<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, 1996
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 of (IRS Employer
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, 1996, UMB Financial Corporation had 18,788,532 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, 1996 and 1995 and December 31, 1995 3
Consolidated Statements of Income for the Three and Nine Months
Ended September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1996 and 1995 5
Consolidated Statements of Shareholders' Equity for the Nine Months
Ended September 30, 1996 and 1995 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 1996 1995 1995
Loans:
<S> <C> <C> <C>
Commercial, financial and agricultural $1,180,020 $1,206,476 $1,198,808
Consumer (net of unearned interest) 892,575 767,708 784,091
Real estate 416,730 441,326 467,570
Leases 2,368 1,383 2,057
Allowance for loan losses (34,436) (31,823) (32,685)
__________ __________ __________
Net Loans $2,457,257 $2,385,070 $2,419,841
Securities available for sale:
U.S. Treasury and agencies $2,131,717 $1,857,603 $2,330,164
Equity securities and other 6,880 6,267 6,410
__________ __________ __________
Total securities available for sale $2,138,597 $1,863,870 $2,336,574
Securities held to maturity:
State and political subdivisions $325,628 $301,203 $311,757
U.S. Agencies 86,189 -
__________ __________ __________
Total securities held to maturity (market value
of $324,862, $388,280 & $313,173, respectively) $325,628 $387,392 $311,757
Federal funds and resell agreements 109,932 82,245 89,165
Trading securities and other earning assets 79,004 73,185 86,011
__________ __________ __________
Total earning assets $5,110,418 $4,791,762 $5,243,348
Cash and due from banks 638,411 499,466 696,407
Bank premises and equipment, net 151,242 138,667 147,576
Accrued income 74,698 74,786 79,149
Premium on and intangibles of purchased banks 69,303 72,767 74,739
Other Assets 52,537 42,422 40,109
__________ __________ __________
Total assets $6,096,609 $5,619,870 $6,281,328
========= ========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand $1,414,390 $1,229,123 $1,634,960
Interest-bearing demand and savings 2,027,440 1,836,898 1,877,019
Time deposits under $100,000 932,360 944,561 977,666
Time deposits of $100,000 or more 225,693 241,650 324,038
__________ __________ __________
Total deposits $4,599,883 $4,252,232 $4,813,683
Federal funds and repurchase agreements 814,922 651,437 721,340
Short-term debt 1,995 1,923 501
Long-term debt 51,859 41,626 40,736
Accrued expenses and taxes 38,012 37,779 63,135
Other liabilities 22,481 23,942 19,493
__________ __________ __________
Total liabilities $5,529,152 $5,008,939 $5,658,888
__________ __________ __________
Common stock repurchase commitment $46,481
SHAREHOLDERS' EQUITY
Common stock, $1.00 par value; authorized 33,000,000
shares; 22,547,521 issued $22,548 $20,678 $22,548
Capital surplus 522,720 442,557 522,892
Retained earnings 172,089 208,064 136,943
Net unrealized gain (loss) on securities available for sale (9,972) 233 3,612
Unearned ESOP shares (15,628) -
Treasury stock, 3,399,722, 1,906,390 and
1,972,239 shares, at cost, respectively (124,300) (60,601) (63,555)
Common stock repurchase commitment, 1,068,533
shares at December 31, 1995 (46,481)
__________ __________ __________
Total shareholders' equity $567,457 $610,931 $575,959
__________ __________ __________
Total liabilities and shareholders' equity $6,096,609 $5,619,870 $6,281,328
<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 1996 1995 1996 1995
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Loans $55,748 $55,932 $164,813 $161,276
Securities:
Taxable interest 30,618 26,502 92,039 82,623
Tax-exempt interest 3,677 3,614 10,846 10,706
__________ __________ __________ __________
Total securities income 34,295 30,116 102,885 93,329
Federal funds and resell agreements 2,390 1,843 7,952 8,853
Trading securities and other 957 669 2,982 2,538
__________ __________ __________ __________
Total interest income 93,390 88,560 278,632 265,996
__________ __________ __________ __________
INTEREST EXPENSE
Deposits 30,267 29,141 92,410 91,751
Federal funds and repurchase
agreements 9,502 8,652 28,078 23,831
Short-term debt 12 17 31 38
Long-term debt 976 879 3,078 2,703
__________ __________ __________ __________
Total interest expense 40,757 38,689 123,597 118,323
__________ __________ __________ __________
Net interest income 52,633 49,871 155,035 147,673
Provision for loan losses 1,821 1,181 8,476 3,032
__________ __________ __________ __________
Net interest income after provision 50,812 48,690 146,559 144,641
__________ __________ __________ __________
NONINTEREST INCOME
Trust income 10,565 8,741 31,361 26,119
Securities processing 2,280 2,530 7,086 8,120
Trading and investment banking 2,831 2,659 9,807 8,176
Service charges on deposits 8,321 7,729 24,894 24,041
Other service charges and fees 4,085 3,184 11,232 8,459
Bankcard fees 1,762 1,712 4,546 5,105
Net investment security gains - 73 469 1,356
Other 1,347 961 13,782 5,780
__________ __________ __________ __________
Total noninterest income 31,191 27,589 103,177 87,156
NONINTEREST EXPENSE
Salaries and employee benefits 32,754 30,465 96,682 92,486
Occupancy, net 4,526 4,038 13,249 11,665
Equipment 5,834 5,811 16,936 16,259
Supplies and services 4,568 5,024 14,121 14,291
Bankcard processing 2,217 1,935 5,374 4,410
Marketing and business development 3,989 3,256 11,130 9,813
FDIC and regulatory fees 320 972 979 7,126
Other 7,083 6,309 21,209 20,250
__________ __________ __________ __________
Total noninterest expense 61,291 57,810 179,680 176,300
__________ __________ __________ __________
Income before income taxes 20,712 18,469 70,056 55,497
Income tax provision 6,678 6,189 23,483 18,267
__________ __________ __________ __________
NET INCOME $14,034 $12,280 $46,573 $37,230
====== ====== ====== ======
PER SHARE DATA
Net income $0.75 $0.59 $2.44 $1.79
Dividends $0.20 $0.18 $0.60 $0.54
Weighted average shares outstanding 18,786,519 20,666,827 19,074,720 20,775,421
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
Operating Activities __________ __________
<S> <C> <C>
Net Income $46,573 $37,230
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Provision for loan losses 8,476 3,032
Depreciation and amortizaton 16,213 17,236
Deferred income taxes and investment tax credits (4,049) (3,828)
Net (increase) decrease in trading securities 7,007 (42,203)
Gains on sales of securities available for sale (470) (3,589)
Losses on sales of securities available for sale 1 2,233
Amortization of securities premium,
net of discount accretion 17,565 25,770
Earned ESOP shares 1,595 -
Changes in:
Accrued income 4,451 6,433
Accrued expenses and taxes (12,713) 3,560
Other, net (9,682) 12,932
__________ __________
Net cash provided by operating activities $74,967 $58,806
__________ __________
Investing Activities
Proceeds from maturities of investment securities $73,217 $82,421
Proceeds from sales of investment securities - 152
Proceeds from sales of securities available for sale 2,095 393,113
Proceeds from maturities of securities available for sale 1,422,866 986,297
Purchases of investment securities (88,736) (86,995)
Purchases of securities available for sale (1,264,250) (933,263)
Net increase in loans (45,892) (151,012)
Net (increase) decrease in federal funds and resell agreemen (20,767) 451,854
Purchases of bank premises and equipment (14,559) (20,399)
Proceeds from sales of bank premises and equipment 231 549
__________ __________
Net cash provided by investing activities $64,205 $722,717
__________ __________
Financing Activities
Net decrease in demand and savings deposits ($70,149) ($925,606)
Net increase (decrease) in time deposits (143,651) 45,004
Net increase (decrease) in federal funds and repurchase agre 93,582 (149,566)
Net increase in short term borrowings 1,494 1,051
Repayment of long term debt (6,158) (4,704)
Cash dividends (11,427) (11,325)
Proceeds from exercise of stock options 255 122
Purchases of treasury stock (61,114) (7,846)
__________ __________
Net cash used in financing activities ($197,168)($1,052,870)
__________ __________
Decrease in cash and due from banks ($57,996) ($271,347)
__________ __________
Cash and due from banks at beginning of year 696,407 770,813
Cash and due from banks at end of period $638,411 $499,466
====== ======
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands)
<TABLE>
<CAPTION>
Net
Unrealized Purchase
Common Capital Retained Holding Treasury Commitment/
Stock Surplus Earnings Gain (Loss) Stock Unearned ESOP
__________ __________ __________ __________ __________ __________
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1994 $20,678 $442,606 $182,159 ($35,211) ($52,926) $ -
Net income - - 37,230 - - -
Cash Dividends - - (11,325) - - -
Purchase of treasury stock - - - - (7,846) -
Exercise of stock options - (49) - - 171 -
Net unrealized gain on securities available for sale - - - 35,444 - -
__________ __________ __________ __________ __________ __________
Balance - September 30, 1995 $20,678 $442,557 $208,064 $233 ($60,601) -
====== ====== ====== ====== ====== ======
Balance - December 31, 1995 $22,548 $522,892 $136,943 $3,612 ($63,555) ($46,481)
Net income - - 46,573 - - -
Cash dividends - - (11,427) - - -
Shares purchased by ESOP - - - - - 16,530
Guaranteed ESOP obligation - - - - - (17,281)
Earned ESOP shares - (58) - - - 1,653
Purchase of treasury stock - - - - (61,114) 29,951
Exercise of stock options - (114) - - 369 -
Net unrealized loss on securities available for sale - - - (13,584) - -
__________ __________ __________ __________ __________ __________
Balance - September 30, 1996 $22,548 $522,720 $172,089 ($9,972) ($124,300) ($15,628)
====== ====== ====== ====== ====== ======
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30,1996
1. 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 1995 Annual Report to Shareholders.
2. 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
January 2, 1996.
3. Acquisitions:
On December 13, 1995 the Company acquired First Sooner Bancshares, the one-bank
holding company of The Oklahoma Bank (now UMB Oklahoma Bank), for $12.7 million.
The acquisition of this $139 million bank was recorded as a purchase, with
$3.3 million recorded as premium on purchased bank. This acquisition is not
deemed to be material in relation to the consolidated results of the Company.
4. Allowance for Loan Losses:
The following is a summary of the Allowance for Loan Losses for the nine months
ended September 30, 1996 and 1995 (in thousands):
Nine Months Ended September 30,
1996 1995
Balance January 1 $32,685 $32,527
Additions:
Provision for loan losses 8,476 3,032
__________ __________
41,161 35,559
__________ __________
Deductions:
Charge-offs (8,469) (5,650)
Less recoveries on loans
previously charged-off 1,744 1,914
__________ __________
Net charge-offs (6,725) (3,736)
__________ __________
Balance, September 30 $34,436 $31,823
====== ======
<PAGE>
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30,1996
4. Allowance for Loan Losses: (Continued)
At September 30, 1996 the amount of loans that are considered to be impaired
under SFAS No. 114 was $11,925,000. All of these loans are currently on a
nonaccrual basis. Included in the impaired loans is $11,010,000 of loans for
which the related allowance for loan losses is $1,924,000. The remaining
$915,000 of impaired loans do not have an allowance for loan loss as a result
of write-downs and supporting collateral value. Theaverage recorded
investment in impaired loans during the period ended September 30, 1996
was approximately $7,909,000.
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. Other Events:
During the first quarter of 1996, the Company recorded a gain of $9.8 million
on the sale of its merchant bankcard portfolio. Merchant bankcard
processing income and related processing expenses previously
were reported separately in the Company's consolidated statements of income.
Merchant processing income has been reclassified against processing
expense in order to allow a more meaningful comparison of current and prior
period results.
On April 17, the Board of Directors authorized the purchase of one million
shares of the Company's common stock. The authorization allows for the
purchase of approximately 5 percent of the Company's common stock
during the next 12 months.
<PAGE>
UMB FINANCIAL CORPORATION
AVERAGE BALANCES/YIELDS AND RATES
(tax-equivalent basis) (in thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
Average Average Average Average
Assets Balance Yield/Rate Balance Yield/Rate
<S> <C> <C> <C> <C>
Loans, net of unearned interest $2,420,888 9.13 $2,333,152 9.29
Securities:
Taxable 2,186,887 5.62 2,114,011 5.23
Tax-exempt 315,996 6.72 308,555 6.81
__________ __________ __________ __________
Total securities 2,502,883 5.76 2,422,566 5.43
Federal funds and resell agreements 201,674 5.27 209,095 5.66
Other earning assets 67,989 6.11 56,272 6.33
__________ __________ __________ __________
Total earning assets 5,193,434 7.32 5,021,085 7.24
Allowance for loan losses (34,058) (32,131)
Other assets 982,422 970,332
__________ __________
Total assets $6,141,798 $5,959,286
====== ======
Liabilities and Shareholders' Equity
Interest-bearing deposits $3,296,161 3.74 $3,323,082 3.69
Federal funds and repurchase agreements 778,467 4.82 582,065 5.47
Borrowed funds 57,549 7.22 47,013 7.80
__________ __________ __________ __________
Total interest-bearing liabilities 4,132,177 4.00 3,952,160 4.00
Noninterest-bearing demand deposits 1,375,208 1,359,135
Other liabilities 62,756 58,391
Shareholders' equity 571,657 589,600
__________ __________
Total liabilities and shareholders' equity $6,141,798 $5,959,286
====== ======
Net interest spread 3.32 % 3.24 %
Net interest margin 4.14 4.09
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
ANALYSIS OF CHANGES IN NET INTEREST INCOME AND MARGIN
(tax-equivalent basis) (in thousands)
<TABLE>
<CAPTION>
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Three Months Ended Nine Months Ended
September 30, 1996 vs. 1995 September 30, 1996 vs. 1995
Volume Rate Total Volume Rate Total
Change in interest earned on:
<S> <C> <C> <C> <C> <C> <C>
Loans $2,450 ($2,710) ($260) $6,134 ($2,817) $3,317
Securities:
Taxable 1,506 2,609 4,115 2,942 6,474 9,416
Tax-exempt 145 (187) (42) 385 (218) 167
Federal funds sold 409 139 548 (304) (597) (901)
Other 269 15 284 540 (95) 445
__________ __________ __________ __________ __________ __________
Interest income $4,779 ($134) $4,645 $9,697 $2,747 $12,444
__________ __________ __________ __________ __________ __________
Change in interest paid on:
Interest-bearing deposits $878 $248 $1,126 ($717) $1,376 $659
Federal funds purchased 2,381 (1,531) 850 7,353 (3,106) 4,247
Borrowed funds 169 (78) 91 583 (215) 368
__________ __________ __________ __________ __________ __________
Interest expense $3,428 ($1,361) $2,067 $7,219 (1,945) 5,274
__________ __________ __________ __________ __________ __________
Net interest income $1,351 $1,227 $2,578 $2,478 $4,692 $7,170
====== ====== ====== ====== ====== ======
ANALYSIS OF NET INTEREST MARGIN
Three Months Ended Nine Months Ended
September 30, 1996 September 30, 1996
1996 1995 Change 1996 1995 Change
Average earning assets $5,121,052 $4,843,402 $277,650 $5,193,434 $5,021,085 $172,349
Interest-bearing liabilities 4,088,435 3,792,452 295,983 4,132,177 3,952,160 180,017
__________ __________ __________ __________ __________ __________
Interest free funds $1,032,617 $1,050,950 ($18,333) $1,061,257 $1,068,925 ($7,668)
====== ====== ====== ====== ====== ======
Free funds ratio 20.16 21.70 (1.54) 20.43 21.29 (0.86)
(free funds to earning assets)
Tax-equivalent yield on earning assets 7.40 7.42 (0.02) 7.32 7.24 0.08
Cost of interest-bearing liabilities 3.97 4.05 (0.08) 4.00 4.00 0.00
__________ __________ __________ __________ __________ __________
Net interest spread 3.43 3.37 0.06 3.32 3.24 0.08
Benefit of interest free funds 0.80 0.88 (0.08) 0.82 0.85 (0.03)
__________ __________ __________ __________ __________ __________
Net interest margin 4.23 4.25 (0.02) 4.14 4.09 0.05
====== ====== ====== ====== ====== ======
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
Summary
UMB Financial Corporation (the Company) earned net income of $14,034,000 for
the three months ended September 30, 1996, compared to $12,280,000 for the same
period last year. This represents per share earnings of $0.75 for the
third quarter of 1996 compared to $0.59 for the third quarter of 1995,
an increase of 27.1%. On a year-to-date basis, 1996 earnings were $46,573,000,
or $2.44 per share, compared to $37,230,000 or $1.79 per share for the prior
year. Return on average assets was 1.01% and return on
average equity was 10.88% for the nine months ended September 30, 1996.
The Company's improved performance has been primarily driven by an increase in
non-interest income and a decrease in average common shares outstanding.
Net interest income increased on a quarterly and year-to-date
basis as a result of an increase in lending activity and the effect of higher
interest rates. The Company increased its provision for loan losses for the
quarter and for the year due to increases in non performing loans and increased
loan charge-offs. Non-interest expense increased slightly during both periods.
Results of Operations
For the three months ended September 30, 1996, net interest income totaled
$52,633,000 compared to $49,871,000 for the same period a year earlier.
This represents a 5.54% increase which is consistent with the year-to-date
results which increased to $155,035,000 for 1996 from $147,673,000
for 1995. The Company's yield on interest earning assets was 7.32% for 1996,
compared to 7.24% for the first nine months of 1995. This increase has resulted
from higher interest rates and a change in the mix of the Company's assets.
Average loan balances during 1996 increased 3.76% over the average for the same
period of 1995. Average investment securities balances during
1996 increased 3.32% compared to the average for 1995. The yield on investment
securities has also increased as the Company has slightly extended the average
maturity of its portfolio.
The provision for loan losses for the three months ended September 30, 1996 was
$1,821,000 compared to $1,181,000 for the same period of 1995. The provision
for the third quarter of 1996 approximates net charge-offs for the period.
This increase is consistent with the 1996 year-to-date provision which increased
to $8,476,000 from $3,032,000 for the same period in 1995. The increase
in year-to-date provision was the result of increased net loan charge-offs and
additional provision provided for the increase in non-accrual loans.
Non interest income totaled $31,191,000 for the third quarter of 1996
compared to $27,589,000 for the same period of 1995. The largest
components of these changes were increases in trust income and service charges.
For the first nine months of 1996, non interest income increased to
$103,177,000 from $87,156,000 a year earlier. Contributing to the year-to-date
increase was a $9.8 million gain on the sale of the servicing rights of the
merchant bankcard portfolio, during the first quarter of 1996. Also
effecting the year-to-date results were increases in trust income, service
charges and trading income.
Non interest expense was $61,291,000 for the three months ended
September 30, 1996 compared to $57,810,000 for the same period of 1995. For
the first nine months of 1996, non interest expense increased to $179,680,000
compared to $176,300,000 for 1995, an increase of 1.92%. In comparing the
quarter and year-to-date results, the Company incurred marginal increases
in staffing related costs, marketing and occupancy expense
which were offset by reductions in premiums for deposit insurance.
The Company has and will continue to aggressively take measures
to control all overhead related items.
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
Financial Condition
Total assets were $6.097 billion at September 30, 1996 compared to $5.620
billion at September 30, 1995. The increase in assets during the twelve month
period ended September 30, 1996 was the result of increases in loans
and investment securities, as well as the acquisition of
UMB Oklahoma Bank. Loans, net of unearned interest increased to $2.492 billion
as of September 30, 1996, from $2.417 billion at September
30, 1995. The Company's loan growth for the period has been slightly lower
than expectations due to a very competitive loan market. Investment
securities were $2.464 billion at September 30, 1996 compared to $2.251
billion at September 30, 1995. Increases in securities and loans were funded
by an increase in deposits.
Non accrual and restructured loans totaled $13,639,000, 0.55% of total loans at
September 30, 1996. Loans past due 90 days or more were $6,569,000, 0.26% of
total loans at September 30, 1996. The increase in non accrual loans was
primarily the result of three commercial loans. Significant additions in
the Company's reserve for loan losses are not anticipated as a result
of these loans. At September 30, 1996, the Company's allowance for loan
losses was $34,436,000 or 1.38% of outstanding loans, compared to
$31,823,000 one year earlier. Other real estate owned totaled $0.6 million
at September 30, 1996 compared to $4.5 million a year earlier.
Liquidity and Capital Resources
The Company's liquidity position continues to be strong. At September 30, 1996
the Company's average loan to deposit ratio was 51.8% compared to 49.8% at
September 30, 1995. At September 30, 1996, the average life of the securities
portfolio was 24 months and 28% of the portfolio matures during the
next twelve months. The Company has access to various borrowing markets
should there be a need for additional funding.
Shareholders' equity totaled $567 million at September 30, 1996 compared to
$611 million at September 30, 1995 and $576 million at year end 1995. During
the twelve months ended September 30, 1996, the Company increased its treasury
stock holding by $64 million. Management will continue to consider treasury
stock purchases depending on price, availability and alternative uses
of funds. At September 30, 1996, the net unrealized loss on securities
available for sale was $10.0 million, compared to an unrealized gain of
$233,000 at September 30, 1995, and an unrealized gain of $3.6 million at
December 31, 1995.
In December 1995, the Company and its Employee Stock Ownership Plan (ESOP)
entered into a commitment to purchase 1,581,133 shares of common stock of the
Company. During the first half of 1996, the Company acquired 1,201,133 of such
shares for treasury stock using existing working capital. Also,
in the first quarter the ESOP purchased 380,000 shares by means
of a seven-year loan guaranteed by the Company. This ESOP transaction
is reflected on the balance sheet as an increase in long term debt
and as equity under the caption, Unearned ESOP.
Included in this report are limited forward looking statements concerning
the Company's future financial condition and results of operations. These
statements are the result of Management's current expectations based
on information presently available. Actual results would differ from these
expectations as a result of many factors including changes
in economic conditions impacting customers ability to repay loans, interest
rates and loan demand. Changes in technology, regulatory requirements
and competition will also impact future results.
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
The Company's capital position is summarized in the table below and far exceeds
regulatory requirements.
Nine Months Ended
September 30,
RATIOS 1996 1995
Return on average assets 1.01% 0.84%
Return on average equity 10.88 8.44
Average equity to assets 9.31 9.89
Tier 1 risk-based capital ratio 15.86 16.82
Total risk-based capital ratio 16.93 17.84
Leverage ratio 8.42 9.70
Per Share Data
Earnings $2.44 $1.79
Cash Dividends 0.60 0.54
Dividend payout ratio 24.59% 30.17%
Book value $30.16 $29.59
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1996
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, 1996 Form 10-Q.
b) Reports on Form 8-K:
The Company filed no reports on Form 8-K during the quarter ended
September 30, 1996.
<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
/s/ R. Crosby Kemper
R. Crosby Kemper
Chairman
/s/ Timothy M. Connealy
Timothy M. Connealy
Chief Financial Officer
Date: November 14, 1996
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
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<INT-BEARING-DEPOSITS> 3,185,493
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