Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q4 2018 Earnings Presentation
40 slides from Umb Financial's earnings presentation, Jan 29, 2019
Slide 1: UMB Financial Fourth Quarter 2018
UMB Financial Fourth Quarter 2018 January 29, 2019 Exhibit 99.2
Slide 2: Cautionary Notice about Forward-Looking Statements
Cautionary Notice about Forward-Looking Statements This presentation of UMB Financial Corporation (the “company,” “our,” “us,” or “we”) contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These sta
Slide 3: 4Q 2018 Highlights
4Q 2018 Highlights
Slide 4: Earnings Summary – 4Q 2018
Earnings Summary – 4Q 2018 $ in thousands, except share and per share data; unaudited Non-GAAP adjustments include acquisition and divestiture expense and income, severance expense and the cumulative tax impact of these adjustments. See the non-GAAP reconciliations and additional information on thes
Slide 5: Earnings Summary – Full Year 2018
Earnings Summary – Full Year 2018 $ in thousands, except share and per share data; unaudited Non-GAAP adjustments include fair value adjustments on contingent consideration, acquisition and divestiture expense and income, severance expense and the cumulative tax impact of these adjustments. See the
Slide 6: Select Balance Sheet Items
Select Balance Sheet Items $ in thousands, average balances; unaudited Three Months Ended For 2018, securities yields, earning asset yields, net interest spread and net interest margin were computed using net interest income adjusted to a fully taxable equivalent (“FTE") basis assuming a federal inc
Slide 7: Key Performance Metrics
Key Performance Metrics See slides 39 and 40 for additional disclosures and reconciliations related to these non-GAAP financial measures. Beginning in Q1 2018, the Company revised the denominator of its Efficiency Ratio and Operating Efficiency Ratio calculations to use “Net Interest Income” in plac
Slide 8: Balance Sheet
Balance Sheet
Slide 9: Consistent Loan Growth
Consistent Loan Growth Average Total Loans 5 Year CAGR 13.3%
Slide 10: Loan Composition
Loan Composition Diverse Loan Book (Average Loan Balances for the three months ended December 31 of the indicated year) Commercial Credit Card Commercial & Industrial HELOC Residential Real Estate Real Estate Construction Commercial Real Estate Consumer Credit Card Consumer Other Factoring Loans Ass
Slide 11: Geographic Diversity
Colorado Kansas City Kansas Greater MO St. Louis Arizona Texas Oklahoma Marquette Transportation Fin (Natl. Sales) Nebraska Marquette Business Credit (Natl. Sales) Geographic Diversity Loans by Region (Average Loan Balances for the three months ended December 31 of the indicated year) Percentages le
Slide 12: Loan Activity
Loan Activity Beginning in fourth quarter 2018, net charge-off amounts, previously impacting gross loan production, were moved to a separate line. This change was also made to prior periods shown.
Slide 13: High Quality Investment Portfolio
Securities Held to Maturity $1.2 billion at December 31, 2018 Securities Available for Sale $6.5 billion at December 31, 2018 High Quality Investment Portfolio Governmental Other Higher Education Healthcare Utility Social Service Industrial Cultural Civic K-12 Education NFP - Other Average Balance:
Slide 14: Securities and Loan Statistics
Securities and Loan Statistics (1) Roll off includes cash flow from maturities, calls or amortizations of securities and is presented net of sales. (2) Purchased amount is presented net of purchases made related to sales. Loan Portfolio Statistics at December 31, 2018 Variable Rate Loans: $7.8 billi
Slide 15: Diverse Sources of Deposits
Diverse Sources of Deposits (Average Deposits for the three months ended December 31 of the indicated year) Deposit Composition Personal Banking - Consumer Commercial Institutional Banking Personal Banking - Private Wealth Institutional Banking - Asset Servicing Healthcare Personal Banking - Small B
Slide 16: Strong Capital Position
Strong Capital Position Capital Ratio Trends (%) 2015 - 2018 ratios calculated under Basel III requirements. Total Risk-Based Capital Tier 1 Risk-Based Capital Tier 1 Leverage Common Equity Tier 1
Slide 17: Vepupu
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Slide 18: Net Charge-Off History
Net Charge-Off History (1) Commercial Loans includes commercial and industrial, commercial credit card, asset-based and factoring loans. (2) Other includes all real-estate related loans (commercial, residential and HELOC) plus consumer loans and DDA charge-offs.
Slide 19: Credit Risk Profile
Credit Risk Profile Commercial Asset-based Factoring December 31, September 30, December 31, September 30, December 31, September 30, 2018 2018 2018 2018 Non-watch list $4,788,234 $4,447,646 S$ 206,719 $ — 329,986 $260,727 $ 245,248 Watch 192,653 158,164 S 2 : : Special Mention 55,927 68,591 84,019
Slide 20: Loan Classification Trends
Loan Classification Trends % of total loans 0.0% 1.0% 2.0% 3.0%
Slide 21: Income Statement
Income Statement
Slide 22: Noninterest Income – 4Q 2018
Noninterest Income – 4Q 2018 Noninterest income decreased $5.9MM, or 5.8%, compared to 3Q’18, primarily driven by: Decreases of $5.7MM in company-owned life insurance income and $1.3MM in derivative income, both recorded in other income. These decreases were partially offset by $2.9MM gains on sales
Slide 23: Noninterest Income Composition – 4Q 2018
Bankcard Fees Noninterest Income Composition – 4Q 2018 Service Charges on Deposit Accounts Trust & Securities Processing Insurance Fees & Commissions Other Brokerage Fees Trading & Investment Banking Trust & Securities Processing Composition: ($ in millions) Gains on Sales of Securities Source of In
Slide 24: Noninterest Income – Full Year 2018
Noninterest Income – Full Year 2018 Beginning in Q1 2018, “Other” includes “Equity Earnings on Alternative Investments” which was previously separately disclosed.
Slide 25: Noninterest Income Composition – Full Year 2018
Bankcard Fees Noninterest Income Composition – Full Year 2018 Service Charges on Deposit Accounts Trust & Securities Processing Insurance Fees & Commissions Other Brokerage Fees Trading & Investment Banking Trust & Securities Processing Composition: ($ in millions) Gains on Sales of Securities Sourc
Slide 26: Noninterest Expense – 4Q 2018
Noninterest Expense – 4Q 2018 Operating noninterest expense, which excludes the impact of acquisition and divestiture expense and severance expense, was $181.6 million for the fourth quarter of 2018, an increase of $1.4 million, or 0.8 percent, compared to the linked quarter, and a decrease of $0.7
Slide 27: Noninterest Expense – Full Year 2018
Noninterest Expense – Full Year 2018 Operating noninterest expense, which excludes the impact of fair value adjustments on contingent consideration, acquisition and divestiture expenses and severance expense, was $712.0 million for 2018, an increase of $8.0 million, or 1.1 percent, compared to 2017.
Slide 28: Segment Updates
Segment Updates
Slide 29: Commercial Banking
Commercial Banking Commercial Banking Loans $ in billions Commercial Banking Deposits $ in billions Demand Deposits Interest-Bearing Deposits
Slide 30: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio CRE & Construction Lending (Average Loan Balances for the three months ended December 31 of the indicated year) Investment CRE Owner Occ. CRE Construction Farmland Multi-Family CRE Residential Construction (1) Percentages less than 5% have been omitted.
Slide 31: Institutional Banking
Institutional Banking Institutional Banking Deposits $ in billions Demand Deposits Interest-Bearing Deposits
Slide 32: Institutional Banking – Business Description
Institutional Banking – Business Description Banking services for broker-dealers FDIC sweep solutions; liquidity alternative to overnight funds Fixed income services for banks, institutional & corporate clients Underwriting for healthcare, municipalities, educational institutions & corporate clients
Slide 33: Personal Banking
Personal Banking Personal Banking Deposits $ in billions Personal Banking Loans $ in billions Consumer & Small Business Private Banking
Slide 34: Personal Banking: HELOC and Assets Under Management
Home Equity Lines of Credit $ in billions Assets Under Management $ in billions Personal Banking
Slide 35: Healthcare Services
Healthcare Services Healthcare Deposits & Assets End-of-period balances; $ in billions 2014 2015 2016 2017 2018 HSA deposits as % of total UMB deposits 6.2% 7.8% 9.7% 11.4% 12.5% HSA Deposits HSA Investment Assets
Slide 36: Multi-Channel Healthcare Strategy
Multi-Channel Healthcare Strategy UMB offers a modular and configurable platform of applications and services that deliver the underlying core banking functionality to our healthcare partners Broker/Employer TPAs Health Plans Technology Firms Payment Aggregators Healthcare Partners HCS Applications
Slide 37: Healthcare Services – Growth & Potential
Healthcare Services – Growth & Potential Industry information source: Devenir Research 2018 Midyear HSA Market Statistics & Trends report dated August 22, 2018. Rankings as of June 30, 2018. Deposit and asset growth rates on an annual basis as of June 30, 2018. HCS represents a unique asset as one o
Slide 38: Card Purchase Volumes
Card Purchase Volumes Purchase Volume & Interchange Revenue Commercial Credit Consumer Credit Consumer Debit Healthcare Debit Institutional Banking – IBIS Debit Interchange ($ in millions) Percentages less than 5% have been omitted. (1)
Slide 39: Non-GAAP Reconciliation
In this presentation, we provide information about net operating income from continuing operations, operating earnings per share from continuing operations-diluted (operating EPS-diluted), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operati
Slide 40: Operating Noninterest Expense & Efficiency Ratio Reconciliation
(i) Calculated using the Company's marginal tax rate of 22.2% for periods beginning after December 31, 2017, as a result of the Tax Cuts and Jobs Act. All prior periods were calculated using the Company’s previous marginal tax rate of 36.0%. Operating Noninterest Expense & Efficiency Ratio Non-GAAP