UMB Financial Corporation Reports Third Quarter 2017 Income from Continuing Operations of $48.9 Million, or $0.98 per diluted share
KANSAS CITY, Mo.--(BUSINESS WIRE)-- UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced income from continuing operations for the third quarter 2017 of $48.9 million or $0.98 per diluted share, compared to $44.8 million or $0.90 per diluted share in the second quarter 2017 (linked quarter) and $39.4 million or $0.80 per diluted share in the third quarter 2016. Results from continuing operations exclude the impact of the previously announced divestiture of Scout Investments, Inc., the company’s institutional investment management subsidiary. Reported GAAP income from continuing operations represents an increase of 9.2 percent on a linked-quarter basis and 24.0 percent compared to the third quarter 2016. For the nine months ended September 30, 2017, GAAP income from continuing operations was $135.6 million or $2.72 per diluted share, an increase of 23.0 percent compared to $110.2 million or $2.24 per diluted share for the nine month period ended September 30, 2016.
Net operating income from continuing operations, a non-GAAP financial measure which is reconciled to the nearest comparable GAAP measure later in this release, was $48.9 million or $0.98 per diluted share for the third quarter 2017, compared to $44.9 million or $0.90 per diluted share for the linked quarter and $40.1 million or $0.81 per diluted share for the third quarter 2016. These results represent an increase of 8.9 percent on a linked-quarter basis and an increase of 21.9 percent compared to the third quarter 2016. For the nine months ended September 30, 2017, net operating income from continuing operations was $136.2 million or $2.73 per diluted share, compared to $114.3 million or $2.32 per diluted share for the nine month period ended September 30, 2016.
| Summary of quarterly financial results | UMB Financial Corporation | ||||||||||||||
| (unaudited, dollars in thousands, except per share data) | |||||||||||||||
| Q3 | Q2 | Q3 | |||||||||||||
| 2017 | 2017 | 2016 | |||||||||||||
| Income from continuing operations |
$ |
48,872 |
$ |
44,771 |
$ |
39,422 |
|||||||||
| Income from discontinued operations-general operations (non-GAAP) | 3,372 | 2,586 | 2,850 | ||||||||||||
| Loss from discontinued operations-non-GAAP adjustments | (4,102 | ) | (4,536 | ) | (326 | ) | |||||||||
| (Loss) income from discontinued operations-total | (730 | ) | (1,950 | ) | 2,524 | ||||||||||
| Net income | 48,142 | 42,821 | 41,946 | ||||||||||||
| Earnings per share from continuing operations (diluted) | 0.98 | 0.90 | 0.80 | ||||||||||||
| Earnings per share from discontinued operations-general operations (non-GAAP) (diluted) | 0.07 | 0.05 | 0.06 | ||||||||||||
|
Losses per share from discontinued operations-non-GAAP adjustments (diluted) |
(0.08 | ) | (0.09 | ) | (0.01 | ) | |||||||||
|
(Losses) earnings per share from discontinued operations (diluted) |
(0.01 | ) | (0.04 | ) | 0.05 | ||||||||||
| Earnings per share (diluted) | 0.97 | 0.86 | 0.85 | ||||||||||||
|
GAAP - continuing operations |
|||||||||||||||
| Return on average assets |
0.95 |
% |
0.88 |
% |
0.80 |
% |
|||||||||
| Return on average equity | 9.17 | 8.69 | 7.76 | ||||||||||||
| Efficiency ratio | 67.25 | 68.30 | 69.91 | ||||||||||||
|
Non-GAAP - continuing operations |
|||||||||||||||
| Operating return on average assets |
0.96 |
% |
0.89 |
% |
0.81 |
% |
|||||||||
| Operating return on average equity | 9.18 | 8.72 | 7.90 | ||||||||||||
| Operating efficiency ratio | 67.22 | 68.19 | 69.43 | ||||||||||||
| Summary of year-to-date financial results | UMB Financial Corporation | |||||||||||
| (unaudited, dollars in thousands, except per share data) | September | September | ||||||||||
| YTD | YTD | |||||||||||
| 2017 | 2016 | |||||||||||
| Income from continuing operations |
$ |
135,619 |
$ |
110,234 |
||||||||
| Income from discontinued operations-general operations (non-GAAP) | 8,164 | 6,919 | ||||||||||
| Loss from discontinued operations-non-GAAP adjustments | (8,639 | ) | (1,286 | ) | ||||||||
| (Loss) income from discontinued operations-total | (475 | ) | 5,633 | |||||||||
| Net income | 135,144 | 115,867 | ||||||||||
| Earnings per share from continuing operations (diluted) | 2.72 | 2.24 | ||||||||||
| Earnings per share from discontinued operations-general operations (non-GAAP) (diluted) | 0.16 | 0.14 | ||||||||||
|
Losses per share from discontinued operations-non-GAAP adjustments (diluted) |
(0.17 | ) | (0.02 | ) | ||||||||
|
(Losses) earnings per share from discontinued operations (diluted) |
(0.01 | ) | 0.12 | |||||||||
| Earnings per share (diluted) | 2.71 | 2.36 | ||||||||||
|
GAAP - continuing operations |
||||||||||||
| Return on average assets |
0.89 |
% |
0.76 |
% |
||||||||
| Return on average equity | 8.82 | 7.43 | ||||||||||
| Efficiency ratio | 68.44 | 72.18 | ||||||||||
|
Non-GAAP - continuing operations |
||||||||||||
| Operating return on average assets |
0.90 |
% |
0.78 |
% |
||||||||
| Operating return on average equity | 8.85 | 7.70 | ||||||||||
| Operating efficiency ratio | 68.33 | 71.26 | ||||||||||
“Third quarter 2017 highlights included year-over-year improvement of 29 basis points in our net interest margin and solid positive operating leverage of 3.4 percent,” said Mariner Kemper, chairman and chief executive officer. “Revenue increased 7.4 percent while expenses increased 4.0 percent compared to the third quarter 2016. Our balance sheet growth was driven by continued momentum in our commercial real estate lending business and our national lending platforms, as well as a 32 percent increase in healthcare deposits compared to a year ago.”
Discussion of results from continuing operations
| Summary of revenue | UMB Financial Corporation | ||||||||||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||||||||||
| Q3 | Q2 | Q3 | CQ vs. | CQ vs. | |||||||||||||||||
| 2017 | 2017 | 2016 | LQ | PY | |||||||||||||||||
| Net interest income | $ | 140,858 | $ | 137,394 | $ | 124,765 | $ | 3,464 | $ | 16,093 | |||||||||||
| Noninterest income: | |||||||||||||||||||||
| Trust and securities processing | 45,060 | 44,811 | 41,812 | 249 | 3,248 | ||||||||||||||||
| Trading and investment banking | 4,453 | 6,173 | 6,114 | (1,720 | ) | (1,661 | ) | ||||||||||||||
| Service charges on deposit accounts | 21,510 | 22,731 | 21,832 | (1,221 | ) | (322 | ) | ||||||||||||||
| Insurance fees and commissions | 425 | 513 | 698 | (88 | ) | (273 | ) | ||||||||||||||
| Brokerage fees | 5,815 | 5,889 | 4,712 | (74 | ) | 1,103 | |||||||||||||||
| Bankcard fees | 17,427 | 20,234 | 17,086 | (2,807 | ) | 341 | |||||||||||||||
| Gains on sales of securities available for sale, net | 2,390 | 1,280 | 2,978 | 1,110 | (588 | ) | |||||||||||||||
| Equity (losses) earnings on alternative investments | (584 | ) | (195 | ) | 1,594 | (389 | ) | (2,178 | ) | ||||||||||||
| Other | 7,810 | 8,870 | 6,716 | (1,060 | ) | 1,094 | |||||||||||||||
| Total noninterest income | $ | 104,306 | $ | 110,306 | $ | 103,542 | $ | (6,000 | ) | $ | 764 | ||||||||||
| Total Revenue | $ | 245,164 | $ | 247,700 | $ | 228,307 | $ | (2,536 | ) | $ | 16,857 | ||||||||||
| Net interest margin |
3.16 |
% |
|
3.12 |
% |
|
2.87 |
% |
|
||||||||||||
| Total noninterest income as a % of total revenue | 42.55 | 44.53 | 45.35 | ||||||||||||||||||
Net interest income
- On a linked quarter basis, the increase in net interest income was driven by a four basis point improvement in net interest margin.
- Earning asset yields improved 11 basis points from the linked quarter driven by improved loan yields of 15 basis points. The cost of interest-bearing liabilities increased 10 basis points due to increased federal fund borrowing costs of 20 basis points coupled with a nine basis point increase in interest-bearing deposit rates.
- The cost of interest-bearing liabilities for the third quarter 2017 was 55 basis points, and total cost of funds, including noninterest-bearing deposits was 38 basis points.
- On a year-over-year basis, the increase in net interest income was driven by a 7.2 percent or $729.3 million increase in average loans as well as higher average loan yields, which increased 47 basis points from one year ago, primarily driven by higher interest rates and mix changes.
- For the third quarter 2017, average earning assets stood at $18.9 billion, which is flat compared to the linked quarter and an increase of 3.1 percent over the third quarter 2016.
Noninterest income
-
Third quarter 2017 noninterest income decreased $6.0 million, or 5.4
percent, on a linked quarter basis largely due to:
- a $0.9 million decrease in bond trading fees, and a $0.8 million decrease in market adjustments from the company’s seed investments in certain Scout Funds following the liquidation of such investments at the end of the second quarter of 2017;
- lower service charges on deposits driven by higher earnings credit rates;
- lower bankcard fees driven by a $2.7 million increase in retail and commercial card program rewards and rebates expense recorded;
- a decrease in other noninterest income of $1.1 million which was primarily due to a $1.0 million gain on the sale of a branch building recorded in the second quarter;
- which were partially offset by a $1.1 million increase in gains on sales of available-for-sale securities.
-
Noninterest income in the third quarter of 2017 improved $0.8 million,
or 0.7 percent, compared to the same quarter in 2016 primarily driven
by:
- a $1.7 million increase in fund servicing revenue, a $1.0 million increase in wealth management revenue, and a $0.5 million increase in corporate trust revenue all recorded in trust and securities processing;
- which were partially offset by a $2.2 million decrease in equity earnings on alternative investments and $1.7 million decrease in trading and investment banking revenue, driven by a $1.2 million decrease in market adjustments from the company’s seed investments in certain Scout Funds and a $0.5 million decrease in bond trading fees.
Noninterest expense
|
Summary of noninterest expense |
UMB Financial Corporation | |||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||
| Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||
| 2017 | 2017 | 2016 | LQ | PY | ||||||||||||||
| Salaries and employee benefits | $ | 99,749 | $ | 102,773 | $ | 99,403 | $ | (3,024 | ) | $ | 346 | |||||||
| Occupancy, net | 11,285 | 11,061 | 11,224 | 224 | 61 | |||||||||||||
| Equipment | 17,880 | 17,956 | 16,029 | (76 | ) | 1,851 | ||||||||||||
| Supplies and services | 4,076 | 4,792 | 4,472 | (716 | ) | (396 | ) | |||||||||||
| Marketing and business development | 5,056 | 5,732 | 5,090 | (676 | ) | (34 | ) | |||||||||||
| Processing fees | 11,151 | 10,743 | 9,084 | 408 | 2,067 | |||||||||||||
| Legal and consulting | 5,844 | 6,467 | 4,437 | (623 | ) | 1,407 | ||||||||||||
| Bankcard | 5,130 | 5,033 | 5,015 | 97 | 115 | |||||||||||||
| Amortization of other intangible assets | 1,715 | 1,924 | 2,088 | (209 | ) | (373 | ) | |||||||||||
| Regulatory fees | 3,798 | 4,071 | 3,370 | (273 | ) | 428 | ||||||||||||
| Other | 6,137 | 6,387 | 4,999 | (250 | ) | 1,138 | ||||||||||||
| Total noninterest expense | $ | 171,821 | $ | 176,939 | $ | 165,211 | $ | (5,118 | ) | $ | 6,610 | |||||||
- GAAP noninterest expense for the third quarter of 2017 was $171.8 million and decreased $5.1 million, or 2.9 percent, from the linked quarter.
- On a non-GAAP basis, operating noninterest expense (as reconciled later in this release) was $171.7 million for the third quarter 2017, a decrease of $4.9 million, or 2.8 percent, compared to the linked quarter, and an increase of $7.6 million, or 4.7 percent, compared to the third quarter 2016.
-
The linked quarter decrease in operating noninterest expense was
driven by:
- a $3.0 million decrease in salaries and employee benefits expense driven by a $1.6 million decrease in bonus and commission expense, and a $1.6 million decrease in employee benefits partially due to lower employment taxes and medical expense;
- a $0.7 million decline in both supplies and services expense and marketing and business development expenses.
-
The year-over-year increase in GAAP noninterest expense of $6.6
million, or 4.0 percent, was primarily driven by:
- a $1.9 million increase in 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;
- higher processing expenses in healthcare, fund servicing, and institutional businesses and higher legal and consulting expense;
- a $0.7 million increase in off-balance sheet commitment reserves and $0.5 million increase in losses on sales of assets, both recorded in other noninterest expense.
Income Taxes
- For the nine months ended September 30, 2017, the company’s effective tax rate decreased to 21.4 percent compared to 23.6 percent for the same period a year earlier. The decrease is primarily attributable to a larger portion of income being earned from tax-exempt municipal securities and an increase in excess tax benefits associated with stock compensation recorded through the third quarter of 2017.
Balance Sheet
- Average total assets for the third quarter 2017 were $20.3 billion, unchanged from the linked quarter, and up from $19.7 billion for the same period in 2016.
| Summary of average loans and leases - QTD Average | UMB Financial Corporation | |||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||
| Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||
| 2017 | 2017 | 2016 | LQ | PY | ||||||||||||||
| Commercial | $ | 4,539,302 | $ | 4,597,866 | $ | 4,441,790 | $ | (58,564 | ) | $ | 97,512 | |||||||
| Asset-based loans | 278,479 | 242,719 | 228,310 | 35,760 | 50,169 | |||||||||||||
| Factoring loans | 173,876 | 155,528 | 101,731 | 18,348 | 72,145 | |||||||||||||
| Commercial credit card | 174,892 | 157,214 | 166,617 | 17,678 | 8,275 | |||||||||||||
| Real estate - construction | 782,898 | 802,350 | 591,584 | (19,452 | ) | 191,314 | ||||||||||||
| Real estate - commercial | 3,284,871 | 3,152,317 | 2,976,666 | 132,554 | 308,205 | |||||||||||||
| Real estate - residential | 603,865 | 592,253 | 505,721 | 11,612 | 98,144 | |||||||||||||
| Real estate - HELOC | 668,340 | 682,889 | 735,527 | (14,549 | ) | (67,187 | ) | |||||||||||
| Consumer credit card | 239,529 | 254,552 | 262,937 | (15,023 | ) | (23,408 | ) | |||||||||||
| Consumer other | 140,344 | 139,120 | 137,949 | 1,224 | 2,395 | |||||||||||||
| Leases | 24,758 | 35,250 | 32,987 | (10,492 | ) | (8,229 | ) | |||||||||||
| Total loans | $ | 10,911,154 | $ | 10,812,058 | $ | 10,181,819 | $ | 99,096 | $ | 729,335 | ||||||||
- Average loans for the third quarter 2017 increased 0.9 percent, on a linked-quarter basis, and 7.2 percent, compared to third quarter 2016.
| Summary of average securities - QTD Average | UMB Financial Corporation | |||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||
| Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||
| 2017 | 2017 | 2016 | LQ | PY | ||||||||||||||
| Securities available for sale: | ||||||||||||||||||
| U.S. Treasury | $ | 47,216 | $ | 63,945 | $ | 340,144 | $ | (16,729 | ) | $ | (292,928 | ) | ||||||
| U.S. Agencies | 22,743 | 48,914 | 369,022 | (26,171 | ) | (346,279 | ) | |||||||||||
| Mortgage-backed | 3,564,974 | 3,677,797 | 3,512,905 | (112,823 | ) | 52,069 | ||||||||||||
| State and political subdivisions | 2,536,281 | 2,478,358 | 2,314,875 | 57,923 | 221,406 | |||||||||||||
| Corporates | 21,848 | 60,508 | 77,646 | (38,660 | ) | (55,798 | ) | |||||||||||
| Total securities available for sale | 6,193,062 | 6,329,522 | 6,614,592 | (136,460 | ) | (421,530 | ) | |||||||||||
| Securities held to maturity: | ||||||||||||||||||
| State and political subdivisions | 1,283,258 | 1,242,519 | 927,875 | 40,739 | 355,383 | |||||||||||||
| Trading securities | 49,396 | 75,075 | 51,280 | (25,679 | ) | (1,884 | ) | |||||||||||
| Other securities | 64,294 | 66,199 | 65,984 | (1,905 | ) | (1,690 | ) | |||||||||||
| Total securities | $ | 7,590,010 | $ | 7,713,315 | $ | 7,659,731 | $ | (123,305 | ) | $ | (69,721 | ) | ||||||
- The growth in the company’s held to maturity securities portfolio is due to increased activity in private placement bonds, primarily used to refinance existing revenue bonds in the healthcare and education sectors.
- Total securities available for sale decreased 2.2 percent on a linked-quarter basis and 6.4 percent compared to the third quarter 2016, driven by the ongoing reinvestment of cash flows from such securities to fund growth in the private placement bond and loan portfolio.
| Summary of average deposits - QTD Average | UMB Financial Corporation | |||||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||||
| Q3 | Q2 | Q3 | CQ vs. | CQ vs. | ||||||||||||||||
| 2017 | 2017 | 2016 | LQ | PY | ||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 5,728,145 | $ | 5,837,602 | $ | 5,690,838 | $ | (109,457 | ) | $ | 37,307 | |||||||||
| Interest-bearing demand and savings | 8,789,217 | 8,475,782 | 8,276,491 | 313,435 | 512,726 | |||||||||||||||
| Time deposits | 1,162,383 | 1,258,384 | 1,154,762 | (96,001 | ) | 7,621 | ||||||||||||||
| Total deposits | $ | 15,679,745 | $ | 15,571,768 | $ | 15,122,091 | $ | 107,977 | $ | 557,654 | ||||||||||
| Non-interest bearing deposits as % of total |
36.53 |
% |
|
37.49 |
% |
|
37.63 |
% |
|
|||||||||||
- Average noninterest-bearing demand deposits were relatively unchanged compared to the third quarter of 2016, but declined 1.9 percent on a linked-quarter basis primarily due to institutional customers deploying more funds in the markets.
Capital
| Capital information | UMB Financial Corporation | ||||||||||||||
| (unaudited, dollars in thousands, except per share data) | |||||||||||||||
| Q3 | Q2 | Q3 | |||||||||||||
| 2017 | 2017 | 2016 | |||||||||||||
| Total equity | $ | 2,101,543 | $ | 2,071,119 | $ | 2,024,628 | |||||||||
| Book value per common share | 42.15 | 41.42 | 40.86 | ||||||||||||
| Regulatory capital: | |||||||||||||||
| Common equity Tier 1 capital | $ | 1,893,842 | $ | 1,863,359 | $ | 1,749,738 | |||||||||
| Tier 1 capital | 1,893,842 | 1,863,359 | 1,749,738 | ||||||||||||
| Total capital | 2,062,928 | 2,031,618 | 1,909,583 | ||||||||||||
| Regulatory capital ratios: | |||||||||||||||
| Common equity Tier 1 capital ratio |
12.18 |
% |
|
12.22 |
% |
|
11.75 |
% |
|||||||
| Tier 1 risk-based capital ratio | 12.18 | 12.22 | 11.75 | ||||||||||||
| Total risk-based capital ratio | 13.26 | 13.32 | 12.82 | ||||||||||||
| Tier 1 leverage ratio | 9.43 | 9.28 | 8.99 | ||||||||||||
- At September 30, 2017, the company’s risk-based capital ratios presented in the foregoing table exceeded all of the “well-capitalized” regulatory thresholds.
Asset Quality
| Credit quality | UMB Financial Corporation | ||||||||||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||||||||||
| Q3 | Q2 | Q1 | Q4 | Q3 | |||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||||
| Net charge-offs - Commercial loans | $ | 8,961 | $ | 7,971 | $ | 5,283 | $ | 1,127 | $ | 5,538 | |||||||||||
| Net charge-offs (recoveries) - Real estate loans | 238 | (95 | ) | 125 | 3,373 | (67 | ) | ||||||||||||||
| Net charge-offs - Consumer credit card loans | 1,635 | 2,079 | 1,815 | 1,692 | 1,658 | ||||||||||||||||
| Net charge-offs - Consumer other loans | 74 | 71 | 103 | 63 | 133 | ||||||||||||||||
| Net charge-offs - Total loans | 10,908 | 10,026 | 7,326 | 6,255 | 7,262 | ||||||||||||||||
| Net loan charge-offs as a % of total average loans |
0.40 |
% |
|
0.37 |
% |
|
0.28 |
% |
|
0.24 |
% |
|
0.28 |
% |
|||||||
| Loans over 90 days past due | $ | 2,088 | $ | 2,657 | $ | 3,369 | $ | 3,365 | $ | 2,678 | |||||||||||
| Loans over 90 days past due as a % of total loans |
0.02 |
% |
|
0.02 |
% |
|
0.03 |
% |
|
0.03 |
% |
|
0.03 |
% |
|||||||
| Nonaccrual and restructured loans |
$ |
54,231 | $ | 51,390 | $ | 56,594 | $ | 70,259 | $ | 79,620 | |||||||||||
| Nonaccrual and restructured loans as a % of total loans |
0.49 |
% |
|
0.47 |
% |
|
0.53 |
% |
|
0.67 |
% |
|
0.77 |
% |
|||||||
| Provision for loan losses |
$ |
11,500 |
$ |
14,500 | $ | 9,000 | $ | 7,500 | $ | 13,000 | |||||||||||
- Nonperforming loans, defined as restructured loans on nonaccrual and all other nonaccrual loans, increased $2.8 million from the linked quarter and decreased $25.4 million from the prior year period.
- Net charge-offs increased to $10.9 million or 0.40 percent of average loans, compared to $10.0 million, or 0.37 percent of average loans in the linked quarter, and $7.3 million, or 0.28 percent of average loans in the third quarter of 2016.
- Provision for loan losses decreased $3.0 million from the elevated linked quarter levels and is consistent with the company’s methodology, which considers the inherent risk in the loan portfolio, as well as other qualitative factors, such as macroeconomic conditions, loan growth, increased impaired loans and increased net charge-offs.
Dividend Declaration
At the company’s quarterly board meeting, the Board of Directors declared a $0.275 per share quarterly cash dividend, an increase of 7.8 percent or $0.02 per share. The cash dividend will be payable on January 2, 2018, to shareholders of record at the close of business on December 8, 2017.
Conference Call
The company plans to host a conference call to discuss its third quarter 2017 earnings results on Wednesday, October 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 3Q 2017 Conference Call
A replay of the conference call may be heard through November 8, 2017, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10112430. 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, operating efficiency ratio, income from discontinued operations-general operations, and earnings per share from discontinued operations-general operations, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (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, operating efficiency ratio, income from discontinued operations-general operations, and earnings per share from discontinued operations-general operations—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, one-time marketing agent termination costs, and divestiture 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 Reams Asset Management Company (Reams), (ii) expenses related to acquisitions, (iii) non-acquisition related severance expense, and (v) the cumulative 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)-(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 revenue (calculated as tax equivalent net interest income, plus noninterest income, less gains on sales of securities available for sale, net).
Income from discontinued operations-general operations for the relevant period is defined as GAAP income from discontinued operations, adjusted to reflect the impact of excluding non-GAAP adjustment (iii) and (v) above and (iv) divestiture expenses related to Scout for the relevant period. 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.
Earnings per share from discontinued operations-general operations (diluted) is calculated as earnings per share from discontinued operations (diluted) as reported, adjusted to reflect, on a per share basis, the impact of excluding non-GAAP adjustment (iii) and (v) above and (iv) divestiture expenses related to Scout for the relevant period.
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 the timeframe or amount of expected proceeds from the closing of the sale of Scout. 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, 2016, 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 | |||||||||
| (unaudited, dollars in thousands) | ||||||||||
| September 30, | ||||||||||
| 2017 | 2016 | |||||||||
|
Assets |
||||||||||
| Loans | $ | 10,997,028 | $ | 10,293,494 | ||||||
| Allowance for loan losses | (98,389 | ) | (90,404 | ) | ||||||
| Net loans | 10,898,639 | 10,203,090 | ||||||||
| Loans held for sale | 4,525 | 11,880 | ||||||||
| Investment securities: | ||||||||||
| Available for sale | 5,848,960 | 6,295,687 | ||||||||
| Held to maturity | 1,276,252 | 1,009,117 | ||||||||
| Trading securities | 60,660 | 58,062 | ||||||||
| Other securities | 63,543 | 66,853 | ||||||||
| Total investment securities | 7,249,415 | 7,429,719 | ||||||||
| Federal funds and resell agreements | 244,436 | 244,891 | ||||||||
| Interest-bearing due from banks | 221,856 | 453,189 | ||||||||
| Cash and due from banks | 366,169 | 354,184 | ||||||||
| Premises and equipment, net | 277,454 | 287,267 | ||||||||
| Accrued income | 103,076 | 93,016 | ||||||||
| Goodwill | 180,867 | 180,867 | ||||||||
| Other intangibles, net | 23,477 | 28,681 | ||||||||
| Other assets | 655,846 | 383,095 | ||||||||
|
Discontinued assets – goodwill and other intangibles, net |
53,743 | 56,267 | ||||||||
| Total assets | $ | 20,279,503 | $ | 19,726,146 | ||||||
|
Liabilities |
||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing demand | $ | 5,812,117 | $ | 6,008,326 | ||||||
| Interest-bearing demand and savings | 9,063,079 | 8,288,670 | ||||||||
| Time deposits under $250,000 | 576,035 | 658,541 | ||||||||
| Time deposits of $250,000 or more | 548,373 | 422,712 | ||||||||
| Total deposits | 15,999,604 | 15,378,249 | ||||||||
| Federal funds and repurchase agreements | 1,856,837 | 2,021,123 | ||||||||
| Long-term debt | 76,071 | 75,418 | ||||||||
| Accrued expenses and taxes | 193,978 | 163,221 | ||||||||
| Other liabilities | 51,470 | 63,507 | ||||||||
| Total liabilities | 18,177,960 | 17,701,518 | ||||||||
|
Shareholders' Equity |
||||||||||
| Common stock | 55,057 | 55,057 | ||||||||
| Capital surplus | 1,042,022 | 1,028,869 | ||||||||
| Retained earnings | 1,239,865 | 1,112,613 | ||||||||
| Accumulated other comprehensive (loss) income | (22,668 | ) | 42,512 | |||||||
| Treasury stock | (212,733 | ) | (214,423 | ) | ||||||
| Total shareholders' equity | 2,101,543 | 2,024,628 | ||||||||
| Total liabilities and shareholders' equity | $ | 20,279,503 | $ | 19,726,146 | ||||||
| Consolidated Statements of Income | UMB Financial Corporation | |||||||||||||||||
| (unaudited, dollars in thousands except share and per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
|
Interest Income |
2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Loans | $ | 119,132 | $ | 98,820 | $ | 338,416 | $ | 283,313 | ||||||||||
| Securities: | ||||||||||||||||||
| Taxable interest | 17,720 | 17,012 | 55,351 | 55,221 | ||||||||||||||
| Tax-exempt interest | 18,893 | 14,797 | 54,372 | 41,377 | ||||||||||||||
| Total securities income | 36,613 | 31,809 | 109,723 | 96,598 | ||||||||||||||
| Federal funds and resell agreements | 1,008 | 790 | 2,638 | 1,939 | ||||||||||||||
| Interest-bearing due from banks | 753 | 445 | 1,884 | 1,772 | ||||||||||||||
| Trading securities | 389 | 174 | 1,135 | 399 | ||||||||||||||
| Total interest income | 157,895 | 132,038 | 453,796 | 384,021 | ||||||||||||||
|
Interest Expense |
||||||||||||||||||
| Deposits | 10,181 | 4,626 | 23,982 | 12,817 | ||||||||||||||
| Federal funds and repurchase agreements | 5,811 | 1,894 | 14,274 | 4,750 | ||||||||||||||
| Other | 1,045 | 753 | 2,973 | 2,587 | ||||||||||||||
| Total interest expense | 17,037 | 7,273 | 41,229 | 20,154 | ||||||||||||||
| Net interest income | 140,858 | 124,765 | 412,567 | 363,867 | ||||||||||||||
| Provision for loan losses | 11,500 | 13,000 | 35,000 | 25,000 | ||||||||||||||
| Net interest income after provision for loan losses | 129,358 | 111,765 | 377,567 | 338,867 | ||||||||||||||
|
Noninterest Income |
||||||||||||||||||
| Trust and securities processing | 45,060 | 41,812 | 132,412 | 123,984 | ||||||||||||||
| Trading and investment banking | 4,453 | 6,114 | 18,168 | 16,382 | ||||||||||||||
| Service charges on deposits | 21,510 | 21,832 | 66,316 | 65,713 | ||||||||||||||
| Insurance fees and commissions | 425 | 698 | 1,584 | 3,355 | ||||||||||||||
| Brokerage fees | 5,815 | 4,712 | 17,081 | 13,159 | ||||||||||||||
| Bankcard fees | 17,427 | 17,086 | 55,413 | 52,636 | ||||||||||||||
| Gains on sale of securities available for sale, net | 2,390 | 2,978 | 4,138 | 8,509 | ||||||||||||||
| Equity (losses) earnings on alternative investments | (584 | ) | 1,594 | (1,393 | ) | 2,191 | ||||||||||||
| Other | 7,810 | 6,716 | 23,810 | 18,352 | ||||||||||||||
| Total noninterest income | 104,306 | 103,542 | 317,529 | 304,281 | ||||||||||||||
|
Noninterest Expense |
||||||||||||||||||
| Salaries and employee benefits | 99,749 | 99,403 | 306,174 | 293,294 | ||||||||||||||
| Occupancy, net | 11,285 | 11,224 | 33,314 | 32,996 | ||||||||||||||
| Equipment | 17,880 | 16,029 | 53,318 | 48,807 | ||||||||||||||
| Supplies, postage and telephone | 4,076 | 4,472 | 12,962 | 13,875 | ||||||||||||||
| Marketing and business development | 5,056 | 5,090 | 14,929 | 15,273 | ||||||||||||||
| Processing fees | 11,151 | 9,084 | 31,093 | 27,118 | ||||||||||||||
| Legal and consulting | 5,844 | 4,437 | 17,361 | 14,107 | ||||||||||||||
| Bankcard | 5,130 | 5,015 | 15,066 | 16,199 | ||||||||||||||
| Amortization of other intangibles | 1,715 | 2,088 | 5,685 | 6,644 | ||||||||||||||
| Regulatory fees | 3,798 | 3,370 | 11,702 | 10,491 | ||||||||||||||
| Other | 6,137 | 4,999 | 20,966 | 20,094 | ||||||||||||||
| Total noninterest expense | 171,821 | 165,211 | 522,570 | 498,898 | ||||||||||||||
| Income before income taxes | 61,843 | 50,096 | 172,526 | 144,250 | ||||||||||||||
| Income tax provision | 12,971 | 10,674 | 36,907 | 34,016 | ||||||||||||||
| Income from continuing operations | $ | 48,872 | $ | 39,422 | $ | 135,619 | $ | 110,234 | ||||||||||
|
Discontinued operations |
||||||||||||||||||
| (Loss) income from discontinued operations before income taxes | (1,030 | ) | 3,834 | (722 | ) | 8,792 | ||||||||||||
| Income tax (benefit) expense | (300 | ) | 1,310 | (247 | ) | 3,159 | ||||||||||||
| (Loss) income on discontinued operations | (730 | ) | 2,524 | (475 | ) | 5,633 | ||||||||||||
| Net Income | $ | 48,142 | $ | 41,946 | $ | 135,144 | $ | 115,867 | ||||||||||
|
Per Share Data |
||||||||||||||||||
| Basic: | ||||||||||||||||||
| Income from continuing operations | $ | 0.99 | $ | 0.81 | $ | 2.76 | $ | 2.26 | ||||||||||
| (Loss) income from discontinued operations | (0.01 | ) | 0.05 | (0.01 | ) | 0.11 | ||||||||||||
| Net income – basic | $ | 0.98 | $ | 0.86 | $ | 2.75 | $ | 2.37 | ||||||||||
| Diluted: | ||||||||||||||||||
| Income from continuing operations | 0.98 | 0.80 | 2.72 | 2.24 | ||||||||||||||
| (Loss) income from discontinued operations | (0.01 | ) | 0.05 | (0.01 | ) | 0.12 | ||||||||||||
| Net income – diluted | 0.97 | 0.85 | 2.71 | 2.36 | ||||||||||||||
| Dividends | 0.255 | 0.245 | 0.765 | 0.735 | ||||||||||||||
| Weighted average shares outstanding | 49,283,322 | 48,849,251 | 49,221,629 | 48,792,419 | ||||||||||||||
| Weighted average shares outstanding – diluted | 49,833,141 | 49,284,280 | 49,838,619 | 49,162,200 | ||||||||||||||
| Consolidated Statements of Comprehensive Income | UMB Financial Corporation | |||||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||||
|
Three Months Ended September 30, |
Nine Months EndedSeptember 30, |
|||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Net Income | $ | 48,142 | $ | 41,946 | $ | 135,144 | $ | 115,867 | ||||||||||||
|
Other comprehensive income (loss), net of tax: |
||||||||||||||||||||
|
Unrealized gains (losses) on securities: |
||||||||||||||||||||
|
Change in unrealized holding gains (losses), net |
5,064 | (16,946 | ) | 62,646 | 90,639 | |||||||||||||||
|
Less: Reclassifications adjustment for gains included in net income |
(2,390 | ) | (2,978 | ) | (4,138 | ) | (8,509 | ) | ||||||||||||
|
Change in unrealized gains (losses) on securities during the period |
2,674 | (19,924 | ) | 58,508 | 82,130 | |||||||||||||||
| Change in unrealized losses on derivatives | (169 | ) | (643 | ) | (1,080 | ) | (7,677 | ) | ||||||||||||
|
Income tax (expense) benefit |
(1,548 | ) | 7,784 | (22,554 | ) | (28,223 | ) | |||||||||||||
|
Other comprehensive income (loss) |
957 | (12,783 | ) | 34,874 | 46,230 | |||||||||||||||
| Comprehensive income | $ | 49,099 | $ | 29,163 | $ | 170,018 | $ | 162,097 | ||||||||||||
|
Consolidated Statements of Changes in 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, 2016 | $ | 55,057 | $ | 1,019,889 | $ | 1,033,990 | $ | (3,718 | ) | $ | (211,524 | ) | $ | 1,893,694 | ||||||||||
| Total comprehensive income | - | - | 115,867 | 46,230 | - | 162,097 | ||||||||||||||||||
|
Cash dividends ($0.735 per share) |
- | - | (36,388 | ) | - | - | (36,388 | ) | ||||||||||||||||
| Purchase of treasury stock | - | - | - | - | (14,189 | ) | (14,189 | ) | ||||||||||||||||
| Issuance of equity awards | - | (3,373 | ) | - | - | 3,802 | 429 | |||||||||||||||||
| Recognition of equity based compensation | - | 8,253 | - | - | - | 8,253 | ||||||||||||||||||
| Sale of treasury stock | - | 362 | - | - | 474 | 836 | ||||||||||||||||||
| Exercise of stock options | - | 2,400 | - | - | 7,014 | 9,414 | ||||||||||||||||||
| Cumulative effect adjustment | - | 1,338 | (856 | ) | - | - | 482 | |||||||||||||||||
| Balance – September 30, 2016 | $ | 55,057 | $ | 1,028,869 | $ | 1,112,613 | $ | 42,512 | $ | (214,423 | ) | $ | 2,024,628 | |||||||||||
| Balance - January 1, 2017 | $ | 55,057 | $ | 1,033,419 | $ | 1,142,887 | $ | (57,542 | ) | $ | (211,437 | ) | $ | 1,962,384 | ||||||||||
| Total comprehensive income | - | - | 135,144 | 34,874 | - | 170,018 | ||||||||||||||||||
| Cash dividends ($0.765 per share) | - | - | (38,166 | ) | - | - | (38,166 | ) | ||||||||||||||||
| Purchase of treasury stock | - | - | - | - | (14,369 | ) | (14,369 | ) | ||||||||||||||||
| Issuance of equity awards | - | (3,364 | ) | - | - | 3,835 | 471 | |||||||||||||||||
| Recognition of equity based compensation | - | 9,576 | - | - | - | 9,576 | ||||||||||||||||||
| Sale of treasury stock | - | 468 | - | - | 381 | 849 | ||||||||||||||||||
| Exercise of stock options | - | 1,923 | - | - | 8,857 | 10,780 | ||||||||||||||||||
| Balance – September 30, 2017 | $ | 55,057 | $ | 1,042,022 | $ | 1,239,865 | $ | (22,668 | ) | $ | (212,733 | ) | $ | 2,101,543 | ||||||||||
| Average Balances / Yields and Rates | UMB Financial Corporation | |||||||||||||||||
| (tax - equivalent basis) | ||||||||||||||||||
| (unaudited, dollars in thousands) | Three Months Ended September 30, | |||||||||||||||||
| 2017 | 2016 | |||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||
|
Assets |
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
| Loans, net of unearned interest | $ | 10,911,154 | 4.33 | % | $ | 10,181,819 | 3.86 | % | ||||||||||
| Securities: | ||||||||||||||||||
| Taxable | 3,794,074 | 1.85 | 4,449,485 | 1.52 | ||||||||||||||
| Tax-exempt | 3,746,540 | 3.06 | 3,158,966 | 2.86 | ||||||||||||||
| Total securities | 7,540,614 | 2.46 | 7,608,451 | 2.08 | ||||||||||||||
| Federal funds and resell agreements | 190,036 | 2.10 | 217,287 | 1.45 | ||||||||||||||
| Interest-bearing due from banks | 254,702 | 1.17 | 314,619 | 0.56 | ||||||||||||||
| Trading securities | 49,396 | 3.95 | 51,280 | 1.75 | ||||||||||||||
| Total earning assets | 18,945,902 | 3.52 | 18,373,456 | 3.03 | ||||||||||||||
| Allowance for loan losses | (99,954 | ) | (86,368 | ) | ||||||||||||||
| Other assets | 1,467,273 | 1,405,152 | ||||||||||||||||
| Total assets | $ | 20,313,221 | $ | 19,692,240 | ||||||||||||||
|
Liabilities and Shareholders' Equity |
||||||||||||||||||
| Interest-bearing deposits | $ | 9,951,600 | 0.41 | % | $ | 9,431,253 | 0.20 | % | ||||||||||
| Federal funds and repurchase agreements | 2,234,666 | 1.03 | 2,261,863 | 0.33 | ||||||||||||||
| Borrowed funds | 76,159 | 5.44 | 82,340 | 3.64 | ||||||||||||||
| Total interest-bearing liabilities | 12,262,425 | 0.55 | 11,775,456 | 0.25 | ||||||||||||||
| Noninterest-bearing demand deposits | 5,728,145 | 5,690,838 | ||||||||||||||||
| Other liabilities | 207,417 | 203,953 | ||||||||||||||||
| Shareholders' equity | 2,115,234 | 2,021,993 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 20,313,221 | $ | 19,692,240 | ||||||||||||||
| Net interest spread | 2.97 | % | 2.78 | % | ||||||||||||||
| Net interest margin | 3.16 | 2.87 | ||||||||||||||||
| Average Balances / Yields and Rates | UMB Financial Corporation | |||||||||||||||||
| (tax - equivalent basis) | ||||||||||||||||||
| (unaudited, dollars in thousands) | Nine Months Ended September 30, | |||||||||||||||||
| 2017 | 2016 | |||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||
|
Assets |
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
| Loans, net of unearned interest | $ | 10,762,401 | 4.20 | % | $ | 9,874,298 | 3.83 | % | ||||||||||
| Securities: | ||||||||||||||||||
| Taxable | 3,995,441 | 1.85 | 4,650,111 | 1.59 | ||||||||||||||
| Tax-exempt | 3,625,727 | 3.07 | 2,984,538 | 2.85 | ||||||||||||||
|
Total securities |
7,621,168 | 2.43 | 7,634,649 | 2.08 | ||||||||||||||
| Federal funds and resell agreements | 192,817 | 1.83 | 181,854 | 1.42 | ||||||||||||||
| Interest-bearing due from banks | 271,799 | 0.93 | 425,155 | 0.56 | ||||||||||||||
| Trading securities | 61,604 | 3.06 | 39,588 | 1.70 | ||||||||||||||
| Total earning assets | 18,909,789 | 3.42 | 18,155,544 | 2.99 | ||||||||||||||
| Allowance for loan losses | (96,181 | ) | (82,975 | ) | ||||||||||||||
| Other assets | 1,474,177 | 1,415,325 | ||||||||||||||||
| Total assets | $ | 20,287,785 | $ | 19,487,894 | ||||||||||||||
|
Liabilities and Shareholders' Equity |
||||||||||||||||||
| Interest-bearing deposits | $ | 9,777,717 | 0.33 | % | $ | 9,392,435 | 0.18 | % | ||||||||||
| Federal funds and repurchase agreements | 2,321,144 | 0.82 | 2,041,369 | 0.31 | ||||||||||||||
| Borrowed funds | 76,192 | 5.22 | 88,621 | 3.90 | ||||||||||||||
| Total interest-bearing liabilities | 12,175,053 | 0.45 | 11,522,425 | 0.23 | ||||||||||||||
| Noninterest-bearing demand deposits | 5,853,905 | 5,809,398 | ||||||||||||||||
| Other liabilities | 203,037 | 174,873 | ||||||||||||||||
| Shareholders' equity | 2,055,790 | 1,981,198 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 20,287,785 | $ | 19,487,894 | ||||||||||||||
| Net interest spread | 2.97 | % | 2.76 | % | ||||||||||||||
| Net interest margin | 3.12 | 2.84 | ||||||||||||||||
| Business Segment Information | UMB Financial Corporation | |||||||||||
| (unaudited, dollars in thousands) | ||||||||||||
| Three Months Ended September 30, 2017 | ||||||||||||
| Bank |
AssetServicing |
Total | ||||||||||
| Net interest income | $ | 137,331 | $ | 3,527 | $ | 140,858 | ||||||
| Provision for loan losses | 11,500 | - | 11,500 | |||||||||
| Noninterest income | 79,759 | 24,547 | 104,306 | |||||||||
| Noninterest expense | 150,057 | 21,764 | 171,821 | |||||||||
| Income before taxes | 55,533 | 6,310 | 61,843 | |||||||||
| Income tax expense | 11,649 | 1,322 | 12,971 | |||||||||
| Income from continuing operations | $ | 43,884 | $ | 4,988 | $ | 48,872 | ||||||
| Average assets | $ | 19,542,050 | $ | 770,950 | $ | 20,313,000 | ||||||
| Three Months Ended September 30, 2016 | ||||||||||||
| Bank |
AssetServicing |
Total | ||||||||||
| Net interest income | $ | 121,963 | $ | 2,802 | $ | 124,765 | ||||||
| Provision for loan losses | 13,000 | - | 13,000 | |||||||||
| Noninterest income | 80,540 | 23,002 | 103,542 | |||||||||
| Noninterest expense | 144,450 | 20,761 | 165,211 | |||||||||
| Income before taxes | 45,053 | 5,043 | 50,096 | |||||||||
| Income tax expense | 9,560 | 1,114 | 10,674 | |||||||||
| Income from continuing operations | $ | 35,493 | $ | 3,929 | $ | 39,422 | ||||||
| Average assets | $ | 18,441,950 | $ | 1,250,050 | $ | 19,692,000 | ||||||
| Nine Months Ended September 30, 2017 | ||||||||||||
| Bank |
AssetServicing |
Total | ||||||||||
| Net interest income | $ | 403,450 | $ | 9,117 | $ | 412,567 | ||||||
| Provision for loan losses | 35,000 | - | 35,000 | |||||||||
| Noninterest income | 245,583 | 71,946 | 317,529 | |||||||||
| Noninterest expense | 456,680 | 65,890 | 522,570 | |||||||||
| Income before taxes | 157,353 | 15,173 | 172,526 | |||||||||
| Income tax expense | 33,733 | 3,174 | 36,907 | |||||||||
| Income from continuing operations | $ | 123,620 | $ | 11,999 | $ | 135,619 | ||||||
| Average assets | $ | 19,501,000 | $ | 787,000 | $ | 20,288,000 | ||||||
| Nine Months Ended September 30, 2016 | ||||||||||||
| Bank |
AssetServicing |
Total | ||||||||||
| Net interest income | $ | 355,847 | $ | 8,020 | $ | 363,867 | ||||||
| Provision for loan losses | 25,000 | - | 25,000 | |||||||||
| Noninterest income | 234,643 | 69,638 | 304,281 | |||||||||
| Noninterest expense | 435,708 | 63,190 | 498,898 | |||||||||
| Income before taxes | 129,782 | 14,468 | 144,250 | |||||||||
| Income tax expense | 30,478 | 3,538 | 34,016 | |||||||||
| Income from continuing operations | $ | 99,304 | $ | 10,930 | $ | 110,234 | ||||||
| Average assets | $ | 18,205,900 | $ | 1,282,100 | $ | 19,488,000 | ||||||
| Non-GAAP Financial Measures | UMB Financial Corporation | |||||||||||||||||
| Net operating income non-GAAP reconciliation: | ||||||||||||||||||
| (unaudited, dollars in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Income from continuing operations (GAAP) | $ | 48,872 | $ | 39,422 | $ | 135,619 | $ | 110,234 | ||||||||||
| Adjustments: | ||||||||||||||||||
|
Fair value adjustments on contingent consideration (i) |
- | - | - | 67 | ||||||||||||||
| Acquisition expenses (ii) | 5 | 434 | 22 | 4,473 | ||||||||||||||
|
Non-acquisition severance expense (iii) |
80 | 680 | 815 | 1,751 | ||||||||||||||
| Tax-impact of adjustments (v) | (30 | ) | (401 | ) | (301 | ) | (2,265 | ) | ||||||||||
| Total Non-GAAP adjustments (net of tax) | 55 | 713 | 536 | 4,026 | ||||||||||||||
| Net operating income (Non-GAAP) | $ | 48,927 | $ | 40,135 | $ | 136,155 | $ | 114,260 | ||||||||||
| Earnings per share from continuing operations as reported - diluted | $ | 0.98 | $ | 0.80 | $ | 2.72 | $ | 2.24 | ||||||||||
|
Fair value adjustments on contingent consideration (i) |
- | - | - | - | ||||||||||||||
| Acquisition expenses (ii) | - | 0.01 | - | 0.09 | ||||||||||||||
| Non-acquisition severance expense (iii) | - | 0.01 | 0.02 | 0.04 | ||||||||||||||
| Tax-impact of adjustments (v) | - | (0.01 | ) | (0.01 | ) | (0.05 | ) | |||||||||||
| Operating earnings per share - diluted | $ | 0.98 | $ | 0.81 | $ | 2.73 | $ | 2.32 | ||||||||||
|
GAAP |
||||||||||||||||||
| Return on average assets |
0.95 |
% |
|
0.80 |
% |
|
0.89 |
% |
|
0.76 |
% |
|||||||
| Return on average equity | 9.17 | 7.76 | 8.82 | 7.43 | ||||||||||||||
|
Non-GAAP |
||||||||||||||||||
| Operating return on average assets |
0.96 |
% |
|
0.81 |
% |
|
0.90 |
% |
|
0.78 |
% |
|||||||
| Operating return on average equity | 9.18 | 7.90 | 8.85 | 7.70 | ||||||||||||||
| Operating noninterest expense and operating efficiency ratio non-GAAP reconciliation: | UMB Financial Corporation | |||||||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Noninterest expense | $ | 171,821 | $ | 165,211 | $ | 522,570 | $ | 498,898 | ||||||||||||
| Adjustments to arrive at operating noninterest expense (pre-tax): | ||||||||||||||||||||
| Fair value adjustments on contingent consideration (i) | - | - | - | 67 | ||||||||||||||||
| Acquisition expenses (ii) | 5 | 434 | 22 | 4,473 | ||||||||||||||||
| Non-acquisition severance expense (iii) | 80 | 680 | 815 | 1,751 | ||||||||||||||||
| Total Non-GAAP adjustments (pre-tax) | 85 | 1,114 | 837 | 6,291 | ||||||||||||||||
| Operating noninterest expense | $ | 171,736 | $ | 164,097 | $ | 521,733 | $ | 492,607 | ||||||||||||
| Noninterest expense | $ | 171,821 | $ | 165,211 | $ | 522,570 | $ | 498,898 | ||||||||||||
| Less: Amortization of other intangibles | 1,715 | 2,088 | 5,685 | 6,644 | ||||||||||||||||
| Noninterest expense, net of amortization of other intangibles (numerator A) | $ | 170,106 | $ | 163,123 | $ | 516,885 | $ | 492,254 | ||||||||||||
| Operating noninterest expense | $ | 171,736 | $ | 164,097 | $ | 521,733 | $ | 492,607 | ||||||||||||
| Less: Amortization of other intangibles | 1,715 | 2,088 | 5,685 | 6,644 | ||||||||||||||||
| Operating expense, net of amortization of other intangibles (numerator B) | $ | 170,021 | $ | 162,009 | $ | 516,048 | $ | 485,963 | ||||||||||||
| Net interest income (tax equivalent) (vi) | $ | 151,014 | $ | 132,765 | $ | 441,809 | $ | 386,190 | ||||||||||||
| Noninterest income | 104,306 | 103,542 | 317,529 | 304,281 | ||||||||||||||||
| Less: Gains on sales of securities available for sale, net | 2,390 | 2,978 | 4,138 | 8,509 | ||||||||||||||||
| Total (denominator A) | $ | 252,930 | $ | 233,329 | $ | 755,200 | $ | 681,962 | ||||||||||||
| Efficiency ratio (numerator A/denominator A) |
67.25 |
% |
|
69.91 |
% |
|
68.44 |
% |
|
72.18 |
% |
|||||||||
| Operating efficiency ratio (numerator B/denominator A) | 67.22 | 69.43 | 68.33 | 71.26 | ||||||||||||||||
| Income from discontinued operations-general operations non-GAAP reconciliation | UMB Financial Corporation | |||||||||||||||||||
| (unaudited, dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| (Loss) income from discontinued operations (GAAP) | $ | (730 | ) | $ | 2,524 | $ | (475 | ) | $ | 5,633 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Divestiture expense (iv) | 6,410 | - | 13,498 | - | ||||||||||||||||
| Non-acquisition severance expense (iii) | - | 509 | - | 2,010 | ||||||||||||||||
| Tax-impact of adjustments (v) | (2,308 | ) | (183 | ) | (4,859 | ) | (724 | ) | ||||||||||||
| Total Non-GAAP adjustments (net of tax) | 4,102 | 326 | 8,639 | 1,286 | ||||||||||||||||
|
Net income from discontinued operations-general operations (Non-GAAP) |
$ | 3,372 | $ | 2,850 | $ | 8,164 | $ | 6,919 | ||||||||||||
| (Losses) earnings per share from discontinued operations - diluted | $ | (0.01 | ) | $ | 0.05 | $ | (0.01 | ) | $ | 0.12 | ||||||||||
| Divestiture expense (iv) | 0.13 | - | 0.27 | - | ||||||||||||||||
| Non-acquisition severance expense (iii) | - | 0.01 | - | 0.03 | ||||||||||||||||
| Tax-impact of adjustments (v) | (0.05 | ) | - | (0.10 | ) | (0.01 | ) | |||||||||||||
| Total Non-GAAP adjustments (net of tax) | 0.08 | 0.01 | 0.17 | 0.02 | ||||||||||||||||
| Earnings per share from discontinued operations-general operations - diluted (Non-GAAP) | $ | 0.07 | $ | 0.06 | $ | 0.16 | $ | 0.14 | ||||||||||||
|
(i) |
Represents fair value adjustments to contingent consideration for the acquisitions of Reams. |
|
|
(ii) |
Represents expenses related to acquisitions. |
|
|
(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 divestiture of Scout. |
|
|
(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 $10.1 million and $8.0 million for the three months ended September 30, 2017 and September 30 2016, respectively. |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171024006267/en/
UMB Financial Corporation
Media Contact:
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Crocker, 816-860-7775
or
Investor Relations Contact:
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Gregory, 816-860-7106
Source: UMB Financial Corporation