UMB Financial Corporation Reports Third Quarter Income from Continuing Operations of $62.4 Million, or $1.27 per Diluted Share

KANSAS CITY, Mo.--()--UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced income from continuing operations for the third quarter of 2019 of $62.4 million, or $1.27 per diluted share, compared to $57.0 million, or $1.16 per diluted share, in the second quarter of 2019 (linked quarter) and $57.8 million, or $1.16 per diluted share, in the third quarter of 2018. The reported GAAP income from continuing operations represents an increase of 9.5 percent on a linked-quarter basis and an increase of 7.8 percent compared to the third quarter of 2018.

Net operating income from continuing operations, a non-GAAP financial measure reconciled to income from continuing operations, the nearest comparable GAAP measure, later in this release, was $62.5 million, or $1.27 per diluted share, for the third quarter of 2019, compared to $57.2 million, or $1.17 per diluted share, for the linked quarter and $58.0 million, or $1.16 per diluted share, for the third quarter of 2018. These results represent an increase of 9.2 percent on a linked-quarter basis and an increase of 7.8 percent compared to the third quarter of 2018.

Summary of quarterly financial results

 

UMB Financial Corporation

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

 

 

 

 

Q3

 

Q2

 

Q3

 

 

2019

 

2019

 

2018

Income from continuing operations

 

$

62,382

 

 

$

56,959

 

 

$

57,849

 

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

Net income

 

 

62,382

 

 

 

56,959

 

 

 

57,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations (diluted)

 

 

1.27

 

 

 

1.16

 

 

 

1.16

 

Losses per share from discontinued operations (diluted)

 

 

 

 

 

 

 

 

 

Earnings per share (diluted)

 

 

1.27

 

 

 

1.16

 

 

 

1.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income from continuing operations

 

 

62,525

 

 

 

57,245

 

 

 

58,024

 

Operating earnings per share from continuing operations (diluted)

 

 

1.27

 

 

 

1.17

 

 

1.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP - continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.03

%

 

 

0.98

%

 

 

1.11

%

Return on average equity

 

 

9.69

 

 

 

9.46

 

 

 

10.32

 

Efficiency ratio

 

 

70.70

 

 

 

70.32

 

 

 

71.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP - continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.04

%

 

 

0.99

%

 

 

1.11

%

Operating return on average equity

 

 

9.72

 

 

 

9.51

 

 

 

10.35

 

Operating efficiency ratio

 

 

70.63

 

 

 

70.19

 

 

 

71.18

 

 

Summary of year-to-date financial results

 

UMB Financial Corporation

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

 

September

 

 

September

 

 

YTD

 

 

YTD

 

 

2019

 

 

2018

Income from continuing operations

 

$

177,085

 

 

$

170,806

 

Loss from discontinued operations

 

 

 

 

 

(747

)

Net income

 

 

177,085

 

 

 

170,059

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations (diluted)

 

 

3.61

 

 

 

3.41

 

Losses per share from discontinued operations (diluted)

 

 

 

 

 

(0.01

)

Earnings per share (diluted)

 

 

3.61

 

 

 

3.40

 

 

 

 

 

 

 

 

 

 

Net operating income from continuing operations

 

 

177,978

 

 

 

173,165

 

Operating earnings per share from continuing operations (diluted)

 

 

3.63

 

 

 

3.47

 

 

 

 

 

 

 

 

 

 

GAAP - continuing operations

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.01

%

 

 

1.10

%

Return on average equity

 

 

9.86

 

 

 

10.43

 

Efficiency ratio

 

 

70.34

 

 

 

70.09

 

 

 

 

 

 

 

 

 

 

Non-GAAP - continuing operations

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.02

%

 

 

1.12

%

Operating return on average equity

 

 

9.91

 

 

 

10.57

 

Operating efficiency ratio

 

 

70.20

 

 

 

69.69

 

“For the third quarter, revenues increased 8.2 percent over the prior year period, driven by an 11.8 percent increase in net interest income,” said Mariner Kemper, chairman, president and chief executive officer. “We are pleased with our reported average loan growth of 10.0 percent over the same period, which is more than double the 4.7 percent growth estimated for the industry as a whole, as reported by the Federal Reserve. Additionally, net charge-offs were just 0.07 percent of average loans for the quarter and 0.29 percent on a year-to-date basis, in line with our long-term historical performance. While the shape of the yield curve and low and declining interest rates pose challenges, strong loan pipelines coupled with our focus on diversified fee income sources will help mitigate some of these headwinds.”

Discussion of results from continuing operations

Summary of revenue

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q2

 

Q3

 

CQ vs.

 

CQ vs.

 

 

2019

 

2019

 

2018

 

LQ

 

PY

Net interest income

 

$

168,260

 

 

$

166,414

 

 

$

150,490

 

 

$

1,846

 

 

$

17,770

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

45,218

 

 

 

42,903

 

 

 

43,425

 

 

 

2,315

 

 

 

1,793

 

Trading and investment banking

 

 

5,712

 

 

 

5,453

 

 

 

3,711

 

 

 

259

 

 

 

2,001

 

Service charges on deposit accounts

 

 

20,620

 

 

 

20,747

 

 

 

20,927

 

 

 

(127

)

 

 

(307

)

Insurance fees and commissions

 

 

320

 

 

 

465

 

 

 

339

 

 

 

(145

)

 

 

(19

)

Brokerage fees

 

 

8,102

 

 

 

7,077

 

 

 

6,402

 

 

 

1,025

 

 

 

1,700

 

Bankcard fees

 

 

16,895

 

 

 

16,439

 

 

 

16,838

 

 

 

456

 

 

 

57

 

Gains (losses) on sales of securities available for sale, net

 

 

3,057

 

 

 

(1,403

)

 

 

211

 

 

 

4,460

 

 

 

2,846

 

Other

 

 

3,711

 

 

 

13,717

 

 

 

9,032

 

 

 

(10,006

)

 

 

(5,321

)

Total noninterest income

 

$

103,635

 

 

$

105,398

 

 

$

100,885

 

 

$

(1,763

)

 

$

2,750

 

Total revenue

 

$

271,895

 

 

$

271,812

 

 

$

251,375

 

 

$

83

 

 

$

20,520

 

Net interest margin

 

 

3.09

%

 

 

3.19

%

 

 

3.18

%

 

 

 

 

 

 

 

 

Total noninterest income as a % of total revenue

 

 

38.12

 

 

 

38.78

 

 

 

40.13

 

 

 

 

 

 

 

 

 

Net interest income

  • Net interest income totaled $168.3 million, an increase of $1.8 million, or 1.1 percent, from linked quarter levels, impacted by a $269.9 million, or 2.1 percent, increase in average loans, a $249.9 million, or 3.0 percent, increase in average securities and one additional day in the third quarter. These benefits were offset by the impact of recent reductions in short-term interest rates on net interest margin.
  • Net interest margin for the third quarter was 3.09 percent, down 10 basis points from the linked quarter, in large part due to lower short-term interest rates. Earning asset yields declined 12 basis points from the linked quarter, in part driven by declining yields in the loan portfolio due to recent reductions in short-term interest rates. The cost of interest-bearing liabilities decreased five basis points to 1.34 percent, driven by a two-basis-point decline in cost of interest-bearing deposits and lower borrowing costs. Net interest margin was also adversely impacted by a slight reduction in the benefit of interest-free funds and the impact of a $750 million cash flow hedge executed in late August.
  • On a year-over-year basis, the increase in net interest income was driven by a 10.0 percent, or $1.2 billion, increase in average loans, as well as higher average loan yields, which increased 12 basis points compared to 2018.
  • For the third quarter of 2019, earning assets averaged $22.4 billion, an increase of 15.5 percent over the third quarter of 2018.

Noninterest income

  • Third quarter 2019 noninterest income decreased $1.8 million, or 1.7 percent, on a linked-quarter basis, largely due to:
    • Decreases of $3.7 million in equity earnings on alternative investments, $2.3 million in company-owned life insurance income, and $1.5 million in derivative income, all recorded in other income. The decrease in company-owned life insurance income is offset by a proportionate decrease in deferred compensation expense noted below.
    • These decreases were partially offset by the following increases:
      • An increase of $4.5 million in gains on sales of available-for-sale securities.
      • Increases of $1.1 million in fund servicing revenue, $0.6 million in trust services income and $0.6 million in corporate trust income, all recorded in trust and securities processing.
      • An increase of $1.0 million in brokerage fees, primarily driven by higher 12b-1 income.
  • Compared to the prior year, noninterest income in the third quarter of 2019 increased $2.8 million, or 2.7 percent, primarily driven by:
    • An increase of $2.8 million in gains on sales of available-for-sale securities.
    • A $2.0 million increase in trading and investment banking income due to increased trading volume.
    • An increase of $2.0 million in corporate trust income, recorded in trust and securities processing.
    • An increase of $1.7 million in brokerage fees, primarily driven by higher 12b-1 and money market income.
    • These increases were partially offset by decreases of $2.0 million in company-owned life insurance income, $1.9 million in equity earnings on alternative investments, and $1.0 million in derivative income, all recorded in other income. The decrease in company-owned life insurance income is offset by a proportionate decrease in deferred compensation expense noted below.

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

2019

 

 

2019

 

 

2018

 

 

LQ

 

PY

Salaries and employee benefits

 

$

110,153

 

 

$

114,454

 

 

$

102,956

 

 

$

(4,301

)

 

$

7,197

 

Occupancy, net

 

 

12,240

 

 

 

11,539

 

 

 

11,628

 

 

 

701

 

 

 

612

 

Equipment

 

 

19,775

 

 

 

18,824

 

 

 

18,533

 

 

 

951

 

 

 

1,242

 

Supplies and services

 

 

4,261

 

 

 

4,285

 

 

 

4,528

 

 

 

(24

)

 

 

(267

)

Marketing and business development

 

 

5,655

 

 

 

7,304

 

 

 

6,671

 

 

 

(1,649

)

 

 

(1,016

)

Processing fees

 

 

13,619

 

 

 

13,096

 

 

 

12,331

 

 

 

523

 

 

 

1,288

 

Legal and consulting

 

 

8,374

 

 

 

7,496

 

 

 

8,470

 

 

 

878

 

 

 

(96

)

Bankcard

 

 

4,643

 

 

 

4,701

 

 

 

4,407

 

 

 

(58

)

 

 

236

 

Amortization of other intangible assets

 

 

1,335

 

 

 

1,251

 

 

 

1,385

 

 

 

84

 

 

 

(50

)

Regulatory fees

 

 

2,749

 

 

 

2,910

 

 

 

3,337

 

 

 

(161

)

 

 

(588

)

Other

 

 

8,593

 

 

 

7,527

 

 

 

6,139

 

 

 

1,066

 

 

 

2,454

 

Total noninterest expense

 

$

191,397

 

 

$

193,387

 

 

$

180,385

 

 

$

(1,990

)

 

$

11,012

 

  • GAAP noninterest expense for the third quarter of 2019 was $191.4 million, a decrease of $2.0 million, or 1.0 percent, from the linked quarter and an increase of $11.0 million, or 6.1 percent, from the third quarter of 2018.
  • On a non-GAAP basis, operating noninterest expense (as reconciled later in this release) was $191.2 million for the third quarter of 2019, a decrease of $1.8 million, or 0.9 percent, compared to the linked quarter and an increase of $11.1 million, or 6.1 percent, compared to the third quarter of 2018.
  • The linked quarter decrease in noninterest expense was driven by:
    • A decrease of $4.3 million in salaries and employee benefits, largely driven by a $3.0 million decrease in lower bonus and commission expense and a $1.7 million decrease in deferred compensation expense, which is offset by the decrease in company-owned life insurance income noted above.
    • A $1.6 million decrease in marketing and business development expense, primarily driven by a decrease of $0.9 million in travel expense and $0.5 million in advertising and business development due to the timing of multiple product initiatives.
    • These decreases were partially offset by an increase in other expense driven by a $1.3 million fee paid to partially terminate a building lease, increased software equipment expense of $1.2 million, and increased occupancy and legal and consulting expense, due to the timing of multiple technology initiatives.
  • The year-over-year increase in noninterest expense was driven by:
    • A $7.2 million increase in salaries and employee benefits, primarily due to increases in salaries and wages expense, bonus and commission expense, and higher benefits expense, partially offset by a decrease of $1.6 million in deferred compensation expense, which is offset by the increase in company-owned life insurance income noted above.
    • A $1.3 million increase in processing fees expense due to investments in digital channel and integrated platform solutions to support business growth and the ongoing modernization of the company’s core systems.
    • An increase of $2.5 million in other noninterest expense, driven by a $1.3 million fee paid to partially terminate a building lease in the third quarter of 2019 and an increase of $1.2 million in derivative expense.

Income taxes

  • The company’s effective tax rate was 15.1 percent for the nine months ended September 30, 2019, compared to 14.2 percent for the same period in 2018.

Balance sheet

  • Average total assets for the third quarter of 2019 were $23.9 billion compared to $23.3 billion for the linked quarter and $20.7 billion for the same period in 2018.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

2019

 

 

2019

 

 

2018

 

 

LQ

 

PY

Commercial

 

$

5,443,718

 

 

$

5,427,498

 

 

$

4,717,530

 

 

$

16,220

 

 

$

726,188

 

Asset-based loans

 

 

372,938

 

 

 

387,983

 

 

 

382,672

 

 

 

(15,045

)

 

 

(9,734

)

Factoring loans

 

 

221,862

 

 

 

261,041

 

 

 

264,414

 

 

 

(39,179

)

 

 

(42,552

)

Commercial credit card

 

 

204,905

 

 

 

196,313

 

 

 

199,730

 

 

 

8,592

 

 

 

5,175

 

Real estate - construction

 

 

819,926

 

 

 

889,233

 

 

 

814,053

 

 

 

(69,307

)

 

 

5,873

 

Real estate - commercial

 

 

4,164,477

 

 

 

3,831,818

 

 

 

3,701,072

 

 

 

332,659

 

 

 

463,405

 

Real estate - residential

 

 

805,994

 

 

 

744,750

 

 

 

688,097

 

 

 

61,244

 

 

 

117,897

 

Real estate - HELOC

 

 

498,460

 

 

 

514,044

 

 

 

566,460

 

 

 

(15,584

)

 

 

(68,000

)

Consumer credit card

 

 

220,363

 

 

 

230,863

 

 

 

222,223

 

 

 

(10,500

)

 

 

(1,860

)

Consumer other

 

 

136,117

 

 

 

132,662

 

 

 

152,894

 

 

 

3,455

 

 

 

(16,777

)

Leases

 

 

2,118

 

 

 

4,776

 

 

 

9,407

 

 

 

(2,658

)

 

 

(7,289

)

Total loans

 

$

12,890,878

 

 

$

12,620,981

 

 

$

11,718,552

 

 

$

269,897

 

 

$

1,172,326

 

  • Average loans for the third quarter of 2019 increased 2.1 percent on a linked-quarter basis and 10.0 percent compared to the third quarter of 2018.

Summary of average securities - QTD Average

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

 

Q2

 

 

Q3

 

 

CQ vs.

 

CQ vs.

 

 

2019

 

 

2019

 

 

2018

 

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

250,552

 

 

$

256,949

 

 

$

38,044

 

 

$

(6,397

)

$

212,508

 

U.S. Agencies

 

 

93,440

 

 

 

91,822

 

 

 

198

 

 

 

1,618

 

 

93,242

 

Mortgage-backed

 

 

3,987,463

 

 

 

3,926,164

 

 

 

3,590,703

 

 

 

61,299

 

 

396,760

 

State and political subdivisions

 

 

2,795,210

 

 

 

2,659,397

 

 

 

2,290,906

 

 

 

135,813

 

 

504,304

 

Corporates

 

 

155,656

 

 

 

84,910

 

 

 

718

 

 

 

70,746

 

 

154,938

 

Total securities available for sale

 

$

7,282,321

 

 

$

7,019,242

 

 

$

5,920,569

 

 

$

263,079

 

$

1,361,752

 

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and political subdivisions

 

$

1,105,397

 

 

$

1,128,526

 

 

$

1,205,007

 

 

$

(23,129

)

$

(99,610

)

Trading securities

 

 

44,571

 

 

 

61,565

 

 

 

45,476

 

 

 

(16,994

)

 

(905

)

Other securities

 

 

90,008

 

 

 

80,097

 

 

 

65,962

 

 

 

9,911

 

 

24,046

 

Total securities

 

$

8,522,297

 

 

$

8,289,430

 

 

$

7,237,014

 

 

$

232,867

 

$

1,285,283

 

  • Average securities available for sale increased 3.7 percent on a linked-quarter basis and increased 23.0 percent compared to the third quarter of 2018.

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q2

 

Q3

 

CQ vs.

 

CQ vs.

 

 

2019

 

2019

 

2018

 

LQ

 

PY

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

6,082,498

 

 

$

6,078,520

 

 

$

5,547,880

 

 

$

3,978

 

$

534,618

 

Interest-bearing demand and savings

 

 

12,214,570

 

 

 

11,740,634

 

 

 

9,954,008

 

 

 

473,936

 

 

2,260,562

 

Time deposits

 

 

1,011,862

 

 

 

966,719

 

 

 

1,030,411

 

 

 

45,143

 

 

(18,549

)

Total deposits

 

$

19,308,930

 

 

$

18,785,873

 

 

$

16,532,299

 

 

$

523,057

 

$

2,776,631

 

Noninterest bearing deposits as % of total

 

 

31.50

%

 

 

32.36

%

 

 

33.56

%

 

 

 

 

 

 

 

  • Average deposits increased 2.8 percent on a linked-quarter basis and 16.8 percent compared to the third quarter of 2018.

Capital

Capital information

 

UMB Financial Corporation

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,
2019

 

June 30,
2019

 

September 30,
2018

Total equity

 

$

2,563,866

 

 

$

2,477,790

 

 

$

2,203,464

 

Book value per common share

 

 

52.23

 

 

 

50.50

 

 

 

44.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

2,284,417

 

 

$

2,236,930

 

 

$

2,175,700

 

Tier 1 capital

 

 

2,284,417

 

 

 

2,236,930

 

 

 

2,175,700

 

Total capital

 

 

2,464,698

 

 

 

2,411,510

 

 

 

2,348,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

12.53

%

 

 

12.65

%

 

 

13.47

%

Tier 1 risk-based capital ratio

 

 

12.53

 

 

 

12.65

 

 

 

13.47

 

Total risk-based capital ratio

 

 

13.51

 

 

 

13.63

 

 

 

14.54

 

Tier 1 leverage ratio

 

 

9.62

 

 

 

9.69

 

 

 

10.58

 

  • At September 30, 2019, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds.

Asset Quality

Credit quality

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3

 

Q2

 

Q1

 

Q4

 

Q3

 

 

2019

 

2019

 

2019

 

2018

 

2018

Net charge-offs - Commercial loans

 

$

568

 

 

$

11,790

 

 

$

10,537

 

 

$

44,010

 

 

$

624

 

Net charge-offs (recoveries) - Real estate loans

 

 

161

 

 

 

(714

)

 

 

41

 

 

 

28

 

 

 

408

 

Net charge-offs - Consumer credit card loans

 

 

1,377

 

 

 

1,336

 

 

 

1,676

 

 

 

1,606

 

 

 

1,632

 

Net charge-offs - Consumer other loans

 

 

80

 

 

 

157

 

 

 

70

 

 

 

23

 

 

 

82

 

Net charge-offs - Total loans

 

 

2,186

 

 

 

12,569

 

 

 

12,324

 

 

 

45,667

 

 

 

2,746

 

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

 

 

0.07

%

 

 

0.40

%

 

 

0.41

%

 

 

1.51

%

 

 

0.09

%

Loans over 90 days past due

 

$

2,466

 

 

$

1,825

 

 

$

1,874

 

 

$

6,009

 

 

$

1,927

 

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

 

 

0.02

%

 

 

0.01

%

 

 

0.01

%

 

 

0.05

%

 

 

0.02

%

Nonaccrual and restructured loans

 

$

71,838

 

 

$

53,395

 

 

$

63,270

 

 

$

43,018

 

 

$

50,568

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.55

%

 

 

0.41

%

 

 

0.50

%

 

 

0.35

%

 

 

0.42

%

Provision for loan losses

 

$

7,500

 

 

$

11,000

 

 

$

12,350

 

 

$

48,000

 

 

$

5,750

 

  • Provision for loan losses totaled $7.5 million, a decrease of $3.5 million from the linked quarter, and an increase of $1.8 million from the third quarter of 2018.
  • Net charge-offs totaled $2.2 million, or 0.07 percent, of average loans, compared to $12.6 million, or 0.40 percent, of average loans in the linked quarter.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors declared a $0.31 per share quarterly cash dividend, an increase of 3.3 percent, or $0.01 per share. The cash dividend will be payable on January 2, 2020, to shareholders of record at the close of business on December 10, 2019.

Conference Call

The company plans to host a conference call to discuss its third quarter of 2019 earnings results on Wednesday, October 30, 2019, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 3Q 2019 Conference Call

A replay of the conference call may be heard through November 13, 2019 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10135206. The call replay may also be accessed at investorrelations.umb.com.

Non-GAAP Financial Information

In this release, we provide information about net operating income from continuing operations (net operating income), operating earnings per share from continuing operations - 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 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, 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 acquisition-, divestiture-, and severance-related items that management does not believe reflect the company’s fundamental operating performance.

Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions and divestitures, severance expense, and the cumulative tax impact of these adjustments.

Operating EPS (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 above for the relevant period. Operating ROE is calculated as net operating income from continuing operations, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income from continuing operations, 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 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 non-GAAP revenue (calculated as net interest income plus noninterest income, less gains on sales of securities available for sale, net).

Forward-Looking Statements:

This press 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. 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, 2018, 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, except to the extent required by applicable securities laws. 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 financial services company headquartered in Kansas City, Mo. UMB offers personal banking, commercial banking, healthcare services and institutional banking, which includes services to mutual funds and alternative-investment entities and registered investment advisors. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. For more information, visit UMB.com, UMB Blog or follow us on Twitter at @UMBBank, UMB Facebook and UMB LinkedIn.

 

Consolidated Balance Sheets

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

2019

 

2018

ASSETS

 

 

 

 

 

 

 

 

Loans

 

$

13,043,840

 

 

$

11,964,724

 

Allowance for loan losses

 

 

(107,406

)

 

 

(101,302

)

Net loans

 

 

12,936,434

 

 

 

11,863,422

 

Loans held for sale

 

 

11,025

 

 

 

2,222

 

Securities:

 

 

 

 

 

 

 

 

Available for sale

 

 

7,411,908

 

 

 

5,932,741

 

Held to maturity

 

 

1,102,005

 

 

 

1,199,114

 

Trading securities

 

 

86,074

 

 

 

81,159

 

Other securities

 

 

88,176

 

 

 

65,252

 

Total securities

 

 

8,688,163

 

 

 

7,278,266

 

Federal funds sold and resell agreements

 

 

463,392

 

 

 

206,412

 

Interest-bearing due from banks

 

 

158,339

 

 

 

668,990

 

Cash and due from banks

 

 

658,198

 

 

 

348,700

 

Premises and equipment, net

 

 

290,273

 

 

 

277,123

 

Accrued income

 

 

119,024

 

 

 

104,012

 

Goodwill

 

 

180,867

 

 

 

180,867

 

Other intangibles, net

 

 

17,190

 

 

 

16,335

 

Other assets

 

 

620,187

 

 

 

516,011

 

Total assets

 

$

24,143,092

 

 

$

21,462,360

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

6,652,887

 

 

$

5,757,353

 

Interest-bearing demand and savings

 

 

11,689,871

 

 

 

10,938,839

 

Time deposits under $250,000

 

 

618,301

 

 

 

594,705

 

Time deposits of $250,000 or more

 

 

348,286

 

 

 

445,807

 

Total deposits

 

 

19,309,345

 

 

 

17,736,704

 

Federal funds purchased and repurchase agreements

 

 

1,791,000

 

 

 

1,192,985

 

Long-term debt

 

 

86,951

 

 

 

78,523

 

Accrued expenses and taxes

 

 

223,210

 

 

 

171,548

 

Other liabilities

 

 

168,720

 

 

 

79,136

 

Total liabilities

 

 

21,579,226

 

 

 

19,258,896

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,069,510

 

 

 

1,054,801

 

Retained earnings

 

 

1,621,198

 

 

 

1,477,732

 

Accumulated other comprehensive income (loss), net

 

 

96,021

 

 

 

(155,641

)

Treasury stock

 

 

(277,920

)

 

 

(228,485

)

Total shareholders' equity

 

 

2,563,866

 

 

 

2,203,464

 

Total liabilities and shareholders' equity

 

$

24,143,092

 

 

$

21,462,360

 

 

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,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

162,243

 

 

$

143,947

 

 

$

481,342

 

 

$

405,231

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest

 

 

26,966

 

 

 

20,263

 

 

 

79,057

 

 

 

60,566

 

Tax-exempt interest

 

 

23,202

 

 

 

18,281

 

 

 

65,887

 

 

 

55,274

 

Total securities income

 

 

50,168

 

 

 

38,544

 

 

 

144,944

 

 

 

115,840

 

Federal funds and resell agreements

 

 

2,817

 

 

 

665

 

 

 

8,968

 

 

 

2,455

 

Interest-bearing due from banks

 

 

3,450

 

 

 

1,513

 

 

 

10,117

 

 

 

4,149

 

Trading securities

 

 

425

 

 

 

428

 

 

 

1,701

 

 

 

1,567

 

Total interest income

 

 

219,103

 

 

 

185,097

 

 

 

647,072

 

 

 

529,242

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

41,144

 

 

 

25,792

 

 

 

118,494

 

 

 

57,961

 

Federal funds and repurchase agreements

 

 

8,313

 

 

 

7,524

 

 

 

25,924

 

 

 

18,922

 

Other

 

 

1,386

 

 

 

1,291

 

 

 

4,112

 

 

 

3,721

 

Total interest expense

 

 

50,843

 

 

 

34,607

 

 

 

148,530

 

 

 

80,604

 

Net interest income

 

 

168,260

 

 

 

150,490

 

 

 

498,542

 

 

 

448,638

 

Provision for loan losses

 

 

7,500

 

 

 

5,750

 

 

 

30,850

 

 

 

22,750

 

Net interest income after provision for loan losses

 

 

160,760

 

 

 

144,740

 

 

 

467,692

 

 

 

425,888

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

45,218

 

 

 

43,425

 

 

 

130,078

 

 

 

130,272

 

Trading and investment banking

 

 

5,712

 

 

 

3,711

 

 

 

16,746

 

 

 

12,465

 

Service charges on deposit accounts

 

 

20,620

 

 

 

20,927

 

 

 

62,648

 

 

 

63,554

 

Insurance fees and commissions

 

 

320

 

 

 

339

 

 

 

1,123

 

 

 

980

 

Brokerage fees

 

 

8,102

 

 

 

6,402

 

 

 

22,422

 

 

 

19,046

 

Bankcard fees

 

 

16,895

 

 

 

16,838

 

 

 

50,401

 

 

 

52,145

 

Gains on sales of securities available for sale, net

 

 

3,057

 

 

 

211

 

 

 

2,463

 

 

 

578

 

Other

 

 

3,711

 

 

 

9,032

 

 

 

30,534

 

 

 

27,659

 

Total noninterest income

 

 

103,635

 

 

 

100,885

 

 

 

316,415

 

 

 

306,699

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

110,153

 

 

 

102,956

 

 

 

340,639

 

 

 

315,099

 

Occupancy, net

 

 

12,240

 

 

 

11,628

 

 

 

35,522

 

 

 

33,394

 

Equipment

 

 

19,775

 

 

 

18,533

 

 

 

58,283

 

 

 

56,201

 

Supplies and services

 

 

4,261

 

 

 

4,528

 

 

 

12,419

 

 

 

12,434

 

Marketing and business development

 

 

5,655

 

 

 

6,671

 

 

 

17,872

 

 

 

17,889

 

Processing fees

 

 

13,619

 

 

 

12,331

 

 

 

38,847

 

 

 

35,029

 

Legal and consulting

 

 

8,374

 

 

 

8,470

 

 

 

21,503

 

 

 

18,774

 

Bankcard

 

 

4,643

 

 

 

4,407

 

 

 

13,689

 

 

 

13,198

 

Amortization of other intangible assets

 

 

1,335

 

 

 

1,385

 

 

 

3,913

 

 

 

4,432

 

Regulatory fees

 

 

2,749

 

 

 

3,337

 

 

 

8,549

 

 

 

10,014

 

Other

 

 

8,593

 

 

 

6,139

 

 

 

24,174

 

 

 

17,015

 

Total noninterest expense

 

 

191,397

 

 

 

180,385

 

 

 

575,410

 

 

 

533,479

 

Income before income taxes

 

 

72,998

 

 

 

65,240

 

 

 

208,697

 

 

 

199,108

 

Income tax expense

 

 

10,616

 

 

 

7,391

 

 

 

31,612

 

 

 

28,302

 

Income from continuing operations

 

 

62,382

 

 

 

57,849

 

 

 

177,085

 

 

 

170,806

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

(917

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

(170

)

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(747

)

NET INCOME

 

$

62,382

 

 

$

57,849

 

 

$

177,085

 

 

$

170,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.28

 

 

$

1.17

 

 

$

3.63

 

 

$

3.45

 

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Net income – basic

 

 

1.28

 

 

 

1.17

 

 

 

3.63

 

 

 

3.44

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

1.27

 

 

 

1.16

 

 

 

3.61

 

 

 

3.41

 

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Net income – diluted

 

 

1.27

 

 

 

1.16

 

 

 

3.61

 

 

 

3.40

 

Dividends

 

 

0.30

 

 

 

0.29

 

 

 

0.90

 

 

 

0.87

 

Weighted average shares outstanding – basic

 

 

48,797,182

 

 

 

49,473,157

 

 

 

48,762,667

 

 

 

49,482,087

 

Weighted average shares outstanding – diluted

49,096,196

49,912,084

 

 

49,052,329

 

49,952,984

 

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

62,382

 

 

$

57,849

 

 

$

177,085

 

 

$

170,059

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

54,182

 

 

 

(36,331

)

 

 

268,100

 

 

 

(133,013

)

Less: Reclassification adjustment for gains included in net income

 

 

(3,057

)

 

 

(211

)

 

 

(2,463

)

 

 

(578

)

Change in unrealized gains and losses on debt securities during the period

 

 

51,125

 

 

 

(36,542

)

 

 

265,637

 

 

 

(133,591

)

Change in unrealized gains and losses on derivative hedges

 

 

(7,189

)

 

 

1,162

 

 

 

(12,323

)

 

 

4,274

 

Income tax (expense) benefit

 

 

(10,532

)

 

 

8,698

 

 

 

(61,511

)

 

 

32,250

 

Other comprehensive income (loss) before reclassifications

 

 

33,404

 

 

 

(26,682

)

 

 

191,803

 

 

 

(97,067

)

Amounts reclassified from accumulated other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

(13,049

)

Net current-period other comprehensive income (loss)

 

 

33,404

 

 

 

(26,682

)

 

 

191,803

 

 

 

(110,116

)

Comprehensive income

 

$

95,786

 

 

$

31,167

 

 

$

368,888

 

 

$

59,943

 

 

Consolidated Statements of Shareholders' Equity

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

Common
Stock

 

Capital
Surplus

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
(Loss) Income

 

Treasury
Stock

 

Total

Balance - January 1, 2018

 

$

55,057

 

$

1,046,095

 

 

$

1,338,110

 

 

$

(45,525

)

 

$

(212,206

)

 

$

2,181,531

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

170,059

 

 

 

(110,116

)

 

 

 

 

 

59,943

 

Reclassification of certain tax effects

 

 

 

 

 

 

 

12,917

 

 

 

 

 

 

 

 

 

12,917

 

Dividends ($0.87 per share)

 

 

 

 

 

 

 

(43,499

)

 

 

 

 

 

 

 

 

(43,499

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,417

)

 

 

(26,417

)

Issuances of equity awards, net of forfeitures

 

 

 

 

(2,004

)

 

 

 

 

 

 

 

 

2,499

 

 

 

495

 

Recognition of equity-based compensation

 

 

 

 

8,469

 

 

 

 

 

 

 

 

 

 

 

 

8,469

 

Sale of treasury stock

 

 

 

 

409

 

 

 

 

 

 

 

 

 

406

 

 

 

815

 

Exercise of stock options

 

 

 

 

1,832

 

 

 

 

 

 

 

 

 

7,233

 

 

 

9,065

 

Cumulative effect adjustments

 

 

 

 

 

 

 

145

 

 

 

 

 

 

 

 

 

145

 

Balance - September 30, 2018

 

$

55,057

 

$

1,054,801

 

 

$

1,477,732

 

 

$

(155,641

)

 

$

(228,485

)

 

$

2,203,464

 

 

Balance - January 1, 2019

 

$

55,057

 

$

1,054,601

 

 

$

1,488,421

 

 

$

(95,782

)

 

$

(273,827

)

 

$

2,228,470

 

Total comprehensive income

 

 

 

 

 

 

 

177,085

 

 

 

191,803

 

 

 

 

 

 

368,888

 

Dividends ($0.90 per share)

 

 

 

 

 

 

 

(44,308

)

 

 

 

 

 

 

 

 

(44,308

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,335

)

 

 

(4,335

)

Forfeitures of equity awards, net of issuances

 

 

 

 

3,113

 

 

 

 

 

 

 

 

 

(2,497

)

 

 

616

 

Recognition of equity-based compensation

 

 

 

 

10,918

 

 

 

 

 

 

 

 

 

 

 

 

10,918

 

Sale of treasury stock

 

 

 

 

265

 

 

 

 

 

 

 

 

 

380

 

 

 

645

 

Exercise of stock options

 

 

 

 

613

 

 

 

 

 

 

 

 

 

2,359

 

 

 

2,972

 

Balance - September 30, 2019

 

$

55,057

 

$

1,069,510

 

 

$

1,621,198

 

 

$

96,021

 

 

$

(277,920

)

 

$

2,563,866

 

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2019

 

2018

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

12,890,878

 

 

 

4.99

%

 

$

11,718,552

 

 

 

4.87

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

4,636,243

 

 

 

2.31

 

 

 

3,760,332

 

 

 

2.14

 

Tax-exempt

 

 

3,841,483

 

 

 

3.03

 

 

 

3,431,206

 

 

 

2.67

 

Total securities

 

 

8,477,726

 

 

 

2.63

 

 

 

7,191,538

 

 

 

2.39

 

Federal funds and resell agreements

 

 

394,587

 

 

 

2.83

 

 

 

101,223

 

 

 

2.61

 

Interest bearing due from banks

 

 

582,116

 

 

 

2.35

 

 

 

322,882

 

 

 

1.86

 

Trading securities

 

 

44,571

 

 

 

4.32

 

 

 

45,476

 

 

 

4.35

 

Total earning assets

 

 

22,389,878

 

 

 

3.99

 

 

 

19,379,671

 

 

 

3.89

 

Allowance for loan losses

 

 

(104,795

)

 

 

 

 

 

 

(99,289

)

 

 

 

 

Other assets

 

 

1,652,033

 

 

 

 

 

 

 

1,469,283

 

 

 

 

 

Total assets

 

$

23,937,116

 

 

 

 

 

 

$

20,749,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

13,226,432

 

 

 

1.23

%

 

$

10,984,419

 

 

 

0.93

%

Federal funds and repurchase agreements

 

 

1,683,072

 

 

 

1.96

 

 

 

1,733,884

 

 

 

1.72

 

Borrowed funds

 

 

88,100

 

 

 

6.24

 

 

 

78,764

 

 

 

6.50

 

Total interest-bearing liabilities

 

 

14,997,604

 

 

 

1.34

 

 

 

12,797,067

 

 

 

1.07

 

Noninterest-bearing demand deposits

 

 

6,082,498

 

 

 

 

 

 

 

5,547,880

 

 

 

 

 

Other liabilities

 

 

303,736

 

 

 

 

 

 

 

179,775

 

 

 

 

 

Shareholders' equity

 

 

2,553,278

 

 

 

 

 

 

 

2,224,943

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

23,937,116

 

 

 

 

 

 

$

20,749,665

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

2.65

%

 

 

 

 

 

 

2.82

%

Net interest margin

 

 

 

 

 

 

3.09

 

 

 

 

 

 

 

3.18

 

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

12,607,157

 

 

 

5.10

%

 

$

11,484,757

 

 

 

4.72

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

4,481,242

 

 

 

2.36

 

 

 

3,830,164

 

 

 

2.11

 

Tax-exempt

 

 

3,730,744

 

 

 

2.98

 

 

 

3,519,060

 

 

 

2.66

 

Total securities

 

 

8,211,986

 

 

 

2.64

 

 

 

7,349,224

 

 

 

2.37

 

Federal funds and resell agreements

 

 

414,560

 

 

 

2.89

 

 

 

122,961

 

 

 

2.67

 

Interest bearing due from banks

 

 

563,810

 

 

 

2.40

 

 

 

336,144

 

 

 

1.65

 

Trading securities

 

 

50,841

 

 

 

5.05

 

 

 

45,206

 

 

 

5.21

 

Total earning assets

 

 

21,848,354

 

 

 

4.07

 

 

 

19,338,292

 

 

 

3.76

 

Allowance for loan losses

 

 

(106,565

)

 

 

 

 

 

 

(100,856

)

 

 

 

 

Other assets

 

 

1,607,087

 

 

 

 

 

 

 

1,467,036

 

 

 

 

 

Total assets

 

$

23,348,876

 

 

 

 

 

 

$

20,704,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

12,897,172

 

 

 

1.23

%

 

$

10,831,775

 

 

 

0.72

%

Federal funds and repurchase agreements

 

 

1,655,934

 

 

 

2.09

 

 

 

1,678,108

 

 

 

1.51

 

Borrowed funds

 

 

84,107

 

 

 

6.54

 

 

 

78,770

 

 

 

6.32

 

Total interest-bearing liabilities

 

 

14,637,213

 

 

 

1.36

 

 

 

12,588,653

 

 

 

0.86

 

Noninterest-bearing demand deposits

 

 

6,040,019

 

 

 

 

 

 

 

5,753,237

 

 

 

 

 

Other liabilities

 

 

269,425

 

 

 

 

 

 

 

172,560

 

 

 

 

 

Shareholders' equity

 

 

2,402,219

 

 

 

 

 

 

 

2,190,022

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

23,348,876

 

 

 

 

 

 

$

20,704,472

 

 

 

 

 

Net interest spread

 

 

 

 

 

 

2.71

%

 

 

 

 

 

 

2.90

%

Net interest margin

 

 

 

 

 

 

3.16

 

 

 

 

 

 

 

3.20

 

 

Business Segment Information

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2019

 

Commercial
Banking

Institutional
Banking

Personal
Banking

Healthcare
Services

Total

Net interest income

$

104,360

$

18,726

$

33,296

 

$

11,878

$

168,260

Provision for loan losses

 

5,966

 

256

 

1,278

 

 

 

7,500

Noninterest income

 

18,874

 

49,806

 

26,118

 

 

8,837

 

103,635

Noninterest expense

 

66,447

 

55,280

 

58,328

 

 

11,342

 

191,397

Income (loss) before taxes

 

50,821

 

12,996

 

(192

)

 

9,373

 

72,998

Income tax expense (benefit)

 

7,390

 

1,891

 

(28

)

 

1,363

 

10,616

Income (loss) from continuing operations

$

43,431

$

11,105

$

(164

)

$

8,010

$

62,382

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

Commercial
Banking

Institutional
Banking

Personal
Banking

Healthcare
Services

Total

Net interest income

$

94,782

$

15,235

$

31,069

 

$

9,404

$

150,490

Provision for loan losses

 

4,063

 

354

 

1,333

 

 

 

5,750

Noninterest income

 

20,825

 

43,171

 

28,269

 

 

8,620

 

100,885

Noninterest expense

 

64,076

 

47,083

 

56,651

 

 

12,575

 

180,385

Income before taxes

 

47,468

 

10,969

 

1,354

 

 

5,449

 

65,240

Income tax expense

 

5,378

 

1,243

 

153

 

 

617

 

7,391

Income from continuing operations

$

42,090

$

9,726

$

1,201

 

$

4,832

$

57,849

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2019

 

Commercial
Banking

Institutional
Banking

Personal
Banking

Healthcare
Services

Total

Net interest income

$

306,752

$

58,599

$

98,933

 

$

34,258

$

498,542

Provision for loan losses

 

25,602

 

723

 

4,525

 

 

 

30,850

Noninterest income

 

62,442

 

142,370

 

83,855

 

 

27,748

 

316,415

Noninterest expense

 

201,777

 

160,308

 

176,762

 

 

36,563

 

575,410

Income before taxes

 

141,815

 

39,938

 

1,501

 

 

25,443

 

208,697

Income tax expense

 

21,482

 

6,049

 

227

 

 

3,854

 

31,612

Income from continuing operations

$

120,333

$

33,889

$

1,274

 

$

21,589

$

177,085

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

Commercial
Banking

Institutional
Banking

Personal
Banking

Healthcare
Services

Total

Net interest income

$

279,842

$

47,225

$

93,057

 

$

28,514

$

448,638

Provision for loan losses

 

17,179

 

1,027

 

4,544

 

 

 

22,750

Noninterest income

 

60,590

 

132,005

 

87,708

 

 

26,396

 

306,699

Noninterest expense

 

189,050

 

141,517

 

165,968

 

 

36,944

 

533,479

Income before taxes

 

134,203

 

36,686

 

10,253

 

 

17,966

 

199,108

Income tax expense

 

19,076

 

5,215

 

1,457

 

 

2,554

 

28,302

Income from continuing operations

$

115,127

$

31,471

$

8,796

 

$

15,412

$

170,806

The company has strategically aligned its operations into the following four reportable segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services. Senior executive officers regularly evaluate business segment financial results produced by the company’s internal reporting system in deciding how to allocate resources and assess performance for individual business segments. The company’s reportable segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at September 30, 2019.

Non-GAAP Financial Measures

 

Net operating income Non-GAAP reconciliations:

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Income from continuing operations (GAAP)

 

$

62,382

 

 

$

57,849

 

 

$

177,085

 

 

$

170,806

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and divestiture expense (income)

 

 

71

 

 

 

3

 

 

 

168

 

 

 

(3

)

Severance expense

 

 

113

 

 

 

221

 

 

 

980

 

 

 

3,035

 

Tax-impact of adjustments (i)

 

 

(41

)

 

 

(49

)

 

 

(255

)

 

 

(673

)

Total Non-GAAP adjustments (net of tax)

 

 

143

 

 

 

175

 

 

 

893

 

 

 

2,359

 

Net operating income from continuing operations (Non-GAAP)

 

$

62,525

 

 

$

58,024

 

 

$

177,978

 

 

$

173,165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations - diluted (GAAP)

 

$

1.27

 

 

$

1.16

 

 

$

3.61

 

 

$

3.41

 

Acquisition and divestiture expense

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense

 

 

 

 

 

 

 

 

0.02

 

 

 

0.07

 

Tax-impact of adjustments (i)

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Operating earnings per share from continuing operations - diluted (Non-GAAP)

 

$

1.27

 

 

$

1.16

 

 

$

3.63

 

 

$

3.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.03

%

 

 

1.11

%

 

 

1.01

%

 

 

1.10

%

Return on average equity

 

 

9.69

 

 

 

10.32

 

 

 

9.86

 

 

 

10.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.04

%

 

 

1.11

%

 

 

1.02

%

 

 

1.12

%

Operating return on average equity

 

 

9.72

 

 

 

10.35

 

 

 

9.91

 

 

 

10.57

 

 

(i) Calculated using the company’s marginal tax rate of 22.2 percent.

Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations:

 

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

Noninterest expense

 

$

191,397

 

 

$

180,385

 

 

$

575,410

 

 

$

533,479

 

Adjustments to arrive at operating noninterest expense (pre-tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and divestiture expense (income)

 

 

71

 

 

 

3

 

 

 

168

 

 

 

(3

)

Severance expense

 

 

113

 

 

 

221

 

 

 

980

 

 

 

3,035

 

Total Non-GAAP adjustments (pre-tax)

 

 

184

 

 

 

224

 

 

 

1,148

 

 

 

3,032

 

Operating noninterest expense (Non-GAAP)

 

$

191,213

 

 

$

180,161

 

 

$

574,262

 

 

$

530,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

191,397

 

 

$

180,385

 

 

$

575,410

 

 

$

533,479

 

Less: Amortization of other intangibles

 

 

1,335

 

 

 

1,385

 

 

 

3,913

 

 

 

4,432

 

Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)

 

$

190,062

 

 

$

179,000

 

 

$

571,497

 

 

$

529,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

191,213

 

 

$

180,161

 

 

$

574,262

 

 

$

530,447

 

Less: Amortization of other intangibles

 

 

1,335

 

 

 

1,385

 

 

 

3,913

 

 

 

4,432

 

Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)

 

$

189,878

 

 

$

178,776

 

 

$

570,349

 

 

$

526,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

168,260

 

 

$

150,490

 

 

$

498,542

 

 

$

448,638

 

Noninterest income

 

 

103,635

 

 

 

100,885

 

 

 

316,415

 

 

 

306,699

 

Less: Gains on sales of securities available for sale, net

 

 

3,057

 

 

 

211

 

 

 

2,463

 

 

 

578

 

Total Non-GAAP Revenue (denominator A)

 

$

268,838

 

 

$

251,164

 

 

$

812,494

 

 

$

754,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

70.70

%

 

 

71.27

%

 

 

70.34

%

 

 

70.09

%

Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)

 

 

70.63

 

 

 

71.18

 

 

 

70.20

 

 

 

69.69

 

 

Contacts

Media Contact:
Stephanie Hague, 816.860.5088

Investor Relations Contact:
Kay Gregory, 816.860.7106

Release Summary

UMB Financial Corporation reports third quarter income from continuing operations of $62.4 million, or $1.27 per diluted share.

Contacts

Media Contact:
Stephanie Hague, 816.860.5088

Investor Relations Contact:
Kay Gregory, 816.860.7106