Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q4 2022 Earnings Presentation
45 slides from Umb Financial's earnings presentation, Jan 24, 2023
Slide 1: 4th Quarter 2022 Update
4th Quarter 2022 Update January 24, 2023
Slide 2: Presentation Index
Presentation Index 2 Corporate Overview Opportunity – Our Investment Thesis 4th Quarter 2022 Results Line of Business Updates Appendix 3 8 16 30 40 Board of Directors Forward-Looking Statements Non-GAAP Reconciliations Please refer to the Forward-Looking Statements on slide 42 for important disclosu
Slide 3: Corporate Overview Highlights
Corporate Overview Highlights Asset-based lending Healthcare Services 89 banking centers 232 ATMs UMB Bank Presence Twin Cities - MN Salt Lake City - UT UMB Financial Corporation Headquarters Expansion Markets International Presence UMBF Trust & Agency Services – Dublin, Ireland Specialized Lending
Slide 4: Business Model: Our Diverse Foundation
Business Model Our Diverse Foundation Commercial & Personal Banking Services 4Q’22 Revenue: $235.6 million. 4Q’22 Average Deposits: $20.6 billion Average loans: $2.8B (1) (2) Average deposits: $6.2B Retail deposit & lending services through 89 branches and online Private banking services Consumer mo
Slide 5: Beyond Financials: Our Culture
An unwavering commitment to doing more for our customers. Beyond Financials Our Culture 5 Our Values Our Commitment Our Vision the unparalleled customer experience Customers First We do the unparalleled to create an environment that consistently exceeds the expectations of our customers. Integrity &
Slide 6: Beyond Financials: Our Culture
6 Beyond Financials Our Culture Creating an unparalleled customer experience requires a culture where our people feel part of something more, something bigger. We foster this experience through our policies, our business decisions and our expectations of each associate.
Slide 7: Beyond Financials: Our Commitment to Corporate Citizenship
7 Beyond Financials Our Commitment to Corporate Citizenship Read our 2021 Corporate Citizenship Report at UMB.com/CorporateCitizenship UMB recognizes the undeniable importance of sustainable business practices. Efficient & Sensible Resource Use Associate volunteerism and corporate philanthropy help
Slide 8: Our Investment Thesis
Our Investment Thesis st. Louts,/MO
Slide 9: Investment Thesis: Our Opportunity
9 Investment Thesis Our Opportunity Track record of relative outperformance in loan growth – opportunities remain Underpenetrated across our geographic footprint, focused on market share gains Underpenetrated vertically on an asset class basis; built out specialized teams Runway for Growth Attractiv
Slide 10: Balance Sheet Growth Across All Business Cycles
8% Balance Sheet Growth Across All Business Cycles 10 Average Loans Average Deposits Average annual balances in billions. 2.89% 2.10% 0.53% Annual Loan Growth 12% 19% 9% 7% 5% 2% 6% 10% 10% 18% 12% 21% 19% 9% 7% 10% 25% 4% 14% 16% 11% 14% 10% 20% 13% 6% 11% 9% 4% 7% 14% 15 Year CAGR 11.0% 15 Year CA
Slide 11: Differentiated Revenue Profile
Differentiated Revenue Profile Multiple Sources of Growth 11 Net Interest Income Fee Income Provides Diversity Dollars in millions. 29% 55% 38% $ 1,282.7 $1,291.4 $1,468.0 $613.2 $521.5 $731.3 $587.8 $778.2 $671.0 $825.1 $878.5 $982.5 $848.7 $1,012.1 $971.4 $1,097.7 Total Revenue 15 Year CAGR 7.1% R
Slide 12: Capital & Liquidity Supports Growth Outlook
Capital & Liquidity Supports Growth Outlook Cash & Securities / Assets Loans / Deposits Tier 1 Capital Ratio Tangible Common Equity / Assets (4) (3) (2) (1) UMB traditional peers (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence; (2) Non-GAAP measure. See recon
Slide 13: Resilient Credit Metrics Through All Economic Environments
Resilient Credit Metrics Through All Economic Environments 13 Net Charge-Offs / Average Loans Nonperforming Loans / Loans 15 Year Average 0.30% 15 Year Average 0.44% (1) UMB traditional peers (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence; (2) All FDIC-insur
Slide 14: Risk-Adjusted Returns
Risk-Adjusted Returns Rowing Close to Shore 14 Return on Risk-Weighted Assets (1) UMB traditional peers (15 banks), data as of latest available annual period. Source: S&P Global Market Intelligence. Risk-Weighted Assets / Assets
Slide 15: Dividend Trends
Dividend Trends Sustained Growth 15 (1) Dividends adjusted for 2-for-1 stock split in 2006. (2) Annualized 2023 full-year dividend assumes all 4 quarters are $0.38/share, consistent with first quarter 2023 dividend, declared in January 2023. The Board of Directors may declare dividends of different
Slide 16: 4th Quarter 2022 Financial Review
4th Quarter 2022 Financial Review
Slide 17: 4Q 2022 Results At-A-Glance
4Q 2022 Results At-A-Glance 4Q ’21 3Q ’22 4Q ’22 Linked-Quarter Commentary 17 Dollars in millions, except per share amounts. (1) Net gains/losses from mark-to-market valuations and any dispositions of equity investments. (2) Non-GAAP measure; reconciled on slide 43.
Slide 18: 4Q 2022 Earnings Highlights
4Q 2022 Earnings Highlights 18 Operating PTPP Income (1) $187.1 $131.2 $134.1 $107.4 $119.4 Net Income $106.0 $137.6 $88.0 $100.2 $78.5 Dollars in millions, except per share amounts. (1) Operating pre-tax, pre-provision income. See reconciliation on slide 43; (2) Net gains/losses related to mark-to-
Slide 19: Revenue Trends
Revenue Trends 19 Dollars in millions. Columns may not sum due to rounding differences. 4Q ’21 1Q ’22 2Q ’22 3Q ’22 4Q ‘22 Linked-Qtr. Variance $ ∆ % ∆
Slide 20: Net Interest Income
Net Interest Income 20 @ 3.28% $3.7B $1.5B $1.8B $6.8B $6.6B @ 2.83% @ 4.30% @ 0.83% @ 0.78% @ 1.27% @ 0.15% @ 0.19% @ 0.64% @ 1.60% Asset Yield and Liability Cost Trends Liquidity Trends Impact NIM $224.8 $245.2 $210.6 $210.4 18.8% 17.6% 10.5% 4.3% 5.1% $233.5 $2.1B @ 1.79% @ 1.30% 8.4% Pre- pandem
Slide 21: Noninterest Income
Noninterest Income 21 Current Quarter Drivers Dollars in millions. (1) UMB traditional peers (15 banks), data as of latest available quarter. Source: S&P Global Market Intelligence. Noninterest income decreased $3.2mm, or 2.5%, vs. 3Q’22. Primary drivers: Reductions in market-related income, includi
Slide 22: Noninterest Expense
Noninterest Expense 22 Current Quarter Drivers Dollars in millions. Columns may not sum due to rounding differences. (1) See non-GAAP reconciliation on slide 43. Noninterest expense increased $6.4mm, or 2.8%, vs. 3Q’22. Primary drivers: An increase of $2.6mm in processing fees, largely software cost
Slide 23: Diversified Loan Portfolio
$16,693 $ 17,361 $ 18,318 $ 19,284 Diversified Loan Portfolio 23 Average balances in millions. $ 20,295 4Q ’21 3Q ’22 4Q ’22 Linked-Qtr. Variance $ ∆ % ∆ Loans by Region Kansas City 33% Colorado 19% Arizona 10% St. Louis 15% Greater MO 6% KS - 2% Texas 11% NE - 2% OK - 2%
Slide 24: Quarterly Loan Activity
Quarterly Loan Activity 24 (1) Payoffs and paydowns include C&I and CRE loans. 4Q ’21 1Q ’22 2Q ’22 3Q ’22 4Q ’22 (1) (1)
Slide 25: Strong Asset Quality
Strong Asset Quality Net Loan Charge-Offs Delinquencies Nonperforming Loans Allowance for Credit Losses Dollars in millions. (1) Average & loans include PPP balances; (2) Delinquencies represent accruing loans > 30 days past due. 25 0.02%
Slide 26: Detailed Net Charge-Off History
Detailed Net Charge-Off History Historical Recent Trends (1) Loan categories updated in 2020 with adoption of ASU 2016-13. In prior periods, NCOs for “Commercial” included C&I, commercial card, ABL and factoring loans. NCOs for “Other” included consumer cards, all real-estate loans, consumer loans a
Slide 27: High-Quality Investment Portfolio
High-Quality Investment Portfolio $8,093 $7,566 $6,999 $11,271 $11,278 $5,199 $5,785 $5,872 $1,195 $1,894 Available-for-Sale Held-to-Maturity Average balances - $ millions (1) Cash flow and purchase activity and HTM duration includes AFS and the portion of the HTM portfolio managed by the Corporate
Slide 28: Diversified Deposit Mix
Diversified Deposit Mix 28 $31,589 $31,374 $31,637 $32,580 Deposits by Line of Business Commercial Personal Institutional Commercial Banking 46% Consumer & Private Wealth 20% Capital Mkts. & Corp. Trust 11% Healthcare Services 8% Fund Services 6% Investor Solutions 9% 42% 40% 41% 43% 45% Average bal
Slide 29: Interest Rate Sensitivity
29 Interest Rate Sensitivity Impact to Net Interest Income Assumptions Projected rates for new loans and deposits based on historical analysis, management outlook and repricing strategies Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other ma
Slide 30: Line of Business Updates
Line of Business Updates
Slide 31: Commercial Banking: Commercial Capabilities
Commercial Banking Commercial Capabilities 31 Middle Market 54% Investment Real Estate 27% Sm./Med Biz 5% Specialized Verticals 14% $17.0B Average balance for 4Q’22, excludes credit card. (1) Rank among U.S. Visa & Mastercard Commercial Card Issuers, Source: Nilson Report, ‘21; (2) ABA 2021, FDIC da
Slide 32: Commercial Banking: C&I Lending
Commercial Banking C&I Lending 32 Commercial & Industrial Statistics C&I Industry Diversification (1) (2) Average loan size: $5.6 million Considerations Internal limits on loan size and projects per sponsor Concentration guidelines for all lending verticals, monitored for changing conditions C&I Bal
Slide 33: Commercial Banking: Commercial Real Estate
Commercial Banking Commercial Real Estate 33 Commercial Real Estate Statistics Investment CRE / Construction Portfolio (1) Total Investment CRE Portfolio Average Loan-to-Value: 59% Recourse: 85% Const. / Land Dev. 19% Owner-Occupied 28% Investment CRE 45% $7.6B Farmland 7% as of Dec. 31, 2022 1-4 Un
Slide 34: Personal Banking: Consumer
Personal Banking Consumer 35 Strategic & Stable Source of Low-Cost Funds Diversified Products, Services & Engagement Consumer plays a strategic role for UMB as a large and stable source of deposits. Poised for continued asset growth. Metrics at, or for the quarter ended, 12/31/22. (1) Includes resid
Slide 35: Personal Banking: Private Wealth Management
Personal Banking Private Wealth Management 35 Composition as of 12/31/22. (1) Includes AUM and AUA. Personal Trust 22% Investment Advisory 39% Non-Managed AUA 26% IRAs 6% Brokerage 3% Other 4% Customer Assets Wealth Management Financial planning Discretionary investment management Investment researc
Slide 36: Institutional Banking: Fund Services & Institutional Custody
Institutional Banking Fund Services & Institutional Custody 36 Best Interval Fund Administrator (1) Best Administrator – Technology (2) $352B $419B $407B $382B Provides services for 1,700 funds, including registered and alternative investment funds, PE funds, real estate and venture capital funds an
Slide 37: Institutional Banking: Corporate Trust & Capital Markets
Institutional Banking Corp/Specialty Trust & Capital Markets 37 (1)Thomson Reuters municipal rankings, Sept. 2022; (2) Ranked by number of issues; (3) Debtwire – ranking ’21; (4) Green Street Advisors’ Asset-Based Alert – 2021. Corporate Trust & Escrow Services Provides trustee, paying agent and esc
Slide 38: Institutional Banking: Investor Solutions & Healthcare Services
FDIC Sweep Assets Under Administration $64B Institutional Banking Investor Solutions & Healthcare Services 38 Investor Solutions Annual ACH Transactions Healthcare Services Provides a suite of tax-advantaged benefit accounts including Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs)
Slide 39: Payments: Credit & Debit Card Products
Payments Credit & Debit Card Products 39 $3,812 $3,708 $3,714 $3,723 4Q ’22 Card Spend $3.7B 23rd In U.S. Credit Card Purchase Volume (1) #23 $3,680 Dollars in millions. (1) Rank in commercial, consumer and small business cards among top 50 U.S. issuers. Source: Nilson Report, December 2021. Card Pu
Slide 40: Appendix
Appendix Milwaukee, WI
Slide 41: Governance: Our Board of Directors
Governance Our Board of Directors 41 AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee; RC = Risk Committee Advisory Directors
Slide 42: Forward-Looking Statements
Forward-Looking Statements 42 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 strictly to historical or
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations 43 (unaudited, dollars in thousands except per share data) The following are non-GAAP measures used by from time to time. To the extent a non-GAAP measure is used during this presentation, a reconciliation to such measure’s closest GAAP equivalent is provided below. UMB beli
Slide 44: Non-GAAP Reconciliations: Tangible Common Equity Ratio
Non-GAAP Reconciliations 44 Tangible Common Equity Ratio (unaudited, dollars in thousands)
Slide 45: Our Peer Group
45 Our Peer Group UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106 UMBFInvestorRelations@umb.com