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): 7/28/2015

 

 

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 28, 2015, UMB Financial Corporation (the “Company”) issued a press release announcing the financial results for the Company for the quarter ending June 30, 2015. A copy of the press release is attached as Exhibit 99.1.

The information contained under Item 2.02 of this Current Report and in Exhibit 99.1 is being furnished and shall not be deemed filed 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 29, 2015, at 8:30 a.m. (CDT). 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 July 28, 2015, and the Company disclaims any obligation to correct or update any of the materials in the future.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit 99.1		Press release announcing 1st quarter financial results.
Exhibit 99.2		Presentation for Conference Call.

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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 28, 2015

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: Kelli Christman: 816.860.5088

Investor Relations Contact: Kay Gregory: 816.860.7106

UMB Financial Corporation Reports Second Quarter 2015 Earnings of $30.2 million, or $0.65 per Diluted Share

Selected second quarter financial highlights:

 

•

Closed on the acquisition of Marquette Financial Companies on May 31, 2015, adding assets with an acquired value of $1.3 billion to the balance sheet

 

•

Loans at June 30, 2015, increased 28.8 percent to $8.9 billion with legacy UMB loans having increased 14.4 percent to $7.9 billion compared to June 30, 2014

 

•

Total deposits at June 30, 2015, increased 19.1 percent to $14.5 billion with legacy UMB deposits having increased 11.5 percent to $13.6 billion compared to June 30, 2014

 

•

Noninterest income decreased 10.8 percent from the second quarter 2014 to $119.6 million, and was 55.1 percent of total revenue

 

•

Total assets under management stood at $42.5 billion at June 30, 2015

 

•

Tier 1 capital ratio remains strong at 12.77 percent

KANSAS CITY, Mo. (July 28, 2015) – UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the three months ended June 30, 2015 of $30.2 million or $0.65 per share ($0.65 diluted). This is a decrease of $4.5 million, or 12.9 percent, compared to second quarter 2014 earnings of $34.7 million or $0.77 per share ($0.76 diluted). Earnings for the six months ended June 30, 2015, were $64.0 million or $1.40 per share ($1.39 diluted). This is an increase of $5.9 million, or 10.1 percent, compared to the earnings for the six months ended June 30, 2014 of $58.1 million or $1.30 per share ($1.28 diluted).

On May 31, 2015 the company completed its previously announced acquisition of Marquette Financial Companies (Marquette). This acquisition resulted in assets with an acquired value of $1.3 billion being added to the company’s balance sheet on that date.

“The highlight of the second quarter was closing on our acquisition of Marquette Financial Companies,” said Mariner Kemper, Chairman and Chief Executive Officer. “The combination is already producing positive results, helping drive a $2.0 billion, or 28.8 percent, end-of-period increase in total loan balances compared to the second quarter of 2014. At June 30, the acquired loans plus production in the legacy Marquette channels comprised $1.0 billion of the increase in total loan balances. The remaining increase of $1.0 billion was generated by legacy UMB lenders, for a year-over-year increase of 14.4 percent, and a linked-quarter increase of 5.6 percent. This is a testament to the strength of our commercial-lending franchise.

“While we experienced solid net-interest-income growth in the second quarter, noninterest income contracted, primarily due to continued revenue headwinds from Scout Investments. To address ongoing revenue and expense pressures, we remain focused on revenue growth but have increased attention on our expense structure as well. In the second quarter, we consolidated several customer-facing

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lines of business—primarily in the bank—to more efficiently deliver our customer-service strategy. Additionally, we reorganized our technology, operations, and related support groups. These and related actions are a strategic first step to improve our efficiency ratio and are expected to provide an annualized cost savings of approximately $3.6 million. We have already begun to engage in additional planning and are committed to sharing details later in 2015.”

Net Interest Income and Margin

Net interest income for the second quarter of 2015 increased $11.2 million, or 13.0 percent, compared to the same period in 2014. Average earning assets increased $1.4 billion, or 10.0 percent, compared to the second quarter of 2014. This increase was primarily due to a $1.2 billion, or 17.0 percent, increase in average loans. Marquette added earning assets with an acquired value of $1.3 billion including loan balances with an acquired value of $980.3 million on May 31, 2015. Net interest margin increased six basis points to 2.59 percent for the three months ended June 30, 2015, compared to the same quarter in 2014.

Noninterest Income and Expense

Noninterest income decreased $14.5 million, or 10.8 percent, for the three months ended June 30, 2015, compared to the same period in 2014. This decrease is largely attributable to decreased trust and securities processing income of $6.0 million, or 8.1 percent, for the three months ended June 30, 2015, compared to the same period in 2014. This decrease in trust and securities processing income was primarily due to an $8.5 million, or 34.9 percent, decrease in advisory fee income from the Scout Funds. This decrease was offset by an increase in fees related to institutional and personal investment management services of $1.5 million, or 6.6 percent, an increase in fund administration and custody services of $0.5 million, or 2.2 percent, and an increase in corporate trust fees of $0.5 million, or 15.8 percent. Equity earnings on alternative investments decreased $4.6 million due to a decline in unrealized gains on Prairie Capital Management (PCM) equity method investments for the three months ended June 30, 2015, compared to the same period in 2014. Other noninterest income decreased $3.0 million primarily driven by a gain on the sale of a branch property of $2.8 million that was recorded in the second quarter of 2014.

Noninterest expense increased $5.8 million, or 3.5 percent, for the three months ended June 30, 2015, compared to the same period in 2014. Salary and benefits expense increased $10.1 million, or 11.2 percent, due to increases in salaries and wages of $7.4 million, or 13.4 percent, a $1.9 million, or 9.9 percent, increase in commissions and bonuses, and a $0.8 million, or 5.0 percent, increase in employee benefits expense. The acquisition of Marquette added approximately $3.4 million of salary and benefits expense for the second quarter of 2015. Equipment expense increased $2.5 million, or 19.3 percent, due to increased computer and hardware costs related to investments for regulatory requirements, cyber security and the ongoing modernization of our core systems. These increases were offset by a decrease in processing fees of $2.2 million, or 14.6 percent, due to decreased fees paid by the advisor to distributors of the Scout Funds. The second quarter of 2014 included an additional $5.3 million of contingency reserve expense related to the earn-out amount and related incentive bonus compensation for the employees of PCM that was not repeated in the second quarter of 2015. Total acquisition expenses recognized in noninterest expense during the second quarter totaled $0.7 million.

Balance Sheet

Average total assets for the three months ended June 30, 2015 were $17.4 billion compared to $15.6 billion for the same period in 2014, an increase of $1.8 billion, or 11.5 percent. Average earning assets increased by $1.4 billion for the period, or 10.0 percent.

Average loan balances for the three months ended June 30, 2015, increased $1.2 billion, or 17.0 percent, to $8.1 billion compared to the same period in 2014. Actual loan balances on June 30, 2015, were $8.9 billion, an increase of $2.0 billion, or 28.8 percent, compared to June 30, 2014. The overall actual loan increase at June 30, 2015 was driven by an increase in commercial real estate loans of $658.2 million, or 38.1 percent, a $593.3 million, or 16.8 percent, increase in commercial loans, a $211.3 million, or 100.0 percent, increase in asset-based loans, a $163.9 million, or 70.7 percent, increase in construction real estate loans, a $134.2 million, or 44.9 percent, increase in residential real estate loans, and a $109.2 million, or 100.0 percent, increase in factoring loans. A significant driver in

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the increase in loans was the acquisition of Marquette and its loan portfolio with an acquired value of $980.3 million at May 31, 2015. These acquired Marquette loans and loans originated through the legacy Marquette channels had an actual balance at June 30, 2015 of $1.0 billion. This total includes $343.4 million in commercial real estate loans, $211.3 million in asset-based loans, $109.2 million in factoring loans, $105.7 million in commercial loans, and $98.3 million in residential real estate loans. The remaining increase in loans of $1.0 billion compared to June 30, 2014 is comprised of loans originated through the legacy UMB channels. This increase was primarily driven by an increase in commercial loans of $487.6 million and a $314.8 million increase in commercial real estate loans.

Nonperforming loans increased to $37.6 million on June 30, 2015, from $27.2 million on June 30, 2014. Nonperforming loans are defined as nonaccrual loans and restructured loans. As a percentage of loans, nonperforming loans increased to 0.42 percent as of June 30, 2015, compared to 0.39 percent on June 30, 2014. The company’s allowance for loan losses totaled $77.7 million, or 0.87 percent of loans, as of June 30, 2015, compared to $76.8 million, or 1.11 percent of loans, as of June 30, 2014.

For the three months ended June 30, 2015, average securities, including trading securities, totaled $7.4 billion. This is an increase of $442.3 million, or 6.3 percent, from the same period in 2014.

Average total deposits increased $1.1 billion, or 9.4 percent, to $13.4 billion for the three months ended June 30, 2015, compared to the same period in 2014. Deposit balances with an acquired value of $944.1 million at May 31, 2015 were acquired as part of the Marquette acquisition. Average noninterest-bearing demand deposits increased $351.4 million, or 6.8 percent, in the period compared to the same one in 2014. Average interest-bearing deposits increased by $798.1 million, or 11.2 percent, in the second quarter of 2015 as compared to the same period in 2014. Total actual deposits as of June 30, 2015, were $14.5 billion, compared to $12.2 billion as of June 30, 2014, a 19.1 percent increase. Also, for the three months ended June 30, 2015, average noninterest-bearing demand deposits were 41.0 percent of average total deposits.

As of June 30, 2015, UMB had total shareholders’ equity of $1.9 billion, an increase of 16.0 percent as compared to June 30, 2014. This increase is primarily attributable to the common stock issuance associated with the acquisition of Marquette of $179.7 million at May 31, 2015.

“The acquisition of Marquette furthers our strategy to shift the mix of earning assets,” said Brian Walker, Chief Financial Officer. “This continued shift, along with solid loan growth across our footprint, resulted in a 60.1 percent average loan-to-deposit ratio compared to 56.2 percent for the quarter ended June 30, 2014, and a net interest margin of 2.59 percent, an increase from 2.53 percent a year ago.”

Year-to-Date

Earnings for the six months ended June 30, 2015, were $64.0 million or $1.40 per share ($1.39 diluted). This is an increase of $5.9 million, or 10.1 percent, compared to earnings for the six months ended June 30, 2014, of $58.1 million or $1.30 per share ($1.28 diluted).

Net interest income for the six months ended June 30, 2015, increased $16.1 million, or 9.4 percent, compared to the same period in 2014. Net interest margin increased to 2.53 percent for the six months ended June 30, 2015, as compared to 2.45 percent for the same period in 2014.

Noninterest income decreased $12.2 million, or 4.8 percent, to $244.8 million for the six months ended June 30, 2015, as compared to the same period in 2014. The decrease in noninterest income is primarily driven by decreased trust and securities processing income of $10.2 million, or 7.1 percent. The decrease in trust and securities processing income was primarily due to a $17.4 million, or 35.2 percent, decrease in advisory fee income from the Scout Funds, partially offset by an increase of $3.7 million, or 8.1 percent, in fees related to institutional and personal investment management services and a $2.6 million, or 5.9 percent, increase in fund administration and custody services. Equity earnings on alternative investments decreased $8.0 million compared to the same period in 2014. Gains on securities available for sale of $8.3 million were recognized in the first six months of 2015 compared to $4.0 million for the same period in 2014, a $4.3 million increase.

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Noninterest expense decreased $1.8 million, or 0.5 percent, for the six months ended June 30, 2015, compared to the same period in 2014. This decrease was driven by a $20.3 million contingency reserve expense 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. This decrease was largely offset by an increase in salaries and employee benefits of $19.7 million, or 11.0 percent, compared to the same period in 2014. The drivers of this increase include an increase in salary and wage expense of $12.2 million, or 11.3 percent, an increase in bonus and commission expense of $5.1 million, or 13.7 percent, and an increase in employee benefits expense of $2.4 million, or 7.2 percent. The acquisition of Marquette added approximately $3.4 million of salary and benefits expense for the first six months of 2015. Total acquisition expenses recognized in noninterest expense during the first six months of 2015 totaled $1.5 million.

Dividend Declaration

The Board of Directors declared during the company’s quarterly board meeting a $0.235 quarterly cash dividend, payable on Oct. 1, 2015, to shareholders of record at the close of business on Sept. 10, 2015.

Conference Call

The company plans to host a conference call to discuss its 2015 second quarter earnings results on July 29, 2015, at 8:30 a.m. (CDT).

Interested parties may access the call by dialing (toll-free) 877-267-8760 or (U.S.) 412-542-4148 and requesting to join the UMB Financial call. The live call can also be accessed by visiting the investor relations area of umbfinancial.com or by using the following the link:

UMB Financial 2Q 2015 Conference Call

A replay of the conference call may be heard through August 12, 2015, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10068556. The call replay may also be accessed via the company’s website umbfinancial.com by visiting the investor relations area.

Forward-Looking Statements and Non-GAAP Reconciliation:

This release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as our statements about expected cost savings. 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, 2014, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the SEC. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

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In this release, we provide information using the tangible book value (TBV) of Marquette Financial Companies (MFC). This table is being provided as an update to materials furnished on December 15, 2014 in relation to our announcement of the agreement to acquire MFC. This information supplements the results that are reported according to generally accepted accounting principles (GAAP) and should not be viewed in isolation from, or as a substitute for, GAAP results. The difference between the TBV of MFC and the comparable GAAP measure is reconciled later in this release. We believe that this information and the reconciliation may be useful to investors because TBV is commonly used by investors as an additional measure of a company’s total value and the strength and adequacy of its capital-management strategies.

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, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors. For more information, visit umb.com, umbfinancial.com, blog.umb.com or follow us on Twitter at @UMBBank, Facebook at facebook.com/UMBBank and LinkedIn at linkedin.com/company/umb-bank.

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Consolidated Balance Sheets		UMB Financial Corporation
(unaudited, dollars in thousands)

 

		June 30,
		2015				2014
Assets
Loans		$	8,916,128			$	6,920,683
Allowance for loan losses			(77,721	)			(76,802	)
Net loans			8,838,407				6,843,881
Loans held for sale			2,819				3,156
Investment securities:
Available for sale			6,925,115				6,700,623
Held to maturity			446,881				238,799
Trading securities			36,616				26,484
Other securities			77,800				67,527
Total investment securities			7,486,412				7,033,433
Federal funds and resell agreements			91,326				82,652
Interest-bearing due from banks			698,940				255,453
Cash and due from banks			490,171				639,878
Bank premises and equipment, net			279,996				250,655
Accrued income			84,979				73,805
Goodwill			228,217				209,758
Other intangibles			53,649				49,888
Other assets			163,811				120,131
Total assets		$	18,418,727			$	15,562,690
Liabilities
Deposits:
Noninterest-bearing demand		$	5,887,525			$	5,399,733
Interest-bearing demand and savings			7,303,306				5,754,573
Time deposits under $100,000			479,820				442,361
Time deposits of $100,000 or more			825,995				577,622
Total deposits			14,496,646				12,174,289
Federal funds and repurchase agreements			1,774,435				1,607,294
Long-term debt			88,346				5,745
Accrued expenses and taxes			155,246				131,996
Other liabilities			46,998				42,024
Total liabilities			16,561,671				13,961,348
Shareholders’ Equity
Common stock			55,057				55,057
Capital surplus			1,009,965				887,086
Retained earnings			1,005,563				922,268
Accumulated other comprehensive (loss) income			(2,141	)			16,901
Treasury stock			(211,388	)			(279,970	)
Total shareholders’ equity			1,857,056				1,601,342
Total liabilities and shareholders’ equity		$	18,418,727			$	15,562,690

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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,
		2015				2014				2015				2014
Interest Income
Loans		$	71,396			$	60,309			$	135,628			$	119,209
Securities:
Taxable interest			19,163				19,021				37,971				37,982
Tax-exempt interest			10,607				9,798				20,522				19,705
Total securities income			29,770				28,819				58,493				57,687
Federal funds and resell agreements			151				46				202				79
Interest-bearing due from banks			434				466				1,286				1,589
Trading securities			133				149				228				272
Total interest income			101,884				89,789				195,837				178,836
Interest Expense
Deposits			3,522				3,092				6,570				6,151
Federal funds and repurchase agreements			470				454				962				935
Other			532				73				587				135
Total interest expense			4,524				3,619				8,119				7,221
Net interest income			97,360				86,170				187,718				171,615
Provision for loan losses			5,000				5,000				8,000				9,500
Net interest income after provision for loan losses			92,360				81,170				179,718				162,115
Noninterest Income
Trust and securities processing			67,381				73,357				134,680				144,920
Trading and investment banking			5,568				6,409				11,690				10,732
Service charges on deposits			21,625				20,627				43,166				42,185
Insurance fees and commissions			586				732				1,156				1,335
Brokerage fees			2,936				3,075				5,790				4,890
Bankcard fees			18,035				17,185				34,218				32,808
Gains on sale of securities available for sale, net			967				2,569				8,303				4,039
Equity (loss) earnings on alternative investments			(1,125	)			3,462				(1,967	)			5,992
Other			3,577				6,585				7,721				10,064
Total noninterest income			119,550				134,001				244,757				256,965
Noninterest Expense
Salaries and employee benefits			99,585				89,532				198,122				178,413
Occupancy, net			10,312				9,705				20,322				19,410
Equipment			15,410				12,920				29,582				25,583
Supplies, postage and telephone			4,603				5,554				8,928				10,191
Marketing and business development			6,530				6,307				11,148				10,909
Processing fees			12,654				14,817				25,437				28,468
Legal and consulting			5,917				4,632				10,295				8,004
Bankcard			4,953				4,997				9,721				8,685
Amortization of other intangibles			2,569				3,074				5,324				6,176
Regulatory fees			2,873				2,709				5,629				5,225
Contingency reserve			—				5,272				—				20,272
Other			6,558				6,682				11,869				16,796
Total noninterest expense			171,964				166,201				336,377				338,132
Income before income taxes			39,946				48,970				88,098				80,948
Income tax provision			9,732				14,298				24,119				22,863
Net income		$	30,214			$	34,672			$	63,979			$	58,085
Per Share Data
Net income - basic		$	0.65			$	0.77			$	1.40			$	1.30
Net income - diluted			0.65				0.76				1.39				1.28
Dividends			0.235				0.225				0.470				0.450
Weighted average shares outstanding			46,240,869				44,823,370				45,624,276				44,782,944
Weighted average shares outstanding - diluted			46,611,096				45,421,148				46,029,978				45,409,289

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

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
Net Income		$	30,214			$	34,672			$	63,979			$	58,085
Other comprehensive income, net of tax:
Unrealized (losses) gains on securities:
Change in unrealized holding (losses) gains, net			(45,553	)			50,910				(12,877	)			83,369
Less: Reclassifications adjustment for gains included in net income			(967	)			(2,569	)			(8,303	)			(4,039	)
Change in unrealized (losses) gains on securities during the period			(46,520	)			48,341				(21,180	)			79,330
Income tax benefit (expense)			17,569				(18,143	)			8,033				(29,789	)
Other comprehensive (loss) income			(28,951	)			30,198				(13,147	)			49,541
Comprehensive income		$	1,263			$	64,870			$	50,832			$	107,626

 

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

 

		Common Stock				Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Total
Balance - January 1, 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
Balance - January 1, 2015		$	55,057			$	894,602			$	963,911			$	11,006			$	(280,818	)		$	1,643,758
Total comprehensive income (loss)			—				—				63,979				(13,147	)			—				50,832
Cash dividends ($0.47 per share)			—				—				(22,327	)			—				—				(22,327	)
Purchase of treasury stock			—				—				—				—				(5,379	)			(5,379	)
Issuance of equity awards			—				(5,509	)			—				—				5,969				460
Recognition of equity based compensation			—				5,779				—				—				—				5,779
Net tax benefit related to equity compensation plans			—				664				—				—				—				664
Sale of treasury stock			—				306				—				—				197				503
Exercise of stock options			—				1,488				—				—				1,541				3,029
Common stock issuance for acquisition			—				112,635				—				—				67,102				179,737
Balance - June 30, 2015		$	55,057			$	1,009,965			$	1,005,563			$	(2,141	)		$	(211,388	)		$	1,857,056

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

 

		Three Months Ended June 30,
		2015								2014
		Average Balance				Average Yield/Rate				Average Balance				Average Yield/Rate
Assets
Loans, net of unearned interest		$	8,071,991				3.55	%		$	6,897,840				3.51	%
Securities:
Taxable			4,974,668				1.55				4,836,080				1.58
Tax-exempt			2,407,759				2.72				2,104,368				2.88
Total securities			7,382,427				1.93				6,940,448				1.97
Federal funds and resell agreements			69,053				0.88				32,692				0.56
Interest-bearing due from banks			414,446				0.42				619,094				0.30
Trading securities			37,063				1.70				36,785				1.80
Total earning assets			15,974,980				2.70				14,526,859				2.63
Allowance for loan losses			(77,667	)							(75,929	)
Other assets			1,515,687								1,167,262
Total assets		$	17,413,000							$	15,618,192
Liabilities and Shareholders’ Equity
Interest-bearing deposits		$	7,924,696				0.18	%		$	7,126,614				0.17	%
Federal funds and repurchase agreements			1,715,836				0.11				1,592,986				0.11
Borrowed funds			49,827				4.28				5,771				5.07
Total interest-bearing liabilities			9,690,359				0.19				8,725,371				0.17
Noninterest-bearing demand deposits			5,504,333								5,152,980
Other liabilities			473,676								154,229
Shareholders’ equity			1,744,632								1,585,612
Total liabilities and shareholders’ equity		$	17,413,000							$	15,618,192
Net interest spread							2.51	%							2.46	%
Net interest margin							2.59								2.53
		Six Months Ended June 30,
		2015								2014
		Average Balance				Average Yield/Rate				Average Balance				Average Yield/Rate
Assets
Loans, net of unearned interest		$	7,772,709				3.52	%		$	6,788,991				3.54	%
Securities:
Taxable			4,921,907				1.56				4,861,475				1.58
Tax-exempt			2,331,422				2.73				2,107,119				2.90
Total securities			7,253,329				1.93				6,968,594				1.98
Federal funds and resell agreements			51,793				0.79				29,939				0.53
Interest-bearing due from banks			759,238				0.34				1,154,811				0.28
Trading securities			33,661				1.76				37,682				1.63
Total earning assets			15,870,730				2.63				14,980,017				2.55
Allowance for loan losses			(77,124	)							(75,466	)
Other assets			1,330,476								1,160,124
Total assets		$	17,124,082							$	16,064,675
Liabilities and Shareholders’ Equity
Interest-bearing deposits		$	7,764,368				0.17	%		$	7,545,182				0.16	%
Federal funds and repurchase agreements			1,713,386				0.11				1,630,169				0.12
Borrowed funds			29,193				4.05				5,738				4.74
Total interest-bearing liabilities			9,506,947				0.17				9,181,089				0.16
Noninterest-bearing demand deposits			5,582,180								5,160,206
Other liabilities			325,066								156,608
Shareholders’ equity			1,709,889								1,566,772
Total liabilities and shareholders’ equity		$	17,124,082							$	16,064,675
Net interest spread							2.46	%							2.39	%
Net interest margin							2.53								2.45

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SECOND QUARTER 2015
FINANCIAL HIGHLIGHTS		UMB Financial Corporation
(unaudited, dollars in thousands, except share and per share data)

 

Six Months Ended June 30		2015				2014
Net interest income		$	187,718			$	171,615
Provision for loan losses			8,000				9,500
Noninterest income			244,757				256,965
Noninterest expense			336,377				338,132
Income before income taxes			88,098				80,948
Net income			63,979				58,085
Net income per share - Basic			1.40				1.30
Net income per share - Diluted			1.39				1.28
Return on average assets			0.75	%			0.73	%
Return on average equity			7.55	%			7.48	%
Three Months Ended June 30
Net interest income		$	97,360			$	86,170
Provision for loan losses			5,000				5,000
Noninterest income			119,550				134,001
Noninterest expense			171,964				166,201
Income before income taxes			39,946				48,970
Net income			30,214				34,672
Net income per share - Basic			0.65				0.77
Net income per share - Diluted			0.65				0.76
Return on average assets			0.70	%			0.89	%
Return on average equity			6.95	%			8.77	%
At June 30
Assets		$	18,418,727			$	15,562,690
Loans, net of unearned interest			8,916,128				6,920,683
Securities			7,486,412				7,033,433
Deposits			14,496,646				12,174,289
Shareholders’ equity			1,857,056				1,601,342
Book value per share			37.68				35.21
Market price per share			57.02				63.39
Equity to assets			10.08	%			10.29	%
Allowance for loan losses		$	77,721			$	76,802
As a % of loans			0.87	%			1.11	%
Nonaccrual and restructured loans		$	37,649			$	27,175
As a % of loans			0.42	%			0.39	%
Loans over 90 days past due		$	7,645			$	4,522
As a % of loans			0.09	%			0.07	%
Other real estate owned		$	2,553			$	1,455
Net loan charge-offs quarter-to-date		$	4,758			$	3,713
As a % of average loans			0.24	%			0.22	%
Net loan charge-offs year-to-date		$	6,419			$	7,449
As a % of average loans			0.17	%			0.22	%
Common shares outstanding			49,288,971				45,475,197
Average Balances Six Months Ended June 30
Assets		$	17,124,082			$	16,064,675
Loans, net of unearned interest			7,772,709				6,788,991
Securities			7,286,990				7,006,276
Deposits			13,346,548				12,705,388
Shareholders’ equity			1,709,889				1,566,772

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

 

		Three Months Ended June 30, 2015
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	82,758			$	13,599			$	—			$	1,003			$	97,360
Provision for loan losses			2,612				2,388				—				—				5,000
Noninterest income			47,548				23,293				25,684				23,025				119,550
Noninterest expense			107,293				26,399				18,285				19,987				171,964
Income before taxes			20,401				8,105				7,399				4,041				39,946
Income tax expense			4,915				2,046				1,785				986				9,732
Net income		$	15,486			$	6,059			$	5,614			$	3,055			$	30,214
Average assets		$	13,423,000			$	2,980,000			$	70,000			$	940,000			$	17,413,000
		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			56,024				21,201				33,999				22,777				134,001
Noninterest expense			100,788				24,506				22,053				18,854				166,201
Income before taxes			25,031				6,771				11,945				5,223				48,970
Income tax expense			7,482				1,931				3,389				1,496				14,298
Net income		$	17,549			$	4,840			$	8,556			$	3,727			$	34,672
Average assets		$	12,008,000			$	2,148,000			$	69,000			$	1,393,000			$	15,618,000
		Six Months Ended June 30, 2015
		Bank				Payment Solutions				Institutional Investment Management				Asset Servicing				Total
Net interest income		$	158,085			$	27,632			$	1			$	2,000			$	187,718
Provision for loan losses			4,211				3,789				—				—				8,000
Noninterest income			99,099				46,432				52,768				46,458				244,757
Noninterest expense			207,861				51,062				36,227				41,227				336,377
Income before taxes			45,112				19,213				16,542				7,231				88,098
Income tax expense			12,313				5,373				4,511				1,922				24,119
Net income		$	32,799			$	13,840			$	12,031			$	5,309			$	63,979
Average assets		$	13,089,000			$	3,031,000			$	72,000			$	932,000			$	17,124,000
		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			103,458				41,420				68,094				43,993				256,965
Noninterest expense			208,337				45,453				47,943				36,399				338,132
Income before taxes			33,611				16,357				20,148				10,832				80,948
Income tax expense			9,801				4,524				5,532				3,006				22,863
Net income		$	23,810			$	11,833			$	14,616			$	7,826			$	58,085
Average assets		$	12,204,000			$	2,023,000			$	71,000			$	1,767,000			$	16,065,000

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Non-GAAP Reconciliation Schedule		UMB Financial Corporation
(unaudited, dollars in thousands)

 

Price to MFC Tangible Book Value at May 31, 2015
GAAP Total Shareholders’ Equity (1)		$	127,277
Deduct: Goodwill and Other Intangibles			(7,626	)
Tangible Book Value		$	119,651
Total Consideration (2)		$	179,737
Price to Tangible Book Value			150	%
Price to GAAP Total Shareholders’ Equity			141	%

 

(1)	Source: MFC financial statements as of May 31, 2015.

(2)	Based on UMBF 05/29/15 closing price per share of $51.79 and consideration of 3.47 million shares of UMBF stock, subject to post-closing adjustments.

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