Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q2 2013 Earnings Presentation
46 slides from Umb Financial's earnings presentation, Aug 15, 2013
Slide 1: Second Quarter 2013
Second Quarter 2013 UMB Financial Exhibit 99.1
Slide 2: A Different Kind of Bank
A Different Kind of Bank The company The business model The performance
Slide 3: UMB is Born as City Center Bank - 1913
UMB is Born as City Center Bank - 1913
Slide 4: A Leader in Serving our Customers
A Leader in Servin g our Customers “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 City Bank is the first bank in Kansas Ci
Slide 5: Self-Reliance and Stability
Self-Reliance and Stability No need for government assistance – then or now. 1934 – Emerging from the Great Depression “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 6: 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 7: Total Returns Reflect Long-Term Performance
Total Returns Reflect Long-Term Performance Total Shareholder Return June1993 – June 2013 416.8% $100 302.4% UMBF S&P 500 SNL U.S. Bank 506.6%
Slide 8: UMB At A Glance
UMB At A Glance $35.6B 8 states 115/320+ 23 >$2.4B 31.8% $15.3B 58.0% Assets under management Banking presence Branches/ATMs Acquisitions last 10 years Market cap Dividend payout ratio* $35.6B 8 states 115/320+ >$2.4B 31.8% Total assets $15.3B Revenue from fee businesses 58.0% *Average over past 4 q
Slide 9: We Have Repositioned UMB
We Have Repositioned UMB… More stable earnings Faster growth National Regional Low High Geographic focus Diversity of revenue streams More than a typical bank
Slide 10: Resulting in a Growing National Presence
…Resulting in a Growing National Presence Fund Services Prairie Capital Healthcare Services – National Sales Scout Investment Advisors – National Sales Corporate Trust UMB Bank presence Loan Production Office
Slide 11: With Diverse Revenue Streams
… With Diverse Revenue Streams 0% 50% 100% FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 2Q12 2Q13 Net Interest Income Noninterest Income High level of fee income reduces reliance on margin
Slide 12: Today: UMB is More than a Regional Bank
Today: UMB is More than a Re g ional Bank… …We are a diversified financial services company Trust Services TRADITIONAL BANKING Card Services Treasury Management DIVERSIFIED FINANCIAL SERVICES Healthcare Services Corporate Trust UMB Fund Services Scout Investments • JD Clark Prairie Capital • Reams D
Slide 13: A Financial Services Company
A Financial Services Company The company The business model The performance
Slide 14: Our Time-Tested Business Model
+ + + Hi g h Quality Credit Diverse Revenue Streams Low-cost Fundin g Stron g Balance Sheet Our Time-Tested Business Model
Slide 15: Our Credit Quality Outpaces the Industry
Our Credit Quality Outpaces the Industry 2Q 2013 NPLs = 0.40% Peer Average 2.85% Peer Average as of 1Q13; Source: SNL Financial Midwest Bank Peers as defined by Raymond James & Associates in their April 11, 2011 report. Shaded area is high/low range of the peer group Non-Performing Loans % of averag
Slide 16: Today: More Fee Revenue than Our Peers
Today: More Fee Revenue than Our Peers 3X vs. Industry % of Total Revenue from Fees 2Q13 • More stable earnings • Greater growth opportunities Industry Median as of 1Q13; Source: SNL Financial 18.5% 58.0% Industry Median
Slide 17: Successful Record Growing Fee Businesses
Successful Record Growing Fee Businesses Noninterest Income ($000’s) *Includes Scout Investments and UMB Bank wealth management Asset Management Businesses (Total Company Assets Under Management*) $62.4 $113.6 2Q13 2Q05 $8.2B $35.6B 2Q13
Slide 18: Low Cost Funding Sources
Low Cost Funding Sources > 2X vs. Industry At June 30 40.0% vs. Industry Median* of 18.6% non-interest bearing deposits Average Non-Interest Bearing Deposits as % of Total Deposits *Industry Median as of 1Q13; Source: SNL Financial 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 2Q'13 UMBF
Slide 19: Balance Sheet – Strong with Growth Potential
Balance Sheet – Strong with Growth Potential Tier 1 Capital Ratio 2Q 2013 Without Federal bailout funds Highly Liquid – Low Average Loan to Deposit Ratio 2Q 2013 Industry Median as of 1Q13; Source: SNL Financial 13.94% 10.72% Industry Median 76.2% 54.0% Industry Median
Slide 20: Quality Loan Composition
Commercial Real Estate Commercial & Industrial Quality Loan Composition Commercial & Industrial Commercial Real Estate 4.6% 20.0% 44.1% 54.7% 24.8% 3.9% Commercial Real Estate Commercial & Industrial Consumer Real Estate Credit Card Home Equity Consumer Changing Loan Mix Consumer 2Q 2013 Year-End 20
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 6.2% 11.7% 7.0% 5.0% 26.5% Revenue growth Average Asset Growth Average Equity Growth EPS growth 5 year CAGR (2Q’08--2Q’13) Total Assets Under Management (diluted)
Slide 23: EPS Growth vs. the Industry & Peers
*Bank industry defined as all publicly traded banks per SNL Financial; EPS Growth vs. the Industry & Peers -16.7% -14.8% -4.2% -3.6% -3.6% -3.2% 0.0% 0.01% 1.1% 2.0% 3.4% 4.99% 7.3% 8.2% 5-Year Diluted Earnings Per Share 2Q’08 – 2Q’13 CAGR UMBF vs. Traditional Peers CYN Bank Industry Median * ONB BO
Slide 24: Second Quarter 2013 Highlights
2 nd Quarter 2013 Highlights
Slide 25: Changing Earning Asset Mix
Changing Earning Asset Mix 2Q’08 Net Loans – 54.9% Total Securities – 41.3% 48.5% 44.6% 41.9% 43.0% 44.9% 45.1% 49.4% 50.2% 53.2% 51.7% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 2Q'09 2Q'10 2Q'11 2Q'12 2Q'13 Net loans Total securities Fed funds & resell agreements Interest Bearing Due From Banks
Slide 26: Investment Portfolio Statistics
Average Balance: $7.2 billion Average Yield: 1.95% Investment Portfolio Statistics Roll off Purchased ($ millions) Yield ($ millions) Yield 2Q12 $396 2.52% $636 1.69% 1Q13 $413 1.98% $769 1.31% 2Q13 $340 2.13% $815 1.41% Scheduled Cash Flow 3Q13 $269 1.81% Next 12 months $1,230 1.88% Duration/Life (
Slide 27: Liabilities
Liabilities 2Q’13 Cost of Funds 0.18% Including DDA 0.11% 38.5% 40.8% 41.7% 34.0% Deposit Growth & % of Free Funds ($ billions) $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 Interest Bearing Non-Interest Bearing $11.7 $10.3 $9.9 $8.4
Slide 28: Capital
Capital 8.13% 7.71% 6.26% 5.97% 6.66% 7.36% 6.76% 6.90% 7.48% 7.78% 7.49% 6.55% 6.37% Total Shareholder Equity Shareholder Equity ($billions) TCE Ratio Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 4.0% 6.0% 8.0% 10.0% $1.07 $1.09 $1.06 $1.08 $1.13 $1.17 $1.19 $1.21 $
Slide 29: Net Interest Income
Net Interest Income 3.13% 3.09% 3.15% 2.90% 2.98% 2.98% 2.91% 2.75% 2.82% 2.80% 2.64% 2.51% 2.56% 2Q’13 net interest income increased 2.4% vs. 2Q’12; driven by earning asset growth and improved deposit pricing $77.7 $78.4 $78.8 $78.4 $79.9 $79.1 $79.5 $79.1 $80.4 $80.4 $80.2 $79.5 $82.3 $65.0 $67.0
Slide 30: Noninterest Income Highlights
Noninterest Income Highlights 5 Year CAGR 2Q’08– 2Q’13 13.9% 55.9% 18.4% 14.1% Trust & Securities Process Revenue Trust & Securities Processing Composition : Bankcard Fees Deposit Service Charges Insurance Fees & Commissions Trading & Investment Banking Trust & Securities Processing Gains on Sale of
Slide 31: Noninterest Expense
Noninterest Expense Salary CAGR 8.7% NI Income CAGR 7.6% NI Expense CAGR 7.2% Noninterest expense increased 3.9% to $150.3 million vs. 2Q’12 • Increase primarily driven by higher salary and benefits expense of $5.6 million and increased processing fees of $1.7 million related to fees paid to third-p
Slide 32: Business Segment Updates
Business Se g ment Updates
Slide 33: Institutional Investment Management
Institutional Investment Mana g ement $22.4 $22.6 $23.5 $25.7 $26.3 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 Total Scout Assets Under Management ($ billions) * Industry data source: Strategic Insight AUM increased 17.5% year- over-year to $26.3 billion Net inflows of $902 million for Q2’13; year-to-date flows
Slide 34: Institutional Investment Management: AUM Drivers
$51.6 $1,435.7 Institutional Investment Management $119.8 $171.8 $703.5 $606.4 $585.7 ($84.0) ($622.9) $204.1 $134.4 $729.9 $354.0 $2.4 $48.7 ($250.4) -$1,000 -$500 $0 $500 $1,000 $1,500 $2,000 $2,500 3Q'12 4Q'12 1Q'13 2Q'13 Equity Flows Equity Market Impact Fixed Income Flows Fixed Income Market Im
Slide 35: Institutional Investment Management
Institutional Investment Management $8.1 $8.2 $10.4 $11.0 $11.1 Total AUM $19.9B $19.7B $23.5B $25.7B $26.3B $0.2 $0.6 $0.9 $1.0 $1.3 $0.8 $0.6 $0.6 $0.8 $2.3 $2.3 $10.2 $10.3 $11.4 $11.4 $11.6 1Q13 2Q13 Equity Mutual Funds Fixed Income Mutual Funds Money Market Equity Institutional & Other Fixed In
Slide 36: AUM by Strategy – As of 2Q'13
AUM by Strategy – As of 2Q’13 Acquired Reams Asset Management in December 2010 49.0% 51.0% 70.4% 29.4% Equity Strategies International Mid Cap International ADR Emerging Markets Global Small Cap Other: Equity Fixed Income Fixed Income Strategies Core Plus Core Low Duration Long Duration Intermediate
Slide 37: Fixed Income Rotation
Fixed Income Rotation 47.3% 29.4% Change in Fixed Income Strategies Core Plus Core Low Duration Long Duration Intermediate Unconstrained Global Aggregate 2Q’13 2Q’12 14.7% 21.3% 12.4% 2.1% 2.0% 0.1% 9.7% 23.3% 16.1% 2.1% 19.2% 0.2%
Slide 38: Asset Servicing
Asset Servicing $162.4 $179.3 $206.4 $156.0 $165.4 $168.0 1Q13 2Q13 Asset Servicing Operating Results 3 mos Ended March 31, Year-Over-Year Linked-Quarter Net interest income 26.78% -13.04% Noninterest income 19,275 18,779 20,278 2.64% -4.95% Noninterest expense 17,054 17,296 19,932 -1.40% -14.44% NI
Slide 39: Asset Servicing Business Metrics
Asset Servicin g 179 181 116 160 170 170 170 182 406 467 487 504 520 532 543 549 470 499 511 418 423 443 432 400 227 256 244 272 255 270 275 284 Fund Accounting & Administration Alternative Asset Servicing Custody Transfer Agency Business Metrics $30.5 $35.9 $40.2 $39.8 $41.7 $44.1 $48.4 $52.1 1Q'12
Slide 40: Payment Solutions
Payment Solutions Inter- change 2Q ‘09–’13 12.6% $10.7 $13.7 $15.8 $15.6 Total Card Purchase Volume & Interchange Revenue Durbin effective Payment Solutions Operating Results 3 mos Ended March 31, Year-Over-Year Linked-Quarter Net interest income 11,192 10,556 11,548 6.03% -3.08% Provision for loan
Slide 41: Payment Solutions: Healthcare Services
Payment Solutions Health Savings Accounts & Balances * Deposits and investment assets Healthcare card purchase volume +39.6% to $748.6 million Interchange contribution +43% to $2.7 million Quarter 2013 Highlights Healthcare Services Card Utilization Commitments Outstandings Utilization 2Q '13 $296.7
Slide 42: Bank
Bank 49.3% 49.2% 49.4% 49.0% 47.1% 46.1% Assets Under Management ($ billions) Bank Operating Results 3 mos Ended March 31, Year-Over-Year Linked-Quarter Net interest income 70,558 69,354 67,260 1.74% 4.90% Provision for loan losses 1,682 2,222 -24.30% 554.47% Noninterest income 46,501 49,716 52,748
Slide 43: Bank: Commercial Loan Growth
Bank 48.5% 48.2% 47.3% 46.1% 43.9% 42.8% 5 yr CAGR 2Q ‘08–’13 10.6% $3.03 $3.46 $3.46 $3.75 $4.20 $5.00 2Q'08 2Q'09 2Q'10 2Q'11 2Q'12 2Q'13 High Growth Regions 2Q’13 vs. 2Q’12 • Arizona +67% • Nebraska +37% 0% 50% 100% 2Q'08 2Q'09 2Q'10 2Q'11 2Q'12 2Q'13 KC CO STL Greater MO KS OK AZ NE Commercial L
Slide 44: Bank: Total Deposits
Bank 5 yr CAGR 2Q ‘08–’13 16.5% 31.3% 32.3% 33.5% 33.7% 40.0% 40.0% 52.4% 54.3% 55.3% 58.8% 60.2% 63.6% Total Deposits Deposits By Region $6.3 $7.6 $8.3 $9.5 $10.3 $11.6 2Q'08 2Q'09 2Q'10 2Q'11 2Q'12 2Q'13 Interest Bearing Non-Interest Bearing 0% 50% 100% 2Q'08 2Q'09 2Q'10 2Q'11 2Q'12 2Q'13 KC STL C
Slide 45: Strengths We are Leveraging
Strengths We are Leveraging Growing fee businesses Infrastructure Diversified revenue Success building a diversified financial services company Building scale through strategic acquisitions Existing technology, operations, products, distribution
Slide 46: Building a company for the next 100 years
Buildin g a company for the next 100 years. Second Quarter 2013 UMB Financial