |
|
|
$ |
28,514 |
|
|
$ |
448,638 |
|
Provision for loan losses |
|
|
17,179 |
|
|
|
1,027 |
|
|
|
4,544 |
|
|
|
— |
|
|
|
22,750 |
|
Noninterest income |
|
|
60,590 |
|
|
|
132,005 |
|
|
|
87,708 |
|
|
|
26,396 |
|
|
|
306,699 |
|
Noninterest expense |
|
|
189,050 |
|
|
|
141,517 |
|
|
|
165,968 |
|
|
|
36,944 |
|
|
|
533,479 |
|
Income before taxes |
|
|
134,203 |
|
|
|
36,686 |
|
|
|
10,253 |
|
|
|
17,966 |
|
|
|
199,108 |
|
Income tax expense |
|
|
19,076 |
|
|
|
5,215 |
|
|
|
1,457 |
|
|
|
2,554 |
|
|
|
28,302 |
|
Income from continuing operations |
|
$ |
115,127 |
|
|
$ |
31,471 |
|
|
$ |
8,796 |
|
|
$ |
15,412 |
|
|
$ |
170,806 |
|
The company has strategically aligned its operations into the following four reportable segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at September 30, 2019.
Non-GAAP Financial Measures
Net operating income Non-GAAP reconciliations: |
|
UMB Financial Corporation |
|
|||||||||||||
(unaudited, dollars in thousands except per share data) |
|
|
|
|||||||||||||
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Income from continuing operations (GAAP) |
|
$ |
62,382 |
|
|
$ |
57,849 |
|
|
$ |
177,085 |
|
|
$ |
170,806 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and divestiture expense (income) |
|
|
71 |
|
|
|
3 |
|
|
|
168 |
|
|
|
(3 |
) |
Severance expense |
|
|
113 |
|
|
|
221 |
|
|
|
980 |
|
|
|
3,035 |
|
Tax-impact of adjustments (i) |
|
|
(41 |
) |
|
|
(49 |
) |
|
|
(255 |
) |
|
|
(673 |
) |
Total Non-GAAP adjustments (net of tax) |
|
|
143 |
|
|
|
175 |
|
|
|
893 |
|
|
|
2,359 |
|
Net operating income from continuing operations (Non-GAAP) |
|
$ |
62,525 |
|
|
$ |
58,024 |
|
|
$ |
177,978 |
|
|
$ |
173,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations - diluted (GAAP) |
|
$ |
1.27 |
|
|
$ |
1.16 |
|
|
$ |
3.61 |
|
|
$ |
3.41 |
|
Acquisition and divestiture expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Severance expense |
|
|
— |
|
|
|
— |
|
|
|
0.02 |
|
|
|
0.07 |
|
Tax-impact of adjustments (i) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Operating earnings per share from continuing operations - diluted (Non-GAAP) |
|
$ |
1.27 |
|
|
$ |
1.16 |
|
|
$ |
3.63 |
|
|
$ |
3.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.03 |
% |
|
|
1.11 |
% |
|
|
1.01 |
% |
|
|
1.10 |
% |
Return on average equity |
|
|
9.69 |
|
|
|
10.32 |
|
|
|
9.86 |
|
|
|
10.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating return on average assets |
|
|
1.04 |
% |
|
|
1.11 |
% |
|
|
1.02 |
% |
|
|
1.12 |
% |
Operating return on average equity |
|
|
9.72 |
|
|
|
10.35 |
|
|
|
9.91 |
|
|
|
10.57 |
|
(i) Calculated using the company’s marginal tax rate of 22.2 percent.
Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: |
|
UMB Financial Corporation |
|
|||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Noninterest expense |
|
$ |
191,397 |
|
|
$ |
180,385 |
|
|
$ |
575,410 |
|
|
$ |
533,479 |
|
Adjustments to arrive at operating noninterest expense (pre-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and divestiture expense (income) |
|
|
71 |
|
|
|
3 |
|
|
|
168 |
|
|
|
(3 |
) |
Severance expense |
|
|
113 |
|
|
|
221 |
|
|
|
980 |
|
|
|
3,035 |
|
Total Non-GAAP adjustments (pre-tax) |
|
|
184 |
|
|
|
224 |
|
|
|
1,148 |
|
|
|
3,032 |
|
Operating noninterest expense (Non-GAAP) |
|
$ |
191,213 |
|
|
$ |
180,161 |
|
|
$ |
574,262 |
|
|
$ |
530,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
$ |
191,397 |
|
|
$ |
180,385 |
|
|
$ |
575,410 |
|
|
$ |
533,479 |
|
Less: Amortization of other intangibles |
|
|
1,335 |
|
|
|
1,385 |
|
|
|
3,913 |
|
|
|
4,432 |
|
Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) |
|
$ |
190,062 |
|
|
$ |
179,000 |
|
|
$ |
571,497 |
|
|
$ |
529,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating noninterest expense |
|
$ |
191,213 |
|
|
$ |
180,161 |
|
|
$ |
574,262 |
|
|
$ |
530,447 |
|
Less: Amortization of other intangibles |
|
|
1,335 |
|
|
|
1,385 |
|
|
|
3,913 |
|
|
|
4,432 |
|
Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) |
|
$ |
189,878 |
|
|
$ |
178,776 |
|
|
$ |
570,349 |
|
|
$ |
526,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
168,260 |
|
|
$ |
150,490 |
|
|
$ |
498,542 |
|
|
$ |
448,638 |
|
Noninterest income |
|
|
103,635 |
|
|
|
100,885 |
|
|
|
316,415 |
|
|
|
306,699 |
|
Less: Gains on sales of securities available for sale, net |
|
|
3,057 |
|
|
|
211 |
|
|
|
2,463 |
|
|
|
578 |
|
Total Non-GAAP Revenue (denominator A) |
|
$ |
268,838 |
|
|
$ |
251,164 |
|
|
$ |
812,494 |
|
|
$ |
754,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (numerator A/denominator A) |
|
|
70.70 |
% |
|
|
71.27 |
% |
|
|
70.34 |
% |
|
|
70.09 |
% |
Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) |
|
|
70.63 |
|
|
|
71.18 |
|
|
|
70.20 |
|
|
|
69.69 |
|
UMB Financial Third Quarter 2019 October 29, 2019 Exhibit 99.2
Cautionary Notice about Forward-Looking Statements This presentation of UMB Financial Corporation (the “Company,” “our,” “us,” or “we”) contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.
Earnings Summary – 3Q 2019 $ in thousands, except share and per share data; unaudited Non-GAAP adjustments include acquisition and divestiture income and expense, severance expense and the cumulative tax impact of these adjustments. See the non-GAAP reconciliations and additional information on these items on slides 37 and 38.
Select Balance Sheet Items $ in thousands, average balances; unaudited Three Months Ended
Key Performance Metrics This represents a non-GAAP measure. See slides 37 and 38 for additional disclosures and reconciliations related to these non-GAAP financial measures.
Balance Sheet
Consistent Loan Growth Average Total Loans 5 Year CAGR 12.9%
Loan Composition Diverse Loan Book (Average loan balances for the three months ended September 30 of the indicated year) Commercial Credit Card Commercial & Industrial HELOC Residential Real Estate Real Estate Construction Commercial Real Estate Consumer Credit Card Consumer Other Factoring Loans Asset-Based Loans Percentages less than 5% have been omitted. Includes leases. (1) (2)
Colorado Kansas City Kansas Greater MO St. Louis Arizona Texas Oklahoma Marquette Transportation Fin (Natl. Sales) Nebraska Marquette Business Credit (Natl. Sales) Geographic Diversity Loans by Region (Average loan balances for the three months ended September 30 of the indicated year) Percentages less than 5% have been omitted. (1)
Loan Activity
High Quality Investment Portfolio Securities Held to Maturity $1.1 billion at September 30, 2019 Securities Available for Sale $7.4 billion at September 30, 2019 Governmental Other Higher Education Healthcare Utility Social Service Industrial Cultural Civic K-12 Education NFP - Other Average Balance: $7.3 billion Average Yield: 2.55% Duration: 47 months Average Balance: $1.1 billion Average Yield: 3.28% Duration: 70 months Total Portfolio Average Yield: 2.64% Duration: 50 months Agencies Corporates Municipals Mortgage-Backed Securities Treasuries
Securities and Loan Statistics (1) Roll off includes cash flow from maturities, calls or amortizations of securities and is presented net of sales. (2) Purchased amount is presented net of purchases made related to sales. Loan Portfolio Statistics at September 30, 2019 Variable Rate Loans: $8.1 billion or 62% of the loan book ~35% of variable loans are tied to Prime for the next quarter ~64% of variable loans are tied to LIBOR for the next quarter Loan Repricing/Maturity Schedule 56% in 4th quarter 2019 66% in the next 12 months AFS Portfolio Activity
Diverse Sources of Deposits (Average deposits for the three months ended September 30 of the indicated year) Deposit Composition Personal Banking - Consumer Commercial Institutional Banking Personal Banking - Private Wealth Institutional Banking - Asset Servicing Healthcare Personal Banking - Small Business Other Percentages less than 5% have been omitted. (1)
Strong Capital Position Capital Ratio Trends (%) Total Risk-Based Capital Tier 1 Risk-Based Capital Tier 1 Leverage Common Equity Tier 1
Asset Quality
Net Charge-Off History (1) Commercial Loans includes commercial and industrial, commercial credit card, asset-based and factoring loans. (2) Other includes all real-estate related loans (commercial, residential and HELOC), plus consumer loans and DDA charge-offs.
Loan Classification Trends % of total loans 0.0% 1.0% 2.0% 3.0% Definitions: “Watch” – This rating represents credit exposure that presents higher than average risk and warrants greater than routine attention due to conditions affecting the borrower, the borrower’s industry or the economic environment. “Special Mention” – This rating reflects a potential weakness that deserves management’s close attention and that, if left uncorrected, may result in deterioration of the repayment prospects. “Substandard” – Loans in this category are inadequately protected by the current paying capacity of the borrower or by the collateral pledged, if any, and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. “Non-Performing” – Includes restructured loans on non-accrual and all other non-accrual loans.
Income Statement
Noninterest Income – 3Q 2019 3rd Quarter ‘19 Drivers Noninterest income decreased $1.8MM, or 1.7%, compared to 2Q’19, primarily driven by: Decreases of the following market-related metrics, recorded in “other” income $3.7MM in equity earnings on alternative investments; $2.3MM in company-owned life insurance income (offset by a proportionate decrease in deferred compensation expense noted below); and $1.5MM in derivative income. Partially offset by increases of $4.5MM in gains on the sale of securities; $2.3MM in trust and securities processing income, driven by fund services, corporate trust and private wealth revenue; and $1.0MM in brokerage fees related to 12b-1 income.
Bankcard Fees Noninterest Income Composition – 3Q 2019 Service Charges on Deposit Accounts Trust & Securities Processing Gains on Sales of Securities Trading & Investment Banking Other Brokerage Fees Trust & Securities Processing Composition: ($ in millions) Insurance Fees & Commissions Source of Income: 3Q’19 2Q’19 3Q’18 Personal Banking – Private Wealth & Prairie Capital $ 16.4 $ 15.7 $ 16.4 Institutional Banking – Fund Services 20.9 19.8 21.2 Institutional Banking – Corp. Trust & other 7.9 7.4 5.8 $ 45.2 $ 42.9 $ 43.4
Noninterest Expense – 3Q 2019 Operating noninterest expense, which excludes the impact of acquisition and divestiture expense and severance expense, was $191.2 million for the third quarter of 2019, a decrease of $1.8 million, or 0.9 percent, compared to the linked quarter, and an increase of $11.1 million, or 6.1 percent, compared to the third quarter of 2018. See slides 37 and 38 for a reconciliation of this non-GAAP financial measure. Noninterest expense decreased $2.0MM, or 1.0%, compared to 2Q’19, primarily driven by: A decrease of $4.3MM in salary and employee benefit expense due to $3.0MM lower bonus and commission expense; $1.7MM lower deferred compensation expense (offset by the decrease in company-owned life insurance income noted above); and A $1.6MM decrease in the timing of marketing and business development expense related to multiple product initiatives. Partially offset by a $1.3MM fee recorded in other income, which was paid to terminate a portion of a building lease. 3rd Quarter ‘19 Drivers
Segment Updates
Commercial Banking Commercial Banking Loans Average $ in billions Commercial Banking Deposits Average $ in billions Demand Deposits Interest-Bearing Deposits
Commercial Real Estate Portfolio CRE & Construction Lending (Average loan balances for the three months ended September 30 of the indicated year) Investment CRE Owner Occ. CRE Construction Farmland Multi-Family CRE Residential Construction (1) Percentages less than 5% have been omitted.
Institutional Banking Institutional Banking Deposits Average $ in billions Demand Deposits Interest-Bearing Deposits
Institutional Banking – Business Description Banking services for 4 of the top 10 broker-dealers FDIC sweep solutions; liquidity alternative to overnight funds Expanded to include Fintech clients as a channel for services in 2019 Fixed income services for banks, institutional, municipal & corporate clients $26.6 billion par value bonds traded YTD 2019 Fund accounting & administration Alternative Investments $224 billion in assets under administration Specialty corporate trust Aviation lease transactions Workout defaulted bond deals on behalf of holders Investor Solutions Corporate Trust Investment Banking Distressed Debt/ Specialty Finance Institutional Custody Asset Servicing Bond trustee and agency services to municipal and corporate issuers Approximately $20.1 billion in assets under administration #3 trustee and #3 paying agent in U.S. based on number of new deals Provides custodial services to municipalities, corporations, fund companies and more Among top 10 U.S. fund custodians as measured by AUC (MFSG)
Personal Banking Personal Banking Deposits Average $ in billions Personal Banking Loans Average $ in billions Consumer & Small Business Private Banking
Home Equity Lines of Credit $ in billions Assets Under Management $ in billions Personal Banking UPDATE
Healthcare Services Healthcare Deposits & Assets End-of-period balances; $ in billions 2015 2016 2017 2018 3Q’19 HSA deposits as % of total UMB deposits 7.8% 9.7% 11.4% 12.5% 14.0% HSA Deposits HSA Investment Assets
Multi-Channel Healthcare Strategy UMB offers a modular and configurable platform of applications and services that deliver the underlying core banking functionality to our healthcare partners Broker/Employer TPAs Health Plans Technology Firms Payment Aggregators Healthcare Partners HCS Applications SSO Web Services Contributions Enrollment BIN Sponsor HCS Saver Partner Portal Core Banking Systems
Healthcare Services – Industry Statistics Industry information source: Devenir Research 2019 Mid-Year HSA Market Statistics & Trends report dated August 27, 2019. Rankings as of 06/30/19. HCS represents a unique asset as one of the top 5 leaders in a growing niche market. Growth Rates – Deposits and Assets
Card Purchase Volumes Purchase Volume & Interchange Revenue Commercial Credit Consumer Credit Consumer Debit Healthcare Debit Institutional Banking – IBIS Debit Interchange ($ in millions) Percentages less than 5% have been omitted. (1)
Appendix
Dividend increase = 172.1% Industry Median +51.4% increase Industry is defined as all publicly traded banks with dividend data reported for 2004 and 2018. Source: S&P Global Returning Capital to Our Shareholders Annual Dividends Declared 2004 - 2018
Long-Term Value Creation Data as available at time of printing, 07/19/18. (1) See reconciliation of tangible book value per share on slide 39. *KBW Nasdaq Regional Bank Index (50 banks); **All publicly-traded banks with data reported for 2003 and 2018; ***UMB traditional peer group (15 banks). Source: S&P Global. 15-Year Compound Annual Growth Rates 2003 - 2018 Diluted Earnings Per Share Tangible Book Value Per Share (1) UMBF KRX* Industry** Peer Median***
Long-Term Shareholder Return +32% +207% +229% December 31, 2003 – December 31, 2018 Reinvesting all dividends Source: S&P Global
In this presentation, we provide information about net operating income from continuing operations, operating earnings per share from continuing operations-diluted (operating EPS-diluted), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense and operating efficiency ratio, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures and the nearest comparable GAAP financial measures are reconciled in the table above and on the next slide. The Company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition-, divestiture-, and severance-related items that management does not believe reflect the Company’s fundamental operating performance. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions and divestitures, severance expense, and the cumulative tax impact of these adjustments. Net Operating Income Non-GAAP Reconciliation (continued on next page)
(i) Calculated using the Company's marginal tax rate of 22.2%. Operating Noninterest Expense & Efficiency Ratio Non-GAAP Reconciliation Operating EPS-diluted is calculated as diluted earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described above for the relevant period. Operating ROE is calculated as net operating income from continuing operations, divided by the Company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income from continuing operations, divided by the Company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described above. Operating efficiency ratio is calculated as the Company’s operating noninterest expense, net of amortization of other intangibles, divided by the Company’s total non-GAAP revenue (which is calculated as net interest income plus noninterest income, less gains (losses) on sales of securities available for sale, net).
Tangible Book Value Non-GAAP Reconciliation Share count for December 31, 2003 adjusted for Company’s 2-for-1 stock split on May 31, 2006. In this presentation, we provide information about tangible book value per share, which is a non-GAAP financial measure. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The difference between the non-GAAP financial measure and the nearest comparable GAAP financial measure is reconciled in the table above. The Company believes that this non-GAAP financial measure and the reconciliation may be useful to investors because it is an important measure of the strength of the Company’s capital and its ability to generate earnings on tangible equity invested by our shareholders. Tangible book value ratio is calculated as the Company’s total shareholders’ equity, net of intangible assets, divided by the Company’s total shares outstanding.
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