8-K
UMB FINANCIAL CORP (UMBF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 4/26/2022
UMB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number: 001-38481
| Missouri | 43-0903811 |
|---|---|
| (State or other jurisdiction of | (IRS Employer |
| incorporation) | Identification No.) |
1010 Grand Blvd., Kansas City, MO 64106
(Address of principal executive offices, including zip code)
(816) 860-7000
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $1.00 Par Value | UMBF | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition
On April 26, 2022, UMB Financial Corporation (the “Company”) issued a press release announcing the financial results for the Company for the quarter ended March 31, 2022. A copy of the press release is attached as Exhibit 99.1 and the information is hereby incorporated by reference herein. The Company does not incorporate by reference information presented at any website referenced in the press release.
The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” with the Securities and Exchange Commission (“SEC”) for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report on Form 8-K in such a filing.
Item 7.01 Regulation FD Disclosure
On April 26, 2022, the Company announced in the same press release that the Board of Directors of the Company (“the Board”) had declared a quarterly dividend of $0.37 per share that is payable on July 1, 2022 to shareholders of record of the Company as of the close of business on June 10, 2022.
The April 26, 2022 press release that is attached as Exhibit 99.1 also announced that the Board has authorized the repurchase of up to two million shares of the Company’s common stock from time to time until the meeting of the Board that immediately follows the 2023 annual meeting of the Company’s shareholders.
The Company is furnishing a copy of materials that will be used in the Company’s shareholder conference call at 8:30 a.m. (CT) on April 27, 2022. A copy of the materials is attached as Exhibit 99.2 and will be available on the Company’s website at www.umb.com. The materials are dated April 26, 2022, and the Company disclaims any obligation to correct or update any of the materials in the future.
In addition, the Company is furnishing a copy of materials that were used in the presentation delivered by the Company’s representatives at the 2022 Annual Meeting of Shareholders that was held virtually at 9:00 a.m. (CT) on April 26, 2022. A copy of the materials is attached as Exhibit 99.3 and is available on the Company’s website at www.umb.com. The materials are dated April 26, 2022, and the Company disclaims any obligation to correct or update any of the materials in the future.
The information provided under Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, is being furnished and is not deemed to be “filed” with the SEC for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report on Form 8-K in such a filing. The Company does not incorporate by reference to this Current Report on Form 8-K information presented at any website referenced in this report or in any of the Exhibits attached hereto.
Item 9.01 Financial Statements and Exhibits
| 99.1 | Press Release announcing financial results for quarter ended March 31, 2022, and announcing dividend declaration. |
|---|---|
| 99.2 | Investor Presentation Materials, dated April 26, 2022. |
| 99.3 | Presentation for the 2022 Annual Meeting of Shareholders. |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UMB FINANCIAL CORPORATION | |
|---|---|
| By: | /s/ Ram Shankar |
| Ram Shankar<br><br><br>Chief Financial Officer |
Date: April 26, 2022
umbf-ex991_6.htm
Exhibit 99.1
UMB Financial Corporation News Release
1010 Grand Boulevard
Kansas City, MO 64106
816.860.7000
umb.com
//FOR IMMEDIATE RELEASE//
Media Contact: Stephanie Hague: 816.860.5088
Investor Relations Contact: Kay Gregory: 816.860.7106
UMB Financial Corporation Reports First Quarter Net Income of $106.0 Million
First Quarter 2022 Financial Highlights
| • | GAAP net income of $106.0 million, or $2.17 per diluted share; net operating income (a non-GAAP financial measure) of $106.1 million, or $2.17 per diluted share. |
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| • | Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE, a non-GAAP financial measure) of $125.7 million, an increase of 10.9% compared to the fourth quarter of 2021. |
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| • | Excluding Paycheck Protection Program (PPP) balances, average loans increased 19.1% on a linked-quarter, annualized basis. |
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| • | Quarterly average deposits grew 21.5% compared to the first quarter of 2021. |
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| • | Noninterest income increased 13.6% as compared to the first quarter of 2021, equal to 37.0% of total revenue. |
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| • | Credit quality remained strong, with net charge-offs of just 0.20% of average loans, consistent with the company’s historical performance. |
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KANSAS CITY, Mo. (April 26, 2022) – UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the first quarter of 2022 of $106.0 million, or $2.17 per diluted share, compared to $78.5 million, or $1.61 per diluted share, in the fourth quarter of 2021 (linked quarter) and $92.6 million, or $1.91 per diluted share, in the first quarter of 2021.
Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $106.1 million, or $2.17 per diluted share, for the first quarter of 2022, compared to $78.9 million, or $1.62 per diluted share, for the linked quarter and $92.8 million, or $1.91 per diluted share, for the first quarter of 2021. 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 $125.7 million, or $2.57 per diluted share, for the first quarter of 2022, compared to $113.4 million, or $2.32 per diluted share, for the linked quarter, and $108.7 million, or $2.24 per diluted share, for the first quarter of 2021. These PTPP-FTE results represent increases of 10.9% on a linked-quarter basis and 15.6% compared to the first quarter of 2021.
“Our results for the first quarter of 2022 reflect the team’s continued execution of our differentiated business model, with robust growth on both sides of our balance sheet, strong asset quality metrics, and sustained momentum in our fee income businesses,” said Mariner Kemper, chairman, president and chief executive officer. “Compared to the first quarter of 2021, average loans excluding PPP balances and average deposits increased 15.6% and 21.5%, respectively. Together with a 13.6% increase in fee income, our first quarter revenues increased 10.2% compared to the prior period. In addition, our results benefited from a provision release of $6.5 million in the first quarter, driven by favorable portfolio metrics and the improving macro-economic outlook. I am also extremely proud of the team’s continued commitment to the communities we serve, which you may read about in our 2022 corporate citizenship and ESG report.”
| Summary of quarterly financial results | UMB Financial Corporation | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands, except per share data) | |||||||||||||||
| Q1 | Q4 | Q1 | |||||||||||||
| 2022 | 2021 | 2021 | |||||||||||||
| Net income (GAAP) | $ | 105,963 | $ | 78,496 | $ | 92,643 | |||||||||
| Earnings per share (diluted) | 2.17 | 1.61 | 1.91 | ||||||||||||
| Pre-tax, pre-provision income (Non-GAAP) | 119,255 | 106,869 | 102,066 | ||||||||||||
| Pre-tax, pre-provision earnings per share (diluted) | 2.44 | 2.19 | 2.10 | ||||||||||||
| Pre-tax, pre-provision income - FTE (Non-GAAP) | 125,654 | 113,352 | 108,744 | ||||||||||||
| Pre-tax, pre-provision earnings per share - FTE (diluted) | 2.57 | 2.32 | 2.24 | ||||||||||||
| Net operating income (Non-GAAP) | 106,073 | 78,921 | 92,780 | ||||||||||||
| Operating earnings per share (diluted) | 2.17 | 1.62 | 1.91 | ||||||||||||
| GAAP | |||||||||||||||
| Return on average assets | 1.10 | % | 0.82 | % | 1.14 | % | |||||||||
| Return on average equity | 14.65 | 9.91 | 12.56 | ||||||||||||
| Efficiency ratio | 63.98 | 67.78 | 66.46 | ||||||||||||
| Non-GAAP | |||||||||||||||
| Operating return on average assets | 1.10 | % | 0.82 | % | 1.14 | % | |||||||||
| Operating return on average equity | 14.67 | 9.97 | 12.58 | ||||||||||||
| Operating efficiency ratio | 63.93 | 67.61 | 66.40 | ||||||||||||
| Summary of revenue | UMB Financial Corporation | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (unaudited, dollars in thousands) | |||||||||||||||
| Q1 | Q4 | Q1 | CQ vs. | CQ vs. | |||||||||||
| 2022 | 2021 | 2021 | LQ | PY | |||||||||||
| Net interest income | $ | 210,355 | $ | 210,570 | $ | 194,115 | $ | (215 | ) | $ | 16,240 | ||||
| Noninterest income: | |||||||||||||||
| Trust and securities processing | 59,528 | 58,515 | 54,834 | 1,013 | 4,694 | ||||||||||
| Trading and investment banking | 5,440 | 6,977 | 9,356 | (1,537 | ) | (3,916 | ) | ||||||||
| Service charges on deposit accounts | 24,642 | 21,607 | 21,976 | 3,035 | 2,666 | ||||||||||
| Insurance fees and commissions | 259 | 359 | 420 | (100 | ) | (161 | ) | ||||||||
| Brokerage fees | 3,456 | 3,346 | 3,334 | 110 | 122 | ||||||||||
| Bankcard fees | 16,635 | 16,642 | 14,673 | (7 | ) | 1,962 | |||||||||
| Investment securities (losses) gains, net | (522 | ) | 1,448 | (8,336 | ) | (1,970 | ) | 7,814 | |||||||
| Other | 14,240 | 9,888 | 12,640 | 4,352 | 1,600 | ||||||||||
| Total noninterest income | $ | 123,678 | $ | 118,782 | $ | 108,897 | $ | 4,896 | $ | 14,781 | |||||
| Total revenue | $ | 334,033 | $ | 329,352 | $ | 303,012 | $ | 4,681 | $ | 31,021 | |||||
| Net interest income (FTE) | $ | 216,754 | $ | 217,053 | $ | 200,793 | |||||||||
| Net interest margin (FTE) | 2.35 | % | 2.37 | % | 2.59 | % | |||||||||
| Total noninterest income as a % of total revenue | 37.03 | 36.07 | 35.94 |
Net interest income
| • | Net interest income totaled $210.4 million, which is flat as compared to the linked quarter. The benefit from growth in average earning assets was partially offset by $4.1 million in reduced income from PPP loans. Average earning assets increased $1.2 billion, or 3.2%, driven by loan |
|---|---|
| growth and an increase in investment securities purchases, while noninterest-bearing deposits increased $900.7 million, or 6.9% and interest-bearing liabilities increased $406.1 million, or 1.9%. | |
| --- | |
| • | Net interest margin for the first quarter was 2.35%, a decrease of two basis points from the linked quarter, driven by a decline in loan yields primarily due to $4.1 million in reduced income from PPP loans. Earning asset yields declined two basis points from the linked quarter, driven by a twenty-basis-point decline in loan yields and mix changes. The cost of interest-bearing liabilities increased one basis point to 0.21%. Net interest spread decreased three basis points to 2.26% from the linked quarter and was 24 basis points lower than the first quarter of 2021. |
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| • | On a year-over-year basis, net interest income increased $16.2 million, or 8.4%, driven by a $2.8 billion, or 26.2% increase in average securities, coupled with a $1.1 billion, or 6.9%, increase in average loans. These increases were driven by organic loan growth and excess liquidity. |
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| • | Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. Average noninterest-bearing demand deposit balances increased 6.9% on a linked-quarter basis and 43.8% compared to the first quarter of 2021. |
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Noninterest income
| • | First quarter 2022 noninterest income increased $4.9 million, or 4.1%, on a linked-quarter basis, largely due to: |
|---|---|
| o | An increase of $3.0 million in service charges on deposits primarily driven by increased healthcare income related to customer transfer and conversion fees. |
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| o | A gain of $2.4 million on the sale of the company’s factoring loan portfolio during the first quarter of 2022, recorded in other income. |
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| o | An increase of $1.9 million in derivative income and $0.8 million in company-owned life insurance income, both recorded in other income. The increase in company-owned life insurance is offset by a proportionate increase in deferred compensation expense as noted below. |
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| o | Increases of $0.9 million in corporate trust income and $0.4 million in fund services income, both recorded in trust and securities processing. |
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| o | These increases were partially offset by a decrease of $2.7 million in gains on sales of available-for-sale securities, recorded in investment securities gains, and a decrease of $1.5 million in trading and investment banking income driven by decreased trading volume. |
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| • | Compared to the prior year, noninterest income in the first quarter of 2022 increased $14.8 million, or 13.6%, primarily driven by: |
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| o | An increase of $7.8 million in investment securities gains, primarily due to mark-to-market valuations on the company’s equity investment in TTCF. |
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| o | Increases of $5.0 million in derivative income, recorded in other income, and $2.0 million in bankcard income, due to higher interchange revenue. |
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| o | An increase of $4.7 million in trust and securities processing income, primarily driven by increases of $6.4 million and $1.7 million in fund services and corporate trust income, respectively. These increases were partially offset by a decrease of $3.4 million in trust income. |
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| o | An increase of $2.7 million in service charges on deposits driven by increased healthcare income related to customer transfer and conversion fees and increased corporate service charge income. |
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| o | These increases were partially offset by decreases of $3.9 million in trading and investment banking income driven by lower trading volume, $2.1 million in gains on sale of other assets, and $1.2 million in company-owned life insurance income, both recorded |
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| in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below. | |
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Noninterest expense
| Summary of noninterest expense | UMB Financial Corporation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | ||||||||||||
| Q1 | Q4 | Q1 | CQ vs. | CQ vs. | ||||||||
| 2022 | 2021 | 2021 | LQ | PY | ||||||||
| Salaries and employee benefits | $ | 130,634 | $ | 131,360 | $ | 127,681 | $ | (726 | ) | $ | 2,953 | |
| Occupancy, net | 12,232 | 10,907 | 11,935 | 1,325 | 297 | |||||||
| Equipment | 18,164 | 19,886 | 19,615 | (1,722 | ) | (1,451 | ) | |||||
| Supplies and services | 3,262 | 4,646 | 3,492 | (1,384 | ) | (230 | ) | |||||
| Marketing and business development | 4,932 | 6,528 | 2,345 | (1,596 | ) | 2,587 | ||||||
| Processing fees | 18,443 | 19,083 | 15,417 | (640 | ) | 3,026 | ||||||
| Legal and consulting | 6,911 | 10,858 | 5,755 | (3,947 | ) | 1,156 | ||||||
| Bankcard | 6,567 | 4,865 | 4,956 | 1,702 | 1,611 | |||||||
| Amortization of other intangible assets | 1,071 | 1,110 | 1,380 | (39 | ) | (309 | ) | |||||
| Regulatory fees | 3,482 | 3,393 | 2,546 | 89 | 936 | |||||||
| Other | 9,080 | 9,847 | 5,824 | (767 | ) | 3,256 | ||||||
| Total noninterest expense | $ | 214,778 | $ | 222,483 | $ | 200,946 | $ | (7,705 | ) | $ | 13,832 | |
| • | Noninterest expense for the first quarter of 2022 was $214.8 million, a decrease of $7.7 million, or 3.5%, from the linked quarter and an increase of $13.8 million, or 6.9%, from the first quarter of 2021. | |||||||||||
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| • | The linked-quarter decrease in noninterest expense was driven by: | |||||||||||
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| o | A decrease of $11.5 million in salaries and bonus expense, recorded in salaries and employee benefits, driven primarily by increased incentive compensation tied to business growth and higher overall company performance during the fourth quarter of 2021. | |||||||||||
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| o | Decreases of $3.9 million in legal and consulting expense and $1.6 million in marketing and business development due to the timing of multiple projects. | |||||||||||
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| o | Decreases of $1.7 million in equipment expense driven by reduced software expense and $1.4 million in supplies expense primarily due to decreased computer hardware purchases. | |||||||||||
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| o | These decreases were partially offset by increases of $10.7 million in employee benefits expense driven by a seasonal increase of $9.3 million in payroll taxes, insurance, and 401(k) expense recognized in the first quarter, as well as an increase of $1.5 million in deferred compensation expense, all recorded in salaries and employee benefits. The increase in deferred compensation expense was offset by the increase in company-owned life insurance income noted above. Additionally, there was an increase of $1.7 million in bankcard processing expense. | |||||||||||
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| • | The year-over-year increase in noninterest expense was driven by: | |||||||||||
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| o | An increase of $3.0 million in processing fees due to the timing of multiple software projects. | |||||||||||
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| o | Increases of $2.6 million in marketing and business development and $1.2 million in legal and consulting expense due to the timing of multiple projects. | |||||||||||
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| o | Increases of $2.4 million in salaries and bonus expense and $1.3 million in payroll taxes, insurance, and 401(k) expense, both recorded in salaries and employee benefits, primarily driven by increased company performance in the first quarter of 2022. | |||||||||||
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| o | An increase of $1.6 million in bankcard expense primarily due to higher processing expense and bankcard fraud losses. | |||||||||||
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| o | Increases of $1.2 million in operational losses, and $0.9 million in derivative-related expense, both recorded in other expense. | |||||||||||
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| o | These increases were partially offset by a decrease of $1.2 million in deferred compensation expense, recorded in salaries and employee benefits. The decrease in deferred compensation expense was offset by the decrease in company-owned life insurance income noted above. | |||||||||||
| --- | --- |
Income taxes
| • | The company’s effective tax rate was 15.7% for the three months ended March 31, 2022, compared to 15.4% for the same period in 2021. |
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Balance sheet
| • | Average total assets for the first quarter of 2022 were $39.2 billion compared to $38.1 billion for the linked quarter and $33.1 billion for the same period in 2021. | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Summary of average loans and leases - QTD Average | UMB Financial Corporation | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| (unaudited, dollars in thousands) | ||||||||||||||
| Q1 | Q4 | Q1 | CQ vs. | CQ vs. | ||||||||||
| 2022 | 2021 | 2021 | LQ | PY | ||||||||||
| Commercial and industrial | $ | 7,409,623 | $ | 6,994,935 | $ | 7,139,101 | $ | 414,688 | $ | 270,522 | ||||
| Specialty lending | 463,793 | 484,552 | 502,585 | (20,759 | ) | (38,792 | ) | |||||||
| Commercial real estate | 6,338,160 | 6,218,138 | 5,971,047 | 120,022 | 367,113 | |||||||||
| Consumer real estate | 2,339,050 | 2,272,498 | 1,970,767 | 66,552 | 368,283 | |||||||||
| Consumer | 135,942 | 107,841 | 117,095 | 28,101 | 18,847 | |||||||||
| Credit cards | 399,857 | 414,267 | 362,051 | (14,410 | ) | 37,806 | ||||||||
| Leases and other | 274,652 | 200,417 | 183,447 | 74,235 | 91,205 | |||||||||
| Total loans | $ | 17,361,077 | $ | 16,692,648 | $ | 16,246,093 | $ | 668,429 | $ | 1,114,984 | ||||
| • | Average loans for the first quarter of 2022 increased 4.0% on a linked-quarter basis and 6.9% compared to the first quarter of 2021. Excluding PPP balances, average loans increased 4.8% on a linked-quarter basis and increased 15.6% as compared to the first quarter of 2021. | |||||||||||||
| --- | --- | |||||||||||||
| Summary of average securities - QTD Average | UMB Financial Corporation | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| (unaudited, dollars in thousands) | ||||||||||||||
| Q1 | Q4 | Q1 | CQ vs. | CQ vs. | ||||||||||
| 2022 | 2021 | 2021 | LQ | PY | ||||||||||
| Securities available for sale: | ||||||||||||||
| U.S. Treasury | $ | 176,476 | $ | 69,398 | $ | 36,032 | $ | 107,078 | $ | 140,444 | ||||
| U.S. Agencies | 125,017 | 93,619 | 95,494 | 31,398 | 29,523 | |||||||||
| Mortgage-backed | 7,317,968 | 7,395,528 | 5,599,987 | (77,560 | ) | 1,717,981 | ||||||||
| State and political subdivisions | 3,170,757 | 3,437,841 | 3,552,945 | (267,084 | ) | (382,188 | ) | |||||||
| Corporates | 337,526 | 236,743 | 83,271 | 100,783 | 254,255 | |||||||||
| Collateralized loan obligations | 150,134 | 38,099 | — | 112,035 | 150,134 | |||||||||
| Total securities available for sale | $ | 11,277,878 | $ | 11,271,228 | $ | 9,367,729 | $ | 6,650 | $ | 1,910,149 | ||||
| Securities held to maturity: | ||||||||||||||
| U.S. Agencies | $ | 133 | $ | — | $ | — | $ | 133 | $ | 133 | ||||
| Mortgage-backed | 708,075 | 105,622 | — | 602,453 | 708,075 | |||||||||
| State and political subdivisions | 1,185,609 | 1,089,587 | 1,023,418 | 96,022 | 162,191 | |||||||||
| Total securities held to maturity | $ | 1,893,817 | $ | 1,195,209 | $ | 1,023,418 | $ | 698,608 | $ | 870,399 | ||||
| Trading securities | 20,836 | 29,426 | 17,540 | (8,590 | ) | 3,296 | ||||||||
| Other securities | 329,611 | 299,829 | 308,297 | 29,782 | 21,314 | |||||||||
| Total securities | $ | 13,522,142 | $ | 12,795,692 | $ | 10,716,984 | $ | 726,450 | $ | 2,805,158 | ||||
| • | Average total securities increased 5.7% on a linked-quarter basis and 26.2% compared to the first quarter of 2021. | |||||||||||||
| --- | --- | |||||||||||||
| • | In March 2022, securities with an amortized cost of $3.0 billion and a fair value of $2.9 billion were transferred from the available-for-sale classification to the held-to-maturity classification in order to reduce volatility in the company’s equity as a result of higher interest rates. | |||||||||||||
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| Summary of average deposits - QTD Average | UMB Financial Corporation | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (unaudited, dollars in thousands) | ||||||||||||||
| Q1 | Q4 | Q1 | CQ vs. | CQ vs. | ||||||||||
| 2022 | 2021 | 2021 | LQ | PY | ||||||||||
| Deposits: | ||||||||||||||
| Noninterest-bearing demand | $ | 14,025,585 | $ | 13,124,918 | $ | 9,753,680 | $ | 900,667 | $ | 4,271,905 | ||||
| Interest-bearing demand and savings | 17,852,721 | 17,809,817 | 16,302,880 | 42,904 | 1,549,841 | |||||||||
| Time deposits | 701,973 | 701,836 | 769,464 | 137 | (67,491 | ) | ||||||||
| Total deposits | $ | 32,580,279 | $ | 31,636,571 | $ | 26,826,024 | $ | 943,708 | $ | 5,754,255 | ||||
| Noninterest bearing deposits as % of total | 43.05 | % | 41.49 | % | 36.36 | % | ||||||||
| • | Average deposits increased 3.0% on a linked-quarter basis and 21.5% compared to the first quarter of 2021. | |||||||||||||
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| • | Average noninterest-bearing demand deposits increased 6.9% on a linked-quarter basis to $14.0 billion. | |||||||||||||
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Capital
| Capital information | UMB Financial Corporation | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands, except per share data) | |||||||||
| March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||
| Total equity | $ | 2,748,405 | $ | 3,145,424 | $ | 2,958,239 | |||
| Book value per common share | 56.78 | 64.95 | 61.24 | ||||||
| Tangible book value per common share | 52.69 | 61.05 | 57.26 | ||||||
| Regulatory capital: | |||||||||
| Common equity Tier 1 capital | $ | 2,938,100 | $ | 2,885,576 | $ | 2,660,102 | |||
| Tier 1 capital | 2,938,100 | 2,885,576 | 2,660,102 | ||||||
| Total capital | 3,369,866 | 3,324,284 | 3,102,333 | ||||||
| Regulatory capital ratios: | |||||||||
| Common equity Tier 1 capital ratio | 11.81 | % | 12.05 | % | 12.25 | % | |||
| Tier 1 risk-based capital ratio | 11.81 | 12.05 | 12.25 | ||||||
| Total risk-based capital ratio | 13.55 | 13.88 | 14.28 | ||||||
| Tier 1 leverage ratio | 7.53 | 7.61 | 8.08 | ||||||
| • | At March 31, 2022, 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 | |||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||
| Net charge-offs - Total loans | $ | 8,378 | $ | 8,061 | $ | 3,127 | $ | 28,374 | $ | 5,310 | |||||
| Net loan charge-offs as a % of total average loans | 0.20 | % | 0.19 | % | 0.07 | % | 0.68 | % | 0.13 | % | |||||
| Loans over 90 days past due | $ | 3,600 | $ | 2,633 | $ | 2,319 | $ | 1,265 | $ | 1,773 | |||||
| Loans over 90 days past due as a % of total loans | 0.02 | % | 0.02 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||
| Nonaccrual and restructured loans | $ | 110,356 | $ | 92,300 | $ | 96,536 | $ | 58,219 | $ | 76,706 | |||||
| Nonaccrual and restructured loans as a % of total loans | 0.62 | % | 0.54 | % | 0.59 | % | 0.34 | % | 0.46 | % | |||||
| Provision for credit losses | $ | (6,500 | ) | $ | 8,500 | $ | (5,000 | ) | $ | 24,000 | $ | (7,500 | ) | ||
| • | Provision for credit losses for the first quarter decreased $15.0 million from the linked quarter and increased $1.0 million from the first quarter of 2021. Provision expense in the first quarter of 2022 represented a release of the Allowance for Credit Losses (ACL) based on positive macro-economic data and portfolio credit metrics. | ||||||||||||||
| --- | --- | ||||||||||||||
| • | Net charge-offs for the first quarter totaled $8.4 million, or 0.20%, of average loans, compared to $8.1 million, or 0.19%, of average loans in the linked quarter, and $5.3 million, or 0.13%, of average loans for the first quarter of 2021. | ||||||||||||||
| --- | --- |
Dividend Declaration and Share Repurchase Authorization
At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on July 1, 2022, to shareholders of record at the close of business on June 10, 2022.
As in prior years, the Board also approved the repurchase of up to 2,000,000 shares of the company’s common stock. Share repurchases may occur from time to time at any point until the regular meeting of the Board that immediately follows the 2023 annual meeting of the company’s shareholders. Shares acquired under the repurchase program may be available for reissuance or resale, including in connection with the company's compensation plans and dividend reinvestment plan. Under the repurchase program, the company may acquire the shares from time to time in open market or privately negotiated transactions, at the discretion of management.
Conference Call
The company plans to host a conference call to discuss its first quarter 2022 earnings results on Wednesday, April 27, 2022, at 8:30 a.m. (CT).
Interested parties may access the call by dialing (toll-free) 844-200-6205 or (international) 929-526-1599 and requesting to join the UMB Financial call with access code 758098. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:
UMB Financial 1Q 2022 Conference Call
A replay of the conference call may be heard through May 11, 2022 by calling (toll-free)
866-813-9403 or (international) 929-458-6194. The replay access code required for playback is 176268. 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, 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, 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, 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 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).
PTPP income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding income tax and provision expenses.
PTPP-FTE 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, 2021, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished
with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.
About UMB:
UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank.
| Consolidated Balance Sheets | |||||
|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | |||||
| 2021 | |||||
| ASSETS | |||||
| Loans | 17,731,700 | $ | 16,497,385 | ||
| Allowance for credit losses on loans | (179,288 | ) | (202,814 | ) | |
| Net loans | 17,552,412 | 16,294,571 | |||
| Loans held for sale | 384 | 10,275 | |||
| Securities: | |||||
| Available for sale | 8,550,093 | 9,753,392 | |||
| Held to maturity, net of allowance for credit losses | 4,600,187 | 1,039,711 | |||
| Trading securities | 17,059 | 29,099 | |||
| Other securities | 332,123 | 298,209 | |||
| Total securities | 13,499,462 | 11,120,411 | |||
| Federal funds sold and resell agreements | 1,319,809 | 1,629,813 | |||
| Interest-bearing due from banks | 6,355,941 | 3,860,763 | |||
| Cash and due from banks | 357,772 | 387,230 | |||
| Premises and equipment, net | 264,519 | 286,068 | |||
| Accrued income | 127,139 | 131,533 | |||
| Goodwill | 182,225 | 174,518 | |||
| Other intangibles, net | 15,690 | 17,793 | |||
| Other assets | 930,389 | 756,414 | |||
| Total assets | 40,605,742 | $ | 34,669,389 | ||
| LIABILITIES | |||||
| Deposits: | |||||
| Noninterest-bearing demand | 15,946,738 | $ | 11,604,415 | ||
| Interest-bearing demand and savings | 17,828,794 | 16,011,812 | |||
| Time deposits under 250,000 | 399,467 | 457,290 | |||
| Time deposits of 250,000 or more | 187,566 | 207,275 | |||
| Total deposits | 34,362,565 | 28,280,792 | |||
| Federal funds purchased and repurchase agreements | 2,840,535 | 2,759,818 | |||
| Long-term debt | 272,036 | 270,074 | |||
| Accrued expenses and taxes | 178,130 | 239,001 | |||
| Other liabilities | 204,071 | 161,465 | |||
| Total liabilities | 37,857,337 | 31,711,150 | |||
| SHAREHOLDERS' EQUITY | |||||
| Common stock | 55,057 | 55,057 | |||
| Capital surplus | 1,109,585 | 1,093,667 | |||
| Retained earnings | 2,265,129 | 1,968,318 | |||
| Accumulated other comprehensive (loss) income, net | (343,128 | ) | 169,197 | ||
| Treasury stock | (338,238 | ) | (328,000 | ) | |
| Total shareholders' equity | 2,748,405 | 2,958,239 | |||
| Total liabilities and shareholders' equity | 40,605,742 | $ | 34,669,389 |
All values are in US Dollars.
| Consolidated Statements of Income | UMB Financial Corporation | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands except share and per share data) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||
| INTEREST INCOME | ||||||||||||||||
| Loans | $ | 149,470 | $ | 150,170 | ||||||||||||
| Securities: | ||||||||||||||||
| Taxable interest | 43,382 | 27,162 | ||||||||||||||
| Tax-exempt interest | 23,855 | 24,964 | ||||||||||||||
| Total securities income | 67,237 | 52,126 | ||||||||||||||
| Federal funds and resell agreements | 2,450 | 2,821 | ||||||||||||||
| Interest-bearing due from banks | 2,457 | 703 | ||||||||||||||
| Trading securities | 185 | 159 | ||||||||||||||
| Total interest income | 221,799 | 205,979 | ||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Deposits | 6,173 | 6,798 | ||||||||||||||
| Federal funds and repurchase agreements | 2,148 | 1,886 | ||||||||||||||
| Other | 3,123 | 3,180 | ||||||||||||||
| Total interest expense | 11,444 | 11,864 | ||||||||||||||
| Net interest income | 210,355 | 194,115 | ||||||||||||||
| Provision for credit losses | (6,500 | ) | (7,500 | ) | ||||||||||||
| Net interest income after provision for credit losses | 216,855 | 201,615 | ||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||
| Trust and securities processing | 59,528 | 54,834 | ||||||||||||||
| Trading and investment banking | 5,440 | 9,356 | ||||||||||||||
| Service charges on deposit accounts | 24,642 | 21,976 | ||||||||||||||
| Insurance fees and commissions | 259 | 420 | ||||||||||||||
| Brokerage fees | 3,456 | 3,334 | ||||||||||||||
| Bankcard fees | 16,635 | 14,673 | ||||||||||||||
| Investment securities losses, net | (522 | ) | (8,336 | ) | ||||||||||||
| Other | 14,240 | 12,640 | ||||||||||||||
| Total noninterest income | 123,678 | 108,897 | ||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||
| Salaries and employee benefits | 130,634 | 127,681 | ||||||||||||||
| Occupancy, net | 12,232 | 11,935 | ||||||||||||||
| Equipment | 18,164 | 19,615 | ||||||||||||||
| Supplies and services | 3,262 | 3,492 | ||||||||||||||
| Marketing and business development | 4,932 | 2,345 | ||||||||||||||
| Processing fees | 18,443 | 15,417 | ||||||||||||||
| Legal and consulting | 6,911 | 5,755 | ||||||||||||||
| Bankcard | 6,567 | 4,956 | ||||||||||||||
| Amortization of other intangible assets | 1,071 | 1,380 | ||||||||||||||
| Regulatory fees | 3,482 | 2,546 | ||||||||||||||
| Other | 9,080 | 5,824 | ||||||||||||||
| Total noninterest expense | 214,778 | 200,946 | ||||||||||||||
| Income before income taxes | 125,755 | 109,566 | ||||||||||||||
| Income tax expense | 19,792 | 16,923 | ||||||||||||||
| NET INCOME | $ | 105,963 | $ | 92,643 | ||||||||||||
| PER SHARE DATA | ||||||||||||||||
| Net income – basic | $ | 2.19 | $ | 1.93 | ||||||||||||
| Net income – diluted | 2.17 | 1.91 | ||||||||||||||
| Dividends | 0.37 | 0.32 | ||||||||||||||
| Weighted average shares outstanding – basic | 48,406,840 | 48,096,643 | ||||||||||||||
| Weighted average shares outstanding – diluted | 48,832,177 | 48,520,752 | ||||||||||||||
| Consolidated Statements of Comprehensive Income | UMB Financial Corporation | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||||
| Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||
| Net income | $ | 105,963 | $ | 92,643 | ||||||||||||
| Other comprehensive loss, before tax: | ||||||||||||||||
| Unrealized gains and losses on debt securities: | ||||||||||||||||
| Change in unrealized holding gains and losses, net | (622,910 | ) | (199,038 | ) | ||||||||||||
| Less: Reclassification adjustment for gains included in net income | — | (2,720 | ) | |||||||||||||
| Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity | 582 | — | ||||||||||||||
| Change in unrealized gains and losses on debt securities | (622,328 | ) | (201,758 | ) | ||||||||||||
| Unrealized gains and losses on derivative hedges: | ||||||||||||||||
| Change in unrealized gains and losses on derivative hedges, net | 4,680 | 6,503 | ||||||||||||||
| Less: Reclassification adjustment for gains included in net income | (851 | ) | (842 | ) | ||||||||||||
| Change in unrealized gains and losses on derivative hedges | 3,829 | 5,661 | ||||||||||||||
| Other comprehensive loss, before tax | (618,499 | ) | (196,097 | ) | ||||||||||||
| Income tax benefit | 149,057 | 46,954 | ||||||||||||||
| Other comprehensive loss | (469,442 | ) | (149,143 | ) | ||||||||||||
| Comprehensive loss | $ | (363,479 | ) | $ | (56,500 | ) | ||||||||||
| Consolidated Statements of Shareholders' Equity | UMB Financial Corporation | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (unaudited, dollars in thousands except per share data) | ||||||||||||||||
| Capital<br><br><br>Surplus | Retained<br><br><br>Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury<br><br><br>Stock | Total | ||||||||||||
| 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 | ||||
| Balance - January 1, 2022 | 55,057 | $ | 1,110,520 | $ | 2,176,998 | $ | 126,314 | $ | (323,465 | ) | $ | 3,145,424 | ||||
| Total comprehensive income (loss) | — | — | 105,963 | (469,442 | ) | — | (363,479 | ) | ||||||||
| Dividends (0.37 per share) | — | — | (17,832 | ) | — | — | (17,832 | ) | ||||||||
| Purchase of treasury stock | — | — | — | — | (22,487 | ) | (22,487 | ) | ||||||||
| Issuances of equity awards, net of forfeitures | — | (6,630 | ) | — | — | 7,309 | 679 | |||||||||
| Recognition of equity-based compensation | — | 5,485 | — | — | — | 5,485 | ||||||||||
| Sale of treasury stock | — | 84 | — | — | 54 | 138 | ||||||||||
| Exercise of stock options | — | 126 | — | — | 351 | 477 | ||||||||||
| Balance - March 31, 2022 | 55,057 | $ | 1,109,585 | $ | 2,265,129 | $ | (343,128 | ) | $ | (338,238 | ) | $ | 2,748,405 |
All values are in US Dollars.
| Average Balances / Yields and Rates | UMB Financial Corporation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (tax - equivalent basis) | ||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| 2022 | 2021 | |||||||||||
| Average | Average | Average | Average | |||||||||
| Balance | Yield/Rate | Balance | Yield/Rate | |||||||||
| Assets | ||||||||||||
| Loans, net of unearned interest | $ | 17,361,077 | 3.49 | % | $ | 16,246,093 | 3.75 | % | ||||
| Securities: | ||||||||||||
| Taxable | 9,461,567 | 1.86 | 6,398,188 | 1.72 | ||||||||
| Tax-exempt | 4,039,739 | 3.03 | 4,301,256 | 2.98 | ||||||||
| Total securities | 13,501,306 | 2.21 | 10,699,444 | 2.23 | ||||||||
| Federal funds and resell agreements | 1,265,776 | 0.78 | 1,643,894 | 0.70 | ||||||||
| Interest bearing due from banks | 5,320,360 | 0.19 | 2,823,771 | 0.10 | ||||||||
| Trading securities | 20,836 | 4.38 | 17,540 | 4.30 | ||||||||
| Total earning assets | 37,469,355 | 2.47 | 31,430,742 | 2.74 | ||||||||
| Allowance for credit losses | (198,217 | ) | (219,672 | ) | ||||||||
| Other assets | 1,882,376 | 1,841,224 | ||||||||||
| Total assets | $ | 39,153,514 | $ | 33,052,294 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Interest-bearing deposits | $ | 18,554,694 | 0.13 | % | $ | 17,072,344 | 0.16 | % | ||||
| Federal funds and repurchase agreements | 2,973,785 | 0.29 | 2,519,373 | 0.30 | ||||||||
| Borrowed funds | 271,731 | 4.66 | 269,576 | 4.78 | ||||||||
| Total interest-bearing liabilities | 21,800,210 | 0.21 | 19,861,293 | 0.24 | ||||||||
| Noninterest-bearing demand deposits | 14,025,585 | 9,753,680 | ||||||||||
| Other liabilities | 394,714 | 445,777 | ||||||||||
| Shareholders' equity | 2,933,005 | 2,991,544 | ||||||||||
| Total liabilities and shareholders' equity | $ | 39,153,514 | $ | 33,052,294 | ||||||||
| Net interest spread | 2.26 | % | 2.50 | % | ||||||||
| Net interest margin | 2.35 | 2.59 | ||||||||||
| Business Segment Information | UMB Financial Corporation | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| (unaudited, dollars in thousands) | ||||||||||||
| Three Months Ended March 31, 2022 | ||||||||||||
| Commercial Banking | Institutional Banking | Personal Banking | Total | |||||||||
| Net interest income | $ | 145,002 | $ | 26,253 | $ | 39,100 | $ | 210,355 | ||||
| Provision for credit losses | (7,040 | ) | 151 | 389 | (6,500 | ) | ||||||
| Noninterest income | 26,707 | 73,262 | 23,709 | 123,678 | ||||||||
| Noninterest expense | 79,596 | 75,592 | 59,590 | 214,778 | ||||||||
| Income before taxes | 99,153 | 23,772 | 2,830 | 125,755 | ||||||||
| Income tax expense | 15,606 | 3,741 | 445 | 19,792 | ||||||||
| Net income | $ | 83,547 | $ | 20,031 | $ | 2,385 | $ | 105,963 | ||||
| Three Months Ended March 31, 2021 | ||||||||||||
| Commercial Banking | Institutional Banking | Personal Banking | Total | |||||||||
| Net interest income | $ | 136,410 | $ | 22,138 | $ | 35,567 | $ | 194,115 | ||||
| Provision for credit losses | (8,178 | ) | 220 | 458 | (7,500 | ) | ||||||
| Noninterest income | 8,176 | 68,421 | 32,300 | 108,897 | ||||||||
| Noninterest expense | 69,725 | 71,282 | 59,939 | 200,946 | ||||||||
| Income before taxes | 83,039 | 19,057 | 7,470 | 109,566 | ||||||||
| Income tax expense | 12,826 | 2,943 | 1,154 | 16,923 | ||||||||
| Net income | $ | 70,213 | $ | 16,114 | $ | 6,316 | $ | 92,643 |
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, 2022.
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, | ||||||
| 2022 | 2021 | |||||
| Net income (GAAP) | $ | 105,963 | $ | 92,643 | ||
| Adjustments: | ||||||
| Acquisition expense | — | — | ||||
| Severance expense | 145 | 21 | ||||
| COVID-19 related expense | — | 155 | ||||
| Tax-impact of adjustments (i) | (35 | ) | (39 | ) | ||
| Total Non-GAAP adjustments (net of tax) | 110 | 137 | ||||
| Net operating income (Non-GAAP) | $ | 106,073 | $ | 92,780 | ||
| Earnings per share - diluted (GAAP) | $ | 2.17 | $ | 1.91 | ||
| Acquisition expense | — | — | ||||
| Severance expense | — | — | ||||
| COVID-19 related expense | — | — | ||||
| Tax-impact of adjustments (i) | — | — | ||||
| Operating earnings per share - diluted (Non-GAAP) | $ | 2.17 | $ | 1.91 | ||
| GAAP | ||||||
| Return on average assets | 1.10 | % | 1.14 | % | ||
| Return on average equity | 14.65 | 12.56 | ||||
| Non-GAAP | ||||||
| Operating return on average assets | 1.10 | % | 1.14 | % | ||
| Operating return on average equity | 14.67 | 12.58 |
(i) Calculated using the company’s marginal tax rate of 24.0% in 2022 and 22.2% in 2021.
| Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations: | UMB Financial Corporation | |||||
|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | ||||||
| Three Months Ended March 31, | ||||||
| 2022 | 2021 | |||||
| Noninterest expense | $ | 214,778 | $ | 200,946 | ||
| Adjustments to arrive at operating noninterest expense (pre-tax): | ||||||
| Acquisition expense | — | — | ||||
| Severance expense | 145 | 21 | ||||
| COVID-19 related expense | — | 155 | ||||
| Total Non-GAAP adjustments (pre-tax) | 145 | 176 | ||||
| Operating noninterest expense (Non-GAAP) | $ | 214,633 | $ | 200,770 | ||
| Noninterest expense | $ | 214,778 | $ | 200,946 | ||
| Less: Amortization of other intangibles | 1,071 | 1,380 | ||||
| Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A) | $ | 213,707 | $ | 199,566 | ||
| Operating noninterest expense | $ | 214,633 | $ | 200,770 | ||
| Less: Amortization of other intangibles | 1,071 | 1,380 | ||||
| Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B) | $ | 213,562 | $ | 199,390 | ||
| Net interest income | $ | 210,355 | $ | 194,115 | ||
| Noninterest income | 123,678 | 108,897 | ||||
| Less: Gains on sales of securities available for sale, net | — | 2,720 | ||||
| Total Non-GAAP Revenue (denominator A) | $ | 334,033 | $ | 300,292 | ||
| Efficiency ratio (numerator A/denominator A) | 63.98 | % | 66.46 | % | ||
| Operating efficiency ratio (Non-GAAP) (numerator B/denominator A) | 63.93 | 66.40 | ||||
| Pre-tax, pre-provision income non-GAAP reconciliations: | UMB Financial Corporation | |||||
| --- | --- | --- | --- | --- | --- | --- |
| (unaudited, dollars in thousands except per share data) | ||||||
| Three Months Ended March 31, | ||||||
| 2022 | 2021 | |||||
| Net income before taxes (GAAP) | $ | 125,755 | $ | 109,566 | ||
| Adjustments: | ||||||
| Provision for credit losses | (6,500 | ) | (7,500 | ) | ||
| Pre-tax, pre-provision income (Non-GAAP) | $ | 119,255 | $ | 102,066 | ||
| Pre-tax earnings per share - diluted (GAAP) | $ | 2.58 | $ | 2.26 | ||
| Provision for credit losses | (0.14 | ) | (0.16 | ) | ||
| Pre-tax, pre-provision earnings per share - diluted (Non-GAAP) | $ | 2.44 | $ | 2.10 | ||
| 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, | ||||||
| 2022 | 2021 | |||||
| Net interest income | $ | 210,355 | $ | 194,115 | ||
| Adjustments to arrive at net interest income - FTE: | ||||||
| Tax equivalent interest | 6,399 | 6,678 | ||||
| Net interest income - FTE | $ | 216,754 | $ | 200,793 | ||
| Noninterest income | 123,678 | 108,897 | ||||
| Less: Noninterest expense | 214,778 | 200,946 | ||||
| Pre-tax, pre-provision income - FTE (Non-GAAP) | $ | 125,654 | $ | 108,744 | ||
| Net interest income earnings per share - diluted | $ | 4.31 | $ | 4.00 | ||
| Tax equivalent interest | 0.13 | 0.14 | ||||
| Net interest income - FTE | 4.44 | 4.14 | ||||
| Noninterest income | 2.53 | 2.24 | ||||
| Less: Noninterest expense | 4.40 | 4.14 | ||||
| Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP) | $ | 2.57 | $ | 2.24 | ||
| Tangible book value non-GAAP reconciliations: | UMB Financial Corporation | |||||
| --- | --- | --- | --- | --- | ||
| (unaudited, dollars in thousands except share and per share data) | ||||||
| As of March 31, | ||||||
| 2022 | 2021 | |||||
| Total shareholders' equity (GAAP) | $ | 2,748,405 | $ | 2,958,239 | ||
| Less: Intangible assets | ||||||
| Goodwill | 182,225 | 174,518 | ||||
| Other intangibles, net | 15,690 | 17,793 | ||||
| Total intangibles, net | 197,915 | 192,311 | ||||
| Total tangible shareholders' equity (Non-GAAP) | $ | 2,550,490 | $ | 2,765,928 | ||
| Total shares outstanding | 48,403,262 | 48,302,634 | ||||
| Ratio of total shareholders' equity (book value) per share | $ | 56.78 | $ | 61.24 | ||
| Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP) | 52.69 | 57.26 |
1st Quarter 2022 Update April 26, 2022 Exhibit 99.2
Presentation Index 2 Corporate Overview Opportunity – Our Investment Thesis 1st Quarter 2022 Results Line of Business Updates Appendix 3 8 17 30 40 Board of Directors Forward-Looking Statements Non-GAAP Reconciliations Please refer to the Forward-Looking Statements on slide 43 for important disclosures about information contained in this presentation. Peer Group
Corporate Overview 3 Highlights Asset-based lending Healthcare Services 92 banking centers 230 ATMs UMB Bank Presence Twin Cities - MN Salt Lake City - UT UMB Financial Corporation Headquarters Expansion Markets International Presence UMBF Trust & Agency Services – Dublin, Ireland Specialized Lending Verticals Corporate Trust Capital Markets (4) Fund Services Private Wealth Management & Personal Trust
At, or for the 3 months ended, 03/31/22. (1) Includes $77 mm in PPP balances; (2) Includes $11.8B in managed assets and $4.9B in Assets Under Administration for Private Wealth customers; (3) Includes assets in Fund Services, Corporate Trust and Healthcare Services; (4) UMB Bank, n.a. Capital Markets Division.
An unwavering commitment to doing more for our customers. Beyond Financials Our Culture 4 Customers First We do the unparalleled to create an environment that consistently exceeds the expectations of our customers.
Integrity & Trust We demonstrate our uncompromising honesty and integrity to earn the trust of everyone we serve.
Performance & Strength We achieve sustainable greatness by delivering on our promise, remaining independent and maintaining financial soundness.
Associate Spirit We rely upon our people and their collective attitude and skills to differentiate us from our competitors.
Inclusion & Diversity We believe an inclusive and diverse culture energizes the workplace and ignites innovation. Our Values Our Commitment Our Vision the unparalleled customer experience
5 Beyond Financials Our Culture Creating an unparalleled customer experience requires a culture where our people feel part of something more, something bigger. We foster this experience through our policies, our business decisions and our expectations of each associate.
Beyond Financials Our Commitment to Corporate Citizenship Read our 2021 Corporate Citizenship Report at UMB.com/CorporateCitizenship 6 UMB recognizes the undeniable importance of sustainable business practices. Efficient & Sensible Resource Use Associate volunteerism and corporate philanthropy help build strong community partnerships. $6.6 million in company donations and sponsorships in 2021, supporting underserved communities’ housing needs, small business efforts, education and emerging talent
1,000+ participants in our workplace giving campaign supporting qualified nonprofits with pledges of $526k
Associates receive 16 hours of paid Volunteer Time Off (VTO) annually, and participates logged over 6,500 hours of volunteer time, despite the pandemic
UMB Market, which helps children learn about healthy shopping on a budget, was the Financial Education winner in the American Bankers Association Community Commitment Awards Community Impact 74 UMB buildings use automated systems to conserve energy, with a goal to include all UMB properties by year-end 2023
More than 183k Kilowatt hours generated from solar panels
Exterior lighting upgrades to LED saved more than 95k Kilowatt hours; committed to convert all locations by year-end 2023
Committed to paper reduction through digital opportunities and education programs
Adapting technology to include rooftop gardens, geothermal energy and charging stations for electric cars
Installed beehives at a Colorado branch to support the local honeybee population Effective governance practices preserve the confidence and trust of our stakeholders. 12-person board of directors, with 10 independent members, a lead independent director, and 100% independence on board committees
33% board diversity
Deliberate selection criteria which includes diversity standards in the board nomination process
Robust risk oversight with distinct risk management committees: enterprise risk, asset and liability, and credit
Board oversight of the executive ESG Committee Strong Corporate Governance We want our company to be as diverse as the world we live in. As an early CEO Action for Diversity and Inclusion signatory, we regularly review progress of our inclusion strategy with executives and our board of directors
Eight Business Resource Groups (BRGs) help us understand the needs of our associates, customers and communities and turn empathy into action
In 2021, 34% of all UMB hires were people of color, 52% were women and 2% were veterans
Diversity among leadership team – 8 of 16 members Inclusion & Diversity
Business Model Our Diverse Foundation Commercial & Personal Banking Services Revenue: FY’21 $922 million; 1Q’22 $235 million / Average deposits: $20.4 billion Average loans: $2.5B (1) (3) Average deposits: $6.7B (2) Retail deposit & lending services through 92 branches and online Private banking services Consumer mortgage AUM = $11.8B AUA = $4.9B Financial planning Investment management Trust & custody Estate planning Family office Business exit planning C&I lending Small business lending CRE & Construction lending Average loans: $14.4B (1) Average deposits: $13.7B (2) Agribusiness Energy Practice finance Mezzanine debt & equity investments Commercial Private Wealth Institutional Banking Services Revenue: FY’21 $361 million; 1Q’22 $100 million / Average deposits: $12.1 billion Institutional Banking provides solutions for the entire marketplace; $441.4 billion in AUA. (4) Corporate Trust Bond trustee, paying agent & escrow services Institutional Custody Domestic & international custody services Fund Services Fund accounting, fund administration & transfer agency Specialty Trust & Agency Solutions Default workout & successor trustee services Aviation, ABS & loan agency services Capital Markets Division (5) Fixed income sales & trading Public finance Investor Solutions Banking, cash management & specialty services for financial firms Healthcare Services Health savings & benefit spending accounts Healthcare payment solutions Balances at or for quarter ended 03/31/22. (1) Loan balances exclude credit card and PPP balances; (2) Small business deposits were moved from consumer to commercial in 1Q’22; (3) Includes consumer loans plus residential real estate loans to retail and private banking clients; (4) Includes AUA in Fund Services/custody, corporate trust and Healthcare Services; (5) Products and services offered through UMB Bank Capital Markets Division; NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED. Aviation Asset-based lending Beverage Treasury management Merchant payments Specialized Expertise: 7
Our Investment Thesis
9 Investment Thesis Our Opportunity Track record of relative outperformance in loan growth – opportunities remain Underpenetrated across our geographic footprint, focused on market share gains Underpenetrated vertically on an asset class basis; built out specialized teams Runway for Growth Attractive deposit base Diverse and low-cost funding sources Track record of strong deposit growth in challenging times Net interest income growth outpacing the industry Above peer earning asset growth Balance sheet flexibility to lever up deposit base through deployment into high-quality earning assets Focus on returning value to shareholders Risk-adjusted returns EPS and tangible book value growth outpace peers over the long-term Consistent dividend growth Differentiated revenue profile and growing fee income Revenue from diverse lines of business and verticals provide a natural hedge in all rate environments Lower-than-peer reliance on mortgage and NSF/OD revenue Solid capital and liquidity positions support growth objectives Higher common equity levels Attractive loan-to-deposit ratio provides flexibility Time-tested underwriting philosophy Unwavering credit standards Long-tenured credit team – average of 23 years with UMB Chief Credit Officer – 36 years with UMB
7% Balance Sheet Growth Across All Business Cycles 10 Average Loans Average Deposits Average annual balances in billions. 2.50% 0.40% 1.77% 0.09% Annual Loan Growth 12% 14% 9% 7% 5% 2% 6% 10% 10% 18% 12% 21% 19% 9% 7% 10% 25% 4% 14% 16% 11% 14% 10% 20% 13% 6% 11% 9% 4% 7% 14% 15 Year CAGR
10.4% 15 Year CAGR
11.7% (1) (1) Excludes PPP balances for ’20 & ‘21; (2) UMB traditional peers (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence. Peer group defined on slide 48. (1) Annual Deposit Growth
Differentiated Revenue Profile Multiple Sources of Growth 11 Net Interest Income Fee Income Provides Diversity Dollars in millions. 29% 28% 54% 36% $ 1,282.7 $1,291.4 $472.2 $613.2 $521.5 $731.3 $587.8 $778.2 $671.0 $825.1 $878.5 $982.5 $848.7 $1,012.1 $971.4 $1,097.7 Total Revenue 15 Year CAGR
6.9% Revenue Growth Annual NII Growth Annual Revenue Growth 12% 15% 7% 18% 10% 3% 2% 1% 9% 4% 5% 18% 20% 13% 9% 10% -1% 7% 10% 13% 4% 9% 9% 6% 18% 6% 3% 4% 11% 1% 3% 8% (1) Fee income prior to 2017 contains income from discontinued operations; (2) UMB traditional peers (15 banks) as of latest available annual period. Source: S&P Global Market Intelligence. 15 Year CAGR
9.2% 15 Year CAGR
4.1% Fee Income Growth $ 815.5 $731.2 $217.2 $303.0 $232.7 $317.0 $275.1 $320.1 $310.6 $333.3 $412.1 $558.9 $350.1 $610.4 $495.3 $670.9
Capital & Liquidity Supports Growth Outlook 12 Cash & Securities / Assets Loans / Deposits Tier 1 Capital Ratio Tangible Common Equity / Assets (4) (3) (2) (1) UMB traditional peers (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence; (2) Non-GAAP measure. See reconciliation on slide 47; (3) As defined by S&P Global: “Cash, cash equiv. & investment securities/assets;” (4) End-of-period balances.
Resilient Credit Metrics Through All Economic Environments 13 Net Charge-Offs / Average Loans Nonperforming Loans / Loans 15 Year Average
0.30% 15 Year Average
0.45% (1) UMB traditional peers (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence; (2) All FDIC-insured banks. Source: FDIC. 0.25% 0.10% 0.27% 0.89% 0.47% 0.54%
Risk-Adjusted Returns Rowing Close to Shore 14 Risk-Weighted Assets / Assets Return on Risk-Weighted Assets (1) UMB traditional peers (15 banks), data as of latest available annual period. Source: S&P Global Market Intelligence.
Outperformance Building Long-Term Value 15 15-Year Compounded Annual Growth Rates 2006 – 2021 (2) *KBW Nasdaq Regional Bank Index (median of 50 banks); **UMB’s traditional peers (median of 15 banks); ***Median of all publicly-traded banks with data reported for both 2006 and 2021. (1) As of March 2022; (2) Non-GAAP measure. See reconciliation on slide 46. Source: KRX, Peer and Industry data from S&P Global Market Intelligence. (1)
Dividend Trends Sustained Growth 16 (1) Dividends adjusted for 2-for-1 stock split in 2006; (2) Annualized 2022 full-year dividend assumes all 4 quarters are $0.37/share, consistent with first quarter 2022 dividend. The Board of Directors may declare dividends of different amounts in future quarters. Annual Dividends Declared (1) +263.2%
2001 - 2021 (2) (2)
1st Quarter 2022 Financial Review
1Q 2022 Results At-A-Glance 18 Dollars in millions, except per share amounts. (1) Net gains/losses related to mark-to-market valuations and any disposition of shares in equity investments. (2) Non-GAAP measure. See reconciliations on slides 44 and 45. 1Q ’21 4Q ’21 1Q ’22 Linked-Quarter Commentary
1Q 2022 Earnings Highlights 19 Pre-Tax, Pre-Provision (“PTPP”) Income (1) $102.1 $131.3 $108.8 $106.9 $119.3 Net Income $106.0 $92.6 $87.4 $94.5 $78.5 Dollars in millions, except per share amounts. (1) Non-GAAP measure. See reconciliation on slide 44; (2) Net gains/losses related to mark-to-market valuations and any disposition of shares in our equity investments.
Revenue Trends 20 Dollars in millions. Columns may not sum due to rounding differences. 1Q ’21 2Q ’21 3Q ’21 4Q ’21 1Q ‘22 Linked-Qtr. Variance $ ∆ % ∆
Net Interest Income 21 @ 0.16% $4.5B $4.5B $5.4B $6.8B $6.6B @ 0.92% @ 0.87% @ 0.83% @ 0.78% @ 0.70% @ 0.15% @ 0.19% @ 0.10% @ 0.10% Asset Yield and Liability Cost Trends Liquidity Trends Impact NIM $194.1 $209.8 $210.6 $210.4 $199.7 $204.5 $208.4 $180.7 14.2% 13.7% 15.9% 18.8% 17.6% $201.1 $188.7 $2.1B @ 1.79% @ 1.30% 8.4% Pre- pandemic Liquidity trends shown as average quarterly balances. $ millions $ billions
Noninterest Income 22 Current Quarter Drivers Dollars in millions. (1) UMB traditional peers (15 banks), data as of latest available quarter. Source: S&P Global Market Intelligence. Noninterest income increased $4.9mm, or 4.1%, vs. 4Q’21, largely driven by:
An increase of $3.0mm in deposit service charges related to healthcare customer transfer and conversion fees; Variances in “other” income, including A gain of $2.4mm on the previously disclosed sale of the factoring portfolio; An increase of $1.9mm in derivative income; and An increase of $0.8mm in company-owned life insurance income. $1.0mm in higher income in trust & securities processing from strong performance in Fund Services and corporate trust. Partially offset by: A decrease of $2.0mm in investment securities gains; and $1.5mm lower investment banking income due to reduced trading volume and volatility in bond markets. $108.9 $131.6 $107.9 $118.8 $123.7 LQ Variance Composition / Changes in Inv. Securities Gains (Losses) and Trust & Securities Processing
Noninterest Expense 23 Current Quarter Drivers Noninterest expense decreased $7.7mm, or 3.5%, vs. 4Q’21. Primary drivers:
A decrease of $11.5mm in salaries and bonus expense following higher levels of incentive compensation for company performance during 4Q ’21; Reductions of $3.9mm in legal and consulting and $1.6mm in marketing and business development expenses due to the timing of multiple projects; and Software and hardware expense reductions of $1.7mm in equipment expense and $1.4mm in supplies expense. Partially offset by: Seasonal increases in payroll taxes, insurance and 401(k) expenses of $9.3mm and additional deferred compensation expense of $1.5mm, recorded in salaries and benefits; and An increase of $1.7mm in bankcard processing expense. Dollars in millions. Columns may not sum due to rounding differences. 1Q ’21 2Q ’21 3Q ’21 4Q ’21 1Q ‘22 Linked-Qtr. Variance $ ∆ % ∆
$16,693 $16,473 $ 17,259 $ 14,933 $ 17,361 $ 16,246 $ 16,818 Diversified Loan Portfolio 24 Average balances in millions. $ 15,642 $ 16,757 $ 16,240 1Q ’21 4Q ’21 1Q ’22 Linked-Qtr. Variance $ ∆ % ∆ Loans by Region
Quarterly Loan Activity 25 (1) Payoffs and paydowns include C&I and CRE loans. 1Q ’21 2Q ’21 3Q ’21 4Q ’21 1Q ’22 (1) (1)
Strong Asset Quality Net Loan Charge-Offs Delinquencies Nonperforming Loans Allowance for Credit Losses Dollars in millions. (1) Delinquencies represent accruing loans > 30 days past due; (2) Total loans include PPP balances. 26
27 Detailed Net Charge-Off History (1) Loan categories updated in 2020 with adoption of ASU 2016-13. In prior periods, NCOs for “Commercial” included C&I, commercial card, ABL and factoring loans. NCOs for “Other” included consumer cards, all real-estate loans, consumer loans and DDA. Historical Recent Trends
$10,699 $11,284 $11,903 $12,766 $13,501 $11,271 $11,278 $9,368 $9,924 $10,567 High-Quality Investment Portfolio Cash flow and purchase activity and HTM duration includes AFS and the portion of the HTM portfolio managed by the Corporate Treasury team; excludes industrial revenue bonds held-to-maturity; Purchases made for roll-off and overbuy; net of purchases related to sales/trades. (3) Includes impact of ~$1B pay-fixed receive-float swap portfolio with varying start dates. 28 Average balances - $ millions. In March 2022, securities with an amortized cost of $3.0 billion and fair value of $2.9 billion were transferred from available-for-sale to held-to-maturity to help reduce equity volatility as a result of higher interest rates Securities Portfolio Statistics & Activity (1)
Diversified Deposit Mix 29 $26,826 $29,428 $31,637 $32,580 Deposits by Line of Business Commercial Personal Institutional Commercial Banking 42% Consumer & Private Wealth 21% Capital Mkts. & Corp. Trust 15% Healthcare Services 7% Fund Services 6% Investor Solutions 9% 41% 43% 36% 39% 39% Average balances in millions. (1) Small business deposits were moved from consumer to commercial in 1Q ’22. $27,783 1Q ’21 4Q ’21 1Q ’22 Linked-Qtr. Variance $ ∆ % ∆ (1) (1)
30 Interest Rate Sensitivity Impact to Net Interest Income Assumptions Projected rates for new loans and deposits based on historical analysis, management outlook and repricing strategies Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other market changes
Shock Scenario – Static Balance Sheet Ramp Scenario – Static Balance Sheet 56% of total loans, or $9.7B, are variable.
Of variable loans: 63% reprice within 12 months 58% tied to LIBOR (1) 29% tied to Prime Loan Repricing (1) Loans tied to LIBOR are expected to migrate to the Secured Overnight Financing Rate index (“SOFR”) or other indices by 2Q ’23.
Line of Business Updates
Commercial Banking Commercial Capabilities 32 Average balance for 1Q’22. (1) ABA 2021, FDIC data; (2) Rank among U.S. Visa & Mastercard Commercial Card Issuers, Source: Nilson Report, 2020. Commercial Lending Portfolio Middle Market 56% Investment Real Estate 27% Sm./Med Biz 5% Specialized Verticals 12% $14.4B #28 Largest farm lenders in the U.S. (1) Top 20 Commercial Credit Card Purchase Volume (2) Average Balance
Commercial Banking C&I Lending 33 Commercial & Industrial Statistics C&I Industry Diversification (1) (2) Average loan size: $3.6 million Considerations Internal limits on loan size and projects per sponsor Concentration guidelines for all lending verticals, monitored for changing conditions C&I Balance Trends Transp. / Warehouse Diversified Technology Materials & Commodities Manufacturing Food/Beverage Manufacturing Healthcare Commercial Svcs. Other (4) Agribusiness RE & Construction Finance & Insurance Energy-Related $7.8B 44.2% of total UMB loans (1) Includes C&I and leases; Industries as percentage of C&I loans; (2) End-of-period balances; (3) Excluding PPP loans; (4) Average quarterly utilization; previously reported as spot rates. (3) (2) Average Line Utilization Trends +30% YoY
Commercial Banking Commercial Real Estate 34 Commercial Real Estate Statistics Investment CRE / Construction Portfolio (1) Total Investment CRE Portfolio
Average Loan-to-Value: 62% Recourse: 83% Const. / Land Dev. 13% Owner-Occupied 31% Investment CRE 48% $6.4B Farmland 7% as of March 31, 2022 1-4 Unit Residential Construction = 1% of total (2) Retail Multifamily Office Building Hotel Industrial Sr. Living Mixed Use Student Housing Other (4) Owner-occupied – new purchase or refinance Real estate development – construction / perm financing, bridge financing, renovations Investment CRE – 3 to 10-year term loans for property investors Resi. Rental (1) Industries as a percentage of investment CRE and construction portfolio; (2) Excluding PPP loans; (3) Calculated using Tier 1 capital plus an adjusted ACL, per regulatory guidelines. Regulatory Concentrations
Total non-farmland CRE / Total RBC: 154% Construction & Development Loans / Total RBC: 31% (3) $3.9B 22.1% of total UMB loans
Personal Banking Consumer 35 Strategic & Stable Source of Low-Cost Funds Diversified Products, Services & Engagement Hybrid Service & Sales Model—provides channel of choice & drives customer satisfaction New Down Payment Assistance Mortgage Program Consumer plays a strategic role for UMB as a large and stable source of deposits. Poised for continued asset growth. Metrics at or for the quarter ended 03/31/22; (1) Small business was moved from consumer to commercial as of 1Q’22; (2) 2021 average across 43 financial services companies. Source: Medallia, Inc. $11M 1Q ‘22 new mortgage requests from 47 applications Financial Education – powered by 7,300 1Q ‘22 page views for UMB Financial Education Center landing page Community Engagements & Sponsorships 20 Organizations engaged by UMB Community Development in 1Q ‘22 Growth engine for new customers and deepening existing relationships. Digital Banking $47mm Consumer deposits via Mobile +19% YoY 30% of non-mortgage loan applications $23mm 12% of new retail deposit accounts NPS Score 62.7 UMBF Industry Average (2) 51 Private Banking Strategically positioned for sales growth Retail Banking
Personal Banking Private Wealth Management 36 Composition as of 03/31/22. (1) Includes AUM and AUA. Personal Trust 22% Investment Advisory 36% Non-Managed AUA 29% IRAs 5% Brokerage 4% Other 4% Customer Assets Wealth Management
Financial planning Discretionary investment management Investment research & education Brokerage services
Trust Management and Estate Planning
Charitable foundation planning & administration Trustee & successor trustee services Personal custody, including self-directed IRAs Unique asset administration Fine art management Trust tax preparation
Family Wealth Management A multi-family office
Strategic wealth solutions for ultra-high net worth families Business succession planning & continuity Direct private equity investments opportunities New Assets / Sales (1) $11.8B Managed Assets (AUM) $4.9B Non-Managed Assets (AUA) $258mm YTD ‘22
Institutional Banking Fund Services & Institutional Custody 37 +18% YoY Best Interval Fund Administrator (1) Best Administrator – Technology (2) Fund Services – Registered Funds & Alternative Investments Institutional Custody $379B $419B $407B $345B Provides services for 1,700 funds, including registered and alternative investment funds, PE funds, real estate and venture capital funds and ETFs and more. One of the nation's leading providers of domestic and global custody, serving insurance companies, public & private corporations, nonprofits, municipalities, fund companies and endowments. Established in 1948. Best Custodian – 2021 (4) New Custody Accounts +24% Year-over-Year +207 Custody Assets +20% Year-over-Year $148B $405B (1) With Intelligence ‘19-’20 & ‘22 Awards; (2) Hedgeweek U.S. Awards ‘20 & PE Wire U.S. Awards ’20; (3) PE Wire ‘21; (4) HFM U.S. Services Awards ‘21. Best Administrator – GPs with assets <$30B (3) Assets Under Administration
Institutional Banking Corp/Specialty Trust & Capital Markets 38 (1) Ranked by proceeds and number of issues; (2)Thomson Reuters municipal rankings, Sept. 2021; (3) Debtwire - ranking 1H’21; (4) Green Street Advisors’ Asset-Based Alert – 2021. Corporate Trust & Escrow Services Provides trustee, paying agent and escrow services to municipal and corporate issuers. $34B Assets Under Administration Municipal Trustee (1) (2) & Paying Agent (2) in U.S. #3 Specialty Trust & Agency Solutions Services for asset-backed securitizations, aviation and other transportation and real estate projects. Workout and successor trustee services on behalf of bondholders of defaulted transactions. +46% New Business $ Volume YTD 466 1Q Deals +9% 121 New Deals YTD vs. 111 in 1Q ‘21 +91% Growth in New Business $ Volume YTD Examples of recent deals: Capital Markets Division Capital solutions including fixed income sales, trading and underwriting for institutional, municipal and not-for-profit organizations. $33,100,000
Housing System Rev. Refunding Bonds, Series ‘22 Sole Manager $19,655,000
Combined Tax & Rev. Certificates, Series ‘22 Senior Manager $2,200,000,000
General Obligation Bonds, Series ‘22 Co-Manager State of California City of Brownsville, TX Northwest Missouri State University Products and services offered through UMB Bank Capital Markets Division NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED. #1 Agent for Debtor-in-Possession financing (3) #7 Aviation & Asset-Based Securitization Trustee (4) TOP 10 Public Finance 62 2019 2020 2021 84 119 Closed Deals 34 Closed Deals in 1Q ’22 vs. 18 in 1Q ’21 +89%
FDIC Sweep Assets Under Administration $72B Institutional Banking Investor Solutions & Healthcare Services 39 Investor Solutions Annual ACH Transactions Healthcare Services Provides a suite of tax-advantaged benefit accounts including Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Commuter Benefit Accounts. HSA Account Holders 1.2mm In HSA Assets & Deposits $2.7B Top 10 HSA Custodians in the U.S. (2) TOP 10 Benefit Cards 4.9mm >65mm ~ 6mm accounts Recognized for Investment Quality (1) Named a Top HSA for Features & Investment Options (3) (1) Investor’s Business Daily 2021; (2) #6 by total accounts - Devenir Research Year-End ‘21; (3) Investor’s Business Daily ‘21. Our banking as a service (BaaS) solution includes deposit services for checking, saving, and investment accounts, including expanded FDIC insurance through our proprietary Sweep Program.
Payments Credit & Debit Card Products 40 $3,550 $3,789 $3,714 $3,723 1Q ’22 Card Spend
$3.7B 23rd In U.S. Credit Card Purchase Volume (1) #23 $3,658 Dollars in millions. (1) Rank in commercial, consumer and small business cards among top 50 U.S. issuers. Source: Nilson Report, December 2021. Card Purchase Volume & Interchange Trends
Appendix
Governance Our Board of Directors 42 AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee; RC = Risk Committee. Advisory Directors
Forward-Looking Statements 43 This presentation contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. 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, our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC).
In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements.
Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult 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.
Non-GAAP Reconciliations 44 The following are non-GAAP measures used by the company from time to time. To the extent a non-GAAP measure is used during this presentation, a reconciliation to such measure’s closest GAAP equivalent is provided below. The Company believes that these non-GAAP financial measures may be useful to investors because they adjust for items that management does not believe reflect the Company’s fundamental operating performance.
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 expense.
Pre-tax pre-provision earnings per share for the relevant period is defined as GAAP earnings per share, adjusted to reflect the impact of excluding income tax and provision expense.
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 book value per share is defined as the Company’s total shareholders’ equity, net of intangible assets, divided by total shares outstanding.
Tangible common equity ratio is calculated as the Company’s total shareholders’ equity, net of intangible assets, divided by total assets, net of intangible assets. Pre-Tax, Pre-Provision Income (unaudited, dollars in thousands except per share data)
Non-GAAP Reconciliations 45 Pre-Tax, Pre-Provision Income on a Fully Tax-Equivalent Basis (unaudited, dollars in thousands except per share data)
Non-GAAP Reconciliations 46 Tangible Book Value (unaudited, dollars in thousands except share and per share data)
Non-GAAP Reconciliations 47 Tangible Common Equity Ratio (unaudited, dollars in thousands)
48 Our Peer Group UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106
UMBFInvestorRelations@umb.com
April 26, 2022 2022 ANNUAL MEETING OF SHAREHOLDERS Exhibit 99.3
Business Meeting 2021 Results Questions & Answers Why UMB? Agenda
2022 Annual Meeting of Shareholders 3 Business Meeting Agenda Introduction of the Board of Directors Independent Registered Public Accounting Firm Appointment of Inspector of Election Presentation of List of Shareholders as of Record Date Report of Quorum Opening of the Polls and Review of Proposals Election of Directors Advisory Vote on Executive Compensation Ratification of Appointment of KPMG as Independent Registered Public Accounting Firm Closing of Polls and Preliminary Results
Board of Directors 4 Robin Beery CC (Chair), RC Tim Murphy AC, CC Janine Davidson CC, GC Tammy Peterman GC, RC K.C. Gallagher AC, RC Kris Robbins AC, RC (Chair) Greg Graves Lead Independent Director, GC (Chair) Josh Sosland GC, RC Mariner Kemper Chairman of the Board Leroy Williams CC, RC Sandy Kemper Jim Rine Advisory Director Gordon Lansford AC (Chair), CC Tom Wood Advisory Director AC = Audit Committee; CC = Compensation Committee; GC = Governance Committee; RC = Risk Committee
Business Meeting 2022 Annual Meeting of Shareholders
Agenda Business Meeting 2021 Results Questions & Answers Why UMB?
2021 Results Revenue 7 Diluted Earnings Per Share (“EPS”) Net Income $286.5 million $353.0 million Primary drivers of net income growth of $66.5 million: Lower expense for provision for credit losses +$110.5mm due to the 2020 implementation of a required accounting standard and improvements in macroeconomic factors; and Higher net interest income +$84.3mm, related to strong asset growth, the lower rate environment and proactive balance sheet management. Partially offset by: Expense growth of $11.6mm, driven largely by employee incentives tied to improved volumes and overall positive company performance, along with increased processing fees and software expense for our investments to support growth and an increase in charitable contributions; A $93.0mm reduction in noninterest income, due largely to market-related valuations in our equity investments (particularly our position in Tattooed Chef, which posted outsized gains in 2020), although several businesses, including fund services, corporate trust and bankcard, posted strong revenue; and Increased tax expense of -$23.7mm. +23.2% Total Revenue $1.3 billion ‘20 ‘21 Net Interest Income 64% ‘20 ‘21 Net Interest Income 57% Noninterest Income 36% Noninterest Income 43% $4.96 $5.93 $7.24 All comparisons are full-year 2021 as compared to full-year 2020.
8 2021 Results Earnings Summary Dollars in thousands, except per share amounts. The Company adopted ASU 2016-13 as of 1/1/2020; (2) Non-GAAP measure. See reconciliations and additional information on slides 27-29.
Total Deposits $27.1 billion $35.6 billion 2020 2021 2021 Results Balance Sheet Metrics 9 Loan–to–Deposit Ratio as of December 31, 2021 UMBF
Peer Median (1) 48% 74% Total Loans (2) Total Assets at year end, $ billions $27.1 billion $35.6 billion 2020 2021 Peer median total deposits increased 10.6% (1) +31.6% (1) Peer median source: S&P Global Market Intelligence; (2) PPP loans are excluded from total loan balances; (3) Ratio calculated on period-end balances. Growth rates are year-end 2021 balances as compared to year-end 2020 balances. Peer median total loans increased 5.7% (1) (2) +14.7% $17.0 billion $14.9 billion 2020 2021 +28.9%
2021 vs. 2020 (3)
Agenda Business Meeting 2021 Results Questions & Answers Why UMB?
Our philosophy never varies. Our business always responds. Why UMB For more than a century, UMB has been an unwavering partner helping people prosper as they achieve financial security, grow their businesses, retire with peace of mind, create legacies for future generations, and contribute to their communities.
An unwavering commitment to doing more for our customers. 12 Beyond The Numbers Our Culture Customers First We do the unparalleled to create an environment that consistently exceeds the expectations of our customers.
Integrity & Trust We demonstrate our uncompromising honesty and integrity to earn the trust of everyone we serve.
Performance & Strength We achieve sustainable greatness by delivering on our promise, remaining independent and maintaining financial soundness.
Associate Spirit We rely upon our people and their collective attitude and skills to differentiate us from our competitors.
Inclusion & Diversity We believe an inclusive and diverse culture energizes the workplace and ignites innovation. Our Values Our Commitment Our Vision
Supporting Customers & Communities Paycheck Protection Program 13 In Loans Originated $2.0B Businesses Supported 8,300+ PPP Loans in 43 States & Territories 15% 85% New Customers Existing Customers 43 Loan Breakdown by Size UMB Associate Efforts 200+ UMB associates who assisted with SBA PPP process 13% <$150k 53% $150k - $1mm 35% >$1mm 24/7 3 shifts worked around the clock to fund loans
Supporting Customers & Communities A Few Highlights 14 $6.6 million + UMB corporate donations to nonprofit organizations to support housing needs, small business efforts, education and emerging talent in underserved communities in our footprint Volunteer Time Off (“VTO”) Associates receive 16 hours / year to volunteer with a 501(c)(3) of their choice. $526,000 32% of associates pledged to contribute to community organizations in our workplace giving campaign School of Economics at UMB UMB Market First-time homebuyer grant and down payment assistance programs help qualified homebuyers achieve their dream of homeownership Education & Assistance UMB Financial Education Center - free financial education tools and resources to help address common financial challenge Volunteering and VTO participation was impacted by the COVID pandemic in 2021. Nevertheless, hundreds of associates supported communities. Youth Programs Interactive, educational experiences through curriculum-based field trips for Kansas City-area students. UMB leases space for $1 annually for the program’s downtown location and provides a pipeline of eager volunteers. A grocery store simulation where students practice healthy shopping on a budget to help build personal finance skills.
The American Bankers Association recognized UMB as the 2021 Financial Education winner in their Community Commitment Awards for the UMB Market. Associate Involvement Charitable Contributions Workplace Giving & Matching Gift Program 1,010 Associates participated in UMB’s matching gift program
Balances as of December 31, 2021. (1) Loan balances exclude PPP and credit card loans; (2) Includes consumer loans plus residential real estate loans to retail and private banking clients; (3) Products and services offered through UMB Bank Capital Markets Division; NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED 15 Our Business Model Diverse By Design Commercial Consumer Commercial & Personal Banking Services
2021 Annual Revenue: $922 million
Total Deposits: $21.1 billion Private Wealth $2.5B in loans (2) $6.8B in deposits AUM = $12.2B AUA = $4.9B Institutional Banking Services
2021 Annual Revenue: $361 million
Total Deposits: $14.5 billion Retail deposit and lending services through 91 branches and online Small business banking Consumer mortgage Private banking services Financial planning Investment management Trust and estate planning Family office Business exit planning Institutional Banking provides solutions for the entire marketplace. $453.2 billion in AUA. C&I and CRE Lending ABL and Factoring Treasury Management Merchant Payments Specialized Expertise: $14.2B in loans (1) $14.3B in deposits Agribusiness Energy Practice Finance Mezzanine debt & equity investments Aviation Construction Beverage Corporate Trust Bond trustee, paying agent & escrow services Institutional Custody Domestic & international custody services Fund Services Fund accounting, fund administration & transfer agency Specialty Trust & Agency Solutions Default workout & successor trustee services Aviation, ABS & loan agency services Capital Markets Division (3) Fixed income sales & trading Public finance Investor Solutions Banking, cash management & specialty services for financial firms Healthcare Services Health savings accounts Healthcare payment solutions
Built for the Ages Our Runway for Growth Opportunity to continue relative outperformance in loan growth Peer-leading levels of fee income Attractive deposit base Solid capital and liquidity positions support growth objectives Differentiated net interest income growth Time-tested underwriting philosophy Focus on returning value to shareholders
17 0.49% 0.25% 0.16% 0.74% 0.36% 0.16% 0.25% 0.10% 0.27% Resilient Credit Metrics Through All Economic Cycles Net Charge-Offs / Average Loans Nonperforming Loans / Loans 15 Year Average
0.30% 15 Year Average
0.45% 2021 Net Charge-offs
0.27% Of avg. loans 2021 Nonperforming Loans
0.54% Of loans (1) UMB traditional peer group (15 banks), as of latest available annual period. Source: S&P Global Market Intelligence; (2) All FDIC-insured institutions, as of latest available annual period. Source: FDIC Annual Statistics. 0.89% 0.47% 0.54%
Outperformance Building Long-Term Value 18 *KBW Nasdaq Regional Bank Index (median of 50 banks); **UMB’s traditional peers (median of 15 banks); ***Median of all publicly-traded banks with data reported for both 2006 and 2021. (1) Non-GAAP measure. See definitions and reconciliations on pages 27-29. Source: KRX, Peer and Industry data from S&P Global Market Intelligence. 15-Year Compounded Annual Growth Rates 2006 – 2021 (1)
19 Sustained Growth Our Commitment to Shareholders Annual Dividends Declared (1) 2021 = $1.38 +10.4%
vs. 2020 +263.2%
2001 - 2021 2022 = $1.48 +7.2%
vs. 2021 (1) Dividends adjusted for 2-for-1 stock split in 2006; (2) Annualized 2022 full-year dividend assumes all 4 quarters are $0.37/share, consistent with first quarter 2022 dividend. The Board of Directors may declare dividends of different amounts in future quarters; (3) S&P Dow Jones Indices, January 24, 2022. (2) (2)
20 Stock Performance Returning Value (1) Composite return of UMB’s traditional peer group (15 banks); (2) Chart Source: S&P Global Market Intelligence. Total Shareholder Return Full-Year 2021 assumes reinvestment of dividends 28.7% 34.9% 56.1%
21 Stock Performance Returning Value (1) Composite price performance of UMB’s traditional peer group (15 banks); (2) Chart Source: S&P Global Market Intelligence. -17.6% 7.2% 6.2% 1-Year Stock Price Performance April 2021 – April 2022
15-Year Stock Price Performance April 2007 – April 2022 monthly 22 Stock Performance Returning Value (1) Composite price performance of UMB’s traditional peer group (15 banks); (2) Chart Source: S&P Global Market Intelligence. -57.3% 12.9% 148.7%
2020 Corporate Citizenship Report 23 Corporate Citizenship Report Read our 2021 Corporate Citizenship & ESG Report at UMB.com/ESGreport 23
Questions & Answers 2022 Annual Meeting of Shareholders
Appendix 2022 Annual Meeting of Shareholders
26 Forward-Looking Statements This presentation contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. 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, our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC).
In addition to such factors that have been disclosed previously: macroeconomic and other challenges and uncertainties related to the COVID-19 pandemic, such as the impacts to the U.S. and global economies; and impacts related to or resulting from Russia’s military action in Ukraine, such as the broader impacts to financial markets and the global macroeconomic and geopolitical environments, may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements.
Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult 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.
27 Non-GAAP Reconciliations In this presentation, we provide information about pre-tax pre-provision income, net operating income, operating earnings per share-diluted (operating EPS-diluted), pre-tax, pre-provision earnings per share-diluted (PTPP EPS), 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 and the nearest comparable GAAP financial measures are reconciled on the next 2 slides. 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.
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 expense.
Pre-tax pre-provision earnings per share for the relevant period is defined as GAAP earnings per share, adjusted to reflect the impact of excluding income tax and provision expense.
Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding expenses related to acquisitions, severance expense, COVID-19 related expense, and the cumulative tax impact of these adjustments.
Operating EPS-diluted is calculated as diluted 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.
Tangible book value per share is defined as the Company’s total shareholders’ equity, net of intangible assets, divided by total shares outstanding.
28 Non-GAAP Reconciliations Pre-Tax, Pre-Provision Income Dollars in thousands, except per share amounts, unaudited. Tangible Book Value
29 Non-GAAP Reconciliations (1) Calculated using the Company's marginal tax rate of 22.2%. Net Operating Income Dollars in thousands, except per share amounts, unaudited.