Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q1 2022 Earnings Presentation
48 slides from Umb Financial's earnings presentation, Apr 26, 2022
Slide 1: 1st Quarter 2022 Update
1st Quarter 2022 Update April 26, 2022 Exhibit 99.2
Slide 2: Presentation Index
Presentation Index 2 Corporate Overview Opportunity – Our Investment Thesis 1st Quarter 2022 Results Line of Business Updates Appendix 3 8 17 30 40 Board of Directors Forward-Looking Statements Non-GAAP Reconciliations Please refer to the Forward-Looking Statements on slide 43 for important disclosu
Slide 3: Corporate Overview
Corporate Overview 3 Highlights Asset-based lending Healthcare Services 92 banking centers 230 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 Lendin
Slide 4: An unwavering commitment to doing more for our customers
An unwavering commitment to doing more for our customers. Beyond Financials Our Culture 4 Customers First We do the unparalleled to create an environment that consistently exceeds the expectations of our customers. Integrity & Trust We demonstrate our uncompromising honesty and integrity to earn the
Slide 5: Beyond Financials: Our Culture
5 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 6: Our Commitment to Corporate Citizenship
Beyond Financials Our Commitment to Corporate Citizenship Read our 2021 Corporate Citizenship Report at UMB.com/CorporateCitizenship 6 UMB recognizes the undeniable importance of sustainable business practices. Efficient & Sensible Resource Use Associate volunteerism and corporate philanthropy help
Slide 7: Business Model: Our Diverse Foundation
Business Model Our Diverse Foundation Commercial & Personal Banking Services Revenue: FY’21 $922 million; 1Q’22 $235 million / Average deposits: $20.4 billion Average loans: $2.5B (1) (3) Average deposits: $6.7B (2) Retail deposit & lending services through 92 branches and online Private banking ser
Slide 8: Our Investment Thesis
Our Investment Thesis Dallas, TX
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: 7% Balance Sheet Growth Across All Business Cycles
7% Balance Sheet Growth Across All Business Cycles 10 Average Loans Average Deposits Average annual balances in billions. 2.50% 0.40% 1.77% 0.09% Annual Loan Growth 12% 14% 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 10.4% 15 Y
Slide 11: Differentiated Revenue Profile
Differentiated Revenue Profile Multiple Sources of Growth 11 Net Interest Income Fee Income Provides Diversity Dollars in millions. 29% 28% 54% 36% $ 1,282.7 $1,291.4 $472.2 $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 6.9%
Slide 12: Capital & Liquidity Supports Growth Outlook
Capital & Liquidity Supports Growth Outlook 12 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 re
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 0.45% (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 Risk-Weighted Assets / Assets Return on Risk-Weighted Assets (1) UMB traditional peers (15 banks), data as of latest available annual period. Source: S&P Global Market Intelligence.
Slide 15: Outperformance Building Long-Term Value
Outperformance Building Long-Term Value 15 15-Year Compounded Annual Growth Rates 2006 – 2021 (2) *KBW Nasdaq Regional Bank Index (median of 50 banks); **UMB’s traditional peers (median of 15 banks); ***Median of all publicly-traded banks with data reported for both 2006 and 2021. (1) As of March 20
Slide 16: Dividend Trends
Dividend Trends Sustained Growth 16 (1) Dividends adjusted for 2-for-1 stock split in 2006; (2) Annualized 2022 full-year dividend assumes all 4 quarters are $0.37/share, consistent with first quarter 2022 dividend. The Board of Directors may declare dividends of different amounts in future quarters
Slide 17: 1st Quarter 2022 Financial Review
1st Quarter 2022 Financial Review
Slide 18: 1Q 2022 Results At-A-Glance
1Q 2022 Results At-A-Glance 18 Dollars in millions, except per share amounts. (1) Net gains/losses related to mark-to-market valuations and any disposition of shares in equity investments. (2) Non-GAAP measure. See reconciliations on slides 44 and 45. 1Q ’21 4Q ’21 1Q ’22 Linked-Quarter Commentary
Slide 19: 1Q 2022 Earnings Highlights
1Q 2022 Earnings Highlights 19 Pre-Tax, Pre-Provision (“PTPP”) Income (1) $102.1 $131.3 $108.8 $106.9 $119.3 Net Income $106.0 $92.6 $87.4 $94.5 $78.5 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliation on slide 44; (2) Net gains/losses related to mark-to-market v
Slide 20: Revenue Trends
Revenue Trends 20 Dollars in millions. Columns may not sum due to rounding differences. 1Q ’21 2Q ’21 3Q ’21 4Q ’21 1Q ‘22 Linked-Qtr. Variance $ ∆ % ∆
Slide 21: Net Interest Income
Net Interest Income 21 @ 0.16% $4.5B $4.5B $5.4B $6.8B $6.6B @ 0.92% @ 0.87% @ 0.83% @ 0.78% @ 0.70% @ 0.15% @ 0.19% @ 0.10% @ 0.10% Asset Yield and Liability Cost Trends Liquidity Trends Impact NIM $194.1 $209.8 $210.6 $210.4 $199.7 $204.5 $208.4 $180.7 14.2% 13.7% 15.9% 18.8% 17.6% $201.1 $188.7 $
Slide 22: Noninterest Income
Noninterest Income 22 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 increased $4.9mm, or 4.1%, vs. 4Q’21, largely driven by: An increase of $3.0mm in deposit service c
Slide 23: Noninterest Expense
Noninterest Expense 23 Current Quarter Drivers Noninterest expense decreased $7.7mm, or 3.5%, vs. 4Q’21. Primary drivers: A decrease of $11.5mm in salaries and bonus expense following higher levels of incentive compensation for company performance during 4Q ’21; Reductions of $3.9mm in legal and con
Slide 24: Diversified Loan Portfolio
$16,693 $16,473 $ 17,259 $ 14,933 $ 17,361 $ 16,246 $ 16,818 Diversified Loan Portfolio 24 Average balances in millions. $ 15,642 $ 16,757 $ 16,240 1Q ’21 4Q ’21 1Q ’22 Linked-Qtr. Variance $ ∆ % ∆ Loans by Region
Slide 25: Quarterly Loan Activity
Quarterly Loan Activity 25 (1) Payoffs and paydowns include C&I and CRE loans. 1Q ’21 2Q ’21 3Q ’21 4Q ’21 1Q ’22 (1) (1)
Slide 26: Strong Asset Quality
Strong Asset Quality Net Loan Charge-Offs Delinquencies Nonperforming Loans Allowance for Credit Losses Dollars in millions. (1) Delinquencies represent accruing loans > 30 days past due; (2) Total loans include PPP balances. 26
Slide 27: Detailed Net Charge-Off History
27 Detailed Net Charge-Off History (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 and DDA. Historical Rec
Slide 28: High-Quality Investment Portfolio
$10,699 $11,284 $11,903 $12,766 $13,501 $11,271 $11,278 $9,368 $9,924 $10,567 High-Quality Investment Portfolio Cash flow and purchase activity and HTM duration includes AFS and the portion of the HTM portfolio managed by the Corporate Treasury team; excludes industrial revenue bonds held-to-maturit
Slide 29: Diversified Deposit Mix
Diversified Deposit Mix 29 $26,826 $29,428 $31,637 $32,580 Deposits by Line of Business Commercial Personal Institutional Commercial Banking 42% Consumer & Private Wealth 21% Capital Mkts. & Corp. Trust 15% Healthcare Services 7% Fund Services 6% Investor Solutions 9% 41% 43% 36% 39% 39% Average bal
Slide 30: Interest Rate Sensitivity
30 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 31: Line of Business Updates
Line of Business Updates
Slide 32: Commercial Banking: Commercial Capabilities
Commercial Banking Commercial Capabilities 32 Average balance for 1Q’22. (1) ABA 2021, FDIC data; (2) Rank among U.S. Visa & Mastercard Commercial Card Issuers, Source: Nilson Report, 2020. Commercial Lending Portfolio Middle Market 56% Investment Real Estate 27% Sm./Med Biz 5% Specialized Verticals
Slide 33: Commercial Banking: C&I Lending
Commercial Banking C&I Lending 33 Commercial & Industrial Statistics C&I Industry Diversification (1) (2) Average loan size: $3.6 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 34: Commercial Banking: Commercial Real Estate
Commercial Banking Commercial Real Estate 34 Commercial Real Estate Statistics Investment CRE / Construction Portfolio (1) Total Investment CRE Portfolio Average Loan-to-Value: 62% Recourse: 83% Const. / Land Dev. 13% Owner-Occupied 31% Investment CRE 48% $6.4B Farmland 7% as of March 31, 2022 1-4 U
Slide 35: Personal Banking: Consumer
Personal Banking Consumer 35 Strategic & Stable Source of Low-Cost Funds Diversified Products, Services & Engagement Hybrid Service & Sales Model—provides channel of choice & drives customer satisfaction New Down Payment Assistance Mortgage Program Consumer plays a strategic role for UMB as a large
Slide 36: Personal Banking: Private Wealth Management
Personal Banking Private Wealth Management 36 Composition as of 03/31/22. (1) Includes AUM and AUA. Personal Trust 22% Investment Advisory 36% Non-Managed AUA 29% IRAs 5% Brokerage 4% Other 4% Customer Assets Wealth Management Financial planning Discretionary investment management Investment researc
Slide 37: Institutional Banking: Fund Services & Institutional Custody
Institutional Banking Fund Services & Institutional Custody 37 +18% YoY Best Interval Fund Administrator (1) Best Administrator – Technology (2) Fund Services – Registered Funds & Alternative Investments Institutional Custody $379B $419B $407B $345B Provides services for 1,700 funds, including regis
Slide 38: Institutional Banking: Corporate Trust & Capital Markets
Institutional Banking Corp/Specialty Trust & Capital Markets 38 (1) Ranked by proceeds and number of issues; (2)Thomson Reuters municipal rankings, Sept. 2021; (3) Debtwire - ranking 1H’21; (4) Green Street Advisors’ Asset-Based Alert – 2021. Corporate Trust & Escrow Services Provides trustee, payin
Slide 39: Institutional Banking: Investor Solutions & Healthcare Services
FDIC Sweep Assets Under Administration $72B Institutional Banking Investor Solutions & Healthcare Services 39 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 40: Payments: Credit & Debit Card Products
Payments Credit & Debit Card Products 40 $3,550 $3,789 $3,714 $3,723 1Q ’22 Card Spend $3.7B 23rd In U.S. Credit Card Purchase Volume (1) #23 $3,658 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 41: Appendix
Appendix St. Louis, MO
Slide 42: Governance: Our Board of Directors
Governance Our Board of Directors 42 AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee; RC = Risk Committee. Advisory Directors
Slide 43: Forward-Looking Statements
Forward-Looking Statements 43 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 44: Non-GAAP Reconciliations
Non-GAAP Reconciliations 44 The following are non-GAAP measures used by the company 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. The Company believes that these non-GAAP financial m
Slide 45: Non-GAAP Reconciliations: Pre-Tax, Pre-Provision Income
Non-GAAP Reconciliations 45 Pre-Tax, Pre-Provision Income on a Fully Tax-Equivalent Basis (unaudited, dollars in thousands except per share data)
Slide 46: Non-GAAP Reconciliations: Tangible Book Value
Non-GAAP Reconciliations 46 Tangible Book Value (unaudited, dollars in thousands except share and per share data)
Slide 47: Non-GAAP Reconciliations: Tangible Common Equity Ratio
Non-GAAP Reconciliations 47 Tangible Common Equity Ratio (unaudited, dollars in thousands)
Slide 48: Our Peer Group
48 Our Peer Group UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106 UMBFInvestorRelations@umb.com