Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q4 2013 Earnings Presentation
46 slides from Umb Financial's earnings presentation, Feb 11, 2014
Slide 1: UMB Financial Fourth Quarter & Year-End
UMB Financial Fourth Quarter & Year-End February 10, 2014
Slide 2: Cautionary Notice about Forward-Looking Statements
Cautionary Notice about Forward-Looking Statements This presentation 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 stric
Slide 3: A Different Kind of Bank
A Different Kind of Bank The company The business model The performance
Slide 4: UMB is Born as City Center Bank—1913
UMB is Born as City Center Bank—1913
Slide 5: A Leader in Serving our Customers
A Leader in Serving our Customers 1931 – KC’s First “Drive Through Bank” “Beginning today, motorists can do business with the City Bank, Eighteenth Street & Grand Avenue, from the alley between Grand & McGee streets. They can drive to the new “cage” and make deposits without leaving the car.” The Ci
Slide 6: Self-Reliance and Stability
Self-Reliance and Stability 1934 – Emerging from the Great Depression No need for government assistance – then or now. “If we were to liquidate this bank today, we could pay our depositors one hundred cents on the dollar and collect our entire Surplus and Capital Account of $700,000 and a large part
Slide 7: Our company has remained true to its values
“Our company has remained true to its values and the results are evident in our shareholder returns.” Mariner Kemper Chairman & Chief Executive Officer
Slide 8: Total Returns Reflect Long-Term Performance
Total Returns Reflect Long-Term Performance Total Shareholder Return December 1993 – December 2013 $664 $484 $367 $100 Source: SNL Financial UMBF S&P 500 SNL U.S. Bank Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11
Slide 9: UMB At A Glance
UMB At A Glance As of December 31, 2013 Total assets $16.9B Assets under management $41.4B Banking presence 8 states Branches/ATMs 111/310 4Q Percent of revenue from fee businesses 61.2% Acquisitions last 10 years 23 Market cap >$2.9B Dividend payout ratio* 27.2% *Average over past 4 quarters
Slide 10: We Have Repositioned UMB…
We Have Repositioned UMB… National More stable earnings Geographic focus Faster growth Regional Low High Diversity of revenue streams More than a typical bank
Slide 11: …Resulting in a Growing National Presence
…Resulting in a Growing National Presence UMB Bank presence Fund Services Prairie Capital Healthcare Services – National Sales Scout Investments – National Sales Personal Trust
Slide 12: Today: UMB is More than a Regional Bank
Today: UMB is More than a Regional Bank National DIVERSIFIED FINANCIAL SERVICES Scout Investments Prairie •Reams UMB Fund Capital Services •JD Clark Geographic focus TRADITIONAL BANKING Healthcare Services Treasury Trust Management Corporate Services Trust Card UMB Services Insurance BAN K Regional
Slide 13: Financial Services Company
Financial Services Company The company The business model The performance
Slide 14: Our Time-Tested Business Model
Our Time-Tested Business Model High Quality Credit + Diverse Revenue Streams + Low-cost + Funding Strong Balance Sheet
Slide 15: Our Credit Quality Outpaces the Industry
Our Credit Quality Outpaces the Industry Non-Performing Loans % of average loans 7.0 6.0 5.0 4.0 3.0 2.0 1.15% 1.0 0.47% 0.0 Traditional Peer Median UMBF Shaded area is high/low range of the peer group Peer Median as of 3Q13; Source: SNL Financial 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q
Slide 16: More Fee Revenue than Our Peers
More Fee Revenue than Our Peers % of Total Revenue from Fees 4Q13 61.2% 3X vs. Industry 18.6% More stable earnings Greater growth opportunities Industry Median Industry Median as of 3Q13; Source: SNL Financial
Slide 17: Successful Record Growing Fee Businesses
Successful Record Growing Fee Businesses Noninterest Asset Management Income Businesses ($000’s) (Total Company Assets Under Management*) $41.4B $135.6 $60.9 $8.2B 4Q05 4Q13 4Q05 4Q13 *Includes Scout Investments and UMB Bank wealth management
Slide 18: Low-Cost Funding Sources
Low-Cost Funding Sources Non-Interest Bearing Deposits as % of Total Deposits At December 31, 2013 2012 38.0% 2011 vs. 2010 Industry Median* of 2009 20.1% 2008 non-interest bearing deposits 2005 ~2X 2004 vs. Industry 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% UMBF Industry Median*Indu
Slide 19: Balance Sheet – Strong Capital Position
Balance Sheet – Strong Capital Position Tier 1 Capital Ratio vs. Industry Equity 4Q 2013 5 yr Without Federal bailout funds CAGR 13.35% 13.61% $1,506.1 9.1% $974.8 Industry Median Industry Median of publicly-traded banks reporting as of 2/5/14; Source:SNL Financial Capital Ratio Trends 14.09 14.18 1
Slide 20: Loan Composition: Quality
Quality Loan Composition Changing Loan Mix Year-End 2006 Year-End 1.0% 5.1% 8.7% 6.5% 21.0% 4.4% 44.1% 5.2% 53.3% 4.6% 26.1% 20.0% Commercial & Industrial Consumer Real Estate Consumer Commercial Real Estate Credit Card Home Equity
Slide 21: A Financial Services Company
A Financial Services Company The company The business model The performance
Slide 22: Consistent Performance – Despite Headwinds
Consistent Performance – Despite Headwinds year CAGR (4Q’08 – 4Q’13) Revenue growth 8.4% Average Asset Growth 9.8% Average Equity Growth 9.7% EPS growth (diluted) 9.5% Total Assets Under Management 33.6%
Slide 23: EPS Growth vs. the Industry & Peers
EPS Growth vs. the Industry & Peers 5-Year Diluted Earnings Per Share 4Q’08 – 4Q’13 CAGR UMBF vs. Traditional Peers CYN 48.9% FMBI 24.0% WBS 20.6% ONB 20.1% BOKF 15.3% COBZ 13.7% HBHC 9.5% 9.5% CBSH 8.8% BXS 7.7% CFR 2.2% TCB 1.9% BOH 1.4% TRMK 0.0% 1.2% FMER .7% Bank Industry Median * *All publicly
Slide 24: Slowing Annual Expense Growth
Slowing Annual Expense Growth Total Noninterest Expense (millions) $624.2 $590.5 $562.7 $512.6 $460.6 2014… $430.2 $407.2 Increased focus on expense control Year-over- Year Increase +5.6% +7.1% +11.3% +9.8% +4.9% +5.7% Completed 20 strategic Focus on improved profit margins acquisitions from 2007—20
Slide 25: 4th Quarter 2013 Highlights
4th Quarter 2013 Highlights
Slide 26: AFS Investment Portfolio Statistics
AFS Investment Portfolio Statistics Investment Mix Securities Available for Sale, Roll off Purchased as of December 31, 2013 ($ millions) Yield ($ millions) Yield 1.6% 1Q13 $413 1.98% $769 1.31% 2Q13 $340 2.13% $815 1.41% 6.7% 3Q13 $265 1.85% $77 1.02% 4Q13 $308 2.04% $355 0.64% 18.6% Scheduled Cash
Slide 27: Liabilities: Deposit Growth & % of Free Funds
Liabilities Deposit Growth & % of Free Funds ($ billions) $13.6 $12.0 $11.7 38.0% $10.2 $10.0 $9.0 42.2% $8.0 38.8% 32.0% $6.0 $4.0 $2.0 $0.0 Interest Bearing Non-Interest Bearing 4Q’13 Cost of Funds 0.14% Including DDA 0.10% Q4’10 Q4’11 Q4’12 Q4’13
Slide 28: Net Interest Income
Net Interest Income +7.1% 4Q’13 vs. 4Q’12 Loan Growth $90.0 • Improved deposit pricing $85.5 $85.9 $85.0 $82.3 $80.4 $80.4 $80.2 $80.0 $79.9 $79.5 $79.1 $79.5 $78.8 $78.4 $79.1 $75.0 $70.0 $65.0 Millions 3.12% 2.90% 2.98% 2.98% 2.91% 2.75% 2.82% 2.80% 2.64% 2.51% 2.56% 2.61% 2.51% 4Q’10 1Q’11 2Q’11
Slide 29: Noninterest Income Highlights
Noninterest Income Highlights 3.2% 2.0% 0.5% Trust & Securities Processing 4.4% Deposit Service Charges Equity Earnings/Alternatives Bankcard Fees 10.6% Other Trading & Investment Banking 52.9% 11.1% Brokerage Fees Gains on Sale of Securities 15.3% Trust & Securities Processing Composition: $71.7 mi
Slide 30: Noninterest Expense
Noninterest Expense Noninterest expense increased 7.9% to $170.4 million vs. 4Q’12 Increase primarily driven by higher salary and benefits expense of $5.6 million and increased processing fees of $2.1 million related to fees paid to third-party distributors of the Scout Funds Fourth Quarter expenses
Slide 31: Business Segment Updates
Business Segment Updates
Slide 32: Institutional Investment Management
Institutional Investment Management Institutional Investment Management Operating Results (unaudited, $000s) 3 mos Ended Year Ended 4th Quarter 2013 December 31,% Change December 31,% Change Highlights 2013 2012 2013 2012 Net Interest income(10)—NA(32) 2 -1700.0% AUM increased 32.4% year- Noninteres
Slide 33: Institutional Investment Management
Institutional Investment Management AUM Drivers Total Change Total AUM ($millions)($millions)($millions) 4Q’13 $(120.4) $829.9 $1,062.2 $86.8 $1,858.5 $31,167.4 3Q’13 $645.6 $1,053.4 $1,239.6 $56.2 $2,994.8 $29,308.9 ($84.0) 2Q’13($250.4) $729.9 $567.3 $26,314.1 $171.8 $48.7 1Q’13 $1,435.7 $585.7 $1
Slide 34: Institutional Investment Management
Institutional Investment Management Total AUM $19.7B $23.5B $25.7B $26.3B $29.3B $31.2B $2.8 $1.9 $1.0 $1.3 $0.8 $12.6 $12.3 $0.6 $11.4 $11.6 $11.4 Billions $10.3 $3.0 $3.2 $2.3 $2.3 $0.9 $0.6 $10.4 $11.0 $11.1 $12.1 $12.6 $8.2 2011 2012 1Q13 2Q13 3Q13 4Q13 Equity Mutual Funds Equity Institutional &
Slide 35: AUM by Strategy – As of 4Q'13
AUM by Strategy – As of 4Q’13 Equity Fixed Income 1.8% 0.1% 2.6% 1.9% 0.2% 51% 49% 2.9% 25.3% 26.6% 28.7% 68.7% 21.4% 13.4% 6.4% Equity Strategies Fixed Income Strategies International Other: Core Plus Core Emerging Markets Mid Cap Low Duration Real Return Global International ADR Unconstrained Inte
Slide 36: Fixed Income Rotation
Fixed Income Rotation Fixed Income AUM 4Q’12 Strategy Mix 4Q’13 0.1% 2.2% 0.2% 1.8% 2.9% 5.5% 36.6% 25.3% 14.1% 28.7% 16.8% 21.4% 13.4% 24.6% 6.5% Core Plus Core Low Duration Real Return Unconstrained Intermediate Long Duration Global Aggregate
Slide 37: Asset Servicing
Asset Servicing Asset Servicing Operating Results (unaudited, $000s) 3 mos Ended Year Ended December 31,% Change December 31,% Change 2013 2012 2013 2012 Net interest income 545 534 2.1% 2,357 1,861 26.7% Noninterest income 20,572 18,362 12.0% 80,633 75,589 6.7% Noninterest expense 18,583 17,274 7.6
Slide 38: Asset Servicing
Asset Servicing Business Metrics Fund Accounting & Administration $63.0 $58.2 $52.1 $48.4 219 $44.1 $21.3 $35.9 179 181 182 Billions $30.5 160 Billions $ $ 2010 2011 2012 1Q’13 2Q’13 3Q’13 4Q’13 2010 Assets Under Administration # of Funds Serviced Transfer Agency 1,280.1 1,213.8 1,208.0 1,058.7 $101
Slide 39: Payment Solutions
Payment Solutions Payment Solutions Operating Results (unaudited, $000s) 4th Quarter 2013 Highlights 3 mos Ended Year Ended December 31,% Change December 31,% Change Commercial credit card 2013 2012 2013 2012 purchase volume +5.1% year- Net interest income 11,505 11,227 2.5% 45,832 43,350 5.7% over-
Slide 40: Payment Solutions
Payment Solutions Card Utilization $2,613.1 $2,633.2 $2,484.1 $1,774.7 $1,602.5 22.9% Millions 18.5% 17.0% 16.4% 16.0% $296.7 $405.8 $422.4 $429.4 $421.5 2009 2010 2011 2012 2013 Commitments Outstandings Utilization Healthcare Services Health Savings Accounts & Balances* 4th Quarter 2013 Highlights
Slide 41: Bank
Bank Bank Operating Results (unaudited, $000s) 4th Quarter 2013 Highlights 3 mos Ended Year Ended Total net loans grew for the 15th December 31,% Change December 31,% Change consecutive quarter, year-over-year, 2013 2012 2013 2012 increasing 14.8% to $6.4 billion Net interest income 73,874 68,468 7.
Slide 42: Bank: Commercial Loan Balances
Bank Commercial Loan Balances (Average C&I and CRE Loan Balances for Three Months Ended December 31) 4 yr CAGR 4Q ‘09–’13 12.6% $5.50 Billions $3.42 $3.65 $3.95 $4.45 4Q’09 4Q’10 4Q’11 4Q’12 4Q’13 Commercial Loans By Region 100% High Growth Regions 4Q’13 vs. 4Q’12 • Arizona +94.6% 50% • St. Louis +4
Slide 43: Bank: Average Deposits
Bank Average Deposits 4 yr (Average deposits for the three months ended December 31) $11.1 CAGR $9.9 $8.8 4Q ‘09–’13 $7.8 42.5% 12.9% $7.1 39.1% 33.4% 31.8% Billions 29.1% 4Q’09 4Q’10 4Q’11 4Q’12 4Q’13 Interest Bearing Non-Interest Bearing Deposits By Region 100% 50% 61.6% 66.2% 53.6% 56.4% 57.8% 0%
Slide 44: Deposit Composition
Deposit Composition Deposit Composition by Line of Business At December 31, 2013 Actual Pro-forma, After deposit migration 0.2% 0.3% 4.5% 4.3% 4.7% 5.1% 6.6% 7.4% 7.2% 8.0% 35.1% 39.4% 7.8% 17.8% 24.3% 27.3% Commercial Inst. Asset Management Consumer Healthcare Asset Servicing Small Business Private
Slide 45: Strengths We are Leveraging
Strengths We are Leveraging Diversified Success building a diversified revenue financial services company Growing fee Building scale through businesses strategic acquisitions Infrastructure Existing technology, operations, products, distribution
Slide 46: Building a company for the next years
Building a company for the next 100 years. UMB Financial Fourth Quarter 2013