Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q3 2017 Earnings Presentation
44 slides from Umb Financial's earnings presentation, Oct 24, 2017
Slide 1: UMB Financial Third Quarter 2017
UMB Financial Third Quarter 2017 October 24, 2017 Exhibit 99.2
Slide 2: Cautionary Notice about Forward-Looking Statements
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 sta
Slide 3: 3Q 2017 Highlights
UMB 3Q 2017 Highlights
Slide 4: Earnings Summary – 3Q 2017
Earnings Summary – 3Q 2017 $ in thousands, except share and per share data; unaudited Non-GAAP adjustments include fair value adjustments on contingent consideration, acquisition expenses, non-acquisition related severance expense and the tax impact of these adjustments. See the non-GAAP reconciliat
Slide 5: Net Operating Income Non-GAAP Reconciliation
Net Operating Income Non-GAAP Reconciliation In this presentation, we provide information about net operating income, operating earnings per share-diluted (operating EPS-diluted), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating nonint
Slide 6: Operating Noninterest Expense & Efficiency Ratio Non-GAAP Reconciliation
Operating Noninterest Expense & Efficiency Ratio Non-GAAP Reconciliation Operating ROE is calculated as net operating income, divided by the Company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the Company’s average ass
Slide 7: Income from Discontinued Operations – General Operations Non-GAAP Reconciliation
Income from Discontinued Operations – General Operations Non-GAAP Reconciliation (i) Represents fair value adjustments to contingent consideration for the acquisition of Reams. (ii) Represents expenses related to acquisitions. (iii) Represents non-acquisition severance expense related to UMB-legacy
Slide 8: Select Balance Sheet Items
Select Balance Sheet Items $ in thousands, average balances; unaudited Three Months Ended
Slide 9: Consistent Loan Growth
Consistent Loan Growth Average Total Loans 5 Year CAGR 15.6%
Slide 10: Net Charge-Off History
Net Charge-Off History (1) Commercial Loans includes commercial & 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.
Slide 11: Loan Classification Trends
Loan Classification Trends % of total actual loans
Slide 12: Key Performance Metrics
Key Performance Metrics See slides 5 through 7 for additional disclosures and reconciliations related to these non-GAAP financial measures. Operating metrics for fourth quarter 2016 are not available on a continuing operations basis. (2)
Slide 13: 3Q 2017 Financials
UMB 3Q 2017 Financials
Slide 14: Noninterest Income – 3Q 2017
Noninterest Income – 3Q 2017 Noninterest income decreased $6.0 million, or 5.4%, compared to 2Q’17, primarily driven by: lower bankcard fees driven by a $2.7MM increase in card program rewards and rebates expense; a $1.2MM decrease in deposit service charges related to typical seasonal fluctuations
Slide 15: Noninterest Income Composition – 3Q 2017
Bankcard Fees Noninterest Income Composition – 3Q 2017 Service Charges on Deposit Accounts Trust & Securities Processing Gains on Sales of Securities Other Brokerage Fees Trading & Investment Banking Trust & Securities Processing Composition: ($ in millions) Insurance Fees & Commissions Equity Earni
Slide 16: Noninterest Expense – 3Q 2017
Noninterest expense decreased $5.1MM, or 2.9%, compared to 2Q’17, driven by: a $3.0MM decrease in salaries and benefits expense due equally from a decrease in bonus and commissions and lower employee benefits costs; and a $700k decline in both supplies and services expense and marketing and business
Slide 17: Discontinued Operations Summary – Q3 2017
Discontinued Operations Summary – Q3 2017 Components of (loss) income from Discontinued Operations, net of taxes $ in thousands, except share and per share data; unaudited Non-GAAP adjustments include divestiture expense and non-acquisition related severance expense. See the non-GAAP reconciliations
Slide 18: High Quality Investment Portfolio
Securities Held to Maturity $1.3 billion at September 30, 2017 Securities Available for Sale $5.8 billion at September 30, 2017 High Quality Investment Portfolio Agencies Corporates Municipals Mortgage-Backed Securities Treasuries (2) (1) Governmental Other Higher Education Healthcare Utility Social
Slide 19: Securities and Loan Statistics
Securities and Loan Statistics AFS Portfolio Activity (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, 2017 Variabl
Slide 20: Deposit Growth
Deposit Growth Deposits & Percent of Free Funds Average Balances; $ in billions 3Q 2017 Cost of Interest-Bearing Liabilities 0.55% Including DDA 0.38% $11.8 $14.3 $12.5 $15.1 $15.7
Slide 21: Strong Capital Position
Strong Capital Position Capital Ratio Trends 2015 - 2017 ratios calculated under Basel III requirements. Total Risk-Based Capital Tier 1 Risk-Based Capital Tier 1 Leverage Common Equity Tier 1
Slide 22: Business Segment Updates
UMB Business Segment Updates
Slide 23: Segment Financials
Segment Financials Asset Servicing Segment Results (Sin thousands, unaudited) Net interest income Income from continuing operations % Variance vs. 2017 vs. 3016 3a17_ 2017 ___— 3016 $ 3527 § 2914 § 0 25.9 24,547 24,222 3 67 24 G1) 48 6,310 7 35.4 25.41 22 2 18.7 Pre-tax profit margin 22.5% 17.2% 19.
Slide 24: Asset Servicing Assets Under Administration
Asset Servicing Assets Under Administration $ in billions 3rd Quarter Statistics Assets under administration stood at $207.9 billion, an increase of 11.2% compared to a year ago Noninterest income increased $1.5 million, or 6.7%, year-over-year related to new alternative and 40 Act servicing busines
Slide 25: Asset Servicing
Asset Servicing Fund Accounting & Administration Alternative Asset Servicing Custody Transfer Agency
Slide 26: UMB Fund Services – Turnkey Solutions
UMB Fund Services – Turnkey Solutions A turnkey, cost-effective means of starting and operating a mutual fund—ideal for advisors who wish to offer a mutual fund to enhance their product line. Ideal for advisors seeking a low-cost pooled alternative to enter the qualified retirement plan market space
Slide 27: Bank Line of Business Detail – 3Q'17
Bank Personal Banking Commercial & Business Banking Institutional Banking Healthcare Services (1) (1) Includes Prairie Capital Management (PCM) income and expense. Line of Business Detail – 3Q’17 (as a percentage of Bank Segment) 3rd Quarter Highlights Net Interest Income Noninterest Income Noninter
Slide 28: Bank - Diverse Sources of Net Income
Bank - Diverse Sources of Net Income Prior periods have been restated in discontinued operations format. Percentages less than 1% have been omitted. Operating metrics for fourth quarter 2016 are not available on a continuing operations basis. Includes PCM’s income and expense. Personal Banking Comme
Slide 29: Loan Paydowns, Payoffs, and Line Changes
Loan Paydowns, Payoffs, and Line Changes
Slide 30: Bank – Loan Composition
Bank – 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 $6.4B $7.0
Slide 31: Bank – Regional Lending
Colorado Kansas City Kansas Greater MO St. Louis Arizona Texas Oklahoma Marquette Transportation Fin (Natl. Sales) Nebraska Marquette Business Credit (Natl. Sales) Bank – Regional Lending $6.4B $7.0B $8.9B $10.2B $10.9B Loans by Region (Average Loan Balances for the three months ended September 30,
Slide 32: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio CRE & Construction Lending (Average Loan Balances for the three months ended September 30, of the indicated year) $4.1B $3.6B $2.8B $2.0B $1.7B Investment CRE Owner Occ. CRE Construction Farmland Multi-Family CRE Residential Construction (1) Percentages less than 5%
Slide 33: Bank – Total Deposits
Bank – Total Deposits Diverse Sources of Deposits (Average Deposits for the three months ended September 30,) $11.8B $12.5B $14.3B $15.1B $15.7B Personal Banking - Consumer Commercial Institutional Banking Personal Banking - Private Wealth Asset Servicing Healthcare Small Business Other (1) Percenta
Slide 34: Personal Banking
$10.2B $11.6B $12.8B $13.6B $15.5B $1.2B $1.4B $1.6B $1.7B $1.6B Home Equity Lines of Credit $ in millions Assets Under Management $ in millions Personal Banking
Slide 35: Institutional Banking – Business Description
Institutional Banking – Business Description Investor Solutions Corporate Trust Investment Banking Public Finance Distressed Debt FDIC Sweep Provides banking solutions to 7 of top 10 clearing Broker-Dealer’s and 6 of top 10 independent Broker-Dealer’s Provides services to more than 25MM investor acc
Slide 36: Institutional Banking FDIC Sweep Program
Institutional Banking FDIC Sweep Program $ in billions $20.4B $26.9B $35.5B $48.2B $52.7B 5 Year CAGR 25.8%
Slide 37: Healthcare Services
Healthcare Services 2013 2014 2015 2016 3Q’17 HSA investment assets as % of total healthcare deposits & assets 7.4% 8.3% 9.2% 8.7% 11.8% HSA deposits as % of total UMB deposits 4.4% 6.2% 7.8% 9.7% 12.5% +34.2% Sept 30, 2017 vs. Sept 30, 2016 Healthcare Deposits & Assets End-of-period balances; $ in
Slide 38: Healthcare Services – Growth & Potential
Healthcare Services – Growth & Potential Industry information source: Devenir Research 2017 Midyear HSA Market Statistics & Trends report dated August 16, 2017. Rankings as of June 30, 2017. Deposit and asset growth rates on an annual basis with the exception of 2017 which is year to date growth ver
Slide 39: Multi-Channel Healthcare Strategy
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
Slide 40: Card Purchase Volumes
Card Purchase Volumes Purchase Volume & Interchange Revenue Commercial Credit Consumer Credit Consumer Debit Healthcare Debit Institutional Banking – IBIS Debit Interchange ($ in millions) $2.5B $1.6B $2.1B $2.3B $2.4B Percentages less than 5% have been omitted. (1)
Slide 41: Appendix
UMB Appendix
Slide 42: Agreement to Sell Scout Investments – April 20, 2017
Agreement to Sell Scout Investments – April 20, 2017 This transaction allows us to allocate more time, energy and capital to our core banking businesses as well as our asset servicing operations. While Scout has generated shareholder value over the years, it has limited connectivity with our relatio
Slide 43: AUM Drivers – Scout Investments
AUM Drivers $ in millions Scout Investments 2Q’17 1Q’17 4Q’16 3Q’16 3Q’17 Equity Scout Funds ($39MM) Separate Accts ($40MM) Fixed Income Scout Funds ($55MM) Separate Accts ($798MM) 3Q’17 Net Flows
Slide 44: Scout Investments – AUM by Strategy
Scout Investments – AUM by Strategy Equity Fixed Income Equity Strategies International MidCap International ADR Small Cap Fixed Income Strategies Core Plus Low Duration Long Duration Core Real Return Unconstrained Intermediate Other: Global Aggregate Unconstrained UCITS Total AUM - $27.0 billion as