Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q4 2015 Earnings Presentation
50 slides from Umb Financial's earnings presentation, Jan 26, 2016
Slide 1: Strength in Balance.
Exhibit 99.2 Strength in Balance. UMB Financial Fourth Quarter 2015 January 26, 2016
Slide 2: Cautionary Notice about Forward-Looking Statements
Cautionary Notice about Forward-Looking Statements 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 stric
Slide 3: 4Q 2015 Performance Highlights
4Q 2015 Performance Highlights
Slide 4: Earnings Summary – 4Q 2015
Earnings Summary – 4Q 2015 $ in thousands, except per-share data; unaudited % variance 4Q'15 4Q'14 3Q'15 vs. 4Q'14 vs. 3Q'15 Net Interest Income $ 114,454 $ 90,914 $ 109,895 25.9 4.1 Noninterest Income 112,599 115,248 109,098 (2.3) 3.2 Pre-Provision Net Revenue 227,053 206,162 218,993 10.1 3.7 Nonin
Slide 5: Earnings Summary – Full-Year 2015
Earnings Summary – Full-Year 2015 $ in thousands, except per-share data; unaudited % variance 2015 2014 2013 '15 to '14 '14 to '13 Net Interest Income $ 412,067 $ 350,055 $ 333,269 17.7 5.0 Noninterest Income 466,454 498,688 491,833 (6.5) 1.4 Pre-Provision Net Revenue 878,521 848,743 825,102 3.5 2.9
Slide 6: Select Balance Sheet Items
Select Balance Sheet Items $ in thousands, average balances; unaudited Three Months Ended % variance December 31, 2015 December 31, 2014 September 30, 2015 vs. 4Q'14 vs. 3Q'15 Avg. Balance Avg Yield Avg. Balance Avg Yield Avg. Balance Avg Yield Assets / Rate % / Rate % / Rate % Loans, net of unearne
Slide 7: Key Performance Metrics
Key Performance Metrics 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 ROAE 6.15% 4.72% 6.95% 8.18% 6.47% ROAA 0.63% 0.49% 0.70% 0.81% 0.66% Efficiency Ratio 77.21% 80.79% 76.41% 75.67% 77.31% Net Interest Margin 2.76% 2.73% 2.59% 2.46% 2.52% Noninterest Income % of revenue 49.6% 49.8% 55.1% 58.1% 55.9% Avg. Loan/De
Slide 8: Net Operating Income Non-GAAP Reconciliation
Net Operating Income Non-GAAP Reconciliation In this presentation, we provide information using net operating income, operating earnings per share, operating return on average equity, operating return on average assets, operating noninterest expense, and operating efficiency ratio, all of which are
Slide 9: Operating Noninterest Expense & Efficiency Ratio Non-GAAP Reconciliation
Operating Noninterest Expense & Efficiency Ratio Non-GAAP Reconciliation (unaudited, dollars in thousands) Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2015 2014 2015 2014 Noninterest expense (GAAP) $182,080 $166,397 $703,736 $665,680 Adjustments (pre-tax): Conti
Slide 10: Efficiency Initiative Update
Efficiency Initiative Update
Slide 11: Components of Efficiency Initiative
Components of Efficiency Initiative Key Initiatives – Drive enhanced operating leverage and improve customer experience Simplification of organizational and reporting structures Improvement in efficiency within branch operations Streamlining of back-office functions Elimination of duplication and im
Slide 12: Salaries & Benefits Details
Salaries & Benefits Details 2015 2016 2016 2015 ($ millions) Initial Initial Updated Annualized Actual Estimate Estimate Estimate Salaries and Benefits Efficiencies(1) $5.2 $15.0 $7.7 $14.6 $23.4 Components of Salaries and Benefits Savings: FTE reductions No backfill of certain positions vacated in
Slide 13: 4Q 2015 Financials
4Q 2015 Financials
Slide 14: Marquette Integration Update
Marquette Integration Update Transaction Costs 2014 1Q’15 2Q’15 3Q’15 4Q’15 Total $ thousands 2014-2015 HR Costs $215.1 $121.1 $452.4 $1,909.1 $1,756.1 $4,453.8 Technology Integration - 10.3 - 2,405.0 1,658.2 4,073.5 Professional Fees 1,680.1 627.0 264.4 93.0 345.9 3,010.4 Other Integration Fees 46.
Slide 15: Consistent Loan Growth
Consistent Loan Growth End-of-Period Total Loans 5 Year $9.4 (1) CAGR (1) $8.9 15.5% $7.5 $6.5 $5.7 $5.0 $4.6 (1) On May 31, 2015, we closed the acquisition of Marquette Financial Companies and loans with an acquired value of $980.4 million were added to the UMB portfolio. At December 31, 2015, the
Slide 16: UMB and Marquette Loans
UMB and Marquette Loans $ in thousands Legacy UMB Legacy Marquette Loans Loans December 31, 2014 September 30, 2015 December 31, 2015 vs. Dec '14 vs. Sep '15 vs. Sep '15 Legacy UMB Loans $ 7,465,794 $ 8,041,024 $ 8,448,650 13.2% 5.1% n/a Legacy Marquette Loans - 1,005,102 982,111 n/a n/a -2.3% Total
Slide 17: Quality Credit Metrics
Quality Credit Metrics Net Charge-Offs $000’s $4,758 $4,176 0.23% 0.24% $2,192 $1,661 $1,886 0.09% 0.10% 0.08% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 Net Charge-offs NCOs/Avg. Loans Nonperforming Loans $000’s $61,152 $49,955 $37,649 0.65% $27,382 $29,187 0.55% 0.39% 0.42% 0.37% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15
Slide 18: High Quality Investment Portfolio
High Quality Investment Portfolio Investment Mix AFS Portfolio Statistics Securities Available for Sale $6.8 billion at December 31, 2015 Roll off Purchased ($ millions) Yield ($ millions) Yield 5.1% 1.2% 1Q'15 $333 2.02% $709 1.89% 2Q'15 $299 1.98% $498 1.90% 9.8% 3Q'15 $278 1.88% $114 2.17% 4Q'15
Slide 19: Asset Sensitivity at December 31, 2015
Asset Sensitivity at December 31, 2015 Projected Net Interest Income Differential $90.1 vs. Rates Unchanged (1) ($ millions) $67.8 $58.7 $59.2 $41.6 $37.6 $26.7 $24.8 $16.0 $17.8 $14.3 $4.4 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 +100 bps +200 bps +300 bps 12-mo Ramp - Year 1 Immediate Shock - Yea
Slide 20: Deposit Growth
Deposit Growth Deposits & Percent of Free Funds Actual EOP Balances; $ billions $15.1 $13.6 $13.6 $11.7 41.8% $10.2 38.0% 41.4% 42.2% 38.8% Interest Bearing Non -Interest Bearing 4Q 2015 Cost of Interest-Bearing Liabilities 0.21% Including DDA 0.12% 20
Slide 21: Balance Sheet – Strong Capital Position
Balance Sheet – Strong Capital Position Common Equity Tier 1 Ratio vs. Industry Average Equity 2015 ($ billions) 12.92% 11.70% $1.91 Industry $1.09 Median Capital Ratio Trends 14.43 14.04 13.61 13.29 12.75 11.92 11.81 11.70 11.05 8.72 9.08 8.41 6.81 (1) 4Q'10 4Q'15 2012 2013 2014 2015 Total Risk-Bas
Slide 22: Noninterest Income – 4Q 2015
Noninterest Income – 4Q 2015 th $ in thousands 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 4 Quarter ‘15 Drivers Trust and securities processing $ 62,194 $ 65,182 $ 67,381 $ 67,299 $ 69,072 Noninterest income decreased $2.6 Trading and investment banking 5,559 2,969 5,568 6,122 4,840 million, or 2.3%, compared to
Slide 23: Noninterest Income Composition – 4Q 2015
Noninterest Income Composition – 4Q 2015 1.8% 0.8% 2.7% Trust & Securities Processing Trust & Securities Processing Composition: Deposit Service Charges 4.6% ($ millions) Bankcard Fees 4.9% Source of income: 4Q’15 4Q'14 Trading & Investment Banking Institutional Investment Mgmt. $20.9 $29.1 Other 15
Slide 24: Noninterest Income – Full-Year 2015
Noninterest Income – Full-Year 2015 $ in thousands 2015 2014 2013 2012 2011 Full-Year ‘15 Drivers Trust and securities processing $ 262,056 $ 288,054 $ 265,948 $ 225,094 $ 208,392 Noninterest income decreased $32.2 Trading and investment banking 20,218 19,398 20,641 30,359 27,720 million, or 6.5%, c
Slide 25: Noninterest Income Composition – Full Year 2015
Noninterest Income Composition – Full Year 2015 0.5% 2.5% 2.2% Trust & Securities Processing 3.4% Trust & Securities Processing Composition: Deposit Service Charges ($ millions) 4.3% Bankcard Fees Source of income: 2015 2014 Trading & Investment Banking Institutional Investment Mgmt. $95.8 $130.5 Ot
Slide 26: Noninterest Expense – 4Q 2015
Noninterest Expense – 4Q 2015 th $ in thousands 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 4 Quarter ‘15 Drivers Salaries and employee benefits $ 103,617 $ 104,733 $ 99,585 $ 98,537 $ 90,115 Noninterest expense increased $15.7 Occupancy, net 11,791 11,748 10,312 10,010 10,312 million, or 9.4%, compared to 4Q’14.
Slide 27: Noninterest Expense – Full-Year
Noninterest Expense – Full-Year $ in thousands 2015 2014 2013 2012 2011 Full-Year ‘15 Drivers Salaries and employee benefits $ 406,472 $ 358,569 $ 339,691 $ 319,852 $ 294,756 Noninterest expense increased $38.1 Occupancy, net 43,861 40,197 39,291 37,927 38,406 million, or 5.7%, compared to 2014. Sal
Slide 28: Business Segment Updates - 4Q 2015
Business Segment Updates - 4Q 2015
Slide 29: Bank
Bank $ in 000s, unaudited Year Ended 3 mos Ended December 31, % Change December 31, % Change 2015 2014 Y/Y 2015 2014 Y/Y $ 348,701 $ 292,356 19.3% $ 96,658 $ 75,861 27.4% 8,541 9,175 -6.9% 2,997 1,617 85.3% 188,444 194,223 -3.0% 46,400 42,380 9.5% 446,656 404,203 10.5% 116,710 96,803 20.6% 81,948 73
Slide 30: Loan Paydowns, Payoffs, and Line Changes
Loan Paydowns, Payoffs, and Line Changes $ in thousands 4Q'15 3Q'15 2Q'15 1Q'15 4Q'14 (1) End-of-Period Total Loans $ 9,430.8 $ 9,046.1 $ 8,916.1 $ 7,498.3 $ 7,465.8 Gross Loan Production 696.9 525.0 573.9 471.2 480.7 Revolving Balance Changes 32.3 (105.8) 178.8 (116.8) 107.2 Payoffs (119.9) (82.8)
Slide 31: Bank – Loan Composition
Bank – Loan Composition Diverse Loan Book (Actual Loan Balances at December 31) $9.4B 1.6% 3.1% 7.7% $7.5B 5.2% 1.4% 4.2% $6.5B 8.6% 1.0% 28.3% $5.7B 4.9% 4.3% 8.7% 1.0% $5.0B 5.9% 4.4% 25.0% 4.4% 1.9% 10.1% 6.7% 1.3% 3.7% 1.0% 26.1% 10.7% 3.4% 3.7% 1.5% 2.3% 25.2% 2.3% 1.6% 28.1% 1.4% 1.8% 1.7% 1.9
Slide 32: Bank – Regional Lending
Bank – Regional Lending Loans by Region (Actual Loan Balances at December 31) $9.4B $90.7 $215.8 $236.7 $348.8 (1) $7.5B $559.3 $558.7 $213.2 $6.5B $333.2 $138.6 $714.5 $204.1 $559.5 (2) $5.7B $363.0 $68.1 $896.7 $679.7 $5.0B $313.2 $187.2 $450.1 $390.3 $933.9 $130.1 $403.1 $614.6 $242.5 $294.7 $805
Slide 33: Net Charge-Off History
Net Charge-Off History 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $ in thousands (1) Commerial Loans $ 3,415 $ 6,459 $ 3,881 $ 7,310 $ 11,880 $ 6,007 $ 4,113 $ 2,943 $ 1,569 $ 2,367 Credit Card 6,753 8,301 8,811 9,382 11,127 14,279 12,291 6,839 4,577 3,449 (2) Other 329 851 1,483 1,399 1,128
Slide 34: Loan Classification Trends
Loan Classification Trends 8.0% 7.0% 6.0% 5.0% 4.80% 4.0% 3.0% 2.30% 2.0% 1.70% 1.0% 0.80% 0.65% 0.0% Watch Special Mention Substandard Non-Performing Loans Total 34
Slide 35: Bank – Deposits
Bank – Deposits Diverse Sources of Deposits (Actual Deposits at December 31) $15.1B 0.9% $13.6B $13.6B 3.6% 10.0% 4.0% 4.0% 4.0% 0.2% 3.7% $11.7B 6.9% 6.6% 6.1% 3.0% 5.7% 6.3% $10.2B 4.7% 0.2% 7.8% 2.1% 8.1% 17.1% 6.3% 4.5% 1.4% 6.2% 9.9% 7.8% 8.5% 4.4% 3.4% 8.3% 5.4% 6.4% 2.9% 7.7% 8.4% 24.1% 23.3%
Slide 36: Bank – Asset Mgmt. & Home Equity Lending
Bank – Asset Mgmt. & Home Equity Lending Assets Under Management $ in millions $12.8B $11.6B $421 $10.2B $419 $351 $3,712 $8.8B $3,603 $7.6B $226 $2,853 $188 $2,219 $2,035 $8,659 (1) $7,044 $7,610 $6,390 $5,366 2011 2012 2013 2014 2015 Personal Banking - Private Wealth & Institutional - IAM Prairie
Slide 37: Institutional Investment Management
Institutional Investment Management $ in 000s, unaudited Year Ended 3 mos Ended December 31, % Change December 31, % Change 2015 2014 Y/Y 2015 2014 Y/Y $ 2 $ (3) 166.7% $ - $ 1 -100.0% 95,097 131,225 -27.5% 20,880 29,212 -28.5% 71,413 92,048 -22.4% 18,636 23,183 -19.6% 23,686 39,174 -39.5% 2,244 6,0
Slide 38: Institutional Investment Management
Institutional Investment Management Total AUM $19.7B $23.5B $31.2B $31.2B $27.2B $2.8 $2.9 $2.4 $0.8 $12.6 $0.6 $18.1 $11.4 $18.9 $10.3 $3.2 $0.9 $0.6 $2.4 $12.6 $10.4 $2.0 $8.2 $7.8 $3.9 2011 2012 2013 2014 2015 Equity Mutual Funds Equity Institutional & Other Fixed Income Institutional & Other Fix
Slide 39: Institutional Investment Management
Institutional Investment Management AUM Drivers $ in millions Total Change Total AUM ($millions) ($millions) ($221.6) $207.2 $262.1 4Q’15 ($1,078.6) ($830.9) $27,181.3 $34.5 $37.7 3Q’15 ($745.4) ($1,354.3) ($2,027.5) $28,012.2 ($51.0) $262.6 ($97.2) 2Q’15 ($682.1) ($567.7) $30,039.7 ($79.3) $172.0 1
Slide 40: AUM by Strategy – As of December 31, 2015
AUM by Strategy – As of December 31, 2015 Equity Fixed Income 0.8% 3.9% 22% 4.7% 5.1% 4.3% 78% 13.3% 47.4% 31.2% 18.7% 42.8% 27.8% Equity Strategies Fixed Income Strategies Mid Cap Other: Core Plus Core Emerging Markets International Unconstrained Other: Global Real Return International ADR Equity O
Slide 41: Morningstar Ratings
Morningstar Ratings Fund Name Category Overall Rating Funds in Category Scout Emerging Markets Diversified Emerging Mrkts 578 Scout Global Equity World Stock 984 Scout Small Cap Small Growth 660 Scout Core Bond - Institutional Class Intermediate-Term Bond 947 Scout Core Plus Bond - Institutional Cla
Slide 42: Important Disclosures
Important Disclosures Each Fund’s Prospectus or Summary Prospectus, available by calling 800.996.2862 or visiting scoutinv.com, includes investment objectives, risks, fees, expenses and other important information. Please read and consider carefully before investing. Risk considerations: Stock fund
Slide 43: Payment Solutions
Payment Solutions Payment Solutions Segment Results $ in 000s, unaudited Year Ended 3 mos Ended December 31, % Change December 31, % Change 2015 2014 Y/Y 2015 2014 Y/Y Net interest income $ 58,288 $ 52,251 11.6% $ 16,028 $ 14,003 14.5% Provision for loan losses 6,959 7,825 -11.1% 2,003 1,383 44.8% N
Slide 44: Payment Solutions
Payment Solutions Total Card Purchase Volume & Interchange Revenue $2.3B 1.4% $2.1B 1.6% $1.6B 1.8% 53.1% 50.7% $1.4B $1.3B 1.4% 1.6% 39.8% $19.9 30.7% 27.7% $18.0 $15.7 $15.9 $14.2 17.6% 24.4% 19.5% 30.3% 28.3% 21.7% 19.3% 17.1% 18.2% 21.1% 19.3% 17.9% 14.7% 11.1% 9.7% 4Q '11 4Q '12 4Q '13 4Q '14 4
Slide 45: Payment Solutions – Healthcare Services
Payment Solutions – Healthcare Services Healthcare Purchase Volume Trends $millions $1,393.0 $1,379.7 $1,290.5 $1,195.9 $1,150.0 $1,152.1 $1,082.9 $1,052.3 $881.3 $748.6 $393.8 $680.2 $649.1 $536.4 $448.0 $421.4 $350.0 34.3% 38.6% 36.7% 32.5% 37.7% 41.0% 29.0% 22.7% 23.4% Virtual Card Volume Other H
Slide 46: Payment Solutions – Healthcare Services
Payment Solutions – Healthcare Services Healthcare Deposits and Assets $millions Healthcare provided 7.8% of Total $1,292.4 Company Deposits in 4Q’15 $118.3 $917.5 $75.8 $642.4 $47.4 $1,174.1 $430.5 $323.3 $30.9 $841.7 $24.9 $595.0 $399.6 $298.4 2011 2012 2013 2014 2015 HSA Deposits HSA Investment A
Slide 47: Multi-Channel Healthcare Strategy
Multi-Channel Healthcare Strategy We offer a modular and configurable platform of applications and services that deliver the underlying core banking functionality to our healthcare partners. Healthcare Partners Broker/Employer TPAs Health Plans Tech Cos Payment Aggregators Web BIN HCS Partner SSO Co
Slide 48: Asset Servicing
Asset Servicing Asset Servicing Segment Results $ in 000s, unaudited Year Ended 3 mos Ended December 31, % Change December 31, % Change 2015 2014 Y/Y 2015 2014 Y/Y Net interest income $ 5,076 $ 5,451 -6.9% $ 1,768 $ 1,049 68.5% Noninterest income 91,587 88,762 3.2% 22,517 22,177 1.5% Noninterest exp
Slide 49: Asset Servicing
Asset Servicing Fund Accounting & Administration Alternative Asset Servicing $38.1 $72.1 $31.5 $63.0 $27.9 $60.8 $26.3 $24.7 253 610 249 $44.1 579 219 532 $35.9 514 467 179 160 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Assets Under Administration # of Funds Serviced Assets Under Administrati
Slide 50: Strength in balance – today and tomorrow.
Strength in balance – today and tomorrow. UMB Financial Fourth Quarter 2015