<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________________ to ____________________
Commission file number 0-4887
UMB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 43-0903811
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1010 Grand Avenue, Kansas City, Missouri 64106
(Address of principal executive offices and Zip Code)
(816) 860-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
At September 30, 1995, UMB Financial Corporation had 18,771,168 shares of common
stock outstanding. This is the only class of stock of the Company.
<PAGE>
UMB FINANCIAL CORPORATION
FORM 10-Q
INDEX
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
as of September 30, 1995 and 1994 and December 31, 1994 3
Consolidated Statements of Income for the Three and Nine Months
Ended September 30, 1995 and 1994 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1995 and 1994 5
Consolidated Statements of Shareholders' Equity
Ended September 30, 1995 and 1994 6
Notes to Consolidated Financial Statements 7-8
Supplemental Financial Data
Average Balances/ Yields and Rates 9
Analysis of Changes in Net Interest Income and Margin 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-13
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994 1994
Loans:
<S> <C> <C> <C>
Commercial, financial and agricultural $1,206,473 $1,097,225 $1,135,827
Consumer (net of unearned interest) 767,708 646,952 687,068
Real estate 441,326 445,191 444,565
Leases 1,386 2,249 2,157
Allowance for loan losses (31,823) (32,947) (32,527)
--------- --------- ---------
Net Loans 2,385,070 2,158,670 2,237,090
Securities available for sale:
U.S. Treasury and agencies 1,857,603 2,301,179 2,267,188
Equity securities and other 6,267 9,315 8,025
--------- --------- ---------
Total securities available for sale 1,863,870 2,310,494 2,275,213
Securities held to maturity:
State and political subdivisions 301,203 301,768 298,556
U.S. Agencies 86,189 86,670 86,278
-------- -------- ---------
Total securities held to maturity (market value
of $388,280, $380,776 & $373,644, respectively) 387,392 388,438 384,834
Federal funds and resell agreements 82,245 279,554 534,099
Trading securities and other earning assets 72,006 64,125 30,982
--------- --------- ---------
Total earning assets 4,790,583 5,201,281 5,462,218
Cash and due from banks 500,645 492,704 770,813
Bank premises and equipment, net 138,667 129,804 130,261
Accrued income 74,786 73,358 81,219
Premium on and intangibles of purchased banks 72,767 79,973 78,091
Other Assets 42,422 64,072 76,418
--------- --------- ---------
Total assets $5,619,870 $6,041,192 $6,599,020
========= ========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand $1,229,123 $1,430,034 $1,570,478
Interest-bearing demand and savings 1,836,898 2,317,011 2,421,149
Time deposits under $100,000 944,561 969,253 949,728
Time deposits of $100,000 or more 241,650 163,242 191,479
--------- --------- ---------
Total deposits 4,252,232 4,879,540 5,132,834
Federal funds and repurchase agreements 651,437 480,859 801,003
Short-term debt 1,923 1,923 872
Long-term debt 41,626 49,907 46,330
Accrued expenses and taxes 37,779 32,282 38,638
Other liabilities 23,942 31,617 22,037
--------- --------- ---------
Total liabilities $5,008,939 $5,476,128 $6,041,714
SHAREHOLDERS' EQUITY
Common stock, $1.00 par value; authorized
23,000,000 shares; 20,677,558 shares issued $20,678 $20,678 $20,678
Capital surplus 442,557 442,640 442,606
Retained Earnings 208,064 173,855 182,159
Net unrealized gain (loss) on securities available for sale 233 (21,018) (35,211)
Treasury stock, 1,906,390, 1,618,071 and
1,676,451 shares, at cost, respectively (60,601) (51,091) (52,926)
-------- -------- --------
Total shareholders' equity 610,931 565,064 557,306
--------- --------- ---------
Total liabilities and shareholders' equity $5,619,870 $6,041,192 $6,599,020
========= ========= ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited in thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
INTEREST INCOME 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Loans $55,932 $44,661 $161,276 $125,053
Securities:
Taxable interest 26,502 30,331 82,623 92,191
Tax-exempt interest 3,614 3,334 10,706 9,339
------ ------ ------ -------
Total securities income 30,116 33,665 93,329 101,530
Federal funds and resell agreements 1,843 3,385 8,853 9,633
Trading securities and other 669 595 2,538 2,298
------ ------ ------- -------
Total interest income 88,560 82,306 265,996 238,514
INTEREST EXPENSE
Deposits 29,141 26,840 91,751 78,377
Federal funds and repurchase
agreements 8,652 7,339 23,831 17,671
Short-term debt 17 8 38 23
Long-term debt 879 1,010 2,703 3,048
------ ------ ------- ------
Total interest expense 38,689 35,197 118,323 99,119
Net interest income 49,871 47,109 147,673 139,395
Provision for loan losses 1,181 861 3,032 1,759
------ ------ ------- -------
Net interest income after provision 48,690 46,248 144,641 137,636
NONINTEREST INCOME
Trust income 8,741 8,403 26,119 25,942
Securities processing 2,530 3,707 8,120 9,496
Trading and investment banking 2,657 2,245 8,175 7,827
Service charges on deposits 7,729 8,107 24,041 24,486
Other service charges and fees 3,184 3,001 8,459 9,060
Bankcard fees 8,667 8,148 24,384 21,995
Net investment security gains 73 225 1,356 3,540
Other 930 1,257 5,781 3,776
------ ------ ------- -------
Total noninterest income 34,511 35,093 106,435 106,122
NONINTEREST EXPENSE
Salaries and employee benefits 30,464 30,254 92,486 90,667
Occupancy, net 4,038 3,867 11,665 11,392
Equipment 5,811 5,403 16,259 15,492
Supplies and services 5,024 4,875 14,291 14,511
Bankcard processing 8,876 6,735 23,698 18,680
Marketing and business development 3,272 2,904 9,809 9,042
FDIC and regulatory fees 972 3,091 7,126 9,137
Other 6,275 7,314 20,245 21,640
------ ------ ------- -------
Total noninterest expense 64,732 64,443 195,579 190,561
------ ------ ------- -------
Income before income taxes 18,469 16,898 55,497 53,197
Income tax provision 6,189 5,647 18,267 17,491
------ ------ ------ ------
NET INCOME $12,280 $11,251 $37,230 $35,706
====== ====== ====== ======
PER SHARE DATA
Net income $0.65 $0.59 $1.97 $1.85
Dividends $0.20 $0.20 $0.60 $0.56
Weighted average shares outstanding 18,796,864 19,179,958 18,905,458 19,261,569
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
Operating Activities
<S> <C> <C>
Net Income $37,230 $35,706
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 3,032 1,759
Depreciation and amortizaton 17,236 16,395
Deferred income taxes and investment tax credits (3,828) (1,419)
Net (increase) decrease in trading securities (41,024) 19,621
Investment security gains (3,589) (3,600)
Investment security losses 2,233 60
Amortization of securities premium,
net of discount accretion 25,770 33,706
Increase (decrease) in interest receivable 6,433 (807)
Decrease in interest payable (73) (2,201)
Other, net 16,565 (27,950)
------ ------
Net cash provided by operating activities $59,985 $71,270
Investing Activities
Proceeds from maturities of investment securities $82,421 $96,941
Proceeds from sales of investment securities 152 287
Proceeds from sales of securities available for sale 393,113 142,431
Proceeds from maturities of securities available for sale 986,297 679,661
Purchases of investment securities (86,995) (121,852)
Purchases of securities available for sale (933,263) (604,375)
Net increase in loans (151,012) (36,258)
Net decrease in federal funds and resell agreements 451,854 59,621
Purchases of bank premises and equipment (20,399) (12,025)
Proceeds from sales of bank premises and equipment 549 133
------- -------
Net cash provided by investing activities $722,717 $204,564
Financing Activities
Net decrease in demand and savings deposits $(925,606) $(105,574)
Net (increase) decrease in time deposits 45,004 (176,615)
Net decrease in federal funds and repurchase agreements (149,566) (144,223)
Net increase in short term borrowings 1,051 470
Repayment of long term debt (4,704) (1,622)
Cash dividends (11,325) (10,865)
Proceeds from exercise of stock options 122 226
Purchases of treasury stock (7,846) (11,295)
--------- -------
Net cash used by financing activities $(1,052,870) $(449,498)
Decrease in cash and due from banks $(270,168) $(173,664)
Cash and due from banks at beginning of year 770,813 666,368
------- -------
Cash and due from banks at end of period $500,645 $492,704
======== ========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Net
Unrealized
Common Capital Retained Holding Treasury
Stock Surplus Earnings Gain (Loss) Stock
<S> <C> <C> <C> <C> <C>
Balance - December 31, 1993 $236,579 $167,368 $208,557 $14,333 ($40,194)
Net income 0 0 35,706 0 0
Cash Dividends 0 0 (10,865) 0 0
10% stock dividend 1,751 57,792 (59,543) 0 0
Adjust par value (217,652) 217,652 0 0 0
Purchase of treasury stock 0 0 0 0 (11,295)
Exercise of stock options 0 (172) 0 0 398
Net unrealized loss on securities available for sale 0 0 0 (35,351) 0
------ ------- ------- ------ ------
Balance - September 30, 1994 $20,678 $442,640 $173,855 ($21,018) ($51,091)
====== ======= ======= ====== ======
Balance - December 31, 1994 $20,678 $442,606 $182,159 ($35,211) ($52,926)
Net income 0 0 37,230 0 0
Cash dividends 0 0 (11,325) 0 0
Purchase of treasury stock 0 0 0 0 (7,846)
Exercise of stock options 0 (49) 0 0 171
Net unrealized gain on securities available for sale 0 0 0 35,444 0
------ ------- ------- ------ --
Balance - September 30, 1995 $20,678 $442,557 $208,064 $233 ($60,601)
====== ======= ======= ======
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1995
1. Change of Company Name and Par Value of Common Stock:
On April 21, 1994 the Company's shareholders approved changing the Company's
name from United Missouri Bancshares, Inc. to UMB Financial Corporation. The
name change was made in order to have a corporate identity which was not
geographically restrictive and which was consistent with the broad range of
financial services and products provided by the Company. On this same date the
shareholders approved an amendment to the Company's Articles of Incorporation to
reduce the par value of the Company's common stock from $12.50 per share to
$1.00 per share.
2. Financial Statement Presentation:
The consolidated financial statements include the accounts of the Company and
its subsidiaries after elimination of all material intercompany transactions.
In the opinion of management of the Company, all adjustments, which were of a
normal recurring nature, necessary for a fair presentation of the financial
position and results of operations have been made. The financial statements
should be read in conjunction with the Management's Discussion and Analysis of
Financial Condition and Results of Operations and with reference to the
1994 Annual Report to Shareholders.
3. Earnings Per Share:
Earnings per share are based on the weighted average number of shares of common
stock outstanding during the interim periods. All share and per share data has
been adjusted to reflect a 10% stock dividend paid on July 1, 1994.
4. Allowance for Loan Losses:
The following is a summary of the Allowance for Loan Losses for the nine months
ended September 30, 1995 and 1994 (in thousands):
1995 1994
Balance January 1 $32,527 $35,590
Additions:
Provision for loan losses 3,032 1,759
------ ------
35,559 37,349
Deductions:
Charge-offs (5,650) (6,466)
Less recoveries on loans
previously charged-off 1,914 2,064
------ -------
Net charge-offs (3,736) (4,402)
------ ------
Balance, September 30 $31,823 $32,947
====== ======
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1995
4. Allowance for Loan Losses: (Continued)
At September 30, 1995 the amount of loans that are considered to be impaired
under SFAS No. 114 was $1,010,000. All of these loans are currently on a
nonaccrual basis. Included in the impaired loans is $641,000 of loans for
which the related allowance for loan losses is $213,000. The remaining
$369,000 of impaired loans do not have an allowance for loan loss as a result of
write-downs and supporting collateral value. The average recorded
investment in impaired loans during the period ended September 30, 1995
was approximately $993,000. The Company has recorded no interest income
on its impaired loans for the nine months ended September 30, 1995.
5. Commitments and Contingencies:
In the normal course of business, the Company and its subsidiaries are named
defendants in various lawsuits and counterclaims. In the opinion of
management after consultation with legal counsel, none of the suits will have
a materially adverse effect on the financial position or results of operations
of the Company.
6. Subsequent Events:
On August 2, 1995 the Company entered into an agreement to purchase 100% of the
outstanding shares of First Sooner Bancshares, Inc., a one bank holding company
headquartered in Oklahoma City, Oklahoma. First Sooner Bancshares is the sole
owner of The Oklahoma Bank, a $129 million-asset bank with three locations in
Oklahoma City. The acquisition, which is structured as a cash transaction,
is expected to close by the end of the year.
<PAGE>
UMB FINANCIAL CORPORATION
AVERAGE BALANCES/YIELDS AND RATES
(tax-equivalent basis) (in thousands)
<TABLE>
<CAPTION>
1995 1994
Average Average Average Average
Assets Balance Yield/Rate Balance Yield/Rate
<S> <C> <C> <C> <C>
Loans, net of unearned interest $2,333,152 9.29% $2,133,696 7.89%
Securities:
Taxable 2,114,011 5.23 2,621,289 4.70
Tax-exempt 308,555 6.81 285,824 6.37
Total securities 2,422,566 5.43 2,907,113 4.87
Federal funds and resell agreements 209,095 5.66 360,353 3.57
Other earning assets 56,272 6.33 58,781 5.39
--------- ---------
Total earning assets 5,021,085 7.24 5,459,943 5.97
Allowance for loan losses (32,131) (34,616)
Other assets 970,332 1,014,526
--------- ---------
Total assets $5,959,286 $6,439,853
========= =========
Liabilities and Shareholders' Equity
Interest-bearing deposits $3,323,082 3.69% $3,608,489 2.90%
Federal funds and repurchase agreements 582,065 5.47 674,287 3.50
Borrowed funds 47,013 7.80 53,125 7.73
--------- ---------
Total interest-bearing liabilities 3,952,160 4.00 4,335,901 3.06
Noninterest-bearing demand deposits 1,359,135 1,465,524
Other liabilities 58,391 62,976
Shareholders' equity 589,600 575,452
--------- ---------
Total liabilities and shareholders' equity $5,959,286 $6,439,853
========= =========
Net interest spread 3.24% 2.91%
Net interest margin 4.09 3.54
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
ANALYSIS OF CHANGES IN NET INTEREST INCOME AND MARGIN
(tax-equivalent basis) (in thousands)
[CAPTION]
<TABLE>
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Three Months Ended Nine Months Ended
September 30, 1995 vs. 1994 September 30, 1995 vs. 1994
Volume Rate Total Volume Rate Total
Change in interest earned on:
<S> <C> <C> <C> <C> <C> <C>
Loans $3,061 $8,245 $11,306 $12,497 $23,733 $36,230
Securities:
Taxable (6,183) 2,354 (3,829) (19,101) 9,533 (9,568)
Tax-exempt 252 248 500 1,122 988 2,110
Federal funds sold (2,426) 884 (1,542) (5,030) 4,251 (779)
Other 60 18 78 (104) 399 295
----- ------ ----- ------ ------ ----
Interest income ($5,236) $11,749 $6,513 ($10,616) $38,904 $28,288
Change in interest paid on:
Interest-bearing deposits $(3,048) $5,349 $2,301 $ (6,579) $19,953 13,374
Federal funds purchased (1,373) 2,686 1,313 (2,683) 8,843 $6,160
Borrowed funds (135) 13 (122) (356) 26 (330)
------ ----- ----- ----- ------
Interest expense (4,556) 8,048 3,492 (9,618) 28,822 19,204
----- ----- ----- ----- ------
Net interest income ($680) $3,701 $3,021 ($998) $10,082 $9,084
====== ===== ===== ===== ======
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET INTEREST MARGIN
Three Months Ended Nine Months Ended
September 30, 1995 September 30, 1995
1995 1994 Change 1995 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Average earning assets $4,843,402 $5,378,541 ($535,139) $5,021,085 $5,459,943 ($438,858)
Interest-bearing liabilities 3,792,452 4,292,933 (500,481) 3,952,160 4,335,901 (383,741)
--------- --------- ------- --------- --------- -------
Interest free funds $1,050,950 $1,085,608 ($34,658) $1,068,925 $1,124,042 ($ 55,117)
========= ========= ====== ========= ========= ======
Free funds ratio 21.70% 20.18% 1.51% 21.29% 20.59% .70%
(free funds to earning assets)
Tax-equivalent yield on earning assets 7.42% 6.20% 1.22% 7.24% 5.97% 1.27%
Cost of interest-bearing liabilities 4.05 3.25 .80 4.00 3.06 .94
---- ---- ---- ---- ---- ----
Net interest spread 3.37 2.95 .42 3.24 2.91 .33
Benefit of interest free funds .88 .66 .22 .85 .63 .22
---- ---- ---- ---- ---- ----
Net interest margin 4.25% 3.61% .64% 4.09% 3.54% .55%
==== ==== ==== ==== ==== ====
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
Summary
UMB Financial Corporation (the Company) recorded net income of $12,280,000 for
the three months ended September 30, 1995, a 9.15% increase over the third
quarter results of 1994. On a per share basis, income for the period
was $0.65, compared to $0.59 for the same period in 1994. Year to date income
for 1995 was $37,230,000, $1.97 per share, compared to $35,706,000, $1.85
per share, for the same period in 1994.
The Company's improved performance has been primarily driven by an increase
in net interest income. Higher interest rates, an increase in lending
activity and a change in balance sheet mix have resulted in an increase in the
Company's net interest margin. In comparing the third quarter
of 1995 to the same period in 1994, non interest income decreased marginally
and non interest expense increased slightly.
Results of Operations
For the three months ended September 30, 1995, net interest income totaled
$49,871,000 compared to $47,109,000 for the same period a year earlier.
This represents a 5.9% increase which is consistent with the year to
date results which increased to $147,673,000 for 1995 from $139,395,000 for
1994. The Company's yield on interest earning assets was 7.24% as of
September 30, 1995, compared to 5.97% for the first three quarters of 1994.
This increase has resulted from higher interest rates and change in the mix
of the Company's assets. Average loans during 1995 increase 9.3% over
the average for the same period of 1994. The Company's loan growth has been the
result of continued emphasis on middle market commercial lending and
targeted campaigns for consumer loans. The effect of this increase on the
Company's asset yield has been magnified as a result of a 8% decrease
in average earning assets. Average investment securities during 1995 decreased
by $485 million compared to the average for 1994. This change
was primarily caused by the increase in lending activity and the loss of
deposit balances associated with a mutual fund processing customer. On average
these mutual fund deposit balances paid a higher interest rate than
the Company's other deposits. As a result year to date 1995 funding costs
increased by only 94 basis points compared to a 127 basis point increase in
the yield on interest earning assets.
The provision for loan losses for the three months ended September 30, 1995,
was $1,181,000 compared to $861,000 for the same period of 1994.
The provision for third quarter 1995 approximates net charge offs for the
period. The year to date 1995 loan loss provision was $3,032,000 compared
to $1,759,000 for year to date 1994. Year to date net charge offs for 1995
were $3,736,000 compared to $4,402,000 for the same period of 1994.
Non interest income totaled $34,511,000 for the third quarter of 1995 compared
to $35,093,000 for the same period of 1994. The largest component of this
change was a decrease in securities processing income, resulting from
the loss of a large mutual fund processing customer. This change was partially
offset by an increase in trust income, fees related to security sales and
bankcard processing income. Year to date income in this area is consistent
with third quarter results.
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
Non interest expense was $64,732,000 for the three months ended
September 30, 1995, compared to $64,443,000 for the same period of 1994.
In comparing the third quarter of 1995 to the same period of 1994, the Company
incurred marginal increases in occupancy costs, equipment related expenses and
various supplies and services. Salaries and benefit costs, the largest
component of non interest expense, increased by only 0.7%. The Company
has and will continue to aggressively take measures to control not only
staffing costs but all overhead related items. Costs associated with bankcard
processing increase significantly in the third quarter of 1995 compared to
the same period of 1994. In the first quarter of 1995 the Company converted to
a new bankcard processor and has seen its resulting costs increase
significantly. A portion of this increase was anticipated as the new processor
has provided additional services to the Company that previously were performed
in house or from a different source. The Company is continuing to work with
the new processor to ensure the system is being utilized in the most
efficient manner as possible. The recent reduction in premiums for
deposit insurance resulted in a decrease in expense for the third quarter
of 1995. Other expenses decreased during the third quarter of 1995
as compared to the third quarter of 1995 primarily as a result of a decrease in
legal and other professional fees.
Financial Condition
Total assets at September 30, 1995, were $5.620 billion compared to $6.041
billion at September 30, 1994. The decrease in assets during the
twelve month period ended September 30, 1995, was primarily the result of a
reduction in securities available for sale. Maturing securities were
used to fund an increase in loans and a decrease in deposits. Total deposits
at September 30, 1995, decreased to $4.252 billion from $4.880 billion a year
earlier. The most significant reason for this decline was a loss of deposits
associated with a mutual fund processing customer. As noted previously, these
deposits paid interest at near money market rates and based on the
Company's balance sheet mix, were at best, marginally profitable. The
Company also experienced a reduction in deposits related to trust
business as more customers invested in mutual funds. A portion of which were
invested in funds managed by the Company. There has also been a decline in the
Company's retail money market deposits. Interest rate competition and
the popularity of mutual funds has been the primary cause of this decline.
Loans totaled $2.417 billion at September 30, 1995, compared to
$2.192 billion a year earlier, a 10.3% increase. The
Company has and expects to continue to grow its commercial loan portfolio.
This growth comes from both increased borrowing needs of existing
customers as well as the establishment of new borrowing relationships
and increased marketing efforts in new markets. During the third quarter
the Company established a loan production office in Omaha, Nebraska and is
planning a similar office in Lincoln, Nebraska. The Company's consumer
loan portfolio increased by 18% for the twelve months ended September 30, 1995,
to $768 million. A significant portion of this growth has
been the result of target campaigns with the goal to attract new customers to
the Company and provide multiple products and services.
Non accrual and restructured loans totaled $4.1 million at September 30, 1995,
a 31% decrease from the previous year. Loans over 90 days past due totaled
$6.4 million, or 0.27% of total loans at September 30, 1995, compared to 0.22%
of total loans at September 30, 1994. This represents only a temporary
increase in past due credits and the Company does not expect any
significant increase in loan losses. Other real estate owned totaled
$4.5 million at September 30, 1995, compared to $5.8 million a year earlier.
The Company anticipated further reductions during the remainder of the year.
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
LIQUIDITY AND CAPITAL RESOURCES
The Company has a high level of liquidity as evidenced by the
funding of the recent reduction of deposits. The Company does
not anticipate borrowing funds to complete its pending
acquisition in Oklahoma. The average maturity of the investment
portfolio (both held to maturity and available for sale) at
September 30, 1995, was 20 months. The Company's loan to deposit
ratio has increased to 56.8% from 44.9% at September 30, 1994.
This increase was the result of both an increase in loans and a
reduction of deposits. The Company has access to various
borrowing markets should there be a need for additional funding.
Shareholders' equity totaled $611 million at September 30, 1995,
compared to $565 million at September 30, 1994 and $557 million
at year end 1994. During the twelve months ended September 30,
1995, the Company increased its treasury stock holdings by $9.5
million. Management will continue to consider treasury stock
purchases depending on price, availability and alternative uses
of funds. At September 30, 1995, the net unrealized gain on
securities available for sale was $233 thousand, compared to a
loss of $35.2 million at December 31, 1994.
The Company's capital position is summarized in the table below and far exceeds
regulatory requirements.
Nine Months Ended
September 30,
1995 1994
RATIOS
Return on average assets .84% .74%
Return on average equity 8.44 8.30
Average equity to assets 9.89 8.94
Tier 1 risk-based capital rio 16.82 17.92
Total risk-based capital rao 17.84 19.25
Leverage ratio 9.70 8.49
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
a) The following exhibit is filed herewith:
27-Article 9 of Regulation S-X Financial Data Schedule for
September 30, 1995 Form 10-Q.
b) Reports on Form 8-K:
The Company filed no reports on Form 8-K during the quarter ended
September 30, 1995.
<PAGE>
UMB FINANCIAL CORPORATION
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UMB FINANCIAL CORPORATION
R. Crosby Kemper
Chairman
Timothy M. Connealy
Chief Financial Officer
Date: November 14, 1995
[ARTICLE] 9
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] SEP-30-1995
[CASH] 500,645
[INT-BEARING-DEPOSITS] 3,023,109
[FED-FUNDS-SOLD] 82,245
[TRADING-ASSETS] 72,006
[INVESTMENTS-HELD-FOR-SALE] 1,863,870
[INVESTMENTS-CARRYING] 387,392
[INVESTMENTS-MARKET] 388,280
[LOANS] 2,416,893
[ALLOWANCE] 31,823
[TOTAL-ASSETS] 5,619,870
[DEPOSITS] 4,252,232
[SHORT-TERM] 1,923
[LIABILITIES-OTHER] 61,721
[LONG-TERM] 41,626
[COMMON] 20,678
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 590,253
[TOTAL-LIABILITIES-AND-EQUITY] 5,619,870
[INTEREST-LOAN] 161,276
[INTEREST-INVEST] 95,867
[INTEREST-OTHER] 8,853
[INTEREST-TOTAL] 265,996
[INTEREST-DEPOSIT] 91,751
[INTEREST-EXPENSE] 118,323
[INTEREST-INCOME-NET] 147,673
[LOAN-LOSSES] 3,032
[SECURITIES-GAINS] 1,356
[EXPENSE-OTHER] 195,579
[INCOME-PRETAX] 55,497
[INCOME-PRE-EXTRAORDINARY] 55,497
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 37,230
[EPS-PRIMARY] 1.97
[EPS-DILUTED] 1.97
[YIELD-ACTUAL] 3.06
[LOANS-NON] 2,286
[LOANS-PAST] 6,418
[LOANS-TROUBLED] 1,838
[LOANS-PROBLEM] 0
[ALLOWANCE-OPEN] 32,527
[CHARGE-OFFS] 5,650
[RECOVERIES] 1,914
[ALLOWANCE-CLOSE] 31,823
[ALLOWANCE-DOMESTIC] 31,823
[ALLOWANCE-FOREIGN] 0
[ALLOWANCE-UNALLOCATED] 0
</TABLE>
