UMB Financial 8K Reports Earnings of $196.3 Million for the Full-Year 2018 | UMBF 29 Jan 19

Exhibit 99.1

UMB Financial Corporation News Release

1010 Grand Boulevard

Kansas City, MO 64106

816.860.7000

umb.com

//FOR IMMEDIATE RELEASE//

Media Contact: Stephanie Hague: 816.860.5088

Investor Relations Contact: Kay Gregory: 816.860.7106

UMB Financial Corporation Reports Earnings of $196.3 Million for the Full-Year 2018

KANSAS CITY, Mo. (January 29, 2019) – UMB Financial Corporation (Nasdaq: UMBF), a financial services company, announced results for the fourth quarter and year ended December 31, 2018.

“Results for the fourth quarter 2018 included 8.5 percent annualized average loan growth, 9.9 percent deposit growth and margin expansion of six basis points on a linked-quarter basis,” said Mariner Kemper, chairman and chief executive officer. “However, our results for the quarter were significantly impacted by the charge off of a single $48.1 million factoring relationship. Strong asset quality has long been a hallmark of UMB and this event is certainly not typical for us. After a thorough review, we believe that the issues specific to this credit were isolated and that this charge-off does not point to deterioration in any particular sector. We will continue to evaluate our internal controls.”

Income from continuing operations for the fourth quarter 2018 was $25.5 million, or $0.52 per diluted share, compared to $57.8 million, or $1.16 per diluted share, in the third quarter 2018 (linked quarter) and $47.4 million, or $0.95 per diluted share, in the fourth quarter 2017. The reported GAAP income from continuing operations represents decreases of 56.0 percent on a linked-quarter basis and 46.3 percent compared to the fourth quarter 2017. For the year ended December 31, 2018, income from continuing operations was $196.3, million or $3.94 per diluted share, which is an increase of 7.3 percent compared to $183.0 million, or $3.67 per diluted share, for the year ended December 31, 2017.

Net operating income from continuing operations, a non-GAAP financial measure reconciled to income from continuing operations, the nearest comparable GAAP measure, later in this release, was $27.6 million, or $0.56 per diluted share, for the fourth quarter 2018, compared to $58.0 million, or $1.16 per diluted share, for the linked quarter and $47.5 million, or $0.95 per diluted share, for the fourth quarter 2017. These results represent decreases of 52.5 percent on a linked-quarter basis and 42.0 percent compared to the fourth quarter 2017. For the year ended December 31, 2018, net operating income from continuing operations was $200.7 million, or $4.03 per diluted share, compared to $183.7 million, or $3.69 per diluted share, for the year ended December 31, 2017.

Summary of quarterly financial results	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
	Q4			Q3			Q4
	2018			2018			2017
Income from continuing operations	$	25,454		$	57,849		$	47,357
Income from discontinued operations		—			—			64,604
Net income		25,454			57,849			111,961

Earnings per share from continuing operations (diluted)		0.52			1.16			0.95
Earnings per share from discontinued operations (diluted)		—			—			1.30
Earnings per share (diluted)		0.52			1.16			2.25

Net operating income from continuing operations		27,578			58,024			47,533
Operating earnings per share from continuing operations (diluted)		0.56			1.16			0.95

GAAP - continuing operations
Return on average assets		0.46	%		1.11	%		0.91	%
Return on average equity		4.57			10.32			8.72
Efficiency ratio		71.26			71.27			71.70

Non-GAAP - continuing operations
Operating return on average assets		0.50	%		1.11	%		0.91	%
Operating return on average equity		4.95			10.35			8.75
Operating efficiency ratio		70.19			71.18			71.59

Summary of year-to-date financial results	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)	December			December
	YTD			YTD
	2018			2017
Income from continuing operations	$	196,260		$	182,976
(Loss) income from discontinued operations		(747	)		64,129
Net income		195,513			247,105

Earnings per share from continuing operations (diluted)		3.94			3.67
(Losses) earnings per share from discontinued operations (diluted)		(0.01	)		1.29
Earnings per share (diluted)		3.93			4.96

Net operating income from continuing operations		200,743			183,688
Operating earnings per share from continuing operations (diluted)		4.03			3.69

GAAP - continuing operations
Return on average assets		0.93	%		0.90	%
Return on average equity		8.94			8.79
Efficiency ratio		70.39			71.33

Non-GAAP - continuing operations
Operating return on average assets		0.96	%		0.90	%
Operating return on average equity		9.15			8.83
Operating efficiency ratio		69.82			71.22

Discussion of results from continuing operations

Summary of revenue	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4			Q3			Q4			CQ vs.			CQ vs.
	2018			2018			2017			LQ			PY
Net interest income	$	161,808		$	150,490		$	146,346		$	11,318		$	15,462
Noninterest income:
Trust and securities processing		41,891			43,425			44,234			(1,534	)		(2,343	)
Trading and investment banking		3,119			3,711			5,015			(592	)		(1,896	)
Service charges on deposit accounts		20,733			20,927			21,364			(194	)		(631	)
Insurance fees and commissions		312			339			388			(27	)		(76	)
Brokerage fees		6,761			6,402			6,127			359			634
Bankcard fees		16,375			16,838			17,617			(463	)		(1,242	)
Gains on sales of securities available for sale, net		—			211			54			(211	)		(54	)
Other		5,808			9,032			11,234			(3,224	)		(5,426	)
Total noninterest income	$	94,999		$	100,885		$	106,033		$	(5,886	)	$	(11,034	)
Total revenue	$	256,807		$	251,375		$	252,379		$	5,432		$	4,428
Net interest margin		3.24	%		3.18	%		3.21	%
Total noninterest income as a % of total revenue		36.99			40.13			42.01

Following the enactment of the Tax Cuts and Jobs Act, beginning in the first quarter of 2018, net interest margin is computed using net interest income adjusted to a fully taxable equivalent (FTE) basis assuming a statutory federal income tax rate of 21 percent and, where applicable, state income taxes; prior period net interest margins are computed using the then-statutory federal income tax rate of 35 percent and, where applicable, state income taxes.

Net interest income

•

Net interest income totaled $161.8 million, an increase of $11.3 million, or 7.5 percent, from linked quarter levels, impacted by a $249.4 million, or 2.1 percent, increase in average loans, as well as a six-basis-point improvement in net interest margin.

•

Earning asset yields improved 14 basis points from the linked quarter, primarily due to improved loan yields of 24 basis points to 5.11 percent, in part driven by favorable re-pricing from recent increases in short-term interest rates. The cost of interest-bearing liabilities increased 14 basis points to 1.21 percent, driven by a 19-basis point increase in cost of interest-bearing deposits. Total cost of deposits, including noninterest-bearing deposits, was 75 basis points, an increase of 13 basis points from the linked quarter.

•

On a year-over-year basis, the increase in net interest income was driven by an 8.0 percent, or $883.2 million, increase in average loans, as well as higher average loan yields, which increased 71 basis points from 2017, primarily driven by higher short-term interest rates, volume, and asset mix changes.

•

For the fourth quarter 2018, average earning assets stood at $20.5 billion, an increase of 5.8 percent over the fourth quarter 2017.

Noninterest income

•

Fourth quarter 2018 noninterest income decreased $5.9 million, or 5.8 percent, on a linked quarter basis, largely due to:

Decreases of $5.7 million and $1.3 million in company-owned life insurance income and derivative income, respectively, both of which are recorded in other income. These decreases were partially offset by $2.9 million in gains on sales of assets and $0.9 million in loss recoveries.

A decrease in trust and securities processing due to a $1.5 million decline in alternative investment revenue.

A $0.6 million decrease in trading and investment banking due to decreased bond trading income.

•

Compared to prior year, noninterest income in the fourth quarter of 2018 decreased $11.0 million, or 10.4 percent, primarily driven by:

Decreases of $6.6 million and $0.9 million in company-owned life insurance and derivative income, respectively, both of which are recorded in other income. These decreases were partially offset by $2.9 million in gains on sales of assets.

A $3.5 million decline in fund servicing revenue due to customer repricing and losses, which was partially offset by an increase of $1.4 million in corporate trust income, both recorded in trust and securities processing.

A $1.9 million decrease in trading and investment banking income due to decreased trading volume.

A $1.7 million increase in rewards and rebates expense recorded as an offset to bankcard fees driven by increased purchase volume, partially offset by a $0.4 million increase in interchange income.

A $0.6 million decrease in service charges on deposits primarily due to customer repricing.

Noninterest expense

Summary of noninterest expense	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4		Q3		Q4		CQ vs.			CQ vs.
	2018		2018		2017		LQ			PY
Salaries and employee benefits	$	103,992	$	102,956	$	107,656	$	1,036		$	(3,664	)
Occupancy, net		11,845		11,628		11,148		217			697
Equipment		18,983		18,533		18,690		450			293
Supplies and services		3,669		4,528		4,211		(859	)		(542	)
Marketing and business development		6,483		6,671		6,540		(188	)		(57	)
Processing fees		11,948		12,331		11,238		(383	)		710
Legal and consulting		11,085		8,470		6,045		2,615			5,040
Bankcard		4,316		4,407		4,405		(91	)		(89	)
Amortization of other intangible assets		1,332		1,385		1,641		(53	)		(309	)
Regulatory fees		2,681		3,337		3,825		(656	)		(1,144	)
Other		7,987		6,139		7,160		1,848			827
Total noninterest expense	$	184,321	$	180,385	$	182,559	$	3,936		$	1,762

•

GAAP noninterest expense for the fourth quarter of 2018 was $184.3 million, an increase of $3.9 million, or 2.2 percent, from the linked quarter and an increase of $1.8 million, or 1.0 percent, from the fourth quarter of 2017.

•

On a non-GAAP basis, operating noninterest expense (as reconciled later in this release) was $181.6 million for the fourth quarter 2018, an increase of $1.4 million, or 0.8 percent, compared to the linked quarter, and a decrease of $0.7 million, or 0.4 percent, compared to the fourth quarter 2017.

•

The linked quarter increase in noninterest expense was driven by:

A $1.8 million increase in other noninterest expense, largely driven by a $0.9 million contribution made to the UMB Financial Corporation Charitable Foundation and an increase of $0.7 million in derivative expense.

A $1.7 million increase in consulting expense incurred in conjunction with the company’s ongoing investments in digital channel and integrated platform solutions to support business growth and the continued modernization of its core systems.

A $1.0 million increase in salaries and employee benefits, largely due to increased severance during the fourth quarter of 2018 and increased salary and wage expense driven by one additional business day in the fourth quarter compared to the third quarter. These increases were offset by a decrease in deferred compensation expense.

•

The year-over-year increase in noninterest expense was driven by:

A $5.0 million increase in legal and consulting expense due to investments in digital channel and integrated platform solutions to support business growth and the continued ongoing modernization of the company’s core systems.

An increase of $0.7 million in derivative expense recorded in other noninterest expense.

These increases were partially offset by a decrease of $3.7 million in salaries and employee benefits, largely due to decreased deferred compensation expense and bonus expense.

Full year 2018 financial discussion

•

The 9.2 percent year-over-year increase in net interest income was driven by benefits from higher short-term interest rates, favorable pricing and increased loan balances. In 2018, average loan balances increased $762.9 million and average loan yields increased 57 basis points. Average interest-bearing liabilities increased $620.4 million, while the cost of interest-bearing liabilities increased 47 basis points.

•

Full-year noninterest income decreased $21.9 million, or 5.2 percent, due to:

An $8.1 million increase in rewards and rebates expense recorded as an offset to bankcard fees driven by increased purchase volume, partially offset by a $4.8 million increase in interchange income.

A $7.6 million decrease in trading and investment banking due to decreased bond trading income and due to market adjustments from the company’s seed investments in certain Scout funds following the liquidation of such investments in 2017.

A $7.5 million decrease in fund servicing revenue and a $1.0 million decrease in wealth management revenue, partially offset by a $4.0 million increase in corporate trust revenue, all recorded in trust and securities processing.

A $3.6 million decrease in gains on sales of available-for-sale securities.

A $3.4 million decrease in service charges on deposits, primarily due to repricing.

These decreases were partially offset by an increase of $2.6 million in brokerage fees, primarily driven by higher 12b-1 income.

•

Full-year noninterest expense increased $12.7 million, or 1.8 percent, primarily due to:

A $5.3 million increase in salary and employee benefit expense driven by increased bonus and sales commission expense and one additional business day in 2018 as compared to 2017, partially offset by a decrease in deferred compensation expense.

A $6.5 million increase in legal and consulting expense and a $4.6 million increase in processing fees expense due to investments in digital channel and integrated platform solutions to support business growth and the continued ongoing modernization of the company’s core systems.

These increases were partially offset by a decrease of $3.1 million in other noninterest expense due to lower operational losses during 2018 as compared to 2017.

•

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 $712.0 million for full-year 2018, an increase of $8.0 million, or 1.1 percent, compared to the full-year 2017.

Income taxes

•

The company’s effective tax rate was 12.2 percent for the year ended December 31, 2018, compared to 22.6 percent for the same period in 2017. The decrease is primarily a result of the Tax Cuts and Jobs Act, which lowered the federal corporate income tax rate to 21 percent from 35 percent, effective January 1, 2018. The decrease is also attributable to a discrete tax benefit of $5.1 million related to provision-to-return adjustments.

Balance sheet

•

Average total assets for the fourth quarter 2018 were $21.9 billion compared to $20.7 billion for both the linked quarter and the same period in 2017.

Summary of average loans and leases - QTD Average	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4		Q3		Q4		CQ vs.			CQ vs.
	2018		2018		2017		LQ			PY
Commercial	$	4,977,907	$	4,717,530	$	4,438,241	$	260,377		$	539,666
Asset-based loans		381,477		382,672		326,845		(1,195	)		54,632
Factoring loans		300,265		264,414		212,123		35,851			88,142
Commercial credit card		178,772		199,730		172,193		(20,958	)		6,579
Real estate - construction		826,310		814,053		835,715		12,257			(9,405	)
Real estate - commercial		3,663,610		3,701,072		3,394,232		(37,462	)		269,378
Real estate - residential		697,927		688,097		619,985		9,830			77,942
Real estate - HELOC		555,161		566,460		649,268		(11,299	)		(94,107	)
Consumer credit card		248,309		222,223		247,284		26,086			1,025
Consumer other		132,812		152,894		164,667		(20,082	)		(31,855	)
Leases		5,386		9,407		24,163		(4,021	)		(18,777	)
Total loans	$	11,967,936	$	11,718,552	$	11,084,716	$	249,384		$	883,220

•

Average loans for the fourth quarter 2018 increased 2.1 percent on a linked-quarter basis and 8.0 percent compared to fourth quarter 2017.

Summary of average securities - QTD Average	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4		Q3		Q4		CQ vs.			CQ vs.
	2018		2018		2017		LQ			PY
Securities available for sale:
U.S. Treasury	$	105,509	$	38,044	$	38,776	$	67,465		$	66,733
U.S. Agencies		198		198		14,753		-			(14,555	)
Mortgage-backed		3,703,212		3,590,703		3,484,304		112,509			218,908
State and political subdivisions		2,353,816		2,290,906		2,555,462		62,910			(201,646	)
Corporates		—		718		15,880		(718	)		(15,880	)
Total securities available for sale	$	6,162,735	$	5,920,569	$	6,109,175	$	242,166		$	53,560
Securities held to maturity:
State and political subdivisions		1,180,061		1,205,007		1,269,058		(24,946	)		(88,997	)
Trading securities		61,629		45,476		43,388		16,153			18,241
Other securities		66,760		65,962		63,543		798			3,217
Total securities	$	7,471,185	$	7,237,014	$	7,485,164	$	234,171		$	(13,979	)

•

Average securities available for sale increased 4.1 percent on a linked-quarter basis and remained flat compared to the fourth quarter of 2017.

Summary of average deposits - QTD Average				UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4			Q3			Q4			CQ vs.		CQ vs.
	2018			2018			2017			LQ		PY
Deposits:
Noninterest-bearing demand	$	6,052,011		$	5,547,880		$	6,180,293		$	504,131	$	(128,282	)
Interest-bearing demand and savings		11,057,273			9,954,008			9,439,202			1,103,265		1,618,071
Time deposits		1,060,838			1,030,411			1,230,303			30,427		(169,465	)
Total deposits	$	18,170,122		$	16,532,299		$	16,849,798		$	1,637,823	$	1,320,324
Noninterest bearing deposits as % of total		33.31	%		33.56	%		36.68	%

•

Average deposits increased 9.9 percent on a linked-quarter basis and 7.8 percent as compared to the fourth quarter of 2017, primarily driven by the seasonal influx of public fund deposits as well as recent deposit campaigns.

Capital

Capital information	UMB Financial Corporation
(unaudited, dollars in thousands, except per share data)
	December 31, 2018			September 30, 2018			December 31, 2017
Total equity	$	2,228,470		$	2,203,464		$	2,181,531
Book value per common share		45.37			44.20			43.72

Regulatory capital:
Common equity Tier 1 capital	$	2,142,469		$	2,175,700		$	2,041,504
Tier 1 capital		2,142,469			2,175,700			2,041,504
Total capital		2,318,145			2,348,731			2,213,050

Regulatory capital ratios:
Common equity Tier 1 capital ratio		12.89	%		13.47	%		12.95	%
Tier 1 risk-based capital ratio		12.89			13.47			12.95
Total risk-based capital ratio		13.95			14.54			14.04
Tier 1 leverage ratio		9.87			10.58			9.94

•

On December 17, 2018, the company completed its previously announced accelerated share repurchase (ASR) program with Bank of America Merrill Lynch.

•

Under the ASR, the company repurchased a total of 780,321 shares of its common stock (or approximately 1.6 percent of its outstanding common stock on October 23, 2018, the date the agreement governing the ASR was entered into) for an aggregate purchase price of $50.0 million.

•

At December 31, 2018, the regulatory capital ratios presented in the foregoing table reflect the impact of this ASR, and exceeded all “well-capitalized” regulatory thresholds.

Asset Quality

Credit quality	UMB Financial Corporation
(unaudited, dollars in thousands)
	Q4			Q3			Q2			Q1			Q4
	2018			2018			2018			2018			2017
Net charge-offs - Commercial loans	$	44,010		$	624		$	6,137		$	6,847		$	2,248
Net charge-offs (recoveries) - Real estate loans		28			408			1,035			1,512			(242	)
Net charge-offs - Consumer credit card loans		1,606			1,632			1,786			1,849			1,612
Net charge-offs - Consumer other loans		23			82			46			94			167
Net charge-offs - Total loans		45,667			2,746			9,004			10,302			3,785
Net loan charge-offs as a % of total average loans		1.51	%		0.09	%		0.32	%		0.37	%		0.14	%
Loans over 90 days past due	$	6,009		$	1,927		$	2,883		$	5,650		$	3,091
Loans over 90 days past due as a % of total loans		0.05	%		0.02	%		0.02	%		0.05	%		0.03	%
Nonaccrual and restructured loans	$	43,018		$	50,568		$	56,030		$	67,604		$	59,142
Nonaccrual and restructured loans as a % of total loans		0.35	%		0.42	%		0.48	%		0.59	%		0.52	%
Provision for loan losses	$	48,000		$	5,750		$	7,000		$	10,000		$	6,000

•

Nonperforming loans, defined as restructured loans on nonaccrual and all other nonaccrual loans, decreased $7.6 million from the linked quarter and $16.1 million from the prior year.

•

Net charge-offs were $45.7 million, or 1.51 percent, of average loans, compared to $2.7 million, or 0.09 percent, of average loans in the linked quarter, and $3.8 million, or 0.14 percent, of average loans in the fourth quarter of 2017. Charge-offs in the fourth quarter of 2018 included a $48.1 million loss recognized on a single factoring credit relationship, which has since entered into bankruptcy. The company intends to pursue its rights both in and outside the bankruptcy proceedings.

•

Provision for loan losses increased $42.3 million from the linked quarter, and $42.0 million from the fourth quarter of 2017. This increase was driven by higher provision to cover the loss related to the single factoring credit relationship noted above, as well as other qualitative factors, such as macroeconomic conditions, loan growth, loan impairment changes, loan risk grading changes, and net charge-off levels.

Dividend Declaration

At the company’s quarterly board meeting, the board of directors declared a $0.30 per share quarterly cash dividend, payable on April 1, 2019, to shareholders of record at the close of business on March 11, 2019.

Conference Call

The company plans to host a conference call to discuss its fourth quarter and full year 2018 earnings results on Wednesday, January 30, 2019, 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 the investor relations area of umbfinancial.com or by using the following the link:

UMB Financial 4Q 2018 Conference Call

A replay of the conference call may be heard through February 13, 2019 by calling (toll-free)

877-344-7529 or (international) 412-317-0088. The replay access code required for playback is 10127436. The call replay may also be accessed at umbfinancial.com by visiting the investor relations area.

Non-GAAP Financial Information

In this release, we provide information about net operating income from continuing operations (net operating income), operating earnings per share from continuing operations - 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 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, 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 acquisition-, divestiture-, and severance-related items 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 expenses related to acquisitions and divestitures, severance 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 from continuing operations, divided by the company’s average total shareholders’ equity for the relevant period. Operating ROA is calculated as net operating income from continuing operations, 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).

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, 2017, 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, 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, Mo. UMB offers personal banking, commercial banking, healthcare services and institutional

banking, which includes services to mutual funds and alternative-investment entities and registered investment advisors. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. For more information, visit UMB.com, UMB Financial.com, UMB Blog or follow us on Twitter at @UMBBank, UMB Facebook and UMB LinkedIn.

Consolidated Balance Sheets	UMB Financial Corporation
(dollars in thousands)
	December 31,
	2018			2017
	(unaudited)			(audited)
ASSETS
Loans	$	12,178,150		$	11,280,513
Allowance for loan losses		(103,635	)		(100,604	)
Net loans		12,074,515			11,179,909
Loans held for sale		3,192			1,460
Investment Securities:
Available for sale		6,542,800			6,258,577
Held to maturity		1,170,646			1,261,014
Trading securities		61,011			54,055
Other securities		73,692			65,897
Total investment securities		7,848,149			7,639,543
Federal funds sold and resell agreements		627,001			191,601
Interest-bearing due from banks		1,047,830			1,351,760
Cash and due from banks		645,123			392,723
Premises and equipment, net		283,879			275,942
Accrued income		110,168			98,863
Goodwill		180,867			180,867
Other intangibles, net		15,003			20,257
Other assets		515,392			438,658
Total assets	$	23,351,119		$	21,771,583

LIABILITIES
Deposits:
Noninterest-bearing demand	$	6,680,070		$	6,839,171
Interest-bearing demand and savings		11,454,442			9,903,565
Time deposits under $250,000		593,904			547,990
Time deposits of $250,000 or more		552,844			732,274
Total deposits		19,281,260			18,023,000
Federal funds purchased and repurchase agreements		1,518,920			1,260,704
Long-term debt		82,671			79,281
Accrued expenses and taxes		177,731			191,464
Other liabilities		62,067			35,603
Total liabilities		21,122,649			19,590,052

SHAREHOLDERS' EQUITY
Common stock		55,057			55,057
Capital surplus		1,054,601			1,046,095
Retained earnings		1,488,421			1,338,110
Accumulated other comprehensive loss, net		(95,782	)		(45,525	)
Treasury stock		(273,827	)		(212,206	)
Total shareholders' equity		2,228,470			2,181,531
Total liabilities and shareholders' equity	$	23,351,119		$	21,771,583

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,
	2018			2017		2018			2017
	(unaudited)			(unaudited)		(unaudited)			(audited)
INTEREST INCOME
Loans	$	154,120		$	122,885	$	559,351		$	461,301
Securities:
Taxable interest		22,767			17,774		83,333			73,125
Tax-exempt interest		19,137			19,047		74,411			73,419
Total securities income		41,904			36,821		157,744			146,544
Federal funds and resell agreements		2,353			1,062		4,808			3,700
Interest-bearing due from banks		3,761			1,987		7,910			3,871
Trading securities		581			361		2,148			1,496
Total interest income		202,719			163,116		731,961			616,912
INTEREST EXPENSE
Deposits		34,140			12,372		92,101			36,354
Federal funds and repurchase agreements		5,815			3,632		24,737			17,906
Other		956			766		4,677			3,739
Total interest expense		40,911			16,770		121,515			57,999
Net interest income		161,808			146,346		610,446			558,913
Provision for loan losses		48,000			6,000		70,750			41,000
Net interest income after provision for loan losses		113,808			140,346		539,696			517,913
NONINTEREST INCOME
Trust and securities processing		41,891			44,234		172,163			176,646
Trading and investment banking		3,119			5,015		15,584			23,183
Service charges on deposit accounts		20,733			21,364		84,287			87,680
Insurance fees and commissions		312			388		1,292			1,972
Brokerage fees		6,761			6,127		25,807			23,208
Bankcard fees		16,375			17,617		68,520			73,030
Gains on sales of securities available for sale, net		—			54		578			4,192
Other		5,808			11,234		33,467			33,651
Total noninterest income		94,999			106,033		401,698			423,562
NONINTEREST EXPENSE
Salaries and employee benefits		103,992			107,656		419,091			413,830
Occupancy, net		11,845			11,148		45,239			44,462
Equipment		18,983			18,690		75,184			72,008
Supplies and services		3,669			4,211		16,103			17,173
Marketing and business development		6,483			6,540		24,372			21,469
Processing fees		11,948			11,238		46,977			42,331
Legal and consulting		11,085			6,045		29,859			23,406
Bankcard		4,316			4,405		17,514			19,471
Amortization of other intangible assets		1,332			1,641		5,764			7,326
Regulatory fees		2,681			3,825		12,695			15,527
Other		7,987			7,160		25,002			28,126
Total noninterest expense		184,321			182,559		717,800			705,129
Income before income taxes		24,486			63,820		223,594			236,346
Income tax (benefit) expense		(968	)		16,463		27,334			53,370
Income from continuing operations		25,454			47,357		196,260			182,976
Discontinued Operations
Loss from discontinued operations before income taxes		—			101,948		(917	)		101,226
Income tax expense (benefit)		—			37,344		(170	)		37,097
Income (loss) from discontinued operations		—			64,604		(747	)		64,129
NET INCOME	$	25,454		$	111,961	$	195,513		$	247,105


PER SHARE DATA
Basic:
Income from continuing operations	$	0.52	$	0.96	$	3.98		$	3.72
Income (loss) from discontinued operations		—		1.31		(0.01	)		1.30
Net income – basic		0.52		2.27		3.97			5.02
Diluted:
Income from continuing operations		0.52		0.95		3.94			3.67
Income (loss) from discontinued operations		—		1.30		(0.01	)		1.29
Net income - diluted		0.52		2.25		3.93			4.96
Dividends		0.300		0.275		1.170			1.040
Weighted average shares outstanding - basic		48,898,286		49,229,693		49,334,937			49,223,661
Weighted average shares outstanding - diluted		49,230,321		49,840,529		49,770,737			49,839,290

Consolidated Statements of Comprehensive Income	UMB Financial Corporation
(dollars in thousands)
	Three Months Ended						Year Ended
	December 31,						December 31,
	2018			2017			2018			2017
	(unaudited)			(unaudited)			(unaudited)			(audited)
Net income	$	25,454		$	111,961		$	195,513		$	247,105
Other comprehensive income (loss), net of tax:
Unrealized gains and losses on debt securities:
Change in unrealized holding gains and losses, net		81,742			(41,507	)		(51,271	)		21,139
Less: Reclassification adjustment for gains included in net income		—			(54	)		(578	)		(4,192	)
Change in unrealized gains and losses on debt securities during the period		81,742			(41,561	)		(51,849	)		16,947
Change in unrealized gains and losses on derivative hedges		(2,368	)		30			1,906			(1,050	)
Income tax (expense) benefit		(19,515	)		18,674			12,735			(3,880	)
Other comprehensive income (loss) before reclassifications		59,859			(22,857	)		(37,208	)		12,017
Amounts reclassified from accumulated other comprehensive income		—			—			(13,049	)		—
Net current-period other comprehensive income (loss)		59,859			(22,857	)		(50,257	)		12,017
Comprehensive income	$	85,313		$	89,104		$	145,256		$	259,122

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 Loss			Treasury Stock			Total
Balance - January 1, 2017	$	55,057	$	1,033,419		$	1,142,887		$	(57,542	)	$	(211,437	)	$	1,962,384
Total comprehensive income		—		—			247,105			12,017			—			259,122
Cash dividends ($1.04 per share)		—		—			(51,882	)		—			—			(51,882	)
Purchase of treasury stock		—		—			—			—			(15,276	)		(15,276	)
Issuance of equity awards		—		(2,871	)		—			—			3,343			472
Recognition of equity-based compensation		—		12,844			—			—			—			12,844
Sale of treasury stock		—		608			—			—			512			1,120
Exercise of stock options		—		2,095			—			—			10,652			12,747
Balance - December 31, 2017	$	55,057	$	1,046,095		$	1,338,110		$	(45,525	)	$	(212,206	)	$	2,181,531
(unaudited)
Balance - January 1, 2018	$	55,057	$	1,046,095		$	1,338,110		$	(45,525	)	$	(212,206	)	$	2,181,531
Total comprehensive income (loss)		—		—			195,513			(50,257	)		—			145,256
Reclassification of certain tax effects		—		—			12,917			—			—			12,917
Cash dividends ($1.17 per share)		—		—			(58,264	)		—			—			(58,264	)
Purchase of treasury stock		—		(2,807	)		—			—			(73,700	)		(76,507	)
Issuance of equity awards		—		(2,004	)		—			—			2,499			495
Recognition of equity-based compensation		—		10,579			—			—			—			10,579
Sale of treasury stock		—		524			—			—			538			1,062
Exercise of stock options		—		2,214			—			—			9,042			11,256
Cumulative effect adjustments		—		—			145			—			—			145
Balance - December 31, 2018	$	55,057	$	1,054,601		$	1,488,421		$	(95,782	)	$	(273,827	)	$	2,228,470

Average Balances / Yields and Rates	UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
	Three Months Ended December 31,
	2018						2017
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
Assets
Loans, net of unearned interest	$	11,967,936			5.11	%	$	11,084,716			4.40	%
Securities:
Taxable		3,943,891			2.29			3,688,202			1.91
Tax-exempt		3,465,665			2.77			3,753,574			3.08
Total securities		7,409,556			2.51			7,441,776			2.50
Federal funds and resell agreements		344,502			2.71			181,933			2.32
Interest bearing due from banks		672,916			2.22			587,181			1.34
Trading securities		61,629			4.44			43,388			4.21
Total earning assets		20,456,539			4.03			19,338,994			3.56
Allowance for loan losses		(101,221	)					(100,344	)
Other assets		1,523,434						1,485,075
Total assets	$	21,878,752					$	20,723,725

Liabilities and Shareholders' Equity
Interest-bearing deposits	$	12,118,111			1.12	%	$	10,669,505			0.46	%
Federal funds and repurchase agreements		1,206,152			1.91			1,424,380			1.01
Borrowed funds		80,442			4.71			76,626			3.97
Total interest-bearing liabilities		13,404,705			1.21			12,170,511			0.55
Noninterest-bearing demand deposits		6,052,011						6,180,293
Other liabilities		213,107						217,721
Shareholders' equity		2,208,929						2,155,200
Total liabilities and shareholders' equity	$	21,878,752					$	20,723,725
Net interest spread					2.82	%					3.01	%
Net interest margin					3.24						3.21

Average Balances / Yields and Rates	UMB Financial Corporation
(tax - equivalent basis)
(unaudited, dollars in thousands)
	Year Ended December 31,
	2018						2017
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
Assets
Loans, net of unearned interest	$	11,606,544			4.82	%	$	10,843,642			4.25	%
Securities:
Taxable		3,858,829			2.16			3,918,001			1.87
Tax-exempt		3,505,602			2.68			3,657,951			3.08
Total securities		7,364,431			2.41			7,575,952			2.45
Federal funds and resell agreements		178,801			2.69			190,074			1.95
Interest bearing due from banks		419,768			1.88			351,293			1.10
Trading securities		49,345			4.97			57,013			3.28
Total earning assets		19,618,889			3.83			19,017,974			3.45
Allowance for loan losses		(100,948	)					(97,231	)
Other assets		1,481,936						1,475,685
Total assets	$	20,999,877					$	20,396,428

Liabilities and Shareholders' Equity
Interest-bearing deposits	$	11,156,002			0.83	%	$	10,002,497			0.36	%
Federal funds and repurchase agreements		1,559,149			1.59			2,095,111			0.85
Borrowed funds		79,191			5.91			76,301			4.90
Total interest-bearing liabilities		12,794,342			0.95			12,173,909			0.48
Noninterest-bearing demand deposits		5,828,545						5,936,172
Other liabilities		182,202						205,500
Shareholders' equity		2,194,788						2,080,847
Total liabilities and shareholders' equity	$	20,999,877					$	20,396,428
Net interest spread					2.88	%					2.97	%
Net interest margin					3.21						3.15

Business Segment Information	UMB Financial Corporation
(unaudited, dollars in thousands)
	Three Months Ended December 31, 2018
	Commercial Banking			Institutional Banking			Personal Banking			Healthcare Services			Total
Net interest income	$	100,423		$	19,361		$	31,988		$	10,036		$	161,808
Provision for loan losses		46,662			308			1,030			—			48,000
Noninterest income		14,689			41,569			30,310			8,431			94,999
Noninterest expense		65,037			48,175			59,112			11,997			184,321
Income before taxes		3,413			12,447			2,156			6,470			24,486
Income tax benefit		(135	)		(492	)		(85	)		(256	)		(968	)
Income from continuing operations	$	3,548		$	12,939		$	2,241		$	6,726		$	25,454
Average assets	$	10,061,000		$	4,291,000		$	5,272,000		$	2,255,000		$	21,879,000

	Three Months Ended December 31, 2017
	Commercial Banking			Institutional Banking			Personal Banking			Healthcare Services			Total
Net interest income	$	92,130		$	15,245		$	30,821		$	8,150		$	146,346
Provision for loan losses		4,437			360			1,203			—			6,000
Noninterest income		20,921			46,771			30,250			8,091			106,033
Noninterest expense		65,196			48,532			57,162			11,669			182,559
Income before taxes		43,418			13,124			2,706			4,572			63,820
Income tax expense		11,199			3,385			699			1,180			16,463
Income from continuing operations	$	32,219		$	9,739		$	2,007		$	3,392		$	47,357
Average assets	$	9,710,000		$	4,101,000		$	4,953,000		$	1,960,000		$	20,724,000

	Year Ended December 31, 2018
	Commercial Banking			Institutional Banking			Personal Banking			Healthcare Services			Total
Net interest income	$	380,266		$	66,585		$	125,045		$	38,550		$	610,446
Provision for loan losses		63,841			1,335			5,574			—			70,750
Noninterest income		74,931			173,591			118,344			34,832			401,698
Noninterest expense		253,740			189,708			225,406			48,946			717,800
Income before taxes		137,616			49,133			12,409			24,436			223,594
Income tax expense		16,824			6,007			1,517			2,986			27,334
Income from continuing operations	$	120,792		$	43,126		$	10,892		$	21,450		$	196,260
Average assets	$	9,856,000		$	3,995,000		$	4,959,000		$	2,190,000		$	21,000,000

	Year Ended December 31, 2017
	Commercial Banking			Institutional Banking			Personal Banking			Healthcare Services			Total
Net interest income	$	353,627		$	51,977		$	122,304		$	31,005		$	558,913
Provision for loan losses		32,937			1,461			6,602			—			41,000
Noninterest income		82,221			187,003			118,896			35,442			423,562
Noninterest expense		250,308			184,618			226,634			43,569			705,129
Income before taxes		152,603			52,901			7,964			22,878			236,346
Income tax expense		34,460			11,946			1,798			5,166			53,370
Income from continuing operations	$	118,143		$	40,955		$	6,166		$	17,712		$	182,976
Average assets	$	9,717,000		$	3,622,000		$	5,160,000		$	1,897,000		$	20,396,000

The company has strategically aligned its operations into the following four reportable segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services. 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. Previously, the company had the following two business segments: Bank and Asset Servicing. 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, 2018.

Non-GAAP Financial Measures	UMB Financial Corporation
Net operating income Non-GAAP reconciliations:
(unaudited, dollars in thousands except per share data)
	Three Months Ended December 31,						Year Ended December 31,
	2018			2017			2018			2017
Income from continuing operations (GAAP)	$	25,454		$	47,357		$	196,260		$	182,976
Adjustments:
Acquisition and divestiture expense		5			52			2			74
Severance expense		2,725			224			5,760			1,039
Tax-impact of adjustments (i)		(606	)		(100	)		(1,279	)		(401	)
Total Non-GAAP adjustments (net of tax)		2,124			176			4,483			712
Net operating income from continuing operations (Non-GAAP)	$	27,578		$	47,533		$	200,743		$	183,688

Earnings per share from continuing operations - diluted (GAAP)	$	0.52		$	0.95		$	3.94		$	3.67
Acquisition and divestiture expense (income)		—			—			—			—
Severance expense		0.05			—			0.12			0.02
Tax-impact of adjustments (i)		(0.01	)		—			(0.03	)		—
Operating earnings per share from continuing operations - diluted (Non-GAAP)	$	0.56		$	0.95		$	4.03		$	3.69

GAAP
Return on average assets		0.46	%		0.91	%		0.93	%		0.90	%
Return on average equity		4.57			8.72			8.94			8.79

Non-GAAP
Operating return on average assets		0.50	%		0.91	%		0.96	%		0.90	%
Operating return on average equity		4.95			8.75			9.15			8.83

(i) Calculated using the company’s marginal tax rate of 22.2 percent for periods beginning after December 31, 2017 as a result of the Tax Cuts and Jobs Act. The prior periods were calculated using the company’s marginal tax rate of 36.0 percent.

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,
	2018			2017			2018			2017
Noninterest expense	$	184,321		$	182,559		$	717,800		$	705,129
Adjustments to arrive at operating noninterest expense (pre-tax):
Acquisition and divestiture expense		5			52			2			74
Severance expense		2,725			224			5,760			1,039
Total Non-GAAP adjustments (pre-tax)		2,730			276			5,762			1,113
Operating noninterest expense (Non-GAAP)	$	181,591		$	182,283		$	712,038		$	704,016

Noninterest expense	$	184,321		$	182,559		$	717,800		$	705,129
Less: Amortization of other intangibles		1,332			1,641			5,764			7,326
Noninterest expense, net of amortization of other intangibles (Non-GAAP) (numerator A)	$	182,989		$	180,918		$	712,036		$	697,803

Operating noninterest expense	$	181,591		$	182,283		$	712,038		$	704,016
Less: Amortization of other intangibles		1,332			1,641			5,764			7,326
Operating expense, net of amortization of other intangibles (Non-GAAP) (numerator B)	$	180,259		$	180,642		$	706,274		$	696,690

Net interest income	$	161,808		$	146,346		$	610,446		$	558,913
Noninterest income		94,999			106,033			401,698			423,562
Less: Gains on sales of securities available for sale, net		—			54			578			4,192
Total Non-GAAP Revenue (denominator A)	$	256,807		$	252,325		$	1,011,566		$	978,283

Efficiency ratio (numerator A/denominator A)		71.26	%		71.70	%		70.39	%		71.33	%
Operating efficiency ratio (Non-GAAP) (numerator B/denominator A)		70.19			71.59			69.82			71.22

UMB Financial (UMBF) 8-KUMB Financial Corporation Reports Earnings of $196.3 Million for the Full-Year 2018