UMBF UMB Financial Corporation

 

 

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): 7/22/2014

 

 

UMB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Commission File Number : 0-4887

 

MO		43-0903811
(State or other jurisdiction of incorporation)		(IRS Employer 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))

 

 

 

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Item 2.02

Results of Operations and Financial Condition

On July 22, 2014, UMB Financial Corporation (the “Company”) issued a press release announcing the financial results for the Company for the quarter ending June 30, 2014. A copy of the press release is attached as Exhibit 99.1.

The information contained in Item 2.02 of this Current Report and in Exhibit 99.1 is being furnished and shall not be deemed to be “filed” with the SEC for the purposes of Section 18 of the Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section.

 

Item 7.01

Regulation FD Disclosure

The information provided under Item 7.01 of this Current Report on Form 8-K is being furnished and is not deemed to be “filed” with the SEC for the purposes of Section 18 of the Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section.

The Company is furnishing a copy of materials that will be used in the Company’s shareholder conference call on July 23, 2014, at 9:30 a.m. (CST). A copy of the materials is attached as Exhibit 99.2 and will be available on the Company’s website at www.umbfinancial.com. The materials are dated July 22, 2014, and the Company disclaims any obligation to correct or update any of the materials in the future.

The Company’s July 22, 2014, press release that is attached as Exhibit 99.1 also announced that the Board of Directors declared a regular quarterly dividend of $0.225 per share payable on October 1, 2014, to shareholders of record on September 10, 2014.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit 99.1		Press Release announcing financial results for quarter ending June 30, 2014, and announcing dividend declaration
Exhibit 99.2		Investor Presentation Materials, dated July 22, 2014.

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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.

 

Date: July 22, 2014

Exhibit 99.1

 

UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106 816.860.7000 umb.com		News Release

//FOR IMMEDIATE RELEASE//

Media Contact: Kelli Christman: 816.860.5088

Investor Relations Contact: Abby Wendel: 816.860.1685

UMB Financial Corporation Reports Second Quarter 2014 Earnings of $34.7 million,

or $0.76 per Diluted Share

Selected second quarter financial highlights:

 

•

Average net loans for the three months ended June 30, 2014 increased 12.0 percent to $6.9 billion compared to the three months ended June 30, 2013; marks the 17th consecutive quarter of loan growth

 

•

Nonperforming loans decreased to 0.39 percent of loans as of June 30, 2014, from 0.40 percent of loans as of June 30, 2013

 

•

Noninterest income increased 18.0 percent from the second quarter of 2013 to $134.0 million; represents 60.9 percent of total revenue

 

•

Total company assets under management stood at a record $43.7 billion, an increase of 21.9 percent compared to the second quarter of 2013

 

•

Tier 1 capital ratio remains strong at 13.81 percent

KANSAS CITY, Mo. (July 22, 2014)—UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the three months ended June 30, 2014 of $34.7 million or $0.77 per share ($0.76 diluted). This is an increase of $4.7 million, or 15.8 percent, compared to second quarter 2013 earnings of $29.9 million or $0.75 per share ($0.74 diluted). Earnings for the six months ended June 30, 2014, were $58.1 million or $1.30 per share ($1.28 diluted). This is a decrease of $6.8 million, or 10.5 percent, compared to the prior year-to-date earnings of $64.9 million or $1.62 per share ($1.61 diluted).

“As our second quarter results demonstrate, the strength of our business model relies on diverse revenue sources, high quality credit, a strong balance sheet and low-cost funding,” said Mariner Kemper, Chairman and Chief Executive Officer. “Total company assets under management reached a record high this quarter at $43.7 million. Compared to the same period a year ago, AUM increased 21.9 percent, and over the past five years increased 34.1 percent on a compound annual growth rate basis. Loan growth continues to be a driving force behind our success with average net loans increasing 12.0 percent during the second quarter of 2014, as compared to the second quarter of 2013. This was our 17^th consecutive quarter of loan growth. Finally, noninterest income increased 18.0 percent, compared to the second quarter 2013, led by revenue growth in our investment management and asset servicing businesses. Diverse revenue, loan growth, total cost of funds at 10 basis points, and excellent credit quality demonstrate that our business model continues to serve us well.”

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Net Interest Income and Margin

Net interest income for the second quarter of 2014 increased $3.8 million, or 4.7 percent, compared to the same period in 2013. Average earning assets increased by $749.3 million, or 5.4 percent, compared to the second quarter of 2013. This increase was due to a $739.0 million, or 12.0 percent, increase in average loans. Net interest margin decreased three basis points to 2.53 percent for the three months ended June 30, 2014, compared to the same quarter in 2013.

Noninterest Income and Expense

Noninterest income increased $20.4 million, or 18.0 percent, for the three months ended June 30, 2014, compared to the same period in 2013. This increase is attributable to increased trust and securities processing income of $9.9 million, or 15.6 percent, for the three months ended June 30, 2014, compared to the same period in 2013. The increase in trust and securities processing income was primarily due to a $3.7 million, or 18.9 percent, increase in fees related to institutional and personal investment management services, a $3.1 million, or 16.3 percent, increase in fund administration and custody services, and a $2.2 million, or 10.0 percent increase, in advisory fee income from the Scout Funds. Equity earnings on alternative investments increased $3.5 million due to unrealized gains on Prairie Capital Management (“PCM”) equity method investments for the three months ended June 30, 2014, compared to the same period in 2013. Other noninterest income increased $4.5 million primarily driven by a gain on the sale of a branch property of $2.8 million and increased fair value adjustments on interest rate swap transactions of $0.8 million compared to the same period in 2013.

Noninterest expense increased $16.2 million, or 10.8 percent, for the three months ended June 30, 2014, compared to the same period in 2013. This increase is driven by higher salary and benefits expense of $6.0 million, or 7.1 percent, an increase in the contingency reserve of $5.3 million, an increase in equipment expense of $1.0 million, and an increase in other noninterest expense of $2.1 million. The increase in salary and benefits is due to increases in salaries and wages of $2.5 million, or 4.7 percent, a $1.2 million, or 6.7 percent, increase in commissions and bonuses, and a $2.3 million, or 17.4 percent, increase in employee benefits expense. The increase of $2.1 million in other noninterest expense is due to a $0.8 million increase in fair value adjustments on contingent consideration liabilities and a $0.6 million increase in fair value adjustments on interest rate swap transactions. On June 30, 2014, the Company entered into a settlement agreement to resolve objections to its calculation of the earn-out amount owed to the sellers of PCM and a related incentive bonus calculation for the employees of PCM. As of June 30, 2014, an additional $5.3 million of contingency reserve expense was recorded during the second quarter of 2014 for a total estimated settlement liability of $20.3 million.

“Our fee-based businesses continue to perform well, resulting in noninterest income at 60.9 percent of our total revenue,” said Peter deSilva, President and Chief Operating Officer. “Trust and securities processing revenue increased 15.6 percent to $73.4 million compared to the second quarter 2013. Scout Investments—our institutional investment management segment—delivered nearly half of the increase with 16.6 percent growth in noninterest income year-over-year. Revenue from our asset servicing business increased 17.7 percent compared to the second quarter 2013. Assets under management within the bank are now more than $11 billion—also a record—and asset management-related revenue within the bank increased 14.2 percent. Within our payment solutions segment, healthcare deposits increased 36.4 percent compared to the prior year and healthcare and flexible spending accounts increased more than 45 percent year-over-year to 4.6 million total accounts.”

Balance Sheet

Average total assets for the three months ended June 30, 2014, were $15.6 billion compared to $14.9 billion for the same period in 2013, an increase of $0.7 billion, or 5.0 percent. Average earning assets increased by $0.7 billion for the period, or 5.4 percent.

Average loan balances for the three months ended June 30, 2014, increased $739.0 million, or 12.0 percent, to $6.9 billion compared to the same period in 2013. Actual loan balances on June 30, 2014, were $6.9 billion, an increase of $0.6 billion, or 9.2 percent, compared to June 30, 2013. This increase

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was primarily driven by an increase in commercial loans of $207.5 million, or 6.2 percent, a $160.2 million, or 10.2 percent, increase in commercial real estate loans, and a $124.7 million, or 116.4 percent, increase in construction loans. Nonperforming loans increased to $27.2 million on June 30, 2014, from $25.5 million on June 30, 2013. As a percentage of loans, nonperforming loans decreased to 0.39 percent as of June 30, 2014, compared to 0.40 percent on June 30, 2013. Nonperforming loans are defined as nonaccrual loans and restructured loans. The company’s allowance for loan losses totaled $76.8 million, or 1.11 percent of loans, as of June 30, 2014, compared to $71.6 million, or 1.13 percent of loans, as of June 30, 2013.

For the three months ended June 30, 2014, average securities, including trading securities, totaled $7.0 billion. This is a decrease of $180.4 million, or 2.5 percent, from the same period in 2013.

Average total deposits increased $0.7 billion, or 6.0 percent, to $12.3 billion for the three months ended June 30, 2014, compared to the same period in 2013. Average noninterest-bearing demand deposits increased $516.7 million, or 11.2 percent, compared to 2013. Average interest-bearing deposits increased by $183.2 million, or 2.6 percent, in 2014 as compared to 2013. Total deposits as of June 30, 2014, were $12.2 billion, compared to $11.7 billion as of June 30, 2013, a 3.8 percent increase. Also, as of June 30, 2014, noninterest-bearing demand deposits were 44.4 percent of total deposits.

As of June 30, 2014, UMB had total shareholders’ equity of $1.6 billion, an increase of 30.6 percent as compared to the same period in 2013. This increase is primarily attributable to the common stock issuance the company completed in September 2013.

“True to our strategy to rotate out of the investment portfolio and into loans, the increase in interest income in the second quarter came from loan volume and changes to the earning asset mix,” said Brian Walker, Chief Financial Officer. “The average balance of the investment portfolio decreased 2.1 percent year-over-year. Our bias toward shortening the duration of the portfolio, combined with the strategy to rotate into loans further demonstrates our balanced approach toward asset sensitivity while guarding against a continued, sustained low interest rate environment. We believe we are well positioned to benefit in a rising rate environment.”

Year-to-Date

Earnings for the six months ended June 30, 2014, were $58.1 million or $1.30 per share ($1.28 diluted). This is a decrease of $6.8 million, or 10.5 percent, compared to the prior year-to-date earnings of $64.9 million or $1.62 per share ($1.61 diluted).

Net interest income for the six months ended June 30, 2014, increased $9.8 million, or 6.1 percent, compared to the same period in 2013. Net interest margin decreased to 2.45 percent for the six months ended June 30, 2014, as compared to 2.53 percent for the same period in 2013.

Noninterest income increased $22.4 million, or 9.5 percent, to $257.0 million for the six months ended June 30, 2014, as compared to the same period in 2013. The increase in noninterest income is primarily driven by increased trust and securities processing income of $19.1 million, or 15.2 percent. The increase in trust and securities processing income was primarily due to a $6.7 million, or 17.2 percent, increase in fees related to institutional and personal investment management services, a $6.5 million, or 15.0 percent, increase in advisory fee income from the Scout Funds, and a $4.5 million, or 11.6 percent, increase in fund administration and custody services. Additional increases in noninterest income include a $6.0 million increase in equity earnings on alternative investments due to unrealized gains on PCM equity method investments and a $4.1 million, or 69.0 percent increase in other noninterest income. The increase in other noninterest income is driven by $2.8 million gain on the sale of a branch property and a $1.4 million increase in fair value adjustments on interest rate swap transactions during the first six months of 2014 compared to the same period in 2013. These increases were offset by a decrease in trading and investment banking income of $1.8 million and a decrease in gains on securities available for sale of $3.4 million in the first six months of 2014 compared to the same period in 2013.

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Noninterest expense increased $38.1 million, or 12.7 percent, for the six months ended June 30, 2014, compared to the same period in 2013. This increase is driven by an increase in salary and employee benefit expense of $11.1 million, or 6.7 percent, and a $20.3 million increase in the contingency reserve. As noted above, $20.3 million of contingency reserve has been recognized in 2014 in conjunction with the settlement agreement entered into on June 30, 2014, to resolve the PCM dispute. Of this amount $15.0 million was recognized in the first quarter of 2014 and $5.3 million was recognized in the second quarter of 2014.

Dividend Declaration

The Board of Directors declared during the company’s quarterly board meeting a $0.225 quarterly cash dividend, payable on October 1, 2014, to shareholders of record at the close of business on September 10, 2014.

Conference Call

The company plans to host a conference call to discuss its 2014 second quarter earnings results on July 23, 2014, at 9:30 a.m. (CDT).

Interested parties may access the call by dialing (toll-free) 800-524-8950 or (U.S.) 416-260-0113. The live call can also be accessed by visiting the investor relations area of umbfinancial.com or by using the following the link:

http://event.on24.com/r.htm?e=816187&s=1&k=2C36A678B70F9F90A5C30FBBFC76E890

A replay of the conference call may be heard until August 8, 2014, by calling (toll-free) 888-203-1112 or (U.S.) 719-457-0820. The replay pass code required for playback is conference identification number 5599321. The call replay may also be accessed via the company’s website umb.com by visiting the investor relations area.

Forward-Looking Statements:

This release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. 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, 2013, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the SEC. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

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About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors. For more information, visit umb.com, umbfinancial.com, blog.umb.com or follow us on Twitter at @UMBBank, Facebook at facebook.com/UMBBank and LinkedIn at linkedin.com/company/umb-bank.

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CONSOLIDATED BALANCE SHEETS		UMB Financial Corporation
(unaudited, dollars in thousands)

 

		June 30,
		2014				2013
Assets
Loans		$	6,920,683			$	6,338,921
Allowance for loan losses			(76,802	)			(71,647	)
Net loans			6,843,881				6,267,274
Loans held for sale			3,156				6,693
Investment securities:
Available for sale			6,700,623				6,944,358
Held to maturity			238,799				160,328
Trading securities			26,484				47,996
Federal Reserve Bank Stock and other			67,527				25,955
Total investment securities			7,033,433				7,178,637
Federal funds and resell agreements			82,652				66,973
Interest-bearing due from banks			255,453				607,470
Cash and due from banks			639,878				415,489
Bank premises and equipment, net			250,655				246,300
Accrued income			73,805				71,817
Goodwill			209,758				209,758
Other intangibles			49,888				61,994
Other assets			120,131				120,812
Total assets		$	15,562,690			$	15,253,217
Liabilities
Deposits:
Noninterest-bearing demand		$	5,399,733			$	4,887,643
Interest-bearing demand and savings			5,754,573				5,801,388
Time deposits under $100,000			442,361				509,412
Time deposits of $100,000 or more			577,622				531,307
Total deposits			12,174,289				11,729,750
Federal funds and repurchase agreements			1,607,294				2,157,979
Short-term debt			—				514
Long-term debt			5,745				4,063
Accrued expenses and taxes			131,996				117,916
Other liabilities			42,024				16,523
Total liabilities			13,961,348				14,026,745
Shareholders’ Equity
Common stock			55,057				55,057
Capital surplus			887,086				736,456
Retained earnings			922,268				834,445
Accumulated other comprehensive income (loss)			16,901				(22,227	)
Treasury stock			(279,970	)			(377,259	)
Total shareholders’ equity			1,601,342				1,226,472
Total liabilities and shareholders’ equity		$	15,562,690			$	15,253,217

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Consolidated Statements of Income		UMB Financial Corporation
(unaudited, dollars in thousands except share and per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2014				2013				2014				2013
Interest Income
Loans		$	60,309			$	56,615			$	119,209			$	111,335
Securities:
Taxable interest			19,021				18,841				37,982				37,305
Tax-exempt interest			9,798				10,118				19,705				19,877
Total securities income			28,819				28,959				57,687				57,182
Federal funds and resell agreements			46				40				79				64
Interest-bearing due from banks			466				330				1,589				1,000
Trading securities			149				268				272				533
Total interest income			89,789				86,212				178,836				170,114
Interest Expense
Deposits			3,092				3,333				6,151				7,125
Federal funds and repurchase agreements			454				491				935				1,058
Other			73				61				135				121
Total interest expense			3,619				3,885				7,221				8,304
Net interest income			86,170				82,327				171,615				161,810
Provision for loan losses			5,000				5,000				9,500				7,000
Net interest income after provision for loan losses			81,170				77,327				162,115				154,810
Noninterest Income
Trust and securities processing			73,357				63,486				144,920				125,798
Trading and investment banking			6,409				5,423				10,732				12,532
Service charges on deposits			20,627				20,882				42,185				42,405
Insurance fees and commissions			732				1,236				1,335				2,198
Brokerage fees			3,075				2,886				4,890				5,832
Bankcard fees			17,185				16,032				32,808				32,470
Gains on sale of securities available for sale, net			2,569				1,519				4,039				7,412
Equity earnings on alternative investments			3,462				—				5,992				—
Other			6,585				2,121				10,064				5,954
Total noninterest income			134,001				113,585				256,965				234,601
Noninterest Expense
Salaries and employee benefits			89,532				83,566				178,413				167,268
Occupancy, net			9,705				9,273				19,410				19,160
Equipment			12,920				11,873				25,583				23,807
Supplies and services			5,554				5,362				10,191				9,849
Marketing and business development			6,307				5,705				10,909				9,977
Processing fees			14,817				14,293				28,468				28,383
Legal and consulting			4,632				4,844				8,004				8,445
Bankcard			4,997				4,709				8,685				9,257
Amortization of intangible assets			3,074				3,354				6,176				6,809
Regulatory fees			2,709				2,484				5,225				4,395
Contingency reserve			5,272				—				20,272				—
Other			6,992				4,848				17,416				13,339
Total noninterest expense			166,511				150,311				338,752				300,689
Income before income taxes			48,660				40,601				80,328				88,722
Income tax provision			13,988				10,672				22,243				23,852
Net income		$	34,672			$	29,929			$	58,085			$	64,870
Per Share Data
Net income—basic		$	0.77			$	0.75			$	1.30			$	1.62
Net income—diluted			0.76				0.74				1.28				1.61
Dividends			0.225				0.215				0.450				0.430
Weighted average shares outstanding			44,823,370				39,966,869				44,782,944				39,924,423

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Statements of Consolidated Comprehensive Income (Loss)		UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Net Income		$	34,672			$	29,929			$	58,085			$	64,870
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities:
Change in unrealized holding gains (losses), net			50,910				(136,367	)			83,369				(163,415	)
Less: Reclassifications adjustment for gains included in net income			(2,569	)			(1,519	)			(4,039	)			(7,412	)
Change in unrealized gains (losses) on securities during the period			48,341				(137,886	)			79,330				(170,827	)
Income tax (benefit) expense			(18,143	)			52,087				(29,789	)			63,012
Other comprehensive income (loss)			30,198				(85,799	)			49,541				(107,815	)
Comprehensive income (loss)		$	64,870			$	(55,870	)		$	107,626			$	(42,945	)

 

Consolidated Statements of
Shareholders’ Equity		UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)

 

														Accumulated
														Other
		Common				Capital				Retained				Comprehensive				Treasury
		Stock				Surplus				Earnings				Income (Loss)				Stock				Total
Balance—January 1, 2013		$	55,057			$	732,069			$	787,015			$	85,588			$	(380,384	)		$	1,279,345
Total comprehensive income (loss)			—				—				64,870				(107,815	)			—				(42,945	)
Cash dividends ($0.43 per share)			—				—				(17,440	)			—				—				(17,440	)
Purchase of treasury stock			—				—				—				—				(1,750	)			(1,750	)
Issuance of equity awards			—				(2,466	)			—				—				2,916				450
Recognition of equity based compensation			—				4,096				—				—				—				4,096
Net tax benefit related to equity compensation plans			—				503				—				—				—				503
Sale of treasury stock			—				198				—				—				104				302
Exercise of stock options			—				2,056				—				—				1,855				3,911
Balance—June 30, 2013		$	55,057			$	736,456			$	834,445			$	(22,227	)		$	(377,259	)		$	1,226,472
Balance—January 1, 2014		$	55,057			$	882,407			$	884,630			$	(32,640	)		$	(283,389	)		$	1,506,065
Total comprehensive income			—				—				58,085				49,541				—				107,626
Cash dividends ($0.45 per share)			—				—				(20,447	)			—				—				(20,447	)
Purchase of treasury stock			—				—				—				—				(3,165	)			(3,165	)
Issuance of equity awards			—				(3,395	)			—				—				3,865				470
Recognition of equity based compensation			—				4,733				—				—				—				4,733
Net tax benefit related to equity compensation plans			—				1,202				—				—				—				1,202
Sale of treasury stock			—				300				—				—				159				459
Exercise of stock options			—				1,839				—				—				2,560				4,399
Balance—June 30, 2014		$	55,057			$	887,086			$	922,268			$	16,901			$	(279,970	)		$	1,601,342

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Average Balances / Yields and Rates		UMB Financial Corporation
(tax—equivalent basis)
(unaudited, dollars in thousands)

 

		Three Months Ended June 30,
		2014								2013
		Average				Average				Average				Average
		Balance				Yield/Rate				Balance				Yield/Rate
Assets
Loans, net of unearned interest		$	6,897,840				3.51	%		$	6,158,821				3.69	%
Securities:
Taxable			4,836,080				1.58				4,978,109				1.52
Tax-exempt			2,104,368				2.88				2,113,009				2.97
Total securities			6,940,448				1.97				7,091,118				1.95
Federal funds and resell agreements			32,692				0.56				28,524				0.56
Interest-bearing due from banks			619,094				0.30				432,588				0.31
Trading securities			36,785				1.80				66,482				1.79
Total earning assets			14,526,859				2.63				13,777,533				2.67
Allowance for loan losses			(75,929	)							(70,004	)
Other assets			1,167,262								1,167,899
Total assets		$	15,618,192							$	14,875,428
Liabilities and Shareholders’ Equity
Interest-bearing deposits		$	7,126,614				0.17	%		$	6,943,399				0.19	%
Federal funds and repurchase agreements			1,592,986				0.11				1,848,118				0.11
Borrowed funds			5,771				5.07				4,592				5.33
Total interest-bearing liabilities			8,725,371				0.17				8,796,109				0.18
Noninterest-bearing demand deposits			5,152,980								4,636,240
Other liabilities			154,229								153,227
Shareholders’ equity			1,585,612								1,289,852
Total liabilities and shareholders’ equity		$	15,618,192							$	14,875,428
Net interest spread							2.46	%							2.49	%
Net interest margin							2.53								2.56

 

		Six Months Ended June 30,
		2014								2013
		Average				Average				Average				Average
		Balance				Yield/Rate				Balance				Yield/Rate
Assets
Loans, net of unearned interest		$	6,788,991				3.54	%		$	5,987,788				3.75	%
Securities:
Taxable			4,861,475				1.58				4,925,312				1.53
Tax-exempt			2,107,119				2.90				2,054,141				3.02
Total securities			6,968,594				1.98				6,979,453				1.97
Federal funds and resell agreements			29,939				0.53				23,858				0.54
Interest-bearing due from banks			1,154,811				0.28				701,282				0.29
Trading securities			37,682				1.63				62,048				1.92
Total earning assets			14,980,017				2.55				13,754,429				2.65
Allowance for loan losses			(75,466	)							(70,750	)
Other assets			1,160,124								1,145,799
Total assets		$	16,064,675							$	14,829,478
Liabilities and Shareholders’ Equity
Interest-bearing deposits		$	7,545,182				0.16	%		$	6,980,728				0.21	%
Federal funds and repurchase agreements			1,630,169				0.12				1,761,074				0.12
Borrowed funds			5,738				4.74				4,989				4.89
Total interest-bearing liabilities			9,181,089				0.16				8,746,791				0.19
Noninterest-bearing demand deposits			5,160,206								4,631,425
Other liabilities			156,608								165,117
Shareholders’ equity			1,566,772								1,286,145
Total liabilities and shareholders’ equity		$	16,064,675							$	14,829,478
Net interest spread							2.39	%							2.46	%
Net interest margin							2.45								2.53

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SECOND QUARTER 2014
FINANCIAL HIGHLIGHTS		UMB Financial Corporation
(unaudited, dollars in thousands, except share and per share data)

 

Six Months Ended June 30		2014				2013
Net interest income		$	171,615			$	161,810
Provision for loan losses			9,500				7,000
Noninterest income			256,965				234,601
Noninterest expense			338,752				300,689
Income before income taxes			80,328				88,722
Net income			58,085				64,870
Net income per share—Basic			1.30				1.62
Net income per share—Diluted			1.28				1.61
Return on average assets			0.73	%			0.88	%
Return on average equity			7.48	%			10.17	%
Three Months Ended June 30
Net interest income		$	86,170			$	82,327
Provision for loan losses			5,000				5,000
Noninterest income			134,001				113,585
Noninterest expense			166,511				150,311
Income before income taxes			48,660				40,601
Net income			34,672				29,929
Net income per share—Basic			0.77				0.75
Net income per share—Diluted			0.76				0.74
Return on average assets			0.89	%			0.81	%
Return on average equity			8.77	%			9.31	%
At June 30
Assets		$	15,562,690			$	15,253,217
Loans, net of unearned interest			6,920,683				6,338,921
Securities			7,033,433				7,178,637
Deposits			12,174,289				11,729,750
Shareholders’ equity			1,601,342				1,226,472
Book value per share			35.21				30.20
Market price per share			63.39				55.67
Equity to assets			10.29	%			8.04	%
Allowance for loan losses		$	76,802			$	71,647
As a % of loans			1.11	%			1.13	%
Nonaccrual and restructured loans		$	27,175			$	25,489
As a % of loans			0.39	%			0.40	%
Loans over 90 days past due		$	4,522			$	4,013
As a % of loans			0.07	%			0.06	%
Other real estate owned		$	1,455			$	3,573
Net loan charge-offs quarter-to-date		$	3,713			$	3,234
As a % of average loans			0.22	%			0.21	%
Net loan charge-offs year-to-date		$	7,449			$	6,779
As a % of average loans			0.22	%			0.23	%
Common shares outstanding			45,475,197				40,610,316
Average Balances
Six Months Ended June 30
Assets		$	16,064,675			$	14,829,478
Loans, net of unearned interest			6,788,991				5,987,788
Securities			7,006,276				7,041,501
Deposits			12,705,388				11,612,153
Shareholders’ equity			1,566,772				1,286,145

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Business Segment Information		UMB Financial Corporation
(unaudited, dollars in thousands)

 

		Three Months Ended June 30, 2014
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	72,481			$	12,390			$	(1	)		$	1,300			$	86,170
Provision for loan losses			2,686				2,314				—				—				5,000
Noninterest income			56,006				21,219				33,999				22,777				134,001
Noninterest expense			100,928				24,603				22,111				18,869				166,511
Income before taxes			24,873				6,692				11,887				5,208				48,660
Income tax expense			7,211				1,910				3,375				1,492				13,988
Net income		$	17,662			$	4,782			$	8,512			$	3,716			$	34,672
Average assets		$	12,008,000			$	2,148,000			$	69,000			$	1,393,000			$	15,618,000

 

		Three Months Ended June 30, 2013
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	70,558			$	11,192			$	(10	)		$	587			$	82,327
Provision for loan losses			1,628				3,372				—				—				5,000
Noninterest income			46,436				18,640				29,155				19,354				113,585
Noninterest expense			92,540				21,850				18,856				17,065				150,311
Income before taxes			22,826				4,610				10,289				2,876				40,601
Income tax expense			6,035				1,203				2,708				726				10,672
Net income		$	16,791			$	3,407			$	7,581			$	2,150			$	29,929
Average assets		$	11,201,000			$	1,793,000			$	80,000			$	1,801,000			$	14,875,000

 

		Six Months Ended June 30, 2014
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	143,602			$	24,778			$	(3	)		$	3,238			$	171,615
Provision for loan losses			5,112				4,388				—				—				9,500
Noninterest income			103,425				41,453				68,094				43,993				256,965
Noninterest expense			208,671				45,631				47,998				36,452				338,752
Income before taxes			33,244				16,212				20,093				10,779				80,328
Income tax expense			9,242				4,485				5,523				2,993				22,243
Net income		$	24,002			$	11,727			$	14,570			$	7,786			$	58,085
Average assets		$	12,204,000			$	2,023,000			$	71,000			$	1,767,000			$	16,065,000

 

		Six Months Ended June 30, 2013
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	137,818			$	22,740			$	(10	)		$	1,262			$	161,810
Provision for loan losses			1,937				5,063				—				—				7,000
Noninterest income			99,184				38,077				57,708				39,632				234,601
Noninterest expense			184,076				41,968				37,700				36,945				300,689
Income before taxes			50,989				13,786				19,998				3,949				88,722
Income tax expense			13,740				3,737				5,376				999				23,852
Net income		$	37,249			$	10,049			$	14,622			$	2,950			$	64,870
Average assets		$	11,294,000			$	1,726,000			$	78,000			$	1,731,000			$	14,829,000

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