UMB Financial Corporation - Growth & Income


UMB Financial Corporation ( UMBF ) recently delivered better than expected first quarter results, driven by strong fee-based income and solid credit quality.

Estimates have been rising off the strong quarter, sending the stock to a Zacks #1 Rank (Strong Buy).

Unlike many of its peers, UMB has been steadily raising its dividend over the last decade - even during the financial crisis. It currently yields 1.7%.

Company Description

UMB Financial Corporation is a financial services company primarily offering banking and asset management services.

It is headquartered in Kansas City, Missouri and was founded in 1913. It has a market cap of $1.9 billion.

First Quarter Results

UMB Financial delivered better than expected first quarter results on April 24. Earnings per share came in at $1.15, crushing the Zacks Consensus Estimate of $0.61. Excluding certain one-time items, "core" EPS was around $0.76, still easily beating the consensus.

Net interest income declined 1% year-over-year, but this was more than offset by a 6% increase adjusted non-interest income. Trust & Securities Processing, which made up 41% of non-interest income, increased 6%. Overall, non-interest accounted for 63% of total revenue for the quarter.

The company also recorded its 8th consecutive quarter of loan growth, driven by a 21% increase in commercial loans. And credit quality remained strong, with non-performing loans representing just 0.50% of total loans, well below the industry average around 3.4%.

Estimates Rising

Earnings estimates jumped higher for both 2012 and 2013 following solid Q1 results, sending the stock to a Zacks #1 Rank (Strong Buy) stock.

The Zacks Consensus Estimate for 2012 is now $3.10, representing 12% growth over 2011 EPS. The 2013 consensus is a couple pennies higher at $3.12.


Unlike many of its peers, UMB did not cut its dividend during the financial crisis of 2008-2009. In fact, the company actually raised it twice in 2008 and then again in 2009:

UMBF: UMB Financial Corporation

It currently yields a solid 1.7%.


The valuation picture looks reasonable for UMB with shares trading at 15x 12-month forward earnings. That's a premium to the industry median of 13x, but a discount to its 10-year median of 19x.

Its price to book ratio of 1.6 is in-line with the group and its historical multiple.

The Bottom Line

With a growing loan portfolio, strong fee-based income, solid credit quality, a 1.7% yield and reasonable valuation, UMB Financial offers investors a lot to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service .

UMB FINL CORP (UMBF): Free Stock Analysis Report
To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: UMBF

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