Umb Financial Corporation · NASDAQ:UMBF
Umb Financial — Q4 2021 Earnings Presentation
47 slides from Umb Financial's earnings presentation, Jan 25, 2022
Slide 1: 4th Quarter 2021 Update
4th Quarter 2021 Update UMB Financial Corporation January 25, 2022 Exhibit 99.2
Slide 2: Presentation Index
Presentation Index 2 Corporate Overview Opportunity – Our Investment Thesis 4th Quarter 2021 Results Line of Business Updates Appendix 3 8 17 30 40 Board of Directors Forward-Looking Statements Non-GAAP Reconciliations Please refer to the Forward-Looking Statements on slide 42 for important disclosu
Slide 3: Corporate Overview
Corporate Overview 3 Highlights Asset-based lending 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 – Dublin, Ireland Corporate Trust Ca
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; FY’21 $922 million / Average deposits: $20.0 billion C&I and CRE Lending Asset-Based Lending Treasury Management Merchant Payments Specialized Expertise: Average loans: $13.7B (1) Average depo
Slide 8: Our Investment Thesis
Our Investment Thesis
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
7% Balance Sheet Growth – Across All Business Cycles 10 Average Loans Average Deposits Average annual balances in billions. 2.50% 0.40% 1.77% 0.09% Annual Loan Growth 12% 14% 9% 7% 5% 2% 6% 10% 10% 18% 12% 21% 19% 9% 7% 10% 25% 4% 14% 16% 11% 14% 10% 20% 13% 6% 11% 9% 4% 7% 14% 15 Year CAGR 10.4% 15
Slide 11: Differentiated Revenue Profile – Multiple Sources of Growth
Differentiated Revenue Profile – Multiple Sources of Growth 11 Net Interest Income Fee Income Provides Diversity Dollars in millions. 29% 28% 54% 36% $ 1,282.7 $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 15 Year CAGR 6.
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) UMB traditional peer group (15 banks), as of latest available annual period. Source: S&P Global; (2) Non-GAAP measure. See reconciliation
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 0.39% 0.20% 0.13% 0.80% 0.34% 0.17% 1.18% 0.79% 0.54% 0.50% 15 Year Average 0.30% 15 Year Average 0.45% (1) UMB traditional peer group (15 banks), as of latest avail
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) UMB traditional peer group (15 banks), data as of latest available annual period. 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. (2) S&P Dow Jones Indices, January 24, 2022. Annual Dividends Declared (1)
Slide 17: 4th Quarter 2021 Financial Review
4th Quarter 2021 Financial Review
Slide 18: 4Q 2021 Results At-A-Glance
4Q 2021 Results At-A-Glance 18 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliations on slides 43 and 44. 4Q ’20 3Q ’21 4Q ’21 Linked-Quarter Commentary
Slide 19: 4Q 2021 Earnings Highlights
4Q 2021 Earnings Highlights 19 Pre-Tax, Pre-Provision (“PTPP”) Income (1) $102.1 $131.3 $108.8 $106.9 $196.1 Net Income $156.3 $92.6 $87.4 $94.5 $78.5 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliation on slide 43; (2) Net gains/losses related to mark-to-market v
Slide 20: Revenue Trends
Revenue Trends 20 Dollars in millions. Columns may not sum due to rounding differences. 4Q ’20 1Q ’21 2Q ’21 3Q ’21 4Q ‘21 Linked-Qtr. Variance $ ∆ % ∆
Slide 21: Net Interest Income
Net Interest Income 21 @ 0.10% $4.5B $4.5B $5.4B $6.8B $2.6B @ 0.92% @ 0.87% @ 0.83% @ 0.86% @ 0.70% @ 0.16% @ 0.15% @ 0.11% @ 0.10% Asset Yield and Liability Cost Trends Liquidity Trends Impact NIM $194.1 $209.8 $210.6 $194.7 $199.7 $204.5 $180.8 $180.7 Dollars in millions. $201.1 $188.7
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) UMB traditional peer group (15 banks), data as of latest available quarter. Source: S&P Global. Noninterest income increased $10.9mm, or
Slide 23: Noninterest Expense
Noninterest Expense 23 Current Quarter Highlights Noninterest expense increased $13.6mm, or 6.5%, vs. 3Q’21. Primary drivers: An increase of $7.3mm in salaries and bonus expense, driven largely by higher associate population and by higher performance-based incentives related to business activity; Hi
Slide 24: Diversified Loan Portfolio
$16,693 $16,473 $ 14,625 $ 14,933 $ 16,041 $ 16,246 $ 16,818 Diversified Loan Portfolio 24 Average balances in millions. Loans by Region Kansas City 34% Colorado 19% Arizona 10% St. Louis 14% Greater MO 5% KS - 2% Texas 11% NE - 2% OK - 2% MN - 1% $ 15,642 $ 16,757 $ 16,240
Slide 25: Quarterly Loan Activity
Quarterly Loan Activity 25 (1) Payoffs and paydowns include C&I and CRE loans. (1) (1)
Slide 26: Strong Asset Quality
Strong Asset Quality 26 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.
Slide 27: Detailed Net Charge-Off History
27 Detailed Net Charge-Off History (1) Loan categories were updated in 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. Recen
Slide 28: High-Quality Investment Portfolio
$10,699 $11,284 $11,903 $12,766 $10,171 $11,271 $8,858 $9,368 $9,924 $10,567 Available-for-sale Portfolio High-Quality Investment Portfolio 28 (1) purchases made for roll-off and overbuy; net of purchases related to sales/trades. (2) Includes impact of ~$1B pay-fixed receive-float swap portfolio wit
Slide 29: Diversified Deposit Mix
Diversified Deposit Mix 29 $26,826 $29,428 $31,637 $24,965 Deposits by Line of Business Commercial Personal Institutional Commercial Banking 40% Consumer & Private Wealth 23% Capital Mkts. & Corp. Trust 14% Healthcare Services 8% Fund Services 6% Investor Solutions 9% 41% 36% 36% 39% 39% Average bal
Slide 30: Line of Business Updates
Line of Business Updates iNet i! 1, il (dpe Minneapolis, MN
Slide 31: Commercial Banking – C&I Lending
Commercial Banking – C&I Lending 31 Commercial & Industrial Statistics (1) C&I Industry Diversification (2) Average loan size: $4.8 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 32: Commercial Banking – Commercial Real Estate
Commercial Banking – Commercial Real Estate 32 Commercial Real Estate Statistics Investment CRE / Construction Portfolio (1) Total Investment CRE Portfolio Average Loan-to-Value: 60% Recourse: 82% Const. / Land Dev. 12% Owner-Occupied 30% Investment CRE 49% $6.3B Farmland 8% as of Dec. 31, 2021 1-4
Slide 33: Commercial Banking – Capital Finance
Commercial Banking – Capital Finance 33 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 34: Personal Banking – Consumer
Personal Banking – Consumer 34 Metrics at or for the quarter ended 12/31/21. (1) Includes residential real estate and other consumer loans for retail and private banking customers. $ millions +30% YoY Mobile Deposits 18% Digital Sales 26% 12% of non-mortgage loan applications of new retail deposit a
Slide 35: Personal Banking – Private Wealth Management
Personal Banking – Private Wealth Management 35 (1) Includes AUM and AUA; (2) American Customer Satisfaction Index “Score.” Source: Market Strategies International; (3) Source: 2020 Forrester Net Promoter Benchmarks Study Customer Assets Managed Assets (AUM): $12.2B Non-Managed Assets (AUA): $4.9B C
Slide 36: Institutional Banking – Fund Services & Institutional Custody
Institutional Banking – Fund Services & Institutional Custody 36 Assets Under Administration +25% YoY Best Interval Fund Administrator (1) Best Administrator – Technology (2) Fund Services – Registered Funds & Alternative Investments Institutional Custody $345B $405B $419B $336B Provides services fo
Slide 37: 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. $34B Assets Under Administration Municipal Trustee (1) (2) & Paying Agent (2) in U.S. #3 Specialty Trust & Agency So
Slide 38: Institutional Banking – Investor Solutions & Healthcare Services
FDIC Sweep Assets Under Administration $68B Institutional Banking – Investor Solutions & Healthcare Services 38 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 39: Payments – Credit & Debit Card Products
Payments – Credit & Debit Card Products 39 $3,550 $3,789 $3,714 $3,315 Card Purchase Volume & Interchange Trends 4Q ‘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 40: Appendix
Appendix . — +; = St. Louis, Mo | = = 3 = -_
Slide 41: Leadership – Our Board of Directors
Leadership – Our Board of Directors 41 AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee RC = Risk Committee Advisory Directors
Slide 42: Forward-Looking Statements
Forward-Looking Statements 42 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 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations 43 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 44: Non-GAAP Reconciliations – Pre-Tax, Pre-Provision Income
Non-GAAP Reconciliations 44 Pre-Tax, Pre-Provision Income on a Fully Tax-Equivalent Basis (unaudited, dollars in thousands except per share data)
Slide 45: Non-GAAP Reconciliations – Tangible Book Value
Non-GAAP Reconciliations 45 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 46: Non-GAAP Reconciliations – Tangible Common Equity Ratio
Non-GAAP Reconciliations 46 Tangible Common Equity Ratio (unaudited, dollars in thousands)
Slide 47: Our Peer Group
47 Our Peer Group All peer data in this presentation is sourced from S&P Global.