KANSAS CITY, Mo.--(BUSINESS WIRE)--UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2023 of $92.4 million, or $1.90 per diluted share, compared to $100.2 million, or $2.06 per diluted share, in the fourth quarter of 2022 (linked quarter) and $106.0 million, or $2.17 per diluted share, in the first quarter of 2022.
Net operating income, a non-GAAP financial measure reconciled later in this release to net income, the nearest comparable GAAP measure, was $92.8 million, or $1.91 per diluted share, for the first quarter of 2023, compared to $101.1 million, or $2.07 per diluted share, for the linked quarter and $106.1 million, or $2.17 per diluted share, for the first quarter of 2022. Operating pre-tax, pre-provision income (operating PTPP), a non-GAAP measure reconciled later in this release to the components of net income before taxes, the nearest comparable GAAP measure, was $135.4 million, or $2.78 per diluted share, for the first quarter of 2023, compared to $134.1 million, or $2.75 per diluted share, for the linked quarter, and $119.4 million, or $2.44 per diluted share, for the first quarter of 2022. These operating PTPP results represent increases of 1.0% on a linked-quarter basis and 13.4%, compared to the first quarter of 2022.
“Comments made publicly about the health of the banking industry, driven by the mistaken presumption that the drivers of the failure of two banks would apply to other banks generally, did a great disservice not only to UMB, but to regional banks as a whole,” said Mariner Kemper, chairman, president and chief executive officer. “Despite the challenging environment resulting from this flawed and exaggerated crisis of confidence created by certain market participants, we had a strong first quarter, with average deposit growth of 2.4% and average loan growth of 19.3%, on a linked-quarter annualized basis. We had continued momentum in our fee businesses, and credit quality remains strong, with net charge offs of just 0.09% of average loans. Nonperforming loans further improved from year-end, and were just 0.07% of loans at March 31.” Mr. Kemper continued, “Our business model is built to withstand difficult economic environments and crises. Our deposit base is diverse across multiple lines of businesses and reflects long tenured and deeply entrenched relationships, with more than 55% of our customers having banked with us for ten years or more. Our regulatory capital ratios are above peer median, and our liquidity levels are strong, including many contingent sources. Despite conjectures in the aftermath of Silicon Valley Bank’s failure, not every bank, including UMB, needs to sell investment securities at a loss.”
First Quarter 2023 earnings discussion
Summary of quarterly financial results |
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UMB Financial Corporation |
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(unaudited, dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
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|
Q1 |
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|
Q4 |
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|
Q1 |
|
|||
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|||
Net income (GAAP) |
|
$ |
92,437 |
|
|
$ |
100,173 |
|
|
$ |
105,963 |
|
Earnings per share (diluted) |
|
|
1.90 |
|
|
|
2.06 |
|
|
|
2.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating pre-tax, pre-provision income (Non-GAAP) |
|
|
135,369 |
|
|
|
134,054 |
|
|
|
119,400 |
|
Operating pre-tax, pre-provision earnings per share (diluted) |
|
|
2.78 |
|
|
|
2.75 |
|
|
|
2.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating pre-tax, pre-provision income - FTE (Non-GAAP) |
|
|
141,924 |
|
|
|
140,717 |
|
|
|
125,799 |
|
Operating pre-tax, pre-provision earnings per share - FTE (diluted) |
|
|
2.91 |
|
|
|
2.89 |
|
|
|
2.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (Non-GAAP) |
|
|
92,836 |
|
|
|
101,092 |
|
|
|
106,073 |
|
Operating earnings per share (diluted) |
|
|
1.91 |
|
|
|
2.07 |
|
|
|
2.17 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
GAAP |
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|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.97 |
% |
|
|
1.06 |
% |
|
|
1.10 |
% |
Return on average equity |
|
|
13.76 |
|
|
|
15.16 |
|
|
|
14.65 |
|
Efficiency ratio |
|
|
63.12 |
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|
|
63.72 |
|
|
|
63.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Non-GAAP (i) |
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|
|
|
|
|
|
|
|
|
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Operating return on average assets |
|
|
0.98 |
% |
|
|
1.07 |
% |
|
|
1.10 |
% |
Operating return on average equity |
|
|
13.82 |
|
|
|
15.30 |
|
|
|
14.67 |
|
Operating return on average tangible equity excluding AOCI |
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|
12.21 |
|
|
|
12.85 |
|
|
|
14.99 |
|
Operating efficiency ratio |
|
|
62.98 |
|
|
|
63.39 |
|
|
|
63.93 |
|
(i) See Non-GAAP reconciliation later in this release. |
Summary of revenue |
|
UMB Financial Corporation |
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(unaudited, dollars in thousands) |
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|||||
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|
Q1 |
|
Q4 |
|
Q1 |
|
CQ vs. |
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CQ vs. |
||||||||||
|
|
2023 |
|
2022 |
|
2022 |
|
LQ |
|
PY |
||||||||||
Net interest income |
|
$ |
241,696 |
|
|
$ |
245,166 |
|
|
$ |
210,355 |
|
|
$ |
(3,470 |
) |
|
$ |
31,341 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Trust and securities processing |
|
|
62,359 |
|
|
|
59,207 |
|
|
|
59,528 |
|
|
|
3,152 |
|
|
|
2,831 |
|
Trading and investment banking |
|
|
5,308 |
|
|
|
5,251 |
|
|
|
5,440 |
|
|
|
57 |
|
|
|
(132 |
) |
Service charges on deposit accounts |
|
|
21,159 |
|
|
|
19,758 |
|
|
|
24,642 |
|
|
|
1,401 |
|
|
|
(3,483 |
) |
Insurance fees and commissions |
|
|
274 |
|
|
|
459 |
|
|
|
259 |
|
|
|
(185 |
) |
|
|
15 |
|
Brokerage fees |
|
|
13,676 |
|
|
|
13,332 |
|
|
|
3,456 |
|
|
|
344 |
|
|
|
10,220 |
|
Bankcard fees |
|
|
18,172 |
|
|
|
19,597 |
|
|
|
16,635 |
|
|
|
(1,425 |
) |
|
|
1,537 |
|
Investment securities losses, net |
|
|
(5,324 |
) |
|
|
(409 |
) |
|
|
(522 |
) |
|
|
(4,915 |
) |
|
|
(4,802 |
) |
Other |
|
|
14,576 |
|
|
|
8,302 |
|
|
|
14,240 |
|
|
|
6,274 |
|
|
|
336 |
|
Total noninterest income |
|
$ |
130,200 |
|
|
$ |
125,497 |
|
|
$ |
123,678 |
|
|
$ |
4,703 |
|
|
$ |
6,522 |
|
Total revenue |
|
$ |
371,896 |
|
|
$ |
370,663 |
|
|
$ |
334,033 |
|
|
$ |
1,233 |
|
|
$ |
37,863 |
|
Net interest income (FTE) |
|
$ |
248,251 |
|
|
$ |
251,829 |
|
|
$ |
216,754 |
|
|
|
|
|
|
|
||
Net interest margin (FTE) |
|
|
2.76 |
% |
|
|
2.83 |
% |
|
|
2.35 |
% |
|
|
|
|
|
|
||
Total noninterest income as a % of total revenue |
|
|
35.0 |
|
|
|
33.9 |
|
|
|
37.0 |
|
|
|
|
|
|
|
||
Net interest income
- First quarter 2023 net interest income totaled $241.7 million, a decrease of $3.5 million, or 1.4% from the linked quarter, driven by the impact of fewer days in the first quarter, as well as higher interest costs primarily driven by unfavorable mix shift in the composition of liabilities, partially offset by continued growth in average loans.
- Average earning assets increased $1.2 billion, or 3.3% from the linked quarter, largely driven by an increase of $976.9 million in average loans, an increase of $398.3 million in interest-bearing due from banks, partially offset by a decrease of $204.9 million in federal funds sold and resell agreements.
- Average interest-bearing liabilities increased $1.6 billion, or 7.2% from the linked quarter, primarily driven by increases of $803.5 million in borrowed funds and $723.6 million in interest-bearing deposits. Average noninterest-bearing deposits decreased $535.1 million, or 4.3% as compared to the linked quarter.
- Net interest margin for the first quarter was 2.76%, a decrease of seven basis points from the linked quarter, driven by increased cost of interest-bearing liabilities, partially offset by the benefit of free funds and earning asset mix changes. The cost of interest-bearing liabilities increased 69 basis points to 2.91%. Total cost of funds increased 51 basis points from the linked quarter to 1.92%. Average loan yields increased 53 basis points while earning asset yields increased 42 basis points from the linked quarter.
- On a year-over-year basis, net interest income increased $31.3 million, or 14.9%, driven by a $3.9 billion, or 22.5%, increase in average loans, favorable mix shift in earning assets, and benefit from higher interest rates, partially offset by higher cost of interest-bearing liabilities.
- Compared to the first quarter of 2022, average earning assets decreased $1.0 billion, or 2.7%, largely driven by a decrease of $3.8 billion in interest-bearing due from banks and a decrease of $814.6 million in federal funds sold and resell agreements, partially offset by the increase in average loans noted above.
- Average deposits decreased 3.1% compared to the first quarter of 2022. Average noninterest-bearing demand deposit balances decreased 15.0% compared to the first quarter of 2022, driven by expected migration to rate-bearing deposit categories in a higher interest rate environment. Demand deposit balances comprised 37.8% of total deposits, compared to 39.7% in the linked quarter and 43.0% in the first quarter of 2022.
- Average borrowed funds increased $803.5 million as compared to the linked quarter and $928.6 million as compared to the first quarter of 2022, driven by short-term borrowings with the Federal Home Loan Bank and the Federal Reserve Discount Window.
Noninterest income
-
First quarter 2023 noninterest income increased $4.7 million, or 3.7%, on a linked-quarter basis, largely due to:
- Increases of $4.0 million in company-owned life insurance income and $1.8 million in derivative income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below.
- Increases of $1.8 million in corporate trust income, $0.9 million in fund services income and $0.5 million in trust income, all recorded in trust and securities processing.
- These increases were partially offset by a decrease of $4.9 million in investment securities gains, largely driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter.
-
Compared to the prior year, noninterest income in the first quarter of 2023 increased $6.5 million, or 5.3%, primarily driven by:
- An increase of $10.2 million in brokerage income, largely driven by increases in 12b-1 fees and money market income.
- An increase of $4.1 million in company-owned life insurance income, recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below.
- Increases of $2.3 million in corporate trust income and $1.3 million in fund services income, both recorded in trust and securities processing.
- An increase of $1.5 million in bankcard income due to higher interchange revenue.
-
These increases were partially offset by the following decreases:
- A decrease of $4.8 million in investment securities gains, driven by an impairment loss on an available-for-sale subordinated debt security recorded in the first quarter of 2023.
- A decrease of $3.5 million in service charges on deposits primarily due to decreased healthcare services income related to customer transfer and conversion fees recognized in the first quarter of 2022.
- A decrease of $2.4 million in other miscellaneous income, driven by the gain on sale of the company’s factoring loan portfolio recorded in the first quarter of 2022.
- A decrease of $2.1 million in derivative income, recorded in other income.
Noninterest expense
Summary of noninterest expense |
|
UMB Financial Corporation |
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(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Q1 |
|
Q4 |
|
Q1 |
|
CQ vs. |
|
CQ vs. |
||||||||||
|
|
2023 |
|
2022 |
|
2022 |
|
LQ |
|
PY |
||||||||||
Salaries and employee benefits |
|
$ |
142,498 |
|
$ |
135,940 |
|
$ |
130,634 |
|
$ |
6,558 |
|
|
$ |
11,864 |
|
|||
Occupancy, net |
|
|
12,177 |
|
|
|
12,409 |
|
|
|
12,232 |
|
|
|
(232 |
) |
|
|
(55 |
) |
Equipment |
|
|
17,849 |
|
|
|
18,969 |
|
|
|
18,164 |
|
|
|
(1,120 |
) |
|
|
(315 |
) |
Supplies and services |
|
|
3,875 |
|
|
|
3,697 |
|
|
|
3,262 |
|
|
|
178 |
|
|
|
613 |
|
Marketing and business development |
|
|
5,335 |
|
|
|
8,788 |
|
|
|
4,932 |
|
|
|
(3,453 |
) |
|
|
403 |
|
Processing fees |
|
|
23,240 |
|
|
|
23,545 |
|
|
|
18,443 |
|
|
|
(305 |
) |
|
|
4,797 |
|
Legal and consulting |
|
|
7,285 |
|
|
|
10,664 |
|
|
|
6,911 |
|
|
|
(3,379 |
) |
|
|
374 |
|
Bankcard |
|
|
7,133 |
|
|
|
7,369 |
|
|
|
6,567 |
|
|
|
(236 |
) |
|
|
566 |
|
Amortization of other intangible assets |
|
|
2,298 |
|
|
|
1,649 |
|
|
|
1,071 |
|
|
|
649 |
|
|
|
1,227 |
|
Regulatory fees |
|
|
5,551 |
|
|
|
4,232 |
|
|
|
3,482 |
|
|
|
1,319 |
|
|
|
2,069 |
|
Other |
|
|
9,811 |
|
|
|
10,556 |
|
|
|
9,080 |
|
|
|
(745 |
) |
|
|
731 |
|
Total noninterest expense |
|
$ |
237,052 |
|
|
$ |
237,818 |
|
|
$ |
214,778 |
|
|
$ |
(766 |
) |
|
$ |
22,274 |
|
- Noninterest expense for the first quarter of 2023 was $237.1 million, a decrease of $0.8 million, or 0.3%, from the linked quarter and an increase of $22.3 million, or 10.4%, from the first quarter of 2022.
-
The linked-quarter decrease in noninterest expense was driven by:
- A decrease of $6.6 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2022.
- Decreases of $3.5 million in marketing and business development expense and $3.4 million in legal and consulting expense due to the timing of multiple projects. The decrease in marketing and business development expense was also partially driven by a decrease in advertising for various projects and a decrease in travel and entertainment expense.
- A decrease of $1.1 million in equipment expense driven by reduced software expense.
- These decreases were partially offset by increases of $13.2 million in employee benefits expense driven by a seasonal increase of $11.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $2.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.3 million in regulatory fees expense driven by higher deposit insurance expense due to previously announced higher industry assessment rates.
-
The year-over-year increase in noninterest expense was driven by:
- An increase of $11.9 million in salaries and employee benefits expense, driven primarily by increases of $11.0 million in salaries and wage expense and $4.7 million in employee benefits expense, primarily due to an increase of $3.1 million in payroll taxes, insurance, and 401(k) expense, and an increase of $1.7 million in deferred compensation expense. These increases were partially offset by a decrease of $3.8 million in bonus and commission expense. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above.
- An increase of $4.8 million in processing fees expense due to the ongoing modernization of the company’s core systems and the timing of multiple software projects.
- Increases of $2.1 million in regulatory fees expense driven by higher deposit insurance expense, $2.0 million in operational losses, recorded in other expense, and $1.2 million in intangible amortization expense. The increase in amortization expense is related to the acquisition of the healthcare savings account business from Old National Bank, completed in the fourth quarter of 2022.
Income taxes
- The company’s effective tax rate was 17.2% for the three months ended March 31, 2023, compared to 15.7% for the same period in 2022. The effective tax rate increased primarily as a result of a decrease in excess tax benefits associated with stock compensation recorded in the first quarter of 2023 compared to the same period a year earlier.
Balance sheet
- Average total assets for the first quarter of 2023 were $38.5 billion compared to $37.3 billion for the linked quarter and $39.2 billion for the same period in 2022.
Summary of average loans and leases - QTD Average |
UMB Financial Corporation |
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(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Q1 |
|
Q4 |
|
Q1 |
|
CQ vs. |
|
CQ vs. |
||||||||||
|
|
2023 |
|
2022 |
|
2022 |
|
LQ |
|
PY |
||||||||||
Commercial and industrial |
|
$ |
9,287,319 |
|
$ |
8,891,356 |
|
$ |
7,409,623 |
|
$ |
395,963 |
|
|
$ |
1,877,696 |
||||
Specialty lending |
|
|
564,633 |
|
|
|
559,200 |
|
|
|
463,793 |
|
|
|
5,433 |
|
|
|
100,840 |
|
Commercial real estate |
|
|
7,812,140 |
|
|
|
7,323,877 |
|
|
|
6,338,160 |
|
|
|
488,263 |
|
|
|
1,473,980 |
|
Consumer real estate |
|
|
2,738,184 |
|
|
|
2,678,771 |
|
|
|
2,339,050 |
|
|
|
59,413 |
|
|
|
399,134 |
|
Consumer |
|
|
136,571 |
|
|
|
145,811 |
|
|
|
135,942 |
|
|
|
(9,240 |
) |
|
|
629 |
|
Credit cards |
|
|
453,704 |
|
|
|
457,043 |
|
|
|
399,857 |
|
|
|
(3,339 |
) |
|
|
53,847 |
|
Leases and other |
|
|
279,049 |
|
|
|
238,603 |
|
|
|
274,652 |
|
|
|
40,446 |
|
|
|
4,397 |
|
Total loans |
|
$ |
21,271,600 |
|
|
$ |
20,294,661 |
|
|
$ |
17,361,077 |
|
|
$ |
976,939 |
|
|
$ |
3,910,523 |
|
- Average loans for the first quarter of 2023 increased $976.9 million, or 4.8%, on a linked-quarter basis and $3.9 billion, or 22.5%, compared to the first quarter of 2022.
Summary of average securities - QTD Average |
|
UMB Financial Corporation |
||||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Q1 |
|
Q4 |
|
Q1 |
|
CQ vs. |
|
CQ vs. |
||||||||||
|
|
2023 |
|
2022 |
|
2022 |
|
LQ |
|
PY |
||||||||||
Securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury |
|
$ |
783,170 |
|
$ |
752,339 |
|
$ |
176,476 |
|
$ |
30,831 |
|
|
$ |
606,694 |
|
|||
U.S. Agencies |
|
|
171,825 |
|
|
|
171,171 |
|
|
|
125,017 |
|
|
|
654 |
|
|
|
46,808 |
|
Mortgage-backed |
|
|
3,938,137 |
|
|
|
4,027,120 |
|
|
|
7,317,968 |
|
|
|
(88,983 |
) |
|
|
(3,379,831 |
) |
State and political subdivisions |
|
|
1,356,785 |
|
|
|
1,353,307 |
|
|
|
3,170,757 |
|
|
|
3,478 |
|
|
|
(1,813,972 |
) |
Corporates |
|
|
364,854 |
|
|
|
366,131 |
|
|
|
337,526 |
|
|
|
(1,277 |
) |
|
|
27,328 |
|
Collateralized loan obligations |
|
|
348,477 |
|
|
|
328,475 |
|
|
|
150,134 |
|
|
|
20,002 |
|
|
|
198,343 |
|
Total securities available for sale |
|
$ |
6,963,248 |
|
|
$ |
6,998,543 |
|
|
$ |
11,277,878 |
|
|
$ |
(35,295 |
) |
|
$ |
(4,314,630 |
) |
Securities held to maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Agencies |
|
$ |
123,106 |
|
|
$ |
123,077 |
|
|
$ |
133 |
|
|
$ |
29 |
|
|
$ |
122,973 |
|
Mortgage-backed |
|
|
2,934,113 |
|
|
|
2,983,489 |
|
|
|
708,075 |
|
|
|
(49,376 |
) |
|
|
2,226,038 |
|
State and political subdivisions |
|
|
2,814,912 |
|
|
|
2,765,717 |
|
|
|
1,185,609 |
|
|
|
49,195 |
|
|
|
1,629,303 |
|
Total securities held to maturity |
|
$ |
5,872,131 |
|
|
$ |
5,872,283 |
|
|
$ |
1,893,817 |
|
|
$ |
(152 |
) |
|
$ |
3,978,314 |
|
Trading securities |
|
|
9,258 |
|
|
|
11,799 |
|
|
|
20,836 |
|
|
|
(2,541 |
) |
|
|
(11,578 |
) |
Other securities |
|
|
359,238 |
|
|
|
315,748 |
|
|
|
329,611 |
|
|
|
43,490 |
|
|
|
29,627 |
|
Total securities |
|
$ |
13,203,875 |
|
|
$ |
13,198,373 |
|
|
$ |
13,522,142 |
|
|
$ |
5,502 |
|
|
$ |
(318,267 |
) |
- Average total securities remained flat on a linked-quarter basis and decreased 2.4% compared to the first quarter of 2022.
- At March 31, 2023, the unrealized pre-tax net loss on the available-for-sale securities portfolio narrowed to $677.7 million, or 8.9% of the $7.6 billion amortized cost value, down from $771.6 million at December 31, 2022.
- At March 31, 2023, the unrealized pre-tax net loss on the securities designated as held to maturity narrowed to $489.8 million, or 8.4% of amortized cost value, compared to $580.9 million at December 31, 2022.
- During 2022, the company transferred securities with an amortized cost balance of $4.1 billion and a fair value of $3.8 billion from the available-for-sale category to the held-to-maturity category. The remaining balance of unrealized pre-tax net losses related to transferred securities was $237.1 million as of March 31, 2023 and was included in the amortized cost balance of held-to-maturity securities.
- At March 31, 2023, an after-tax gain of $57.2 million was included in accumulated other comprehensive income (AOCI) related to the company’s fair value hedges of municipal securities. During 2021, the company entered into ten of these hedge transactions, nine of which have since been terminated. The gain on the terminated hedges is being amortized over the remaining life of the underlying bonds.
Summary of average deposits - QTD Average |
UMB Financial Corporation |
|||||||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Q1 |
|
Q4 |
|
Q1 |
|
CQ vs. |
|
CQ vs. |
||||||||||
|
|
2023 |
|
2022 |
|
2022 |
|
LQ |
|
PY |
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Noninterest-bearing demand |
|
$ |
11,919,277 |
|
|
$ |
12,454,413 |
|
|
$ |
14,025,585 |
|
|
$ |
(535,136 |
) |
|
$ |
(2,106,308 |
) |
Interest-bearing demand and savings |
|
|
18,427,662 |
|
|
|
17,952,568 |
|
|
|
17,852,721 |
|
|
|
475,094 |
|
|
|
574,941 |
|
Time deposits |
|
|
1,215,506 |
|
|
|
966,969 |
|
|
|
701,973 |
|
|
|
248,537 |
|
|
|
513,533 |
|
Total deposits |
|
$ |
31,562,445 |
|
|
$ |
31,373,950 |
|
|
$ |
32,580,279 |
|
|
$ |
188,495 |
|
|
$ |
(1,017,834 |
) |
Noninterest bearing deposits as % of total |
|
|
37.8 |
% |
|
|
39.7 |
% |
|
|
43.0 |
% |
|
|
|
|
|
|
||
- Average deposits increased 0.6% on a linked-quarter basis and decreased 3.1% compared to the first quarter of 2022.
- As of March 31, 2023, the total estimated uninsured deposits were $21.3 billion or approximately 66.6% of total deposits. Estimated uninsured deposits, when adjusted to exclude affiliate (company-owned) and collateralized deposits, were $13.8 billion and represented approximately 43.1% of total deposits.
Capital
Capital information |
|
UMB Financial Corporation |
|
|||||||||
(unaudited, dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|||
Total equity |
|
$ |
2,814,659 |
|
|
$ |
2,667,093 |
|
|
$ |
2,748,405 |
|
Accumulated other comprehensive (loss) income, net |
|
|
(626,776 |
) |
|
|
(702,735 |
) |
|
|
(343,128 |
) |
Book value per common share |
|
|
58.03 |
|
|
|
55.20 |
|
|
|
56.78 |
|
Tangible book value per common share (Non-GAAP) |
|
|
52.17 |
|
|
|
49.28 |
|
|
|
52.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory capital: |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital |
|
$ |
3,196,111 |
|
|
$ |
3,129,030 |
|
|
$ |
2,938,100 |
|
Tier 1 capital |
|
|
3,196,111 |
|
|
|
3,129,030 |
|
|
|
2,938,100 |
|
Total capital |
|
|
3,776,407 |
|
|
|
3,682,619 |
|
|
|
3,369,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory capital ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital ratio |
|
|
10.57 |
% |
|
|
10.62 |
% |
|
|
11.81 |
% |
Tier 1 risk-based capital ratio |
|
|
10.57 |
|
|
|
10.62 |
|
|
|
11.81 |
|
Total risk-based capital ratio |
|
|
12.49 |
|
|
|
12.50 |
|
|
|
13.55 |
|
Tier 1 leverage ratio |
|
|
8.35 |
|
|
|
8.43 |
|
|
|
7.53 |
|
- At March 31, 2023, 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
|
Q4 |
|
|
Q3 |
|
|
Q2 |
|
|
Q1 |
|
|||||
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|||||
Net charge-offs - total loans |
|
$ |
4,643 |
|
|
$ |
2,189 |
|
|
$ |
1,173 |
|
|
$ |
28,128 |
|
|
$ |
8,378 |
|
Net loan charge-offs as a % of total average loans |
|
|
0.09 |
% |
|
|
0.04 |
% |
|
|
0.02 |
% |
|
|
0.62 |
% |
|
|
0.20 |
% |
Loans over 90 days past due |
|
$ |
1,723 |
|
|
$ |
1,617 |
|
|
$ |
2,513 |
|
|
$ |
3,446 |
|
|
$ |
3,600 |
|
Loans over 90 days past due as a % of total loans |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.02 |
% |
|
|
0.02 |
% |
Nonaccrual and restructured loans |
|
$ |
15,480 |
|
|
$ |
19,269 |
|
|
$ |
19,817 |
|
|
$ |
18,117 |
|
|
$ |
110,356 |
|
Nonaccrual and restructured loans as a % of total loans |
|
|
0.07 |
% |
|
|
0.09 |
% |
|
|
0.10 |
% |
|
|
0.10 |
% |
|
|
0.62 |
% |
Provision for credit losses |
|
$ |
23,250 |
|
|
$ |
9,000 |
|
|
$ |
22,000 |
|
|
$ |
13,400 |
|
|
$ |
(6,500 |
) |
- Provision for credit losses for the first quarter totaled $23.3 million, an increase of $14.3 million from the linked quarter and an increase of $29.8 million from the first quarter of 2022. These changes are driven largely by loan growth and changes in macro-economic metrics in the current period as compared to the prior periods.
- Net charge-offs for the first quarter totaled $4.6 million, or 0.09%, of average loans, compared to $2.2 million, or 0.04%, of average loans in the linked quarter, and $8.4 million, or 0.20%, of average loans for the first quarter of 2022.
Dividend Declaration
At the company’s quarterly board meeting, the Board of Directors declared a $0.38 per share quarterly cash dividend, payable on July 3, 2023, to shareholders of record at the close of business on June 12, 2023.
Conference Call
The company plans to host a conference call to discuss its first quarter 2023 earnings results on Wednesday, April 26, 2023, at 8:30 a.m. (CT).
Interested parties may access the call by dialing (toll-free) 833-470-1428 or (international) 404-975-4839 and requesting to join the UMB Financial call with access code 443869. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:
UMB Financial 1Q 2023 Conference Call
A replay of the conference call may be heard through May 10, 2023, by calling (toll-free) 866-813-9403 or (international) 226-828-7578. The replay access code required for playback is 582627. The call replay may also be accessed at investorrelations.umb.com.
Non-GAAP Financial Information
In this release, we may provide information about net operating income, operating earnings per share – diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, operating pre-tax, pre-provision income (operating PTPP), operating pre-tax, pre-provision earnings per share – diluted (operating PTPP EPS), operating pre-tax, pre-provision income on a fully tax equivalent basis (operating PTPP-FTE), operating pre-tax, pre-provision FTE earnings per share – diluted (operating PTPP-FTE EPS), tangible shareholders’ equity, tangible book value per share, and operating return on average tangible equity excluding AOCI, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures – net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, operating PTPP, operating PTPP EPS, operating PTPP-FTE, operating PTPP-FTE EPS, tangible shareholders’ equity, tangible book value per share, and operating return on average tangible equity excluding AOCI – 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- 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, 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, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described 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).
Operating PTPP income for the relevant period is defined as GAAP net interest income plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance expense.
Operating PTPP-FTE for the relevant period is defined as GAAP net interest income on a fully tax equivalent basis plus GAAP noninterest income, less noninterest expense, adjusted to reflect the impact of excluding expenses related to acquisitions and severance expense.
Tangible shareholders’ equity for the relevant period is defined as GAAP shareholders’ equity, net of intangible assets. Tangible book value per share is defined as tangible shareholders’ equity divided by the Company’s total shares outstanding.
Operating return on average tangible equity excluding AOCI is calculated as net operating income, divided by the company’s average tangible shareholders’ equity exclusive of AOCI for the relevant period.
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, 2022, 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). In addition to such factors that have been disclosed previously: macroeconomic and adverse developments and uncertainties related to the collateral effects of the collapse of, and challenges for, domestic and international banks, including the impacts to the U.S. and global economies; sustained levels of high inflation and the potential for an economic recession on the heels of aggressive quantitative tightening by the Federal Reserve, and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. 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, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn.
Consolidated Balance Sheets |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
||
|
|
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
|
|
|
||
Loans |
|
$ |
21,812,972 |
|
|
$ |
17,731,700 |
|
Allowance for credit losses on loans |
|
|
(210,509 |
) |
|
|
(179,288 |
) |
Net loans |
|
|
21,602,463 |
|
|
|
17,552,412 |
|
Loans held for sale |
|
|
1,422 |
|
|
|
384 |
|
Securities: |
|
|
|
|
|
|
||
Available for sale |
|
|
6,907,897 |
|
|
|
8,550,093 |
|
Held to maturity, net of allowance for credit losses |
|
|
5,859,323 |
|
|
|
4,600,187 |
|
Trading securities |
|
|
19,823 |
|
|
|
17,059 |
|
Other securities |
|
|
416,337 |
|
|
|
332,123 |
|
Total securities |
|
|
13,203,380 |
|
|
|
13,499,462 |
|
Federal funds sold and resell agreements |
|
|
368,158 |
|
|
|
1,319,809 |
|
Interest-bearing due from banks |
|
|
3,121,323 |
|
|
|
6,355,941 |
|
Cash and due from banks |
|
|
472,248 |
|
|
|
357,772 |
|
Premises and equipment, net |
|
|
260,623 |
|
|
|
264,519 |
|
Accrued income |
|
|
181,586 |
|
|
|
127,139 |
|
Goodwill |
|
|
207,385 |
|
|
|
182,225 |
|
Other intangibles, net |
|
|
76,426 |
|
|
|
15,690 |
|
Other assets |
|
|
1,112,176 |
|
|
|
930,389 |
|
Total assets |
|
$ |
40,607,190 |
|
|
$ |
40,605,742 |
|
|
|
|
|
|
|
|
||
LIABILITIES |
|
|
|
|
|
|
||
Deposits: |
|
|
|
|
|
|
||
Noninterest-bearing demand |
|
$ |
12,488,803 |
|
|
$ |
15,946,738 |
|
Interest-bearing demand and savings |
|
|
16,760,603 |
|
|
|
17,828,794 |
|
Time deposits under $250,000 |
|
|
456,129 |
|
|
|
399,467 |
|
Time deposits of $250,000 or more |
|
|
2,226,369 |
|
|
|
187,566 |
|
Total deposits |
|
|
31,931,904 |
|
|
|
34,362,565 |
|
Federal funds purchased and repurchase agreements |
|
|
2,160,808 |
|
|
|
2,840,535 |
|
Short-term debt |
|
|
2,800,000 |
|
|
|
— |
|
Long-term debt |
|
|
381,796 |
|
|
|
272,036 |
|
Accrued expenses and taxes |
|
|
207,633 |
|
|
|
178,130 |
|
Other liabilities |
|
|
310,390 |
|
|
|
204,071 |
|
Total liabilities |
|
|
37,792,531 |
|
|
|
37,857,337 |
|
|
|
|
|
|
|
|
||
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Common stock |
|
|
55,057 |
|
|
|
55,057 |
|
Capital surplus |
|
|
1,120,877 |
|
|
|
1,109,585 |
|
Retained earnings |
|
|
2,609,928 |
|
|
|
2,265,129 |
|
Accumulated other comprehensive loss, net |
|
|
(626,776 |
) |
|
|
(343,128 |
) |
Treasury stock |
|
|
(344,427 |
) |
|
|
(338,238 |
) |
Total shareholders' equity |
|
|
2,814,659 |
|
|
|
2,748,405 |
|
Total liabilities and shareholders' equity |
|
$ |
40,607,190 |
|
|
$ |
40,605,742 |
|
Consolidated Statements of Income |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands except share and per share data) |
|
|
|
|||||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
INTEREST INCOME |
|
|
|
|
|
|
||
Loans |
|
$ |
308,441 |
|
|
$ |
149,470 |
|
Securities: |
|
|
|
|
|
|
||
Taxable interest |
|
|
53,049 |
|
|
|
43,382 |
|
Tax-exempt interest |
|
|
25,306 |
|
|
|
23,855 |
|
Total securities income |
|
|
78,355 |
|
|
|
67,237 |
|
Federal funds and resell agreements |
|
|
5,651 |
|
|
|
2,450 |
|
Interest-bearing due from banks |
|
|
16,166 |
|
|
|
2,457 |
|
Trading securities |
|
|
134 |
|
|
|
185 |
|
Total interest income |
|
|
408,747 |
|
|
|
221,799 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
||
Deposits |
|
|
127,899 |
|
|
|
6,173 |
|
Federal funds and repurchase agreements |
|
|
23,302 |
|
|
|
2,148 |
|
Other |
|
|
15,850 |
|
|
|
3,123 |
|
Total interest expense |
|
|
167,051 |
|
|
|
11,444 |
|
Net interest income |
|
|
241,696 |
|
|
|
210,355 |
|
Provision for credit losses |
|
|
23,250 |
|
|
|
(6,500 |
) |
Net interest income after provision for credit losses |
|
|
218,446 |
|
|
|
216,855 |
|
NONINTEREST INCOME |
|
|
|
|
|
|
||
Trust and securities processing |
|
|
62,359 |
|
|
|
59,528 |
|
Trading and investment banking |
|
|
5,308 |
|
|
|
5,440 |
|
Service charges on deposit accounts |
|
|
21,159 |
|
|
|
24,642 |
|
Insurance fees and commissions |
|
|
274 |
|
|
|
259 |
|
Brokerage fees |
|
|
13,676 |
|
|
|
3,456 |
|
Bankcard fees |
|
|
18,172 |
|
|
|
16,635 |
|
Investment securities losses, net |
|
|
(5,324 |
) |
|
|
(522 |
) |
Other |
|
|
14,576 |
|
|
|
14,240 |
|
Total noninterest income |
|
|
130,200 |
|
|
|
123,678 |
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
||
Salaries and employee benefits |
|
|
142,498 |
|
|
|
130,634 |
|
Occupancy, net |
|
|
12,177 |
|
|
|
12,232 |
|
Equipment |
|
|
17,849 |
|
|
|
18,164 |
|
Supplies and services |
|
|
3,875 |
|
|
|
3,262 |
|
Marketing and business development |
|
|
5,335 |
|
|
|
4,932 |
|
Processing fees |
|
|
23,240 |
|
|
|
18,443 |
|
Legal and consulting |
|
|
7,285 |
|
|
|
6,911 |
|
Bankcard |
|
|
7,133 |
|
|
|
6,567 |
|
Amortization of other intangible assets |
|
|
2,298 |
|
|
|
1,071 |
|
Regulatory fees |
|
|
5,551 |
|
|
|
3,482 |
|
Other |
|
|
9,811 |
|
|
|
9,080 |
|
Total noninterest expense |
|
|
237,052 |
|
|
|
214,778 |
|
Income before income taxes |
|
|
111,594 |
|
|
|
125,755 |
|
Income tax expense |
|
|
19,157 |
|
|
|
19,792 |
|
NET INCOME |
|
$ |
92,437 |
|
|
$ |
105,963 |
|
|
|
|
|
|
|
|
||
PER SHARE DATA |
|
|
|
|
|
|
||
Net income – basic |
|
$ |
1.91 |
|
|
$ |
2.19 |
|
Net income – diluted |
|
|
1.90 |
|
|
|
2.17 |
|
Dividends |
|
|
0.38 |
|
|
|
0.37 |
|
Weighted average shares outstanding – basic |
|
|
48,435,016 |
|
|
|
48,406,840 |
|
Weighted average shares outstanding – diluted |
|
|
48,746,562 |
|
|
|
48,832,177 |
|
Consolidated Statements of Comprehensive Income |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Net income |
|
$ |
92,437 |
|
|
$ |
105,963 |
|
Other comprehensive income (loss), before tax: |
|
|
|
|
|
|
||
Unrealized gains and losses on debt securities: |
|
|
|
|
|
|
||
Change in unrealized holding gains and losses, net |
|
|
93,657 |
|
|
|
(622,910 |
) |
Less: Reclassification adjustment for net losses included in net income |
|
|
433 |
|
|
|
— |
|
Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity |
|
|
9,983 |
|
|
|
582 |
|
Change in unrealized gains and losses on debt securities |
|
|
104,073 |
|
|
|
(622,328 |
) |
Unrealized gains and losses on derivative hedges: |
|
|
|
|
|
|
||
Change in unrealized gains and losses on derivative hedges, net |
|
|
(1,527 |
) |
|
|
4,680 |
|
Less: Reclassification adjustment for net gains included in net income |
|
|
(2,561 |
) |
|
|
(851 |
) |
Change in unrealized gains and losses on derivative hedges |
|
|
(4,088 |
) |
|
|
3,829 |
|
Other comprehensive income (loss), before tax |
|
|
99,985 |
|
|
|
(618,499 |
) |
Income tax (expense) benefit |
|
|
(24,026 |
) |
|
|
149,057 |
|
Other comprehensive income (loss) |
|
|
75,959 |
|
|
|
(469,442 |
) |
Comprehensive income (loss) |
|
$ |
168,396 |
|
|
$ |
(363,479 |
) |
Consolidated Statements of Shareholders' Equity |
UMB Financial Corporation |
|||||||||||||||||||||||
(unaudited, dollars in thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Common Stock |
|
Capital Surplus |
|
Retained Earnings |
|
Accumulated
|
|
Treasury Stock |
|
Total |
||||||||||||
Balance - January 1, 2022 |
|
$ |
55,057 |
|
$ |
1,110,520 |
|
|
$ |
2,176,998 |
|
|
$ |
126,314 |
|
|
$ |
(323,465 |
) |
|
$ |
3,145,424 |
|
|
Total comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
105,963 |
|
|
|
(469,442 |
) |
|
|
— |
|
|
|
(363,479 |
) |
Dividends ($0.37 per share) |
|
|
— |
|
|
|
— |
|
|
|
(17,832 |
) |
|
|
— |
|
|
|
— |
|
|
|
(17,832 |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22,487 |
) |
|
|
(22,487 |
) |
Issuances of equity awards, net of forfeitures |
|
|
— |
|
|
|
(6,630 |
) |
|
|
— |
|
|
|
— |
|
|
|
7,309 |
|
|
|
679 |
|
Recognition of equity-based compensation |
|
|
— |
|
|
|
5,485 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,485 |
|
Sale of treasury stock |
|
|
— |
|
|
|
84 |
|
|
|
— |
|
|
|
— |
|
|
|
54 |
|
|
|
138 |
|
Exercise of stock options |
|
|
— |
|
|
|
126 |
|
|
|
— |
|
|
|
— |
|
|
|
351 |
|
|
|
477 |
|
Balance - March 31, 2022 |
|
$ |
55,057 |
|
|
$ |
1,109,585 |
|
|
$ |
2,265,129 |
|
|
$ |
(343,128 |
) |
|
$ |
(338,238 |
) |
|
$ |
2,748,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance - January 1, 2023 |
|
$ |
55,057 |
|
|
$ |
1,125,949 |
|
|
$ |
2,536,086 |
|
|
$ |
(702,735 |
) |
|
$ |
(347,264 |
) |
|
$ |
2,667,093 |
|
Total comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
92,437 |
|
|
|
75,959 |
|
|
|
— |
|
|
|
168,396 |
|
Dividends ($0.38 per share) |
|
|
— |
|
|
|
— |
|
|
|
(18,595 |
) |
|
|
— |
|
|
|
— |
|
|
|
(18,595 |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,902 |
) |
|
|
(7,902 |
) |
Issuances of equity awards, net of forfeitures |
|
|
— |
|
|
|
(9,764 |
) |
|
|
— |
|
|
|
— |
|
|
|
10,483 |
|
|
|
719 |
|
Recognition of equity-based compensation |
|
|
— |
|
|
|
4,516 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,516 |
|
Sale of treasury stock |
|
|
— |
|
|
|
71 |
|
|
|
— |
|
|
|
— |
|
|
|
56 |
|
|
|
127 |
|
Exercise of stock options |
|
|
— |
|
|
|
105 |
|
|
|
— |
|
|
|
— |
|
|
|
200 |
|
|
|
305 |
|
Balance - March 31, 2023 |
|
$ |
55,057 |
|
|
$ |
1,120,877 |
|
|
$ |
2,609,928 |
|
|
$ |
(626,776 |
) |
|
$ |
(344,427 |
) |
|
$ |
2,814,659 |
|
Average Balances / Yields and Rates |
|
UMB Financial Corporation |
||||||||||||||
(tax - equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended March 31, |
||||||||||||||
|
|
2023 |
|
2022 |
||||||||||||
|
|
Average |
|
Average |
|
Average |
|
Average |
||||||||
|
|
Balance |
|
Yield/Rate |
|
Balance |
|
Yield/Rate |
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans, net of unearned interest |
|
$ |
21,271,600 |
|
|
|
5.88 |
% |
|
$ |
17,361,077 |
|
|
|
3.49 |
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Taxable |
|
|
9,349,351 |
|
|
|
2.30 |
|
|
|
9,461,567 |
|
|
|
1.86 |
|
Tax-exempt |
|
|
3,845,266 |
|
|
|
3.35 |
|
|
|
4,039,739 |
|
|
|
3.03 |
|
Total securities |
|
|
13,194,617 |
|
|
|
2.61 |
|
|
|
13,501,306 |
|
|
|
2.21 |
|
Federal funds and resell agreements |
|
|
451,188 |
|
|
|
5.08 |
|
|
|
1,265,776 |
|
|
|
0.78 |
|
Interest bearing due from banks |
|
|
1,533,704 |
|
|
|
4.27 |
|
|
|
5,320,360 |
|
|
|
0.19 |
|
Trading securities |
|
|
9,258 |
|
|
|
6.31 |
|
|
|
20,836 |
|
|
|
4.38 |
|
Total earning assets |
|
|
36,460,367 |
|
|
|
4.62 |
|
|
|
37,469,355 |
|
|
|
2.47 |
|
Allowance for credit losses |
|
|
(196,128 |
) |
|
|
|
|
|
(198,217 |
) |
|
|
|
||
Other assets |
|
|
2,239,140 |
|
|
|
|
|
|
1,882,376 |
|
|
|
|
||
Total assets |
|
$ |
38,503,379 |
|
|
|
|
|
$ |
39,153,514 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing deposits |
|
$ |
19,643,168 |
|
|
|
2.64 |
% |
|
$ |
18,554,694 |
|
|
|
0.13 |
% |
Federal funds and repurchase agreements |
|
|
2,461,942 |
|
|
|
3.84 |
|
|
|
2,973,785 |
|
|
|
0.29 |
|
Borrowed funds |
|
|
1,200,346 |
|
|
|
5.36 |
|
|
|
271,731 |
|
|
|
4.66 |
|
Total interest-bearing liabilities |
|
|
23,305,456 |
|
|
|
2.91 |
|
|
|
21,800,210 |
|
|
|
0.21 |
|
Noninterest-bearing demand deposits |
|
|
11,919,277 |
|
|
|
|
|
|
14,025,585 |
|
|
|
|
||
Other liabilities |
|
|
554,211 |
|
|
|
|
|
|
394,714 |
|
|
|
|
||
Shareholders' equity |
|
|
2,724,435 |
|
|
|
|
|
|
2,933,005 |
|
|
|
|
||
Total liabilities and shareholders' equity |
|
$ |
38,503,379 |
|
|
|
|
|
$ |
39,153,514 |
|
|
|
|
||
Net interest spread |
|
|
|
|
|
1.71 |
% |
|
|
|
|
|
2.26 |
% |
||
Net interest margin |
|
|
|
|
|
2.76 |
|
|
|
|
|
|
2.35 |
|
||
Business Segment Information |
|
UMB Financial Corporation |
||||||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended March 31, 2023 |
||||||||||||||
|
|
Commercial
|
|
Institutional
|
|
Personal
|
|
Total |
||||||||
Net interest income |
|
$ |
151,027 |
|
|
$ |
55,085 |
|
$ |
35,584 |
|
|
$ |
241,696 |
|
|
Provision for credit losses |
|
|
21,045 |
|
|
|
96 |
|
|
|
2,109 |
|
|
|
23,250 |
|
Noninterest income |
|
|
22,902 |
|
|
|
84,238 |
|
|
|
23,060 |
|
|
|
130,200 |
|
Noninterest expense |
|
|
84,002 |
|
|
|
89,372 |
|
|
|
63,678 |
|
|
|
237,052 |
|
Income (loss) before taxes |
|
|
68,882 |
|
|
|
49,855 |
|
|
|
(7,143 |
) |
|
|
111,594 |
|
Income tax expense (benefit) |
|
|
11,825 |
|
|
|
8,558 |
|
|
|
(1,226 |
) |
|
|
19,157 |
|
Net income (loss) |
|
$ |
57,057 |
|
|
$ |
41,297 |
|
|
$ |
(5,917 |
) |
|
$ |
92,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended March 31, 2022 |
||||||||||||||
|
|
Commercial
|
|
Institutional
|
|
Personal
|
|
Total |
||||||||
Net interest income |
|
$ |
145,002 |
|
|
$ |
26,253 |
|
|
|
39,100 |
|
|
$ |
210,355 |
|
Provision for credit losses |
|
|
(7,040 |
) |
|
|
151 |
|
|
|
389 |
|
|
|
(6,500 |
) |
Noninterest income |
|
|
26,700 |
|
|
|
73,272 |
|
|
|
23,706 |
|
|
|
123,678 |
|
Noninterest expense |
|
|
79,589 |
|
|
|
75,602 |
|
|
|
59,587 |
|
|
|
214,778 |
|
Income before taxes |
|
|
99,153 |
|
|
|
23,772 |
|
|
|
2,830 |
|
|
|
125,755 |
|
Income tax expense |
|
|
15,606 |
|
|
|
3,741 |
|
|
|
445 |
|
|
|
19,792 |
|
Net income |
|
$ |
83,547 |
|
|
$ |
20,031 |
|
|
$ |
2,385 |
|
|
$ |
105,963 |
|
The company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking. 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 March 31, 2023.
Non-GAAP Financial Measures
Net operating income Non-GAAP reconciliations: |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands except per share data) |
|
|
||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Net income (GAAP) |
|
$ |
92,437 |
|
|
$ |
105,963 |
|
Adjustments: |
|
|
|
|
|
|
||
Acquisition expense |
|
|
39 |
|
|
|
— |
|
Severance expense |
|
|
486 |
|
|
|
145 |
|
Tax-impact of adjustments (i) |
|
|
(126 |
) |
|
|
(35 |
) |
Total Non-GAAP adjustments (net of tax) |
|
|
399 |
|
|
|
110 |
|
Net operating income (Non-GAAP) |
|
$ |
92,836 |
|
|
$ |
106,073 |
|
|
|
|
|
|
|
|
||
Earnings per share - diluted (GAAP) |
|
$ |
1.90 |
|
|
$ |
2.17 |
|
Acquisition expense |
|
|
— |
|
|
|
— |
|
Severance expense |
|
|
0.01 |
|
|
|
— |
|
Tax-impact of adjustments (i) |
|
|
— |
|
|
|
— |
|
Operating earnings per share - diluted (Non-GAAP) |
|
$ |
1.91 |
|
|
$ |
2.17 |
|
|
|
|
|
|
|
|
||
GAAP |
|
|
|
|
|
|
||
Return on average assets |
|
|
0.97 |
% |
|
|
1.10 |
% |
Return on average equity |
|
|
13.76 |
|
|
|
14.65 |
|
|
|
|
|
|
|
|
||
Non-GAAP |
|
|
|
|
|
|
||
Operating return on average assets |
|
|
0.98 |
% |
|
|
1.10 |
% |
Operating return on average equity |
|
|
13.82 |
|
|
|
14.67 |
|
(i) Calculated using the company’s marginal tax rate of 24.0%. |
Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
||
|
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Noninterest expense |
|
$ |
237,052 |
|
|
$ |
214,778 |
|
Adjustments to arrive at operating noninterest expense (pre-tax): |
|
|
|
|
|
|
||
Acquisition expense |
|
|
39 |
|
|
|
— |
|
Severance expense |
|
|
486 |
|
|
|
145 |
|
Total Non-GAAP adjustments (pre-tax) |
|
|
525 |
|
|
|
145 |
|
Operating noninterest expense (Non-GAAP) |
|
$ |
236,527 |
|
|
$ |
214,633 |
|
|
|
|
|
|
|
|
||
Noninterest expense |
|
$ |
237,052 |
|
|
$ |
214,778 |
|
Less: Amortization of other intangibles |
|
|
2,298 |
|
|
|
1,071 |
|
Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) |
|
$ |
234,754 |
|
|
$ |
213,707 |
|
|
|
|
|
|
|
|
||
Operating noninterest expense |
|
$ |
236,527 |
|
|
$ |
214,633 |
|
Less: Amortization of other intangibles |
|
|
2,298 |
|
|
|
1,071 |
|
Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) |
|
$ |
234,229 |
|
|
$ |
213,562 |
|
|
|
|
|
|
|
|
||
Net interest income |
|
$ |
241,696 |
|
|
$ |
210,355 |
|
Noninterest income |
|
|
130,200 |
|
|
|
123,678 |
|
Less: Losses on sales of securities available for sale, net |
|
|
(2 |
) |
|
|
— |
|
Total Non-GAAP Revenue (denominator A) |
|
$ |
371,898 |
|
|
$ |
334,033 |
|
|
|
|
|
|
|
|
||
Efficiency ratio (numerator A/denominator A) |
|
|
63.12 |
% |
|
|
63.98 |
% |
Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) |
|
|
62.98 |
|
|
|
63.93 |
|
Operating pre-tax, pre-provision income non-GAAP reconciliations: |
UMB Financial Corporation |
|||||||
(unaudited, dollars in thousands except per share data) |
|
|
|
|
|
|
||
|
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Net interest income (GAAP) |
|
$ |
241,696 |
|
$ |
210,355 |
||
Noninterest income (GAAP) |
|
|
130,200 |
|
|
|
123,678 |
|
|
|
|
|
|
|
|
||
Noninterest expense (GAAP) |
|
|
237,052 |
|
|
|
214,778 |
|
Adjustments to arrive at operating noninterest expense: |
|
|
|
|
|
|
||
Acquisition expense |
|
|
39 |
|
|
|
— |
|
Severance expense |
|
|
486 |
|
|
|
145 |
|
Total Non-GAAP adjustments |
|
|
525 |
|
|
|
145 |
|
Operating noninterest expense (Non-GAAP) |
|
|
236,527 |
|
|
|
214,633 |
|
Operating pre-tax, pre-provision income (Non-GAAP) |
|
$ |
135,369 |
|
|
$ |
119,400 |
|
|
|
|
|
|
|
|
||
Net interest income earnings per share - diluted (GAAP) |
|
$ |
4.96 |
|
|
$ |
4.31 |
|
Noninterest income (GAAP) |
|
|
2.67 |
|
|
|
2.53 |
|
Noninterest expense (GAAP) |
|
|
4.86 |
|
|
|
4.40 |
|
Acquisition expense |
|
|
— |
|
|
|
— |
|
Severance expense |
|
|
0.01 |
|
|
|
— |
|
Operating pre-tax, pre-provision earnings per share - diluted (Non-GAAP) |
|
$ |
2.78 |
|
|
$ |
2.44 |
|
Operating pre-tax, pre-provision income - FTE Non-GAAP reconciliations: |
|
UMB Financial Corporation |
||||||
(unaudited, dollars in thousands except per share data) |
|
|
|
|
|
|
||
|
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Net interest income (GAAP) |
|
$ |
241,696 |
|
$ |
210,355 |
||
Adjustments to arrive at net interest income - FTE: |
|
|
|
|
|
|
||
Tax equivalent interest |
|
|
6,555 |
|
|
|
6,399 |
|
Net interest income - FTE (Non-GAAP) |
|
|
248,251 |
|
|
|
216,754 |
|
|
|
|
|
|
|
|
||
Noninterest income (GAAP) |
|
|
130,200 |
|
|
|
123,678 |
|
|
|
|
|
|
|
|
||
Noninterest expense (GAAP) |
|
|
237,052 |
|
|
|
214,778 |
|
Adjustments to arrive at operating noninterest expense: |
|
|
|
|
|
|
||
Acquisition expense |
|
|
39 |
|
|
|
— |
|
Severance expense |
|
|
486 |
|
|
|
145 |
|
Total Non-GAAP adjustments |
|
|
525 |
|
|
|
145 |
|
Operating noninterest expense (Non-GAAP) |
|
|
236,527 |
|
|
|
214,633 |
|
Operating pre-tax, pre-provision income - FTE (Non-GAAP) |
|
$ |
141,924 |
|
|
$ |
125,799 |
|
|
|
|
|
|
|
|
||
Net interest income earnings per share - diluted (GAAP) |
|
$ |
4.96 |
|
|
$ |
4.31 |
|
Tax equivalent interest |
|
|
0.13 |
|
|
|
0.13 |
|
Net interest income - FTE (Non-GAAP) |
|
|
5.09 |
|
|
|
4.44 |
|
Noninterest income (GAAP) |
|
|
2.67 |
|
|
|
2.53 |
|
Noninterest expense (GAAP) |
|
|
4.86 |
|
|
|
4.40 |
|
Acquisition expense |
|
|
— |
|
|
|
— |
|
Severance expense |
|
|
0.01 |
|
|
|
— |
|
Operating pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) |
|
$ |
2.91 |
|
|
$ |
2.57 |
|
Tangible book value non-GAAP reconciliations: |
UMB Financial Corporation |
|||||||
(unaudited, dollars in thousands except share and per share data) |
|
|
|
|
|
|
||
|
|
As of March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Total shareholders' equity (GAAP) |
|
$ |
2,814,659 |
|
$ |
2,748,405 |
||
Less: Intangible assets |
|
|
|
|
|
|
||
Goodwill |
|
|
207,385 |
|
|
|
182,225 |
|
Other intangibles, net |
|
|
76,426 |
|
|
|
15,690 |
|
Total intangibles, net |
|
|
283,811 |
|
|
|
197,915 |
|
Total tangible shareholders' equity (Non-GAAP) |
|
$ |
2,530,848 |
|
|
$ |
2,550,490 |
|
|
|
|
|
|
|
|
||
Total shares outstanding |
|
|
48,507,116 |
|
|
|
48,403,262 |
|
|
|
|
|
|
|
|
||
Ratio of total shareholders' equity (book value) per share |
|
$ |
58.03 |
|
|
$ |
56.78 |
|
Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) |
|
|
52.17 |
|
|
|
52.69 |
|
Operating return on average tangible equity excluding AOCI non-GAAP reconciliations: |
UMB Financial Corporation |
|||||||||||
(unaudited, dollars in thousands) |
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
||||||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
|
2023 |
|
2022 |
|
2022 |
||||||
Average total shareholders' equity (GAAP) |
|
$ |
2,724,435 |
|
|
$ |
2,621,693 |
|
|
$ |
2,933,005 |
|
Less: Average intangible assets |
|
|
|
|
|
|
|
|
|
|||
Average goodwill |
|
|
207,385 |
|
|
|
194,805 |
|
|
|
174,689 |
|
Average other intangibles, net |
|
|
77,575 |
|
|
|
46,243 |
|
|
|
14,105 |
|
Average total intangibles, net |
|
|
284,960 |
|
|
|
241,049 |
|
|
|
188,794 |
|
Average total tangible shareholders' equity (Non-GAAP) |
|
|
2,439,475 |
|
|
|
2,380,644 |
|
|
|
2,744,211 |
|
Less: Average accumulated other comprehensive (loss) income (AOCI) |
|
|
(643,559 |
) |
|
|
(741,438 |
) |
|
|
(126,392 |
) |
Average total tangible shareholders' equity excluding AOCI (Non-GAAP) |
|
$ |
3,083,034 |
|
|
$ |
3,122,082 |
|
|
$ |
2,870,603 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net operating income (Non-GAAP) |
|
$ |
92,836 |
|
|
$ |
101,092 |
|
|
$ |
106,073 |
|
|
|
|
|
|
|
|
|
|
|
|||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|||
Operating return on average tangible equity excluding AOCI |
|
|
12.21 |
% |
|
|
12.85 |
% |
|
|
14.99 |
% |
