UMBF UMB Financial Corporation

UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced net income for the first quarter 2017 of $44.2 million or $0.89 per diluted share, compared to $42.9 million or $0.87 per diluted share in the fourth quarter 2016 (linked quarter) and $36.4 million or $0.74 per diluted share in the first quarter 2016. Such reported GAAP net income represents an increase of 2.9 percent on a linked-quarter basis and 21.4 percent compared to the first quarter 2016.

Net operating income, a non-GAAP financial measure which is reconciled to the nearest comparable GAAP measure later in this release, was $44.5 million or $0.89 per diluted share for the first quarter 2017, compared to $45.3 million or $0.91 per diluted share for the linked quarter and $38.7 million or $0.79 per diluted share for the first quarter 2016. These results represent a decrease of 1.8 percent on a linked-quarter basis and an increase of 14.9 percent compared to the first quarter 2016.

Summary of financial results    

UMB Financial Corporation

(unaudited, dollars in thousands)     Q1     Q4     Q1 2017     2016     2016

GAAP

Net income

 

$

44,181

 

$

42,934

 

$

36,403

Earnings per share (diluted) 0.89 0.87 0.74 Return on average assets 0.89 % 0.86 % 0.76 % Return on average equity 9.04 8.58 7.54 Efficiency ratio 70.45 % 71.51 % 74.41 %  

Non-GAAP

Net operating income

 

$

44,486

 

$

45,294

 

$

38,729

Operating earnings per share (diluted) 0.89 0.91 0.79 Operating return on average assets 0.89 % 0.90 % 0.81 % Operating return on average equity 9.10 9.05 8.02 Operating efficiency ratio 70.27 % 70.07 % 72.89 %  

“2017 is off to a solid start for UMB,” said Mariner Kemper, chairman and chief executive officer. “We continue to post double-digit year-over-year loan growth, with average loans increasing 10.6 percent compared to the same period in 2016. This growth, along with our efforts to achieve an optimal mix of earning assets and increased loan yields, drove a 13.9 percent increase in net interest income. We are pleased with this continued growth, as well as our progress toward improved profitability.

“In addition, we announced last week an agreement to sell our Scout Investments business to Carillon Tower Advisers. This was a strategic business decision that will allow us to invest time, energy and capital resources into growing our core banking businesses.”

Summary of revenue     UMB Financial Corporation (unaudited, dollars in thousands)                 Q1 Q4 Q1 CQ vs.     CQ vs. 2017     2016     2016     LQ     PY   Net interest income

$

134,315

$

131,456

$

117,892

$

2,859

$

16,423

Noninterest income: Trust and securities processing 60,404 60,431 59,485 (27 ) 919 Trading and investment banking 7,542 5,040 4,630 2,502 2,912 Service charges on deposit accounts 22,075 20,949 21,461 1,126 614

Insurance fees and commissions

646 833 1,497 (187 ) (851 ) Brokerage fees 5,377 4,674 4,185 703 1,192 Bankcard fees 17,752 16,113 18,016 1,639 (264 ) Gains on sales of securities available for sale, net 468 - 2,933 468 (2,465 ) Equity (losses) earnings on alternative investments (614 ) 504 (381 ) (1,118 ) (233 ) Other   7,130         7,786         4,524         (656 )       2,606   Total noninterest income

$

120,780

     

$

116,330

     

$

116,350

     

$

4,450

     

$

4,430

                            Total Revenue

$

255,095

     

$

247,786

     

$

234,242

     

$

7,309

     

$

20,853

    Net interest margin (FTE)

3.09

%

3.00

%

2.79

%

  Total noninterest income as a % of total revenue

47.40

%

46.90

%

49.70

%

 

Net interest income

• On a linked quarter basis, the increase in net interest income was driven by a nine basis point improvement in net interest margin, coupled with a 2.1 percent, or $214.1 million, increase in average loans.
• Earning asset yields improved 14 basis points from the linked quarter, which was partially offset by an increase in the cost of interest-bearing liabilities of nine basis points. Average loan yields improved 13 basis points from the linked quarter to 4.09 percent, driven, in part, by favorable re-pricing and mix changes within the loan portfolio.
• On a year-over-year basis, the increase in net interest income was driven by a 10.6 percent or $1.0 billion increase in average loans as well as higher average loan yields, which increased 28 basis points from a year ago, primarily driven by favorable pricing and mix changes.
• For the first quarter 2017, average earning assets stood at $18.9 billion, an increase of 1.6 percent over the linked quarter and 4.7 percent over the first quarter 2016.

Noninterest income

• First quarter 2017 noninterest income increased $4.5 million, or 3.8 percent, on a linked quarter basis largely due to:
  • a $2.4 million increase in unrealized gains on the company’s seed investments in certain Scout funds;
  • a $1.1 million increase in deposit service charges primarily driven by the company’s healthcare business;
  • a $0.7 million increase in interchange income and a $0.6 million decrease in retail and commercial card program rewards and rebates expense recorded within bankcard fees;
  • which were partially offset by a $1.1 million decrease in equity earnings on alternative investments.
• Noninterest income improved $4.4 million, or 3.8 percent, compared to the same quarter in 2016 driven by:
  • a $1.4 million increase in unrealized gains on the company’s seed investments in certain Scout funds and $0.7 million increase in bond underwriting fees, both recorded in trading and investment banking income;
  • an increase in other noninterest income due to a $2.0 million increase in the fair value of company-owned life insurance;
  • a $1.3 million increase in 12b-1 income recorded in brokerage fees;
  • which were partially offset by a $2.5 million decrease in gains on available-for-sale securities.

Summary of noninterest expense     UMB Financial Corporation (unaudited, dollars in thousands)                     Q1 Q4 Q1 CQ vs. CQ vs. 2017     2016     2016     LQ     PY   Salaries and employee benefits

$

113,834

$

107,538

$

106,850

$

6,296

$

6,984

Occupancy, net 11,148 11,421 10,972 (273 ) 176 Equipment 17,668 17,726 16,282 (58 ) 1,386 Supplies and services 4,281 4,788 4,949 (507 ) (668 ) Marketing and business development 4,503 6,256 4,441 (1,753 ) 62 Processing fees 11,301 11,045 11,462 256 (161 ) Legal and consulting 5,300 7,056 4,799 (1,756 ) 501 Bankcard 4,903 4,558 5,815 345 (912 ) Amortization of other intangible assets 2,869 2,928 3,226 (59 ) (357 ) Regulatory fees 3,833 3,687 3,429 146 404 Other   9,126       9,321       8,219       (195 )       907   Total noninterest expense

$

188,766

   

$

186,324

   

$

180,444

   

$

2,442

     

$

8,322

   

Noninterest expense

• On a non-GAAP basis, operating noninterest expense, which excludes the impact of acquisition expenses and other items as reconciled later in this release, was $188.3 million for the first quarter 2017, an increase of $5.7 million, or 3.1 percent, compared to the linked quarter, and $11.5 million, or 6.5 percent, compared to the first quarter 2016.
• On a linked quarter GAAP basis, the $2.4 million, or 1.3 percent, increase in noninterest expense was driven by expected increases in payroll taxes, 401(k) benefits, and medical insurance expense, offset, in part, by decreases in marketing and business development and legal and consulting expenses from elevated fourth quarter levels.
• The increase in noninterest expense of $8.3 million, or 4.6 percent, compared to the first quarter 2016 was primarily driven by:
  • a $1.9 million increase in salary and wage expense, a $1.9 million increase in bonus and commission expense, and a $3.1 million increase in employee benefits partially driven by a $1.6 million increase in fair value adjustments on the company’s deferred compensation plan; and
  • higher equipment expense for computer and hardware costs related to investments for regulatory requirements, cyber security, and the ongoing modernization of the company’s core systems.

Income Taxes

• The Company’s effective tax rate was 22.9 percent for the quarter ended March 31, 2017 compared to 25.4 percent for the same period a year earlier. The decrease is primarily a result of an increase in excess tax benefits associated with stock compensation recorded in the first quarter of 2017 compared to the same period a year earlier.

Balance Sheet

• Average total assets for the first quarter 2017 were $20.2 billion compared to $19.9 billion for the linked quarter, and $19.3 billion for the same period in 2016.

Summary of average loans and leases     UMB Financial Corporation (unaudited, dollars in thousands)                     Q1 Q4 Q1 CQ vs. CQ vs. 2017     2016     2016     LQ     PY   Averages: Commercial

$

4,397,675

$

4,369,173

$

4,252,016

$

28,502

$

145,659

Asset based loans 225,818 231,035 222,483 (5,217 ) 3,335 Factoring loans 148,356 110,866 85,704 37,490 62,652 Commercial credit card 157,864 150,630 147,121 7,234 10,743 Real estate - construction 793,892 674,367 457,448 119,525 336,444 Real estate - commercial 3,157,363 3,089,946 2,730,483 67,417 426,880 Real estate - residential 567,611 553,770 472,711 13,841 94,900 Real estate - HELOC 697,010 713,528 733,755 (16,518 ) (36,745 ) Consumer credit card 249,489 271,909 270,965 (22,420 ) (21,476 ) Consumer other 125,835 146,779 135,400 (20,944 ) (9,565 ) Leases   39,221       34,020       42,205       5,201         (2,984 ) Total loans

$

10,560,134

   

$

10,346,023

   

$

9,550,291

   

$

214,111

     

$

1,009,843

   

• Average loans for the first quarter 2017 increased 2.1 percent, on a linked-quarter basis, and 10.6 percent, compared to first quarter 2016.

Summary of average securities     UMB Financial Corporation (unaudited, dollars in thousands)                     Q1 Q4 Q1 CQ vs. CQ vs. 2017     2016     2016     LQ     PY   Securities available for sale: U.S. Treasury

$

83,302

$

182,891

$

353,501

$

(99,589

)

$

(270,199

)

U.S. Agencies 144,166 248,329 643,129 (104,163 ) (498,963 ) Mortgage-backed 3,753,733 3,586,040 3,606,221 167,693 147,512 State and political subdivisions 2,412,351 2,362,178 2,153,059 50,173 259,292 Corporates   66,840       67,100       80,082       (260 )       (13,242 ) Total securities available for sale

$

6,460,392

$

6,446,538

$

6,835,992

$

13,854

$

(375,600

)

Securities held to maturity: State and political subdivisions 1,157,871 1,073,509 732,137 84,362 425,734 Trading securities 60,462 50,925 26,358 9,537 34,104 Other securities   67,988       66,567       64,207       1,421         3,781   Total securities

$

7,746,713

   

$

7,637,539

   

$

7,658,694

   

$

109,174

     

$

88,019

   

• The growth in the company’s held to maturity securities portfolio is attributed to increased activity in private placement bonds, primarily used to refinance existing revenue bonds in the healthcare and education sectors.

Summary of average deposits     UMB Financial Corporation (unaudited, dollars in thousands)                     Q1 Q4 Q1 CQ vs. CQ vs. 2017     2016     2016     LQ     PY   Deposits: Noninterest-bearing demand

$

5,998,943

$

6,193,787

$

6,014,820

$

(194,845

)

$

(15,878

)

Interest-bearing demand and savings 8,564,059 8,439,920 8,201,591 124,139 362,468 Time deposits   1,079,946         1,112,781         1,228,183         (32,834 )       (148,236 ) Total deposits

$

15,642,948

     

$

15,746,488

     

$

15,444,594

     

$

(103,540

)

   

$

198,354

    Non-interest bearing deposits as % of total 38.3 % 39.3 % 38.9 %  

• The cost of interest-bearing liabilities for the first quarter 2017 was 35 basis points, and total cost of funds including noninterest-bearing deposits was 23 basis points.

Capital information     UMB Financial Corporation (unaudited, dollars in thousands, except per share data)             March 31, December 31, March 31, 2017     2016     2016   Total equity

$

2,010,878

$

1,962,384

$

1,948,333

Book value per common share 40.34 39.51 39.39   Regulatory capital: Common equity Tier 1 capital

$

1,821,915

$

1,789,581

$

1,675,854

Tier 1 capital 1,821,915 1,789,581 1,675,854 Total capital 1,985,231 1,951,078 1,825,867   Regulatory capital ratios: Common equity Tier 1 capital ratio

11.89

%

11.80

%

11.80

%

Tier 1 risk-based capital ratio 11.89 11.80 11.80 Total risk-based capital ratio 12.96 12.87 12.85 Tier 1 leverage ratio 9.11 9.09 8.78              

Credit quality

UMB Financial Corporation

  (unaudited, dollars in thousands) Q1 Q4 Q3 Q2 Q1 2017       2016       2016       2016       2016   Net charge-offs (recoveries) - Commercial loans $ 5,283 $ 1,127 $ 5,538 $ (59) $ 2,586 Net charge-offs (recoveries) - Real estate loans 125 3,373 (67) 1,164 1,301 Net charge-offs - Consumer credit card loans 1,815 1,692 1,658 1,575 1,781 Net charge-offs - Consumer other loans 103       63       133       52       77 Net charge-offs - Total loans 7,326 6,255 7,262 2,732 5,745 Net loan charge-offs as a % of total average loans 0.28

%

 

0.24

%

 

0.28

%

 

0.11

%

 

0.24 % Loans over 90 days past due $ 3,369 $ 3,365 $ 2,678 $ 4,700 $ 3,334 Loans over 90 days past due as a % of total loans 0.03

%

 

0.03

%

 

0.03

%

 

0.05

%

 

0.03 % Nonaccrual and restructured loans $

56,594

$ 70,259 $ 79,607 $ 58,423 $ 54,933 Nonaccrual and restructured loans as a % of total loans 0.53

%

 

0.67

%

 

0.77

%

 

0.58

%

 

0.57 % Provision for loan losses $ 9,000 $ 7,500 $ 13,000 $ 7,000 $ 5,000  

• Nonperforming loans, defined as restructured loans on nonaccrual and all other nonaccrual loans, decreased $13.7 million from the linked quarter and increased $1.7 million from the prior year.

Divestiture Subsequent Event

On April 20, 2017, the company announced the execution of an agreement to sell 100 percent of the stock of Scout Investments, Inc. (Scout), its institutional investment management subsidiary, with $27.9 billion in assets under management as of March 31, 2017, to Carillon Tower Advisers, a unit of Raymond James Financial, for $172.5 million in cash, subject to purchase price adjustments at closing. The company plans to use the proceeds from the transaction to support its current growth strategies. See the company’s current report Form 8-K filed with the Securities and Exchange Commission on April 20, 2017 for additional information. The transaction did not meet the requirements to be accounted for as a discontinued operation for the March 31, 2017 reporting period but will be presented as a discontinued operation prospectively. The following table shows the company’s income statement components from continuing operations and income from discontinued operations (Scout) for the previous financial periods listed below on a supplemental basis to give effect to the sale of Scout.

Consolidated condensed supplemental information

  UMB Financial Corporation (unaudited, dollars in thousands)                   Full Year Q1 Q2 Q3 Q4 Q1 2014   2015   2016 2016   2016   2016   2016   2017 From continuing operations: Net interest income

$

350,055

$

412,067

$

495,323

$

117,892

$

121,210

$

124,765

$

131,456

$

134,315

Provision for loan losses 17,000 15,500 32,500 5,000 7,000 13,000 7,500 9,000 Noninterest income 368,235 370,659 402,511 97,965 102,774 103,542 98,230 102,917 Noninterest expense   582,942     639,437     667,297     165,406     168,556     165,350     167,985       173,950 Income before taxes 118,348 127,789 198,037 45,451 48,428 49,957 54,201 54,282 Income tax expense   27,502     31,549     44,755   11,190     12,052     10,624     10,889       12,407 Income - continuing operations   90,846     96,240     153,282   34,261     36,376     39,333     43,312       41,875 Income before taxes - discontinued ops 47,715 31,496 8,967 3,347 1,886 3,973 (239 ) 3,047 Income tax expense - discontinued ops   17,906     11,663     3,448   1,205     744     1,360     139       741 Income - discontinued operations   29,809     19,833     5,519   2,142     1,142     2,613     (378 )     2,306 Net Income

$

120,655

 

$

116,073

 

$

158,801

$

36,403

 

$

37,518

 

$

41,946

 

$

42,934

   

$

44,181

 

Conference Call

The company plans to host a conference call to discuss its first quarter 2017 earnings results on Wednesday, April 26, 2017, at 8:30 a.m. (CT).

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 1Q 2017 Conference Call

A replay of the conference call may be heard through May 10, 2017, by calling (toll-free) 877-344-7529 or (U.S.) 412-317-0088. The replay pass code required for playback is 10103480. The call replay may also be accessed via the company's website umbfinancial.com by visiting the investor relations area.

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, and operating efficiency ratio, all of which are non-GAAP financial measures. 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 differences between the non-GAAP financial measures—net operating income, operating EPS, operating ROE, operating ROA, operating noninterest expense and operating efficiency ratio—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 fair value adjustments, acquisition- and severance-related items and one-time marketing agent termination costs that management does not believe reflect the company’s fundamental operating performance.

Net operating income for the relevant period is defined as GAAP net income, adjusted to reflect the impact of excluding the following: (i) fair value adjustments on contingent consideration for the acquisitions of Reams Asset Management Company (Reams), (ii) expenses related to acquisitions, (iii) non-acquisition related severance expense, (iv) expenses related to the buy-out and termination of certain marketing and referral agreements in the company’s institutional investment management business, and (v) the cumulative tax impact of the previous adjustments. The company believes that the financial impact of excluding non-acquisition related severance expense will be immaterial in the near future. It is excluded from certain GAAP financial measures as it has an unusually large impact on the company’s financial statements.

Operating EPS (basic and 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 in clauses (i)-(v) 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 in clauses (i)-(iv) 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 revenue (tax equivalent net interest income plus noninterest income less gains on sales of securities available for sale, net).

Forward-Looking Statements:

This release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts—such as our statements about expected cost savings and other results of efficiency initiatives and our statements about reduced regulation, tax reform and our ability to capitalize on changes. 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, 2016, 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). 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.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, 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.

Consolidated Balance Sheets         UMB Financial Corporation (dollars in thousands)         March 31,

Assets

2017     2016 (unaudited)     (unaudited) Loans $ 10,757,236 $ 9,699,631 Allowance for loan losses   (93,323 )       (80,398 ) Net loans   10,663,913         9,619,233   Loans held for sale 1,934 4,830 Investment securities: Available for sale 6,551,593 6,883,312 Held to maturity 1,206,639 804,652 Trading securities 75,494 26,779 Other securities   67,910         64,591   Total investment securities   7,901,636         7,779,334   Federal funds and resell agreements 196,467 170,824 Interest-bearing due from banks 374,570 401,961 Cash and due from banks 373,671 325,446 Premises and equipment, net 282,398 279,079 Accrued income 97,035 90,002 Goodwill 228,396 228,396 Other intangibles, net 31,622 43,556 Other assets   424,495         360,252   Total assets $ 20,576,137       $ 19,302,913    

Liabilities

Deposits: Noninterest-bearing demand $ 6,202,246 $ 6,202,026 Interest-bearing demand and savings 8,622,219 8,178,712 Time deposits under $250,000 594,967 727,709 Time deposits of $250,000 or more   475,752         309,926   Total deposits   15,895,184         15,418,373   Federal funds and repurchase agreements 2,390,364 1,681,723 Short-term debt - 5,006 Long-term debt 76,104 85,238 Accrued expenses and taxes 142,987 116,034 Other liabilities   60,620         48,206   Total liabilities   18,565,259         17,354,580    

Shareholders' Equity

Common stock 55,057 55,057 Capital surplus 1,033,225 1,018,492 Retained earnings 1,174,587 1,057,433 Accumulated other comprehensive (loss) income, net (44,159 ) 32,468 Treasury stock   (207,832 )       (215,117 ) Total shareholders' equity   2,010,878         1,948,333   Total liabilities and shareholders' equity $ 20,576,137       $ 19,302,913       Consolidated Statements of Income         UMB Financial Corporation (dollars in thousands except share and per share data)             Three Months Ended March 31,

Interest Income

2017     2016 (unaudited) (unaudited) Loans

$

106,560

$

90,544

Securities: Taxable interest 19,190 19,357 Tax-exempt interest   17,183         12,735   Total securities income 36,373 32,092 Federal funds and resell agreements 919 507 Interest-bearing due from banks 551 891 Trading securities   287         52   Total interest income   144,690         124,086    

Interest Expense

Deposits 5,966 4,055 Federal funds and repurchase agreements 3,469 1,230 Other   940         909   Total interest expense   10,375         6,194   Net interest income 134,315 117,892 Provision for loan losses   9,000         5,000   Net interest income after provision for loan losses   125,315         112,892    

Noninterest Income

Trust and securities processing 60,404 59,485 Trading and investment banking 7,542 4,630 Service charges on deposits 22,075 21,461 Insurance fees and commissions 646 1,497 Brokerage fees 5,377 4,185 Bankcard fees 17,752 18,016 Gains on sale of securities available for sale, net 468 2,933 Equity losses on alternative investments (614 ) (381 ) Other   7,130         4,524   Total noninterest income   120,780         116,350    

Noninterest Expense

Salaries and employee benefits 113,834 106,850 Occupancy, net 11,148 10,972 Equipment 17,668 16,282 Supplies, postage and telephone 4,281 4,949 Marketing and business development 4,503 4,441 Processing fees 11,301 11,462 Legal and consulting 5,300 4,799 Bankcard 4,903 5,815 Amortization of other intangibles 2,869 3,226 Regulatory fees 3,833 3,429 Other   9,126         8,219   Total noninterest expense 188,766 180,444 Income before income taxes   57,329         48,798   Income tax provision   13,148         12,395   Net income

$

44,181

     

$

36,403

   

Per Share Data

Net income - basic

$

0.90

$

0.75

Net income – diluted 0.89 0.74 Dividends 0.255 0.245   Weighted average shares outstanding 49,109,872 48,756,433 Weighted average shares outstanding – diluted 49,829,508 49,016,400     Consolidated Statements of Comprehensive Income         UMB Financial Corporation (dollars in thousands)         Three Months Ended March 31, 2017     2016 (unaudited)     (unaudited) Net Income $ 44,181 $ 36,403 Other comprehensive income, net of tax: Unrealized gains on securities: Change in unrealized holding gains, net 22,271 65,312 Less: Reclassifications adjustment for gains included in net income   (468 )       (2,933 ) Change in unrealized gains on securities during the period 21,803 62,379 Change in unrealized gains (losses) on derivatives 246 (4,140 ) Income tax expense   (8,666 )       (22,053 ) Other comprehensive income   13,383         36,186   Comprehensive income $ 57,564       $ 72,589       Consolidated Statements of Shareholders' Equity   UMB Financial Corporation (dollars in thousands, except per share data)           Accumulated     Other Common Capital Retained Comprehensive Treasury (unaudited) Stock   Surplus   Earnings   Income (Loss)   Stock   Total Balance - January 1, 2016 $ 55,057 $ 1,019,889 $ 1,033,990 $ (3,718 ) $ (211,524 ) $ 1,893,694 Total comprehensive income - - 36,403 36,186 - 72,589 Cash dividends ($0.245 per share) - - (12,104 ) - - (12,104 ) Purchase of treasury stock - - - - (12,880 ) (12,880 ) Issuance of equity awards (6,199 ) - - 6,628 429 Recognition of equity based compensation - 2,047 - - - 2,047 Sale of treasury stock - 123 - - 140 263 Exercise of stock options - 1,294 - - 2,519 3,813 Cumulative effect adjustment   -     1,338       (856 )     -       -       482   Balance – March 31, 2016 $ 55,057   $ 1,018,492     $ 1,057,433     $ 32,468     $ (215,117 )   $ 1,948,333     (unaudited) Balance - January 1, 2017 $ 55,057 $ 1,033,419 $ 1,142,887 $ (57,542 ) $ (211,437 ) $ 1,962,384 Total comprehensive income - - 44,181 13,383 - 57,564 Cash dividends ($0.255 per share) - - (12,481 ) - - (12,481 ) Purchase of treasury stock - - - - (4,028 ) (4,028 ) Issuance of equity awards - (4,140 ) - - 4,611 471 Recognition of equity based compensation - 2,861 - - - 2,861 Sale of treasury stock - 150 - - 117 267 Exercise of stock options   -     935       -       -       2,905       3,840   Balance – March 31, 2017 $ 55,057   $ 1,033,225     $ 1,174,587     $ (44,159 )   $ (207,832 )   $ 2,010,878       Average Balances / Yields and Rates     UMB Financial Corporation (tax - equivalent basis)     (unaudited, dollars in thousands) Three Months Ended March 31, 2017     2016 Average     Average Average     Average

Assets

Balance     Yield/Rate Balance     Yield/Rate Loans, net of unearned interest $ 10,560,134 4.09 % $

9,550,291

3.81 % Securities: Taxable 4,198,795 1.85 4,826,822 1.61 Tax-exempt   3,487,456       3.07   2,805,514       2.81   Total securities 7,686,251 2.40 7,632,336 2.05 Federal funds and resell agreements 238,201 1.56 146,791 1.39 Interest-bearing due from banks 309,125 0.72 648,635 0.55 Trading securities   60,462       2.45   26,358       1.01   Total earning assets 18,854,173 3.31 18,004,411 2.93 Allowance for loan losses (93,106 ) (80,820 ) Other assets   1,473,282     1,411,260   Total assets $ 20,234,349   $ 19,334,851      

Liabilities and Shareholders' Equity

Interest-bearing deposits $ 9,644,005 0.25 % $ 9,429,774 0.17 % Federal funds and repurchase agreements 2,329,630 0.60 1,696,555 0.29 Borrowed funds   76,468       4.99   92,558       3.95   Total interest-bearing liabilities 12,050,103 0.35 11,218,887 0.22 Noninterest-bearing demand deposits 5,998,943 6,014,820 Other liabilities 202,248 159,883 Shareholders' equity   1,983,055     1,941,261   Total liabilities and shareholders' equity $ 20,234,349   $ 19,334,851   Net interest spread 2.96 % 2.71 % Net interest margin 3.09 2.79     Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands)     Three Months Ended March 31, 2017 Bank    

InstitutionalInvestmentManagement

    Asset Servicing     Total Net interest income $ 131,663     $ -     $ 2,652     $ 134,315 Provision for loan losses 9,000 - - 9,000 Noninterest income 79,215 19,254 22,311 120,780 Noninterest expense   150,251       17,676       20,839       188,766

Income before taxes

51,627 1,578 4,124 57,329

Income tax expense

  11,861       345       942       13,148

Net income

$ 39,766     $ 1,233     $ 3,182     $ 44,181   Average assets $ 19,341,000 $ 61,000 $ 832,000 $ 20,234,000   Three Months Ended March 31, 2016 Bank    

InstitutionalInvestmentManagement

    Asset Servicing     Total Net interest income $ 115,271 $ - $ 2,621 $ 117,892 Provision for loan losses 5,000 - - 5,000 Noninterest income 75,417 18,425 22,508 116,350 Noninterest expense   142,967       17,266       20,211       180,444 Income before taxes 42,721 1,159 4,918 48,798 Income tax expense   10,855       287       1,253       12,395 Net income $ 31,866     $ 872     $ 3,665     $ 36,403   Average assets $ 17,885,000 $ 63,000 $ 1,387,000 $ 19,335,000     Non-GAAP Financial Measures     UMB Financial Corporation Net operating income and operating earnings per share non-GAAP reconciliations: (unaudited, dollars in thousands, except share and per share data)       Three Months Ended March 31,     December 31,     March 31, 2017     2016     2016 Net income (GAAP)

$

44,181

$

42,934

$

36,403

Adjustments: Fair value adjustments on contingent consideration (i) - - 67 Acquisition expenses (ii) - 547 3,043 Non-acquisition severance expense (iii) 476 415 524 Marketing agent termination costs (iv) - 2,725 - Tax-impact of adjustments (v)   (171 )       (1,327 )       (1,308 ) Total Non-GAAP adjustments (net of tax)   305         2,360         2,326   Net operating income (Non-GAAP)

$

44,486

     

$

45,294

     

$

38,729

    Earnings per share as reported - diluted

$

0.89

$

0.87

$

0.74

Fair value adjustments on contingent consideration (i) - - - Acquisition expenses (ii) - 0.01 0.07 Non-acquisition severance expense (iii) 0.01 0.01 0.01 Marketing agent termination costs (iv) - 0.05 - Tax-impact of adjustments (v)   (0.01 )       (0.03 )       (0.03 ) Operating earnings per share - diluted

$

0.89

     

$

0.91

     

$

0.79

   

GAAP

Return on average assets

0.89

%

0.86

%

0.76

%

Return on average equity 9.04 8.58 7.54  

Non-GAAP

Operating return on average assets

0.89

%

0.90

%

0.81

%

Operating return on average equity 9.10 9.05 8.02     Operating noninterest expense and operating efficiency ratio non-GAAP reconciliations:     UMB Financial Corporation (unaudited, dollars in thousands except share and per share data)     Three Months Ended March 31,     December 31,     March 31, 2017     2016     2016 Noninterest expense $ 188,766 $ 186,324 $ 180,444 Adjustments to arrive at operating noninterest expense (pre-tax): Fair value adjustments on contingent consideration (i) - - 67 Acquisition expenses (ii) - 547 3,043 Non-acquisition severance expense (iii) 476 415 524 Marketing agent termination costs (iv)   -         2,725         -   Total Non-GAAP adjustments (pre-tax)   476         3,687         3,634   Operating noninterest expense $ 188,290       $ 182,637       $ 176,810     Noninterest expense $ 188,766 $ 186,324 $ 180,444 Less: Amortization of other intangibles   2,869         2,928         3,226   Noninterest expense, net of amortization of other intangibles (numerator A) $ 185,897       $ 183,396       $ 177,218     Operating noninterest expense $ 188,290 $ 182,637 $ 176,810 Less: Amortization of other intangibles   2,869         2,928         3,226   Operating expense, net of amortization of other intangibles (numerator B) $ 185,421       $ 179,709       $ 173,584     Net interest income (tax equivalent) (vi) $ 143,572 $ 140,147 $ 124,744 Noninterest income 120,780 116,330 116,350 Less: Gains on sales of securities available for sale, net   468         -         2,933   Total (denominator A) $ 263,884       $ 256,477       $ 238,161     Efficiency ratio (numerator A/denominator A)

70.45

%

 

71.51

%

 

74.41

%

Operating efficiency ratio (numerator B/denominator A) 70.27 70.07 72.89 (i)   Represents fair value adjustments to contingent consideration for the acquisitions of Reams. (ii) Represents expenses related to acquisitions. (iii) Represents non-acquisition severance expense related to UMB-legacy employees as management excludes severance expense from its internal evaluation of company performance. Severance expense for Marquette-legacy employees is included in item (ii). (iv) Represents expenses related to the buy-out and termination of certain marketing and referral agreements in the company’s institutional investment management business. (v) Calculated using the company's marginal tax rate of 36%. (vi) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $9.3 million, $8.7 million, and $6.9 million for the three months ended March 31, 2017, December 31, 2016, and March 31, 2016, respectively.

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UMB Financial CorporationMedia Contact:Rachael Crocker, 816-860-7775orInvestor Relations Contact:Kay Gregory, 816-860-7106