Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q2 2021 Earnings Presentation
48 slides from Umb Financial's earnings presentation, Jul 27, 2021
Slide 1: 2nd Quarter 2021 Update
2nd Quarter 2021 Update UMB Financial Corporation July 27, 2021 Exhibit 99.2
Slide 2: Presentation Index
Presentation Index 2 Corporate Overview Opportunity – Our Investment Thesis 2nd Quarter 2021 Results Line of Business Updates Appendix 3 8 17 32 42 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 Accounts receivable financing Healthcare Services 91 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 – Dubl
Slide 4: Beyond Financials – Our Culture
Beyond Financials – Our Culture 4 A company built to withstand the test of time. 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 trust of
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: Beyond Financials – Our Commitment to Corporate Citizenship
Beyond Financials – Our Commitment to Corporate Citizenship Read our 2020 Corporate Citizenship Report at UMB.com/CorporateCitizenship 6 Effective governance programs help achieve business goals and drive value. 12-person board of directors, with 10 independent members 33% board diversity Deliberate
Slide 7: Business Model – Our Diverse Foundation
Business Model – Our Diverse Foundation Commercial & Personal Banking Services Revenue: FY’20 $929 million; YTD’21 $455 million / Average deposits: $18.0 billion 7 Institutional Banking Services Revenue: FY’20 $362 million; YTD’21 $181 million / Average deposits: $9.8 billion Institutional Banking p
Slide 8: Our Investment Thesis
Our Investment Thesis Denver, CO
Slide 9: Investment Thesis – Our Opportunity
Investment Thesis – Our Opportunity 9 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 Attract
Slide 10: Balance Sheet Growth – Across All Business Cycles
Balance Sheet Growth – Across All Business Cycles 10 Average Loans Average Deposits Average annual balances in billions. 1.69% 0.40% 1.01% 0.25% Annual Loan Growth Annual Deposit Growth 13% 14% 9% 7% 5% 2% 6% 10% 10% 18% 12% 21% 19% 9% 7% 10% 3% 7% 4% 14% 16% 11% 14% 10% 20% 13% 6% 11% 9% 4% 7% 14%
Slide 11: Differentiated Revenue Profile – Multiple Sources of Growth
Differentiated Revenue Profile – Multiple Sources of Growth 11 Net Interest Income Fee Income Provides Diversity 15 Year CAGR 9.5% Dollars in millions. 30% 28% 57% 43% $440.2 $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
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) Source: S&P Global; (2) Non-GAAP measure. See reconciliations on slide 47; (3) As defined by S&P Global; “Cash, cash equiv. & investment s
Slide 13: History of Strong, Resilient Credit
History of Strong, Resilient Credit – Through All Economic Environments 13 Net Charge-Offs / Average Loans Nonperforming Loans / Loans 0.49% 0.25% 0.16% 0.74% 0.36% 0.16% 1.18% 0.79% 0.55% 0.50% 0.22% 0.13% 15 Year Average 0.30% 15 Year Average 0.43% (1) UMB’s traditional peer group (15 banks), sour
Slide 14: Risk-Adjusted Returns – Rowing Close to Shore
Risk-Adjusted Returns – Rowing Close to Shore 14 Risk-Weighted Assets / Assets Return on Risk-Weighted Assets (1) Source: S&P Global.
Slide 15: Outperformance – Building Long-Term Value
Outperformance – Building Long-Term Value 15 15-Year Compounded Annual Growth Rates 2005 – 2020 (1) *KBW Nasdaq Regional Bank Index (50 banks); **UMB’s traditional peer group (15 banks); ***All publicly-traded banks with data reported for both 2005 and 2020. Source: S&P Global. (1) Non-GAAP measure.
Slide 16: Dividend Trends – Sustained Growth
Dividend Trends – Sustained Growth 16 (1) Dividends adjusted for 2-for-1 stock split in 2006. Annual Dividends Declared (1) +228.9% through YE 2020
Slide 17: 2nd Quarter 2021 Financial Review
2nd Quarter 2021 Financial Review
Slide 18: 2Q 2021 Results At-A-Glance
2Q 2021 Results At-A-Glance 18 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliations on slides 44 and 45. 2Q ’20 1Q ’21 2Q ’21 Linked-Quarter Commentary
Slide 19: 2Q 2021 Earnings Highlights
2Q 2021 Earnings Highlights 19 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliations on slide 44; (2) Net gains/losses related to mark-to-market valuations on our investment in TTCF and the sale of 3.5mm shares during 2Q’21.
Slide 20: Revenue Trends
Revenue Trends 20 Dollars in millions. Columns may not sum due to rounding differences. 2Q ’20 3Q ’20 4Q ’20 1Q ’21 2Q ‘21 Linked-Qtr. Variance $ ∆ % ∆
Slide 21: Net Interest Income
Net Interest Income 21 @ 0.10% $4.5B $4.5B $2.3B $2.3B $2.6B @ 0.92% @ 0.78% @ 0.76% @ 0.86% @ 0.70% @ 0.11% @ 0.11% @ 0.11% @ 0.10% Asset Yield and Liability Cost Trends Liquidity Trends Impact NIM $194.1 $178.2 $184.4 $194.7 $171.3 $175.7 $180.8 $180.7 Dollars in millions. $201.1 $188.7 EA % IBL %
Slide 22: Noninterest Income
Noninterest Income 22 Current Quarter Highlights Composition / Changes in Inv. Securities Gains (Losses) and Trust & Securities Processing Dollars in millions. (1) Source: S&P Global. Noninterest income increased $22.7mm, or 20.8%, vs. 1Q’21, driven by: $23.8mm in additional investment securities ga
Slide 23: Noninterest Expense
Noninterest Expense 23 Current Quarter Highlights Noninterest expense increased $392k, or 0.2%, vs. 1Q’21 driven by: Increases of $2.5mm, $2.4mm, and $1.1mm in marketing and business development expense, legal and consulting expense, and processing fees, respectively, due to timing of various market
Slide 24: Diversified Loan Portfolio
$15,098 $13,897 $14,233 $14,625 $15,732 $16,041 $16,246 Diversified Loan Portfolio 24 Average balances in millions. Loans by Region Kansas City 38% Colorado 17% Arizona 9% St. Louis 13% Greater MO 6% KS - 2% Texas 10% NE - 2% OK - 2% MN - 1% $14,933 $16,818 $15,642
Slide 25: Quarterly Loan Activity
Quarterly Loan Activity 25 (1) Payoffs and paydowns include C&I and CRE loans. (1) (1)
Slide 26: Pandemic-Sensitive Industries
Note: We removed Retail CRE, with 06/30/21 balances of $480mm, from the sensitive industries list based on borrower performance and improving macroeconomic environment. Pandemic-Sensitive Industries 26 2.9% 97.1% All Other Loans $15.7B (1) Hotel CRE Majority of the hotel portfolio is flagged by nati
Slide 27: Strong Asset Quality
Strong Asset Quality 27 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. 0.04%
Slide 28: Detailed Net Charge-Off History
28 Detailed Net Charge-Off History (1) Loan categories were updated in Q1 2020 with the 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.
Slide 29: High-Quality Investment Portfolio
$10,699 $11,284 $9,177 $9,815 $10,171 $8,573 $8,858 $9,368 $9,924 $7,928 Available-for-sale Portfolio High-Quality Investment Portfolio 29 Average balances in millions. (1) Includes purchases made for roll-off and overbuy; net of purchases related to sales/trades. AFS Portfolio Statistics & Activity
Slide 30: Diversified Deposit Mix
Diversified Deposit Mix 30 $26,826 $22,781 $24,127 $24,965 Deposits by Line of Business Commercial Personal Institutional Regional Banking 37% Consumer & Private Wealth 25% Capital Mkts. & Corp. Trust 12% Healthcare Services 9% Fund Services 6% Specialty Banking 2% Investor Solutions 9% 34% 34% 36%
Slide 31: Line of Business Updates
Line of Business Updates 4 = Se ery sth ih li a Minneapolis, MN
Slide 32: Commercial Banking – C&I Lending
Commercial Banking – C&I Lending 32 Commercial & Industrial Statistics (1) C&I Industry Diversification (2) Average loan size: $4.9 million Considerations Internal limits on loan size and projects per sponsor Concentration guidelines for all lending verticals, monitored for changing conditions C&I B
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: 61% Recourse: 86% Const. / Land Dev. 13% Owner-Occupied 29% Investment CRE 49% $6.3B Farmland 8% as of June 30, 2021 1-4
Slide 34: Commercial Banking – Capital Finance
Commercial Banking – Capital Finance 34 SBIC fund - UMB Capital Corporation is a small business investment company that provides financing solutions via loans, equity and debt securities Swaps and derivatives - UMB Capital Finance will build customized instruments to help manage interest rate risk a
Slide 35: Personal Banking – Consumer
Personal Banking – Consumer 35 Metrics at or for the quarter ended 06/30/21. (1) Includes residential real estate and other consumer loans for retail and private banking customers. $ millions Mobile Deposits 18% Digital Sales 24% 15% of non-mortgage loan applications of new retail deposit accounts v
Slide 36: Personal Banking – Private Wealth Management
Personal Banking – Private Wealth Management 36 Personal Trust 29% Investment Advisory 22% Non-Managed AUA 26% IRAs 6% Brokerage 4% Other 4% Charitable9% Customer Assets Managed Assets (AUM): $11.8B Non-Managed Assets (AUA): $4.2B $639mm $694mm FY’19 FY’20 New Assets / Sales (1) Composition as of 06
Slide 37: Institutional Banking – Fund Services & Institutional Custody
Institutional Banking – Fund Services & Institutional Custody 37 Assets Under Administration +33% YoY Best Interval Fund Administrator (1) Best Administrator – Technology (2) Voted #1 Transfer Agency (3) Fund Services – Registered Funds & Alternative Investments Institutional Custody $345B $286B $30
Slide 38: Institutional Banking – Corp/Specialty Trust & Capital Markets
Institutional Banking – Corp/Specialty Trust & Capital Markets Corporate Trust & Escrow Services Provides trustee, paying agent and escrow services to municipal and corporate issuers. $30B Assets Under Administration Municipal Trustee & Paying Agent in U.S. (1) #3 Specialty Trust & Agency Solutions
Slide 39: Institutional Banking – Investor Solutions & Healthcare Services
FDIC Sweep Assets Under Administration $67B Institutional Banking – Investor Solutions & Healthcare Services 39 Investor Solutions Provides large-scale banking services and payment solutions for non-bank financial institutions and fintech companies. Annual ACH Transactions Healthcare Services Provid
Slide 40: Payments – Credit & Debit Card Products
Payments – Credit & Debit Card Products 40 $3,550 $2,578 $3,122 $3,315 Card Purchase Volume & Interchange Trends 2Q ‘21 Card Spend $3.7B 23rd In U.S. Credit Card Purchase Volume (1) #23 $3,658 $ millions (1) Rank in commercial, consumer and small business cards among top 50 U.S. issuers. Source: Nil
Slide 41: Appendix
Appendix Milwaukee, WI
Slide 42: Leadership – Our Board of Directors
Leadership – Our Board of Directors 42 AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee RC = Risk Committee
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 share and per share data)
Slide 46: Non-GAAP Reconciliations: Tangible Book Value
Non-GAAP Reconciliations 46 Tangible Book Value (1) Share count for December 31, 2005, adjusted for Company’s 2-for-1 stock split on May 31, 2006. (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 All peer data in this presentation is sourced from S&P Global.