KANSAS CITY, Mo.--(BUSINESS WIRE)-- UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced GAAP earnings for the fourth quarter 2016 of $42.9 million or $0.87 per diluted share, compared to $41.9 million or $0.85 per diluted share in the third quarter 2016 (linked quarter) and $29.6 million or $0.60 per diluted share in the fourth quarter 2015. These results represent an increase of 2.4 percent on a linked-quarter basis and 44.8 percent compared to the fourth quarter 2015. For the year ended Dec. 31, 2016, GAAP earnings were $158.8 million or $3.22 per diluted share, an increase of 36.8 percent compared to $116.1 million or $2.44 per diluted share for the year-ended Dec. 31, 2015.

Net operating income, a non-GAAP financial measure which is reconciled to the nearest comparable GAAP measure later in this release, was $45.3 million or $0.91 per diluted share for the fourth quarter 2016, compared to $43.0 million or $0.87 per diluted share for the linked quarter and $34.2 million or $0.70 per diluted share for the fourth quarter 2015. These results represent an increase of 5.4 percent on a linked-quarter basis and 32.3 percent compared to the fourth quarter 2015. Full year 2016 net operating income was $166.5 million or $3.38 per diluted share, an increase of 34.9 percent compared to $123.4 million or $2.59 per diluted share for the full year 2015.

Summary of financial results													UMB Financial Corporation
(unaudited, dollars in thousands)															December				December
			Q4				Q3				Q4				YTD				YTD
			2016				2016				2015				2016				2015
GAAP
Net income		$	42,934			$	41,946			$	29,643			$	158,801			$	116,073
Earnings per share (diluted)			0.87				0.85				0.60				3.22				2.44
Return on average assets			0.86	%			0.85	%			0.63	%			0.81	%			0.65	%
Return on average equity			8.58				8.25				6.15				8.01				6.43
Efficiency ratio			71.5	%			70.2	%			77.2	%			72.4	%			77.6	%
Non-GAAP
Net operating income		$	45,294			$	42,985			$	34,234			$	166,474			$	123,360
Operating earnings per share (diluted)			0.91				0.87				0.70				3.38				2.59
Operating return on average assets			0.90	%			0.87	%			0.72	%			0.85	%			0.69	%
Operating return on average equity			9.05				8.46				7.10				8.39				6.83
Operating efficiency ratio			70.1	%			69.6	%			74.1	%			71.2	%			76.3	%

“Fourth quarter 2016 net income improved 2.4 percent, or $1.0 million, over the third quarter 2016,” said Mariner Kemper, chairman and chief executive officer. “These results were driven in part by a $164 million increase in average loans, which helped drive a 5.4 percent increase in net interest income. For the full year, we earned a record $158.8 million. 2016 was a year of unprecedented market activity. UMB’s stock posted a 66 percent improvement, outperforming the 26 percent return for the KBW Nasdaq Bank index. During the year, we fully integrated our acquisition of Marquette Financial Companies, executed on our expense initiative, and continued our history of solid loan growth. We are looking forward to 2017 and continuing to improve operating leverage and invest in our business for the future.”

Summary of revenue										UMB Financial Corporation
(unaudited, dollars in thousands)
			Q4			Q3			Q4			CQ vs.			CQ vs.
			2016			2016			2015			LQ			PY
Net interest income		$	131,456	$		124,765	$		114,454		$	6,691		$	17,002
Noninterest income:
Trust and securities processing			60,431			60,218			62,194			213			(1,763)
Trading and investment banking			5,040			6,114			5,559			(1,074)			(519)
Service charges on deposit accounts			20,949			21,832			21,631			(883)			(682)
Insurance fees and commissions			833			698			894			135			(61)
Brokerage fees			4,674			4,712			3,005			(38)			1,669
Bankcard fees			16,113			17,086			17,369			(973)			(1,256)
Gains on sales of securities available for sale, net			-			2,978			1,998			(2,978)			(1,998)
Equity earnings (losses) on alternative investments			504			1,594			(5,189)			(1,090)			5,693
Other			7,786			6,716			5,138			1,070			2,648
Total noninterest income		$	116,330	$		121,948	$		112,599		$	(5,618)		$	3,731
Total Revenue		$	247,786	$		246,713	$		227,053		$	1,073		$	20,733
Net interest margin			3.00	%		2.87	%		2.76	%
Total noninterest income as a % of total revenue			46.9	%		49.4	%		49.6	%

Net interest income

• On a linked quarter basis, the increase in net interest income was driven by a 13 basis point improvement in net interest margin, coupled with a 6.5 percent annualized, or $164.2 million, increase in average loans.
• Earning asset yields improved 14 basis points from the linked quarter while the cost of interest-bearing liabilities increased one basis point to 0.26 percent. Average loan yields improved 10 basis points from the linked quarter to 3.96 percent, in part driven by favorable re-pricing and mix changes within the loan portfolio.
• On a year-over-year basis, the increase in net interest income was driven by a 12.5 percent or $1.1 billion increase in average loans as well as higher average loan yields, which increased 16 basis points from a year ago.
• For the fourth quarter 2016, average earning assets stood at $18.6 billion, an increase of 1.0 percent over the linked quarter and 6.8 percent over the fourth quarter 2015.

Noninterest income

• Fourth quarter 2016 noninterest income decreased $5.6 million, or 4.6 percent, on a linked quarter basis largely due to lower gains on available-for-sale securities and equity earnings on alternative investments, which decreased $3.0 million and $1.1 million, respectively.
• Noninterest income improved $3.7 million, or 3.3 percent, compared to the same quarter in 2015 driven by:
  • a $5.7 million increase in equity earnings on alternative investments from improvements in the valuation of the underlying Prairie Capital Management (PCM) fund investments;
  • a $1.5 million increase in 12b-1 income recorded in brokerage fees;
  • a $1.1 million increase in the fair value of company-owned life insurance, a $0.9 million increase in derivative income, and a $0.6 million gain on the sale of property recorded in other noninterest income;
  • a $1.5 million increase in trust and securities processing income related to the company’s private wealth business; and
  • partially offset by a decrease of $3.1 million, in advisory fee income from the Scout Funds recorded in trust and securities processing income and a $1.2 million decrease in bankcard fees driven by higher retail and commercial card program rewards and rebates expense.

Summary of Noninterest expense									UMB Financial Corporation
(unaudited, dollars in thousands)
			Q4			Q3			Q4			CQ vs.				CQ vs.
			2016			2016			2015			LQ				PY
Salaries and employee benefits		$	107,538		$	109,369		$	103,617		$	(1,831	)		$	3,921
Occupancy, net			11,421			11,394			11,791			27				(370	)
Equipment			17,726			16,231			16,723			1,495				1,003
Supplies and services			4,788			4,624			4,280			164				508
Marketing and business development			6,256			5,332			6,816			924				(560	)
Processing fees			11,045			11,264			13,096			(219	)			(2,051	)
Legal and consulting			7,056			4,450			7,447			2,606				(391	)
Bankcard			4,558			5,015			5,301			(457	)			(743	)
Amortization of other intangible assets			2,928			2,992			3,283			(64	)			(355	)
Regulatory fees			3,687			3,370			3,320			317				367
Other			9,321			5,742			6,406			3,579				2,915
Total noninterest expense		$	186,324		$	179,783		$	182,080		$	6,541			$	4,244

Noninterest expense

• 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 $182.6 million for the fourth quarter 2016, an increase of $4.5 million, or 2.5 percent, compared to the linked quarter, and $7.7 million, or 4.4 percent, compared to the fourth quarter 2015.
• On a linked quarter GAAP basis, the $6.5 million, or 3.6 percent, increase in noninterest expense was driven by:
  • a $2.7 million non-recurring fee paid for marketing agent termination costs within the company’s institutional investment management business and $0.7 million in operational losses within the bank segment, both of which were recorded in other noninterest expense;
  • higher legal and consulting expenses driven by technology-related consulting services and year-end billings from professional services firms;
  • higher equipment expense for computer and hardware costs related to investments for regulatory requirements, cyber security, and the ongoing modernization of the company’s core systems;
  • an increase in $0.9 million of bonus and commission expense driven, in part, by higher one- and three-year performance-related incentives in the company’s institutional management business; and
  • partially offset by a $2.7 million decrease in salaries and employee benefits expense due to lower employee headcount and decreased benefits expense.
• The increase in noninterest expense of $4.2 million, or 2.3 percent, compared to the fourth quarter 2015 was primarily driven by:
  • a $2.7 million non-recurring fee paid for marketing agent termination costs within the company’s institutional investment management business recorded in other noninterest expense;
  • increased bonus and commission expense due to improved company performance;
  • higher equipment expense for computer and hardware costs related to investments for regulatory requirements, cyber security, and the ongoing modernization of the company’s core systems; and
  • partially offset by decreased processing fees paid to distributors of the Scout Funds.

Income Taxes

• The company’s full year effective tax rate as of Dec. 31, 2016 decreased to 23.3 percent, as compared to 27.1 percent for full year Dec. 31, 2015. The decrease is primarily attributable to an increase in federal tax credits and a larger portion of income earned from excludable life insurance policy gains.

Balance Sheet

• Average total assets for the fourth quarter 2016 were $19.9 billion compared to $18.8 billion for the same period in 2015, an increase of $1.2 billion, or 6.2 percent.

Summary of average loans and leases											UMB Financial Corporation
(unaudited, dollars in thousands)
			Q4			Q3			Q4			CQ vs.			CQ vs.
			2016			2016			2015			LQ			PY
Averages:
Commercial		$	4,369,173		$	4,441,790		$	4,101,204		$	(72,617	)	$	267,969
Asset based loans			231,035			228,310			228,709			2,725			2,326
Factoring loans			110,866			101,731			93,535			9,135			17,331
Commercial credit card			150,630			166,617			125,361			(15,987	)		25,269
Real estate - construction			674,367			591,584			393,251			82,783			281,116
Real estate - commercial			3,089,946			2,976,666			2,573,135			113,280			516,811
Real estate - residential			553,770			505,721			478,653			48,049			75,117
Real estate - HELOC			713,528			735,527			725,640			(21,999	)		(12,112	)
Consumer credit card			271,909			262,937			303,887			8,972			(31,978	)
Consumer other			146,779			137,949			135,378			8,830			11,401
Leases			34,020			32,987			41,208			1,033			(7,188	)
Total loans		$	10,346,023		$	10,181,819		$	9,199,961		$	164,204		$	1,146,062

• Average loans for the fourth quarter 2016, increased 1.6 percent, on a linked-quarter basis, and 12.5 percent, compared to fourth quarter 2015.

Summary of average securities											UMB Financial Corporation
(unaudited, dollars in thousands)
			Q4			Q3			Q4			CQ vs.				CQ vs.
			2016			2016			2015			LQ				PY
Securities available for sale:
U.S. Treasury		$	182,891		$	340,144		$	351,191		$	(157,253	)		$	(168,300	)
U.S. Agencies			248,329			369,022			682,418			(120,693	)			(434,089	)
Mortgage-backed			3,586,040			3,512,905			3,444,351			73,135				141,689
State and political subdivisions			2,362,178			2,314,875			2,117,875			47,303				244,303
Corporates			67,100			77,645			80,316			(10,545	)			(13,216	)
Total securities available for sale			6,446,538			6,614,591			6,676,151			(168,053	)			(229,613	)
Securities held to maturity:
State and political subdivisions			1,073,509			927,875			631,127			145,634				442,382
Trading securities			50,925			51,280			27,439			(355	)			23,486
Other securities			66,567			65,986			66,954			581				(387	)
Total securities		$	7,637,539		$	7,659,732		$	7,401,671		$	(22,193	)		$	235,868

• 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 average deposits														UMB Financial Corporation
(unaudited, dollars in thousands)
			Q4				Q3				Q4				CQ vs.				CQ vs.
			2016				2016				2015				LQ				PY
Deposits:
Noninterest-bearing demand		$	6,193,787			$	5,690,838			$	6,734,309			$	502,949			$	(540,522	)
Interest-bearing demand and savings			8,439,920				8,276,491				7,285,061				163,429				1,154,859
Time deposits			1,112,781				1,154,762				1,243,147				(41,981	)			(130,366	)
Total deposits		$	15,746,488			$	15,122,091				15,262,517				624,397			$	483,971
Non-interest bearing deposits as % of total			39.3	%			37.6	%			44.1	%

• The cost of interest-bearing liabilities for the fourth quarter 2016 was 26 basis points, and total cost of funds including noninterest-bearing deposits was 13 basis points.

Full Year 2016 Financial Discussion
Year-to-date results summary						UMB Financial Corporation
(unaudited, dollars in thousands)
									CY vs.
As of and for the years-ended December 31,			2016			2015			PY
Earnings - GAAP
Net interest income		$	495,323		$	412,067		$	83,256
Noninterest income			476,075			466,454			9,621
Noninterest expense			731,894			703,736			28,158
Net income			158,801			116,073			42,728
Average Balances
Loans		$	9,992,874		$	8,425,107		$	1,567,767
Total earnings assets			18,256,621			16,496,213			1,760,408
Total assets			19,592,685			17,786,442			1,806,243
Deposits			15,338,741			14,078,290			1,260,451
Total equity			1,983,749			1,805,856			177,893

• The 20.2 percent year-over-year increase in net interest income was driven by a volume variance of $63.0 million and a rate variance of $20.2 million. In 2016, average loan balances increased $1.6 billion and average loan yields increased 21 basis points.
• Full year noninterest income increased $9.6 million, or 2.1 percent, due to:
  • a $14.9 million increase in equity earnings on alternative investments from improvements in the valuation of the underlying PCM fund investments;
  • a $7.8 million increase in bank-owned and company-owned life insurance income recorded in other noninterest income;
  • a $5.3 million increase in 12b-1 income recorded in brokerage fees; and
  • partially offset by a decrease in trust and securities processing income primarily due to a $22.9 million, or 40.9 percent, decrease in advisory fee income from the Scout Funds.
• Full year noninterest expense increased 28.2 million, or 4.0 percent, primarily due to increases in bonus and commission expense of $11.4 million, salary expense of $9.1 million, and deferred compensation plan fair-value adjustments of $5.1 million.
• 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 $719.9 million for full-year 2016, an increase of $27.6 million, or 4.0 percent, compared to the full-year 2015.

Capital information						UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
		December 31,				September 30,				December 31,
		2016				2016				2015
Total equity		$	1,962,384			$	2,024,628			$	1,893,694
Book value per common share			39.51				40.86				38.34
Regulatory capital:
Common equity Tier 1 capital		$	1,789,581			$	1,749,738			$	1,664,815
Tier 1 capital			1,789,581				1,749,738				1,681,222
Total capital			1,951,078				1,909,583				1,814,705
Regulatory capital ratios:
Common equity Tier 1 capital ratio			11.76	%			11.75	%			11.74	%
Tier 1 risk-based capital ratio			11.76				11.75				11.86
Total risk-based capital ratio			12.82				12.82				12.80
Tier 1 leverage ratio			9.09				8.99				9.08

Credit quality													UMB Financial Corporation
(unaudited, dollars in thousands)
		Q4				Q3				Q2				Q1				Q4
		2016				2016				2016				2016				2015
Net charge-offs (recoveries) - Commercial loans		$	1,127			$	5,538			$	(59	)		$	2,586			$	178
Net charge-offs (recoveries) - Real estate loans			3,373				(67	)			1,164				1,301				(50	)
Net charge-offs - Consumer credit card loans			1,692				1,658				1,575				1,781				1,628
Net charge-offs - Consumer other loans			63				133				52				77				130
Net charge-offs - Total loans		$	6,255			$	7,262			$	2,732			$	5,745			$	1,886
Net loan charge-offs as a % of total average loans			0.24	%			0.28	%			0.11	%			0.24	%			0.08	%
Loans over 90 days past due		$	3,365			$	2,678			$	4,700			$	3,334			$	7,324
Loans over 90 days past due as a % of total loans			0.03	%			0.03	%			0.05	%			0.03	%			0.08	%
Nonaccrual and restructured loans		$	70,259			$	79,607			$	58,423			$	54,933			$	61,152
Nonaccrual and restructured loans as a % of total loans			0.67	%			0.77	%			0.58	%			0.57	%			0.65	%
Provision for loan losses		$	7,500			$	13,000			$	7,000			$	5,000			$	5,000

• Nonperforming loans, defined as restructured loans on nonaccrual and all other nonaccrual loans, decreased $9.4 million from the linked quarter driven primarily due to the sale of one large commercial credit that migrated to nonperforming status last quarter.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors declared a $0.255 per share quarterly cash dividend, payable on April 3, 2017, to shareholders of record at the close of business on March 10, 2017.

Conference Call

The company plans to host a conference call to discuss its fourth quarter and year-end 2016 earnings results on Wednesday, Jan. 25, 2017, 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 & Year-End 2016 Conference Call

A replay of the conference call may be heard through Feb. 8, 2017, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10098797. 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 about net operating income, operating earnings per share - diluted (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 nearest 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 fair value adjustments, acquisition- and severance-related items and one-time marketing agent termination costs 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 on contingent consideration for the acquisitions of Prairie Capital Management, LLC (PCM) and Reams Asset Management Company (Reams), (ii) expenses related to acquisitions (iii) non-acquisition related severance expense (iv) expenses related to the buy-out and termination of certain marketing and referral agreements in the company’s institutional investment management business, and (v) 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 GAAP financial measures as it has an unusually large impact on the company’s financial statements.

Operating EPS (basic and diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described in clauses (i)-(v) above 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, net of amortization of other intangibles, divided by the company’s total revenue (tax equivalent net interest income plus noninterest income less gains on sales of securities available for sale, net).

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 reduced regulation, tax reform and our ability to capitalize on changes. 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 U.S. Securities and Exchange Commission (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.

Consolidated Balance Sheets				UMB Financial Corporation
(dollars in thousands)
				December 31,
Assets				2016					2015
				(unaudited)					(audited)
Loans			$	10,540,383				$	9,430,761
Allowance for loan losses				(91,649	)				(81,143	)
Net loans				10,448,734					9,349,618
Loans held for sale				5,279					589
Investment securities:
Available for sale				6,466,334					6,806,949
Held to maturity				1,115,932					667,106
Trading securities				39,536					29,617
Other securities				68,306					65,198
Total investment securities				7,690,108					7,568,870
Federal funds and resell agreements				324,327					173,627
Interest-bearing due from banks				715,823					522,877
Cash and due from banks				422,117					458,217
Premises and equipment, net				289,007					281,471
Accrued income				99,045					90,127
Goodwill				228,396					228,346
Other intangibles, net				34,491					46,782
Other assets				425,205					373,721
Total assets			$	20,682,532				$	19,094,245
Liabilities
Deposits:
Noninterest-bearing demand			$	6,654,584				$	6,306,895
Interest-bearing demand and savings				8,780,309					7,529,972
Time deposits under $250,000				613,589					771,973
Time deposits of $250,000 or more				522,132					483,912
Total deposits				16,570,614					15,092,752
Federal funds and repurchase agreements				1,856,937					1,818,062
Short-term debt				-					5,009
Long-term debt				76,772					86,070
Accrued expenses and taxes				172,967					161,245
Other liabilities				42,858					37,413
Total liabilities				18,720,148					17,200,551
Shareholders' Equity
Common stock				55,057					55,057
Capital surplus				1,033,419					1,019,889
Retained earnings				1,142,887					1,033,990
Accumulated other comprehensive loss, net				(57,542	)				(3,718	)
Treasury stock				(211,437	)				(211,524	)
Total shareholders' equity				1,962,384					1,893,694
Total liabilities and shareholders' equity			$	20,682,532				$	19,094,245

Consolidated Statements of Income													UMB Financial Corporation
(dollars in thousands except share and per share data)
				Three Months Ended									Year Ended
				December 31,									December 31,
Interest Income				2016				2015					2016				2015
				(unaudited)				(unaudited)					(unaudited)				(audited)
Loans			$	102,961			$	88,011				$	386,274			$	308,325
Securities:
Taxable interest				18,339				18,858					73,560				75,327
Tax-exempt interest				16,139				11,756					57,516				43,598
Total securities income				34,478				30,614					131,076				118,925
Federal funds and resell agreements				769				320					2,708				697
Interest-bearing due from banks				569				595					2,341				2,356
Trading securities				233				75					632				378
Total interest income				139,010				119,615					523,031				430,681
Interest Expense
Deposits				5,119				3,836					17,936				14,269
Federal funds and repurchase agreements				1,774				396					6,524				1,785
Other				661				929					3,248				2,560
Total interest expense				7,554				5,161					27,708				18,614
Net interest income				131,456				114,454					495,323				412,067
Provision for loan losses				7,500				5,000					32,500				15,500
Net interest income after provision for loan losses				123,956				109,454					462,823				396,567
Noninterest Income
Trust and securities processing				60,431				62,194					239,879				262,056
Trading and investment banking				5,040				5,559					21,422				20,218
Service charges on deposits				20,949				21,631					86,662				86,460
Insurance fees and commissions				833				894					4,188				2,530
Brokerage fees				4,674				3,005					17,833				11,753
Bankcard fees				16,113				17,369					68,749				69,211
Gains on sale of securities available for sale, net				-				1,998					8,509				10,402
Equity earnings (loss) on alternative investments				504				(5,189	)				2,695				(12,188	)
Other				7,786				5,138					26,138				16,012
Total noninterest income				116,330				112,599					476,075				466,454
Noninterest Expense
Salaries and employee benefits				107,538				103,617					432,754				406,472
Occupancy, net				11,421				11,791					44,926				43,861
Equipment				17,726				16,723					67,271				63,533
Supplies, postage and telephone				4,788				4,280					19,080				18,579
Marketing and business development				6,256				6,816					22,342				23,730
Processing fees				11,045				13,096					45,235				51,328
Legal and consulting				7,056				7,447					21,242				26,390
Bankcard				4,558				5,301					20,757				20,288
Amortization of other intangibles				2,928				3,283					12,291				12,090
Regulatory fees				3,687				3,320					14,178				12,125
Other				9,321				6,406					31,818				25,340
Total noninterest expense				186,324				182,080					731,894				703,736
Income before income taxes				53,962				39,973					207,004				159,285
Income tax provision				11,028				10,330					48,203				43,212
Net income			$	42,934			$	29,643				$	158,801			$	116,073
Per Share Data
Net income - basic			$	0.88			$	0.61				$	3.25			$	2.46
Net income – diluted				0.87				0.60					3.22				2.44
Dividends				0.255				0.245					0.990				0.950
Weighted average shares outstanding				48,935,216				48,630,195					48,828,313				47,126,252
Weighted average shares outstanding – diluted				49,616,121				49,066,566					49,277,055				47,579,334

Consolidated Statements of Comprehensive (Loss) Income			UMB Financial Corporation
(dollars in thousands)
			Three Months EndedDecember 31,										Year EndedDecember 31,
			2016					2015					2016					2015
				(unaudited)					(unaudited)						(unaudited)					(audited)
Net Income			$	42,934				$	29,643				$		158,801			$		116,073
Other comprehensive loss, net of tax:
Unrealized gains (losses) on securities:
Change in unrealized holding losses, net				(168,433	)				(46,682	)					(77,794	)				(13,393	)
Less: Reclassifications adjustment for gains included in net income				-					(1,998	)					(8,509	)				(10,402	)
Change in unrealized losses on securities during the period				(168,433	)				(48,680	)					(86,303	)				(23,795	)
Change in unrealized gains (losses) on derivatives				7,161					(10	)					(516	)				(10	)
Income tax benefit				61,218					18,442						32,995					9,081
Other comprehensive loss				(100,054	)				(30,248	)					(53,824	)				(14,724	)
Comprehensive (loss) income			$	(57,120	)			$	(605	)			$		104,977			$		101,349

Consolidated Statements of Shareholders' Equity																	UMB Financial Corporation
(dollars in thousands, except per share data)
																	Accumulated
																	Other
			Common				Capital					Retained					Comprehensive					Treasury
(audited)			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			-				-					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			-				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
(unaudited)
Balance - January 1, 2016		$	55,057			$	1,019,889				$	1,033,990				$	(3,718	)			$	(211,524	)			$	1,893,694
Total comprehensive income			-				-					158,801					(53,824	)				-					104,977
Cash dividends ($0.99 per share)			-				-					(49,048	)				-					-					(49,048	)
Purchase of treasury stock			-				-					-					-					(16,367	)				(16,367	)
Issuance of equity awards			-				(3,011	)				-					-					3,440					429
Recognition of equity based compensation			-				11,306					-					-					-					11,306
Sale of treasury stock			-				480					-					-					616					1,096
Exercise of stock options			-				3,417					-					-					12,398					15,815
Cumulative effect adjustment			-				1,338					(856	)				-					-					482
Balance – December 31, 2016		$	55,057			$	1,033,419				$	1,142,887				$	(57,542	)			$	(211,437	)			$	1,962,384

Average Balances / Yields and Rates									UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)				Three Months Ended December 31,
				2016									2015
				Average				Average					Average				Average
Assets				Balance				Yield/Rate					Balance				Yield/Rate
Loans, net of unearned interest			$	10,346,023				3.96	%			$	9,199,961				3.80	%
Securities:
Taxable				4,232,002				1.72					4,704,102				1.59
Tax-exempt				3,354,612				2.94					2,670,130				2.71
Total securities				7,586,614				2.26					7,374,232				2.00
Federal funds and resell agreements				208,581				1.47					117,005				1.09
Interest-bearing due from banks				365,512				0.62					662,036				0.36
Trading securities				50,925				2.18					27,439				1.29
Total earning assets				18,557,655				3.17					17,380,673				2.88
Allowance for loan losses				(91,833	)								(78,906	)
Other assets				1,454,616									1,453,790
Total assets			$	19,920,438								$	18,755,557
Liabilities and Shareholders' Equity
Interest-bearing deposits			$	9,552,701				0.21	%			$	8,528,207				0.18	%
Federal funds and repurchase agreements				1,899,196				0.37					1,305,939				0.12
Borrowed funds				76,831				3.42					88,862				4.15
Total interest-bearing liabilities				11,528,728				0.26					9,923,008				0.21
Noninterest-bearing demand deposits				6,193,787									6,734,309
Other liabilities				206,576									185,586
Shareholders' equity				1,991,347									1,912,654
Total liabilities and shareholders' equity			$	19,920,438								$	18,755,557
Net interest spread								2.91	%								2.67	%
Net interest margin								3.00	%								2.76	%

Average Balances / Yields and Rates													UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)				Year Ended December 31,
				2016												2015
				Average				Average								Average				Average
Assets				Balance				Yield/Rate								Balance				Yield/Rate
Loans, net of unearned interest			$	9,992,874				3.87		%			$			8,425,107				3.66		%
Securities:
Taxable				4,545,013				1.62								4,823,710				1.56
Tax-exempt				3,077,562				2.87								2,473,811				2.72
Total securities				7,622,575				2.12								7,297,521				1.95
Federal funds and resell agreements				188,572				1.44								76,108				0.92
Interest-bearing due from banks				410,163				0.57								664,752				0.35
Trading securities				42,437				1.85								32,725				1.46
Total earning assets				18,256,621				3.03								16,496,213				2.75
Allowance for loan losses				(85,201	)											(77,899	)
Other assets				1,421,265												1,368,128
Total assets			$	19,592,685									$			17,786,442
Liabilities and Shareholders' Equity
Interest-bearing deposits			$	9,432,720				0.19		%			$			8,150,588				0.18		%
Federal funds and repurchase agreements				2,005,631				0.33								1,590,776				0.11
Borrowed funds				85,658				3.79								59,174				4.33
Total interest-bearing liabilities				11,524,009				0.24								9,800,538				0.19
Noninterest-bearing demand deposits				5,906,021												5,927,702
Other liabilities				178,906												252,346
Shareholders' equity				1,983,749												1,805,856
Total liabilities and shareholders' equity			$	19,592,685									$			17,786,442
Net interest spread								2.79		%										2.56		%
Net interest margin								2.88												2.64

Business Segment Information									UMB Financial Corporation
(unaudited, dollars in thousands)
			Three Months Ended December 31, 2016
			Bank				InstitutionalInvestmentManagement					Asset Servicing				Total
Net interest income			$	128,869			$	-				$	2,587			$	131,456
Provision for loan losses				7,500				-					-				7,500
Noninterest income				75,393				18,858					22,079				116,330
Noninterest expense				145,959				20,448					19,917				186,324
Income (loss) before taxes				50,803				(1,590)					4,749				53,962
Income tax expense (benefit)				10,145				(102)					985				11,028
Net income (loss)			$	40,658			$	(1,488)				$	3,764			$	42,934
Average assets			$	18,821,000			$	60,000				$	1,039,000			$	19,920,000
			Three Months Ended December 31, 2015
			Bank				InstitutionalInvestmentManagement					Asset Servicing				Total
Net interest income			$	112,647			$	-				$	1,807			$	114,454
Provision for loan losses				5,000				-					-				5,000
Noninterest income				69,202				20,882					22,515				112,599
Noninterest expense				144,525				18,690					18,865				182,080
Income before taxes				32,324				2,192					5,457				39,973
Income tax expense				8,346				573					1,411				10,330
Net income			$	23,978			$	1,619				$	4,046			$	29,643
Average assets			$	17,660,000			$	65,000				$	1,031,000			$	18,756,000

			Year Ended December 31, 2016
			Bank				InstitutionalInvestmentManagement				Asset Servicing				Total
Net interest income			$	484,716			$	-			$	10,607			$	495,323
Provision for loan losses				32,500				-				-				32,500
Noninterest income				311,309				75,822				88,944				476,075
Noninterest expense				577,683				73,442				80,769				731,894
Income before taxes				185,842				2,380				18,782				207,004
Income tax expense				43,039				798				4,366				48,203
Net income			$	142,803			$	1,582			$	14,416			$	158,801
Average assets			$	18,314,000			$	61,000			$	1,218,000			$	19,593,000
			Year Ended December 31, 2015
			Bank				InstitutionalInvestmentManagement				Asset Servicing				Total
Net interest income			$	406,884			$	-			$	5,183			$	412,067
Provision for loan losses				15,500				-				-				15,500
Noninterest income				279,897				95,064				91,493				466,454
Noninterest expense				552,514				71,498				79,724				703,736
Income before taxes				118,767				23,566				16,952				159,285
Income tax expense				32,208				6,469				4,535				43,212
Net income			$	86,559			$	17,097			$	12,417			$	116,073
Average assets			$	16,732,000			$	69,000			$	985,000			$	17,786,000

Non-GAAP Financial Measures											UMB Financial Corporation
Net operating income and operating earnings per share non-GAAP reconciliations:
(unaudited, dollars in thousands, except share and per share data)
				Three Months Ended							Year Ended
				December 31,							December 31,
				2016				2015			2016			2015
Net income (GAAP)			$	42,934			$	29,643		$	158,801		$	116,073
Adjustments:
Fair value adjustments on contingent consideration (i)				-				469			67			(3,008)
Acquisition expenses (ii)				547				3,427			5,020			9,833
Non-acquisition severance expense (iii)				415				3,278			4,177			4,561
Marketing agent termination costs (iv)				2,725				-			2,725			-
Tax-impact of adjustments (v)				(1,327)				(2,583)			(4,316)			(4,099)
Total Non-GAAP adjustments (net of tax)				2,360				4,591			7,673			7,287
Net operating income (Non-GAAP)			$	45,294			$	34,234		$	166,474		$	123,360
Earnings per share as reported - diluted			$	0.87			$	0.60		$	3.22		$	2.44
Fair value adjustments on contingent consideration (i)				-				0.01			-			(0.06)
Acquisition expenses (ii)				0.01				0.07			0.11			0.20
Non-acquisition severance expense (iii)				0.01				0.07			0.08			0.10
Marketing agent termination costs (iv)				0.05				-			0.06			-
Tax-impact of adjustments (v)				(0.03)				(0.05)			(0.09)			(0.09)
Operating earnings per share - diluted			$	0.91			$	0.70		$	3.38		$	2.59
GAAP
Return on average assets				0.86			%	0.63		%	0.81		%	0.65	%
Return on average equity				8.58				6.15			8.01			6.43
Non-GAAP
Operating return on average assets				0.90			%	0.72		%	0.85		%	0.69	%
Operating return on average equity				9.05				7.10			8.39			6.83

Operating noninterest expense and operating efficiency ratio non-GAAP reconciliations:										UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)
			Three Months Ended							Year Ended
			December 31,							December 31,
				2016			2015			2016			2015
Noninterest expense			$	186,324		$	182,080		$	731,894		$	703,736
Adjustments to arrive at operating noninterest expense (pre-tax):
Fair value adjustments on contingent consideration (i)				-			469			67			(3,008)
Acquisition expenses (ii)				547			3,427			5,020			9,833
Non-acquisition severance expense (iii)				415			3,278			4,177			4,561
Marketing agent termination costs (iv)				2,725			-			2,725			-
Total Non-GAAP adjustments (pre-tax)				3,687			7,174			11,989			11,386
Operating noninterest expense			$	182,637		$	174,906		$	719,905		$	692,350
Noninterest expense			$	186,324		$	182,080		$	731,894		$	703,736
Less: Amortization of other intangibles				2,928			3,283			12,291			12,090
Noninterest expense, net of amortization of other intangibles (numerator A)			$	183,396		$	178,797		$	719,603		$	691,646
Operating noninterest expense			$	182,637		$	174,906		$	719,905		$	692,350
Less: Amortization of other intangibles				2,928			3,283			12,291			12,090
Operating expense, net of amortization of other intangibles (numerator B)			$	179,709		$	171,623		$	707,614		$	680,260
Net interest income (tax equivalent) (vi)			$	140,147		$	120,966		$	526,337		$	435,852
Noninterest income				116,330			112,599			476,075			466,454
Less: Gains on sales of securities available for sale, net				-			1,998			8,509			10,402
Total (denominator A)			$	256,477		$	231,567		$	993,903		$	891,904
Efficiency ratio (numerator A/denominator A)				71.51		%	77.21		%	72.40		%	77.55	%
Operating efficiency ratio (numerator B/denominator A)				70.07			74.11			71.20			76.27

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

(ii) Represents expenses related to the acquisition of 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) Represents expenses related to the buy-out and termination of certain marketing and referral agreements in the company’s institutional investment management business.

(v) Calculated using the company's marginal tax rate of 36%.

(vi) 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 $8.7 million and $6.5 million for the three months ended December 31, 2016 and 2015, respectively and $31.0 million and $23.8 million for the year ended December 31, 2016 and 2015, respectively.

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UMB Financial Corporation

Media Contact:

Rachael Crocker, 816-860-7775

or

Investor Relations Contact:

Kay Gregory, 816-860-7106

Source: UMB Financial Corporation