Market Overview

UMB Financial Corporation Reports Second Quarter 2016 Earnings of $37.3 Million, or $0.76 Per Diluted Share

Share:
KANSAS CITY, Mo.--(BUSINESS WIRE)--

UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the second quarter 2016 of $37.3 million or $0.76 per diluted share, compared to $36.2 million or $0.74 per diluted share in the first quarter 2016 (linked quarter) and $30.2 million or $0.65 per diluted share during the second quarter 2015. Year-to-date earnings as of June 30, 2016, were $73.5 million or $1.50 per diluted share, compared to $64.0 million or $1.39 per diluted share for the six month period ended June 30, 2015.

Net operating income, a non-GAAP financial measure which is reconciled to the comparable GAAP measure later in this release, was $39.2 million or $0.80 per diluted share for the second quarter 2016, compared to $38.6 million or $0.79 per diluted share on a linked quarter basis and $30.0 million or $0.64 per diluted share for the second quarter 2015. Year-to-date net operating income as of June 30, 2016, was $77.8 million or $1.58 per diluted share, compared to $63.0 million or $1.37 per diluted share for the six month period ended June 30, 2015.

   
Summary of financial results     UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

   
Q2     Q1 Q2
2016     2016     2015

 

GAAP

Net income $

37,297

$

36,245

$

30,214

Earnings per share 0.76 0.74 0.65
Return on average assets 0.77 % 0.75 % 0.70 %
Return on average equity 7.58 7.51 6.95
Efficiency ratio 73.57 74.54 % 76.41 %

 

Non-GAAP

Net operating income $

39,245

$

38,571

$

29,979

Operating earnings per share 0.80 0.79 0.64
Operating return on average assets 0.81 % 0.80 % 0.69 %
Operating return on average equity 7.97 7.99 6.89
Operating efficiency ratio 72.34 % 73.01 % 76.57 %
 

"Second quarter results were driven by increased loan volume and balance sheet growth, improved net interest margin and continued progress toward our efficiency initiative," said Mariner Kemper, chairman and chief executive officer. "We have a history of solid, top-tier loan growth and this quarter was no exception, with loans surpassing $10 billion for the first time in the company's history. In addition, we saw net interest income expansion of 24.5 percent, or $23.9 million compared to June 30, 2015, driven by Marquette's higher-yielding loans and changes in our earning asset mix."

 
Summary of revenue   UMB Financial Corporation
(unaudited, dollars in thousands)        
Q2 Q1 Q2 CQ vs. CQ vs.
2016     2016     2015   LQ   PY
 
Net interest income $ 121,210 $ 117,892 $ 97,360 $ 3,318 $ 23,850
Noninterest income:
Trust and securities processing 59,745 59,485 67,381 260 (7,636 )
Trading and investment banking 5,638 4,630 5,568 1,008 70
Service charges on deposit accounts 22,420 21,461 21,625 959 795

Insurance fees and commissions

1,160 1,497 586 (337 ) 574
Brokerage fees 4,262 4,185 2,936 77 1,326
Bankcard fees 17,534 18,016 18,035 (482 ) (501 )
Gains on sales of securities available for sale, net 2,598 2,933 967 (335 ) 1,631
Equity earnings (losses) on alternative investments 978 (381 ) (1,125 ) 1,359 2,103
Other   7,112       4,524       3,577       2,588       3,535  
Total noninterest income $ 121,447     $ 116,350     $ 119,550     $ 5,097     $ 1,897  
 

 

     

 

     

 

             
Total Revenue $ 242,657     $ 234,242     $ 216,910     $ 8,415     $ 25,747  
 
Net interest margin 2.86

%

 

2.79

%

 

2.59

%

 

 

Total noninterest income as a % of total revenue

50.0 % 49.7 % 55.1 %
 

Net interest income

  • Net interest income improved in the second quarter 2016, compared to the same quarter in 2015, and was driven by an increase in average loans of $1.8 billion and higher average loan yields, which increased 27 basis points to 3.82 percent.
  • For the second quarter 2016, average earning assets stood at $18.1 billion, an increase of 0.5 percent over the linked quarter and 13.2 percent over the second quarter 2015. The acquisition of Marquette Financial Companies added earning assets with an acquired value of $1.2 billion on May 31, 2015.
  • Net interest margin for the second quarter 2016, which increased 27 basis points on a year-over-year basis, was driven by the addition of Marquette's higher-yielding loans in addition to changes in the company's earning asset mix.

Noninterest income

  • The improvement in noninterest income over the linked quarter was partially driven by increases of $1.0 million in derivative income and $0.7 million in company-owned life insurance income included in other noninterest income.
  • Compared to the second quarter 2015, trust and securities processing income decreased due primarily to a $7.4 million, or 46.9 percent, decrease in advisory fee income from the Scout Funds. Other noninterest income was driven by increases of $2.4 million in bank-owned and company-owned life insurance income and $1.0 million in derivative income.
         
Summary of Noninterest expense   UMB Financial Corporation
(unaudited, dollars in thousands)
Q2 Q1 Q2 CQ vs. CQ vs.
2016   2016   2015   LQ     PY
 
Salaries and employee benefits $ 108,897 $ 107,150 $ 99,585 $ 1,747 $ 9,312
Occupancy, net 11,139 10,972 10,312 167 827
Equipment 17,032 16,282 15,410 750 1,622
Supplies and services 4,719 4,949 4,603 (230 ) 116
Marketing and business development 6,313 4,441 6,530 1,872 (217 )
Processing fees 11,464 11,462 12,654 2 (1,190 )
Legal and consulting 4,937 4,799 5,917 138 (980 )
Bankcard 5,369 5,815 4,953 (446 ) 416
Amortization of other intangible assets 3,145 3,226 2,569 (81 ) 576
Regulatory fees 3,692 3,429 2,873 263 819
Other   8,536     8,219     6,558     317       1,978  
Total noninterest expense $ 185,243   $ 180,744   $ 171,964   $ 4,499     $ 13,279  
 

Noninterest expense

  • On a linked quarter basis, the increase in noninterest expense was primarily driven by increases in marketing and business development due to the timing of advertising campaigns and travel expenses, and an increase of $1.5 million in non-acquisition related severance expense.
  • The increase in noninterest expense compared to the second quarter 2015 was primarily driven by:
    • increased salaries and employee benefits, which included the following increases: $4.7 million in Marquette salaries and benefits, $2.3 million in ongoing UMB bonus and commissions, and $2.0 million of non-Marquette related severance;
    • higher equipment expense, which increased 10.5 percent year-over-year for computer and hardware costs related to investments for regulatory requirements, cyber security and the ongoing modernization of our core systems; and
    • increased other noninterest expense, driven by increases of $1.2 million in fair value adjustments to the contingent consideration liabilities and $0.5 million in fair value adjustments on derivatives.
  • Acquisition expenses recognized during the second quarter 2016 totaled $1.0 million, compared to $3.0 million for the first quarter 2016 and $0.8 million for the second quarter 2015.
  • On a non-GAAP basis, operating noninterest expense, which excludes the impact of acquisition expenses and other items as reconciled later in this release, was $182.2 million for the second quarter 2016, an increase of $5.1 million, or 2.9 percent, compared to the linked quarter, and $9.9 million, or 5.7 percent, compared to the second quarter 2015.

Balance Sheet

Average total assets for the second quarter 2016 were $19.4 billion compared to $17.4 billion for the same period in 2015, an increase of $2.0 billion, or 11.6 percent.

         
Summary of loans and leases   UMB Financial Corporation
(unaudited, dollars in thousands)
June 30,

March 31,

 

June 30,

CQ vs. CQ vs.
2016   2016  

2015

  LQ   PY
 

Period End:

Commercial $ 4,444,137 $ 4,347,068 $ 4,132,571 $ 97,069 $ 311,566
Asset based 223,339 212,669 211,302 10,670 12,037
Factoring 101,327 88,534 109,212 12,793 (7,885 )
Commercial credit card 145,359 146,031 126,526 (672 ) 18,833
Real estate - construction 531,776 497,504 395,848 34,272 135,928
Real estate - commercial 2,985,194 2,767,233 2,387,557 217,961 597,637
Real estate - residential 478,638 485,722 433,287 (7,084 ) 45,351
Real estate - HELOC 741,703 724,303 698,814 17,400 42,889
Consumer credit card 270,353 270,558 286,478 (205 ) (16,125 )
Consumer other 124,863 116,971 94,460 7,892 30,403
Leases   36,577     43,038     40,073     (6,461 )     (3,496 )

Total loans

$ 10,083,266   $ 9,699,631   $ 8,916,128   $ 383,635     $ 1,167,138  
 
  • Actual loans at June 30, 2016, increased 4.0 percent, on a linked-quarter basis, and 13.1 percent, compared to second quarter 2015.
  • At June 30, 2016, loans acquired and originated through legacy Marquette channels totaled $1.0 billion, comprised of $325.6 million in commercial real estate loans, $223.3 million in asset-based loans, $137.3 million in construction real estate loans, $103.7 million in commercial loans, $101.3 million in factoring loans, and $81.1 million in residential real estate loans.
         
Summary of securities   UMB Financial Corporation
(unaudited, dollars in thousands)
June 30,

March 31,

June 30,

CQ vs.

CQ vs.

2016   2016   2015   LQ   PY
 
Securities available for sale:
U.S. Treasury $ 363,337 $ 354,261 $ 353,915 $ 9,076 $ 9,422
U.S. Agencies 421,625 593,769 808,155 (172,144 ) (386,530 )
Mortgage-backed 3,600,175 3,668,538 3,524,291 (68,363 ) 75,884
State and political subdivisions 2,305,979 2,186,602 2,158,098 119,377 147,881
Corporates   80,063     80,142     80,656     (79 )     (593 )
Total securities available for sale 6,771,179 6,883,312 6,925,115 (112,133 ) (153,936 )
Securities held to maturity:
State and political subdivisions 880,600 804,652 446,881 75,948 433,719
Trading securities 56,311 26,779 36,616 29,532 19,695
Other securities   66,300     64,591     77,800     1,709       (11,500 )
Total securities $ 7,774,390   $ 7,779,334   $ 7,486,412   $ (4,944 )   $ 287,978  
 
  • Total securities available for sale decreased 1.6 percent on a linked-quarter basis and 2.2 percent compared to June 30, 2015, demonstrating our success in rotating earning assets into loans.
  • The growth in the company's held to maturity securities portfolio is attributed to increased activity in private placement bonds, primarily used to refinance existing revenue bonds in the healthcare and education sectors.
 
Summary of deposits   UMB Financial Corporation
(unaudited, dollars in thousands)        
June 30,

March 31,

June 30,

CQ vs.

CQ vs.

  2016       2016       2015     LQ   PY
 
Deposits:
Noninterest-bearing demand $ 6,233,492 $ 6,202,026

$

5,887,525 $ 31,466 $ 345,967
Interest-bearing demand and savings 8,270,416 8,178,712 7,303,306 91,704 967,110
Time deposits under $250,000 695,629 727,709 681,435 (32,080 ) 14,194
Time deposits of $250,000 or more   449,156       309,926       624,380       139,230       (175,224 )
Total deposits $ 15,648,693     $ 15,418,373    

$

14,496,646    

$

230,320     $ 1,152,047  

 

 

 

Non-interest bearing deposits as % of total deposits

39.83 % 40.22 % 40.61 %
 

The cost of interest-bearing liabilities for the second quarter was 23 basis points, and total cost of funds including noninterest-bearing deposits was 16 basis points.

 
Capital information   UMB Financial Corporation

(unaudited, dollars in thousands, except per share data)

June 30,

March 31,

June 30,

  2016       2016      

2015

 
 
Total equity

$

2,002,732 $ 1,947,959 $ 1,857,056
Book value per common share 40.44 39.38 37.68
 
Regulatory capital:
Common equity Tier 1 capital

$

1,709,986

$

1,675,854

$

1,625,078
Tier 1 capital 1,709,833 1,675,854 1,641,492
Total capital 1,864,389 1,825,867 1,770,796
 
Regulatory capital ratios:
Common equity Tier 1 capital ratio

11.65

%

11.80

%

12.64

%

Tier 1 risk-based capital ratio 11.65 11.80 12.77
Total risk-based capital ratio 12.70 12.85 13.77
Tier 1 leverage ratio 8.91 8.78 9.56
 
Credit quality   UMB Financial Corporation
(unaudited, dollars in thousands)        
Q2 Q1 Q4 Q3 Q2
  2016       2016     2015       2015       2015  
 

Net (recoveries) charge-offs - Commercial loans

$

(59 ) $ 2,586 $ 178 $ 636 $ 2,999

Net charge-offs (recoveries) - Real estate loans

1,164 1,301 (50 ) (65 ) (9 )
Net charge-offs - Consumer credit card loans 1,575 1,781 1,628 1,524 1,627
Net charge-offs - Consumer other loans 52 77 130 97 141
Net charge-offs - Total loans 2,732 5,745 1,886 2,192 4,758

Net loan charge-offs as a % of total average loans

0.11

%

0.24

%

0.08

%

0.10

%

0.24

%

Loans over 90 days past due

$

4,700 3,334 7,324 2,552 7,645

Loans over 90 days past due as a % of total loans

0.05

%

0.03

%

0.08

%

0.03

%

0.09

%

Nonaccrual and restructured loans

$

58,423 54,933 61,152 49,955 37,649

Nonaccrual and restructured loans as a % of total loans

0.58

%

0.57

%

0.65

%

0.55

%

0.42

%

 
  • Nonperforming loans, defined as restructured loans on nonaccrual and all other nonaccrual loans, increased $3.5 million from the linked quarter and increased $20.8 million from the same quarter in 2015.

Efficiency Initiatives

In 2015, the company announced efficiency initiatives with cost savings expected to be recognized as follows: $6.8 million in 2015, $22.6 million in 2016, and annualized savings of $32.9 million in 2017 and beyond. As an update, the company recognized $9.5 million of these cost savings in 2015, $4.9 million in the first quarter 2016, $4.1 million in the second quarter 2016, and expects to recognize an additional $9.4 million in the remainder of 2016 and annualized savings of $32.9 million beginning with full-year 2017.

Dividend Declaration

At the company's quarterly board meeting, the Board of Directors declared a $0.245 per share quarterly cash dividend, payable on Oct. 3, 2016, to shareholders of record at the close of business on Sept. 9, 2016.

Conference Call

The company plans to host a conference call to discuss its second quarter 2016 earnings results on July 27, 2016 at 9:30 a.m. (CT). Interested parties may access the call by dialing (toll-free) 877-267-8760 or (U.S.) 412-542-4148 and requesting to join the UMB Financial call. The live call can also be accessed by visiting the investor relations area of umbfinancial.com or by using the following the link:

UMB Financial 2Q 2016 Conference Call

A replay of the conference call may be heard through Aug. 12, 2016, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10089114. The call replay may also be accessed via the company's website umbfinancial.com by visiting the investor relations area.

Non-GAAP Financial Information

In this release, we provide information using net operating income, operating earnings per share (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, and operating efficiency ratio, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures—net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense and operating efficiency ratio—and the comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items that management does not believe reflect the company's fundamental operating performance.

Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding the following: (i) fair value adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management Company, (ii) expenses related to the acquisition of Marquette, and (iii) non-acquisition related severance expense and (iv) the tax impact of the previous adjustments. The company believes that the financial impact of excluding non-acquisition related severance expense will be immaterial in the near future. It is excluded from certain non-GAAP financial measures as it has an unusually large impact on the company's financial statements.

Operating EPS (basic and diluted) is calculated as net operating income, divided by the company's average number of shares outstanding (basic and diluted) for the relevant period. Operating ROE is calculated as net operating income, divided by the company's average total shareholders' equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company's average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described in clauses i-iii above. Operating efficiency ratio is calculated as the company's operating noninterest expense, net of amortization of other intangibles, divided by the company's total revenues (tax equivalent net interest income plus noninterest income) less gains on sales of securities available for sale.

Forward-Looking Statements:

This release 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 current facts—such as our statements about expected cost savings and other results of efficiency initiatives and our statements about asset sensitivity. Forward-looking statements often use words such as "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal," or other words of comparable meaning or future-tense or conditional verbs such as "may," "will," "should," "would," or "could." Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2015, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the SEC. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors. For more information, visit umb.com, umbfinancial.com, blog.umb.com or follow us on Twitter at @UMBBank, Facebook at facebook.com/UMBBank and LinkedIn at linkedin.com/company/umb-bank.

       
Non-GAAP Financial Measures             UMB Financial Corporation
Net operating income non-GAAP reconciliation:  
(unaudited, dollars in thousands, except per share data)
       
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2016     2016     2015     2016     2015  
Net income (GAAP) $37,297 $36,245 $30,214 $73,542     $63,979
Adjustments:
Fair value adjustments on contingent consideration (i) - 67 (1,154 ) 67 (3,418 )
Acquisition expenses (ii) 996 3,043 787 4,039 1,553
Non-acquisition severance expense (iii) 2,048 524 - 2,572 353
Tax-impact of adjustments (iv) (1,096 )     (1,308 )     132       (2,404 )     544    
Total Non-GAAP adjustments 1,948       2,326       (235 )     4,274       (968 )  
Net operating income (Non-GAAP) $39,245       $38,571       $29,979       $77,816       $63,011    
 
Earnings per share as reported - diluted $0.76 $0.74 $0.65 $1.50 $1.39
Fair value adjustments on contingent consideration (i) - - (0.02 ) - (0.07 )
Acquisition expenses (ii) 0.02 0.07 0.01 0.08 0.03
Non-acquisition severance expense (iii) 0.04 0.01 - 0.05 0.01
Tax-impact of adjustments (iv) (0.02 )     (0.03 )     -       (0.05 )     0.01    
Operating earnings per share - diluted $0.80       $0.79       $0.64       $1.58       $1.37    
 

GAAP

Return on average assets 0.77

%

0.75

%

0.70

%

0.76

%

0.75

%

 

Return on average equity 7.58 7.51 6.95 7.54 7.55
 

Non-GAAP

Operating return on average assets 0.81

%

0.80

%

0.69

%

0.81

%

0.74

%

 

Operating return on average equity 7.97 7.99 6.89 7.98 7.43
 
     
Operating noninterest expense and operating efficiency ratio non-GAAP reconciliation:             UMB Financial Corporation
(unaudited, dollars in thousands)        
Three Months Ended Six Months Ended
June 30,   March 31, June 30, June 30,
2016   2016   2015     2016     2015  
Noninterest expense $ 185,243 $ 180,744 $ 171,964 $ 365,987 $ 336,377
Adjustments to arrive at operating noninterest expense (pre-tax):
Fair value adjustments on contingent consideration (i) - 67 (1,154 ) 67 (3,418 )
Acquisition expenses (ii) 996 3,043 787 4,039 1,553
Non-acquisition severance expense (iii)   2,048       524       -         2,572       353    
Total Non-GAAP adjustments (pre-tax)   3,044       3,634       (367 )       6,678       (1,512 )  
Operating noninterest expense $ 182,199     $ 177,110     $ 172,331       $ 359,309     $ 337,889    
 
Noninterest expense $ 185,243 $ 180,744 $ 171,964 $ 365,987 $ 336,377
Less: Amortization of other intangibles   3,145       3,226       2,569         6,371       5,324    
Noninterest expense, net of amortization of other intangibles (numerator A) $ 182,098     $ 177,518     $ 169,395       $ 359,616     $ 331,053    
 
Operating noninterest expense $ 182,199 $ 177,110 $ 172,331 $ 359,309 $ 337,889
Less: Amortization of other intangibles   3,145       3,226       2,569         6,371       5,324    
Operating expense, net of amortization of other intangibles (numerator B) $ 179,054     $ 173,884     $ 169,762       $ 352,938     $ 332,565    
 
Net interest income (tax equivalent) (v) $ 128,681 $ 124,744 $ 103,112 $ 253,425 $ 198,862
Noninterest income 121,447 116,350 119,550 237,797 244,757
Less: Gains on sales of securities available for sale, net   2,598       2,933       967         5,531       8,303    
Total (denominator A) $ 247,530     $ 238,161     $ 221,695       $ 485,691     $ 435,316    
 
Efficiency ratio (numerator A/denominator A) 73.57 % 74.54 % 76.41 % 74.04 % 76.05 %
Operating efficiency ratio (numerator B/denominator A) 72.34 73.01 76.57 72.67 76.40

(i) Represents fair value adjustments to contingent consideration for the acquisitions of PCM and Reams Asset Management Company.

(ii) Represents expenses related to the acquisition of Marquette Financial Companies (Marquette).

(iii) Represents non-acquisition severance expense related to UMB-legacy employees as management excludes severance expense from its internal evaluation of Company performance. Severance expense for Marquette-legacy employees is included in item (ii).

(iv) Calculated using the Company's marginal tax rate of 36%.

(v) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $7.4 million, $6.9 million, and $5.7 million for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015, respectively, and $14.3 million and $11.1 million for the six months ended June 30, 2016 and 2015, respectively.

 
Consolidated Balance Sheets   UMB Financial Corporation
(unaudited, dollars in thousands)    
June 30,

Assets

  2016       2015  
 
Loans $ 10,083,266 $ 8,916,128
Allowance for loan losses   (84,666 )     (77,721 )
Net loans   9,998,600       8,838,407  
Loans held for sale 10,495 2,819
Investment securities:
Available for sale 6,771,179 6,925,115
Held to maturity 880,600 446,881
Trading securities 56,311 36,616
Other securities   66,300       77,800  
Total investment securities   7,774,390       7,486,412  
Federal funds and resell agreements 196,283 91,326
Interest-bearing due from banks 379,611 698,940
Cash and due from banks 355,732 490,171
Premises and equipment, net 277,060 279,996
Accrued income 92,650 84,979
Goodwill 228,396 228,217
Other intangibles, net 40,411 53,649
Other assets   380,448       163,811  
Total assets $ 19,734,076     $ 18,418,727  
 
 

Liabilities

Deposits:
Noninterest-bearing demand $ 6,233,492 $ 5,887,525
Interest-bearing demand and savings 8,270,416 7,303,306
Time deposits under $250,000 695,629 681,435
Time deposits of $250,000 or more   449,156       624,380  
Total deposits   15,648,693       14,496,646  
Federal funds and repurchase agreements 1,788,567 1,774,435
Short-term debt 5,003 -
Long-term debt 85,320 88,346
Accrued expenses and taxes 149,027 155,246
Other liabilities   54,734       46,998  
Total liabilities   17,731,344       16,561,671  
 

Shareholders' Equity

Common stock 55,057 55,057
Capital surplus 1,023,195 1,009,965
Retained earnings 1,083,280 1,005,563
Accumulated other comprehensive income 55,295 (2,141 )
Treasury stock   (214,095 )     (211,388 )
Total shareholders' equity   2,002,732       1,857,056  
Total liabilities and shareholders' equity $ 19,734,076     $ 18,418,727  
 
Consolidated Statements of Income           UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)      
  Three Months Ended Six Months Ended
June 30, June 30,

Interest Income

  2016     2015       2016     2015  
Loans $93,949 $71,396 $184,493 $135,628
Securities:
Taxable interest   18,852   19,163   38,209   37,971
Tax-exempt interest   13,845     10,607       26,580     20,522  
Total securities income 32,697 29,770 64,789 58,493
Federal funds and resell agreements 642 151 1,149 202
Interest-bearing due from banks 436 434 1,327 1,286
Trading securities   173     133       225     228  
Total interest income   127,897     101,884       251,983     195,837  
 

Interest Expense

Deposits 4,136 3,522 8,191 6,570
Federal funds and repurchase agreements 1,626 470 2,856 962
Other   925     532       1,834     587  
Total interest expense   6,687     4,524       12,881     8,119  
Net interest income 121,210 97,360 239,102 187,718
Provision for loan losses   7,000     5,000       12,000     8,000  
Net interest income after provision for loan losses   114,210     92,360       227,102     179,718  
 

Noninterest Income

Trust and securities processing 59,745 67,381 119,230 134,680
Trading and investment banking 5,638 5,568 10,268 11,690
Service charges on deposits 22,420 21,625 43,881 43,166
Insurance fees and commissions 1,160 586 2,657 1,156
Brokerage fees 4,262 2,936 8,447 5,790
Bankcard fees 17,534 18,035 35,550 34,218
Gains on sale of securities available for sale, net 2,598 967 5,531 8,303
Equity earnings(loss) on alternative investments 978 (1,125 ) 597 (1,967 )
Other   7,112     3,577       11,636     7,721  
Total noninterest income   121,447     119,550       237,797     244,757  
 

Noninterest Expense

Salaries and employee benefits 108,897 99,585 216,047 198,122
Occupancy, net 11,139 10,312 22,111 20,322
Equipment 17,032 15,410 33,314 29,582
Supplies, postage and telephone 4,719 4,603 9,668 8,928
Marketing and business development 6,313 6,530 10,754 11,148
Processing fees 11,464 12,654 22,926 25,437
Legal and consulting 4,937 5,917 9,736 10,295
Bankcard 5,369 4,953 11,184 9,721
Amortization of other intangibles 3,145 2,569 6,371 5,324
Regulatory fees 3,692 2,873 7,121 5,629
Other   8,536     6,558       16,755     11,869  
Total noninterest expense 185,243 171,964 365,987 336,377
Income before income taxes 50,414 39,946 98,912 88,098
Income tax provision   13,117     9,732       25,370     24,119  
Net income $37,297   $30,214     $73,542   $63,979  
 

Per Share Data

Net income - basic $0.76 $0.65 $1.51 $1.40
Net income – diluted 0.76 0.65 1.50 1.39
Dividends 0.245 0.235 0.49 0.47
 
Weighted average shares outstanding 48,770,948 46,240,869 48,763,690 45,624,276
Weighted average shares outstanding – diluted 49,165,686 46,611,096 49,126,207 46,029,978
 
Consolidated Statements of Comprehensive Income   UMB Financial Corporation
(unaudited, dollars in thousands)          
Three Months Ended

June 30,

Six Months Ended

June 30,

  2016       2015     2016       2015  
Net Income $ 37,297   $ 30,214

$ 73,542

$ 63,979
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Change in unrealized holding gains (losses), net 42,273 (45,552 ) 107,585 (12,877 )
Less: Reclassifications adjustment for gains included in net income   (2,598 )     (967 )   (5,531 )     (8,303 )
Change in unrealized gains (losses) on securities during the period 39,675 (46,519 ) 102,054 (21,180 )
Change in unrealized losses on derivatives   (2,894 )     -     (7,034 )     -  
Income tax (expense) benefit   (13,954 )     17,569     (36,007 )     8,033  
Other comprehensive income (loss)   22,827       (28,950 )  

59,013

      (13,147 )
Comprehensive income $ 60,124     $ 1,264     $132,555     $ 50,832  
 
Consolidated Statements of Shareholders' Equity       UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)        
    Accumulated
Other
Common Capital Retained Comprehensive Treasury
Stock   Surplus   Earnings   Income (Loss)   Stock   Total
Balance - January 1, 2015 $ 55,057 $ 894,602 $ 963,911 $ 11,006 $ (280,818 ) $ 1,643,758
Total comprehensive income - - 63,979 (13,147 ) - 50,832
Cash dividends ($0.47 per share) - - (22,327 ) - - (22,327 )
Purchase of treasury stock - - - - (5,379 ) (5,379 )
Issuance of equity awards - (5,509 ) - - 5,969 460
Recognition of equity based compensation - 5,779 - - - 5,779
Net tax benefit related to equity compensation plans - 664 - - - 664
Sale of treasury stock - 306 - - 197 503
Exercise of stock options - 1,488 - - 1,541 3,209
Common stock issuance   -     112,635       -       -       67,102       179,737  
Balance – June 30, 2015 $ 55,057   $ 1,009,965     $ 1,005,563     $ (2,141 )   $ (211,388 )   $ 1,857,056  
 
 
Balance - January 1, 2016 $ 55,057 $ 1,019,889 $ 1,033,990 $ (3,718 ) $ (211,524 ) $ 1,893,694
Total comprehensive income - - 73,542 59,013 - 132,555
Cash dividends ($0.49 per share) - - (24,252 ) - - (24,252 )
Purchase of treasury stock - - - - (13,581 ) (13,581 )
Issuance of equity awards - (4,457 ) - - 4,887 430
Recognition of equity based compensation - 5,200 - - - 5,200

Net tax deficiency related to
  equity compensation plans

- 250 - - - 250
Sale of treasury stock - 260 - - 309 569
Exercise of stock options   -     2,053       -       -       5,814       7,867  
Balance – June 30, 2016 $ 55,057   $ 1,023,195     $ 1,083,280     $ 55,295     $ (214,095 )   $ 2,002,732  
 
Average Balances / Yields and Rates       UMB Financial Corporation
(tax - equivalent basis)        
(unaudited, dollars in thousands) Three Months Ended June 30,
2016   2015
Average Average Average Average

Assets

Balance   Yield/Rate   Balance   Yield/Rate
Loans, net of unearned interest $ 9,887,404 3.82 % $ 8,071,991 3.55 %
Securities:
Taxable 4,676,230 1.62 4,974,668 1.55
Tax-exempt   2,987,217     2.86     2,407,759     2.72  
Total securities 7,663,447 2.11 7,382,427 1.93
Federal funds and resell agreements 181,094 1.43 69,053 0.88
Interest-bearing due from banks 313,427 0.56 414,446 0.42
Trading securities   40,996     2.09     37,063     1.70  
Total earning assets 18,086,368 3.01 15,974,980 2.70
Allowance for loan losses (81,699 ) (77,667 )
Other assets   1,431,600     1,515,687  
Total assets $ 19,436,269   $ 17,413,000  
 
 

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 9,315,851 0.18 % $ 7,924,696 0.18 %
Federal funds and repurchase agreements 2,163,264 0.30 1,715,836 0.11
Borrowed funds   91,034     4.09     49,827     4.28  
Total interest-bearing liabilities 11,570,149 0.23 9,690,359 0.19

 

Noninterest-bearing demand deposits 5,723,840 5,504,333
Other liabilities 162,390 473,676
Shareholders' equity   1,979,890     1,744,632  
Total liabilities and shareholders' equity $ 19,436,269   $ 17,413,000  
Net interest spread 2.78 % 2.51 %
Net interest margin 2.86 2.59
 
Average Balances / Yields and Rates           UMB Financial Corporation
(tax - equivalent basis)                
(unaudited, dollars in thousands) Six Months Ended June 30,
2016     2015  
Average   Average Average   Average

Assets

Balance   Yield/Rate   Balance   Yield/Rate
Loans, net of unearned interest $ 9,718,848 3.82 % $7,772,709 3.52 %
Securities:
Taxable 4,751,526 1.62 4,921,907 1.56
Tax-exempt   2,896,366     2.84   2,331,422     2.73  
Total securities 7,647,892 2.08 7,253,329 1.93
Federal funds and resell agreements 163,943 1.41 51,793 0.79
Interest-bearing due from banks 481,031 0.55 759,238 0.34
Trading securities   33,677     1.67   33,661     1.76  
Total earning assets 18,045,391 2.97 15,870,730 2.63
Allowance for loan losses (81,259 ) (77,124 )
Other assets   1,420,465   1,330,476  
Total assets $ 19,384,597   $17,124,082  
 
 

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 9,372,812 0.18 % $7,764,368 0.17 %
Federal funds and repurchase agreements 1,929,910 0.30 1,713,386 0.11
Borrowed funds   91,796     4.02   29,193     4.05  
Total interest-bearing liabilities 11,394,518 0.23 9,506,947 0.17
Noninterest-bearing demand deposits 5,869,330 5,582,180
Other liabilities 160,173 325,066
Shareholders' equity   1,960,576   1,709,889  
Total liabilities and shareholders' equity $ 19,384,597   $17,124,082  
Net interest spread 2.74 % 2.46 %
Net interest margin 2.82 2.53
 
Business Segment Information         UMB Financial Corporation
(unaudited, dollars in thousands)              
Three Months Ended June 30, 2016
Bank    

Institutional
Investment
Management

   

Asset
Servicing

      Total
Net interest income $ 118,613 $ - $ 2,597 $ 121,210
Provision for loan losses 7,000 - - 7,000
Noninterest income 80,044 19,127 22,276 121,447
Noninterest expense   145,736       18,858       20,649       185,243
Income before taxes 45,921 269 4,224 50,414
Income tax expense   11,939       77       1,101       13,117
Net income $ 33,982     $ 192     $ 3,123     $ 37,297
 
Average assets $ 18,170,000 $ 61,000 $ 1,205,000 $ 19,436,000
 
 
Three Months Ended June 30, 2015
Bank    

Institutional
Investment
Management

   

Asset
Servicing

      Total
Net interest income $ 96,403 $ -

$

957

$ 97,360
Provision for loan losses 5,000 - - 5,000
Noninterest income 70,840 25,685 23,025 119,550
Noninterest expense   133,617       18,302       20,045       171,964
Income before taxes 28,626 7,383 3,937 39,946
Income tax expense   7,017       1,747       968       9,732
Net income $ 21,609     $ 5,636    

$

2,969

    $ 30,214
 
Average assets $ 16,384,000 $ 71,000

$

958,000

$ 17,413,000
 
            Six Months Ended June 30, 2016
Bank    

Institutional
Investment
Management

   

Asset
Servicing

      Total
Net interest income $ 233,885     $ -     $ 5,217     $ 239,102
Provision for loan losses 12,000 - - 12,000
Noninterest income 155,483 37,542 44,772 237,797
Noninterest expense   289,104       36,088       40,795       365,987
Income before taxes 88,264 1,454 9,194 98,912
Income tax expense   22,643       367       2,360       25,370
Net income $ 65,621     $ 1,087     $ 6,834     $ 73,542
 
Average assets $ 18,027,000 $ 62,000 $ 1,296,000 $ 19,385,000
 
 
Six Months Ended June 30, 2015
Bank      

Institutional
Investment
Management

     

Asset
Servicing

      Total
Net interest income $ 185,764   $ -   $ 1,954 $ 187,718
Provision for loan losses 8,000 - - 8,000
Noninterest income 145,529 52,769 46,459 244,757
Noninterest expense   258,796         36,262         41,319       336,377
Income before taxes 64,497 16,507 7,094 88,098
Income tax expense   17,732         4,497         1,890       24,119
Net income $ 46,765       $ 12,010       $ 5,204     $ 63,979
 
Average assets $ 16,101,000 $ 73,000 $ 950,000 $ 17,124,000
 

UMB Financial Corporation
Media Contact:
Kelli Christman, 816-860-5088
or
Investor Relations Contact:
Kay Gregory, 816-860-7106

View Comments and Join the Discussion!