Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q3 2013 Earnings Presentation
46 slides from Umb Financial's earnings presentation, Oct 30, 2013
Slide 1: Third Quarter 2013
Third 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. “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 of the Undivided Profits Account.” - R. C
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 Lon g -Term Performance Total Shareholder Return September 1993 – September 2013 Source: SNL Financial UMBF S&P 500 SNL U.S. Bank
Slide 8: UMB At A Glance
UMB At A Glance $38.7B 8 states 115/320+ 23 >$2.4B 30.3% $16.2B 58.7% Assets under management Banking presence Branches/ATMs Acquisitions last 10 years Market cap Dividend payout ratio* Total assets Revenue from fee businesses *Average over past 4 quarters As of September 30, 2013
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: Growing National Presence
…Resulting in a Growing National Presence Fund Services Prairie Capital Corporate Trust UMB Bank presence Loan Production Office Healthcare Services – National Sales Scout Investments – National Sales
Slide 11: UMB is More than a Regional Bank
Today: UMB is More than a Regional Bank …We are a diversified financial services company Trust Services TRADITIONAL BANKING Card Service s Treasury Management DIVERSIFIED FINANCIAL SERVICES Healthcare Services Corporate Trust UMB Fund Services Scout Investments • JD Clark Prairie Capital • Reams Div
Slide 12: A Financial Services Company
A Financial Services Company The company The business model The performance
Slide 13: Our Time-Tested Business Model
+ + + High Quality Credit Diverse Revenue Streams Low-cost Funding Strong Balance Sheet Our Time-Tested Business Model
Slide 14: Our Credit Quality Outpaces the Industry
Our Credit Quality Outpaces the Industry 3Q 2013 0.48% NPLs = Peer Average as of 2Q13; Source: SNL Financial Shaded area is high/low range of the peer group Non-Performing Loans % of average loans Traditional Peer Median UMBF 1.24% 0.40% 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
Slide 15: More Fee Revenue than Our Peers
More Fee Revenue than Our Peers 3X vs. Industry % of Total Revenue from Fees 3Q13 • More stable earnin g s • Greater growth opportunities Industry Median as of 2Q13; Source: SNL Financial 19.1% 58.7% Industry Median
Slide 16: 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*) $64.7 $121.6 3Q05 3Q13 $8.2B $38.7B 3Q13
Slide 17: Low-Cost Funding Sources
Low-Cost Funding Sources > 2X vs. Industry Non-Interest Bearing Deposits as % of Total Deposits *Industry Median as of 2Q13; Source: SNL Financial At September 30 43.2 % vs. Industry Median* of 19.7 % non-interest bearing deposits 2Q'13 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% UMBF
Slide 18: Balance Sheet – Strong Capital Position
Balance Sheet – Stron g Capital Position 5 yr CAGR 6.1% Tier 1 Capital Ratio vs. Industry 3Q 2013 Without Federal bailout funds Industry Median as of 2Q13; Source: SNL Financial Average Equity Successful Equity Offering Supports Our Growth September 2013 • Strong interest from existing and new inves
Slide 19: Quality Loan Composition
Quality Loan Composition 4.2% 25.2% 54.2% 20.0% 44.1% 4.6% Commercial Real Estate Commercial & Industrial Consumer Real Estate Credit Card Home Equity Consumer Changing Loan Mix 3Q 2013 Year-End 2006 6.8% 0.8% 8.8% 5.2% 21.0% 5.1%
Slide 20: A Financial Services Company
A Financial Services Company The company The business model The performance
Slide 21: Consistent Performance – Despite Headwinds
Consistent Performance – Despite Headwinds 7.3% 11.6% 6.1% 9.4% 29.4% Revenue growth Average Asset Growth Average Equity Growth EPS growth 5 year CAGR (3Q’08--3Q’13) Total Assets Under Management (diluted)
Slide 22: EPS Growth vs. the Industry & Peers
*Bank industry defined as all publicly traded banks per SNL Financial; EPS Growth vs. the Industry & Peers 5-Year Diluted Earnings Per Share 3Q’08 – 3Q’13 CAGR UMBF vs. Traditional Peers CBSH COBZ HBHC ONB BXS FMBI CFR CYN BOKF BOH TCB TRMK FMER *All publicly traded banks with 3Q’13 reported EPS per
Slide 23: Slowing Annual Expense Growth
Slowing Annual Expense Growth 2013… Increased focus on expense control Total Noninterest Expense +5.6% +7.1% +11.3% +9.8% +4.9% Year-over- Year Increase Completed 20 strategic acquisitions from 2007 - Focus on improved profit margins in fee businesses pre-tax profit margin Inst Investment Mgmt: Asse
Slide 24: 3rd Quarter 2013 Highlights
3 Quarter 2013 Highlights rd
Slide 25: Changing Earning Asset Mix
Changing Earning Asset Mix 54.6% 46.1% 48.2% 50.9% 45.3% 51.2% 43.1% 58.7% 47.6% 50.6% 46.5% 40.5% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 3Q'08 3Q'09 3Q'10 3Q'11 3Q'12 3Q'13 Net loans Fed funds & resell agreements Total securities Interest Bearing Due From Banks
Slide 26: Investment Portfolio Statistics
Average Balance: $7.0 billion Average Yield: 1.99% Investment Portfolio Statistics Duration/Life (in months) at 09/30/13 at 06/30/13 Avg. Life Total 49.39 48.67 Duration Total 46.31 46.80 Securities Gains ($ millions) 3Q12 259 $ 4Q12 210 $ 1Q13 5,893 $ 2Q13 1,519 $ 3Q13 1,140 $ Roll off Purchased ($
Slide 27: Liabilities and Deposit Growth
Liabilities 3Q’13 Cost of Funds 0.16% Including DDA 0.10% 32.3% 38.5% 41.6% 43.2% Deposit Growth & % of Free Funds ($ billions) $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $8.6 $9.4 $10.6 $13.0 Interest Bearing Non-Interest Bearing
Slide 28: Net Interest Income
Net Interest Income +6.4% 3Q 13 vs. 3Q 12 • Earning asset growth • Improved deposit pricin g ’ ’ Net Interest Income NIM%
Slide 29: Noninterest Income Highlights
Noninterest Income Highlights 5 Year CAGR 3Q’08– 3Q’13 16.8% 12.5% 56.3% Trust & Securities Processing Revenue Trust & Securities Processing Composition : Bankcard Fees Deposit Service Charges Insurance Fees & Commissions Trading & Investment Banking Trust & Securities Processing Gains on Sale of Se
Slide 30: Noninterest Expense
Noninterest Expense Salary CAGR 7.9% NI Income CAGR 9.0% NI Expense CAGR 6.8% • Increase primarily driven by higher salary and benefits expense of $4.9 million, increased equipment expense of $1.9 million and increased processing fees of $1.5 million related to fees paid to third-party distributors
Slide 31: Business Segment Updates
Business Segment Updates
Slide 32: Institutional Investment Management
Institutional Investment Management * Industry data source: Strategic Insight 3 Quarter 2013 Highlights $22.6 $23.5 $25.7 $26.3 $29.3 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Total Scout Assets Under Management ($ billions) AUM increased 29.6% year- over-year to $29.3 billion Record net inflows of $1.9 billion
Slide 33: Institutional Investment Management: AUM Drivers
Institutional Investment Mana g ement AUM Drivers ($millions) $2,994.8 $29,308.9 Total Change ($millions) Total AUM ($millions) $2,204.5 $932.7 $486.2 $25,746.8 $23,542.3 $22,609.6 $567.3 $26,314.1 Equity Flows Equity Market Impact Fixed Income Flows Fixed Income Market Impact
Slide 34: Institutional Investment Management
Institutional Investment Management $8.2 $10.4 $11.0 $11.1 $12.1 Total AUM $19.7B $23.5B $25.7B $26.3B $29.3B 1Q13 2Q13 3Q13 Equity Mutual Funds Equity Institutional & Other Fixed Income Institutional & Other Fixed Income Mutual Funds $10.3 $11.4 $11.4 $11.6 $12.3 $0.6 $0.9 $2.3 $2.3 $3.0 $0.6 $0.8
Slide 35: AUM by Strategy – As of 3Q'13
AUM by Strate g y – As of 3Q’13 Fixed Income Strate g ies Equity Strategies International Mid Cap International ADR Emerging Markets Global Small Cap Other: Core Plus Low Duration Long Duration Core Intermediate Unconstrained Global Aggregate Real Return Equity Fixed Income
Slide 36: Fixed Income Rotation
Fixed Income Rotation 27.6% 40.9% Fixed Income AUM Strategy Mix 3Q’13 3Q’12 Core Plus Low Duration Long Duration Unconstrained Core Intermediate Global Aggregate Real Return 22.5% 22.1% 14.5% 8.3% 13.7% 16.3% 25.1% 2.3% 1.5% 0.2% 2.9% 1.9% 0.2%
Slide 37: Asset Servicing
Asset Servicing Quarter 2013 Highlights Assets Under Administration ( $ billions) Asset Servicing Operating Results ( unaudited, $000s) 3 mos Ended June 30, Year-Over-Year Linked-Quarter Net interest income 16.5% -6.3% Noninterest income 20,429 18,300 19,275 11.6% 6.0% Noninterest expense 17,201 17,
Slide 38: Asset Servicing
Asset Servicing Fund Accounting & Administration Alternative Asset Servicing Custody Transfer Agency Business Metrics Assets Under Administration # of Funds Serviced Assets Under Administration # of Funds Serviced Assets Under Administration # of Custody Accounts # of Shareholders # of Funds Service
Slide 39: Payment Solutions
Payment Solutions Inter- change 3Q ‘09–’13 11.7% Total Card Purchase Volume & Interchange Revenue CAGR Commercial credit card purchase volume +9.8% year- over-year to $321 million; provided 46% of interchange Interchange revenue +6.6% year-over-year to $16.4 million Quarter 2013 Highlights Durbin ef
Slide 40: Payment Solutions
Payment Solutions Health Savings Accounts & Balances * Deposits and investment assets Healthcare card purchase volume +52% to $680.2 million vs. 3Q’12 Customer deposits and assets +50% to $637.8 million vs. 3Q’12 Quarter Highlights Healthcare Services Card Utilization Commitments Outstandings Utiliz
Slide 41: Bank
Bank Assets Under Management ( $ billions) HELOC Lending (average balances) Total net loans grew for the consecutive quarter, increasing 20.9 % year-over-year to $6.4 billion Private Banking exceeded $305 million in average loan balances, an increase of 38.4 % over Q3 Average Small Business Banking
Slide 42: Bank: Commercial Loans by Region
Bank 5 yr CAGR 3Q ‘08–’13 10.9% High Growth Regions 3Q’13 vs. 3Q’12 • Arizona +65% • Nebraska +32% Commercial Loans By Region • St. Louis +32% • Oklahoma +25% • Colorado +21% Commercial Loan Growth (C&I and CRE Loans) KC CO STL Greater MO KS OK AZ NE TX
Slide 43: Bank: Deposits by Region
Bank 5 yr CAGR 3Q ‘08–’13 12.6% 48.1% 53.8% 55.0% 58.3% 60.0% 64.1% 28.6% 30.8% 32.7% 37.1% 40.4% 39.6% Average Deposits Deposits By Region KC STL CO Gtr MO KS OK AZ NE Interest Bearing Non-Interest Bearing 3Q ' 08 3Q ' 09 3Q ' 10 3Q ' 11 3Q ' 12 3Q ' 13 3Q'08 3Q'09 3Q ' 10 3Q ' 11 3Q ' 12 3Q ' 13 $
Slide 44: Deposit Composition
Deposit Composition 28.6% 31.4% Deposit Composition by Line of Business At September 30, 2013 Actual Pro-forma, After deposit migration Commercial Consumer Asset Servicing Private Wealth Management Healthcare Inst. Banking & Investor Services Small Business Inst. Asset Management 0.3% 4.4% 4.9% 6.6%
Slide 45: Strengths We are Leveraging
Strengths We are Leveraging Diversified revenue Growing fee businesses Infrastructure 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 years
Building a company for the next 100 years. Third Quarter 2013 UMB Financial