UMB Financial Corporation (UMBF)

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UMB Financial Corporation (UMBF)

Q4 2009 Earnings Call Transcript

January 27, 2010 9:30 am ET


Abby Wendel – IR

Mariner Kemper – CEO

Mike Hagedorn – CFO

Peter deSilva – President and COO


Chris Mcgratty – Keefe, Bruyette & Woods

Peyton Green – Sterne, Agee & Leach



Ladies and gentlemen, thank you for standing by and welcome to the UMB Financial Corporation fourth quarter conference call on 27 January 2010. Throughout today’s recorded presentation, all participants will be in a listen-only mode, after the presentation, there will be an opportunity to ask questions. (Operator instructions) I will now hand the conference over to Abby Wendel, please go ahead madam.

Abby Wendel

Thank you. Good morning everyone and thank you for joining us for our conference call and webcast regarding our year-end and fourth quarter financial results. Before we begin, let me remind you that our comments in this conference call contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements rely on a number of assumptions concerning future events and are subject to risks and uncertainties, which could cause actual results to differ materially from those indicated in our statements made during this call.

While management of UMB believes our assumptions are reasonable, UMB cautions that material changes in interest rates, the equity markets, general economic conditions as they relate to the company’s loan and fee-based customers, competition in the financial services industry, the ability to integrate acquisitions and other risks and uncertainties, which are detailed in our filings with the Securities and Exchange Commission, may cause actual results to differ materially from those discussed in this call. UMB has no duty to update such statements and undertakes no obligation to update or supplement forward-looking statements that become untrue because of new information, future events or otherwise.

Our earnings release includes both our GAAP based income statement and a reconciliation to the non-GAAP measures recognized in 2008 that were discussed in the release, which includes pre-tax adjustments to noninterest income and noninterest expense, the tax effect of the adjustment and adjusted net income. The adjustment recognized in 2008 include a $8.9 million gain on the mandatory redemption of Visa A Class B common stock, a $4 million gain on the covered litigation provision of the Visa related transaction, and a $1.1 million gain on the sale of our securities transfer product. The reconciliation for these items can also be found on our Web site at

The non-GAAP results are a supplement to the financial statements based upon Generally Accepted Accounting Principles. UMB believes this non-GAAP presentation and the elimination of these items is useful in order to focus on a more reliable indicator of ongoing performance.

By now, we hope most of you on the call who are listening to the webcast have had a chance to review our earnings release dated January 26. If not, you will find it on our Web site at

On the call today are Mariner Kemper, Chairman and Chief Executive Officer; Peter deSilva, President and Chief Operating Officer; and Mike Hagedorn, our Chief Financial Officer. The agenda for today’s call is as follows. First, Mariner will highlight our results for the year and update the progress on growing loans and deposits, managing capital and delivering the unparalleled customer experience, then Mike will provide additional details on our fourth quarter results. Finally, Peter will discuss results relating to our strategies of accelerating fee-income growth and increasing efficiencies followed by closing comments from Mariner. Following that we will be happy to answer your questions.

Now, I’ll turn the call over to Mariner Kemper.

Mariner Kemper

Thank you Abby, welcome everyone and thank you for joining us today. 2009 proved to be a challenging year for the financial services industry but as you have seen in our press release, our ability to stay focused and execute against our business strategies drove sound results. Even in what is now known as the great recession, UMB continued to meet our customers’ credit needs, grow our fee-based businesses and maintain outstanding credit quality and sustain a healthy net interest margin all the while growing capital.

We were delighted to receive a number of industry accolades this year particularly to be rated the Second Best Bank in America by Forbes Magazine. We were honored by this recognition and believe this is further validation that prudent business practices lead to positive results and steady growth. As you know, we strive to do what is right not what is popular. Our intention is to choose the path that best benefits our shareholders, customers and associates and communities that we serve. We remain focused on the long term in delivering sound results year after year.

Turning to specific results for the year, net income was $89.5 million or $2.20 per diluted share, this was a decrease from our 2008 net income of $98.1 million, which included a payment related to the sale of our securities transfer product and transactions related to Visa excluding the impact of those non-reoccurring items 2008 net income was $89.1 million. On a non-GAAP basis, our net income for the year was up slightly, which was particularly pronounced given our record year in 2008.

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