Market Overview

UMB Financial Corporation Reports Fourth Quarter and Full-Year 2015 Results

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

UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the three months ended December 31, 2015, of $29.6 million or $0.61 per share ($0.60 diluted). This is an increase of $2.7 million, or 10.0 percent, compared to fourth quarter 2014 earnings of $26.9 million or $0.60 per share ($0.59 diluted). Earnings for the year ended December 31, 2015, were $116.1 million or $2.46 per share ($2.44 diluted) or a decrease of $4.6 million, or 3.8 percent, compared to the prior year-end earnings of $120.7 million or $2.69 per share ($2.65 diluted).

The company is introducing the non-GAAP financial measure of net operating income to facilitate the evaluation of its fundamental operating performance. Net operating income, which is reconciled to earnings (GAAP net income) later in this release, excludes (net of tax) the contingency reserve expense related to an acquisition, fair value adjustments to contingent consideration for acquisitions, expenses related to an acquisition, and non-acquisition severance expense. Net operating income for the fourth quarter 2015 was $34.2 million or $0.70 per share ($0.70 diluted). This is an increase of $6.4 million, or 23.1 percent, compared to fourth quarter 2014 net operating income of $27.8 million or $0.62 per share ($0.61 diluted). Net operating income for the year ended December 31, 2015, was $123.4 million or $2.62 per share ($2.59 diluted) or a decrease of $16.2 million, or 11.6 percent, compared to the prior year-end net operating income of $139.6 million or $3.11 per share ($3.07 diluted).

"2015 was a year of change for UMB, with an increased focus on maximizing efficiencies" said Mariner Kemper, chairman and chief executive officer. "Total loan balances increased 26.3 percent from December 31, 2014 to December 31, 2015. Loans produced by legacy UMB lenders increased 13.2 percent during that period, once again outpacing industry averages. During the year, we implemented several organizational changes, and while we have faced some headwinds, we have a lot to be excited about. We have a long-standing track record of strong loan and deposit growth, and our focus on improving metrics will push more of that momentum to the bottom line."

Net Interest Income and Margin for the Fourth Quarter 2015

Net interest income for the fourth quarter of 2015 increased $23.5 million, or 25.9 percent, compared to the same period in 2014. Net interest margin increased 24 basis points to 2.76 percent for the three months ended December 31, 2015, compared to the same period in 2014.

Average earning assets increased $2.2 billion, or 14.7 percent, compared to the fourth quarter of 2014. This increase was largely due to an increase in average loans of $1.9 billion, or 25.7 percent, and an increase in average total securities, including trading securities, of $217.6 million, or 3.0 percent. The acquisition of Marquette Financial Companies (Marquette) added earning assets with an acquired value of $1.3 billion on May 31, 2015. Acquired Marquette loans and loans originated through the legacy Marquette channels had an actual balance at December 31, 2015 of $1.0 billion.

Noninterest Income and Expense for the Fourth Quarter 2015

Noninterest income decreased $2.6 million, or 2.3 percent, for the three months ended December 31, 2015, compared to the same period in 2014. This decrease is primarily attributable to a decrease in trust and securities processing income of $6.9 million, or 10.0 percent, driven by a $7.9 million, or 41.6 percent, decrease in advisory fee income from the Scout Funds. Equity earnings on alternative investments had an unrealized loss of $5.2 million at December 31, 2015 compared to an unrealized loss of $4.5 million at December 31, 2014. This is a year-over-year change of $0.7 million, or 15.6 percent. Gains on sales of securities increased $1.9 million, and other noninterest income increased $1.5 million, compared to the same period in 2014. The increase in other noninterest income was driven by $1.8 million of income generated from bank-owned life insurance investments purchased in 2015.

Noninterest expense increased $15.7 million, or 9.4 percent, for the three months ended December 31, 2015, compared to the same period in 2014. Salaries and employee benefits expense increased $13.5 million, or 15.0 percent, compared to the same period in 2014,due to an increase in salaries and wages of $8.0 million, or 13.8 percent, an increase in bonus and commission expense of $4.0 million, or 20.6 percent, and an increase in employee benefits expense of $1.5 million, or 11.9 percent. Included in the increase of salaries and employee benefits is $9.0 million of Marquette salaries and benefits, including $0.6 million in Marquette-related severance, and $3.3 million of non-Marquette severance.

Equipment expense increased $2.1 million, or 14.4 percent, compared to the same period in 2014, due to increased computer and hardware costs related to investments for regulatory requirements, cyber security and the ongoing modernization of our core systems. Occupancy expenses increased $1.5 million, or 14.3 percent, and other noninterest expense increased $1.5 million, or 29.8 percent, compared to the same period in 2014. The increase in other noninterest expense was driven by a $1.3 million increase in fair value adjustments on contingent consideration for acquisitions. Supplies and postage decreased $1.1 million, or 20.8 percent, and bankcard expenses decreased $1.5 million, or 22.2 percent, compared to the same period in 2014.

Total acquisition expenses recognized in noninterest expense during the fourth quarter of 2015 totaled $3.4 million primarily related to $0.6 million of severance expense included in salaries and employee benefits and $2.0 million of consulting expense related to core system conversions projects. Total acquisition expenses for the same period in 2014 were $1.9 million, or a comparable quarterly period increase of $1.5 million or 76.5 percent.

Balance Sheet for the Fourth Quarter 2015

Average total assets for the three months ended December 31, 2015 were $18.8 billion compared to $16.2 billion for the same period in 2014, an increase of $2.5 billion, or 15.6 percent. Average earning assets increased $2.2 billion for the period, or 14.7 percent.

Average loan balances for the three months ended December 31, 2015, increased $1.9 billion, or 25.7 percent, to $9.2 billion compared to the same period in 2014. Actual loan balances on December 31, 2015, were $9.4 billion, an increase of $2.0 billion, or 26.3 percent, compared to December 31, 2014. The overall actual loan increase at December 31, 2015 was driven by a $796.5 million, or 42.7 percent, increase in commercial real estate loans, a $391.7 million, or 10.3 percent, increase in commercial loans, a $219.2 million, or 100.0 percent, increase in asset-based loans, a $172.4 million, or 53.9 percent, increase in residential real estate loans, a $160.6 million, or 62.7 percent, increase in construction real estate loans, and a $90.7 million, or 100.0 percent, increase in factoring loans.

A significant driver in the increase in loans was the acquisition of Marquette and its loan portfolio. These acquired Marquette loans and loans originated through the legacy Marquette channels had an actual balance at December 31, 2015 of $1.0 billion. This total includes $325.2 million in commercial real estate loans, $219.2 million in asset-based loans, $111.8 million in construction real estate loans, $90.7 million in factoring loans, $99.6 million in commercial loans, and $99.4 million in residential real estate loans. The remaining increase in loans of $1.0 billion compared to December 31, 2014 is comprised of loans originated through the legacy UMB channels. This increase was primarily driven by an increase in commercial real estate loans of $471.3 million and an increase in commercial loans of $292.1 million.

Nonperforming loans increased to $61.2 million on December 31, 2015, from $27.4 million on December 31, 2014. Nonperforming loans are defined as nonaccrual loans and restructured loans. As a percentage of loans, nonperforming loans increased to 0.65 percent at December 31, 2015, compared to 0.37 percent on December 31, 2014. The company's allowance for loan losses totaled $81.1 million, or 0.86 percent of loans, at December 31, 2015, compared to $76.1 million, or 1.02 percent of loans, at December 31, 2014.

For the three months ended December 31, 2015, average securities, including trading securities, totaled $7.4 billion. This is an increase of $217.6 million, or 3.0 percent, from the same period in 2014.

Average total deposits increased $2.4 billion, or 18.8 percent, to $15.3 billion for the three months ended December 31, 2015, compared to the same period in 2014. Deposit balances from the legacy Marquette channels totaled $798.6 million at December 31, 2015.

Average noninterest-bearing demand deposits increased $1.3 billion, or 24.6 percent, compared to the same period in 2014. Average interest-bearing deposits increased $1.1 billion, or 14.5 percent, compared to the same period in 2014. Total actual deposits as of December 31, 2015, were $15.1 billion, compared to $13.6 billion as of December 31, 2014, a 10.8 percent increase. Additionally, for the three months ended December 31, 2015, average noninterest-bearing demand deposits were 44.1 percent of average total deposits.

As of December 31, 2015, UMB had total shareholders' equity of $1.9 billion, an increase of 15.2 percent compared to December 31, 2014. This increase is primarily attributable to the common stock issuance associated with the acquisition of Marquette of $179.7 million at May 31, 2015.

Year Ended December 31, 2015

Earnings for the year ended December 31, 2015, were $116.1 million or $2.46 per share ($2.44 diluted). This is a decrease of $4.6 million, or 3.8 percent, compared to the prior year-end earnings of $120.7 million or $2.69 per share ($2.65 diluted).

Net interest income for the year ended December 31, 2015, increased $62.0 million, or 17.7 percent, compared to the same period in 2014. Average earning assets increased $1.6 billion, or 10.6 percent, compared to the same period in 2014. This increase was due primarily to a $1.4 billion, or 20.8 percent, increase in average loans. Net interest margin increased 15 basis points to 2.64 percent, compared to the same period in 2014.

Noninterest income decreased $32.2 million, or 6.5 percent, to $466.5 million for the year ended December 31, 2015, compared to the same period in 2014. The decrease in noninterest income was primarily driven by decreased trust and securities processing income of $26.0 million, or 9.0 percent. The decrease in trust and securities processing income was primarily due to a $35.6 million, or 38.9 percent, decrease in advisory fee income from the Scout Funds, partially offset by a $5.3 million, or 5.5 percent, increase in fees related to institutional and personal investment management services, and a $2.9 million, or 3.3 percent, increase in fund administration and custody services. Equity earnings on alternative investments had an unrealized loss of $12.2 million at December 31, 2015 compared to an unrealized gain of $4.0 million at December 31, 2014, resulting in a year-over-year decrease of $16.2 million. These decreases in noninterest income were partially offset by an increase in gains on sales of securities of $6.3 million for the year ended December 31, 2015 compared to December 31, 2014.

Noninterest expense increased $38.1 million, or 5.7 percent, for the year ended December 31, 2015, compared to the same period in 2014. This increase was driven by an increase in salaries and employee benefits expense of $47.9 million, or 13.4 percent, an increase in equipment expense of $9.9 million, or 18.5 percent, and an increase in legal and consulting expense of $6.0 million, or 29.3 percent. These increases were partially offset by a $20.3 million contingency reserve recorded for the year ended December 31, 2014. Marquette salaries and employee benefits expense, including $2.4 million of Marquette-related severance, totaled $23.2 million and non-Marquette severance totaled $4.6 million for the year ended December 31, 2015.

Total acquisition expenses recognized in noninterest expense were $9.8 million during the year-ended December 31, 2015, compared to $1.9 million during the year-ended December 31, 2014.

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, we recognized $9.5 million of these cost savings in 2015 and now expect to recognize $21.1 million in 2016 and annualized savings of $32.9 million beginning in 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 April 1, 2016, to shareholders of record at the close of business on March 10, 2016.

Conference Call

The company plans to host a conference call to discuss its 2015 fourth quarter and full-year 2015 earnings results on January 27, 2016 at 8:30 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 4Q 2015 Conference Call

A replay of the conference call may be heard through February 10, 2016, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10078224. 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 after-tax impact of excluding the following: (i) the contingency reserve expense related to the acquisition of Prairie Capital Management, LLC, (ii) fair value adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management Company, (iii) expenses related to the acquisition of Marquette Financial Companies, and (iv) non-acquisition severance expense. 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-iv above. Operating efficiency ratio is calculated as the company's operating noninterest expense, less amortization of other intangibles, divided by the company's 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, 2014, 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 Year Ended
December 31, December 31,
  2015       2014       2015       2014
Net income (GAAP) $ 29,643 $ 26,940 $ 116,073 $ 120,655
Adjustments (net of tax):
Contingency reserve expense (i) - - - 12,974
Fair value adjustments on contingent consideration (ii) 300 (543) (1,925) 4,264
Acquisition expenses (iii) 2,193 1,243 6,293 1,243
Non-acquisition severance expense (iv)   2,098       181       2,919       465
Total Non-GAAP adjustments (net of tax)   4,591       881       7,287       18,946
Net operating income (Non-GAAP) $ 34,234     $ 27,821     $ 123,360     $ 139,601
 

GAAP

Earnings per share - Basic $ 0.61 $ 0.60 $ 2.46 $ 2.69
Earnings per share - Diluted 0.60 0.59 2.44 2.65
Return on average assets 0.63% 0.66% 0.65% 0.75%
Return on average equity 6.15% 6.47% 6.43% 7.54%
 

Non-GAAP

Operating earnings per share - Basic $ 0.70 $ 0.62 $ 2.62 $ 3.11
Operating earnings per share - Diluted 0.70 0.61 2.59 3.07
Operating return on average assets 0.72% 0.68% 0.69% 0.87%
Operating return on average equity 7.10% 6.68% 6.83% 8.73%
 
 
Operating noninterest expense and operating efficiency ratio non-GAAP reconciliation:
(unaudited, dollars in thousands)  
 

 

Three Months Ended

    Year Ended

 

December 31,

 

December 31,

 

December 31,

   

 

December 31,

 

2015

      2014       2015       2014
Noninterest expense (GAAP) $ 182,080     $ 166,397 $ 703,736 $ 665,680
Adjustments (pre-tax):
Contingency reserve expense (i) - - - 20,272
Fair value adjustments on contingent consideration (ii) 469 (848) (3,008) 6,662
Acquisition expenses (iii) 3,427 1,942 9,833 1,942
Non-acquisition severance expense (iv)   3,278       282       4,561       726
Total Non-GAAP adjustments (pre-tax)   7,174       1,376       11,386       29,602
Operating noninterest expense   174,906       165,021       692,350       636,078
 
Noninterest expense 182,080 166,397 703,736 665,680
Less: Amortization of other intangibles   3,283       2,974       12,090       12,193
Noninterest expense, net of amortization of other intangibles (numerator A)   178,797       163,423       691,646       653,487
 
Operating noninterest expense (Non-GAAP) 174,906 165,021 692,350 636,078
Less: Amortization of other intangibles   3,283       2,974       12,090       12,193
Operating expense, net of amortization of other intangibles (numerator B)   171,623       162,047       680,260       623,885
 
Net interest income (tax equivalent) (v) 120,966 96,200 435,852 371,289
Noninterest income 112,599 115,248 466,454 498,688
Less: Gains on sales of securities available for sale, net   1,998       62       10,402       4,127
Total (denominator A)   231,567       211,386       891,904       865,850
 
Efficiency ratio (numerator A/denominator A) 77.21% 77.31% 77.55% 75.47%
Operating efficiency ratio (numerator B/denominator A) 74.11% 76.66% 76.27% 72.05%
(i) Represents the company's 2014 contingency reserve for the settlement of disputes related to the acquisition of Prairie Capital Management, LLC (PCM).
(ii) Represents fair value adjustments to contingent consideration for the acquisitions of PCM and Reams Asset Management Company.
(iii) Represents expenses related to the acquisition of Marquette Financial Companies (MFC).
(iv) Represents non-acquisition severance expense related to UMB-legacy employees. Severance expense for MFC-legacy employees is included in item (iii).
(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 $6.5 million and $5.3 million for the three months ended December 31, 2015 and 2014, respectively, and an addition to net interest income of $23.8 million and $21.2 million for the year-ended December 31, 2015 and 2014, respectively.
 
   
Consolidated Balance Sheets       UMB Financial Corporation
(unaudited, dollars in thousands)    
December 31,

Assets

  2015       2014
 
Loans $ 9,430,761 $ 7,465,794
Allowance for loan losses   (81,143)       (76,140)
Net loans   9,349,618       7,389,654
Loans held for sale 589 624
Investment securities:
Available for sale 6,806,949 6,911,936
Held to maturity 667,106 278,054
Trading securities 29,617 27,203
Other securities   65,198       68,474
Total investment securities   7,568,870       7,285,667
Federal funds and resell agreements 173,627 118,105
Interest-bearing due from banks 522,877 1,539,386
Cash and due from banks 458,217 444,299
Bank premises and equipment, net 281,471 257,835
Accrued income 90,127 79,297
Goodwill 228,346 209,758
Other intangibles 46,782 43,991
Other assets   373,721       132,344
Total assets $ 19,094,245     $ 17,500,960
 
 

Liabilities

Deposits:
Noninterest-bearing demand $ 6,306,895 $ 5,643,989
Interest-bearing demand and savings 7,529,972 6,709,281
Time deposits under $250,000 771,973 636,507
Time deposits of $250,000 or more   483,912       627,082
Total deposits   15,092,752       13,616,859
Federal funds and repurchase agreements 1,818,062 2,025,132
Short-term debt 5,009 -
Long-term debt 86,070 8,810
Accrued expenses and taxes 161,245 180,074
Other liabilities   37,413       26,327
Total liabilities   17,200,551       15,857,202
 

Shareholders' Equity

Common stock 55,057 55,057
Capital surplus 1,019,889 894,602
Retained earnings 1,033,990 963,911
Accumulated other comprehensive (loss) income (3,718) 11,006
Treasury stock   (211,524)       (280,818)
Total shareholders' equity   1,893,694       1,643,758
Total liabilities and shareholders' equity $ 19,094,245     $ 17,500,960
 
           
Consolidated Statements of Income           UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)    
 
Three Months Ended Year Ended
December 31, December 31,

Interest Income

  2015       2014       2015       2014
Loans $ 88,011 $ 64,433 $ 308,325 $ 245,278
Securities:
Taxable interest 18,858 19,338 75,327 76,204
Tax-exempt interest 11,756       9,759       43,598       39,209
Total securities income 30,614 29,097 118,925 115,413
Federal funds and resell agreements 320 93 697 259
Interest-bearing due from banks 595 510 2,356 2,525
Trading securities 75       85       378       396
Total interest income 119,615       94,218       430,681       363,871
 

Interest Expense

Deposits 3,836 3,076 14,269 12,242
Federal funds and repurchase agreements 396 323 1,785 1,616
Other 929       (95)       2,560       (42)
Total interest expense 5,161       3,304       18,614       13,816
Net interest income 114,454 90,914 412,067 350,055
Provision for loan losses 5,000       3,000       15,500       17,000
Net interest income after provision for loan losses 109,454       87,914       396,567       333,055
 

Noninterest Income

Trust and securities processing 62,194 69,072 262,056 288,054
Trading and investment banking 5,559 4,840 20,218 19,398
Service charges on deposits 21,631 21,480 86,460 85,299
Insurance fees and commissions 894 765 2,530 3,011
Brokerage fees 3,005 2,595 11,753 10,761
Bankcard fees 17,369 17,321 69,211 67,250
Gains on sale of securities available for sale, net 1,998 62 10,402 4,127
Equity (loss) earnings on alternative investments (5,189) (4,487) (12,188) 3,975
Other 5,138       3,600       16,012       16,813
Total noninterest income 112,599       115,248       466,454       498,688
 

Noninterest Expense

Salaries and employee benefits 103,617 90,115 406,472 358,569
Occupancy, net 11,791 10,312 43,861 40,197
Equipment 16,723 14,618 63,533 53,609
Supplies, postage and telephone 4,280 5,403 18,579 20,411
Marketing and business development 6,816 7,182 23,730 24,148
Processing fees 13,096 13,496 51,328 56,049
Legal and consulting 7,447 7,907 26,390 20,407
Bankcard 5,301 6,812 20,288 19,594
Amortization of other intangibles 3,283 2,974 12,090 12,193
Regulatory fees 3,320 2,643 12,125 10,445
Contingency reserve - - - 20,272
Other 6,406       4,935       25,340       29,786
Total noninterest expense 182,080 166,397 703,736 665,680
 
Income before income taxes 39,973 36,765 159,285 166,063
Income tax provision 10,330       9,825       43,212       45,408
Net income $ 29,643     $ 26,940     $ 116,073     $ 120,655
 

Per Share Data

Net income - basic $ 0.61 $ 0.60 $ 2.46 $ 2.69
Net income – diluted 0.60 0.59 2.44 2.65
Dividends 0.245 0.235 0.950 0.910
Weighted average shares outstanding - basic 48,630,195 44,920,106 47,126,252 44,844,578
Weighted average shares outstanding - diluted 49,066,566 45,465,760 47,579,334 45,445,283
 
Consolidated Statements of Comprehensive (Loss) Income     UMB Financial Corporation

(unaudited, dollars in thousands)

         
   

Three Months Ended
December 31,

Year Ended
December 31,

2015     2014     2015     2014
Net Income $ 29,643     $ 26,940 $ 116,073 $ 120,655
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on securities:
Change in unrealized holding (losses) gains, net (46,682) 14,991 (13,393) 74,147
Less: Reclassifications adjustment for gains included in net income   (1,998)       (62)       (10,402)       (4,127)
Net unrealized holding (losses) gains (48,680) 14,929 (23,795) 70,020
Change in unrealized losses on derivatives   (10)       -       (10)       -
Income tax benefit (expense)   18,442       (5,750)       9,081       (26,374)
Other comprehensive (loss) income   (30,248)       9,179       (14,724)       43,646
Comprehensive (loss) income $ (605)     $ 36,119     $ 101,349     $ 164,301
 
           

 

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     (Loss) Income     Stock     Total
Balance - January 1, 2014 $ 55,057 $ 882,407 $ 884,630 $ (32,640) $ (283,389) $ 1,506,065
Total comprehensive income - - 120,655 43,646 - 164,301
Cash dividends ($0.91 per share) - - (41,374) - - (41,374)
Purchase of treasury stock - - - - (5,741) (5,741)
Issuance of equity awards - (2,338) - - 2,827 489
Recognition of equity based compensation - 9,172 - - - 9,172
Net tax benefit related to equity compensation plans - 1,880 - - - 1,880
Sale of treasury stock - 596 - - 340 936
Exercise of stock options   -     2,885     -     -     5,145     8,030
Balance – December 31, 2014 $ 55,057   $ 894,602   $ 963,911   $ 11,006   $ (280,818)   $ 1,643,758
 
Balance - January 1, 2015 $ 55,057 $ 894,602 $ 963,911 $ 11,006 $ (280,818) $ 1,643,758
Total comprehensive income - - 116,073 (14,724) - 101,349
Cash dividends ($0.95 per share) - - (45,994) - - (45,994)
Purchase of treasury stock - - - - (8,457) (8,457)
Issuance of equity awards - (3,278) - - 3,737 459
Recognition of equity based compensation - 10,292 - - - 10,292
Net tax benefit related to equity compensation plans - 944 - - - 944
Sale of treasury stock - 611 - - 445 1,056
Exercise of stock options - 4,083 - - 6,467 10,550
Common stock issuance for

Acquisition

  -     112,635     -     -     67,102     179,737
Balance – December 31, 2015 $ 55,057   $ 1,019,889   $ 1,033,990   $ (3,718)   $ (211,524)   $ 1,893,694
 
       
Average Balances / Yields and Rates               UMB Financial Corporation  
(tax - equivalent basis)        
(unaudited, dollars in thousands) Three Months Ended December 31,
  2015       2014
Average Average Average Average

Assets

  Balance     Yield/Rate         Balance     Yield/Rate  
Loans, net of unearned interest $ 9,199,961 3.80 % $ 7,320,930 3.49 %
Securities:
Taxable 4,704,102 1.59 5,006,800 1.53
Tax-exempt 2,670,130     2.71 2,148,256     2.77
Total securities 7,374,232 2.00 7,155,056 1.91
Federal funds and resell agreements 117,005 1.09 73,821 0.50
Interest-bearing due from banks 662,036 0.36 571,921 0.35
Trading securities 27,439     1.29 29,019     1.46
Total earning assets 17,380,673 2.88 15,150,747 2.61
Allowance for loan losses (78,906) (77,527)
Other assets   1,453,790   1,158,402
Total assets $ 18,755,557 $ 16,231,622
 
 

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 8,528,207 0.18 % $ 7,446,164 0.16 %
Federal funds and repurchase agreements 1,305,939 0.12 1,535,253 0.08
Borrowed funds 88,862 4.15 7,021 (5.37)
Total interest-bearing liabilities 9,923,008 0.21 8,988,438 0.15
Noninterest-bearing demand deposits 6,734,309 5,403,856
Other liabilities 185,586 187,359
Shareholders' equity   1,912,654   1,651,969
Total liabilities and shareholders' equity $ 18,755,557 $ 16,231,622
Net interest spread 2.67 % 2.46 %
Net interest margin 2.76 2.52
 
 
Year Ended December 31,
  2015       2014
Average Average Average Average

Assets

  Balance     Yield/Rate         Balance     Yield/Rate  
Loans, net of unearned interest $ 8,425,107 3.66 % $ 6,975,338 3.52 %
Securities:
Taxable 4,823,710 1.56 4,898,826 1.56
Tax-exempt 2,473,811     2.72 2,122,822     2.84
Total securities 7,297,521 1.95 7,021,648 1.94
Federal funds and resell agreements 76,108 0.92 48,869 0.53
Interest-bearing due from banks 664,752 0.35 843,134 0.30
Trading securities 32,725     1.46 32,189     1.46
Total earning assets 16,496,213 2.75 14,921,178 2.58
Allowance for loan losses (77,899) (76,459)
Other assets   1,368,128   1,154,174
Total assets $ 17,786,442 $ 15,998,893
 
 

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 8,150,588 0.18 % $ 7,494,744 0.16 %
Federal funds and repurchase agreements 1,590,776 0.11 1,535,038 0.11
Borrowed funds 59,174     4.33 6,059     (0.69)
Total interest-bearing liabilities 9,800,538 0.19 9,035,841 0.15
Noninterest-bearing demand deposits 5,927,702 5,196,529
Other liabilities 252,346 166,758
Shareholders' equity   1,805,856   1,599,765
Total liabilities and shareholders' equity $ 17,786,442 $ 15,998,893
Net interest spread 2.56 % 2.43 %
Net interest margin 2.64 2.49
 
       
FOURTH QUARTER 2015
FINANCIAL HIGHLIGHTS       UMB Financial Corporation
(unaudited, dollars in thousands, except share and per share data)
 
Year Ended December 31   2015         2014  
Net interest income $ 412,067 $ 350,055
Provision for loan losses 15,500 17,000
Noninterest income 466,454 498,688
Noninterest expense 703,736 665,680
Income before income taxes 159,285 166,063
Net income 116,073 120,655
Net income per share - Basic 2.46 2.69
Net income per share - Diluted 2.44 2.65
Return on average assets 0.65 % 0.75 %
Return on average equity 6.43 % 7.54 %
 
Three Months Ended December 31
Net interest income $ 114,454 $ 90,914
Provision for loan losses 5,000 3,000
Noninterest income 112,599 115,248
Noninterest expense 182,080 166,397
Income before income taxes 39,973 36,765
Net income 29,643 26,940
Net income per share - Basic 0.61 0.60
Net income per share - Diluted 0.60 0.59
Return on average assets 0.63 % 0.66 %
Return on average equity 6.15 % 6.47 %
 
At December 31
Assets $ 19,094,245 $ 17,500,960
Loans, net of unearned interest 9,430,761 7,465,794
Securities 7,568,870 7,285,667
Deposits 15,092,752 13,616,859
Shareholders' equity 1,893,694 1,643,758
Book value per share 38.34 36.10
Market price per share 46.55 56.89
Equity to assets 9.92 % 9.39 %
Allowance for loan losses $ 81,143 $ 76,140
As a % of loans 0.86 % 1.02 %
Nonaccrual and restructured loans $ 61,152 $ 27,382
As a % of loans 0.65 % 0.37 %
Loans over 90 days past due $ 7,324 $ 3,830
As a % of loans 0.08 % 0.05 %
Other real estate owned $ 3,307 $ 394
Net loan charge-offs quarter-to-date $ 1,886 $ 4,176
As a % of average loans 0.08 % 0.23 %
Net loan charge-offs year-to-date $ 10,497 $ 15,610
As a % of average loans 0.12 % 0.22 %
 
Common shares outstanding 49,396,366 45,532,188
 
Average Balances
Year Ended December 31
Assets $ 17,786,442 $ 15,998,893
Loans, net of unearned interest 8,425,107 6,975,338
Securities 7,330,246 7,053,837
Deposits 14,078,290 12,691,273
Shareholders' equity 1,805,856 1,599,765
 
Business Segment Information UMB Financial Corporation
(unaudited, dollars in thousands)  
    Three Months Ended December 31, 2015
Bank  

Payment
Solutions

 

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 96,658   $ 16,028   $ -   $ 1,768 $ 114,454
Provision for loan losses 2,997 2,003 - - 5,000
Noninterest income 46,400 22,802 20,880 22,517 112,599
Noninterest expense   116,710     27,887     18,636     18,847     182,080
Income before taxes 23,351 8,940 2,244 5,438 39,973
Income tax expense   6,016     2,325     583     1,406     10,330
Net income $ 17,335   $ 6,615   $ 1,661   $ 4,032   $ 29,643
 
Average assets $ 14,494,000 $ 3,183,000 $ 64,000 $ 1,015,000 $ 18,756,000
 
 
Three Months Ended December 31, 2014
Bank  

Payment
Solutions

 

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 75,861 $ 14,003 $ 1 $ 1,049 $ 90,914
Provision for loan losses 1,617 1,383 - - 3,000
Noninterest income 42,380 21,479 29,212 22,177 115,248
Noninterest expense   96,803     26,473     23,183     19,938     166,397
Income before taxes 19,821 7,626 6,030 3,288 36,765
Income tax expense   5,427    

1,967

    1,559     872     9,825
Net income $ 14,394   $ 5,659   $ 4,471   $ 2,416   $ 26,940
 
Average assets $ 12,323,000 $ 2,949,000 $ 72,000 $ 888,000 $ 16,232,000
 
    Year Ended December 31, 2015

Bank

 

Payment
Solutions

 

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 348,701   $ 58,288   $ 2   $ 5,076   $ 412,067
Provision for loan losses 8,541 6,959 - - 15,500
Noninterest income 188,444 91,326 95,097 91,587 466,454
Noninterest expense   446,656     106,016     71,413     79,651     703,736
Income before taxes 81,948 36,639 23,686 17,012 159,285
Income tax expense   22,127     10,043     6,490     4,552     43,212
Net income $ 59,821   $ 26,596   $ 17,196   $ 12,460   $ 116,073
 
Average assets $ 13,706,000 $ 3,044,000 $ 68,000 $ 968,000 $ 17,786,000
 
Year Ended December 31, 2014
Bank  

Payment
Solutions

 

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 292,356 $ 52,251 $ (3) $ 5,451 $ 350,055
Provision for loan losses 9,175 7,825 - - 17,000
Noninterest income 194,223 84,478 131,225 88,762 498,688
Noninterest expense   404,203     93,915     92,048     75,514     665,680
Income before taxes 73,201 34,989 39,174 18,699 166,063
Income tax expense   24,095     7,791     10,093     3,429     45,408
Net income $ 49,106   $ 27,198   $ 29,081   $ 15,270   $ 120,655
 
Average assets $ 12,099,000 $ 2,456,000 $ 72,000 $ 1,372,000 $ 15,999,000
 

UMB Financial Corporation
Kelli Christman, 816-916-3240

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