We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
UMB Financial’s (UMBF - Free Report) second-quarter 2018 net operating earnings of $1.12 per share missed the Zacks Consensus Estimate of $1.13. The reported figure compares favorably with the prior-year quarter’s earnings of 90 cents.
The company recorded an improvement in revenues, which was propelled by growth in net interest income. UMB Financial also witnessed growth in loans and expansion of net interest margin. However, lower non-interest income was the headwind.
After considering non-recurring items, the company reported net income of $55.4 million or $1.11 per share for the second quarter, up from $42.8 million or 86 cents recorded in the prior-year quarter.
Increase in Revenues and Loan Balance
Total revenues for the April-June quarter came in at $250.5 million, up 1.1% year over year. However, the figure lagged the Zacks Consensus Estimate of $264.2 million.
Net interest income was $150.2 million, reflecting an increase of 9.3% from the year-ago quarter. Net Interest Margin (NIM) expanded 12 basis points (bps) to 3.24% from the prior-year quarter.
Non-interest income totaled $100.3 million, down 9.1% year over year. The decline resulted from a fall in most of the income components, except brokerage fees.
Non-interest expenses (GAAP basis) came in at $177.2 million, increasing slightly from the year-ago period.
Efficiency ratio (GAAP basis) declined to 70.21% from 71.02% in the prior-year quarter. Fall in efficiency ratio indicates improvement in profitability.
As of Jun 30, 2018, average loans and leases were $11.4 billion, up 1.4% sequentially. Nonetheless, average deposits edged down 1.8% from the prior-quarter end to $16.5 billion.
Credit Quality: A Mixed bag
Total non-accrual and restructured loans came in at $56 million, up 9% year over year.
However, provision for loan losses came in at $7 million, down from $14.5 million in the year-earlier quarter. Also, the ratio of net charge-offs to average loans was 0.32% in the reported quarter, down 5 bps from the year-ago quarter.
Capital & Profitability Ratios Improve
As of Jun 30, 2018, Tier 1 risk-based capital ratio was 13.56%, up from 12.22% as of Jun 30, 2017. Further, total risk-based capital ratio was 14.63%, up from 13.32% at the end of the prior-year quarter.
On GAAP basis, return on average assets at the quarter end was 1.08%, up from 0.88% in the year-ago quarter. Also, return on average tangible common equity was 10.18% compared with 8.69% in the year-ago quarter.
Conclusion
UMB Financial witnessed an improvement in its net interest income, primarily driven by soaring loan balances and an expanding net interest margin. Furthermore, the company’s efficiency ratio has been declining on a consistent basis, which signals better profitability over the long run.
Nevertheless, elevated expenses and lower non-interest income can dampen the company’s revenues. In addition, intense competition from other FinTech companies and online service providers is another concern.
UMB Financial Corporation Price, Consensus and EPS Surprise
Among other Midwest banks, First Merchants Corporation (FRME - Free Report) and Independent Bank Corporation (IBCP - Free Report) are scheduled to release their Q2 figures on Jul 26, while Civista Bancshares, Inc. (CIVB - Free Report) is expected to report its quarterly numbers on Jul 27.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
UMB Financial (UMBF) Q2 Earnings Miss, Revenues Improve
UMB Financial’s (UMBF - Free Report) second-quarter 2018 net operating earnings of $1.12 per share missed the Zacks Consensus Estimate of $1.13. The reported figure compares favorably with the prior-year quarter’s earnings of 90 cents.
The company recorded an improvement in revenues, which was propelled by growth in net interest income. UMB Financial also witnessed growth in loans and expansion of net interest margin. However, lower non-interest income was the headwind.
After considering non-recurring items, the company reported net income of $55.4 million or $1.11 per share for the second quarter, up from $42.8 million or 86 cents recorded in the prior-year quarter.
Increase in Revenues and Loan Balance
Total revenues for the April-June quarter came in at $250.5 million, up 1.1% year over year. However, the figure lagged the Zacks Consensus Estimate of $264.2 million.
Net interest income was $150.2 million, reflecting an increase of 9.3% from the year-ago quarter. Net Interest Margin (NIM) expanded 12 basis points (bps) to 3.24% from the prior-year quarter.
Non-interest income totaled $100.3 million, down 9.1% year over year. The decline resulted from a fall in most of the income components, except brokerage fees.
Non-interest expenses (GAAP basis) came in at $177.2 million, increasing slightly from the year-ago period.
Efficiency ratio (GAAP basis) declined to 70.21% from 71.02% in the prior-year quarter. Fall in efficiency ratio indicates improvement in profitability.
As of Jun 30, 2018, average loans and leases were $11.4 billion, up 1.4% sequentially. Nonetheless, average deposits edged down 1.8% from the prior-quarter end to $16.5 billion.
Credit Quality: A Mixed bag
Total non-accrual and restructured loans came in at $56 million, up 9% year over year.
However, provision for loan losses came in at $7 million, down from $14.5 million in the year-earlier quarter. Also, the ratio of net charge-offs to average loans was 0.32% in the reported quarter, down 5 bps from the year-ago quarter.
Capital & Profitability Ratios Improve
As of Jun 30, 2018, Tier 1 risk-based capital ratio was 13.56%, up from 12.22% as of Jun 30, 2017. Further, total risk-based capital ratio was 14.63%, up from 13.32% at the end of the prior-year quarter.
On GAAP basis, return on average assets at the quarter end was 1.08%, up from 0.88% in the year-ago quarter. Also, return on average tangible common equity was 10.18% compared with 8.69% in the year-ago quarter.
Conclusion
UMB Financial witnessed an improvement in its net interest income, primarily driven by soaring loan balances and an expanding net interest margin. Furthermore, the company’s efficiency ratio has been declining on a consistent basis, which signals better profitability over the long run.
Nevertheless, elevated expenses and lower non-interest income can dampen the company’s revenues. In addition, intense competition from other FinTech companies and online service providers is another concern.
UMB Financial Corporation Price, Consensus and EPS Surprise
UMB Financial Corporation Price, Consensus and EPS Surprise | UMB Financial Corporation Quote
UMB Financial currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other Midwest banks, First Merchants Corporation (FRME - Free Report) and Independent Bank Corporation (IBCP - Free Report) are scheduled to release their Q2 figures on Jul 26, while Civista Bancshares, Inc. (CIVB - Free Report) is expected to report its quarterly numbers on Jul 27.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>