First Quarter 2021 Financial Highlights (all
comparisons to prior year)
- GAAP net income of $92.6 million, or $1.91 per diluted share;
net operating income of $92.8 million, or $1.91 per diluted
share.
- Pre-tax, pre-provision (PTPP) income of $102.1 million, an
increase of $18.3 million.
- Quarterly average loan balances increased $2.6 billion, or
19.3%.
- Quarterly average deposits grew 28.8% to $26.8 billion.
- Noninterest income increased 10.6% and comprised 35.9% of
revenue.
- Credit quality remained strong, with net charge-offs of just
0.13% of average loans, consistent with the company’s historical
performance.
UMB Financial Corporation (Nasdaq: UMBF), a financial services
company, announced net income for the first quarter of 2021 of
$92.6 million, or $1.91 per diluted share, compared to net income
of $156.3 million, or $3.24 per diluted share, in the fourth
quarter of 2020 (linked quarter) and net loss of $3.4 million, or
$0.07 per diluted share, in the first quarter of 2020.
Net operating income, a non-GAAP financial measure reconciled to
net income, the nearest comparable GAAP measure, later in this
release, was $92.8 million, or $1.91 per diluted share, for the
first quarter of 2021, compared to $157.4 million, or $3.26 per
diluted share, for the linked quarter and net operating loss of
$1.9 million, or $0.04 per diluted share, for the first quarter of
2020. Pre-tax, pre-provision income on a fully tax equivalent basis
(PTPP-FTE), a non-GAAP measure reconciled to the components of net
income before taxes, the nearest comparable GAAP measure, later in
this release, was $108.7 million, or $2.24 per diluted share, for
the first quarter of 2021, compared to $202.9 million, or $4.20 per
diluted share, for the linked quarter, and $90.2 million, or $1.85
per diluted share, for the first quarter of 2020. These PTPP-FTE
results represent a decrease of 46.4% on a linked-quarter basis and
an increase of 20.5% compared to the first quarter of 2020.
Net income comparisons to the linked quarter were primarily
impacted by an $108.8 million pre-tax gain recognized in the prior
period on the company’s equity investment in Tattooed Chef, Inc.
(TTCF), and a subsequent $16.1 million pre-tax mark-to-market loss
on those investments in the current period. Net income comparisons
to the first quarter of 2020 were primarily impacted by the
significantly higher provision expense in the prior period related
to the implementation of the current expected credit loss (CECL)
methodology for estimating allowance for credit losses as well as
the $16.1 million pre-tax mark-to-market adjustment on TTCF
shares.
Summary of quarterly financial
results
UMB Financial
Corporation
(unaudited, dollars in thousands, except
per share data)
Q1
Q4
Q1
2021
2020
2020
Net income (loss) (GAAP)
$
92,643
$
156,320
$
(3,439
)
Earnings (losses) per share (diluted)
1.91
3.24
(0.07
)
Pre-tax, pre-provision income
(Non-GAAP)
102,066
196,107
83,746
Pre-tax, pre-provision earnings per share
(diluted)
2.10
4.06
1.72
Pre-tax, pre-provision income - FTE
(Non-GAAP)
108,744
202,946
90,224
Pre-tax, pre-provision earnings per share
- FTE (diluted)
2.24
4.20
1.85
Net operating income (loss) (Non-GAAP)
92,780
157,405
(1,881
)
Operating earnings (losses) per share
(diluted)
1.91
3.26
(0.04
)
GAAP
Return on average assets
1.14
%
2.03
%
(0.05
)%
Return on average equity
12.56
21.18
(0.51
)
Efficiency ratio
66.46
53.44
68.93
Non-GAAP
Operating return on average assets
1.14
%
2.05
%
(0.03
)%
Operating return on average equity
12.58
21.33
(0.28
)
Operating efficiency ratio
66.40
53.11
68.19
“Our team continued to deliver and execute on core tenets that
differentiate our story and value proposition for our
shareholders,” said Mariner Kemper, chairman, president and chief
executive officer. “During the first quarter, we saw optimistic
signs of an improving operating environment. Strong balance sheet
growth funded by a growing core deposit base, robust fee income
generation from our diversified business lines, and solid asset
quality metrics drove our strong financial results. Average loans,
excluding Paycheck Protection Program (PPP) balances, increased
8.4% annualized on a linked-quarter basis. Net charge-offs averaged
just 13 basis points of loans, while levels of non-performing
assets and delinquencies improved from the end of the prior period.
The 19-basis-point decline in net interest margin on a
linked-quarter basis was due in part to excess liquidity as well as
seasonal inflows in some of our businesses, which had approximately
a 16 basis-point impact to our margin.”
Summary of revenue
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2021
2020
2020
LQ
PY
Net interest income
$
194,115
$
194,675
$
173,941
$
(560
)
$
20,174
Noninterest income:
Trust and securities processing
54,834
50,773
47,000
4,061
7,834
Trading and investment banking
9,356
9,693
1,723
(337
)
7,633
Service charges on deposit accounts
21,976
20,074
25,081
1,902
(3,105
)
Insurance fees and commissions
420
318
259
102
161
Brokerage fees
3,334
3,918
9,860
(584
)
(6,526
)
Bankcard fees
14,673
15,788
16,545
(1,115
)
(1,872
)
Investment securities (losses) gains,
net
(8,336
)
113,010
3,520
(121,346
)
(11,856
)
Other
12,640
14,716
(5,564
)
(2,076
)
18,204
Total noninterest income
$
108,897
$
228,290
$
98,424
$
(119,393
)
$
10,473
Total revenue
$
303,012
$
422,965
$
272,365
$
(119,953
)
$
30,647
Net interest income (FTE)
$
200,793
$
201,514
$
180,419
Net interest margin (FTE)
2.59
%
2.78
%
2.97
%
Total noninterest income as a % of total
revenue
35.94
53.97
36.14
Net interest income
- Net interest income totaled $194.1 million, which is a decrease
of $0.6 million as compared to the linked quarter. The positive
impact from strong balance sheet growth was reduced by the impacts
of lower loan fees and PPP income in the quarter. Average earning
assets increased $2.6 billion, or 8.9%, driven primarily by an
increase in excess liquidity, while interest-bearing liabilities
increased $1.6 billion, or 8.8%.
- Net interest margin for the first quarter was 2.59%, a decrease
of 19 basis points from the linked quarter, driven in part from the
impacts of excess liquidity. Earning asset yields declined 21 basis
points from the linked quarter, while the cost of interest-bearing
liabilities decreased three basis points to 0.24%, driven by a
four-basis-point decline in the cost of interest-bearing deposits.
Net interest spread decreased 18 basis points to 2.50% from the
linked quarter and was 16 basis points lower than the first quarter
of 2020.
- On a year-over-year basis, net interest income increased $20.2
million, or 11.6%, driven by a $2.6 billion, or 19.3%, increase in
average loans, and a $1.9 billion, or 22.2%, increase in average
securities. These increases were driven by organic loan growth,
excess liquidity, and the company’s PPP participation.
- Average deposits increased 7.5% on a linked-quarter basis and
28.8% compared to the first quarter of 2020. Average
noninterest-bearing demand deposit balances increased 9.0% on a
linked-quarter basis and 50.2% compared to the first quarter of
2020.
Noninterest income
- First quarter 2021 noninterest income decreased $119.4 million,
or 52.3%, on a linked-quarter basis, largely due to:
- A decrease of $121.3 million in investment securities gains,
primarily due to a decrease of $124.9 million in gains on the
company’s investment in TTCF, partially offset by increases of $1.4
million in equity earnings on alternative investments and $1.3
million in gains on sales of available for sale securities.
- Decreases of $4.4 million in company-owned life insurance
income and $1.1 million in derivative income, both recorded in
other income. The decrease in company-owned life insurance is
offset by a proportionate decrease in deferred compensation expense
as noted below.
- These decreases were partially offset by increases of $2.6
million and $1.0 million in fund services income and trust services
income, respectively, both recorded in trust and securities
processing, an increase of $1.7 million in healthcare income,
recorded in service charges on deposits, and an increase in other
income of $4.3 million due to the gain on sale of Prairie Capital
Management, LLC (PCM).
- Compared to the prior year, noninterest income in the first
quarter of 2021 increased $10.5 million, or 10.6%, primarily driven
by:
- An increase of $18.2 million in other income, driven by an
increase of $15.0 million in company-owned life insurance and a
gain of $4.3 million on the sale of PCM. The increase in
company-owned life insurance is offset by a proportionate increase
in deferred compensation expense as noted below.
- An increase of $7.8 million in trust and securities processing,
driven by increases of $5.0 million in fund services income, $1.6
million in trust services income, and $1.2 million in corporate
trust revenue.
- An increase of $7.6 million in trading and investment banking
due to increased trading volume.
- These increases were partially offset by the following
decreases:
- A decrease of $11.9 million in investment securities gains due
to the $16.1 million mark-to-market loss on the company’s
investment in TTCF, during the first quarter of 2021, partially
offset by increased gains on sales of available for sale securities
and equity earnings on alternative investments.
- A decrease of $6.5 million in brokerage fees, primarily driven
by lower 12b-1 income.
- A decrease of $3.1 million in service charges on deposits,
driven by reduced healthcare income related to customer transfer
and conversion fees.
Noninterest expense
Summary of noninterest expense
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2021
2020
2020
LQ
PY
Salaries and employee benefits
$
127,681
$
129,272
$
111,060
$
(1,591
)
$
16,621
Occupancy, net
11,935
11,858
12,180
77
(245
)
Equipment
19,615
22,008
21,241
(2,393
)
(1,626
)
Supplies and services
3,492
4,125
4,185
(633
)
(693
)
Marketing and business development
2,345
3,717
4,640
(1,372
)
(2,295
)
Processing fees
15,417
14,408
13,390
1,009
2,027
Legal and consulting
5,755
10,191
6,110
(4,436
)
(355
)
Bankcard
4,956
4,711
4,860
245
96
Amortization of other intangible
assets
1,380
1,601
1,734
(221
)
(354
)
Regulatory fees
2,546
2,393
2,366
153
180
Other
5,824
22,574
6,853
(16,750
)
(1,029
)
Total noninterest expense
$
200,946
$
226,858
$
188,619
$
(25,912
)
$
12,327
- Noninterest expense for the first quarter of 2021 was $200.9
million, a decrease of $25.9 million, or 11.4%, from the linked
quarter and an increase of $12.3 million, or 6.5%, from the first
quarter of 2020.
- The linked-quarter decrease in noninterest expense was driven
by:
- Decreases of $14.2 million in operational losses, $1.0 million
in derivative expense, $0.9 million in charitable contributions
expense, and $0.9 million in losses on other real estate owned, all
recorded in other noninterest expense.
- A decrease of $2.4 million in software expense, recorded in
equipment expense.
- Decreases of $2.3 million in consulting expense and $2.1
million in legal expense, both recorded in legal and professional
expense, due to timing of multiple technology initiatives and legal
work performed on various matters.
- Decreases of $8.4 million in bonus and commission expense, $1.9
million in deferred compensation expense, and $1.0 million in
salary and wage expense, all recorded in salaries and employee
benefits. These decreases were partially offset by a seasonal
increase of $9.6 million in payroll taxes, insurance, and 401(k)
expense recognized in the first quarter. The decrease in deferred
compensation expense was offset by the decrease in company-owned
life insurance income noted above.
- The year-over-year increase in noninterest expense was driven
by:
- An increase of $16.6 million in salaries and employee benefits,
primarily due to increased deferred compensation expense. The
increase in deferred compensation expense was offset by the
increase in company-owned life insurance income noted above.
- These increases were partially offset by a decrease of $2.3
million in marketing and development expense, primarily due to a
decline in travel and entertainment expense due to the pandemic,
and a decrease of $1.3 million in software expense, recorded in
equipment expense.
Income taxes
- The company recognized income tax expense of $16.9 million, or
15.4%, on pre-tax income of $109.6 million for the three months
ended March 31, 2021, compared to an income tax benefit of $0.8
million, or 19.2%, on a pre-tax loss of $4.3 million for the same
period in 2020. The amount of tax expense recorded for the three
months ended March 31, 2021 reflects management’s estimate of the
annual effective tax rate applied to the year-to-date income
adjusted for the tax impact of items discrete to the quarter.
Balance sheet
- Average total assets for the first quarter of 2021 were $33.1
billion compared to $30.6 billion for the linked quarter and $26.0
billion for the same period in 2020.
Summary of average loans and leases -
QTD Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2021
2020
2020
LQ
PY
Commercial and industrial
$
7,139,101
$
7,079,646
$
5,786,545
$
59,455
$
1,352,556
Specialty lending
502,585
506,225
510,316
(3,640
)
(7,731
)
Commercial real estate
5,971,047
5,847,439
5,181,036
123,608
790,011
Consumer real estate
1,970,767
1,903,892
1,414,025
66,875
556,742
Consumer
117,095
128,350
141,972
(11,255
)
(24,877
)
Credit cards
362,051
382,166
418,485
(20,115
)
(56,434
)
Leases and other
183,447
193,363
164,187
(9,916
)
19,260
Total loans
$
16,246,093
$
16,041,081
$
13,616,566
$
205,012
$
2,629,527
- Average loans for the first quarter of 2021 increased 1.3% on a
linked-quarter basis and 19.3% compared to the first quarter of
2020 due to increased commercial real estate and consumer real
estate loans and the company’s PPP participation, which had an
average balance of $1.3 billion in the first quarter.
Summary of average securities - QTD
Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2021
2020
2020
LQ
PY
Securities available for sale:
U.S. Treasury
$
36,032
$
30,778
$
49,638
$
5,254
$
(13,606
)
U.S. Agencies
95,494
96,082
94,342
(588
)
1,152
Mortgage-backed
5,599,987
5,053,821
4,133,118
546,166
1,466,869
State and political subdivisions
3,552,945
3,600,704
3,058,594
(47,759
)
494,351
Corporates
83,271
76,870
188,257
6,401
(104,986
)
Total securities available for sale
$
9,367,729
$
8,858,255
$
7,523,949
$
509,474
$
1,843,780
Securities held to maturity:
State and political subdivisions
$
1,023,418
$
1,045,640
$
1,108,716
$
(22,222
)
$
(85,298
)
Trading securities
17,540
29,659
48,102
(12,119
)
(30,562
)
Other securities
308,297
267,445
124,795
40,852
183,502
Total securities
$
10,716,984
$
10,200,999
$
8,805,562
$
515,985
$
1,911,422
- Average securities available for sale increased 5.8% on a
linked-quarter basis and 24.5% compared to the first quarter of
2020.
Summary of average deposits - QTD
Average
UMB Financial
Corporation
(unaudited, dollars in thousands)
Q1
Q4
Q1
CQ vs.
CQ vs.
2021
2020
2020
LQ
PY
Deposits:
Noninterest-bearing demand
$
9,753,680
$
8,947,389
$
6,495,611
$
806,291
$
3,258,069
Interest-bearing demand and savings
16,302,880
15,250,236
13,232,370
1,052,644
3,070,510
Time deposits
769,464
767,755
1,097,780
1,709
(328,316
)
Total deposits
$
26,826,024
$
24,965,380
$
20,825,761
$
1,860,644
$
6,000,263
Noninterest bearing deposits as % of
total
36.36
%
35.84
%
31.19
%
- Average deposits increased 7.5% on a linked-quarter basis and
28.8% compared to the first quarter of 2020.
- Average noninterest-bearing demand deposits increased 9.0% on a
linked-quarter basis to $9.8 billion.
Capital
Capital information
UMB Financial
Corporation
(unaudited, dollars in thousands, except
per share data)
March 31, 2021
December 31, 2020
March 31, 2020
Total equity
$
2,958,239
$
3,016,948
$
2,663,441
Book value per common share
61.24
62.84
55.33
Tangible book value per common share
57.26
58.64
51.04
Regulatory capital:
Common equity Tier 1 capital
$
2,660,102
$
2,547,634
$
2,279,039
Tier 1 capital
2,660,102
2,547,634
2,279,039
Total capital
3,102,333
3,002,545
2,514,445
Regulatory capital ratios:
Common equity Tier 1 capital ratio
12.25
%
12.10
%
11.90
%
Tier 1 risk-based capital ratio
12.25
12.10
11.90
Total risk-based capital ratio
14.28
14.26
13.12
Tier 1 leverage ratio
8.08
8.37
8.81
- At March 31, 2021, 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
2021
2020
2020
2020
2020
Net charge-offs - Total loans
$
5,310
$
1,801
$
5,111
$
5,541
$
7,672
Net loan charge-offs as a % of total
average loans
0.13
%
0.04
%
0.13
%
0.15
%
0.23
%
Loans over 90 days past due
$
1,773
$
1,952
$
1,372
$
4,588
$
2,211
Loans over 90 days past due as a % of
total loans
0.01
%
0.01
%
0.01
%
0.03
%
0.02
%
Nonaccrual and restructured loans
$
76,706
$
87,823
$
93,695
$
82,245
$
97,029
Nonaccrual and restructured loans as a %
of total loans
0.46
%
0.55
%
0.59
%
0.54
%
0.70
%
Provision for credit losses
$
(7,500
)
$
5,000
$
16,000
$
21,500
$
88,000
- Provision for credit losses for the first quarter decreased
$12.5 million from the linked quarter and $95.5 million from the
first quarter of 2020.
- Provision expense in 2020 included increased expense related to
the impact on various economic variables due to the COVID-19
pandemic. The decline in the first quarter of 2021 represents a
release of Allowance for Credit Losses based on positive
macro-economic data and portfolio credit metrics.
- Net charge-offs for the first quarter totaled $5.3 million, or
0.13%, of average loans, compared to $1.8 million, or 0.04%, of
average loans in the linked quarter, and $7.7 million, or 0.23%, of
average loans for the first quarter of 2020.
Conference Call The company
plans to host a conference call to discuss its first quarter
earnings results on Wednesday, April 28, 2021, at 8:30 a.m.
(CT).
Interested parties may access the call by dialing (toll-free)
877-267-8760 or (international) 412-542-4148 and requesting to join
the UMB Financial call. The live call may also be accessed by
visiting investorrelations.umb.com or by using the following
link:
UMB Financial 1Q 2021 Conference Call
A replay of the conference call may be heard through May 12,
2021 by calling (toll-free) 877-344-7529 or (international)
412-317-0088. The replay access code required for playback is
10153930. The call replay may also be accessed at
investorrelations.umb.com.
Non-GAAP Financial
Information In this release, we provide information
about net operating income (loss), operating earnings (losses) 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,
pre-tax, pre-provision income, pre-tax, pre-provision earnings per
share – diluted (PTPP EPS), pre-tax, pre-provision income on a
fully tax equivalent basis (PTPP-FTE), pre-tax, pre-provision FTE
earnings per share – diluted (PTPP-FTE EPS), tangible shareholders’
equity, and tangible book value per share, 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 (loss), operating EPS, operating ROE, operating ROA,
operating noninterest expense, operating efficiency ratio, PTPP,
PTPP EPS, PTPP-FTE, PTPP-FTE EPS, tangible shareholders’ equity,
and tangible book value per share – 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-, severance-, and COVID-19 related items that
management does not believe reflect the company’s fundamental
operating performance. COVID-19 related expense includes hazard pay
for branch associates, computer hardware expense to support
associates working remotely, and additional equipment, cleaning,
and janitorial supplies to protect the well-being of our associates
and customers while on the company’s premises.
Net operating income (loss) for the relevant period is defined
as GAAP net income, adjusted to reflect the impact of excluding
expenses related to acquisitions, severance expense, COVID-19
related 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).
Pre-tax, pre-provision income for the relevant period is defined
as GAAP net income, adjusted to reflect the impact of excluding
income tax and provision expenses.
Pre-tax, pre-provision income on a fully tax equivalent basis
for the relevant period is defined as GAAP net interest income on a
fully tax equivalent basis plus noninterest income, less
noninterest 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.
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, 2020, 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, the COVID-19 pandemic (the pandemic) may also cause
actual results or other future events, circumstances, or
aspirations to differ from our forward-looking statements. The
pandemic has created a global public-health crisis that has
resulted in widespread volatility and deteriorations in household,
business, economic, and market conditions. It is currently
adversely affecting the company and its customers, counterparties,
employees, and first-party service providers, and the continued
adverse impacts on our business, financial position, results of
operations, and prospects could be significant. We are not able to
accurately predict the extent of the impact of the pandemic on our
capital, liquidity, and other financial positions and on our
business, results of operations, and prospects at this time, and we
believe it will depend on a number of evolving factors, including:
(i) the duration, extent and severity of the pandemic; (ii) the
response of governmental and non-governmental authorities to the
pandemic, which is rapidly changing and not always coordinated or
consistent across jurisdictions; (iii) the effect of the pandemic
on our customers, counterparties, employees and first-party service
providers, which may vary widely, and which is generally expected
to increase our credit, counterparty, operational, and other risks;
and (iv) the effect of the pandemic on economies and markets, which
in turn could adversely affect, among other things, the origination
of new loans and the performance of our existing loans. Any
forward-looking statement should be evaluated in light of these
considerations. 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, and serves business and institutional
clients nationwide. For more information, visit UMB.com, UMB Blog,
UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank.
For information about UMB’s operations, approach and relief
measures during the COVID-19 pandemic, please visit
umb.com/COVID-19.
Consolidated Balance Sheets
UMB Financial
Corporation
(unaudited, dollars in thousands)
March 31,
2021
2020
ASSETS
Loans
$
16,497,385
$
13,949,710
Allowance for credit losses on loans
(202,814
)
(187,911
)
Net loans
16,294,571
13,761,799
Loans held for sale
10,275
9,585
Securities:
Available for sale
9,753,392
7,639,451
Held to maturity, net of allowance for
credit losses
1,039,711
1,110,925
Trading securities
29,099
61,177
Other securities
298,209
135,194
Total securities
11,120,411
8,946,747
Federal funds sold and resell
agreements
1,629,813
784,750
Interest-bearing due from banks
3,860,763
1,109,254
Cash and due from banks
387,230
340,553
Premises and equipment, net
286,068
297,668
Accrued income
131,533
111,879
Goodwill
174,518
180,867
Other intangibles, net
17,793
25,839
Other assets
756,414
675,945
Total assets
$
34,669,389
$
26,244,886
LIABILITIES
Deposits:
Noninterest-bearing demand
$
11,604,415
$
7,269,520
Interest-bearing demand and savings
16,011,812
12,920,980
Time deposits under $250,000
457,290
595,128
Time deposits of $250,000 or more
207,275
389,892
Total deposits
28,280,792
21,175,520
Federal funds purchased and repurchase
agreements
2,759,818
1,890,917
Short-term debt
—
15,000
Long-term debt
270,074
70,668
Accrued expenses and taxes
239,001
216,272
Other liabilities
161,465
213,068
Total liabilities
31,711,150
23,581,445
SHAREHOLDERS' EQUITY
Common stock
55,057
55,057
Capital surplus
1,093,667
1,073,089
Retained earnings
1,968,318
1,646,751
Accumulated other comprehensive income,
net
169,197
219,390
Treasury stock
(328,000
)
(330,846
)
Total shareholders' equity
2,958,239
2,663,441
Total liabilities and shareholders'
equity
$
34,669,389
$
26,244,886
Consolidated Statements of
Income
UMB Financial
Corporation
(unaudited, dollars in thousands except
share and per share data)
Three Months Ended
March 31,
2021
2020
INTEREST INCOME
Loans
$
150,170
$
151,026
Securities:
Taxable interest
27,162
27,212
Tax-exempt interest
24,964
24,404
Total securities income
52,126
51,616
Federal funds and resell agreements
2,821
5,452
Interest-bearing due from banks
703
2,663
Trading securities
159
654
Total interest income
205,979
211,411
INTEREST EXPENSE
Deposits
6,798
29,732
Federal funds and repurchase
agreements
1,886
6,381
Other
3,180
1,357
Total interest expense
11,864
37,470
Net interest income
194,115
173,941
Provision for credit losses
(7,500
)
88,000
Net interest income after provision for
credit losses
201,615
85,941
NONINTEREST INCOME
Trust and securities processing
54,834
47,000
Trading and investment banking
9,356
1,723
Service charges on deposit accounts
21,976
25,081
Insurance fees and commissions
420
259
Brokerage fees
3,334
9,860
Bankcard fees
14,673
16,545
Investment securities (losses) gains,
net
(8,336
)
3,520
Other
12,640
(5,564
)
Total noninterest income
108,897
98,424
NONINTEREST EXPENSE
Salaries and employee benefits
127,681
111,060
Occupancy, net
11,935
12,180
Equipment
19,615
21,241
Supplies and services
3,492
4,185
Marketing and business development
2,345
4,640
Processing fees
15,417
13,390
Legal and consulting
5,755
6,110
Bankcard
4,956
4,860
Amortization of other intangible
assets
1,380
1,734
Regulatory fees
2,546
2,366
Other
5,824
6,853
Total noninterest expense
200,946
188,619
Income (loss) before income taxes
109,566
(4,254
)
Income tax expense (benefit)
16,923
(815
)
NET INCOME (LOSS)
$
92,643
$
(3,439
)
PER SHARE DATA
Net income (loss) – basic
$
1.93
$
(0.07
)
Net income (loss) – diluted
1.91
(0.07
)
Dividends
0.32
0.31
Weighted average shares outstanding –
basic
48,096,643
48,689,876
Weighted average shares outstanding –
diluted
48,520,752
48,689,876
Consolidated Statements of
Comprehensive Income
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended
March 31,
2021
2020
Net income (loss)
$
92,643
$
(3,439
)
Other comprehensive (loss) income, before
tax:
Unrealized gains and losses on debt
securities:
Change in unrealized holding gains and
losses, net
(199,038
)
164,116
Less: Reclassification adjustment for
gains included in net income
(2,720
)
(1,227
)
Change in unrealized gains and losses on
debt securities
(201,758
)
162,889
Unrealized gains and losses on derivative
hedges:
Change in unrealized gains and losses on
derivative hedges, net
6,503
14,525
Less: Reclassification adjustment for
(gains) losses included in net income
(842
)
768
Change in unrealized gains and losses on
derivative hedges
5,661
15,293
Other comprehensive (loss) income, before
tax
(196,097
)
178,182
Income tax benefit (expense)
46,954
(41,972
)
Other comprehensive (loss) income
(149,143
)
136,210
Comprehensive (loss) income
$
(56,500
)
$
132,771
Consolidated Statements of
Shareholders' Equity
UMB Financial
Corporation
(unaudited, dollars in thousands except
per share data)
Common Stock
Capital Surplus
Retained Earnings
Accumulated Other
Comprehensive Income (Loss)
Treasury Stock
Total
Balance - January 1, 2020
$
55,057
$
1,073,764
$
1,672,438
$
83,180
$
(277,999
)
$
2,606,440
Total comprehensive (loss) income
—
—
(3,439
)
136,210
—
132,771
Dividends ($0.31 per share)
—
—
(15,209
)
—
—
(15,209
)
Purchase of treasury stock
—
(4,500
)
—
—
(54,886
)
(59,386
)
Forfeitures of equity awards, net of
issuances
—
521
—
—
72
593
Recognition of equity-based
compensation
—
2,817
—
—
—
2,817
Sale of treasury stock
—
95
—
—
89
184
Exercise of stock options
—
392
—
—
1,878
2,270
Cumulative effect adjustment
—
—
(7,039
)
—
—
(7,039
)
Balance - March 31, 2020
$
55,057
$
1,073,089
$
1,646,751
$
219,390
$
(330,846
)
$
2,663,441
Balance - January 1, 2021
$
55,057
$
1,090,450
$
1,891,246
$
318,340
$
(338,145
)
$
3,016,948
Total comprehensive income (loss)
—
—
92,643
(149,143
)
—
(56,500
)
Dividends ($0.32 per share)
—
—
(15,571
)
—
—
(15,571
)
Purchase of treasury stock
—
—
—
—
(4,027
)
(4,027
)
Issuances of equity awards, net of
forfeitures
—
(4,043
)
—
—
4,738
695
Recognition of equity-based
compensation
—
4,457
—
—
—
4,457
Sale of treasury stock
—
65
—
—
86
151
Exercise of stock options
—
2,738
—
—
9,348
12,086
Balance - March 31, 2021
$
55,057
$
1,093,667
$
1,968,318
$
169,197
$
(328,000
)
$
2,958,239
Average Balances / Yields and
Rates
UMB Financial
Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
Three Months Ended March
31,
2021
2020
Average
Average
Average
Average
Balance
Yield/Rate
Balance
Yield/Rate
Assets
Loans, net of unearned interest
$
16,246,093
3.75
%
$
13,616,566
4.46
%
Securities:
Taxable
6,398,188
1.72
4,694,418
2.33
Tax-exempt
4,301,256
2.98
4,063,042
3.05
Total securities
10,699,444
2.23
8,757,460
2.67
Federal funds and resell agreements
1,643,894
0.70
1,224,196
1.79
Interest bearing due from banks
2,823,771
0.10
826,963
1.30
Trading securities
17,540
4.30
48,102
5.84
Total earning assets
31,430,742
2.74
24,473,287
3.58
Allowance for credit losses
(219,672
)
(112,751
)
Other assets
1,841,224
1,679,390
Total assets
$
33,052,294
$
26,039,926
Liabilities and Shareholders'
Equity
Interest-bearing deposits
$
17,072,344
0.16
%
$
14,330,150
0.83
%
Federal funds and repurchase
agreements
2,519,373
0.30
2,030,385
1.26
Borrowed funds
269,576
4.78
70,647
7.73
Total interest-bearing liabilities
19,861,293
0.24
16,431,182
0.92
Noninterest-bearing demand deposits
9,753,680
6,495,611
Other liabilities
445,777
392,181
Shareholders' equity
2,991,544
2,720,952
Total liabilities and shareholders'
equity
$
33,052,294
$
26,039,926
Net interest spread
2.50
%
2.66
%
Net interest margin
2.59
2.97
Business Segment Information
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended March 31,
2021
Commercial Banking
Institutional Banking
Personal Banking
Total
Net interest income
$
133,032
$
22,138
$
38,945
$
194,115
Provision for credit losses
(8,182
)
220
462
(7,500
)
Noninterest income
7,385
68,421
33,091
108,897
Noninterest expense
65,645
71,282
64,019
200,946
Income before taxes
82,954
19,057
7,555
109,566
Income tax expense
12,813
2,943
1,167
16,923
Net income
$
70,141
$
16,114
$
6,388
$
92,643
Three Months Ended March 31,
2020
Commercial Banking
Institutional Banking
Personal Banking
Total
Net interest income
$
106,948
$
33,036
$
33,957
$
173,941
Provision for credit losses
82,220
275
5,505
88,000
Noninterest income
11,240
61,952
25,232
98,424
Noninterest expense
59,043
68,453
61,123
188,619
(Loss) income before taxes
(23,075
)
26,260
(7,439
)
(4,254
)
Income tax (benefit) expense
(4,421
)
5,032
(1,426
)
(815
)
Net (loss) income
$
(18,654
)
$
21,228
$
(6,013
)
$
(3,439
)
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, 2021.
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,
2021
2020
Net income (loss) (GAAP)
$
92,643
$
(3,439
)
Adjustments:
Acquisition expense
—
123
Severance expense
21
1,652
COVID-19 related expense
155
228
Tax-impact of adjustments (i)
(39
)
(445
)
Total Non-GAAP adjustments (net of
tax)
137
1,558
Net operating income (loss) (Non-GAAP)
$
92,780
$
(1,881
)
Earnings (losses) per share - diluted
(GAAP)
$
1.91
$
(0.07
)
Acquisition expense
—
—
Severance expense
—
0.04
COVID-19 related expense
—
—
Tax-impact of adjustments (i)
—
(0.01
)
Operating earnings (losses) per share -
diluted (Non-GAAP)
$
1.91
$
(0.04
)
GAAP
Return on average assets
1.14
%
(0.05
)%
Return on average equity
12.56
(0.51
)
Non-GAAP
Operating return on average assets
1.14
%
(0.03
)%
Operating return on average equity
12.58
(0.28
)
(i)
Calculated using the company’s
marginal tax rate of 22.2%.
Operating noninterest expense and
operating efficiency ratio Non-GAAP reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands)
Three Months Ended March
31,
2021
2020
Noninterest expense
$
200,946
$
188,619
Adjustments to arrive at operating
noninterest expense (pre-tax):
Acquisition expense
—
123
Severance expense
21
1,652
COVID-19 related expense
155
228
Total Non-GAAP adjustments (pre-tax)
176
2,003
Operating noninterest expense
(Non-GAAP)
$
200,770
$
186,616
Noninterest expense
$
200,946
$
188,619
Less: Amortization of other
intangibles
1,380
1,734
Noninterest expense, net of amortization
of other intangibles (Non-GAAP) (numerator A)
$
199,566
$
186,885
Operating noninterest expense
$
200,770
$
186,616
Less: Amortization of other
intangibles
1,380
1,734
Operating expense, net of amortization of
other intangibles (Non-GAAP) (numerator B)
$
199,390
$
184,882
Net interest income
$
194,115
$
173,941
Noninterest income
108,897
98,424
Less: Gains on sales of securities
available for sale, net
2,720
1,227
Total Non-GAAP Revenue (denominator A)
$
300,292
$
271,138
Efficiency ratio (numerator A/denominator
A)
66.46
%
68.93
%
Operating efficiency ratio (Non-GAAP)
(numerator B/denominator A)
66.40
68.19
Pre-tax, pre-provision income non-GAAP
reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
per share data)
Three Months Ended March
31,
2021
2020
Net income (loss) before taxes (GAAP)
$
109,566
$
(4,254
)
Adjustments:
Provision for credit losses
(7,500
)
88,000
Pre-tax, pre-provision income
(Non-GAAP)
$
102,066
$
83,746
Pre-tax earnings (losses) per share -
diluted (GAAP)
$
2.26
$
(0.09
)
Provision for credit losses
(0.16
)
1.81
Pre-tax, pre-provision earnings per share
- diluted (Non-GAAP)
$
2.10
$
1.72
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,
2021
2020
Net interest income
$
194,115
$
173,941
Adjustments to arrive at net interest
income - FTE:
Tax equivalent interest
6,678
6,478
Net interest income - FTE
$
200,793
$
180,419
Noninterest income
108,897
98,424
Less: Noninterest expense
200,946
188,619
Pre-tax, pre-provision income - FTE
(Non-GAAP)
$
108,744
$
90,224
Net interest income earnings per share -
diluted
$
4.00
$
3.57
Tax equivalent interest
0.14
0.13
Net interest income - FTE
4.14
3.70
Noninterest income
2.24
2.02
Less: Noninterest expense
4.14
3.87
Pre-tax, pre-provision income - FTE
earnings per share - diluted (Non-GAAP)
$
2.24
$
1.85
Tangible book value non-GAAP
reconciliations:
UMB Financial
Corporation
(unaudited, dollars in thousands except
share and per share data)
As of March 31,
2021
2020
Total shareholders' equity (GAAP)
$
2,958,239
$
2,663,441
Less: Intangible assets
Goodwill
174,518
180,867
Other intangibles, net
17,793
25,839
Total intangibles, net
192,311
206,706
Total tangible shareholders' equity
(Non-GAAP)
$
2,765,928
$
2,456,735
Total shares outstanding
48,302,634
48,134,601
Ratio of total shareholders' equity (book
value) per share
$
61.24
$
55.33
Ratio of total tangible shareholders'
equity (tangible book value) per share (Non-GAAP)
57.26
51.04
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427005120/en/
Media Contact: Stephanie Hague: 816.860.5088 Investor Relations
Contact: Kay Gregory: 816.860.7106
UMB Financial (NASDAQ:UMBF)
Historical Stock Chart
From Sep 2024 to Oct 2024
UMB Financial (NASDAQ:UMBF)
Historical Stock Chart
From Oct 2023 to Oct 2024