Good morning and thank you for joining us. On the call today are Mariner Kemper, President and CEO; Ram Shankar CFO; and Mike Hagedorn, CEO of UMB Bank. 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 SEC filings. Forward-looking statements made in speak only as of today, and we undertake no obligation to update them except to the extent required by Securities laws. Our earnings release and supporting slides are available on our website at umbfinancial.com in the Investor Section. Reconciliations of non-GAAP financial measures have been included in the release, and on pages six through eight of the supporting slides. All earnings per share metrics discussed in this call are on a diluted share basis for continuing operations. Please refer to the tables contained in the earnings release for details about basic and diluted earnings per share. Now, I’ll turn the call over to Mariner Kemper.

Thank you, Kay. Welcome everyone and thank you for joining us. I’m very pleased with our fourth quarter and full year results for 2017. Fourth quarter highlights include loan growth led by CRE and construction lending, strong credit dynamics and expanding net interest margin. And on a full year basis, our average assets topped $20 billion. On Slide 4, you’ll see that GAAP income from continuing operations was 47.4% or $0.95 per share. Tax expense for the fourth quarter included a non- recurring charge of $3 million, resulting from the recently enacted act. Excluding this charge, adjusted EPS would have been approximately $1.01 per share. Discontinued operations posted net income of $64.6 million or $1.30 per share, which included a pretax gain of $103.6 million on the sale of Scout Investments and pretax divestiture expense of $3 million. First, I’d like to cover a few lending and credit highlights. Slide 9 and 10 show balance sheet snapshot and loan growth history. Average loan balances of $11.1 billion for the fourth quarter represent year-over-year increase of 7.1% compared to the third quarter. Average loans increased 1.6%, or 6.4% on a linked-quarter annualized basis. For the full year, loans averaged $10.8 billion increasing 8.5% compared to 2016 average. Top line production remained strong at $686 million, our highest since the fourth quarter of 2015, and above the average of $610 million over the past four quarters. As momentum in CRE, factoring and asset-based lending continued. Conversations with our customers around tax reform have been positive. But while optimistic about the bottom line impact to 2018 many are waiting for the dust to settle, while working with tax advisors on long-term planning. The consensus seems to be that incremental cash will be retained and planned investments will be accelerated to take advantage of…

Thanks, Mariner, and good morning, everyone. I’ll begin with the topic leading the news and follow-up on Mariner’s comments related to tax reform and what impact we expect in 2018. Our effective tax rate for continuing operations was 22.6% for the fourth quarter, and our tax expense of $16.5 million, included a $3 million charge, equating to $0.06 per share, stemming from the enactment of the Tax Cuts and Jobs Act. We expect the GAAP tax rate for the full year 2018 to be approximately 16% to 17%. Moving to components of our fourth quarter revenue. Net interest income of $146.3 million represented a linked quarter increase of 3.9%. Increased volumes drove more than 1/2 of the $5.5 million in additional net interest income during the fourth quarter, followed by mix-shift, at higher yielding CRE, asset-based and factoring loans grew as a percentage of total loan portfolio. Net interest margin for the fourth quarter was 3.21% versus 3.16% in the third quarter. Our yield on earning assets expanded by four basis points to 3.56%, while our cost of interest-bearing liabilities held steady at 55 basis points, as borrowing costs decreased. The five basis points of NIM improvement over the third quarter was driven by a combination of benefits from higher short-term interest rates and favorable funding mix, offset by an increase in cost of interest-bearing deposits. Compared to the fourth quarter of 2016, margin expanded 21 basis points. Approximately 10 basis points of this expansion was driven by the benefit that our free funds provide in a rising rate environment. As a reminder, the reduction of the taxable-equivalent gross up under the lower tax rate going forward will serve to reduce net interest margin. It’ll be offset in the tax line below, and is earnings neutral, but will create the…

Thanks Ram. The Bank segment posted a pretax profit margin of 26.3% for the quarter, a slight improvement from 25.6% in third quarter, despite carrying the majority of increased bonus and commission and employee benefit expense Ram discussed earlier. Turning to Slide 32. You’ll see the strong gross loan production of $686 million plus increases in revolving balances of $69 million. Total payoffs and paydowns of $472 million for the quarter represented 4.2% of loans, which is in line with average levels over the past four quarters. We continue to see some business consolidations among our customers and we experienced some cyclical year-end paydowns in lines. The composition of our loan book and regional view are shown on Slides 33 and 34, and we are seeing positive trends in several of our markets and verticals, commercial real estate and construction and our national lending platforms. Our CRE and construction lenders saw a steady supply of deals in 2017, reviewing more than $5.5 billion in loans year-to-date. While tax reform is seen as a positive, we don’t expect it to significantly affect CRE development or acquisition activity. Market fundamentals remain positive and our pipeline remains active as we move into 2018. Our factoring and asset-based lending businesses each had strong quarters, posting increases of 22% and 17% respectively. As Mariner referenced, there is an anticipation of greater CapEx spending due to the increased cash flows and more beneficial depreciation rules under the new tax act. In Institutional Banking, revenue from Public Finance helped drive the 12.6% linked quarter increase in Trading and Investment Banking income as debt issuers rushed to market in advance of the pending tax reform act. Our Corporate Trust team had a strong quarter, enjoying its best new business month ever in December. Corporate Trust revenue shows up…

Thank you. [Operator Instructions] And the first question comes from Ebrahim Poonawala with Bank of America Merrill Lynch.

Good morning guys.

Good morning Ebrahim.

Good morning Ebrahim.

So Ram, just wanted to follow-up, in terms of your expense guide, I think you mentioned also operating expenses less than $3 million 1Q, should be like 4Q, so about $179 million. What I wanted to understand was the bumps we saw, the $5.5 million in the bonus and commission expense? Is that sticky or do you expect that to offset some of the other seasonable bumps and that’s why you’re not calling it out in terms of one time?

So I did call it out, Ebrahim. I said some of the resetting of FICA and payroll taxes in the first quarter should be offset by some reduction in bonus and commissions. So the bonus and commissions are, as you know, typically variable in nature. If you look on a year-over-year basis, our revenues are up $23 million, so that’s driving some of the bonus and commissions. And so as we reset the year, it should – bonus and commissions should reset.

Okay. So we should see, like when we look at sort of going out in 2Q versus 1Q, outside of any investments, we should expect that number to further drop down into the second quarter as the seasonal impact fades?

The seasonal impact to FICA and payroll, yes. You’re right.

And do you have a sense of how big those two would be, in terms of dollar?

I don’t have that handy, Ebrahim. I can get back to you on that.

Sure. And just a bigger picture question on expenses. So obviously, we delivered 300 basis-plus of efficiency in 2017. Mariner outlined a bunch of investments across sort of the franchise. Like if – without sort of giving targets, how would you sort of want us to think about either expense growth year-over-year or in terms of continued positive operating leverage with the extent relative to 2017?

So Ebrahim, we tried to address that in the prepared remarks. I know it’s a challenging one without giving guidance. But the best I can really give you is that we intend to keep our spending at current levels, kind of moving from investing kind of in the core systems to investing in innovation and the digital roadmap. But it’s really a shift from one of the other rather than at an accelerated rate.

Perfect. That’s helpful. And taking a step back, I think as we think about loan growth for 2018, are we more optimistic in terms of like loan growth should be better overall given where the economy is? Or are you expecting it to be pretty much similar to 2017 outside of any bumps we get because of the tax reform?

We’ve basically given a little bit of the quarter ahead look and nothing really beyond that. We expect our gross loan production to be somewhat in line with what we’ve been seeing. As it relates to whether it would accelerate or not related to taxes, et cetera, I think it’s too early to tell. We’ll be monitoring kind of how customers are reacting. It’s our perception much like our customers that we haven’t really seen these tax impacts flow through our statements yet. And so I think, our customer base much like us will kind of monitor it and react in our own way.

Understood. And one last question, if I may. When we think about – and this is not about 2018. But Mariner, as you think about what this franchise should return, like do you think about what would be the optimal level of ROA or return on tangible equity you want the bank to be operating at a few years out?

So, we’re not doing targets there, publicly anyway. We certainly have our own guidelines and things we’re working towards. We certainly, as we’ve spoken before, believe that we can do better than we are today and we intend to continue to improve. We’re aiming for peer-like performance and so we’re marching in interest.

Perfect. Thanks for taking my questions.

Thank you. And the next question comes from Jared Shaw with Wells Fargo Securities.

Hi, good morning. This is actually Timur Braziler filling in for Jared.

Good morning Timur.

Good morning. First question, as it relates to HSA trends, maybe a little color around the early enrollment season, what you’re seeing from an actual deposit growth standpoint? And we heard from another bank that some of the employer transition to high deductible health plan seems to be slowing of its very high growth rate. I’m just wondering if you guys are seeing any of that similar type of trend?

Yes. This is Mike. We did just complete a successful open enrollment period that honestly, was a little better than what we expected. And we do expect our deposit and investment growth to continue to grow at the historical growth rates, which have all been over 30%. So we’re seeing, as expected, maybe slightly better than as expected results through our open enrollment.

Okay, that’s helpful. And maybe just following up on Ebrahim’s question regarding loan growth. When you look at the composition of loan growth sort of for 2018, should we still be looking at commercial real estate and construction really driving that growth? Or as you’re looking out and having early conversations with clients, are you getting more optimizing that maybe you’ll see from increased line utilization and some other categories contributing more to the overall growth rate next year?

I think your estimation because of improved conditions that there might be better utilization at the commercial level would be something we would also estimate. However, right, there is an improving economy and then likely coming into more cash. Maybe they use it and use their own cash. So there are some things to monitor as to whether or not the tax impact really drives to more borrowing. So we’ll just have to monitor that. We do expect the growth across all of our business lines from a vertical perspective within our lending area. However, just because of the scale of the opportunities on the CRE side, it’s likely that they continue to have a little bit of an outside piece of the growth. The deals are just larger as they come in, so.

Okay, that’s helpful. And I guess one last one for me. As you look at your built up liquidity position this quarter and the subsequent growth in the securities book, I guess, how should we think about the timing of being able to deploy that excess cash? And to what extent should we be seeing that going into the securities portfolio rather than loans?

I would say, Timur, that given where the fixed income markets are, there’s no big appetite for us to increase our investment portfolio. Obviously, we’re watching the markets, municipal markets and MBS markets pretty closely. As Mariner said in his prepared remarks, we’ll deploy this liquidity for organic loan growth. And then, all else being equal, we’ll look for M&A opportunity. That’s been our stated goal and we’ll pursue those actively as we’ve been pursuing it.

Great. Thank you.

Thank you. And the next question comes from Chris McGratty with KBW.

Hey, good morning everybody. Maybe a question on the fee income line to start. The trading in the IB line, can you remind me the driving factor that is supporting this initiative? Is it bond trading? And then, if it is, could you comment on how you think that business will perform with an upward bias to rates?

So your assumption that its bond trading is correct. And remember that historically at UMB, it was predominantly, if not entirely, bank-qualified bond business to other banks or financial institutions. And in the last 18 to 24 months we’ve launched – successfully launched some corporate and non- BQ-related issuance and underwriting. And so while you have seen other institutions, in fact, some of the largest banks in the country report pretty dramatic increases in that, what has helped us and offset some of that decline on the BQ side has been the move into corporates, which has been a successful launch for us.

And the decline in the BQ side is really just a matter of macroeconomic loss clients. It’s just smaller banks have been linked up. And there isn’t a lot of volatility in the bond market to be getting it out and make money as we just discussed in the bond market. So that’s just all basically because of macroeconomic conditions. We expect that to return also in the near future.

And I might just add, our movement into corporates is just kind of a furtherance of a message that you’ve heard. It’s kind of have been a legacy of the company, quite honestly around diversification. So once again, it’s just further diversifying our business in one line that was specifically tied to one customer segment and we’re moving beyond that.

We’re very excited about that business. I talked, I think, in recent calls about our New York office, which is – we’re seeing. We’ve always had a lot of issues, kind of always underwritten a lot of issues. But as we’ve expanded into the non-BQ space for doing larger volume deals, and that’s driving a lot of the positive activity is the size of the deals versus the number of the deals. And we’re pretty excited about that

That’s great color. And Ram, a technical question. I may have missed it or maybe need a little clarification on the expenses. The $183 million that was reported in the quarter, are – was the guide for Q1 take $183 million less $3 million? And that would factor in both the reduction of the charges this quarter but also the payroll? Or is the $180 million – maybe just some clarification there?

Yes. No, I said $183 million minus the $3 million, $2 million for increased profit sharing and $1 million for the charitable foundation. So that’s your new base, if you will.

Okay. And so the $180 million would factor in the seasonal bump as well that we see for FICA?

That’s correct. And then that’ll be offset by the bonus and commissions that increased this past quarter.

Okay, great. And then, maybe two more modeling questions. I think you said in the prepared remarks the gross up adjustment would have been 3.11% for the NIM. That’s relative – that’s 10 basis point relative to 3.21%. Is that the right starting base?

Exactly. That’s right.

Okay. And then the last one on the other income. It looked a little high this quarter. In the release during the slide deck, I think you talked about bully strength, was there an outside benefit this quarter above $3 million?

No, some of it was company-owned life insurance, COLI, and that is an equal offset in the deferred comp line item in the salary and expense line item. So that’s about, call it, $1.5 million. There’s about $1.5 million of additional nonrecurring benefits from a payout.

Okay. So the $1.5 million is kind of the adjustment to the starting, right? Okay. Thank you very much.

And the next question comes from Nathan Race with Piper Jaffray.

Wanted to start on the elevated payoffs in the quarter. It looks like they’re up again sequentially, so just curious if there are any prepaid fees that could have benefited the margin this quarter and just kind of curious how payouts are trending so far in the – in 2018?

Nothing unusual. Just the maturity of being in the CRE space. And that’s largely where that’s going to come – that’s largely where that’s going to take place. Now and then, there’s some acceleration based on buyouts and things like that within our C&I portfolio. But the nuance will probably come from the maturity of our construction lending portfolio. We don’t have a real good handle on what a level set number might be, but there’s nothing unusual to point to in the quarter.

That’s helpful. And then just, kind of, thinking about occupancy expenses. And Ram, I appreciate all your color on just the expense guidance for the first and second quarter. But just curious, as you guys look at your brach network, I think you guys tried to close 10 branches in 2017. So just curious on any plans on that front going forward?

Yes, this is Mike. Not going to give you guidance on a specific number. But as we’ve talked about in the past, this program is called 4K, which represents the number 4,000 transactions per branch or less. And so we are mostly through that process. We’ve started to look at the next group, which we call 7K inside of our company. But the really heavy lifting is mostly behind us. So I don’t think you should expect to see kind of the same levels that we’ve had in the last couple of years.

Got it. Appreciate the color, Mike. Thank you.

[Operator Instructions] And the next question comes from Matt Olney with Stephens Inc.

I guess, Mariner, now that the sale of Scout has closed, I’m curious what the updated thoughts are on the deployment of the excess capital. And I appreciate the thoughts you mentioned before about deploying a portion of that via organic loan growth. I’m just trying to understand how much urgency you guys have for M&A in 2018?

So the urgency really hasn’t changed, which would just be that we are already acquisitive and we remain acquisitive. And we would like to do a transaction and it’s just a matter of finding one that meets all the hurdles, whether it’s financial or cultural or accretive, et cetera. And so we’re on the hunt and are having the conversations and looking for the right deal.

Okay. And then switching over to credit, I’m curious what you’re seeing there? It looks like charge-offs were down, but non-accruals went up and I think, watch list loans also ticked up. Anything you’re seeing in – on the credit side?

No. As a matter of fact, you’ve been watching us for a while, you’ll know that the strength that we really have is that we have an incredibly low migration from nonperforming loans to charge-offs. So we are really good at monitoring situations and reacting and moving things up or out. So our – what you should really focus on is our charge-off rate rather than our nonperforming rate. And what I would say is that as we said in our remarks, we’ve returned to historic levels. And aside from bumps here and there, we expect to continue to operate at historic levels.

Okay. Thank you.

And as there are no more questions at the present time, I would like to return the call to Kay Gregory for any – I’m sorry, for any closing comments.

Thank you, and thanks for joining us today. This call can be accessed via replay at our website and it will run through February 7. As always you can contact UMB Investor Relations at 816-860-7106 with any follow-up questions. Again we appreciate your interest and time. Thank you.

Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.