Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q1 2024 Earnings Presentation
52 slides from Umb Financial's earnings presentation, Apr 29, 2024
Slide 1: 1st Quarter 2024 Update
1 Quarter 2024 st Update Kansas City, MO April 29, 2024
Slide 2: Presentation Index
Presentation Index Corporate Overview 3 Opportunity – Our Investment Thesis 8 1st Quarter 2024 Results 17 Line of Business Updates 33 Appendix 44 Board of Directors Peer Group Forward-Looking Statements Non-GAAP Reconciliations Please refer to the Forward-Looking Statements on slide 46 for important
Slide 3: Corporate Overview
Corporate Overview Highlights Founded 1913 Ticker UMBF - Nasdaq Market Cap $4.2 B Total Assets $45.3 B Gross Loans $23.6 B Total Deposits $36.9 B Private Wealth Customer Assets (1) $16.2 B Institutional Assets Under Administration (AUA) (2) $483.4 B UMB Financial Corporation Headquarters Common Equi
Slide 4: Business Model: Our Diverse Foundation
Business Model Our Diverse Foundation Commercial & Personal Banking Services 1Q’24 Revenue: $256.1 million. 1Q’24 Average Deposits: $19.8 billion (1) Commercial Consumer Private Wealth Average loans: $19.7B (2) Average loans: $3.1B (2) (3) AUM = $13.0B Average deposits: $13.3B Average deposits: $6.5
Slide 5: Beyond Financials: Our Culture
Beyond Financials Our Culture Our Vision Our Values Customers First the We do the unparalleled to create an environment that unparalleled consistently exceeds the expectations of our customers. customer experience Integrity & Trust We demonstrate our uncompromising honesty and integrity to earn the
Slide 6: Beyond Financials: Our Culture
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. MORE MORE MORE HEART TRUST OPPO
Slide 7: Beyond Financials: Our Commitment to Corporate Citizenship
Beyond Financials Our Commitment to Corporate Citizenship Inclusion & Diversity Strong Corporate Governance Effective governance practices preserve the confidence and We want our company to be as diverse as the world we live in. trust of our stakeholders. ▪ As an early CEO Action for Diversity and I
Slide 8: Our Investment Thesis
Our Investment Thesis Salt Lake City, UT
Slide 9: Investment Thesis: Our Opportunity
Investment Thesis Our Opportunity Runway for Growth Solid capital levels and ample liquidity sources ▪ Strong regulatory capital ratios ▪ Access to multiple contingent funding sources Diverse deposit base across multiple lines of business, customer segments and geographies ▪ No one commercial sector
Slide 10: Differentiated Revenue Profile: Multiple Sources of Growth
Differentiated Revenue Profile Multiple Sources of Growth Net Interest Income $913.8 $920.1 15 Year CAGR $ 815.5 $731.2 8.4% $670.9 $610.4 $558.9 $495.3 $412.1 $317.0 $320.1 $333.3 $350.1 $303.0 $310.6 $275.1 Annual NII 18% 10% 3% 2% 1% 4% 5% 18% 20% 13% 9% 10% 9% 12% 12% 1% Growth Fee Income Provid
Slide 11: Balance Sheet Growth Across All Business Cycles
Balance Sheet Growth Across All Business Cycles Average Deposits 15 Year CAGR 2.22% 11.1% 2.01% 1.51% 1.37% Average Deposits Average Total Deposit Cost Peer Median Deposit Cost (1) Annual Deposit 14% 16% 11% 14% 10% 13% 6% 11% 9% 4% 7% 14% 20% 25% 8% 1% Growth Average Loans (2) 15 Year CAGR 11.8% An
Slide 12: Resilient Credit Metrics Through All Economic Environments
Resilient Credit Metrics Through All Economic Environments Net Charge-Offs / Average Loans 15 Year Average 0.29% 0.52% 0.18% 0.05% UMBF Peer Median (1) Industry (2) Nonperforming Loans / Loans 15 Year Average 0.44% 0.86% 0.33% 0.06% UMBF Peer Median (1) Industry (2) (1) UMB peers (15 banks), as of l
Slide 13: Capital & Liquidity Supports Growth Outlook
Capital & Liquidity Supports Growth Outlook Tier 1 Capital Ratio Equity / Assets Tangible Equity / Tangible Assets (2) UMBF Peer Median (1) UMBF Equity / Assets UMBF TCE / Tang. Assets (2) Peer Median TCE / Tang. Assets (1) (2) Cash & Securities / Assets (3) Average Loans / Average Deposits UMBF Pee
Slide 14: Risk-Adjusted Returns: Rowing Close to Shore
Risk-Adjusted Returns Rowing Close to Shore Risk-Weighted Assets / Assets UMBF Peer Median (1) Return on Risk-Weighted Assets (2) UMBF Peer Median (1) (1) UMB peers (15 banks), data as of latest available annual period. Source: S&P Capital IQ. (2) The numerator for the calculation of Return on Risk-
Slide 15: Dividend Trends: Sustained Growth
Dividend Trends Sustained Growth Annual Dividends Declared (1) 2024 = $1.56 (2) +2.0% vs. 2023 +280.5% 2004 - 2024 (2) (1) Dividends adjusted for 2-for-1 stock split in 2006. (2) Annualized 2024 full-year dividend assumes all 4 quarterly dividends are declared at $0.39/share, consistent with 1Q 2024
Slide 16: Outperformance: Building Long-Term Value
Outperformance Building Long-Term Value 15-Year Compounded Annual Growth Rates 2008 – 2023 (1) (2) Diluted Earnings Per Share Tangible Book Value Per Share UMBF KRX* Peer Median** Industry*** *KBW Nasdaq Regional Bank Index (median of 50 banks); **UMB’s traditional peers (median of 15 banks); ***Med
Slide 17: 1st Quarter 2024 Financial Review
1st Quarter 2024 Financial Review St. Louis, MO
Slide 18: 1Q 2024 Results At-A-Glance
1Q 2024 Results At-A-Glance $ millions, except per share amounts. 1Q ’23 4Q ’23 1Q ’24 Linked-Quarter Variance & Commentary Average Loans 21,271.6 23,109.1 23,354.0 +$245mm LQ; Top line production of $771mm. Construction balances +$169mm, C&I +$102mm LQ annualized growth % 19.3% 6.3% 4.2% End-of-Per
Slide 19: 1Q 2024 Earnings Highlights
1Q 2024 Earnings Highlights Net Income & Net Operating Income (1) Operating PTPP Income (2) $157.5 $135.4 $134.9 $127.9 $126.6 $120.7 $112.0 $98.4 $92.8 $93.8 Net Income EPS Operating PTPP Income – gains/losses on inv. securities (3) Net Operating Income (1) Operating EPS (1) Operating PTPP Income,
Slide 20: Revenue Trends
Revenue Trends Linked-Qtr. Variance 1Q ’23 2Q ’23 3Q ’23 4Q ’23 1Q ’24 $∆ %∆ Interest Income 408.7 461.4 472.0 496.6 520.1 23.5 4.7 Interest Expense 167.1 235.8 249.7 266.1 280.6 14.6 5.5 Net Interest Income $ 241.7 $ 225.6 $ 222.3 $ 230.5 $ 239.4 $ 8.9 3.9% Trust & securities processing 62.4 61.6 6
Slide 21: Net Interest Income
Net Interest Income Asset Yield and Liability Cost Trends $241.7 $239.4 $230.5 EA % $225.6 $222.3 IBL % COF % Liquidity Trends $ millions $3.5B Pre- $3.0B pandemic $2.6B $2.1B $ billions $2.0B $1.8B 8.4% 5.4% 7.8% 5.0% 6.8% 8.8% Net Interest Income NIM Spread Int-bearing due from banks Fed funds & r
Slide 22: Noninterest Income
Noninterest Income $159.2 Current Quarter Drivers Noninterest income increased $19.0mm or 13.5%, vs. 4Q’23. Primary drivers: $138.1 $140.3 ▪ An increase of $8.4mm in investment securities gains, driven by a net gain of $8.6mm $130.2 $133.3 on the disposition of two non-marketable securities during t
Slide 23: Noninterest Expense
Noninterest Expense Linked-Qtr. Variance $ in millions 1Q ’23 2Q ’23 3Q ’23 4Q ’23 1Q ’24 $∆ %∆ Severance expense 0.5 4.9 2.4 1.2 0.1 (1.1) (87.9) Salary & Benefits, ex. severance expense 142.0 138.4 131.0 133.0 142.9 9.8 7.4 Occupancy 12.2 11.7 12.3 12.3 12.3 (0.0) (0.2) Equipment 17.8 17.1 17.2 16
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio Linked-Qtr. Variance 1Q ’23 4Q ’23 1Q ’24 $∆ %∆ CRE/Construction 7,812 8,890 9,027 137 1.5 $ 23,109 $ 23,354 $ 22,751 Commercial & Industrial 9,566 10,128 10,230 102 1.0 $ 22,192 $21,272 Residential Real Estate 2,738 2,945 2,968 23 0.8 Consumer 137 153 153 - 0.2 Credit Car
Slide 25: Quarterly Loan Activity
Quarterly Loan Activity 1Q ’23 2Q ’23 3Q ’23 4Q ’23 1Q ’24 Gross Loan Production $933.8 $986.3 $648.9 $909.0 $771.2 Revolving Balance Changes 554.7 431.9 478.8 381.3 344.4 Net (Charge-offs) Recoveries (4.6) 0.1 (4.6) (1.4) (3.0) (1) Payoffs (395.7) (534.5) (497.3) (707.9) (293.4) (1) Paydow ns (306.
Slide 26: Strong Asset Quality
Strong Asset Quality Net Loan Charge-Offs (Recoveries) Delinquencies ($0.1) Net Charge-offs (Recoveries) NCOs / Average Loans Delinquencies (1) Delinquencies / Total Loans Nonperforming Loans Allowance for Credit Losses Nonperforming Loans NPLs / Total Loans Allowance for Credit Losses on Loans ACL
Slide 27: Detailed Net Charge-Off History
Detailed Net Charge-Off History Historical 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Net Charge-Offs $ 6,141 $ 7,673 $ 6,992 $ 8,273 $11,755 $20,258 $21,697 $24,135 $18,091 $14,175 (Recoveries) $ thousands Average Total Loans $ 2,758 $ 3,110 $ 3,562 $ 3,888 $ 4,176 $ 4,356 $ 4,584 $ 4,
Slide 28: High-Quality Investment Portfolio
High-Quality Investment Portfolio Available-for-Sale (1) Held-to-Maturity (1) $6,963 $6,865 $6,816 $6,537 $6,408 $5,872 $5,824 $5,766 $5,705 $5,653 Average balances - $ millions Average balances - $ millions GNMA/GSE Mortgage-Backed General Obligation Municipals Corp. & Commercial Paper GSE Agencies
Slide 29: Securities Portfolio Statistics
Securities Portfolio Statistics Net Securities Portfolio Activity (1) Amortized Fair Unrealized Cost Value $ in millions $ in millions; as of 03/31/24 Loss (5) 1Q'23 2Q'23 3Q'23 4Q'23 (3) 1Q'24 (4) Available for Sale Roll-off / Cash Flow $250 $243 $240 $262 $619 Mortgage-backed 4,214 3,674 (540) Rol
Slide 30: Diversified Deposit Mix
Diversified Deposit Mix Deposits by Line of Business $33,526 $32,675 $31,562 4% $31,475 $31,330 Fund Services 7% Commercial Capital Markets Institutional & Corp. Trust 12% Commercial Banking 40% Investor Solutions 9% Healthcare Services 9% Consumer & Private Wealth 19% Personal 1Q ’23 4Q ’23 1Q ’24
Slide 31: Interest Rate Sensitivity
Interest Rate Sensitivity Impact to Net Interest Income Assumptions Increase / decrease based on hypothetical rate ▪ Projected rates for new loans and deposits based on historical changes and stable balance sheet analysis, management outlook and repricing strategies Ramp Scenario ▪ Asset prepayments
Slide 32: Capital & Liquidity Position
Capital & Liquidity Position Strong Capital Available Liquidity Sources As of March 31, 2024 $ billions Regulatory Capital Ratios Total Available Liquidity Sources * 21.4 (2) Estimated Uninsured Deposits 25.3 13.03% Estimated Uninsured Deposits, as adjusted (3) 17.9 11.09% Liquidity / Uninsured Depo
Slide 33: Line of Business Updates
Line of Business Updates Milwaukee, WI
Slide 34: Commercial Banking: Commercial Capabilities
Commercial Banking Commercial Capabilities Commercial Lending Portfolio Average Loan Balance & Composition $19.7B Middle Market ▪ C&I Lending ▪ Working capital lines ▪ Owner-Occupied CRE ▪ Equipment loans Investment Real Estate 32% Investment Real Estate ▪ Office ▪ Retail Middle Market ▪ Industrial
Slide 35: Commercial Banking: C&I Lending
Commercial Banking C&I Lending Commercial & Industrial Statistics C&I Industries as % of UMB Loans (1) ▪ Includes Middle Market, Lending Verticals & Small / Medium Business Other (2) ▪ Considerations Retail Finance & ▫ Internal limits on loan size and projects per sponsor Insurance Tech. & 10% ▫ Con
Slide 36: Commercial Banking: Commercial Real Estate
Commercial Banking Commercial Real Estate Commercial Real Estate Statistics Investment CRE as % of UMB Loans (1) ▪ Total CRE & Construction = 39% of UMB loans $9.3B 1-4 Unit Other (5) ▪ Owner-occupied – new purchase or refinance Rentals ▪ Real estate development – construction / perm Const. / Land D
Slide 37: Investment Real Estate: Select Property Details
Investment Real Estate Select Property Details Total Investment CRE Portfolio Office CRE Portfolio Average Loan-to-Value, Select Asset Classes MSA Diversification $ millions Statistics Dallas-Fort Worth-Arlington, TX MSA $227 ▪ Industrial: 61% ▪ Average Loan: $9.0mm Jacksonville, FL MSA 92 ▪ Multifa
Slide 38: Personal Banking: Consumer
Personal Banking Consumer Strategic & Stable Source of Low-Cost Funds High Customer Satisfaction Consumer plays a strategic role for UMB as a large and stable source of Consumer serves the personal banking needs of deposits. Poised for continued asset growth clients across all divisions of the bank
Slide 39: Personal Banking: Private Wealth Management
Personal Banking Private Wealth Management Customer Assets Wealth Management $13.0B Non-Managed Personal ▪ Financial planning AUA Trust 23% ▪ Discretionary investment management 20% ▪ Strategic wealth solutions for ultra-high net worth Other Managed Assets families 6% (AUM) ▪ Business succession and
Slide 40: Institutional Banking: Fund Services & Institutional Custody
Institutional Banking Fund Services & Institutional Custody Assets Under Administration Registered Funds & Alternative Investments $443B Provides services for 1,700 funds, including registered and alternative investment funds, PE funds, real estate and venture capital funds and $411B ETFs and more.
Slide 41: Institutional Banking: Corp/Specialty Trust & Capital Markets
Institutional Banking Corp/Specialty Trust & Capital Markets Corporate Trust & Escrow Services Capital Markets Division Provides trustee, paying agent and escrow services to municipal Capital solutions including fixed income sales, trading and underwriting and corporate issuers. for institutional, m
Slide 42: Institutional Banking: Investor Solutions & Healthcare Services
Institutional Banking Investor Solutions & Healthcare Services Investor Solutions $52B ~84mm Our banking as a service (BaaS) solution includes deposit services for checking, saving, and investment accounts, including expanded FDIC insurance through our proprietary Sweep Program. Sample BaaS Partners
Slide 43: Payments: Credit & Debit Card Products
Payments Credit & Debit Card Products Card Purchase Volume & Interchange Trends 1Q ’24 Card Spend $4,558 $4,079 $4,020 $4,009 $4,088 $4.6B #24 Healthcare Debit Consumer Debit Inst. Cash Mgmt. 24th in U.S. Credit Card Commercial Credit Consumer Credit Interchange Income Purchase Volume (1) Dollars in
Slide 44: Appendix
Appendix Phoenix, AZ
Slide 45: Governance: Our Board of Directors
Governance Our Board of Directors Robin Beery Janine Davidson K.C. Gallagher Greg Graves Mariner Kemper Gordon Lansford CC (Chair), RC CC, GC AC, RC Lead Independent Chairman of AC (Chair), CC Director, GC (Chair) the Board Tim Murphy Tammy Peterman Kris Robbins Josh Sosland Leroy Williams AC, CC GC
Slide 46: Forward-Looking Statements
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 strictly to historical or cur
Slide 47: Additional Information
Additional Information Estimated Uninsured Deposit Analysis $ billions Estimated Uninsured Deposits (1) 25.3 (2) Less: Affiliate Deposits (2.0) (3) Less: Collateralized Deposits (5.4) Estimated uninsured deposits ex. items above (4) $17.9 (5) Total Deposits $36.9 Estimated total uninsured deposits a
Slide 48: Non-GAAP Reconciliations
Non-GAAP Reconciliations The following are non-GAAP measures used from time to time. To the extent a non-GAAP measure is used in this presentation, a reconciliation to such measure’s closest GAAP equivalent is provided below. UMB believes that these non-GAAP financial measures may be useful to inves
Slide 49: Non-GAAP Reconciliations: Net Operating Income
Non-GAAP Reconciliations Net Operating Income Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2024 2023 2023 Net income (GAAP) $ 110,258 $ 70,923 $ 92,437 Adjustments: Acquisition expense 431 52 39 Severance expense 146 1,207 486 FDIC special assessment 13,000 52,840 - (1) Tax-impact of adjustments (3
Slide 50: Non-GAAP Reconciliations: Operating Pre-Tax, Pre-Provision Income
Non-GAAP Reconciliations Operating Pre-Tax, Pre-Provision Income Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2024 2023 2023 Net interest income (GAAP) $ 239,434 $ 230,522 $ 241,696 Noninterest income (GAAP) 159,244 140,254 130,200 Noninterest expense (GAAP) 254,804 289,974 237,052 Adjustments to a
Slide 51: Non-GAAP Reconciliations: Tangible Common Equity Ratio
Non-GAAP Reconciliations Tangible Common Equity Ratio As of Mar. 31, Dec. 31, Mar. 31, Dec. 31, 2024 2023 2023 2008 Total shareholders' equity (GAAP) $ 3,152,816 $ 3,100,419 $ 2,814,659 $ 974,811 Less: Intangible assets Goodwill 207,385 207,385 207,385 104,924 Other intangibles, net 69,052 71,012 76
Slide 52: Non-GAAP Reconciliations: Return on Tangible Common Equity
Non-GAAP Reconciliations Return on Tangible Common Equity Operating Return on Tangible Common Equity Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2024 2023 2023 Average shareholders' equity (GAAP) $ 3,143,518 $ 2,954,967 $ 2,724,435 Less: Average Intangible assets Average Goodwill 207,385 207,385 2