Attached files
| file | filename |
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| 8-K - 8-K - UMB FINANCIAL CORP | d761512d8k.htm |
| EX-99.1 - EX-99.1 - UMB FINANCIAL CORP | d761512dex991.htm |
 Quality endures.
Second Quarter 2014
UMB Financial
Exhibit 99.2 |
 Cautionary Notice about Forward-Looking Statements
2
This
presentation
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.
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,
2013,
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
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
Quarterly
Report
on
Form
10-Q,
Current
Report
on
Form
8-K,
or
other
applicable
document
that
is
filed
or
furnished
with
the
SEC. |
 Earnings Summary
$ in thousands, except per-share data; unaudited
3
2Q14
1Q14
2Q13
vs. 1Q14
vs. 2Q13
Net Interest Income
86,170
$
85,445
$
82,327
$
0.8
4.7
Noninterest Income
134,001
122,964
113,585
9.0
18.0
Total Revenue
220,171
208,409
195,912
5.6
12.4
Noninterest Expense
166,511
172,241
150,311
(3.3)
10.8
Operating Income
53,660
36,168
45,601
48.4
17.7
Provision for loan losses
5,000
4,500
5,000
11.1
-
Income before Taxes
48,660
31,668
40,601
53.7
19.8
Income Tax Expense
13,988
8,255
10,672
69.4
31.1
Net Income
34,672
$
23,413
$
29,929
$
48.1
15.8
Diluted EPS
0.76
$
0.52
$
0.74
$
46.2
2.7
Dividends per share
0.225
0.225
0.215
-
4.7
WASO
44,823,370
44,742,068
39,966,869
0.2
12.2
% variance |
 Net
Interest Income 4
+4.7%
Net Interest Income 2Q’14 vs. 2Q’13
•
Increased loan balances |
 54.7%
15.4%
12.8%
4.9%
4.8%
2.6%
2.3%
1.9%
0.6%
Bankcard Fees
Noninterest Income Highlights
5 Year
CAGR
20.7%
Trust & Securities Processing Revenue
Trust & Securities Processing Composition:
Equity Earnings/Alternatives
Trading & Investment Banking
Other
Deposit Service Charges
Trust & Securities Processing
Brokerage Fees
Gains on Sale of Securities
$73.4 million in 2Q14
Primary components:
•$33.8M –
Institutional Investment Management
•$22.4M –
Asset Servicing
•$17.2M –
Bank (Institutional & Personal Investment Mgmt)
Insurance Fees
5 |
 NI
Expense
5yr
CAGR
7.0%
0%
20%
40%
60%
80%
100%
$40
$60
$80
$100
$120
$140
$160
$180
Salary/Benefit Expense
Noninterest Income
Total Noninterest Expense
Coverage Ratio*
Noninterest Expense
Noninterest expense increased 10.8% to $166.5 million vs. 2Q’13
•
Salary and benefit expense increased $6.0 million or 7.1% compared to
2Q’13 •
Added $5.3 million in expense for a contingency reserve related to Prairie Capital
Management in 2Q’14 •
Expense for contingent consideration liabilities on acquisitions
was $805 thousand in 2Q’14 compared to
just $12 thousand a year ago
Salary
5yr
CAGR
8.5%
NI
Income
5yr
CAGR
11.6%
Managed FTE Costs; Growing Noninterest Income
6
* Noninterest Income/Noninterest Expense
Demonstrating Operating
Leverage |
 Select Balance Sheet Items
7
$ in thousands, average balances; unaudited
vs. 1Q14
vs. 2Q13
Avg. Balance
Avg. Balance
Avg. Balance
Assets
Loans, net of unearned interest
6,897,840
$
3.51
6,678,932
$
3.58
6,158,821
$
3.69
3.3
12.0
Total securities
6,940,448
1.97
6,997,052
1.98
7,091,118
1.95
(0.8)
(2.1)
Total earning assets
14,526,859
2.63
15,438,211
2.48
13,777,533
2.67
(5.9)
5.4
Allowance for loan losses
(75,929)
(74,997)
(70,004)
1.2
8.5
Total assets
15,618,192
$
16,504,251
$
14,875,428
$
(5.4)
5.0
Liabilities and Shareholders' Equity
Interest-bearing deposits
7,126,614
$
0.17
7,968,400
$
0.16
6,943,399
$
0.19
(10.6)
2.6
Total interest-bearing liabilities
8,725,371
0.17
9,641,869
0.15
8,796,109
0.18
(9.5)
(0.8)
Noninterest-bearing demand deposits
5,152,980
5,167,513
4,636,240
(0.3)
11.1
Shareholders' Equity
1,585,612
1,547,722
1,289,852
2.4
22.9
Total liabilities and shareholders' equity
15,618,192
$
16,504,251
$
14,875,428
$
(5.4)
5.0
Net interest spread
2.46
2.33
2.49
Net interest margin
2.53
2.39
2.56
% variance
2Q14
1Q14
2Q13
Avg Yield
/ Rate %
Avg Yield
/ Rate %
Avg Yield
/ Rate % |
 Consistent Loan Growth
5 Year
CAGR
9.2%
8
Average Net Loans & Loan Yields |
    47.5%
29.0%
14.5%
2.0%
7.0%
Average Balance, AFS:
$6.7 billion
Average Yield:
1.90%
Investment Mix
Securities Available for Sale,
At June 30, 2014
Agencies
High Quality Investment Portfolio
9
Securities Gains
$ in thousands
2Q13
1,519
$
3Q13
1,140
$
4Q13
(10)
$
1Q14
1,470
$
2Q14
2,569
$
Duration/Life
(in months)
at 06/30/14
at 03/31/14
Avg. Life Total
46.93
46.66
Duration Total
42.55
43.03
Roll off
Purchased
($ millions)
Yield
($ millions)
Yield
3Q13
$265
1.85%
$77
1.02%
4Q13
$308
2.04%
$355
0.64%
1Q14
$528
1.53%
$618
1.26%
2Q14
$275
2.23%
$560
1.35%
Scheduled Cash Flow
3Q14
$226
1.91%
Next 12 months
$1,042
2.01%
CDs & Corporates
Municipals
Mortgage-Backed Securities
Treasuries
AFS Portfolio Statistics |
 73.50%
70.77%
73.64%
79.67%
73.32%
2.56%
2.61%
2.51%
2.39%
2.53%
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
Efficiency Ratio
Net Interest Margin
9.31%
10.84%
9.08%
6.13%
8.77%
0.81%
0.92%
0.89%
0.58%
0.89%
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
Return on Avg Equity
Return on Avg Assets
Key Metrics
Credit Quality
$ in thousands
Performance Metrics
$3,234
$3,209
$4,187
$3,737
$3,713
0.21%
0.20%
0.26%
0.23%
0.22%
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
Net Charge-offs
NCOs/Avg Loans
Net Charge-Offs
$25,489
$31,260
$30,706
$30,153
$27,175
0.40%
0.48%
0.47%
0.45%
0.39%
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
Nonperforming Loans
NPLs/Loans
Nonperforming Loans
ROAE/ROAA
Efficiency Ratio/NIM
10 |
 Business Segment Updates |
 Net loans grew for the 17
th
consecutive
quarter, increasing by 9.2% to $6.8 billion
UMB presence in Texas has expanded into
Fort Worth with a new office and a team of
commercial lenders
Private banking loan demand strong, with
loan balances increasing 27.3% to $359.8
million vs. a year ago
Bank
2
nd
Quarter 2014 Highlights
$8.3
$9.5
$
10.3
$
11.6
$12.3
33.5%
33.7%
40.0%
40.0%
42.0%
2Q'10
2Q'11
2Q'12
2Q'13
2Q'14
Interest Bearing
Non-Interest Bearing
Average Net Loans
$ in billions
Average Deposits
$ in billions
5 yr
CAGR
10.1%
$4.4
$4.7
$5.2
$6.2
$6.9
2Q'10
2Q'11
2Q'12
2Q'13
2Q'14
5 yr
CAGR
9.2%
12
Bank
Operating
Results
$
in
000s,
unaudited
3 mos Ended
March 31,
Y/Y
LQ
2014
2013
2014
Net interest income
72,481
$
70,558
$
71,121
$
2.7%
1.9%
Provision for loan losses
2,686
1,628
2,426
65.0%
10.7%
Noninterest income
56,006
46,436
47,420
20.6%
18.1%
Noninterest expense
100,928
92,540
107,753
9.1%
-6.3%
NI before taxes
24,873
22,826
8,362
9.0%
197.5%
Income tax expense
7,211
6,035
1,942
19.5%
271.3%
Net income
17,662
$
16,791
$
6,420
$
5.2%
175.1%
pre-tax profit margin
19.4%
19.5%
7.1%
3 mos Ended
% Change
June 30, |
 Bank -
Lending
13
Diverse Loan Book
(Actual Loan Balances at June 30)
45.4%
54.8%
28.3%
25.0%
10.6%
$5.3B
$6.9B
8.7%
8.7%
$6.3B
6.1%
4.3%
4.3%
2.7%
$4.7B
1.1%
2Q'11
2Q'12
2Q'13
2Q'14
Commercial & Industrial*
Commercial Real Estate
Home Equity
Credit Card
Consumer Real Estate
Consumer -
Other
*includes C&I and real estate construction and leases
|
 Bank -
Deposits
Diverse Sources of Deposits
(Average Deposits for Three Months Ended June 30)
14
29.3%
34.4%
35.6%
26.0%
11.8%
9.9%
6.0%
7.0%
7.2%
6.8%
2.8%
6.2%
4.2%
3.1%
5.1%
4.6%
$9.5
$10.3
$11.6
$12.3
2Q'11
2Q'12
2Q'13
2Q'14
Commercial/Treasury Mgmt
Consumer Banking
Asset Servicing
Private Wealth Mgmt
Institutional Asset Mgmt
Healthcare Svcs
Small Business Banking
Inst. Banking & Investor Services |
 Bank –
Commercial Banking
High Growth Regions
2Q’14 vs. 2Q’13
Commercial Loans By Region
Loan Balances
$
in
billions,
Average
C&I
and
CRE
Loan
Balances
for
Three
Months
Ended
June
30
5 yr
CAGR
10.6%
15
47.7%
46.0%
43.9%
43.3%
42.1%
0%
50%
100%
2Q'10
2Q'11
2Q'12
2Q'13
2Q'14
KC
CO
STL
Greater MO
KS
OK
AZ
NE
TX |
 Bank –
Private Wealth Mgmt. & Consumer Banking
16
Assets Under Management
$ in billions
$921
$1,004
$1,123
$1,194
$1,296
$452
$486
$549
$550
$584
49.1%
48.4%
48.8%
46.1%
45.1%
2Q '10
2Q '11
2Q '12
2Q '13
2Q '14
Commitments
Balances
Utilization
Home Equity Lines of Credit
$ in billions
$7.4B
$7.6B
$8.8B
$10.2B
$10.9B
$11.3B |
 $26.3
$29.3
$31.2
$32.2
$32.4
2Q'13
3Q'13
4Q'13
1Q'14
2Q'14
Institutional Investment Management
17
Total Scout Assets Under Management
$ in billions
2
nd
Quarter
2014
Highlights
AUM increased 23.1% to $32.4 billion
compared to 2Q’13
Launched the Unconstrained Bond
strategy UCITS during the quarter.
Assets in this vehicle grew to $82
million within the first three months.
Institutional
Investment
Management
Operating
Results
$
in
000s,
unaudited
3 mos Ended
March 31,
Y/Y
LQ
2014
2013
2014
Net Interest income
(1)
$
(10)
$
(2)
$
90.0%
50.0%
Noninterest income
33,999
29,155
34,095
16.6%
-0.3%
Noninterest expense
22,111
18,856
25,894
17.3%
-14.6%
NI before taxes
11,887
10,289
8,199
15.5%
45.0%
Income tax expense
3,375
2,708
2,184
24.6%
54.5%
Net income
8,512
$
7,581
$
6,015
$
12.3%
41.5%
pre-tax profit margin
35.0%
35.3%
24.0%
June 30,
% Change
3 mos Ended |
 AUM Drivers
$ in millions
$230.7
$996.1
Total Change
($millions)
$32,394.3
$32,163.5
Total AUM
($millions)
$567.3
$26,314.1
Institutional Investment Management
18
$2,994.8
$29,308.9
$1,858.5
$31,167.4 |
 Total AUM
$32.4B
$19.7B
$23.5B
Institutional Investment Management
19
$31.2B
$32.2B |
 34.4%
25.5%
19.3%
11.4%
5.1%
4.4%
AUM by Strategy –
As of 2Q’14
Equity Strategies
International
Mid Cap
International ADR
Emerging Markets
Global
Small Cap
Other:
20
Fixed Income Strategies
Core Plus
Low Duration
Long Duration
Core
Intermediate
Unconstrained
Global Aggregate
Real Return
Equity
Fixed Income
55%
45%
63.3%
31.6%
3.1%
1.8%
0.2%
Other: |
 Payment Solutions
Total
Card
Purchase
Volume
&
Interchange
Revenue
2
nd
Quarter 2014 Highlights
21
Durbin
effective
Credit and debit card purchase volume
increased 27% to $2.2 billion vs. 2Q’13
HSA deposits and assets grew by
38.2% to $823.7 million vs. 2Q’13
1.4 million HSA/FSA accounts were
added in the last 12 months; now stand
at 4.6 million accounts
Payment
Solutions
Operating
Results
$
in
000s,
unaudited
3 mos Ended
March 31,
Y/Y
LQ
2014
2013
2014
Net interest income
12,390
$
11,192
$
12,388
$
10.7%
0.02%
Provision for loan losses
2,314
3,372
2,074
-31.4%
11.6%
Noninterest income
21,219
18,640
20,235
13.8%
4.9%
Noninterest expense
24,603
21,850
21,015
12.6%
17.1%
NI before taxes
6,692
4,610
9,534
45.2%
-29.8%
Income tax expense
1,910
1,203
2,609
58.8%
-26.8%
Net income
4,782
$
3,407
$
6,925
$
40.4%
-30.9%
pre-tax profit margin
19.9%
15.5%
29.2%
% Change
June 30,
3 mos Ended |
 Payment Solutions
22
Healthcare Purchase Volume Trends
$millions
*
Interchange
revenue
from
Healthcare
cards
divided
by
purchase
volume
on
Healthcare
cards |
 Asset Servicing
2
nd
Quarter 2014 Highlights
23
Assets Under Administration
$billions
AUA increased 23.7% over the past 12
months to $207.9 billion
80 new alternative servicing clients were
added during the 2
nd
quarter, increasing
assets in that business by 15.5%
UMB Fund Services was again
recognized as a “Best Place to Work”
in
Milwaukee
Asset
Servicing
Operating
Results
$
in
000s,
unaudited
3 mos Ended
March 31,
Y/Y
LQ
2014
2013
2014
Net interest income
1,300
$
587
$
1,938
$
121.5%
-32.9%
Noninterest income
22,777
19,354
21,214
17.7%
7.4%
Noninterest expense
18,869
17,065
17,579
10.6%
7.3%
NI before taxes
5,208
2,876
5,573
81.1%
-6.5%
Income tax expense
1,492
726
1,520
105.5%
-1.8%
Net income
3,716
$
2,150
$
4,053
$
72.8%
-8.3%
pre-tax profit margin
21.6%
14.4%
24.1%
% Change
June 30,
3 mos Ended |
 Asset Servicing
24 |
 Building a company
for the next 100 years.
UMB Financial
Second Quarter 2014 |