Attached files
| file | filename |
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| 8-K - FORM 8-K - UMB FINANCIAL CORP | d156864d8k.htm |
| EX-99.1 - EX-99.1 - UMB FINANCIAL CORP | d156864dex991.htm |
| EX-99.2 - EX-99.2 - UMB FINANCIAL CORP | d156864dex992.htm |
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Defines Us UMB Financial
First Quarter 2016 April 26, 2016 Exhibit 99.3 |
 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—such as our statements about expected cost savings and other results of efficiency initiatives and our statements about asset sensitivity. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,”
“intend,” “estimate,” “project,”
“outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional
verbs such as “may,” “will,” “should,” “would,”
or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which
are beyond our control. You should not rely on any forward-looking
statement as a prediction or guarantee about the future. Our actual
future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or
aspirations to differ from those in forward-looking statements are described in our
Annual Report on Form 10-K for the year ended December 31, 2015, our
subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the 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. |
 1Q 2016
Performance Highlights |
 Earnings
Summary – 1Q 2016
$ in thousands, except share and per share data; unaudited
1Q'16 4Q'15 1Q'15 vs. 4Q'15 vs. 1Q'15 Net Interest Income 117,892 $ 114,454 $ 90,358 $ 3.0 30.5 Noninterest Income 116,350 112,599 125,207 3.3 (7.1) Pre-Provision Net Revenue 234,242 227,053 215,565 3.2 8.7 Noninterest Expense 180,744 182,080 164,413 (0.7) 9.9 Income Before Provision & Taxes 53,498 44,973 51,152 19.0 4.6 Provision for loan losses 5,000 5,000 3,000 - 66.7 Income before Taxes 48,498 39,973 48,152 21.3 0.7 Income Tax Provision 12,253 10,330 14,387 18.6 (14.8) Net Income 36,245 $ 29,643 $ 33,765 $ 22.3 7.3 Diluted EPS 0.74 $ 0.60 $ 0.74 $ 23.3 - Dividends per share 0.245 0.245 0.235 - 4.3 WASO (diluted) 49,090,232 49,066,566 45,437,654 - 8.0 % variance 4 |
 Net
Operating Income Non-GAAP Reconciliation In this presentation, we
provide information using net operating income, operating earnings per share, operating return on average equity, operating return on average assets, operating noninterest expense, and operating efficiency ratio, all of which are non-GAAP financial measures. This
information
supplements the results that are reported according to generally accepted accounting principles (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between these non-GAAP financial measures and the comparable GAAP
financial measures
are reconciled in the tables below and as described further on the next slide. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for acquisition- and severance-related items that management does not believe reflect the company’s fundamental operating performance. Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the after-tax impact of excluding the
following: (i) fair value
adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management Company, (ii) expenses related to the acquisition of Marquette Financial Companies, and (iii) non-acquisition severance expenses. Operating earnings per
share (basic and diluted) is calculated as net operating income, divided
by the company’s average number of shares outstanding (basic and diluted) for the relevant period. Operating return on average equity is calculated as net operating income, divided by the company’s average total
shareholders’ equity for the relevant period. Operating return on
average assets is calculated as net operating income, divided by the company’s average assets for the relevant period. (continued on next page) 5 (unaudited, $ in thousands except per share data) March 31, March 31, 2016 2015 Net income (GAAP) $ 36,245 $ 33,765 Adjustments (net of tax): Fair value adjustments on contingent consideration (i) 43 (1,449) Acquisition expenses (ii) 1,948 490 Non-acquisition severance expense (iii) 335 226 Total Non-GAAP adjustments (net of tax) 2,326 (733) Net Operating Income (Non-GAAP) $ 38,571 $ 33,032 GAAP Earnings per share - Basic $ 0.74 $ 0.75 Earnings per share - Diluted 0.74 0.74 Return on average assets 0.75% 0.81% Return on average equity 7.51% 8.18% Non-GAAP Operating earnings per share - Basic $ 0.79 $ 0.73 Operating earnings per share - Diluted 0.79 0.73 Operating return on average assets 0.80% 0.80% Operating return on average equity 7.99% 8.00% Three Months Ended |
 Operating
Noninterest Expense & Efficiency Ratio Non-GAAP
Reconciliation 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 on slide 5. Operating efficiency ratio is calculated as the company’s operating noninterest
expense, less amortization of other intangibles, divided by the
company’s tax equivalent net interest income plus noninterest income less gains on sales of securities available for sale. i. Represents fair value adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management
Company.
ii. Represents expenses related to the acquisition of Marquette Financial Companies (MFC).
iii. Represents non-acquisition severance expense related to UMB-legacy employees. Severance expense for MFC-legacy employees is included
in item (ii). iv.
Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount
of such adjustment was an addition to net interest income of $6.9 million
and $5.4 million for the three months ended March 31, 2016 and 2015, respectively. 6 (unaudited, $ in thousands) March 31, March 31, 2016 2015 Noninterest expense (GAAP) $ 180,744 $ 164,413 Adjustments (pre-tax): Fair value adjustments on contingent consideration (i) 67 (2,264) Acquisition expenses (ii) 3,043 766 Non-acquisition severance expense (iii) 524 353 Total Non-GAAP adjustments (pre-tax) 3,634 (1,145) Operating noninterest expense 177,110 165,558 Noninterest expense 180,744 164,413 Less: Amortization of other intangibles 3,226 2,755 Noninterest expense, net of amortization of other intangibles (numerator A) 177,518 161,658 Operating noninterest expense (Non-GAAP) 177,110 165,558 Less: Amortization of other intangibles 3,226 2,755 Operating expense, net of amortization of other intangibles (numerator B) 173,884 162,803 Net interest income (tax equivalent) (iv) 124,744 95,750 Noninterest income 116,350 125,207 Less: Gains on sales of securities available for sale, net 2,933 7,336 Total (denominator A) 238,161 213,621 Efficiency ratio (numerator A/denominator A) 74.54% 75.68% Operating efficiency ratio (numerator B/denominator A) 73.01% 76.21% Three Months Ended |
 Select
Balance Sheet Items $ in thousands, average balances; unaudited
7 vs. 4Q'15 vs. 1Q'15 Avg. Balance Avg. Balance Avg. Balance Assets Loans, net of unearned interest 9,550,291 $ 3.81 9,199,961 $ 3.80 7,470,101 $ 3.49 3.8 27.8 Total securities 7,658,694 2.05 7,401,671 1.99 7,153,018 1.94 3.5 7.1 Total earning assets 18,004,411 2.93 17,380,673 2.88 15,765,321 2.56 3.6 14.2 Allowance for loan losses (80,820) (78,906) (76,574) 2.4 5.5 Total assets 19,334,851 $ 18,755,557 $ 16,831,955 $ 3.1 14.9 Liabilities and Shareholders' Equity Interest-bearing deposits 9,429,774 $ 0.17 8,528,207 $ 0.18 7,602,258 $ 0.16 10.6 24.0 Total interest-bearing liabilities 11,218,887 0.22 9,923,008 0.21 9,321,497 0.16 13.1 20.4 Noninterest-bearing demand deposits 6,014,820 6,734,309 5,660,893 (10.7) 6.3 Shareholders' Equity 1,941,261 1,912,654 1,674,761 1.5 15.9 Total liabilities and shareholders' equity 19,334,851 $ 18,755,557 $ 16,831,955 $ 3.1 14.9 Net interest spread 2.71 2.67 2.40 Net interest margin 2.79 2.76 2.46 % variance March 31, 2016 December 31, 2015 March 31, 2015 Avg Yield / Rate % Avg Yield / Rate % Avg Yield / Rate % Three Months Ended |
 Key
Performance Metrics (1)
See Slides 7 and 8 for additional disclosures related to these non-GAAP financial
measures. 8
1Q'16 4Q'15 3Q'15 2Q'15 1Q'15 ROE 7.51% 6.15% 4.72% 6.95% 8.18% Operating ROE (1) 7.99% 7.10% 8.00% ROA 0.75% 0.63% 0.49% 0.70% 0.81% Operating ROA (1) 0.80% 0.72% 0.80% Efficiency Ratio 74.54% 77.21% 80.79% 76.41% 75.67% Operating Efficiency Ratio (1) 73.01% 74.11% 76.21% Net Interest Margin 2.79% 2.76% 2.73% 2.59% 2.46% Noninterest Income % of Revenue 49.7% 49.6% 49.8% 55.1% 58.1% Avg. Loan/Deposit Ratio 61.8% 60.3% 62.3% 60.1% 56.3% Assets Under Mgmt. (billions) 40.0 $ 40.0 $ 40.9 $ 42.5 $ 42.3 $ Tier 1 Capital Ratio 11.80% 11.86% 12.51% 12.77% 12.91% Diluted EPS 0.74 $ 0.60 $ 0.46 $ 0.65 $ 0.74 $ Operating EPS-Diluted (1) 0.79 $ 0.70 $ 0.73 $ |
 Update on
Efficiency Initiative (1)
Excludes severance costs
(2) Excludes Marquette-related synergies (3) Excludes Marquette-related severance expense The amounts in the 2015 and 2016 columns represent actual savings recognized or expected to be recognized, as applicable, in those years based on
the timing
of actions taken as part of these efficiency initiatives. The amounts in the annualized column represent the estimated full-year impact of those savings going forward. ($ in millions) 2015 Initial Estimate 2016 Initial Estimate 2015 Recognized 1Q 2016 Recognized Remaining 2016 Estimate Annualized Salaries and Benefits (1) $5.2 $15.0 $7.7 $3.3 $11.1 $23.4 Business Process Improvements $1.6 $7.6 $1.8 $1.6 $4.8 $9.5 Total Cost Savings (2) $6.8 $22.6 $9.5 $4.9 $15.9 $32.9 Severance Expense – not included in efficiency totals: ($ in millions) 2015 Initial Estimate 2016 Initial Estimate 2015 Actual 1Q 2016 Actual Remaining 2016 Estimate Severance Expense (3) $4.9 $3.1 $4.1 $0.8 $2.8 9 |
 1Q 2016
Financials |
 Marquette
Integration Update Transaction Costs
$ in thousands 2014 2015 1Q’16 Total To-Date Estimated 2Q-4Q ‘16 Estimated 2017 & beyond HR Costs $215.1 $4,238.7 $953.3 $5,407.1 $838 Technology Integration - 4,073.5 1,143.4 5,216.9 88 Professional Fees 1,680.1 1,330.3 1.2 3,011.6 - Other Integration Fees 46.4 190.6 945.3 1,182.3 2,523 Total Transaction Costs $1,941.6 $9,833.1 $3,043.2 $14,817.9 $3,449 $1,910 11 |
 Consistent
Loan Growth End-of-Period Total Loans
1Q’16 Total Loans +29.4% Vs. 1Q’15 (1) On May 31, 2015, we closed the acquisition of Marquette Financial Companies and loans with an acquired value of $980.4 million were added
to the UMB portfolio. At March 31, 2016, the acquired loans plus
production in the legacy Marquette channels totaled $997.9 million.
(1) (1) 12 $4.7 $5.1 $6.0 $6.8 $7.5 $8.9 $9.7 |
 $7.5 $8.4 $8.7 $1.0 $1.0 1Q'15 4Q'15 1Q'16 Legacy UMB Legacy Marquette UMB and Marquette Loans $9.7 $9.4 $ in thousands Legacy Marquette Loans March 31, 2015 December 31, 2015 March 31, 2016 vs. Mar '15 vs. Dec '15 vs. Dec '15 Legacy UMB Loans 7,498,308 $
8,448,650 $
8,701,696 $
16.0% 3.0% n/a Legacy Marquette Loans - 982,111 997,935 n/a n/a 1.6% Total 7,498,308 $
9,430,761 $
9,699,631 $
29.4% 2.9% Legacy UMB Loans 13 |
 Quality
Credit Metrics Net Charge-Offs
$ in thousands Nonperforming Loans $ in thousands 14 $1,661 $4,758 $2,192 $1,886 $5,745 0.09% 0.24% 0.10% 0.08% 0.24% 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Net Charge-offs NCOs/Avg. Loans $29,187 $37,649 $49,955 $61,152 $54,933 0.39% 0.42% 0.55% 0.65% 0.57% 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 Nonperforming Loans NPLs/Loans |
    1 st Quarter 2016 Average Balance, AFS: $6.8 billion Average Yield: 1.87% Investment Mix Securities Available for Sale $6.9 billion at March 31, 2016 Agencies High Quality Investment Portfolio Corporates Municipals Mortgage-Backed Securities Treasuries AFS Portfolio Statistics Roll off Purchased ($ millions) Yield ($ millions) Yield 2Q'15 $299 1.98% $498 1.90% 3Q'15 $278 1.88% $114 2.17% 4Q'15 $293 1.81% $633 2.05% 1Q'16 $432 1.44% $698 2.00% Scheduled Cash Flow 2Q'16 $419 1.46% Next 12 months $1,795 1.40% Duration/Life
(in months) at 3/31/16 at 12/31/15 Avg. Life Total 43.40 44.80 Duration Total 35.02 36.93 Securities Gains ($ thousands) 1Q'15 7,336 $ 2Q'15 967 $
3Q'15 101 $
4Q'15 1,998 $ 1Q'16 2,933 $ 15 53.3% 31.8% 8.6% 5.1% 1.2% |
 40.1% 44.6% 43.2% 42.7% 40.2% Deposit Growth Deposits & Percent of Free Funds Actual EOP Balances; $ in billions 1Q 2016 Cost of Interest-Bearing Liabilities 0.22% Including DDA 0.14% $10.7 $12.3 $12.6 $13.2 $15.4 16 Interest Bearing Non-Interest Bearing |
 14.43
14.04 12.80 12.85 13.61 13.29 11.86 11.80 8.41 8.72 9.08 8.78 11.74 11.80 2013 2014 2015 1Q'16 Balance Sheet – Strong Capital Position Common Equity Tier 1 Ratio vs. Industry 1Q’16 $1.08 $1.94 1Q'11 1Q'16 Average Equity ($ in billions) Capital Ratio Trends Industry Median as of 4Q’15; Source: SNL Financial. (1) 2015 & 2016 ratios calculated under Basel III requirements. Total Risk-Based Capital Tier 1 Capital Tier 1 Leverage Common Equity Tier 1 (1) (1) 17 12.91% 11.81% Industry Median |
 Year
1 Year 2 Year 1 Year 2 Year 1 Year 2 Asset Sensitivity at March 31, 2016 Projected Net Interest Income Differential vs. Rates Unchanged (1) ($ in millions) (1) This analysis is further described in our Annual Report on Form 10-K for the year ended December 31, 2015, and subsequent Quarterly Reports
on Form 10-Q under the heading “Net Interest Income
Modeling” and is subject to the assumptions, risks, and uncertainties noted there. Variable Rate Loans at 3/31/16: $4.5 billion, 48% of loan book
• ~46% of variable loans are tied to Prime for the next quarter • ~53% of variable loans are tied to Libor for the next quarter Loan Repricing/Maturity Schedule: • 54% in 2Q 2016 • 65% in the next 12 months 18 $6.2 $15.2 $24.2 $17.5 $37.7 $57.7 $19.5 $40.9 $61.9 $28.6 $58.5 $87.7 +100 bps +200 bps +300 bps 12-mo Ramp - Year 1 Immediate Shock - Year 1 12-mo Ramp - Year 2 Immediate Shock - Year 2 |
 Noninterest Income –
1Q 2016 Noninterest income increased $3.8 million, or 3.3%, compared to 4Q’15,
and decreased $8.9 million, or 7.1%,
compared to 1Q’15
Equity losses on alternative investments
were $381 thousand in 1Q’16, an
increase of $4.8 million over 4Q’15
(linked quarter) Growing money market balances and increased 12b-1 fees contributed to the improvement in brokerage fees Trust and securities processing income decreased $2.7 million or 4.4% compared to the linked quarter Inst. Inv Mgmt: -$2.5MM Asset Servicing: -$53k Bank: -$131k On a year-over-year basis, trust and securities processing income decreased $7.8 million or 11.6% compared to 1Q’15 Inst. Inv Mgmt: -$7.9MM Asset Servicing: -$726k Bank: +$810k 1 st Quarter ‘16 Drivers $ in thousands 1Q'16 4Q'15 3Q'15 2Q'15 1Q'15 Trust and securities processing 59,485 $ 62,194 $ 65,182 $ 67,381 $ 67,299 $ Trading and investment banking 4,630 5,559 2,969 5,568 6,122 Service charges on deposit accounts 21,461 21,631 21,663 21,625 21,541 Insurance fees and commissions 1,497 894 480 586 570 Brokerage fees 4,185 3,005 2,958 2,936 2,854 Bankcard fees 18,016 17,369 17,624 18,035 16,183 Gains on sales of securities 2,933 1,998 101 967 7,336 Equity losses on alt. investments (381) (5,189) (5,032) (1,125) (842) Other 4,524 5,138 3,153 3,577 4,144 Total noninterest income 116,350 $ 112,599 $ 109,098 $ 119,550 $ 125,207 $ 19 |
 Bankcard Fees Noninterest Income Composition – 1Q 2016 Trust & Securities Processing Revenue Trust & Securities Processing Composition:
Service Charges on Deposit Accounts Trust & Securities Processing Gains on Sales of Securities Other Brokerage Fees Trading & Investment Banking ($ in millions) Insurance Fees & Commissions Source of income: 1Q’16 1Q'15 Institutional Investment Mgmt. $18.4 $26.3 Asset Servicing $22.3 $23.0 Bank (Inst. & Personal Asset Mgmt.) $18.8 $18.0 $59.5 $67.3 Excludes ($0.4MM) unrealized loss from Equity Losses on Alternative Investments, which represents (0.3%) of noninterest income
20 $51.7 $54.7 $62.3 $71.6 $67.3 $59.5 51.1% 18.4% 15.5% 4.0% 3.9% 3.6% 2.5% 1.3% |
 Noninterest Expense –
1Q 2016 Noninterest expense decreased $1.3MM, or 0.7%, compared to 4Q’15, and increased $16.3MM or 9.9% compared to 1Q’15 Salaries and employee benefits expense increased $3.5MM, or 3.4% on a linked quarter basis, and increased $8.6MM or 8.7% year-over-year Ongoing Marquette salaries were $8.3 million Marquette-related severances were $800 thousand Non-Marquette severances were $500 thousand Equipment expense, which increased $2.1 million on a year-over-year basis, was related to technology projects completed and put into production The year-over-year increase in other noninterest expense was driven by a $0.1 million charge on contingent consideration liabilities in 1Q’16 compared to a $2.3 million positive adjustment a year ago 1 st Quarter ‘16 Drivers $ in thousands 1Q'16 4Q'15 3Q'15 2Q'15 1Q'15 Salaries and employee benefits 107,150 $ 103,617 $ 104,733 $ 99,585 $ 98,537 $ Occupancy, net 10,972 11,791 11,748 10,312 10,010 Equipment 16,282 16,723 17,228 15,410 14,172 Supplies and services 4,949 4,280 5,371 4,603 4,325 Marketing and business dev 4,441 6,816 5,766 6,530 4,618 Processing fees 11,462 13,096 12,795 12,654 12,783 Legal and consulting 4,799 7,447 8,648 5,917 4,378 Bankcard 5,815 5,301 5,266 4,953 4,768 Amortization of other intangibles 3,226 3,283 3,483 2,569 2,755 Regulatory fees 3,429 3,320 3,176 2,873 2,756 Other 8,219 6,406 7,065 6,558 5,311 Total noninterest expense 180,744 $ 182,080 $ 185,279 $ 171,964 $ 164,413 $ 21 |
 Business
Segment Updates |
 Bank
Highlights
Total loans at March 31, 2016 stood at $9.7 billion, an increase of
2.9% on a linked-quarter basis and 29.4% year-over-year
Loans produced by legacy UMB lenders increased 3.0% linked quarter
and 16.0% year-over-year to $8.7 billion
Average loan yield for 1Q’16 was 3.81% compared to 3.49% in
1Q’15 Private placement bonds, shown as held to maturity securities, increased 20.6% from year-end 2015 and 132.0% from March 31, 2015 to stand at $804.7 million Total debit and credit card purchase volume was $2.7 billion for 1Q’16, an increase of 18.5% compared to 4Q’15 HSA accounts grew to 826 thousand, for a 36.7% year- over-year increase HSA deposits stood at $1.4 billion, an increase of 35.4% compared to a year ago 23 Bank Segment Results ($ in thousands, unaudited) 1Q'16 4Q'15 1Q'15 vs. 4Q'15 vs. 1Q'15 Net interest income $115,271 $112,686 $ 89,360 2.3% 29.0% Provision for loan losses 5,000 5,000 3,000 - % 66.7% Noninterest income 75,441 69,202 74,689 9.0% 1.0% Noninterest expense 143,361 144,597 125,178 (0.9%) 14.5% NI before taxes 42,351 32,291 35,871 31.2% 18.1% Income tax provision 10,706 8,341 10,715 28.4% (0.1%) Net income $ 31,645 $ 23,950 $ 25,156 32.1% 25.8% pre-tax profit margin 22.2% 17.8% 21.9% % Variance |
 $ in
millions 1Q'16
4Q'15 3Q'15 2Q'15 1Q'15 End-of-Period Total Loans 9,699.6 $ 9,430.8 $ 9,046.1 $ 8,916.1 $ 7,498.3 $ Gross Loan Production 531.8 696.9 525.0 573.9 471.2 Revolving Balance Changes
20.5 32.3 (105.8) 178.8 (116.8) Payoffs (113.8) (119.9) (82.8) (77.3) (125.8) Paydowns (169.7) (224.6) (206.4) (238.0) (196.1) Paydowns/Payoffs as a % of Loans
2.9% 3.8% 3.2% 4.2% 4.3% Loan Paydowns, Payoffs, and Line Changes (1) On May 31, 2015, we closed the acquisition of Marquette Financial Companies and loans with an acquired value of
$980.4 million were added to the UMB portfolio.
(1) 24 |
 48.3% 53.3% 52.0% 51.3% 45.3% 2.2% 3.4% 5.1% 26.5% 24.0% 25.4% 25.9% 28.5% 3.9% 3.8% 4.4% 4.4% 5.0% 10.5% 9.4% 8.4% 8.4% 7.5% 6.1% 5.2% 4.4% 3.8% 2.8% 1.0% 0.9% 0.9% 1.1% 1.2% 1Q'12 1Q'13 1Q'14 1Q'15 1Q'16 Bank – Loan Composition Diverse Loan Book (Actual Loan Balances at March 31) Commercial Credit Card Commercial & Industrial (1) HELOC Residential Real Estate Real Estate Construction Commercial Real Estate Consumer Credit Card Consumer Other $5.1B $6.0B $6.8B $7.5B $9.7B 1.5% 0.9% 1.7% 2.7% 1.8% 1.4% 2.0% 1.6% 2.1% Factoring Loans Asset-Based Loans (1) Includes Leases 25 |
 Bank
– Regional Lending
(2) Arizona loan balances include $593.5MM legacy UMB loans and $368.9MM legacy Marquette loans.
(1) Texas loan balances include $295.9MM legacy UMB loans and $300.6MM legacy Marquette loans.
Colorado Kansas City Kansas Greater MO St. Louis Arizona Texas Oklahoma Marquette Transportation Fin (Natl. Sales) Nebraska Marquette Business Credit (Natl. Sales) $2,481.4 $2,874.1 $3,011.2 $3,353.6 $3,877.5 $699.5 $839.8 $954.5 $999.2 $1,146.4 $523.0 $621.4 $765.2 $817.5 $957.0 $417.9 $962.4 $509.5 $559.8 $625.8 $691.9 $701.6 $394.1 $419.7 $462.0 $517.6 $577.3 $596.5 $299.7 $373.4 $330.0 $354.9 2012 2013 2014 2015 2016 $129.3 $275.7 $132.4 $181.7 $214.4 $200.7 $295.9 $217.5 $153.1 $234.2 $5.1B $6.0B $6.8B $7.5B $9.7B $205.8 $86.3 (1) (2) $70.2 Loans by Region (Actual Loan Balances at March 31, $ in millions) High Growth Regions 1Q’16 vs. 1Q’15 Texas +289.6% Arizona +130.3% St. Louis +17.1% 26 |
 Oil &
Gas Loans Outstanding – as of March 31, 2016
Service Midstream Upstream Downstream UMB Total Loans $9.7 billion Oil & Gas Loans $318.2 million 27 96.7% 3.3% 1.2% 1.1% 0.6% 0.4% |
 Net
Charge-Off History (1)
Commercial includes Commercial & Industrial, Commercial Credit Card, Commercial
Real Estate, Real Estate Construction loans, asset- based, and
factoring loans. (2)
Other includes Consumer, Residential Real Estate, HELOC, and DDA
Charge-offs. 28
($ in thousands) 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q'16 Commercial Loans (1) 1,569 $ 2,943 $ 4,113 $ 6,007 $ 11,880 $ 7,310 $ 3,881 $ 6,459 $ 3,415 $ 2,586 $ Consumer Credit Card 4,577 6,839 12,291 14,279 11,127 9,382 8,811 8,301 6,753 1,781 Other (2) 2,127 1,973 3,854 1,411 1,128 1,399 1,483 851 329 1,378 Total Net Charge-Offs 8,273 $ 11,755 $ 20,258 $ 21,697 $ 24,135 $ 18,091 $ 14,175 $ 15,611 $ 10,497 $ 5,745 $ Average Total Loans ($ in millions) 3,901.9 $ 4,193.9 $ 4,383.6 $ 4,490.6 $ 4,756.2 $ 5,251.3 $ 6,221.3 $ 6,975.3 $ 8,425.1 $ 9,550.3 $ NCOs as % of Average Loans 0.21% 0.28% 0.47% 0.48% 0.51% 0.35% 0.23% 0.22% 0.12% 0.24% |
 Loan
Classification Trends 29
2.00% 0.90% 2.40% 0.57% 5.30% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Watch Special Mention Substandard Non-Performing Loans Total |
 30.5% 29.7% 33.2% 31.1% 27.8% 32.0% 26.5% 26.7% 24.5% 23.4% 7.6% 8.3% 8.1% 9.0% 9.1% 4.6% 6.1% 8.1% 9.3% 10.9% 12.2% 8.7% 6.3% 8.3% 8.1% 7.6% 7.2% 6.5% 6.2% 6.2% 6.3% 4.6% 4.1% 4.6% 3.8% 4.4% 6.8% 5.2% 4.5% 5.2% 2012 2013 2014 2015 2016 Bank – Deposits Diverse Sources of Deposits (Actual Deposits at March 31) $10.7B $12.6B $12.3B $13.2B $15.4B Personal Banking - Consumer Commercial Institutional - IAM Personal Banking - Private Wealth Asset Servicing Healthcare Institutional - IBIS Small Business Other 3.6% 0.2% 1.0% 0.2% 1.7% 30 |
 $8.8B $10.2B $11.6B $12.8B $12.7B $1.2B $1.2B $1.4B $1.6B $1.6B Home Equity Lines of Credit $ in millions Assets Under Management $ in millions Bank – Asset Mgmt. & Home Equity Lending (1) (1) Includes $682.1 million from Marquette Asset Management 31 $6,390 $7,044 $7,610 $8,659 $8,694 $2,219 $2,853 $3,603 $3,712 $3,581 $226 $351 $419 $421 $427 2012 2013 2014 2015 1Q'16 Personal Banking - Private Wealth & Institutional - IAM Prairie Capital Management Brokerage $574 $566 $644 $730 $724 $608 $663 $755 $877 $910 48.5% 46.1% 46.0% 45.4% 44.3% 2012 2013 2014 2015 1Q'16 Balances Unused Commitments Utilization |
 $399.6
$595.0 $841.7 $1,174.1 $1,436.8 $30.9 $47.4 $75.8 $118.3 $140.4 2012 2013 2014 2015 1Q'16 HSA Deposits HSA Investment Assets Healthcare Services Healthcare Deposits and Assets $ in millions $430.5 $642.4 $917.5 $1,292.4 $1,577.2 Investment assets as a 2012 2013 2014 2015 1Q’16 % of total healthcare deposits & assets 7.2% 7.4% 8.3% 9.2% 8.9% 32 Healthcare provided 9.3% of Total Company Deposits in 1Q’16 |
 We offer a
modular and configurable platform of applications and services that deliver the underlying core banking functionality to our healthcare partners.
Broker/Employer TPAs Health Plans Tech Cos Payment Aggregators Healthcare Partners HSA Applications SSO Web Services Contributions Enrollment BIN Sponsor HCS Saver Partner Portal Core Banking Systems Multi-Channel Healthcare Strategy 33 |
 Card
Purchase Volumes Purchase Volume
& Interchange Revenue
Commercial Credit Consumer Credit Consumer Debit Healthcare Debit Institutional Banking – IBIS Debit Interchange ($ in millions) $2.7B $1.6B $1.8B $2.1B $2.3B 1.1% 1.0% 1.5% 1.3% 1.0% 34 14.0% 12.1% 10.2% 8.0% 6.9% 18.1% 17.0% 15.5% 15.1% 15.9% 23.6% 20.7% 18.0% 16.1% 14.2% 43.2% 49.2% 54.8% 59.5% 62.0% $15.3 $16.6 $16.7 $18.4 $20.7 1Q'12 1Q'13 1Q'14 1Q'15 1Q'16 |
 Institutional Investment Management
Scout assets under management stood at $27.3 billion on March 31, 2016; 80% fixed
income / 20% equity
Net flows for 1Q’16 were -$266.0 million in fixed income and -$435.1
million in equity Of the 9 funds rated by Morningstar, 5 have an overall
rating of 4 stars and 1, the Core Plus Bond Fund, has an overall rating
of 5 stars (see disclosures on slides 39 & 40) 1
st Quarter Statistics 35 Institutional Investment Management Segment Results ($ in thousands, unaudited) 1Q'16 4Q'15 1Q'15 vs. 4Q'15 vs. 1Q'15 Net interest income $ - $ - $ 1 - % (100.0%) Noninterest income 18,416 20,880 27,084 (11.8%) (32.0%) Noninterest expense 17,233 18,636 17,961 (7.5%) (4.1%) NI before taxes 1,183 2,244 9,124 (47.3%) (87.0%) Income tax provision 289 583 2,750 (50.4%) (89.5%) Net income $ 894 $ 1,661 $ 6,374 (46.2%) (86.0%) pre-tax profit margin 6.4% 10.7% 33.7% % Variance |
   $10.4
$12.6 $7.8 $3.9 $3.5 $0.9 $3.2 $2.4 $2.0 $1.9 $11.4 $12.6 $18.1 $18.9 $19.5 $0.8 $2.8 $2.9 $2.4 $2.4 2012 2013 2014 2015 1Q'16 Equity Mutual Funds Equity Institutional & Other Fixed Income Institutional & Other Fixed Income Mutual Funds Total AUM $27.3B $23.5B $31.2B Institutional Investment Management $31.2B $27.2B 36 |
 AUM
Drivers $ in millions
($2,027.5) ($567.7) Total Change ($millions) $28,012.2 $30,039.7 Total AUM ($millions) Institutional Investment Management ($570.7) $30,607.4 ($830.9) $27,181.3 $109.9 $27,291.2 1Q’16 4Q’15 3Q’15 2Q’15 1Q’14 37 ($1,111.0) ($682.1) ($1,354.3) ($1,078.6) ($435.1) $447.5 ($51.0) ($745.4) $207.2 ($4.8) ($79.3) $262.6 $37.7 $262.1 ($266.0) $172.0 ($97.2) $34.5 ($221.6) $815.8 ($2,500) ($1,500) ($500) $500 $1,500 Equity Flows Equity Market Impact Fixed Income Flows Fixed Income Market Impact |
 AUM by
Strategy – As of March 31, 2016
Equity Fixed Income Equity Strategies International MidCap International ADR Emerging Markets Global Small Cap Other: Equity Opportunity Fixed Income Strategies Core Plus Low Duration Long Duration Core Real Return Unconstrained Intermediate Other: Global Aggregate Unconstrained UCITS 38 50.5% 39.4% 5.3% 4.1% 0.7% 80% 20% 29.8% 27.7% 18.5% 15.3% 4.2% 4.5% |
 39 Morningstar Ratings MORNINGSTAR RATING: The Overall Morningstar Rating™ for a fund is derived from the weighted-average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics. For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar
Risk-Adjusted Return measure that accounts for variations in a fund's
monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in a broad asset class receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated
separately, which may cause slight variations in the distribution
percentages.) As
of March 31, 2016, the Scout Emerging Markets Fund received the following star ratings among U.S. domiciled Diversified Emerging Mkts Funds for the following time periods: 4 stars (among 591 funds) for the 3 year period. As of March 31, 2016, the Scout Global Equity Fund received the following star ratings among U.S. domiciled World Stock Funds for the
following time periods: 4 stars (among 991 funds) for the 3 year
period. As of March 31, 2016, the Scout Small Cap Fund received the
following star ratings among U.S. domiciled Small Growth Funds for the following time periods: 4 stars (among 658 funds) for the 3 year, 4 stars (among 588 funds) for the 5 year and 3 stars (among 423 funds) for the 10 year periods.
As of March 31, 2016, the Scout Core Bond Fund - Institutional Class received the following star ratings among U.S. domiciled Intermediate-Term Bond Funds for the following time periods: 3 stars (among 951 funds) for the 3 year, 3 stars (among 827 funds) for the 5 year and 5 stars (among 602 funds)
for the 10 year periods. As
of March 31, 2016, the Scout Core Plus Bond Fund - Institutional Class received the following star ratings among U.S. domiciled Intermediate-Term Bond Funds for the following time periods: 3 stars (among 951 funds) for the 3 year, 5 stars (among 827 funds) for the 5 year and 5 stars (among 602 funds) for the 10 year periods. As of March 31, 2016, the Scout Low Duration Bond Fund received the following star ratings among U.S. domiciled Short-Term Bond Funds for the
following time periods: 4 stars (among 490 funds) for the 3 year
period. The
funds may have experienced negative performance during one or more of the time periods represented by the Morningstar rating shown. © 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Rating may differ among share classes of a
mutual fund as a result of different sales loads and/or expense
structures. It may be based, in part, on the performance of a predecessor Fund. The Scout Funds are distributed by UMB Distribution Services LLC, an affiliate of UMB Financial Corporation, and managed by Scout Investments,
Inc., a subsidiary of UMB Financial Corporation.
NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Fund Name Category Funds in Category Scout Emerging Markets Diversified Emerging Mrkts 591 Scout Global Equity World Stock 991 Scout Small Cap Small Growth 658 Scout Core Bond - Institutional Class Intermediate-Term Bond 951 Scout Core Plus Bond - Institutional Class Intermediate-Term Bond 951 Scout Low Duration Bond Short-Term Bond 490 Morningstar ratings based on a risk-adjusted performance as of March 31, 2016
Overall Rating |
 Important
Disclosures 40
Each Fund’s Prospectus or Summary Prospectus, available by calling 800.996.2862 or
visiting scoutinv.com, includes investment objectives, risks, fees,
expenses and other important information. Please read and consider carefully before investing. Risk considerations: Stock fund values fluctuate and investors may lose principal value. Small-cap and mid-cap stocks are more susceptible
to market volatility due to risks such as lack of management experience, product
diversification, financial resources, competitive strength and liquidity.
Real Estate Investment Trusts (REITS) may be affected by economic conditions including credit risk, interest rate risk and other factors that affect property values, rents or occupancies of real estate. Groups of stocks, such as value and growth, go in and out of favor, which
may cause certain funds to underperform other equity funds.
Foreign investments present additional risk due to currency fluctuations, economic and
political factors, government regulations, differences in accounting
standards, and other factors. Investments in emerging markets involve even greater risks. Focusing on particular countries, regions, industries, sectors or types of investments may cause greater risk of adverse developments in certain funds.
The return of principal in a fixed income fund is not guaranteed. Fixed income funds
have the same issuer, interest rate, inflation and credit risks
that are associated with underlying fixed income securities owned by the fund. Mortgage- and Asset-Backed Securities are subject to prepayment risk and the risk of default on the underlying mortgages or other assets. High yield securities involve greater risk than investment
grade securities and tend to be more sensitive to economic conditions and
credit risk. An unconstrained investment approach can create considerable
exposure to certain types of securities, such as derivatives, that present significant volatility, particularly over short periods of time. Derivatives, such as options, futures contracts, currency forwards or swap agreements, may involve greater risks than if the Fund invested in
the referenced obligation directly. Derivatives are subject to risks,
such as market risk, liquidity risk, interest rate risk, credit risk and
management risk. Derivative investments could lose more than the principal amount invested. Certain funds may use derivative for hedging purposes or as part of the fund's investment strategy. The use of leverage, derivatives and short sales could accelerate losses to the Fund.
These losses could exceed the original amount invested.
Certain funds may, at times, experience higher-than-average portfolio turnover, which may generate significant taxable gains and increased trading expenses, which, in turn, may lower the fund’s return. |
 Asset
Servicing Assets Under Administration
$ in billions Investment Management Series Trusts continue to grow, with 83 active funds and $13.1 billion in assets at March 31, 2016 Added 80 net new funds serviced over the past 12 months in the alternative servicing, fund accounting and administration and transfer agent products 1 st Quarter Statistics 41 $156.0 $191.0 $198.3 $185.6 $180.7 Asset Servicing Segment Results $ in thousands, unaudited 1Q'16 4Q'15 1Q'15 vs. 4Q'15 vs. 1Q'15 Net interest income $ 2,621 $ 1,768 $ 997 48.2% 162.9% Noninterest income 22,493 22,517 23,434 -0.1% -4.0% Noninterest expense 20,150 18,847 21,274 6.9% -5.3% NI before taxes 4,964 5,438 3,157 -8.7% 57.2% Income tax provision 1,258 1,406 922 -10.5% 36.4% Net income $ 3,706 $ 4,032 $ 2,235 -8.1% 65.8% pre-tax profit margin 19.8% 22.4% 12.9% % Variance |
 Asset
Servicing Fund Accounting & Administration
Alternative Asset Servicing
Custody Transfer Agency 42 $44.1 $63.0 $72.1 $60.8 $59.9 179 219 249 253 256 2012 2013 2014 2015 1Q'16 Assets Under Administration # of Funds Serviced $26.3 $27.9 $31.5 $38.1 $36.0 532 514 579 610 617 2012 2013 2014 2015 1Q'16 Assets Under Administration # of Funds Serviced 946.8 1,280.1 1,111.2 1,083.4 1,117.6 270 301 349 386 387 2012 2013 2014 2015 1Q'16 # of Shareholders # of Funds Serviced $54.9 $68.0 $62.4 $57.0 $57.6 443 411 454 478 472 2012 2013 2014 2015 1Q'16 Assets Under Administration # of Custody Accounts |
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Defines Us UMB Financial
First Quarter 2016 |