UMB Financial Corporation (Nasdaq: UMBF), a financial holding company, announced income from continuing operations for the fourth quarter 2017 of $47.4 million or $0.95 per diluted share, compared to $48.9 million or $0.98 per diluted share in the third quarter 2017 (linked quarter) and $43.4 million or $0.87 per diluted share in the fourth quarter 2016. For the year ended December 31, 2017, income from continuing operations was $183.0 million or $3.67 per diluted share, an increase of 19.1 percent compared to $153.6 million or $3.12 per diluted share for the year ended December 31, 2016. Included in both the fourth quarter and year-to-date 2017 earnings is the impact of an additional $3.0 million of non-recurring tax expense resulting from the recently enacted Tax Cuts and Jobs Act. Results from continuing operations exclude the impact of the divestiture of Scout Investments, Inc., the company’s institutional investment management subsidiary, which was divested on November 17, 2017.
Net operating income from continuing operations, a non-GAAP financial measure which is reconciled to the nearest comparable GAAP measure later in this release, was $47.5 million or $0.95 per diluted share for the fourth quarter 2017, compared to $48.9 million or $0.98 per diluted share for the linked quarter and $44.0 million or $0.89 per diluted share for the fourth quarter 2016. These results represent a decrease of 2.9 percent on a linked-quarter basis and an increase of 8.0 percent compared to the fourth quarter 2016. For the year ended December 31, 2017, net operating income from continuing operations was $183.7 million or $3.69 per diluted share, compared to $158.3 million or $3.21 per diluted share for the year ended December 31, 2016.
Summary of quarterly financial results | UMB Financial Corporation | ||||||||||||||
(unaudited, dollars in thousands, except per share data) | |||||||||||||||
Q4 | Q3 | Q4 | |||||||||||||
2017 | 2017 | 2016 | |||||||||||||
Income from continuing operations | $ | 47,357 | $ | 48,872 | $ | 43,400 | |||||||||
Income from discontinued operations-general operations (non-GAAP) | 205 | 3,372 | 1,278 | ||||||||||||
Income (loss) from discontinued operations-non-GAAP adjustments |
64,399 | (4,102 | ) | (1,744 | ) | ||||||||||
Income (loss) from discontinued operations-total |
64,604 | (730 | ) | (466 | ) | ||||||||||
Net income | 111,961 | 48,142 | 42,934 | ||||||||||||
Earnings per share from continuing operations (diluted) | 0.95 | 0.98 | 0.87 | ||||||||||||
Earnings per share from discontinued operations-general operations (non-GAAP) (diluted) | - | 0.07 | 0.03 | ||||||||||||
Earnings (losses) per share from discontinued operations-non-GAAP adjustments (diluted) |
1.30 | (0.08 | ) | (0.03 | ) | ||||||||||
Earnings (losses) per share from discontinued operations (diluted) |
1.30 | (0.01 | ) | - | |||||||||||
Earnings per share (diluted) | 2.25 | 0.97 | 0.87 | ||||||||||||
GAAP - continuing operations |
|||||||||||||||
Return on average assets |
0.91 |
% |
|
0.95 |
% |
|
0.87 |
% |
|||||||
Return on average equity | 8.72 | 9.17 | 8.67 | ||||||||||||
Efficiency ratio | 68.90 | 67.25 | 69.55 | ||||||||||||
Non-GAAP - continuing operations |
|||||||||||||||
Operating return on average assets |
0.91 |
% |
|
0.96 |
% |
|
0.88 |
% |
|||||||
Operating return on average equity | 8.75 | 9.18 | 8.79 | ||||||||||||
Operating efficiency ratio |
68.80 |
|
|
67.22 |
|
|
69.15 |
|
|||||||
Summary of year-to-date financial results | UMB Financial Corporation | |||||||||||
(unaudited, dollars in thousands, except per share data) | December | December | ||||||||||
YTD | YTD | |||||||||||
2017 | 2016 | |||||||||||
Income from continuing operations | $ | 182,976 | $ | 153,634 | ||||||||
Income from discontinued operations-general operations (non-GAAP) |
8,369 | 8,197 | ||||||||||
Income (loss) from discontinued operations-non-GAAP adjustments |
55,760 | (3,030 | ) | |||||||||
Income from discontinued operations-total | 64,129 | 5,167 | ||||||||||
Net income | 247,105 | 158,801 | ||||||||||
Earnings per share from continuing operations (diluted) | 3.67 | 3.12 | ||||||||||
Earnings per share from discontinued operations-general operations (non-GAAP) (diluted) | 0.17 | 0.17 | ||||||||||
Earnings (losses) per share from discontinued operations-non-GAAP adjustments (diluted) |
1.12 | (0.07 | ) | |||||||||
Earnings per share from discontinued operations (diluted) | 1.29 | 0.10 | ||||||||||
Earnings per share (diluted) | 4.96 | 3.22 | ||||||||||
GAAP - continuing operations |
||||||||||||
Return on average assets |
0.90 |
% |
|
0.78 |
% |
|||||||
Return on average equity | 8.79 | 7.74 | ||||||||||
Efficiency ratio | 68.56 | 71.50 | ||||||||||
Non-GAAP - continuing operations |
||||||||||||
Operating return on average assets |
0.90 |
% |
|
0.81 |
% |
|||||||
Operating return on average equity | 8.83 | 7.98 | ||||||||||
Operating efficiency ratio | 68.45 | 70.71 | ||||||||||
“Results for the fourth quarter 2017 were driven by loan growth, fueled by CRE and construction lending, strong credit metrics and continued growth in net interest margin,” said Mariner Kemper, chairman and chief executive officer. “For the full year, we earned a record $183.0 million, or $3.67 per diluted share, an increase of 19.1 percent compared to $153.6 million or $3.12 per diluted share in 2016. These results were driven by a 12.8 percent year-over-year increase in net interest income with continued favorable pricing and increased loan balances. In 2017, average loan balances increased 8.5 percent and stood at $10.8 billion.”
Discussion of results from continuing operations
Summary of revenue | UMB Financial Corporation | ||||||||||||||||||||||||
(unaudited, dollars in thousands) | |||||||||||||||||||||||||
Q4 | Q3 | Q4 | CQ vs. | CQ vs. | |||||||||||||||||||||
2017 | 2017 | 2016 | LQ | PY | |||||||||||||||||||||
Net interest income | $ | 146,346 | $ | 140,858 | $ | 131,456 | $ | 5,488 | $ | 14,890 | |||||||||||||||
Noninterest income: | |||||||||||||||||||||||||
Trust and securities processing | 44,234 | 45,060 | 42,331 | (826 | ) | 1,903 | |||||||||||||||||||
Trading and investment banking | 5,015 | 4,453 | 5,040 | 562 | (25 | ) | |||||||||||||||||||
Service charges on deposit accounts | 21,364 | 21,510 | 20,949 | (146 | ) | 415 | |||||||||||||||||||
Insurance fees and commissions | 388 | 425 | 833 | (37 | ) | (445 | ) | ||||||||||||||||||
Brokerage fees | 6,127 | 5,815 | 4,674 | 312 | 1,453 | ||||||||||||||||||||
Bankcard fees | 17,617 | 17,427 | 16,113 | 190 | 1,504 | ||||||||||||||||||||
Gains on sales of securities available for sale, net | 54 | 2,390 | - | (2,336 | ) | 54 | |||||||||||||||||||
Equity earnings (losses) on alternative investments |
285 | (584 | ) | 504 | 869 | (219 | ) | ||||||||||||||||||
Other | 10,949 | 7,810 | 7,786 | 3,139 | 3,163 | ||||||||||||||||||||
Total noninterest income | $ | 106,033 | $ | 104,306 | $ | 98,230 | $ | 1,727 | $ | 7,803 | |||||||||||||||
Total Revenue | $ | 252,379 | $ | 245,164 | $ | 229,686 | $ | 7,215 | $ | 22,693 | |||||||||||||||
Net interest margin |
3.21 |
% |
|
3.16 |
% |
|
3.00 |
% |
|
||||||||||||||||
Total noninterest income as a % of total revenue | 42.0 | % | 42.5 | % | 42.8 | % | |||||||||||||||||||
Net interest income
Noninterest income
Noninterest expense
Summary of noninterest expense | UMB Financial Corporation | |||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||
Q4 | Q3 | Q4 | CQ vs. | CQ vs. | ||||||||||||||||||
2017 | 2017 | 2016 | LQ | PY | ||||||||||||||||||
Salaries and employee benefits | $ | 107,656 | $ | 99,749 | $ | 96,765 | $ | 7,907 | $ | 10,891 | ||||||||||||
Occupancy, net | 11,148 | 11,285 | 11,259 | (137 | ) | (111 | ) | |||||||||||||||
Equipment | 18,690 | 17,880 | 17,530 | 810 | 1,160 | |||||||||||||||||
Supplies and services | 4,211 | 4,076 | 4,660 | 135 | (449 | ) | ||||||||||||||||
Marketing and business development | 6,540 | 5,056 | 5,935 | 1,484 | 605 | |||||||||||||||||
Processing fees | 11,238 | 11,151 | 8,887 | 87 | 2,351 | |||||||||||||||||
Legal and consulting | 6,045 | 5,844 | 6,694 | 201 | (649 | ) | ||||||||||||||||
Bankcard | 4,405 | 5,130 | 4,558 | (725 | ) | (153 | ) | |||||||||||||||
Amortization of other intangible assets | 1,641 | 1,715 | 2,051 | (74 | ) | (410 | ) | |||||||||||||||
Regulatory fees | 3,825 | 3,798 | 3,687 | 27 | 138 | |||||||||||||||||
Other | 7,160 | 6,137 | 5,821 | 1,023 | 1,339 | |||||||||||||||||
Total noninterest expense | $ | 182,559 | $ | 171,821 | $ | 167,847 | $ | 10,738 | $ | 14,712 | ||||||||||||
Full Year 2017 Financial Discussion
Income Taxes
Balance Sheet
Summary of average loans and leases - QTD Average | UMB Financial Corporation | |||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||
Q4 | Q3 | Q4 | CQ vs. | CQ vs. | ||||||||||||||||||
2017 | 2017 | 2016 | LQ | PY | ||||||||||||||||||
Commercial | $ | 4,438,241 | $ | 4,539,302 | $ | 4,369,173 | $ | (101,061 | ) | $ | 69,068 | |||||||||||
Asset-based loans | 326,845 | 278,479 | 231,035 | 48,366 | 95,810 | |||||||||||||||||
Factoring loans | 212,123 | 173,876 | 110,866 | 38,247 | 101,257 | |||||||||||||||||
Commercial credit card | 172,193 | 174,892 | 150,630 | (2,699 | ) | 21,563 | ||||||||||||||||
Real estate - construction | 835,715 | 782,898 | 674,367 | 52,817 | 161,348 | |||||||||||||||||
Real estate - commercial | 3,394,232 | 3,284,871 | 3,089,946 | 109,361 | 304,286 | |||||||||||||||||
Real estate - residential | 619,985 | 603,865 | 553,770 | 16,120 | 66,215 | |||||||||||||||||
Real estate - HELOC | 649,268 | 668,340 | 713,528 | (19,072 | ) | (64,260 | ) | |||||||||||||||
Consumer credit card | 247,284 | 239,529 | 271,909 | 7,755 | (24,625 | ) | ||||||||||||||||
Consumer other | 164,667 | 140,344 | 146,779 | 24,323 | 17,888 | |||||||||||||||||
Leases | 24,163 | 24,758 | 34,020 | (595 | ) | (9,857 | ) | |||||||||||||||
Total loans |
$ | 11,084,716 | $ | 10,911,154 | $ | 10,346,023 | $ | 173,562 | $ | 738,693 | ||||||||||||
Summary of average securities - QTD Average | UMB Financial Corporation | |||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||
Q4 | Q3 | Q4 | CQ vs. | CQ vs. | ||||||||||||||||||
2017 | 2017 | 2016 | LQ | PY | ||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||
U.S. Treasury | $ | 38,776 | $ | 47,216 | $ | 182,891 | $ | (8,440 | ) | $ | (144,115 | ) | ||||||||||
U.S. Agencies |
14,753 | 22,743 | 248,329 | (7,990 | ) | (233,576 | ) | |||||||||||||||
Mortgage-backed | 3,484,304 | 3,564,974 | 3,586,040 | (80,670 | ) | (101,736 | ) | |||||||||||||||
State and political subdivisions | 2,555,462 | 2,536,281 | 2,362,178 | 19,181 | 193,284 | |||||||||||||||||
Corporates | 15,880 | 21,848 | 67,100 | (5,968 | ) | (51,220 | ) | |||||||||||||||
Total securities available for sale | 6,109,175 | 6,193,062 | 6,446,538 | (83,887 | ) | (337,363 | ) | |||||||||||||||
Securities held to maturity: | ||||||||||||||||||||||
State and political subdivisions | 1,269,058 | 1,283,258 | 1,073,509 | (14,200 | ) | 195,549 | ||||||||||||||||
Trading securities | 43,388 | 49,396 | 50,925 | (6,008 | ) | (7,537 | ) | |||||||||||||||
Other securities | 63,543 | 64,294 | 66,567 | (751 | ) | (3,024 | ) | |||||||||||||||
Total securities | $ | 7,485,164 | $ | 7,590,010 | $ | 7,637,539 | $ | (104,846 | ) | $ | (152,375 | ) | ||||||||||
Summary of average deposits - QTD Average | UMB Financial Corporation | |||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||
Q4 | Q3 | Q4 | CQ vs. | CQ vs. | ||||||||||||||||||||
2017 | 2017 | 2016 | LQ | PY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Noninterest-bearing demand | $ | 6,180,293 | $ | 5,728,145 | $ | 6,193,787 | $ | 452,148 | $ | (13,494 | ) | |||||||||||||
Interest-bearing demand and savings | 9,439,202 | 8,789,217 | 8,439,920 | 649,985 | 999,282 | |||||||||||||||||||
Time deposits | 1,230,303 | 1,162,383 | 1,112,781 | 67,920 | 117,522 | |||||||||||||||||||
Total deposits | $ | 16,849,798 | $ | 15,679,745 | $ | 15,746,488 | $ | 1,170,053 | $ | 1,103,310 | ||||||||||||||
Non-interest bearing deposits as % of total | 36.68 | % | 36.53 | % | 39.33 | % | ||||||||||||||||||
Capital
Capital information | UMB Financial Corporation | ||||||||||||||
(unaudited, dollars in thousands, except per share data) | |||||||||||||||
Q4 | Q3 | Q4 | |||||||||||||
2017 | 2017 |
2016 |
|||||||||||||
Total equity | $ | 2,181,531 | $ | 2,101,543 | $ | 1,962,384 | |||||||||
Book value per common share | 43.72 | 42.15 | 39.51 | ||||||||||||
Regulatory capital: | |||||||||||||||
Common equity Tier 1 capital | $ | 2,041,504 | $ | 1,893,842 | $ | 1,789,581 | |||||||||
Tier 1 capital | 2,041,504 | 1,893,842 | 1,789,581 | ||||||||||||
Total capital | 2,213,050 | 2,062,928 | 1,951,078 | ||||||||||||
Regulatory capital ratios: | |||||||||||||||
Common equity Tier 1 capital ratio |
12.95 |
% |
|
12.18 |
% |
|
11.80 |
% |
|||||||
Tier 1 risk-based capital ratio | 12.95 | 12.18 | 11.80 | ||||||||||||
Total risk-based capital ratio | 14.04 | 13.26 | 12.87 | ||||||||||||
Tier 1 leverage ratio | 9.94 | 9.43 | 9.09 | ||||||||||||
Asset Quality
Credit quality | UMB Financial Corporation | ||||||||||||||||||||||||
(unaudited, dollars in thousands) | |||||||||||||||||||||||||
Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||||||
Net charge-offs - Commercial loans | $ | 2,248 | $ | 8,961 | $ | 7,971 | $ | 5,283 | $ | 1,127 | |||||||||||||||
Net (recoveries) charge-offs - Real estate loans |
(242 | ) | 238 | (95 | ) | 125 | 3,373 | ||||||||||||||||||
Net charge-offs - Consumer credit card loans | 1,612 | 1,635 | 2,079 | 1,815 | 1,692 | ||||||||||||||||||||
Net charge-offs - Consumer other loans | 167 | 74 | 71 | 103 | 63 | ||||||||||||||||||||
Net charge-offs - Total loans | 3,785 | 10,908 | 10,026 | 7,326 | 6,255 | ||||||||||||||||||||
Net loan charge-offs as a % of total average loans |
0.14 |
% |
|
0.40 |
% |
|
0.37 |
% |
|
0.28 |
% |
|
0.24 |
% |
|||||||||||
Loans over 90 days past due | $ | 3,091 | $ | 2,088 | $ | 2,657 | $ | 3,369 | $ | 3,365 | |||||||||||||||
Loans over 90 days past due as a % of total loans |
0.03 |
% |
0.02 |
% |
|
0.02 |
% |
|
0.03 |
% |
|
0.03 |
% |
||||||||||||
Nonaccrual and restructured loans | $ | 59,142 | $ | 54,231 | $ | 51,390 | $ | 56,594 | $ | 70,259 | |||||||||||||||
Nonaccrual and restructured loans as a % of total loans |
0.52 |
% |
0.49 |
% |
|
0.47 |
% |
|
0.53 |
% |
|
0.67 |
% |
||||||||||||
Provision for loan losses |
$ |
6,000 |
$ |
11,500 | $ | 14,500 | $ | 9,000 | $ | 7,500 | |||||||||||||||
Dividend Declaration
At the company’s quarterly board meeting, the Board of Directors declared a $0.29 per share quarterly cash dividend, a 5.5 percent increase from previous levels. This cash dividend will be payable on April 2, 2018, to shareholders of record at the close of business on March 9, 2018.
Conference Call
The company plans to host a conference call to discuss its fourth quarter and full year 2017 earnings results on Wednesday, Jan. 24, 2018, at 8:30 a.m. (CT).
Interested parties may access the call by dialing (toll-free) 877-267-8760 or (U.S.) 412-542-4148 and requesting to join the UMB Financial call. The live call can also be accessed by visiting the investor relations area of umbfinancial.com or by using the following the link:
UMB Financial 4Q 2017 Conference Call
A replay of the conference call may be heard through Feb. 7, 2018, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10115494. The call replay may also be accessed via the company's website umbfinancial.com by visiting the investor relations area.
Non-GAAP Financial Information
In this release, we provide information about net operating income, operating earnings per share - diluted (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, operating efficiency ratio, net income from discontinued operations-general operations, and earnings per share from discontinued operations-general operations, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles in the United States (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures—net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense, operating efficiency ratio, net income from discontinued operations-general operations, and earnings per share from discontinued operations-general operations—and the nearest comparable GAAP financial measures are reconciled later in this release. The company believes that these non-GAAP financial measures and the reconciliations may be useful to investors because they adjust for fair value adjustments, acquisition- and severance-related items, one-time marketing agent termination costs, and divestiture costs that management does not believe reflect the company’s fundamental operating performance.
Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding the following: (i) fair value adjustments on contingent consideration for the acquisitions of Reams Asset Management Company (Reams), (ii) expenses related to acquisitions and divestitures, (iii) non-acquisition related severance expense, and (v) the cumulative tax impact of the previous adjustments. The company believes that the financial impact of excluding non-acquisition related severance expense will be immaterial in the near future. It is excluded from certain GAAP financial measures as it has an unusually large impact on the company’s financial statements.
Operating EPS (diluted) is calculated as earnings per share as reported, adjusted to reflect, on a per share basis, the impact of excluding the non-GAAP adjustments described in clauses (i)-(v) above for the relevant period. Operating ROE is calculated as net operating income, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income, divided by the company’s average assets for the relevant period. Operating noninterest expense for the relevant period is defined as GAAP noninterest expense, adjusted to reflect the pre-tax impact of non-GAAP adjustments described in clauses (i)-(iii) above. Operating efficiency ratio is calculated as the company’s operating noninterest expense, net of amortization of other intangibles, divided by the company’s total revenue (calculated as tax equivalent net interest income, plus noninterest income, less gains on sales of securities available for sale, net).
Net income from discontinued operations-general operations for the relevant period is defined as GAAP income from discontinued operations, adjusted to reflect the impact of excluding non-GAAP adjustments (iii) and (v) above, and (iv) divestiture expenses related to Scout, (vii) the gain on sale of Scout, and (viii) expenses related to the buy-out and termination of certain marketing and referral agreements in Scout’s business. The company believes that the financial impact of excluding non-acquisition related severance expense will be immaterial in the near future. It is excluded from certain GAAP financial measures as it has an unusually large impact on the company’s financial statements.
Earnings per share from discontinued operations-general operations (diluted) is calculated as earnings per share from discontinued operations (diluted) as reported, adjusted to reflect, on a per share basis, the impact of excluding non-GAAP adjustment (iii)-(v), and (vii)-(viii) above for the relevant period.
Forward-Looking Statements:
This release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as our statements about the timeframe or amount of expected proceeds from the closing of the sale of Scout. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2016, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.
About UMB:
UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Mo., offering complete banking services, payment solutions and asset servicing. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. A subsidiary of the holding company, UMB Fund Services, Inc., offers services to mutual funds and alternative-investment entities and registered investment advisors. For more information, visit UMB.com, UMB Financial.com, UMB Blog or follow us on Twitter at @UMBBank, UMB Facebook and UMB LinkedIn.
Consolidated Balance Sheets | UMB Financial Corporation | |||||||||||
(dollars in thousands) | ||||||||||||
December 31, | ||||||||||||
Assets |
2017 | 2016 | ||||||||||
(unaudited) | (audited) | |||||||||||
Loans | $ | 11,280,513 | $ | 10,540,383 | ||||||||
Allowance for loan losses | (100,604 | ) | (91,649 | ) | ||||||||
Net loans | 11,179,909 | 10,448,734 | ||||||||||
Loans held for sale | 1,460 | 5,279 | ||||||||||
Investment securities: | ||||||||||||
Available for sale | 6,258,577 | 6,466,334 | ||||||||||
Held to maturity | 1,261,014 | 1,115,932 | ||||||||||
Trading securities | 54,055 | 39,536 | ||||||||||
Other securities | 65,897 | 68,306 | ||||||||||
Total investment securities | 7,639,543 | 7,690,108 | ||||||||||
Federal funds and resell agreements | 191,601 | 324,327 | ||||||||||
Interest-bearing due from banks | 1,351,760 | 715,823 | ||||||||||
Cash and due from banks | 392,723 | 422,117 | ||||||||||
Premises and equipment, net | 275,942 | 289,007 | ||||||||||
Accrued income | 98,863 | 99,045 | ||||||||||
Goodwill | 180,867 | 180,867 | ||||||||||
Other intangibles, net | 20,257 | 26,630 | ||||||||||
Other assets | 438,658 | 425,205 | ||||||||||
Discontinued assets – goodwill and other intangibles, net | - | 55,390 | ||||||||||
Total assets | $ | 21,771,583 | $ | 20,682,532 | ||||||||
Liabilities |
||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing demand | $ | 6,839,171 | $ | 6,654,584 | ||||||||
Interest-bearing demand and savings | 9,903,565 | 8,780,309 | ||||||||||
Time deposits under $250,000 | 547,990 | 613,589 | ||||||||||
Time deposits of $250,000 or more | 732,274 | 522,132 | ||||||||||
Total deposits | 18,023,000 | 16,570,614 | ||||||||||
Federal funds and repurchase agreements | 1,260,704 | 1,856,937 | ||||||||||
Long-term debt | 79,281 | 76,772 | ||||||||||
Accrued expenses and taxes | 191,464 | 172,967 | ||||||||||
Other liabilities | 35,603 | 42,858 | ||||||||||
Total liabilities | 19,590,052 | 18,720,148 | ||||||||||
Shareholders' Equity |
||||||||||||
Common stock | 55,057 | 55,057 | ||||||||||
Capital surplus | 1,046,095 | 1,033,419 | ||||||||||
Retained earnings | 1,338,110 | 1,142,887 | ||||||||||
Accumulated other comprehensive loss, net | (45,525 | ) | (57,542 | ) | ||||||||
Treasury stock | (212,206 | ) | (211,437 | ) | ||||||||
Total shareholders' equity | 2,181,531 | 1,962,384 | ||||||||||
Total liabilities and shareholders' equity | $ | 21,771,583 | $ | 20,682,532 | ||||||||
Consolidated Statements of Income | UMB Financial Corporation | |||||||||||||||||
(dollars in thousands, except share and per share data) | ||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Interest Income |
(unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||||||||
Loans | $ | 122,885 | $ | 102,961 | $ | 461,301 | $ | 386,274 | ||||||||||
Securities: | ||||||||||||||||||
Taxable interest | 17,774 | 18,339 | 73,125 | 73,560 | ||||||||||||||
Tax-exempt interest | 19,047 | 16,139 | 73,419 | 57,516 | ||||||||||||||
Total securities income | 36,821 | 34,478 | 146,544 | 131,076 | ||||||||||||||
Federal funds and resell agreements | 1,062 | 769 | 3,700 | 2,708 | ||||||||||||||
Interest-bearing due from banks | 1,987 | 569 | 3,871 | 2,341 | ||||||||||||||
Trading securities | 361 | 233 | 1,496 | 632 | ||||||||||||||
Total interest income | 163,116 | 139,010 | 616,912 | 523,031 | ||||||||||||||
Interest Expense |
||||||||||||||||||
Deposits | 12,372 | 5,119 | 36,354 | 17,936 | ||||||||||||||
Federal funds and repurchase agreements | 3,632 | 1,774 | 17,906 | 6,524 | ||||||||||||||
Other | 766 | 661 | 3,739 | 3,248 | ||||||||||||||
Total interest expense | 16,770 | 7,554 | 57,999 | 27,708 | ||||||||||||||
Net interest income | 146,346 | 131,456 | 558,913 | 495,323 | ||||||||||||||
Provision for loan losses | 6,000 | 7,500 | 41,000 | 32,500 | ||||||||||||||
Net interest income after provision for loan losses | 140,346 | 123,956 | 517,913 | 462,823 | ||||||||||||||
Noninterest Income |
||||||||||||||||||
Trust and securities processing | 44,234 | 42,331 | 176,646 | 166,315 | ||||||||||||||
Trading and investment banking | 5,015 | 5,040 | 23,183 | 21,422 | ||||||||||||||
Service charges on deposits | 21,364 | 20,949 | 87,680 | 86,662 | ||||||||||||||
Insurance fees and commissions | 388 | 833 | 1,972 | 4,188 | ||||||||||||||
Brokerage fees | 6,127 | 4,674 | 23,208 | 17,833 | ||||||||||||||
Bankcard fees | 17,617 | 16,113 | 73,030 | 68,749 | ||||||||||||||
Gains on sale of securities available for sale, net | 54 | - | 4,192 | 8,509 | ||||||||||||||
Equity earnings (losses) on alternative investments | 285 | 504 | (1,108 | ) | 2,695 | |||||||||||||
Other | 10,949 | 7,786 | 34,759 | 26,138 | ||||||||||||||
Total noninterest income | 106,033 | 98,230 | 423,562 | 402,511 | ||||||||||||||
Noninterest Expense |
||||||||||||||||||
Salaries and employee benefits | 107,656 | 96,765 | 413,830 | 390,059 | ||||||||||||||
Occupancy, net | 11,148 | 11,259 | 44,462 | 44,255 | ||||||||||||||
Equipment | 18,690 | 17,530 | 72,008 | 66,337 | ||||||||||||||
Supplies, postage and telephone | 4,211 | 4,660 | 17,173 | 18,535 | ||||||||||||||
Marketing and business development | 6,540 | 5,935 | 21,469 | 21,208 | ||||||||||||||
Processing fees | 11,238 | 8,887 | 42,331 | 36,005 | ||||||||||||||
Legal and consulting | 6,045 | 6,694 | 23,406 | 20,801 | ||||||||||||||
Bankcard | 4,405 | 4,558 | 19,471 | 20,757 | ||||||||||||||
Amortization of other intangibles | 1,641 | 2,051 | 7,326 | 8,695 | ||||||||||||||
Regulatory fees | 3,825 | 3,687 | 15,527 | 14,178 | ||||||||||||||
Other | 7,160 | 5,821 | 28,126 | 25,915 | ||||||||||||||
Total noninterest expense | 182,559 | 167,847 | 705,129 | 666,745 | ||||||||||||||
Income before income taxes | 63,820 | 54,339 | 236,346 | 198,589 | ||||||||||||||
Income tax provision | 16,463 | 10,939 | 53,370 | 44,955 | ||||||||||||||
Income from continuing operations | $ | 47,357 | $ | 43,400 | $ | 182,976 | $ | 153,634 | ||||||||||
Discontinued operations |
||||||||||||||||||
Income (loss) from discontinued operations before income taxes | 101,948 | (377 | ) | 101,226 | 8,415 | |||||||||||||
Income tax expense | 37,344 | 89 | 37,097 | 3,248 | ||||||||||||||
Income (loss) on discontinued operations | 64,604 | (466 | ) | 64,129 | 5,167 | |||||||||||||
Net income | $ | 111,961 | $ | 42,934 | $ | 247,105 | $ | 158,801 | ||||||||||
Per Share Data |
||||||||||||||||||
Basic: | ||||||||||||||||||
Income from continuing operations | $ | 0.96 | $ | 0.89 | $ | 3.72 | $ | 3.15 | ||||||||||
Income (loss) from discontinued operations | 1.31 | (0.01 | ) | 1.30 | 0.10 | |||||||||||||
Net income - basic | 2.27 | 0.88 | 5.02 | 3.25 | ||||||||||||||
Diluted: | ||||||||||||||||||
Income from continuing operations | 0.95 | 0.87 | 3.67 | 3.12 | ||||||||||||||
Income from discontinued operations | 1.30 | - | 1.29 | 0.10 | ||||||||||||||
Net income – diluted | 2.25 | 0.87 | 4.96 | 3.22 | ||||||||||||||
Dividends | 0.275 | 0.255 | 1.040 | 0.990 | ||||||||||||||
Weighted average shares outstanding | 49,229,693 | 48,935,216 | 49,223,661 | 48,828,313 | ||||||||||||||
Weighted average shares outstanding – diluted | 49,840,529 | 49,616,121 | 49,839,290 | 49,277,055 | ||||||||||||||
Consolidated Statements of Comprehensive Income (Loss) | UMB Financial Corporation | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (audited) | |||||||||||||||||
Net Income | $ | 111,961 | $ | 42,934 | $ | 247,105 | $ | 158,801 | ||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||
Unrealized (losses) gains on securities: | ||||||||||||||||||||
Change in unrealized holding (losses) gains, net | (41,507 | ) | (168,433 | ) | 21,139 | (77,794 | ) | |||||||||||||
Less: Reclassifications adjustment for gains included in net income | (54 | ) | - | (4,192 | ) | (8,509 | ) | |||||||||||||
Change in unrealized (losses) gains on securities during the period | (41,561 | ) | (168,433 | ) | 16,947 | (86,303 | ) | |||||||||||||
Change in unrealized gains (losses) on derivatives | 30 | 7,161 | (1,050 | ) | (516 | ) | ||||||||||||||
Income tax benefit (expense) | 18,674 | 61,218 | (3,880 | ) | 32,995 | |||||||||||||||
Other comprehensive (loss) income | (22,857 | ) | (100,054 | ) | 12,017 | (53,824 | ) | |||||||||||||
Comprehensive income (loss) | $ | 89,104 | $ | (57,120 | ) | $ | 259,122 | $ | 104,977 | |||||||||||
Consolidated Statements of Changes in Shareholders' Equity | UMB Financial Corporation | ||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Common | Capital | Retained | Comprehensive | Treasury | |||||||||||||||||||||||||
(audited) | Stock | Surplus | Earnings |
(Loss) Income |
Stock | Total | |||||||||||||||||||||||
Balance - January 1, 2016 | $ | 55,057 | $ | 1,019,889 | $ | 1,033,990 | $ | (3,718 | ) | $ | (211,524 | ) | $ | 1,893,694 | |||||||||||||||
Total comprehensive income | - | - | 158,801 | (53,824 | ) | - | 104,977 | ||||||||||||||||||||||
Cash dividends ($0.99 per share) | - | - | (49,048 | ) | - | - | (49,048 | ) | |||||||||||||||||||||
Purchase of treasury stock | - | - | - | - | (16,367 | ) | (16,367 | ) | |||||||||||||||||||||
Issuance of equity awards | - | (3,011 | ) | - | - | 3,440 | 429 | ||||||||||||||||||||||
Recognition of equity based compensation | - | 11,306 | - | - | - | 11,306 | |||||||||||||||||||||||
Sale of treasury stock | - | 480 | - | - | 616 | 1,096 | |||||||||||||||||||||||
Exercise of stock options | - | 3,417 | - | - | 12,398 | 15,815 | |||||||||||||||||||||||
Cumulative effect adjustment | - | 1,338 | (856 | ) | - | - | 482 | ||||||||||||||||||||||
Balance – December 31, 2016 | $ | 55,057 | $ | 1,033,419 | $ | 1,142,887 | $ | (57,542 | ) | $ | (211,437 | ) | $ | 1,962,384 | |||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Balance - January 1, 2017 | $ | 55,057 | $ | 1,033,419 | $ | 1,142,887 | $ | (57,542 | ) | $ | (211,437 | ) | $ | 1,962,384 | |||||||||||||||
Total comprehensive income | - | - | 247,105 | 12,017 | - | 259,122 | |||||||||||||||||||||||
Cash dividends ($1.04 per share) | - | - | (51,882 | ) | - | - | (51,882 | ) | |||||||||||||||||||||
Purchase of treasury stock | - | - | - | - | (15,276 | ) | (15,276 | ) | |||||||||||||||||||||
Issuance of equity awards | - | (2,871 | ) | - | - | 3,343 | 472 | ||||||||||||||||||||||
Recognition of equity based compensation | - | 12,844 | - | - | - | 12,844 | |||||||||||||||||||||||
Sale of treasury stock | - | 608 | - | - | 512 | 1,120 | |||||||||||||||||||||||
Exercise of stock options | - | 2,095 | - | - | 10,652 | 12,747 | |||||||||||||||||||||||
Balance – December 31, 2017 | $ | 55,057 | $ | 1,046,095 | $ | 1,338,110 | $ | (45,525 | ) | $ | (212,206 | ) | $ | 2,181,531 | |||||||||||||||
Average Balances / Yields and Rates | UMB Financial Corporation | |||||||||||||||||
(tax - equivalent basis) | ||||||||||||||||||
(unaudited, dollars in thousands) | Three Months Ended December 31, | |||||||||||||||||
2017 | 2016 | |||||||||||||||||
Average | Average | Average | Average | |||||||||||||||
Assets |
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
Loans, net of unearned interest | $ | 11,084,716 | 4.40 | % | $ | 10,346,023 | 3.96 | % | ||||||||||
Securities: | ||||||||||||||||||
Taxable | 3,688,202 | 1.91 | 4,232,002 | 1.72 | ||||||||||||||
Tax-exempt | 3,753,574 | 3.08 | 3,354,612 | 2.94 | ||||||||||||||
Total securities | 7,441,776 | 2.50 | 7,586,614 | 2.26 | ||||||||||||||
Federal funds and resell agreements | 181,933 | 2.32 | 208,581 | 1.47 | ||||||||||||||
Interest-bearing due from banks | 587,181 | 1.34 | 365,512 | 0.62 | ||||||||||||||
Trading securities | 43,388 | 4.21 | 50,925 | 2.18 | ||||||||||||||
Total earning assets | 19,338,994 | 3.56 | 18,557,655 | 3.17 | ||||||||||||||
Allowance for loan losses | (100,344 | ) | (91,833 | ) | ||||||||||||||
Other assets | 1,485,075 | 1,454,616 | ||||||||||||||||
Total assets | $ | 20,723,725 | $ | 19,920,438 | ||||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||||
Interest-bearing deposits | $ | 10,669,505 | 0.46 | % | $ | 9,552,701 | 0.21 | % | ||||||||||
Federal funds and repurchase agreements | 1,424,380 | 1.01 | 1,899,196 | 0.37 | ||||||||||||||
Borrowed funds | 76,626 | 3.97 | 76,831 | 3.42 | ||||||||||||||
Total interest-bearing liabilities | 12,170,511 | 0.55 | 11,528,728 | 0.26 | ||||||||||||||
Noninterest-bearing demand deposits | 6,180,293 | 6,193,787 | ||||||||||||||||
Other liabilities | 217,721 | 206,576 | ||||||||||||||||
Shareholders' equity | 2,155,200 | 1,991,347 | ||||||||||||||||
Total liabilities and shareholders' equity | $ | 20,723,725 | $ | 19,920,438 | ||||||||||||||
Net interest spread | 3.01 | % | 2.91 | % | ||||||||||||||
Net interest margin | 3.21 | 3.00 | ||||||||||||||||
Average Balances / Yields and Rates | UMB Financial Corporation | |||||||||||||||||
(tax - equivalent basis) | ||||||||||||||||||
(unaudited, dollars in thousands) | Year Ended December 31, | |||||||||||||||||
2017 | 2016 | |||||||||||||||||
Average | Average | Average | Average | |||||||||||||||
Assets |
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
Loans, net of unearned interest | $ | 10,843,642 | 4.25 | % | $ | 9,992,874 | 3.87 | % | ||||||||||
Securities: | ||||||||||||||||||
Taxable | 3,918,001 | 1.87 | 4,545,013 | 1.62 | ||||||||||||||
Tax-exempt | 3,657,951 | 3.08 | 3,077,562 | 2.87 | ||||||||||||||
Total securities | 7,575,952 | 2.45 | 7,622,575 | 2.12 | ||||||||||||||
Federal funds and resell agreements | 190,074 | 1.95 | 188,572 | 1.44 | ||||||||||||||
Interest-bearing due from banks | 351,293 | 1.10 | 410,163 | 0.57 | ||||||||||||||
Trading securities | 57,013 | 3.28 | 42,437 | 1.85 | ||||||||||||||
Total earning assets | 19,017,974 | 3.45 | 18,256,621 | 3.03 | ||||||||||||||
Allowance for loan losses | (97,231 | ) | (85,201 | ) | ||||||||||||||
Other assets | 1,475,685 | 1,421,265 | ||||||||||||||||
Total assets | $ | 20,396,428 | $ | 19,592,685 | ||||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||||
Interest-bearing deposits | $ | 10,002,497 | 0.36 | % | $ | 9,432,720 | 0.19 | % | ||||||||||
Federal funds and repurchase agreements | 2,095,111 | 0.85 | 2,005,631 | 0.33 | ||||||||||||||
Borrowed funds | 76,301 | 4.90 | 85,658 | 3.79 | ||||||||||||||
Total interest-bearing liabilities | 12,173,909 | 0.48 | 11,524,009 | 0.24 | ||||||||||||||
Noninterest-bearing demand deposits | 5,936,172 | 5,906,021 | ||||||||||||||||
Other liabilities | 205,500 | 178,906 | ||||||||||||||||
Shareholders' equity | 2,080,847 | 1,983,749 | ||||||||||||||||
Total liabilities and shareholders' equity | $ | 20,396,428 | $ | 19,592,685 | ||||||||||||||
Net interest spread | 2.97 | % | 2.79 | % | ||||||||||||||
Net interest margin | 3.15 | 2.88 | ||||||||||||||||
Business Segment Information | UMB Financial Corporation | |||||||||||
(unaudited, dollars in thousands) | ||||||||||||
Three Months Ended December 31, 2017 | ||||||||||||
Bank | Asset Servicing | Total | ||||||||||
Net interest income | $ | 142,544 | $ | 3,802 | $ | 146,346 | ||||||
Provision for loan losses | 6,000 | - | 6,000 | |||||||||
Noninterest income | 82,966 | 23,067 | 106,033 | |||||||||
Noninterest expense | 160,202 | 22,357 | 182,559 | |||||||||
Income before taxes | 59,308 | 4,512 | 63,820 | |||||||||
Income tax expense | 15,838 | 625 | 16,463 | |||||||||
Net income from continuing operations | $ | 43,470 | $ | 3,887 | $ | 47,357 | ||||||
Average assets | $ | 19,950,550 | $ | 773,450 | $ | 20,724,000 | ||||||
Three Months Ended December 31, 2016 | ||||||||||||
Bank | Asset Servicing | Total | ||||||||||
Net interest income | $ | 128,869 | $ | 2,587 | $ | 131,456 | ||||||
Provision for loan losses | 7,500 | - | 7,500 | |||||||||
Noninterest income | 75,246 | 22,984 | 98,230 | |||||||||
Noninterest expense | 147,006 | 20,841 | 167,847 | |||||||||
Income before taxes | 49,609 | 4,730 | 54,339 | |||||||||
Income tax expense | 9,951 | 988 | 10,939 | |||||||||
Net income from continuing operations | $ | 39,658 | $ | 3,742 | $ | 43,400 | ||||||
Average assets | $ | 18,879,000 | $ | 1,041,000 | $ | 19,920,000 | ||||||
Year Ended December 31, 2017 | ||||||||||||
Bank | Asset Servicing | Total | ||||||||||
Net interest income | $ | 546,000 | $ | 12,913 | $ | 558,913 | ||||||
Provision for loan losses | 41,000 | - | 41,000 | |||||||||
Noninterest income | 328,550 | 95,012 | 423,562 | |||||||||
Noninterest expense | 616,883 | 88,246 | 705,129 | |||||||||
Income before taxes | 216,667 | 19,679 | 236,346 | |||||||||
Income tax expense | 49,522 | 3,848 | 53,370 | |||||||||
Net income from continuing operations | $ | 167,145 | $ | 15,831 | $ | 182,976 | ||||||
Average assets | $ | 19,612,450 | $ | 783,550 | $ | 20,396,000 | ||||||
Year Ended December 31, 2016 | ||||||||||||
Bank | Asset Servicing | Total | ||||||||||
Net interest income | $ | 484,716 | $ | 10,607 | $ | 495,323 | ||||||
Provision for loan losses | 32,500 | - | 32,500 | |||||||||
Noninterest income | 309,889 | 92,622 | 402,511 | |||||||||
Noninterest expense | 582,719 | 84,026 | 666,745 | |||||||||
Income before taxes | 179,386 | 19,203 | 198,589 | |||||||||
Income tax expense | 40,406 | 4,549 | 44,955 | |||||||||
Net income from continuing operations | $ | 138,980 | $ | 14,654 | $ | 153,634 | ||||||
Average assets | $ | 18,371,950 | $ | 1,221,050 | $ | 19,593,000 | ||||||
Non-GAAP Financial Measures | UMB Financial Corporation | |||||||||||||||||||
Net operating income non-GAAP reconciliations: | ||||||||||||||||||||
(unaudited, dollars in thousands, except per share data) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Income from continuing operations (GAAP) | $ | 47,357 | $ | 43,400 | $ | 182,976 | $ | 153,634 | ||||||||||||
Adjustments: | ||||||||||||||||||||
Fair value adjustments on contingent consideration (i) | - | - | - | 67 | ||||||||||||||||
Acquisition expenses (ii) | 52 | 547 | 74 | 5,020 | ||||||||||||||||
Non-acquisition severance expense (iii) | 224 | 415 | 1,039 | 2,167 | ||||||||||||||||
Tax-impact of adjustments (v) | (100 | ) | (346 | ) | (401 | ) | (2,611 | ) | ||||||||||||
Total Non-GAAP adjustments (net of tax) | 176 | 616 | 712 | 4,643 | ||||||||||||||||
Net operating income from continuing operations (Non-GAAP) | $ | 47,533 | $ | 44,016 | $ | 183,688 | $ | 158,277 | ||||||||||||
Earnings per share from continuing operations - diluted (GAAP) | $ | 0.95 | $ | 0.87 | $ | 3.67 | $ | 3.12 | ||||||||||||
Fair value adjustments on contingent consideration (i) | - | - | - | - | ||||||||||||||||
Acquisition expenses (ii) | - | 0.01 | - | 0.10 | ||||||||||||||||
Non-acquisition severance expense (iii) | - | 0.01 | 0.02 | 0.04 | ||||||||||||||||
Tax-impact of adjustments (v) | - | - | - | (0.05 | ) | |||||||||||||||
Operating earnings per share from continuing operations - diluted (Non-GAAP) | $ | 0.95 | $ | 0.89 | $ | 3.69 | $ | 3.21 | ||||||||||||
GAAP |
||||||||||||||||||||
Return on average assets |
0.91 |
% |
|
0.87 |
% |
|
0.90 |
% |
|
0.78 |
% |
|||||||||
Return on average equity | 8.72 | 8.67 | 8.79 | 7.74 | ||||||||||||||||
Non-GAAP |
||||||||||||||||||||
Operating return on average assets |
0.91 |
% |
|
0.88 |
% |
|
0.90 |
% |
|
0.81 |
% |
|||||||||
Operating return on average equity | 8.75 | 8.79 | 8.83 | 7.98 | ||||||||||||||||
Operating noninterest expense and operating efficiency ratio non-GAAP reconciliations: | UMB Financial Corporation | |||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Noninterest expense | $ | 182,559 | $ | 167,847 | $ | 705,129 | $ | 666,745 | ||||||||||||
Adjustments to arrive at operating noninterest expense (pre-tax): | ||||||||||||||||||||
Fair value adjustments on contingent consideration (i) | - | - | - | 67 | ||||||||||||||||
Acquisition expenses (ii) | 52 | 547 | 74 | 5,020 | ||||||||||||||||
Non-acquisition severance expense (iii) | 224 | 415 | 1,039 | 2,167 | ||||||||||||||||
Total Non-GAAP adjustments (pre-tax) | 276 | 962 | 1,113 | 7,254 | ||||||||||||||||
Operating noninterest expense (Non-GAAP) | $ | 182,283 | $ | 166,885 | $ | 704,016 | $ | 659,491 | ||||||||||||
Noninterest expense | $ | 182,559 | $ | 167,847 | $ | 705,129 | $ | 666,745 | ||||||||||||
Less: Amortization of other intangibles | 1,641 | 2,051 | 7,326 | 8,695 | ||||||||||||||||
Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) | $ | 180,918 | $ | 165,796 | $ | 697,803 | $ | 658,050 | ||||||||||||
Operating noninterest expense | $ | 182,283 | $ | 166,885 | $ | 704,016 | $ | 659,491 | ||||||||||||
Less: Amortization of other intangibles | 1,641 | 2,051 | 7,326 | 8,695 | ||||||||||||||||
Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) | $ | 180,642 | $ | 164,834 | $ | 696,690 | $ | 650,796 | ||||||||||||
Net interest income (tax equivalent) (vi) | $ | 156,583 | $ | 140,147 | $ | 598,392 | $ | 526,337 | ||||||||||||
Noninterest income | 106,033 | 98,230 | 423,562 | 402,511 | ||||||||||||||||
Less: Gains on sales of securities available for sale, net | 54 | - | 4,192 | 8,509 | ||||||||||||||||
Total (Non-GAAP) (denominator A) | $ | 262,562 | $ | 238,377 | $ | 1,017,762 | $ | 920,339 | ||||||||||||
Efficiency ratio (numerator A/denominator A) |
68.90 |
% |
|
69.55 |
% |
|
68.56 |
% |
|
71.50 |
% |
|||||||||
Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) | 68.80 | 69.15 | 68.45 | 70.71 | ||||||||||||||||
Net income from discontinued operations-general operations non-GAAP reconciliation: | UMB Financial Corporation | |||||||||||||||||||
(unaudited, dollars in thousands, except per share data) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Income (loss) from discontinued operations (GAAP) | $ | 64,604 | $ | (466 | ) | $ | 64,129 | $ | 5,167 | |||||||||||
Adjustments: | ||||||||||||||||||||
Divestiture expense (iv) | 3,021 | - | 16,519 | - | ||||||||||||||||
Non-acquisition severance expense (iii) | - | - | - | 2,010 | ||||||||||||||||
Gain on sale of discontinued operations (vii) | (103,644 | ) | - | (103,644 | ) | - | ||||||||||||||
Marketing agent termination costs (viii) | - | 2,725 | - | 2,725 | ||||||||||||||||
Tax-impact of adjustments (v) | 36,224 | (981 | ) | 31,365 | (1,705 | ) | ||||||||||||||
Total Non-GAAP adjustments (net of tax) | (64,399 | ) | 1,744 | (55,760 | ) | 3,030 | ||||||||||||||
Net income from discontinued operations-general operations (Non-GAAP) | $ | 205 | $ | 1,278 | $ | 8,369 | $ | 8,197 | ||||||||||||
Earnings per share from discontinued operations - diluted | $ | 1.30 | $ | - | $ | 1.29 | $ | 0.10 | ||||||||||||
Divestiture expense (iv) | 0.06 | - | 0.33 | - | ||||||||||||||||
Non-acquisition severance expense (iii) | - | - | - | 0.04 | ||||||||||||||||
Gain on sale of discontinued operations (vii) | (2.08 | ) | - | (2.08 | ) | - | ||||||||||||||
Marketing agent termination costs (viii) | - | 0.05 | - | 0.06 | ||||||||||||||||
Tax-impact of adjustments (v) | 0.72 | (0.02 | ) | 0.63 | (0.03 | ) | ||||||||||||||
Total Non-GAAP adjustments (net of tax) | (1.30 | ) | 0.03 | (1.12 | ) | 0.07 | ||||||||||||||
Earnings per share from discontinued operations-general operations - diluted (Non-GAAP) | $ | - | $ | 0.03 | $ | 0.17 | $ | 0.17 |
(i) |
Represents fair value adjustments to contingent consideration for the acquisitions of Reams. |
|
(ii) |
Represents expenses related to acquisitions and divestitures. |
|
(iii) |
Represents non-acquisition severance expense related to UMB-legacy employees as management excludes severance expense from its internal evaluation of company performance. Severance expense for Marquette-legacy employees is included in item (ii). Severance expense for Scout employees is included in item (iv) |
|
(iv) |
Represents expenses related to the divestiture of Scout. |
|
(v) |
Calculated using the company's marginal tax rate of 36%. |
|
(vi) |
Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $10.3 million and $8.7 million for the three months ended December 31, 2017 and 2016, respectively. The amount of such adjustment was an addition to net interest income of $39.5 million and $31.0 million for the years ended December 31, 2017 and 2016, respectively. |
|
(vii) |
Represents the gain on the sale of Scout. As this gain does not represent income from the normal course of business, it is removed from the calculation of discontinued operations-general operations |
|
(viii) |
Represents expenses related to the buy-out and termination of certain marketing and referral agreements in the company’s institutional investment management business. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180123006356/en/
UMB Financial Corporation
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Crocker, 816-860-7775
or
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