UMB Financial reports earnings up

Kansas-City, Mo.-based UMB financial Corp. announced earnings for the three months ended June 30 of $23 million, or 57 cents per share (57 cents diluted). This is an increase of $4 million, or 20.9 percent, compared with second quarter 2009 earnings of $19 million, or 47 cents per share (47 cents diluted).

Earnings for the six months ended June 30 were $49.2 million, or $1.23 per share ($1.22 diluted). This is an increase of $7.6 million, or 18.2 percent, compared with the prior year-to-date earnings of $41.6 million, or $1.03 per share ($1.02 diluted).

“We are executing on our strategies, as evidenced by this quarter’s results, in spite of the continuing effects of the weak economy and low interest rates,” said Mariner Kemper, chairman and CEO of UMB financial Corp. “At a time when improvements in industry earnings are driven in part by decreasing provision for loan losses, I am particularly proud of our positive results considering we did not benefit from provision reductions. We take pride in knowing that our business model — anchored by diverse revenue streams — drives solid performance in all types of economic environments.”

Net interest income for the second quarter of 2010 increased $3.5 million, or 4.7 percent, compared with the same period in 2009. Average earning assets increased by $770.8 million, or 8.4 percent, compared with the second quarter of 2009. This increase was due to a $776.9 million, or 18.7 percent, increase in average total securities, including trading securities. Net interest margin decreased 13 basis points to 3.29 percent for the three months ended June 30 compared with the same quarter in 2009.

Noninterest income increased $11.8 million, or 15.2 percent, for the three months ended June 30 compared with the same period in 2009. This increase is primarily attributed to increased trust and securities processing income of $10.0 million, or 34.9 percent, for the three months ended June 30, compared with the same period in 2009. This increase was primarily due to a $4.3 million, or 38.3 percent, increase in fund administration and custody services and a $4.5 million, or 59.1 percent, increase in advisory fee income from the Scout Funds.

Noninterest expense increased $7.2 million, or 6.1 percent, for the three months ended June 30, compared with the same period in 2009. The primary drivers of this increase are higher salary and benefits expense of $4 million, or 6.6 percent, and increased processing fees of $3.1 million, or 37.8 percent. Salaries and benefits increased mostly due to higher base salary, commission and health insurance costs. The processing fees increase, which is correlated to the increase in trust and securities processing income noted above, is due to increased third-party custodian fees related to international transactions from mutual fund clients and fees paid by the adviser to third-party distributors of the Scout Funds.

“During the second quarter, we continued to achieve greater scale in the overall diversity of our revenue mix,” said Peter DeSilva, president and chief operating officer. “Assets under management in our Scout Funds grew from $5.2 billion at June 30, 2009, to $7 billion at June 30. Fee income from our fund services business and advisory fee income from the Scout funds made strong contributions as well this quarter, with a 38.3 and 59.1 percent increase, respectively, compared with last year. Additionally, we signed a definitive agreement during the quarter with Prairie Capital Management, which has assets under management of $2.2 billion. Prairie Capital Management will provide our wealth management clients with the sophisticated products and services they need to accumulate, grow and protect their wealth.”