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UMB Financial's (UMBF) CEO Mariner Kemper on Q1 2015 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 27, 2016 09:30 AM ET

Executives

Kay Gregory - Investor Relations

Mariner Kemper - Chief Executive Officer

Mike Hagedorn - Chief Executive Officer of UMB Bank and Interim Chief Financial Officer

Analysts

Chris McGratty - KBW

David Wong - Raymond James

Matt Olney - Stephens

John Rodis - FIG Partners

Peyton Green - Piper Jaffray

Operator

Good morning and welcome to the UMB Financial First Quarter 2016 Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Kay Gregory. Please go ahead.

Kay Gregory

Good morning and thank you for joining us for our conference call and webcast regarding our first quarter 2016 financial results. Before we begin, let me remind you that today’s presentation contains forward-looking statements, all of which are subject to assumptions, risks and uncertainties. Actual results and other future events, circumstances, or aspirations may differ materially from those set forth in any forward-looking statement.

Information about factors that may cause them to differ is contained in our 10-K for 2015 and subsequent 10-Qs and other SEC filings. Forward-looking statements made in today’s presentation speak only as of today and we undertake no obligation to update them. Our earnings press release, as well as our supporting slide deck is available on our website at umbfinancial.com, under news and events in the Investor Section.

The slides are also available in the webcast link for your reference. Reconciliations of non-GAAP financial measures have been included in the earnings release and on pages 5 and 6 of the supporting slides. You’ll notice that we’ve updated the format of the press release this quarter in an effort to streamline the reporting of our results and to provide ready access to the financial information you need. I hope you find this helpful and I’d be happy to receive any feedback you may have.

In addition, we have realigned our reportable segments merging the payment solution segment into the bank segment. Financial results in our healthcare and card businesses now roll-up within the bank segment and previously reported results have been reclassified to confirm to the new structure. On the call today are Mariner Kemper, Chief Executive Officer; and Mike Hagedorn, CEO of UMB Bank and Interim Chief Financial Officer.

I’ll now turn the call over to Mariner Kemper.

Mariner Kemper

Thank you, Kay. Welcome everyone and thank you for joining us. This morning I’ll provide commentary on our high level results, which include strong loan growth and ahead of plan progress on our efficiency initiatives. Also in the first quarter, we converted market financial companies to our platform and accreted capital to our total risk based capital ratio for the first time in three quarters. In all, it was a very good quarter. If you turn to Slide 4, you’ll see that for the first quarter 2016, net income was $36.2 million or $0.74 per diluted share.

On a non-GAAP basis, adjusting for items shown Slide 5, net operating income was $38.6 million or $0.79 per diluted share. Looking at the balance sheet summary on Slide 7, you’ll see that we continue to deliver solid loan growth. I’m very pleased with these results, driven by the efforts of our lending teams across our whole footprint. At March 31, loans stood at $9.7 billion or an increase of $2.2 billion or 29.4%, compared to a year ago.

On a linked quarter basis, loan balances increased 2.9% on top of strong loan growth in the fourth quarter of 2015. Increased loan volume and markets higher yielding loans were the primary drives for our 33 basis point NIM expansion in this quarter as Mike will discuss with you later in the call.