Slide 1: Second Quarter 2020
Second Quarter 2020 July 28, 2020 UMB Financial Corporation 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: Corporate Snapshot
Corporate Snapshot Corporate Trust / Investment Banking Division Fund Services Asset-based lending Accounts receivable financing Healthcare Services Prairie Capital Management Private Wealth Management / Personal Trust 91 banking centers 231 ATMs Our Footprint National Presence UMB Financial Corpora
Slide 4: Our Continued Response to COVID-19
Our Continued Response to COVID-19 Operational Readiness Launched business continuity plans and executive level pandemic task force Increased and strengthened network capacity Early move to drive-through only branches to protect associates and customers; now seeing customers on-site by appointment t
Slide 5: Our Commitment to Corporate Citizenship
Our Commitment to Corporate Citizenship Inclusion & Diversity Community Impact Efficient & Sensible Resource Use Strong Corporate Governance As we all navigate a global pandemic and an increasingly polarized environment, we are engaging our associates, customers and communities through pro-active ou
Slide 6: Earnings Summary – 2Q 2020
Earnings Summary – 2Q 2020 The Company adopted ASU 2016-13 as of 1/1/2020. See additional information on slides 25-27. Non-GAAP adjustments include provision for credit losses. See the non-GAAP reconciliation and additional information on slide 35. Non-GAAP adjustments include acquisition expense, s
Slide 7: Noninterest Income – 2Q 2020
Noninterest Income – 2Q 2020 2nd Quarter ‘20 Drivers Noninterest income increased $22.0MM, or 22.4%, compared to 1Q’20, primarily driven by: An increase of $24.8MM in company-owned life insurance income, included in “other income,” reflecting higher market valuations. This increase is offset by a pr
Slide 8: Noninterest Income Composition – 2Q 2020
Noninterest Income Composition – 2Q 2020 Trust & Securities Processing Composition: ($ in millions) Source of Income: 2Q’19 1Q’20 2Q’20 Personal Banking $ 15.6 $ 15.7 $ 15.0 Institutional Banking: Asset Servicing 20.0 22.0 22.5 Corp. Trust & Inst. Asset Mgmt. 7.3 9.3 8.8 $ 42.9 $ 47.0 $ 46.3 Bankcar
Slide 9: 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)
Slide 10: Noninterest Expense – 2Q 2020
Noninterest Expense – 2Q 2020 Operating noninterest expense, which excludes the impact of acquisition expense, severance expense and COVID-19 related expense, was $204.3 million for the second quarter of 2020, an increase of $17.7 million, or 9.5 percent, compared to the linked quarter, and an incre
Slide 11: Balance Sheet
Balance Sheet
Slide 12: Select Balance Sheet Items
Select Balance Sheet Items $ in thousands, average balances; unaudited Three Months Ended
Slide 13: Strong Capital Position
Strong Capital Position Capital Ratio Trends (%) Total Risk-Based Capital Tier 1 Risk-Based Capital Tier 1 Leverage Common Equity Tier 1 (1) These ratios are reflective of the Company’s election to utilize the 5-year regulatory capital phase-in of the adoption of ASU 2016-13 under recently issued in
Slide 14: High Quality Investment Portfolio
High Quality Investment Portfolio Securities Held to Maturity $1.1 billion at June 30, 2020 (1) Securities Available for Sale $8.5 billion at June 30, 2020 Governmental Other Higher Education Healthcare Utility Social Service Industrial Cultural Civic K-12 Education NFP - Other Average Balance: $7.9
Slide 15: Securities Portfolio Statistics
Securities Portfolio Statistics AFS Portfolio Activity (1) Roll off includes cash flow from maturities, calls or amortizations of securities and excludes roll off related to non-core purchases. (2) Purchased amount is presented net of purchases made related to sales.
Slide 16: Deposit Trends and Composition
Deposit Trends and Composition Average Deposit Growth and Cost 5-yr CAGR: 8.8% (2014-2019) 15-yr CAGR: 9.5% (2004-2019) Long-Term Track Record At June 30 2020 * Includes consumer banking, private wealth and small business. Deposits by Type Deposits by Line of Business Non-Interest Bearing Interest-B
Slide 17: Growth of Diversified Loan Portfolio
Growth of Diversified Loan Portfolio Average Loans & Yields 5-yr CAGR: 12.8% (2014-2019) 15-yr CAGR: 10.7% (2004-2019) Long-Term Track Record
Slide 18: Loan Portfolio Composition
Loan Portfolio Composition Variable Rate Loans: 55% of loans are variable, $8.4 billion at June 30, 2020 Tied to LIBOR for the next quarter: 68% or ~$5.7 billion Tied to Prime for the next quarter: 28% or ~$2.4 billion Loan Repricing / Maturity Schedule: 50% reprice in 3Q 2020 61% reprice in the nex
Slide 19: Quarterly Loan Activity
Quarterly Loan Activity Commercial Banking Line Draws & Utilization Trends PPP loans of $1.5 billion are included in gross loan production and net loan growth for the second quarter.
Slide 20: Commercial & Industrial Loan Portfolio
Commercial & Industrial Loan Portfolio (2) Other - 14% Undefined or misc. industries – 4% Auto Related – 3% Other smaller categories – 7% Transp. / Warehouse Diversified Technology Materials Manufacturing Retail Healthcare Comm. Services Other (2) Agribusiness RE & Construction Finance & Insurance E
Slide 21: Commercial Real Estate – Disciplined Expansion
Commercial Real Estate – Disciplined Expansion Construction / Land Dev. 17% Owner-Occupied 29% Investment CRE 44% $5.6B At June 30, 2020 Resi. Construction = 1% of total Farmland 9% * Other - 10% Mixed Use Self Storage Home Builder for-sale Vacant Land Healthcare Special Purpose Manufactured Housing
Slide 22: Exposure to Sensitive Industries
Exposure to Sensitive Industries We analyzed our portfolios in each category for specific characteristics based on what is currently known, such as guarantees, recourse, liquidity positions and hedging strategies that provide protection, as well as those which may carry more risk if the current envi
Slide 23: Paycheck Protection Program (“PPP”)
Paycheck Protection Program (“PPP”) PPP Loans by Region PPP Loans by Industry Retail: Auto-related 58%; building materials 13%; clothing/home goods 11%; gas stations 3% Transportation: Freight 45%; warehousing 12%; non-passenger air 15% Accommodation & Food Service: Limited-service hotel 46%; limite
Slide 24: Asset Quality
Asset Quality
Slide 25: Current Expected Credit Loss (“CECL”) Implementation
Current Expected Credit Loss (“CECL”) Implementation CECL Methodology and Key Assumptions Macroeconomic forecast Moody’s Baseline forecast as of June 9th 50% probability the economy performs better or worse Assumptions: Assumes no second wave of COVID-19 that causes states to shut down again or lead
Slide 26: CECL: Allocation of Allowance
CECL: Allocation of Allowance 2Q20 Balances Allowance % of total ACL % Commercial $11,086 $170.4 84% 1.5% National Businesses $414 $0.9 0% 0.2% Consumer real estate $1,631 $6.0 3% 0.4% Credit cards $340 $19.6 10% 5.8% Other $351 $3.4 2% 1.0% Total Loans, ex. PPP $13,822 $200.3 98% 1.4% PPP Loans $1,
Slide 27: Changes to Allowance – 2Q 2020
Changes to Allowance – 2Q 2020 Allowance for Credit Losses ($ in millions) $191.1 $203.6 ($5.5) $5.6 $8.1 $4.3 Net Charge-offs Credit Risk Changes Economic Outlook COVID Modifications ACL 03/31/20 ACL 06/30/20
Slide 28: Net Charge-Off History
Net Charge-Off History Loan categories for disclosure were updated in Q1 2020 with the adoption of ASU 2016-13. In prior periods, net charge-offs for “Commercial Loans” included C&I, commercial credit card, asset-based and factoring loans. Net charge-offs for “Other” included consumer credit cards,
Slide 29: Loan Risk Profile – 2Q 2020
Loan Risk Profile – 2Q 2020 Loan modifications / deferrals of $1.3 billion at June 30, 2020 Originally approved ~$2.1 billion in modifications Booked just 62% percent of approved amount based on reduced customer need Total past due and accruing amounts include loans 30-89 days past due of $21.4 mill
Slide 30: Well-Positioned for the Current Environment
Excess Liquidity Long-Term History of Quality Credit Metrics Leading Fee Income Strong Capital Position Net Charge-offs / Average Loans Liquidity to deploy in favorable rate environments Capital provides flexibility in downturns Fee income provides a revenue buffer in low-rate environments Unwaverin
Slide 31: Appendix
Appendix
Slide 32: Returning Capital to Our Shareholders
Dividend increase = 165.9% Industry Median* +59% increase *Industry is defined as publicly traded banks with dividend data reported for both 2005 and 2019. Source: S&P Global Returning Capital to Our Shareholders Annual Dividends Declared 2005 - 2019
Slide 33: Long-Term Value Creation
Long-Term Value Creation (1) See reconciliation of tangible book value per share on slide 38. *KBW Nasdaq Regional Bank Index (50 banks); **All publicly-traded banks with data reported for both 2004 and 2019; ***UMB traditional peer group (15 banks). Source: S&P Global. 15-Year Compound Annual Growt
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations In this presentation, we provide information about pre-tax pre-provision income, net operating income (loss), operating earnings (losses) per share-diluted (operating EPS-diluted), operating return on average equity (operating ROE), operating return on average assets (operat
Slide 35: Non-GAAP Reconciliations: Pre-Tax, Pre-Provision Income
Non-GAAP Reconciliations Pre-Tax, Pre-Provision Income
Slide 36: Non-GAAP Reconciliations: Net Operating Income
Non-GAAP Reconciliations (i) Calculated using the Company's marginal tax rate of 22.2%. Net Operating Income
Slide 37: Non-GAAP Reconciliations: Operating Noninterest Expense & Efficiency Ratio
Non-GAAP Reconciliations (i) Calculated using the Company's marginal tax rate of 22.2%. Operating Noninterest Expense & Efficiency Ratio
Slide 38: Non-GAAP Reconciliations: Tangible Book Value
Non-GAAP Reconciliations Tangible Book Value Share count for December 31, 2004 adjusted for Company’s 2-for-1 stock split on May 31, 2006.
Slide 39: Non-GAAP Reconciliations: Tangible Common Equity Ratio
Non-GAAP Reconciliations Tangible Common Equity Ratio