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UMB Financial Corporation Reports Fourth Quarter Net Income of $78.5 Million and Record Full-Year Earnings of $353.0 Million

Fourth Quarter 2021 Financial Highlights

  • GAAP net income of $78.5 million, or $1.61 per diluted share; net operating income (non-GAAP) of $78.9 million, or $1.62 per diluted share.
  • Pre-tax, pre-provision income on a fully tax equivalent basis (PTPP-FTE) of $113.4 million.
  • Excluding Paycheck Protection Program (PPP) balances, average loans increased 5.7% on a linked-quarter, annualized basis.
    • Average Commercial & Industrial loan balances, excluding PPP, increased 11.9% on a linked-quarter, annualized basis.
    • Period-end loan balances, excluding PPP, increased by $882.6 million from the linked quarter.
  • Noninterest income increased 10.1% on a linked-quarter basis to $118.8 million, equal to 36.1% of total revenue.
  • Quarterly average deposits grew 26.7% to $31.6 billion compared to the fourth quarter of 2020.
    • Average demand deposit balances increased 60.5% on a linked-quarter annualized basis to $13.1 billion.

 

UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced net income for the fourth quarter of 2021 of $78.5 million, or $1.61 per diluted share, compared to $94.5 million, or $1.94 per diluted share, in the third quarter of 2021 (linked quarter) and $156.3 million, or $3.24 per diluted share, in the fourth quarter of 2020. Results for the fourth quarter and full-year 2020 include a pre-tax gain of $108.8 million on the company’s investment in Tattooed Chef, Inc. (TTCF).

Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $78.9 million, or $1.62 per diluted share, for the fourth quarter of 2021, compared to $95.1 million, or $1.95 per diluted share, for the linked quarter and $157.4 million, or $3.26 per diluted share, for the fourth quarter of 2020. 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 $113.4 million, or $2.32 per diluted share, for the fourth quarter of 2021, compared to $115.3 million, or $2.37 per diluted share, for the linked quarter, and $202.9 million, or $4.20 per diluted share, for the fourth quarter of 2020. These PTPP-FTE results represent decreases of 1.7% on a linked-quarter basis and 44.1% compared to the fourth quarter of 2020.

“Notwithstanding higher-than typical operating expenses tied to profitable business growth, charitable contributions, and timing of other investments in the fourth quarter, our teams executed and delivered exceptional operating and financial results in 2021 through strong growth on both sides of the balance sheet, strong asset quality metrics and continued build-out of our differentiated fee generation businesses,” said Mariner Kemper, chairman, president and chief executive officer. “UMB is positioned to benefit even further from anticipated economic expansion, higher interest rates, our diversified fee income businesses and the franchise investments we are making. In 2021, fee income momentum in our various businesses was offset on a year-over-year basis by the 2020 gain on our investment in Tattooed Chef and ongoing market-related adjustments. Average loans excluding PPP loan balances increased an impressive 12.3%. Average deposits increased 24.8%, including a 43.5% increase in interest-free demand deposit balances. Finally, in January, we pursued and executed the sale of our small, acquired factoring portfolio to an alternative financing company.”

Fourth Quarter 2021 earnings discussion

Summary of quarterly financial results

 

UMB Financial Corporation

 

(unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

 

Q3

 

 

Q4

 

 

 

2021

 

 

2021

 

 

2020

 

Net income (GAAP)

 

$

78,496

 

 

$

94,467

 

 

$

156,320

 

Earnings per share (diluted)

 

 

1.61

 

 

 

1.94

 

 

 

3.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income (Non-GAAP)

 

 

106,869

 

 

 

108,803

 

 

 

196,107

 

Pre-tax, pre-provision earnings per share (diluted)

 

 

2.19

 

 

 

2.23

 

 

 

4.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income - FTE (Non-GAAP)

 

 

113,352

 

 

 

115,347

 

 

 

202,946

 

Pre-tax, pre-provision earnings per share - FTE (diluted)

 

 

2.32

 

 

 

2.37

 

 

 

4.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

78,921

 

 

 

95,112

 

 

 

157,405

 

Operating earnings per share (diluted)

 

 

1.62

 

 

 

1.95

 

 

 

3.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.82

%

 

 

1.04

%

 

 

2.03

%

Return on average equity

 

 

9.91

 

 

 

11.89

 

 

 

21.18

 

Efficiency ratio

 

 

67.78

 

 

 

65.62

 

 

 

53.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.82

%

 

 

1.05

%

 

 

2.05

%

Operating return on average equity

 

 

9.97

 

 

 

11.97

 

 

 

21.33

 

Operating efficiency ratio

 

 

67.61

 

 

 

65.36

 

 

 

53.11

 

 

Summary of revenue

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

Q3

 

Q4

 

CQ vs.

 

CQ vs.

 

 

2021

 

2021

 

2020

 

LQ

 

PY

Net interest income

 

$

210,570

 

 

$

209,765

 

 

$

194,675

 

 

$

805

 

 

$

15,895

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

58,515

 

 

 

56,914

 

 

 

50,773

 

 

 

1,601

 

 

 

7,742

 

Trading and investment banking

 

 

6,977

 

 

 

5,936

 

 

 

9,693

 

 

 

1,041

 

 

 

(2,716

)

Service charges on deposit accounts

 

 

21,607

 

 

 

19,881

 

 

 

20,074

 

 

 

1,726

 

 

 

1,533

 

Insurance fees and commissions

 

 

359

 

 

 

285

 

 

 

318

 

 

 

74

 

 

 

41

 

Brokerage fees

 

 

3,346

 

 

 

2,899

 

 

 

3,918

 

 

 

447

 

 

 

(572

)

Bankcard fees

 

 

16,642

 

 

 

17,198

 

 

 

15,788

 

 

 

(556

)

 

 

854

 

Investment securities gains (losses), net

 

 

1,448

 

 

 

(3,510

)

 

 

113,010

 

 

 

4,958

 

 

 

(111,562

)

Other

 

 

9,888

 

 

 

8,304

 

 

 

14,716

 

 

 

1,584

 

 

 

(4,828

)

Total noninterest income

 

$

118,782

 

 

$

107,907

 

 

$

228,290

 

 

$

10,875

 

 

$

(109,508

)

Total revenue

 

$

329,352

 

 

$

317,672

 

 

$

422,965

 

 

$

11,680

 

 

$

(93,613

)

Net interest income (FTE)

 

$

217,053

 

 

$

216,309

 

 

$

201,514

 

 

 

 

 

 

 

Net interest margin (FTE)

 

 

2.37

%

 

 

2.52

%

 

 

2.78

%

 

 

 

 

 

 

Total noninterest income as a % of total revenue

 

 

36.07

 

 

 

33.97

 

 

 

53.97

 

 

 

 

 

 

 

Net interest income

  • Net interest income totaled $210.6 million, which is an increase of $0.8 million as compared to the linked quarter. The benefit from growth in average earning assets was partially offset by $4.0 million in reduced income from PPP loans. Average earning assets increased $2.2 billion, or 6.4%, driven by an increase in liquidity and investment securities purchases, while noninterest-bearing deposits increased $1.7 billion, or 15.1% and interest-bearing liabilities increased $499.1 million, or 2.4%.
  • Net interest margin for the fourth quarter was 2.37%, a decrease of 15 basis points from the linked quarter, driven in large part by earning asset mix shift in favor of lower-yielding liquidity balances. Earning asset yields declined 16 basis points from the linked quarter, driven by an eight-basis-point decline in loan yields and mix changes. The cost of interest-bearing liabilities decreased two basis points to 0.20%. Net interest spread decreased 14 basis points to 2.29% from the linked quarter and was 39 basis points lower than the fourth quarter of 2020.
  • On a year-over-year basis, net interest income increased $15.9 million, or 8.2%, driven by a $2.6 billion, or 25.5% increase in average securities, coupled with a $651.6 million, or 4.1%, increase in average loans. These increases were driven by organic loan growth, excess liquidity, and the company’s PPP participation.
  • Average deposits increased 7.5% on a linked-quarter basis and 26.7% compared to the fourth quarter of 2020. Average noninterest-bearing demand deposit balances increased 15.1% on a linked-quarter basis and 46.7% compared to the fourth quarter of 2020.

Noninterest income

  • Fourth quarter 2021 noninterest income increased $10.9 million, or 10.1%, on a linked-quarter basis, largely due to:
    • An increase of $3.3 million in the company’s equity investments, and an increase of $1.7 million in gains on sales of available-for-sale securities, both recorded in investment securities gains.
    • An increase of $3.2 million in derivative income, recorded in other income.
    • An increase of $1.7 million in service charges on deposits primarily driven by an increase of $0.9 million in healthcare income related to customer transfer and conversion fees and increased corporate service charge income.
    • Increases of $1.6 million in trust and securities processing and $1.0 million in trading and investment banking. The increase in trust and securities processing income is primarily due to an increase of $1.0 million in fund services income driven by higher levels of assets administered and $0.6 million in corporate trust income. The increase in trading and investment banking income is driven by increased trading volume.
    • These increases were partially offset by a decrease of $1.6 million in company owned life insurance income, recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below.
  • Compared to the prior year, noninterest income in the fourth quarter of 2021 decreased $109.5 million, or 48.0%, primarily driven by:
    • A decrease of $111.6 million in investment securities gains, primarily due to mark-to-market valuations on the company’s equity investment in TTCF. The fourth quarter of 2020 included a pre-tax gain on TTCF of $108.8 million.
    • A decrease of $6.4 million in company-owned life insurance income, recorded in other income. The decrease in company-owned life insurance is offset by a proportionate decrease in deferred compensation expense as noted below.
    • A $2.7 million decrease in trading and investment banking due to decreased trading volumes.
    • These decreases were partially offset by an increase of $7.7 million in trust and securities processing income, an increase of $1.9 million in derivative income, recorded in other income, and an increase of $1.5 million in service charges on deposits. The increase in trust and securities processing was driven by an increase of $8.6 million in fund services income tied to higher levels of assets administered, and an increase of $1.3 million in corporate trust income, partially offset by a decrease of $2.1 million in trust services income.

Noninterest expense

Summary of noninterest expense

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

 

Q3

 

 

Q4

 

 

CQ vs.

 

CQ vs.

 

 

2021

 

 

2021

 

 

2020

 

 

LQ

 

PY

Salaries and employee benefits

 

$

131,360

 

 

$

124,986

 

 

$

129,272

 

 

$

6,374

 

 

$

2,088

 

Occupancy, net

 

 

10,907

 

 

 

12,207

 

 

 

11,858

 

 

 

(1,300

)

 

 

(951

)

Equipment

 

 

19,886

 

 

 

19,701

 

 

 

22,008

 

 

 

185

 

 

 

(2,122

)

Supplies and services

 

 

4,646

 

 

 

3,379

 

 

 

4,125

 

 

 

1,267

 

 

 

521

 

Marketing and business development

 

 

6,528

 

 

 

4,863

 

 

 

3,717

 

 

 

1,665

 

 

 

2,811

 

Processing fees

 

 

19,083

 

 

 

16,562

 

 

 

14,408

 

 

 

2,521

 

 

 

4,675

 

Legal and consulting

 

 

10,858

 

 

 

7,646

 

 

 

10,191

 

 

 

3,212

 

 

 

667

 

Bankcard

 

 

4,865

 

 

 

4,795

 

 

 

4,711

 

 

 

70

 

 

 

154

 

Amortization of other intangible assets

 

 

1,110

 

 

 

1,110

 

 

 

1,601

 

 

 

 

 

 

(491

)

Regulatory fees

 

 

3,393

 

 

 

3,186

 

 

 

2,393

 

 

 

207

 

 

 

1,000

 

Other

 

 

9,847

 

 

 

10,434

 

 

 

22,574

 

 

 

(587

)

 

 

(12,727

)

Total noninterest expense

 

$

222,483

 

 

$

208,869

 

 

$

226,858

 

 

$

13,614

 

 

$

(4,375

)

  • Noninterest expense for the fourth quarter of 2021 was $222.5 million, an increase of $13.6 million, or 6.5%, from the linked quarter and a decrease of $4.4 million, or 1.9%, from the fourth quarter of 2020.
  • The linked-quarter increase in noninterest expense was driven by:
    • An increase of $7.3 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.
    • Increases of $3.2 million in legal and consulting expense and $1.7 million in marketing and business development due to the timing of multiple projects.
    • An increase of $2.5 million in processing fees, due to timing of software projects and an increase of $2.1 million in charitable contributions expense, recorded in other expense.
    • These increases were partially offset by decreases of $2.5 million in operational losses, recorded in other expense, and $0.9 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.
  • The year-over-year decrease in noninterest expense was driven by:
    • A decrease of $13.8 million in operational losses, recorded in other expense.
    • A decrease of $4.5 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.
    • These decreases were partially offset by the following increases:
      • Increases of $4.7 million in processing fees and $2.8 million in marketing and business development due to the timing of multiple software projects and marketing campaigns, respectively.
      • An increase of $4.5 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.
      • An increase of $2.1 million in charitable contributions expense, recorded in other expense.

Full year 2021 earnings discussion

Net income for the year ended December 31, 2021 was $353.0 million, or $7.24 per diluted share, compared to $286.5 million, or $5.93 per diluted share in 2020. Net operating income, a non-GAAP financial measure reconciled to net income, the nearest comparable GAAP measure, later in this release, was $354.4 million, or $7.27 per diluted share, compared to $295.8 million, or $6.12 per diluted share in 2020. These results represent increases of 23.2% and 19.8%, respectively.

Summary of year-to-date financial results

 

UMB Financial Corporation

 

(unaudited, dollars in thousands, except per share data)

 

December

 

 

December

 

 

 

YTD

 

 

YTD

 

 

 

2021

 

 

2020

 

Net income (GAAP)

 

$

353,018

 

 

$

286,502

 

Earnings per share (diluted)

 

 

7.24

 

 

 

5.93

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income (Non-GAAP)

 

 

449,060

 

 

 

469,390

 

Pre-tax, pre-provision earnings per share (diluted)

 

 

9.21

 

 

 

9.71

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income - FTE (Non-GAAP)

 

 

475,394

 

 

 

496,108

 

Pre-tax, pre-provision earnings per share - FTE (diluted)

 

 

9.75

 

 

 

10.26

 

 

 

 

 

 

 

 

 

 

Net operating income (Non-GAAP)

 

 

354,446

 

 

 

295,793

 

Operating earnings per share (diluted)

 

 

7.27

 

 

 

6.12

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.00

%

 

 

1.00

%

Return on average equity

 

 

11.43

 

 

 

10.21

 

Efficiency ratio

 

 

65.02

 

 

 

63.49

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

1.00

%

 

 

1.04

%

Operating return on average equity

 

 

11.47

 

 

 

10.55

 

Operating efficiency ratio

 

 

64.87

 

 

 

62.56

 

  • Net interest income increased $84.3 million, or 11.5%, year-over-year due to a $6.7 billion increase in earning assets, primarily driven by increased volume in the company’s investment portfolio, strong organic loan growth and the company’s participation in the PPP. This growth was partially offset by the impact of lower short-term and long-term interest rates. In 2021, average securities increased $2.2 billion and average loan balances increased $1.5 billion. Average interest-bearing liabilities increased $3.1 billion, while the cost of interest-bearing liabilities declined 22 basis points.
  • Full-year noninterest income decreased $93.0 million, or 16.6%, due to:
    • A decrease of $115.6 million in investment securities gains. 2020 included a pre-tax gain of $108.8 million on the company’s investment in TTCF, compared to a pre-tax loss of $15.4 million in 2021.
    • A decrease of $12.2 million in brokerage fees, primarily driven by lower 12b-1 and money market income.
    • A decrease of $3.8 million in trust income, recorded in trust and securities processing.
    • These decreases were partially offset by the following increases:
      • Increases of $27.5 million in fund services income driven by higher levels of assets administered and $5.8 million in corporate trust revenue, both recorded in trust and securities processing.
      • An increase of $4.0 million in bankcard income, due to higher interchange revenue, offset by increased rebates and rewards expense.
  • Full-year noninterest expense increased $11.6 million, or 1.4%, primarily due to:
    • A $13.4 million increase in processing fees driven by the timing of multiple software projects.
    • An increase of $9.0 million in salary and employee benefit expense driven primarily by increased bonus and sales commission expense tied to business volumes, revenue growth, and overall company performance.
    • Increases of $3.9 million and $2.6 million in marketing and business development and legal and consulting expense, respectively, due to the timing of multiple projects.
    • An increase of $3.9 million in charitable contributions expense, recorded in other expense.
    • These increases were partially offset by a decrease of $14.1 million in operational losses, recorded in other expense, and a decrease of $7.3 million in equipment expense due to lower software amortization expense.

Income taxes

  • The company’s effective tax rate was 17.7% for the year ended December 31, 2021, compared to 15.5% for the same period in 2020. The increase in the effective tax rate for 2021 is primarily attributable to a smaller portion of income being earned from tax-exempt municipal securities and higher state and local income taxes.

Balance sheet

  • Average total assets for the fourth quarter of 2021 were $38.1 billion compared to $35.9 billion for the linked quarter and $30.6 billion for the same period in 2020.

Summary of average loans and leases - QTD Average

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

 

Q3

 

 

Q4

 

 

CQ vs.

 

CQ vs.

 

 

2021

 

 

2021

 

 

2020

 

 

LQ

 

PY

Commercial and industrial

 

$

6,994,935

 

 

$

7,097,248

 

 

$

7,079,646

 

 

$

(102,313

)

 

$

(84,711

)

Specialty lending

 

 

484,552

 

 

 

486,021

 

 

 

506,225

 

 

 

(1,469

)

 

 

(21,673

)

Commercial real estate

 

 

6,218,138

 

 

 

6,285,348

 

 

 

5,847,439

 

 

 

(67,210

)

 

 

370,699

 

Consumer real estate

 

 

2,272,498

 

 

 

2,178,010

 

 

 

1,903,892

 

 

 

94,488

 

 

 

368,606

 

Consumer

 

 

107,841

 

 

 

115,702

 

 

 

128,350

 

 

 

(7,861

)

 

 

(20,509

)

Credit cards

 

 

414,267

 

 

 

400,189

 

 

 

382,166

 

 

 

14,078

 

 

 

32,101

 

Leases and other

 

 

200,417

 

 

 

194,235

 

 

 

193,363

 

 

 

6,182

 

 

 

7,054

 

Total loans

 

$

16,692,648

 

 

$

16,756,753

 

 

$

16,041,081

 

 

$

(64,105

)

 

$

651,567

 

  • Average loans for the fourth quarter of 2021 decreased 0.4% on a linked-quarter basis and increased 4.1% compared to the fourth quarter of 2020 primarily due to the company’s participation in the PPP. Excluding PPP balances, average loans increased 1.4% on a linked-quarter basis.

Summary of average securities - QTD Average

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

 

Q3

 

 

Q4

 

 

CQ vs.

 

CQ vs.

 

 

2021

 

 

2021

 

 

2020

 

 

LQ

 

PY

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury

 

$

69,398

 

 

$

17,903

 

 

$

30,778

 

 

$

51,495

 

 

$

38,620

 

U.S. Agencies

 

 

93,619

 

 

 

94,049

 

 

 

96,082

 

 

 

(430

)

 

 

(2,463

)

Mortgage-backed

 

 

7,395,528

 

 

 

6,766,619

 

 

 

5,053,821

 

 

 

628,909

 

 

 

2,341,707

 

State and political subdivisions

 

 

3,437,841

 

 

 

3,530,031

 

 

 

3,600,704

 

 

 

(92,190

)

 

 

(162,863

)

Corporates

 

 

236,743

 

 

 

158,326

 

 

 

76,870

 

 

 

78,417

 

 

 

159,873

 

Collateralized loan obligations

 

 

38,099

 

 

 

 

 

 

 

 

 

38,099

 

 

 

38,099

 

Total securities available for sale

 

$

11,271,228

 

 

$

10,566,928

 

 

$

8,858,255

 

 

$

704,300

 

 

$

2,412,973

 

Securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and political subdivisions

 

$

1,089,587

 

 

$

1,073,133

 

 

$

1,045,640

 

 

$

16,454

 

 

$

43,947

 

Mortgage-backed

 

 

105,622

 

 

 

 

 

 

 

 

 

105,622

 

 

 

105,622

 

Total securities held to maturity

 

$

1,195,209

 

 

$

1,073,133

 

 

$

1,045,640

 

 

$

122,076

 

 

$

149,569

 

Trading securities

 

 

29,426

 

 

 

25,392

 

 

 

29,659

 

 

 

4,034

 

 

 

(233

)

Other securities

 

 

299,829

 

 

 

262,453

 

 

 

267,445

 

 

 

37,376

 

 

 

32,384

 

Total securities

 

$

12,795,692

 

 

$

11,927,906

 

 

$

10,200,999

 

 

$

867,786

 

 

$

2,594,693

 

  • Average securities available for sale increased 6.7% on a linked-quarter basis and 27.2% compared to the fourth quarter of 2020.

Summary of average deposits - QTD Average

UMB Financial Corporation

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

Q3

 

Q4

 

CQ vs.

 

 

CQ vs.

 

 

2021

 

2021

 

2020

 

LQ

 

 

PY

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

13,124,918

 

 

$

11,400,143

 

 

$

8,947,389

 

 

$

1,724,775

 

 

$

4,177,529

 

Interest-bearing demand and savings

 

 

17,809,817

 

 

 

17,376,135

 

 

 

15,250,236

 

 

 

433,682

 

 

 

2,559,581

 

Time deposits

 

 

701,836

 

 

 

651,727

 

 

 

767,755

 

 

 

50,109

 

 

 

(65,919

)

Total deposits

 

$

31,636,571

 

 

$

29,428,005

 

 

$

24,965,380

 

 

$

2,208,566

 

 

$

6,671,191

 

Noninterest bearing deposits as % of total

 

 

41.49

%

 

 

38.74

%

 

 

35.84

%

 

 

 

 

 

 

 

  • Average deposits increased 7.5% on a linked-quarter basis and 26.7% compared to the fourth quarter of 2020.
  • Average noninterest-bearing demand deposits increased 15.1% on a linked-quarter basis to $13.1 billion.

Capital

Capital information

 

UMB Financial Corporation

 

(unaudited, dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

2021

 

 

September 30,

2021

 

 

December 31,

2020

 

Total equity

 

$

3,145,424

 

 

$

3,112,840

 

 

$

3,016,948

 

Book value per common share

 

 

64.95

 

 

 

64.37

 

 

 

62.84

 

Tangible book value per common share

 

 

61.05

 

 

 

60.44

 

 

 

58.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

 

$

2,885,576

 

 

$

2,811,117

 

 

$

2,547,634

 

Tier 1 capital

 

 

2,885,576

 

 

 

2,811,117

 

 

 

2,547,634

 

Total capital

 

 

3,324,284

 

 

 

3,248,869

 

 

 

3,002,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

 

12.05

%

 

 

12.26

%

 

 

12.10

%

Tier 1 risk-based capital ratio

 

 

12.05

 

 

 

12.26

 

 

 

12.10

 

Total risk-based capital ratio

 

 

13.88

 

 

 

14.17

 

 

 

14.26

 

Tier 1 leverage ratio

 

 

7.61

 

 

 

7.87

 

 

 

8.37

 

  • At December 31, 2021, the regulatory capital ratios presented in the foregoing table exceeded all “well-capitalized” regulatory thresholds.

Asset Quality

Credit quality

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

 

Q4

 

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2020

 

Net charge-offs - Total loans

 

$

8,061

 

 

$

3,127

 

 

$

28,374

 

 

$

5,310

 

 

$

1,801

 

Net loan charge-offs as a % of total average loans

 

 

0.19

%

 

 

0.07

%

 

 

0.68

%

 

 

0.13

%

 

 

0.04

%

Loans over 90 days past due

 

$

2,633

 

 

$

2,319

 

 

$

1,265

 

 

$

1,773

 

 

$

1,952

 

Loans over 90 days past due as a % of total loans

 

 

0.02

%

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

Nonaccrual and restructured loans

 

$

92,300

 

 

$

96,536

 

 

$

58,219

 

 

$

76,706

 

 

$

87,823

 

Nonaccrual and restructured loans as a % of total loans

 

 

0.54

%

 

 

0.59

%

 

 

0.34

%

 

 

0.46

%

 

 

0.55

%

Provision for credit losses

 

$

8,500

 

 

$

(5,000

)

 

$

24,000

 

 

$

(7,500

)

 

$

5,000

 

  • Provision for credit losses for the fourth quarter totaled $8.5 million, an increase of $13.5 million from the linked quarter and an increase of $3.5 million from the fourth quarter of 2020. The fourth quarter provision expense is commensurate with the increases of $701.4 million and $1.1 billion in period-end loan balances as compared to the linked quarter and the fourth quarter of 2020, respectively, as well as considerations for portfolio changes and various macro-economic factors. Provision expense in the third quarter of 2021 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 fourth quarter totaled $8.1 million, or 0.19%, of average loans, compared to $3.1 million, or 0.07%, of average loans in the linked quarter, and $1.8 million, or 0.04%, of average loans for the fourth quarter of 2020.

Dividend Declaration

At the company’s quarterly board meeting, the Board of Directors declared a $0.37 per share quarterly cash dividend, payable on April 1, 2022, to shareholders of record at the close of business on March 10, 2022.

Conference Call

The company plans to host a conference call to discuss its fourth quarter 2021 earnings results on Wednesday, January 26, 2022, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 877-267-8760 or (international) 412-542-4148 and requesting to join the UMB Financial call. The live call may also be accessed by visiting investorrelations.umb.com or by using the following link:

UMB Financial 4Q 2021 Conference Call

A replay of the conference call may be heard through February 9, 2022 by calling (toll-free) 877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 1378406. 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, 2020, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the U.S. Securities and Exchange Commission (SEC). In addition to such factors that have been disclosed previously, the COVID-19 pandemic (the pandemic) may also cause actual results or other future events, circumstances, or aspirations to differ from our forward-looking statements. The pandemic has created a global public-health crisis that has resulted in widespread volatility and deteriorations in household, business, economic, and market conditions. It is currently adversely affecting the company and its customers, counterparties, employees, and first-party service providers, and the continued adverse impacts on our business, financial position, results of operations, and prospects could be significant. We are not able to accurately predict the extent of the impact of the pandemic on our capital, liquidity, and other financial positions and on our business, results of operations, and prospects at this time, and we believe it will depend on a number of evolving factors, including: (i) the duration, extent and severity of the pandemic; (ii) the response of governmental and non-governmental authorities to the pandemic, which is rapidly changing and not always coordinated or consistent across jurisdictions; (iii) the effect of the pandemic on our customers, counterparties, employees and first-party service providers, which may vary widely, and which is generally expected to increase our credit, counterparty, operational, and other risks; and (iv) the effect of the pandemic on economies and markets, which in turn could adversely affect, among other things, the origination of new loans and the performance of our existing loans. Any forward-looking statement should be evaluated in light of these considerations. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except to the extent required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach and relief measures during the COVID-19 pandemic, please visit umb.com/COVID-19.

Consolidated Balance Sheets

 

UMB Financial Corporation

(dollars in thousands)

 

 

 

 

 

 

 

 

December 31,

 

 

2021

 

2020

 

 

(unaudited)

 

(audited)

ASSETS

 

 

 

 

 

 

Loans

 

$

17,170,871

 

 

$

16,103,651

 

Allowance for credit losses on loans

 

 

(194,771

)

 

 

(215,973

)

Net loans

 

 

16,976,100

 

 

 

15,887,678

 

Loans held for sale

 

 

1,277

 

 

 

6,708

 

Securities:

 

 

 

 

 

 

Available for sale

 

 

11,976,514

 

 

 

9,299,688

 

Held to maturity, net of allowance for credit losses

 

 

1,478,476

 

 

 

1,012,004

 

Trading securities

 

 

31,875

 

 

 

35,020

 

Other securities

 

 

327,098

 

 

 

296,053

 

Total securities

 

 

13,813,963

 

 

 

10,642,765

 

Federal funds sold and resell agreements

 

 

1,216,357

 

 

 

1,650,335

 

Interest-bearing due from banks

 

 

8,841,906

 

 

 

3,110,042

 

Cash and due from banks

 

 

413,821

 

 

 

430,638

 

Premises and equipment, net

 

 

270,933

 

 

 

293,095

 

Accrued income

 

 

131,102

 

 

 

139,892

 

Goodwill

 

 

174,518

 

 

 

180,867

 

Other intangibles, net

 

 

14,416

 

 

 

21,056

 

Other assets

 

 

839,091

 

 

 

764,428

 

Total assets

 

$

42,693,484

 

 

$

33,127,504

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing demand

 

$

16,342,642

 

 

$

9,879,970

 

Interest-bearing demand and savings

 

 

18,405,644

 

 

 

16,295,186

 

Time deposits under $250,000

 

 

403,660

 

 

 

477,748

 

Time deposits of $250,000 or more

 

 

447,981

 

 

 

398,347

 

Total deposits

 

 

35,599,927

 

 

 

27,051,251

 

Federal funds purchased and repurchase agreements

 

 

3,238,435

 

 

 

2,315,497

 

Long-term debt

 

 

271,544

 

 

 

269,595

 

Accrued expenses and taxes

 

 

249,492

 

 

 

319,676

 

Other liabilities

 

 

188,662

 

 

 

154,537

 

Total liabilities

 

 

39,548,060

 

 

 

30,110,556

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Common stock

 

 

55,057

 

 

 

55,057

 

Capital surplus

 

 

1,110,520

 

 

 

1,090,450

 

Retained earnings

 

 

2,176,998

 

 

 

1,891,246

 

Accumulated other comprehensive income, net

 

 

126,314

 

 

 

318,340

 

Treasury stock

 

 

(323,465

)

 

 

(338,145

)

Total shareholders' equity

 

 

3,145,424

 

 

 

3,016,948

 

Total liabilities and shareholders' equity

 

$

42,693,484

 

 

$

33,127,504

 

Consolidated Statements of Income

 

UMB Financial Corporation

 

(dollars in thousands except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(audited)

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

155,324

 

 

$

152,486

 

 

$

619,273

 

 

$

585,957

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable interest

 

 

37,376

 

 

 

26,226

 

 

 

127,625

 

 

 

105,701

 

Tax-exempt interest

 

 

24,140

 

 

 

25,427

 

 

 

98,305

 

 

 

99,820

 

Total securities income

 

 

61,516

 

 

 

51,653

 

 

 

225,930

 

 

 

205,521

 

Federal funds and resell agreements

 

 

2,286

 

 

 

2,567

 

 

 

10,048

 

 

 

11,840

 

Interest-bearing due from banks

 

 

2,182

 

 

 

384

 

 

 

5,417

 

 

 

3,744

 

Trading securities

 

 

275

 

 

 

202

 

 

 

854

 

 

 

1,427

 

Total interest income

 

 

221,583

 

 

 

207,292

 

 

 

861,522

 

 

 

808,489

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

6,299

 

 

 

7,955

 

 

 

26,412

 

 

 

58,214

 

Federal funds and repurchase agreements

 

 

1,673

 

 

 

1,726

 

 

 

6,934

 

 

 

11,787

 

Other

 

 

3,041

 

 

 

2,936

 

 

 

12,655

 

 

 

7,259

 

Total interest expense

 

 

11,013

 

 

 

12,617

 

 

 

46,001

 

 

 

77,260

 

Net interest income

 

 

210,570

 

 

 

194,675

 

 

 

815,521

 

 

 

731,229

 

Provision for credit losses

 

 

8,500

 

 

 

5,000

 

 

 

20,000

 

 

 

130,500

 

Net interest income after provision for credit losses

 

 

202,070

 

 

 

189,675

 

 

 

795,521

 

 

 

600,729

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and securities processing

 

 

58,515

 

 

 

50,773

 

 

 

224,126

 

 

 

194,646

 

Trading and investment banking

 

 

6,977

 

 

 

9,693

 

 

 

30,939

 

 

 

32,945

 

Service charges on deposit accounts

 

 

21,607

 

 

 

20,074

 

 

 

86,056

 

 

 

83,879

 

Insurance fees and commissions

 

 

359

 

 

 

318

 

 

 

1,309

 

 

 

1,369

 

Brokerage fees

 

 

3,346

 

 

 

3,918

 

 

 

12,171

 

 

 

24,350

 

Bankcard fees

 

 

16,642

 

 

 

15,788

 

 

 

64,576

 

 

 

60,544

 

Investment securities gains, net

 

 

1,448

 

 

 

113,010

 

 

 

5,057

 

 

 

120,634

 

Other

 

 

9,888

 

 

 

14,716

 

 

 

42,941

 

 

 

41,799

 

Total noninterest income

 

 

118,782

 

 

 

228,290

 

 

 

467,175

 

 

 

560,166

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

131,360

 

 

 

129,272

 

 

 

504,442

 

 

 

495,464

 

Occupancy, net

 

 

10,907

 

 

 

11,858

 

 

 

47,345

 

 

 

47,476

 

Equipment

 

 

19,886

 

 

 

22,008

 

 

 

78,398

 

 

 

85,719

 

Supplies and services

 

 

4,646

 

 

 

4,125

 

 

 

14,986

 

 

 

15,537

 

Marketing and business development

 

 

6,528

 

 

 

3,717

 

 

 

18,533

 

 

 

14,679

 

Processing fees

 

 

19,083

 

 

 

14,408

 

 

 

67,563

 

 

 

54,213

 

Legal and consulting

 

 

10,858

 

 

 

10,191

 

 

 

32,406

 

 

 

29,765

 

Bankcard

 

 

4,865

 

 

 

4,711

 

 

 

19,145

 

 

 

18,954

 

Amortization of other intangible assets

 

 

1,110

 

 

 

1,601

 

 

 

4,757

 

 

 

6,517

 

Regulatory fees

 

 

3,393

 

 

 

2,393

 

 

 

11,894

 

 

 

10,279

 

Other

 

 

9,847

 

 

 

22,574

 

 

 

34,167

 

 

 

43,402

 

Total noninterest expense

 

 

222,483

 

 

 

226,858

 

 

 

833,636

 

 

 

822,005

 

Income before income taxes

 

 

98,369

 

 

 

191,107

 

 

 

429,060

 

 

 

338,890

 

Income tax expense

 

 

19,873

 

 

 

34,787

 

 

 

76,042

 

 

 

52,388

 

NET INCOME

 

$

78,496

 

 

$

156,320

 

 

$

353,018

 

 

$

286,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income – basic

 

$

1.62

 

 

$

3.26

 

 

$

7.31

 

 

$

5.95

 

Net income – diluted

 

 

1.61

 

 

 

3.24

 

 

 

7.24

 

 

 

5.93

 

Dividends

 

 

0.37

 

 

 

0.320

 

 

 

1.38

 

 

 

1.25

 

Weighted average shares outstanding – basic

 

 

48,371,296

 

 

 

47,927,358

 

 

 

48,271,462

 

 

 

48,137,791

 

Weighted average shares outstanding – diluted

 

 

48,854,383

 

 

 

48,264,097

 

 

 

48,738,292

 

 

 

48,343,750

Consolidated Statements of Comprehensive Income

 

UMB Financial Corporation

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(audited)

Net income

 

$

78,496

 

 

$

156,320

 

 

$

353,018

 

 

$

286,502

 

Other comprehensive (loss) income, before tax:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains and losses on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains and losses, net

 

 

(46,275

)

 

 

25,576

 

 

 

(244,695

)

 

 

295,552

 

Less: Reclassification adjustment for gains included in net income

 

 

(2,739

)

 

 

(1,436

)

 

 

(7,817

)

 

 

(6,980

)

Change in unrealized gains and losses on debt securities

 

 

(49,014

)

 

 

24,140

 

 

 

(252,512

)

 

 

288,572

 

Unrealized gains and losses on derivative hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gains and losses on derivative hedges, net

 

 

(407

)

 

 

1,964

 

 

 

3,106

 

 

 

20,979

 

Less: Reclassification adjustment for gains included in net income

 

 

(802

)

 

 

(1,036

)

 

 

(3,352

)

 

 

(1,905

)

Change in unrealized gains and losses on derivative hedges

 

 

(1,209

)

 

 

928

 

 

 

(246

)

 

 

19,074

 

Other comprehensive (loss) income, before tax

 

 

(50,223

)

 

 

25,068

 

 

 

(252,758

)

 

 

307,646

 

Income tax benefit (expense)

 

 

12,230

 

 

 

(5,831

)

 

 

60,732

 

 

 

(72,486

)

Other comprehensive (loss) income

 

 

(37,993

)

 

 

19,237

 

 

 

(192,026

)

 

 

235,160

 

Comprehensive income

 

$

40,503

 

 

$

175,557

 

 

$

160,992

 

 

$

521,662

 

Consolidated Statements of Shareholders' Equity

UMB Financial Corporation

(dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

(audited)

 

Common

Stock

 

 

Capital

Surplus

 

Retained

Earnings

 

Accumulated

Other

Comprehensive Income (Loss)

 

Treasury

Stock

 

Total

Balance - January 1, 2020

 

$

55,057

 

 

$

1,073,764

 

 

$

1,672,438

 

 

$

83,180

 

 

$

(277,999

)

 

$

2,606,440

 

Total comprehensive income

 

 

 

 

 

 

 

 

286,502

 

 

 

235,160

 

 

 

 

 

 

521,662

 

Dividends ($1.25 per share)

 

 

 

 

 

 

 

 

(60,655

)

 

 

 

 

 

 

 

 

(60,655

)

Purchase of treasury stock

 

 

 

 

 

616

 

 

 

 

 

 

 

 

 

(64,382

)

 

 

(63,766

)

Forfeitures of equity awards, net of issuances

 

 

 

 

 

624

 

 

 

 

 

 

 

 

 

(16

)

 

 

608

 

Recognition of equity-based compensation

 

 

 

 

 

14,512

 

 

 

 

 

 

 

 

 

 

 

 

14,512

 

Sale of treasury stock

 

 

 

 

 

201

 

 

 

 

 

 

 

 

 

414

 

 

 

615

 

Exercise of stock options

 

 

 

 

 

733

 

 

 

 

 

 

 

 

 

3,838

 

 

 

4,571

 

Cumulative effect adjustment

 

 

 

 

 

 

 

 

(7,039

)

 

 

 

 

 

 

 

 

(7,039

)

Balance - December 31, 2020

 

$

55,057

 

 

$

1,090,450

 

 

$

1,891,246

 

 

$

318,340

 

 

$

(338,145

)

 

$

3,016,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2021

 

$

55,057

 

 

$

1,090,450

 

 

$

1,891,246

 

 

$

318,340

 

 

$

(338,145

)

 

$

3,016,948

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

353,018

 

 

 

(192,026

)

 

 

 

 

 

160,992

 

Dividends ($1.38 per share)

 

 

 

 

 

 

 

 

(67,266

)

 

 

 

 

 

 

 

 

(67,266

)

Purchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,506

)

 

 

(5,506

)

Issuances of equity awards, net of forfeitures

 

 

 

 

 

(4,605

)

 

 

 

 

 

 

 

 

5,299

 

 

 

694

 

Recognition of equity-based compensation

 

 

 

 

 

20,514

 

 

 

 

 

 

 

 

 

 

 

 

20,514

 

Sale of treasury stock

 

 

 

 

 

316

 

 

 

 

 

 

 

 

 

283

 

 

 

599

 

Exercise of stock options

 

 

 

 

 

3,845

 

 

 

 

 

 

 

 

 

14,604

 

 

 

18,449

 

Balance - December 31, 2021

 

$

55,057

 

 

$

1,110,520

 

 

$

2,176,998

 

 

$

126,314

 

 

$

(323,465

)

 

$

3,145,424

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

2021

 

2020

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

16,692,648

 

 

 

3.69

%

 

$

16,041,081

 

 

 

3.78

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

8,607,960

 

 

 

1.72

 

 

 

5,776,606

 

 

 

1.81

 

Tax-exempt

 

 

4,158,306

 

 

 

2.92

 

 

 

4,394,734

 

 

 

2.91

 

Total securities

 

 

12,766,266

 

 

 

2.11

 

 

 

10,171,340

 

 

 

2.28

 

Federal funds and resell agreements

 

 

1,099,090

 

 

 

0.83

 

 

 

1,186,939

 

 

 

0.86

 

Interest bearing due from banks

 

 

5,712,993

 

 

 

0.15

 

 

 

1,443,979

 

 

 

0.11

 

Trading securities

 

 

29,426

 

 

 

4.41

 

 

 

29,659

 

 

 

3.21

 

Total earning assets

 

 

36,300,423

 

 

 

2.49

 

 

 

28,872,998

 

 

 

2.95

 

Allowance for credit losses

 

 

(196,891

)

 

 

 

 

 

(217,923

)

 

 

 

Other assets

 

 

1,974,579

 

 

 

 

 

 

1,930,559

 

 

 

 

Total assets

 

$

38,078,111

 

 

 

 

 

$

30,585,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

18,511,653

 

 

 

0.13

%

 

$

16,017,991

 

 

 

0.20

%

Federal funds and repurchase agreements

 

 

2,611,151

 

 

 

0.25

 

 

 

1,963,865

 

 

 

0.35

 

Borrowed funds

 

 

271,296

 

 

 

4.45

 

 

 

274,279

 

 

 

4.26

 

Total interest-bearing liabilities

 

 

21,394,100

 

 

 

0.20

 

 

 

18,256,135

 

 

 

0.27

 

Noninterest-bearing demand deposits

 

 

13,124,918

 

 

 

 

 

 

8,947,389

 

 

 

 

Other liabilities

 

 

417,015

 

 

 

 

 

 

446,572

 

 

 

 

Shareholders' equity

 

 

3,142,078

 

 

 

 

 

 

2,935,538

 

 

 

 

Total liabilities and shareholders' equity

 

$

38,078,111

 

 

 

 

 

$

30,585,634

 

 

 

 

Net interest spread

 

 

 

 

 

2.29

%

 

 

 

 

 

2.68

%

Net interest margin

 

 

 

 

 

2.37

 

 

 

 

 

 

2.78

 

Average Balances / Yields and Rates

 

UMB Financial Corporation

(tax - equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2021

 

2020

 

 

Average

 

Average

 

Average

 

Average

 

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned interest

 

$

16,629,867

 

 

 

3.72

%

 

$

15,126,110

 

 

 

3.87

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

7,422,432

 

 

 

1.72

 

 

 

5,256,715

 

 

 

2.01

 

Tax-exempt

 

 

4,246,943

 

 

 

2.93

 

 

 

4,226,363

 

 

 

2.99

 

Total securities

 

 

11,669,375

 

 

 

2.16

 

 

 

9,483,078

 

 

 

2.45

 

Federal funds and resell agreements

 

 

1,234,533

 

 

 

0.81

 

 

 

1,099,447

 

 

 

1.08

 

Interest bearing due from banks

 

 

4,063,089

 

 

 

0.13

 

 

 

1,218,919

 

 

 

0.31

 

Trading securities

 

 

23,480

 

 

 

4.33

 

 

 

37,086

 

 

 

4.28

 

Total earning assets

 

 

33,620,344

 

 

 

2.64

 

 

 

26,964,640

 

 

 

3.10

 

Allowance for credit losses

 

 

(204,705

)

 

 

 

 

 

(184,482

)

 

 

 

Other assets

 

 

1,912,911

 

 

 

 

 

 

1,787,979

 

 

 

 

Total assets

 

$

35,328,550

 

 

 

 

 

$

28,568,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

17,678,122

 

 

 

0.15

%

 

$

15,336,492

 

 

 

0.38

%

Federal funds and repurchase agreements

 

 

2,618,034

 

 

 

0.26

 

 

 

2,023,813

 

 

 

0.58

 

Borrowed funds

 

 

270,498

 

 

 

4.68

 

 

 

136,957

 

 

 

5.30

 

Total interest-bearing liabilities

 

 

20,566,654

 

 

 

0.22

 

 

 

17,497,262

 

 

 

0.44

 

Noninterest-bearing demand deposits

 

 

11,254,761

 

 

 

 

 

 

7,845,667

 

 

 

 

Other liabilities

 

 

418,021

 

 

 

 

 

 

420,247

 

 

 

 

Shareholders' equity

 

 

3,089,114

 

 

 

 

 

 

2,804,961

 

 

 

 

Total liabilities and shareholders' equity

 

$

35,328,550

 

 

 

 

 

$

28,568,137

 

 

 

 

Net interest spread

 

 

 

 

 

2.42

%

 

 

 

 

 

2.66

%

Net interest margin

 

 

 

 

 

2.50

 

 

 

 

 

 

2.81

 

Business Segment Information

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2021

 

 

 

Commercial

Banking

 

 

Institutional

Banking

 

 

Personal

Banking

 

Total

 

Net interest income

 

$

144,051

 

 

$

23,044

 

 

$

43,475

 

 

$

210,570

 

Provision for credit losses

 

 

7,446

 

 

 

90

 

 

 

964

 

 

 

8,500

 

Noninterest income

 

 

21,457

 

 

 

70,695

 

 

 

26,630

 

 

 

118,782

 

Noninterest expense

 

 

79,895

 

 

 

74,869

 

 

 

67,719

 

 

 

222,483

 

Income before taxes

 

 

78,167

 

 

 

18,780

 

 

 

1,422

 

 

 

98,369

 

Income tax expense

 

 

15,791

 

 

 

3,794

 

 

 

288

 

 

 

19,873

 

Net income

 

$

62,376

 

 

$

14,986

 

 

$

1,134

 

 

$

78,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2020

 

 

 

Commercial

Banking

 

 

Institutional

Banking

 

 

Personal

Banking

 

Total

 

Net interest income

 

$

133,019

 

 

$

22,322

 

 

$

39,334

 

 

$

194,675

 

Provision for credit losses

 

 

3,891

 

 

 

116

 

 

 

993

 

 

 

5,000

 

Noninterest income

 

 

131,630

 

 

 

63,746

 

 

 

32,914

 

 

 

228,290

 

Noninterest expense

 

 

85,942

 

 

 

71,562

 

 

 

69,354

 

 

 

226,858

 

Income before taxes

 

 

174,816

 

 

 

14,390

 

 

 

1,901

 

 

 

191,107

 

Income tax expense

 

 

31,821

 

 

 

2,620

 

 

 

346

 

 

 

34,787

 

Net income

 

$

142,995

 

 

$

11,770

 

 

$

1,555

 

 

$

156,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2021

 

 

 

Commercial

Banking

 

 

Institutional

Banking

 

 

Personal

Banking

 

Total

 

Net interest income

 

$

556,673

 

 

$

87,644

 

 

$

171,204

 

 

$

815,521

 

Provision for credit losses

 

 

15,553

 

 

 

630

 

 

 

3,817

 

 

 

20,000

 

Noninterest income

 

 

81,752

 

 

 

273,413

 

 

 

112,010

 

 

 

467,175

 

Noninterest expense

 

 

289,039

 

 

 

292,080

 

 

 

252,517

 

 

 

833,636

 

Income before taxes

 

 

333,833

 

 

 

68,347

 

 

 

26,880

 

 

 

429,060

 

Income tax expense

 

 

59,165

 

 

 

12,113

 

 

 

4,764

 

 

 

76,042

 

Net income

 

$

274,668

 

 

$

56,234

 

 

$

22,116

 

 

$

353,018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2020

 

 

 

Commercial

Banking

 

 

Institutional

Banking

 

 

Personal

Banking

 

Total

 

Net interest income

 

$

475,425

 

 

$

106,856

 

 

$

148,948

 

 

$

731,229

 

Provision for credit losses

 

 

119,424

 

 

 

882

 

 

 

10,194

 

 

 

130,500

 

Noninterest income

 

 

189,412

 

 

 

254,874

 

 

 

115,880

 

 

 

560,166

 

Noninterest expense

 

 

272,283

 

 

 

286,635

 

 

 

263,087

 

 

 

822,005

 

Income (loss) before taxes

 

 

273,130

 

 

 

74,213

 

 

 

(8,453

)

 

 

338,890

 

Income tax expense (benefit)

 

 

42,223

 

 

 

11,472

 

 

 

(1,307

)

 

 

52,388

 

Net income (loss)

 

$

230,907

 

 

$

62,741

 

 

$

(7,146

)

 

$

286,502

 

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 December 31, 2021.

Non-GAAP Financial Measures

Net operating income Non-GAAP reconciliations:

 

UMB Financial Corporation

(unaudited, dollars in thousands except per share data)

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2021

 

2020

 

2021

 

2020

Net income (GAAP)

 

$

78,496

 

 

$

156,320

 

 

$

353,018

 

 

$

286,502

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

 

 

 

18

 

 

 

324

 

Severance expense

 

 

359

 

 

 

109

 

 

 

1,122

 

 

 

4,757

 

COVID-19 related expense

 

 

169

 

 

 

1,286

 

 

 

696

 

 

 

6,861

 

Tax-impact of adjustments (i)

 

 

(121

)

 

 

(310

)

 

 

(408

)

 

 

(2,651

)

Total Non-GAAP adjustments (net of tax)

 

 

425

 

 

 

1,085

 

 

 

1,428

 

 

 

9,291

 

Net operating income (Non-GAAP)

 

$

78,921

 

 

$

157,405

 

 

$

354,446

 

 

$

295,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - diluted (GAAP)

 

$

1.61

 

 

$

3.24

 

 

$

7.24

 

 

$

5.93

 

Acquisition expense

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Severance expense

 

 

0.01

 

 

 

 

 

 

0.02

 

 

 

0.10

 

COVID-19 related expense

 

 

 

 

 

0.03

 

 

 

0.02

 

 

 

0.14

 

Tax-impact of adjustments (i)

 

 

 

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.06

)

Operating earnings per share - diluted (Non-GAAP)

 

$

1.62

 

 

$

3.26

 

 

$

7.27

 

 

$

6.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.82

%

 

 

2.03

%

 

 

1.00

%

 

 

1.00

%

Return on average equity

 

 

9.91

 

 

 

21.18

 

 

 

11.43

 

 

 

10.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Operating return on average assets

 

 

0.82

%

 

 

2.05

%

 

 

1.00

%

 

 

1.04

%

Operating return on average equity

 

 

9.97

 

 

 

21.33

 

 

 

11.47

 

 

 

10.55

 

 

(i) Calculated using the company’s marginal tax rate of 22.2%.

Operating noninterest expense and operating efficiency ratio Non-GAAP reconciliations:

 

UMB Financial Corporation

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Noninterest expense

 

$

222,483

 

 

$

226,858

 

 

$

833,636

 

 

$

822,005

 

Adjustments to arrive at operating noninterest expense (pre-tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition expense

 

 

18

 

 

 

 

 

 

18

 

 

 

324

 

Severance expense

 

 

359

 

 

 

109

 

 

 

1,122

 

 

 

4,757

 

COVID-19 related expense

 

 

169

 

 

 

1,286

 

 

 

696

 

 

 

6,861

 

Total Non-GAAP adjustments (pre-tax)

 

 

546

 

 

 

1,395

 

 

 

1,836

 

 

 

11,942

 

Operating noninterest expense (Non-GAAP)

 

$

221,937

 

 

$

225,463

 

 

$

831,800

 

 

$

810,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

222,483

 

 

$

226,858

 

 

$

833,636

 

 

$

822,005

 

Less: Amortization of other intangibles

 

 

1,110

 

 

 

1,601

 

 

 

4,757

 

 

 

6,517

 

Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)

 

$

221,373

 

 

$

225,257

 

 

$

828,879

 

 

$

815,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating noninterest expense

 

$

221,937

 

 

$

225,463

 

 

$

831,800

 

 

$

810,063

 

Less: Amortization of other intangibles

 

 

1,110

 

 

 

1,601

 

 

 

4,757

 

 

 

6,517

 

Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)

 

$

220,827

 

 

$

223,862

 

 

$

827,043

 

 

$

803,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

210,570

 

 

$

194,675

 

 

$

815,521

 

 

$

731,229

 

Noninterest income

 

 

118,782

 

 

 

228,290

 

 

 

467,175

 

 

 

560,166

 

Less: Gains on sales of securities available for sale, net

 

 

2,739

 

 

 

1,436

 

 

 

7,817

 

 

 

6,980

 

Total Non-GAAP Revenue (denominator A)

 

$

326,613

 

 

$

421,529

 

 

$

1,274,879

 

 

$

1,284,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (numerator A/denominator A)

 

 

67.78

%

 

 

53.44

%

 

 

65.02

%

 

 

63.49

%

Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)

 

 

67.61

 

 

 

53.11

 

 

 

64.87

 

 

 

62.56

 

Pre-tax, pre-provision income non-GAAP reconciliations:

UMB Financial Corporation

 

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income before taxes (GAAP)

 

$

98,369

 

 

$

191,107

 

 

$

429,060

 

 

$

338,890

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

8,500

 

 

 

5,000

 

 

 

20,000

 

 

 

130,500

 

Pre-tax, pre-provision income (Non-GAAP)

 

$

106,869

 

 

$

196,107

 

 

$

449,060

 

 

$

469,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax earnings per share - diluted (GAAP)

 

$

2.01

 

 

$

3.96

 

 

$

8.80

 

 

$

7.01

 

Provision for credit losses

 

 

0.18

 

 

 

0.10

 

 

 

0.41

 

 

 

2.70

 

Pre-tax, pre-provision earnings per share - diluted (Non-GAAP)

 

$

2.19

 

 

$

4.06

 

 

$

9.21

 

 

$

9.71

 

Pre-tax, pre-provision income - FTE Non-GAAP reconciliations:

 

UMB Financial Corporation

 

(unaudited, dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net interest income

 

$

210,570

 

 

$

194,675

 

 

$

815,521

 

 

$

731,229

 

Adjustments to arrive at net interest income - FTE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent interest

 

 

6,483

 

 

 

6,839

 

 

 

26,334

 

 

 

26,718

 

Net interest income - FTE

 

$

217,053

 

 

$

201,514

 

 

$

841,855

 

 

$

757,947

 

Noninterest income

 

 

118,782

 

 

 

228,290

 

 

 

467,175

 

 

 

560,166

 

Less: Noninterest expense

 

 

222,483

 

 

 

226,858

 

 

 

833,636

 

 

 

822,005

 

Pre-tax, pre-provision income - FTE (Non-GAAP)

 

$

113,352

 

 

$

202,946

 

 

$

475,394

 

 

$

496,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income earnings per share - diluted

 

$

4.31

 

 

$

4.03

 

 

$

16.73

 

 

$

15.12

 

Tax equivalent interest

 

 

0.13

 

 

 

0.14

 

 

 

0.53

 

 

 

0.55

 

Net interest income - FTE

 

 

4.44

 

 

 

4.17

 

 

 

17.26

 

 

 

15.67

 

Noninterest income

 

 

2.43

 

 

 

4.73

 

 

 

9.59

 

 

 

11.59

 

Less: Noninterest expense

 

 

4.55

 

 

 

4.70

 

 

 

17.10

 

 

 

17.00

 

Pre-tax, pre-provision income - FTE earnings per share - diluted (Non-GAAP)

 

$

2.32

 

 

$

4.20

 

 

$

9.75

 

 

$

10.26

 

Tangible book value non-GAAP reconciliations:

UMB Financial Corporation

 

(unaudited, dollars in thousands except share and per share data)

 

 

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

2021

 

 

2020

 

Total shareholders' equity (GAAP)

 

$

3,145,424

 

 

$

3,016,948

 

Less: Intangible assets

 

 

 

 

 

 

 

 

Goodwill

 

 

174,518

 

 

 

180,867

 

Other intangibles, net

 

 

14,416

 

 

 

21,056

 

Total intangibles, net

 

 

188,934

 

 

 

201,923

 

Total tangible shareholders' equity (Non-GAAP)

 

$

2,956,490

 

 

$

2,815,025

 

 

 

 

 

 

 

 

 

 

Total shares outstanding

 

 

48,430,805

 

 

 

48,006,386

 

 

 

 

 

 

 

 

 

 

Ratio of total shareholders' equity (book value) per share

 

$

64.95

 

 

$

62.84

 

Ratio of total tangible shareholders' equity (tangible book value) per share (Non-GAAP)

 

 

61.05

 

 

 

58.64

 

 

Contacts

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Investor Relations Contact: Kay Gregory: 816.860.7106

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