Press Release

UMB Financial Corporation Reports First Quarter 2016 Earnings of $36.2 Million, or $0.74 Per Diluted Share

Company Release - 4/26/2016 9:00 AM ET

KANSAS CITY, Mo.--(BUSINESS WIRE)-- UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the first quarter 2016 of $36.2 million or $0.74 per diluted share, compared to $29.6 million or $0.60 per diluted share in the fourth quarter 2015 (linked quarter) and $33.8 million or $0.74 per diluted share during the first quarter 2015.

On a non-GAAP operating basis, which is reconciled to comparable GAAP financial measures later in this release, net operating income for the first quarter 2016 was $38.6 million or $0.79 per diluted share, compared to $34.2 million or $0.70 per diluted share on a linked quarter basis and $33.0 million or $0.73 per diluted share for the first quarter 2015.

     

Summary of financial results

   

UMB Financial Corporation

(unaudited, dollars in thousands)
 

Q1
2016

 

Q4
2015

 

Q1
2015

 

GAAP

Net income $ 36,245 $ 29,643 $ 33,765
Earnings per share (diluted) 0.74 0.60 0.74
Return on average assets

0.75

%

0.63

%

0.81

%

Return on average equity 7.51 6.15 8.18
Efficiency ratio 74.54 77.21 75.68

 

Non-GAAP

Net operating income $ 38,571 $ 34,234 $ 33,032
Operating earnings per share (diluted) 0.79 0.70 0.73
Operating return on average assets

0.80

%

0.72

%

0.80

%

Operating return on average equity 7.99 7.10 8.00
Operating efficiency ratio 73.01 74.11 76.21
 

“UMB began the year by posting another quarter of double-digit year-over-year loan growth and making good progress against our expense initiatives implemented in 2015,” said Mariner Kemper, chairman and chief executive officer. “Total loan balances increased 29.4 percent from March 31, 2015 to March 31, 2016. Loans produced by legacy UMB lenders increased 16.0 percent during that period, once again outpacing industry averages. In addition, we recognized savings of $4.9 million in the first quarter related to our efficiency initiative. I am pleased with the results we’ve posted and look forward to our continued growth.”

       
Summary of revenue     UMB Financial Corporation
(unaudited, dollars in thousands)    
 
Dollar Change

Q1
2016

 

Q4
2015

 

Q1
2015

 

Q116 vs.
Q415

 

Q116 vs.
Q115

Net interest income $ 117,892 $ 114,454 $ 90,358 $3,438 $27,534
Noninterest income:
Trust and securities processing $ 59,485 $ 62,194 $ 67,299 (2,709 ) (7,814 )
Trading and investment banking 4,630 5,559 6,122 (929 ) (1,492 )
Service charges on deposit accounts 21,461 21,631 21,541 (170 ) (80 )
Insurance fees and commissions 1,497 894 570 603 927
Brokerage fees 4,185 3,005 2,854 1,180 1,331
Bankcard fees 18,016 17,369 16,183 647 1,833
Gains on sales of securities available for sale, net 2,933 1,998 7,336 935 (4,403 )
Equity losses on alternative investments (381 ) (5,189 ) (842 ) 4,808 461
Other   4,524       5,138       4,144     (614 )   380  
Total noninterest income $ 116,350     $ 112,599     $ 125,207     $3,751     $(8,857 )
Total Revenue $ 234,242     $ 227,053     $ 215,565     $7,189     $18,677  
Net interest margin 2.79

%

 

2.76

%

 

2.46

%

 

Total noninterest income as a percentage of total revenue 49.7 49.6 58.1
 

Net interest income

  • The improved net interest income in the first quarter 2016, compared to the same quarter in 2015, was driven by an increase in average loans of $2.1 billion and higher average loan yields, which increased 32 basis points to 3.81 percent.
  • For the first quarter 2016, average earning assets stood at $18.0 billion, an increase of 3.6 percent over the linked quarter and 14.2 percent over the first quarter 2015. The acquisition of Marquette Financial Companies (Marquette) added earning assets with an acquired value of $1.2 billion on May 31, 2015.
  • Net interest margin for the first quarter 2016, which increased 33 basis points on a year-over-year basis, was driven by the addition of Marquette’s higher-yielding loans in addition to changes in the company’s earning asset mix.

Noninterest income

  • The improvement in noninterest income over the linked quarter was driven by a change in equity losses on alternative investments of $4.8 million. This increase was partially offset by a decrease in trust and securities processing income due primarily to a $2.5 million, or 22.3 percent decrease in advisory fee income from the Scout Funds.
  • Noninterest income decreased in the first quarter 2016, compared to the first quarter 2015, primarily due to a decrease in trust and securities processing income driven by a $7.6 million, or 47.1 percent, decrease in advisory fee income from the Scout Funds.
         
Noninterest expense                       UMB Financial Corporation
(unaudited, dollars in thousands)
 
                  Dollar Change

Q1
2016

 

Q4
2015

 

Q1
2015

 

Q116 vs.
Q415

 

Q116 vs.
Q115

Salaries and employee benefits $ 107,150 $ 103,617 $ 98,537 $3,533   $8,613
Occupancy, net 10,972 11,791 10,010 (819 ) 962
Equipment 16,282 16,723 14,172 (441 ) 2,110
Supplies and services 4,949 4,280 4,325 669 624
Marketing and business development 4,441 6,816 4,618 (2,375 ) (177 )
Processing fees 11,462 13,096 12,783 (1,634 ) (1,321 )
Legal and consulting 4,799 7,447 4,378 (2,648 ) 421
Bankcard 5,815 5,301 4,768 514 1,047
Amortization of other intangible assets 3,226 3,283 2,755 (57 ) 471
Regulatory fees 3,429 3,320 2,756 109 673
Other   8,219     6,406     5,311   1,813     2,908  
Total noninterest expense $ 180,744   $ 182,080   $ 164,413   $(1,336 )   $16,331  
 

Noninterest expense

  • On a linked quarter basis, the decrease in noninterest expense was primarily due to decreases in marketing and business development and legal and consulting. These decreases were offset, in part, by an increase in employee benefits expense.
  • The increase in noninterest expense compared to the first quarter 2015 was primarily driven by:
    • increased salaries and employee benefits, which included $8.3 million in Marquette salaries and benefits, $0.8 million in Marquette-related severance and $0.5 million of non-Marquette related severance for the first quarter 2016;
    • higher equipment expense, which increased 14.9 percent year-over-year for computer and hardware costs related to investments for regulatory requirements, cyber security and the ongoing modernization of our core systems; and
    • an increase in other noninterest expense, driven by $2.3 million in positive fair value adjustments on contingent consideration liabilities in the first quarter 2015 compared to a $0.1 million charge in the first quarter 2016.
  • Acquisition expenses recognized during the first quarter 2016 totaled $3.0 million, comprised of $1.0 million of human resource costs, $1.1 million of technology integration, and $0.9 million of professional fees and other integration costs. For comparison, acquisition expenses were $3.4 million for the fourth quarter 2015 and $0.8 million for the first quarter 2015.
  • On a non-GAAP basis, operating noninterest expense, which excludes the impact of acquisition expenses and other items as reconciled later in this release, was $177.1 million for the first quarter 2016, an increase of $2.2 million, or 1.3 percent, compared to the linked quarter, and $11.6 million, or 7.0 percent, compared to the first quarter 2015. The year-over-year increase is primarily due to $9.1 million in Marquette salaries and benefits present in the first quarter 2016.
 
Balance Sheet  
Summary of loans and leases       UMB Financial Corporation
(unaudited, dollars in thousands)
  Dollar Change

March 31,
2016

 

December 31,
2015

 

March 31,
2015

 

Q116 vs.

Q415

 

Q116 vs.

Q115

   
Loans:
Commercial $ 4,347,068 $ 4,205,736 $ 3,808,551 $ 141,332 $ 538,517
Asset-based 212,669 219,244 - (6,575 ) 212,669
Factoring 88,534 90,686 - (2,152 ) 88,534
Commercial credit card 146,031 125,361 129,972 20,670 16,059
Real estate – construction 497,504 416,568 256,277 80,936 241,227
Real estate – commercial 2,767,233 2,662,772 1,943,057 104,461 824,176
Real estate – residential 485,722 492,227 330,234 (6,505 ) 155,488
Real estate – HELOC 724,303 729,963 630,850 (5,660 ) 93,453
Consumer credit card 270,558 291,570 284,694 (21,012 ) (14,136 )
Consumer other 116,971 154,777 75,856 (37,806 ) 41,115
Leases   43,038     41,857     38,817     1,181       4,221  
Total loans $ 9,699,631   $ 9,430,761   $ 7,498,308   $ 268,870     $ 2,201,323  
 
  • Average total assets for the first quarter 2016 were $19.3 billion compared to $16.8 billion for the same period in 2015, an increase of $2.5 billion, or 14.9 percent.
  • Actual loans stood at $9.7 billion at March 31, 2016, an increase of $268.9 million, or 2.9 percent, on a linked quarter basis, and $2.2 billion, or 29.4 percent, compared to first quarter 2015.
  • Actual loans originated through legacy UMB channels increased $1.2 billion, or 16.0 percent year-over-year primarily driven by a $485.7 million increase in commercial real estate loans and a $436.5 million increase in commercial loans.
  • At March 31, 2016, loans acquired and originated through legacy Marquette channels totaled $997.9 million, comprised of $338.5 million in commercial real estate loans, $212.7 million in asset-based loans, $121.1 million in construction real estate loans, $95.7 million in residential real estate loans, $88.5 million in factoring loans, and $102.0 million in commercial loans.
   
Summary of securities       UMB Financial Corporation

(unaudited, dollars in thousands)

  Dollar Change

March 31,
2016

 

December 31,
2015

 

March 31,
2015

 

Q116 vs.
Q415

 

Q116
vs. Q115

   
Securities available for sale:
U.S. Treasury $

354,261

$ 349,779 $ 428,311 $ 4,482 $ (74,050 )
U.S. Agencies 593,769 666,389 856,881 (72,620 ) (263,112 )
Mortgage-backed 3,668,538 3,572,446 3,343,521 96,092 325,017
State and political subdivisions 2,186,602 2,138,413 2,049,487 48,189 137,115
Corporates   80,142     79,922     108,801     220       (28,659 )
Total securities available for sale 6,883,312 6,806,949 6,787,001 76,363 96,311
Securities held to maturity
State and political subdivisions 804,652 667,106 346,885 137,546 457,767
Trading Securities 26,779 29,617 29,380 (2,838 ) (2,601 )
Other securities   64,591     65,198     67,200     (607 )     (2,609 )
Total securities $ 7,779,334   $ 7,568,870   $ 7,230,466   $ 210,464     $ 548,868  
 
  • The growth in the company’s held to maturity securities portfolio is attributed to increased activity in private placement bonds, primarily used to refinance existing revenue bonds in the healthcare and education sectors.
   
Summary of deposits     UMB Financial Corporation
(unaudited, dollars in thousands)  
  Dollar Change

March 31,
2016

 

December 31,
2015

 

March 31,
2015

 

Q116 vs.
Q415

 

Q116 vs.
Q115

   
Deposits:
Noninterest-bearing demand $ 6,202,026 $6,306,895 $ 5,617,788 $ (104,869 ) $ 584,238
Interest-bearing demand and savings 8,178,712 7,529,972 6,668,991 648,740 1,509,721
Time deposits under $250,000 727,709 771,973 620,644 (44,264 ) 107,065
Time deposits of $250,000 or more   309,926   483,912     248,865     (173,986 )     61,061
Total deposits $ 15,418,373   $15,092,752   $ 13,156,288   $ 325,621     $ 2,262,085
 
  • At March 31, 2016, noninterest-bearing demand deposits were 40.2 percent of total deposits.
  • Deposit balances from the legacy Marquette channels totaled $744.1 million at March 31, 2016.
   
Capital information       UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
 

March 31,
2016

 

December 31,
2015

 

March 31,
2015

 
Total equity $ 1,947,959 $ 1,893,694 $ 1,682,376
Book value per common share 39.38 38.34 36.76
 
Regulatory capital:
Common equity Tier 1 capital $ 1,675,854 $ 1,664,815 $ 1,444,625
Tier 1 capital 1,675,854 1,681,222 1,444,625
Total capital 1,825,867 1,814,705 1,524,206
 
Regulatory capital ratios:
Common equity Tier 1 capital ratio

11.80

%

11.74

%

12.91

%

Tier 1 risk-based capital ratio 11.80 11.86 12.91
Total risk-based capital ratio 12.85 12.80 13.62
Tier 1 leverage ratio 8.78 9.08 8.69
 
  • The year-over-year increase in total equity is primarily attributable to the common stock issuance associated with the acquisition of Marquette of $179.7 million at May 31, 2015.
     
Credit quality           UMB Financial Corporation
(unaudited, dollars in thousands)

Q1
2016

 

Q4
2015

 

Q3
2015

 

Q2
2015

 

Q1
2015

Net charge-offs – Commercial loans $ 2,586 $ 178 $ 636   $ 2,999   $ (398 )
Net charge-offs – Real estate loans 1,301 (50 ) (65 ) (9 ) 17
Net charge-offs – Consumer credit card loans 1,781 1,628 1,524 1,627 1,974
Net charge-offs – Consumer other loans 77 130 97 141 68
Net charge-offs – Total loans 5,745 1,886 2,192 4,758 1,661
Net loan charge-offs as a percentage of total average loans

0.24

%

0.08

%

0.10

%

0.24

%

0.09

%

Loans over 90 days past due $ 3,334 $ 7,324 $ 2,552 $ 7,645 $ 5,170
Loans over 90 days past due as a percentage of total loans

0.03

%

0.08

%

0.03

%

0.09

%

0.07

%

Nonaccrual and restructured loans $ 54,933 $ 61,152 $ 49,955 $ 37,649 $ 29,187
Nonaccrual and restructured loans as a percentage of total loans 0.57

%

0.65

%

0.55

%

0.42

%

0.39

%

 
  • Nonperforming loans, defined as nonaccrual and restructured loans, decreased $6.2 million from the linked quarter and increased $25.7 million from the same quarter in 2015.

Efficiency Initiatives

In 2015, the company announced efficiency initiatives with cost savings expected to be recognized as follows: $6.8 million in 2015, $22.6 million in 2016, and annualized savings of $32.9 million in 2017 and beyond. As an update, the company recognized $9.5 million of these cost savings in 2015, and $4.9 million in the first quarter 2016, and expects to recognize an additional $15.9 million in the remainder of 2016 and annualized savings of $32.9 million beginning in 2017.

Conference Call

The company plans to host a conference call to discuss its first quarter 2016 earnings results on April 27, 2016 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 1Q 2016 Conference Call

A replay of the conference call may be heard through May 12, 2016, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10083904. 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 using net operating income, operating earnings per share (operating EPS), operating return on average equity (operating ROE), operating return on average assets (operating ROA), operating noninterest expense, and operating efficiency ratio, all of which are non-GAAP financial measures. This information supplements the results that are reported according to generally accepted accounting principles (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The differences between the non-GAAP financial measures—net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense and operating efficiency ratio—and the 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 after-tax impact of excluding the following: (i) fair value adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management Company, (ii) expenses related to the acquisition of Marquette, and (iii) non-acquisition severance expense. Operating EPS (basic and diluted) is calculated as net operating income, divided by the company’s average number of shares outstanding (basic and diluted) for the relevant period. Operating 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, less amortization of other intangibles, divided by the company’s tax equivalent net interest income plus noninterest income less gains on sales of securities available for sale.

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 expected cost savings and other results of efficiency initiatives and our statements about asset sensitivity. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” “target,” “trend,” “plan,” “goal,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, results, or aspirations. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2015, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the 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 diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, asset servicing and institutional investment management to customers. 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. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors. For more information, visit umb.com, umbfinancial.com, blog.umb.com or follow us on Twitter at @UMBBank, Facebook at facebook.com/UMBBank and LinkedIn at linkedin.com/company/umb-bank.

   

Non-GAAP Financial Measures

 

UMB Financial Corporation

Net operating income non-GAAP reconciliation:
(unaudited, dollars in thousands, except per share data)
 
Three Months Ended
March 31,
2016   2015
Net income (GAAP) $ 36,245 $ 33,765
Adjustments (net of tax):
Fair value adjustments on contingent consideration (i) 43 (1,449 )
Acquisition expenses (ii) 1,948 490
Non-acquisition severance expense (iii)   335       226  
Total Non-GAAP adjustments (net of tax)   2,326       (733 )
Net operating income (Non-GAAP) $ 38,571     $ 33,032  
 

GAAP

Earnings per share - basic

$ 0.74 $ 0.75

Earnings per share - diluted

0.74 0.74
Return on average assets 0.75 % 0.81 %
Return on average equity 7.51 % 8.18 %
 

Non-GAAP

Operating earnings per share - basic

$ 0.79 $ 0.73

Operating earnings per share - diluted

0.79 0.73
Operating return on average assets 0.80 % 0.80 %
Operating return on average equity 7.99 % 8.00 %
 
 
Operating noninterest expense and operating efficiency ratio non-GAAP reconciliation:
(unaudited, dollars in thousands)
   
Three Months Ended
March 31,
2016   2015
Noninterest expense (GAAP) $ 180,744 $ 164,413
Adjustments (pre-tax):
Fair value adjustments on contingent consideration (i) 67 (2,264 )
Acquisition expenses (ii) 3,043 766
Non-acquisition severance expense (iii)   524       353  
Total Non-GAAP adjustments (pre-tax)   3,634       (1,145 )
Operating noninterest expense   177,110       165,558  
 
Noninterest expense 180,744 164,413
Less: Amortization of other intangibles   3,226       2,755  
Noninterest expense, net of amortization of other intangibles (numerator A)   177,518       161,658  
 
Operating noninterest expense (Non-GAAP) 177,110 165,558
Less: Amortization of other intangibles   3,226       2,755  
Operating expense, net of amortization of other intangibles (numerator B)   173,884       162,803  
 
Net interest income (tax equivalent) (iv) 124,744 95,750
Noninterest income 116,350 125,207
Less: Gains on sales of securities available for sale, net   2,933       7,336  
Total (denominator A)

$

238,161    

$

213,621  
 
Efficiency ratio (numerator A/denominator A) 74.54 % 75.68 %
Operating efficiency ratio (numerator B/denominator A) 73.01 % 76.21 %
 

(i) Represents fair value adjustments to contingent consideration for the acquisitions of Prairie Capital Management, LLC and Reams Asset Management Company.

(ii) Represents expenses related to the acquisition of Marquette Financial Companies (Marquette).
(iii) Represents non-acquisition severance expense related to UMB-legacy employees. Severance expense for Marquette-legacy employees is included in item (ii).
(iv) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $13.0 million and $9.0 million for the three months ended March 31, 2016 and 2015, respectively.
 
 
Consolidated Balance Sheets     UMB Financial Corporation
(unaudited, dollars in thousands)  
March 31,

Assets

2016   2015
 
Loans $ 9,699,631 $ 7,498,308
Allowance for loan losses   (80,398 )     (77,479 )
Net loans   9,619,233       7,420,829  
Loans held for sale 4,830 3,141
Investment securities:
Available for sale 6,883,312 6,787,001
Held to maturity 804,652 346,885
Trading securities 26,779 29,380
Other securities   64,591       67,200  
Total investment securities   7,779,334       7,230,466  
Federal funds and resell agreements 170,824 24,379
Interest-bearing due from banks 401,961 769,321
Cash and due from banks 325,446 449,315
Premises and equipment, net 279,079 263,542
Accrued income 90,002 80,083
Goodwill 228,396 209,758
Other intangibles, net 43,556 41,236
Other assets   360,252       238,053  
Total assets $ 19,302,913     $ 16,730,123  
 
 

Liabilities

Deposits:
Noninterest-bearing demand $ 6,202,026 $ 5,617,788
Interest-bearing demand and savings 8,178,712 6,668,991
Time deposits under $250,000 727,709 620,644
Time deposits of $250,000 or more   309,926       248,865  
Total deposits   15,418,373       13,156,288  
Federal funds and repurchase agreements 1,681,723 1,719,080
Short-term debt 5,006 -
Long-term debt 85,238 7,600
Accrued expenses and taxes 116,408 135,758
Other liabilities   48,206       29,021  
Total liabilities   17,354,954       15,047,747  
 

Shareholders' Equity

Common stock 55,057 55,057
Capital surplus 1,017,420 892,658
Retained earnings 1,058,131 986,923
Accumulated other comprehensive income 32,468 26,810
Treasury stock   (215,117 )     (279,072 )
Total shareholders' equity   1,947,959       1,682,376  
Total liabilities and shareholders' equity $ 19,302,913     $ 16,730,123  
 
 

Consolidated Statements of Income

   

 

UMB Financial Corporation

(unaudited, dollars in thousands except share and per share data)  
Three Months Ended
March 31,
2016   2015

Interest Income

Loans $ 90,544 $ 64,232
Securities:
Taxable Interest 19,357 18,808
Tax-exempt interest   12,735       9,915  
Total securities income 32,092 28,723
Federal funds and resell agreements 507 51
Interest-bearing due from banks 891 852
Trading securities   52       95  
Total interest income   124,086       93,953  
 

Interest Expense

Deposits 4,055 3,048
Federal funds and repurchase agreements 1,230 492
Other   909       55  
Total interest expense   6,194       3,595  
Net interest income 117,892 90,358
Provision for loan losses   5,000       3,000  
Net interest income after provision for loan losses   112,892       87,358  
 

Noninterest Income

Trust and securities processing 59,485 67,299
Trading and investment banking 4,630 6,122
Service charges on deposits 21,461 21,541
Insurance fees and commissions 1,497 570
Brokerage fees 4,185 2,854
Bankcard fees 18,016 16,183
Gains on sales of securities available for sale, net 2,933 7,336
Equity losses on alternative investments (381 ) (842 )
Other   4,524       4,144  
Total noninterest income   116,350       125,207  
 

Noninterest Expense

Salaries and employee benefits 107,150 98,537
Occupancy, net 10,972 10,010
Equipment 16,282 14,172
Supplies and services 4,949 4,325
Marketing and business development 4,441 4,618
Processing fees 11,462 12,783
Legal and consulting 4,799 4,378
Bankcard 5,815 4,768
Amortization of other intangible assets 3,226 2,755
Regulatory fees 3,429 2,756
Other   8,219       5,311  
Total noninterest expense   180,744       164,413  
 
Income before income taxes   48,498       48,152  
Income tax provision   12,253       14,387  
Net income $ 36,245     $ 33,765  

Per Share Data

Net income - basic

$ 0.74 $ 0.75

Net income - diluted

0.74 0.74
Dividends 0.245 0.235

Weighted average shares outstanding – basic

48,756,433 45,000,831
Weighted average shares outstanding – diluted 49,090,232 45,437,654
 
 
Statements of Consolidated Comprehensive Income   UMB Financial Corporation
(unaudited, dollars in thousands)
Three Months Ended

March 31,

2016   2015
Net Income $ 36,245   $ 33,765
Other comprehensive income, net of tax:
Unrealized gains on securities:
Change in unrealized holding gains, net 65,312 32,676
Less: Reclassifications adjustment for gains included in net income   (2,933)     (7,336)
Change in unrealized gains during the period 62,379 25,340
Change in unrealized losses on derivatives (4,140) -
Income tax expense   (22,053)     (9,536)
Other comprehensive income   36,186     15,804
Comprehensive income $ 72,431   $ 49,569
 
           

 

Consolidated Statements of Shareholders' Equity

              UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
 
 
Accumulated
Other
Common Capital Retained Comprehensive Treasury
Stock   Surplus   Earnings   Income (Loss)   Stock   Total
Balance - January 1, 2015 $ 55,057 $ 894,602 $ 963,911 $11,006 $ (280,818 ) $ 1,643,758
Total comprehensive income - - 33,765 15,804 - 49,569
Cash dividends ($0.235 per share) - - (10,753 ) - - (10,753 )
Purchase of treasury stock - - - - (5,309 ) (5,309 )
Issuance of equity awards - (5,848 ) - - 6,308 460
Recognition of equity based compensation - 2,609 - - - 2,609
Net tax benefit related to equity compensation plans - 585 - - - 585
Sale of treasury stock - 141 - - 94 235
Exercise of stock options   -     569       -     -       653       1,222  
Balance – March 31, 2015 $ 55,057   $ 892,658     $ 986,923     $26,810     $ (279,072 )   $ 1,682,376  
 
Balance - January 1, 2016 $ 55,057 $ 1,019,889 $ 1,033,990 $(3,718 ) $ (211,524 ) $ 1,893,694
Total comprehensive income - - 36,245 36,186 - 72,431
Cash dividends ($0.245 per share) - - (12,104 ) - - (12,104 )
Purchase of treasury stock - - - - (12,880 ) (12,880 )
Issuance of equity awards - (6,199 ) - - 6,628 429
Recognition of equity based compensation - 2,347 - - - 2,347
Net tax deficiency related to equity compensation plans - (34 ) - - - (34 )
Sale of treasury stock - 123 - - 140 263
Exercise of stock options   -     1,294       -     -       2,519       3,813  
Balance – March 31, 2016 $ 55,057   $ 1,017,420     $ 1,058,131     $32,468     $ (215,117 )   $ 1,947,959  
 
   
Average Balances / Yields and Rates     UMB Financial Corporation
(tax - equivalent basis)    
(unaudited, dollars in thousands) Three Months Ended March 31,
2016   2015
Average Average Average Average

Assets

Balance   Yield/Rate   Balance   Yield/Rate
Loans, net of unearned interest $ 9,550,291 3.81 % $ 7,470,101 3.49 %
Securities:
Taxable 4,826,822 1.61 4,868,560 1.57
Tax-exempt   2,805,514     2.81     2,254,237     2.75  
Total securities 7,632,336 2.05 7,122,797 1.94
Federal funds and resell agreements 146,791 1.39 34,340 0.60
Interest-bearing due from banks 648,635 0.55 1,107,862 0.31
Trading securities   26,358     1.01     30,221     1.84  
Total earning assets 18,004,411 2.93 15,765,321 2.56
Allowance for loan losses (80,820 ) (76,574 )
Other assets   1,411,260     1,143,208    
Total assets $ 19,334,851   $ 16,831,955    
 
 

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 9,429,774 0.17 % $ 7,602,258 0.16 %
Federal funds and repurchase agreements 1,696,555 0.29 1,710,908 0.12
Borrowed funds   92,558     3.95     8,331     2.68  
Total interest-bearing liabilities 11,218,887 0.22 9,321,497 0.16
Noninterest-bearing demand deposits 6,014,820 5,660,893
Other liabilities 159,883 174,804
Shareholders' equity   1,941,261     1,674,761    
Total liabilities and shareholders' equity $ 19,334,851   $ 16,831,955    
Net interest spread 2.71 % 2.40 %
Net interest margin 2.79 2.46
 
 
Business Segment Information UMB Financial Corporation
(unaudited, dollars in thousands)
  Three Months Ended March 31, 2016
Bank  

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 115,271   $ -   $ 2,621   $ 117,892
Provision for loan losses 5,000 - - 5,000
Noninterest income 75,441 18,416 22,493 116,350
Noninterest expense   143,361     17,233     20,150     180,744
Income before taxes 42,351 1,183 4,964 48,498
Income tax expense   10,706     289     1,258     12,253
Net income $ 31,645   $ 894   $ 3,706   $ 36,245
 
Average assets $ 17,885,000 $ 63,000 $ 1,387,000 $ 19,335,000
 
 
Three Months Ended March 31, 2015
Bank  

Institutional
Investment
Management

 

Asset
Servicing

    Total
Net interest income $ 89,360 $ 1 $ 997 $ 90,358
Provision for loan losses 3,000 - - 3,000
Noninterest income 74,689 27,084 23,434 125,207
Noninterest expense   125,178     17,961     21,274     164,413
Income before taxes 35,871 9,124 3,157 48,152
Income tax expense   10,715     2,750     922     14,387
Net income $ 25,156   $ 6,374   $ 2,235   $ 33,765
 
Average assets $ 15,814,000 $ 75,000 $ 943,000 $ 16,832,000
 

UMB Financial Corporation
Kelli Christman, 816-916-3240

Source: UMB Financial Corporation

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