<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 June 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 (I.R.S. 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 June 30, 1996, UMB Financial Corporation had 18,786,517 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 June 30, 1996 and 1995 and December 31, 1995 3
Consolidated Statements of Income for the Three and Six Months
Ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1996 and 1995 5
Consolidated Statements of Shareholders' Equity for the Six Months
Ended June 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>
June 30, December 31,
ASSETS 1996 1995 1995
Loans:
<S> <C> <C> <C>
Commercial, financial and agricultural $1,220,691 $1,191,302 $1,198,808
Consumer (net of unearned interest) 812,135 710,738 784,091
Real estate 435,324 446,460 467,570
Leases 2,114 1,428 2,057
Allowance for loan losses (34,577) (31,758) (32,685)
____________________________________
Net Loans 2,435,687 2,318,170 2,419,841
Securities available for sale:
U.S. Treasury and agencies 2,129,527 1,833,461 2,330,164
Equity securities and other $6,517 $6,256 $6,410
____________________________________
Total securities available for sale 2,136,044 1,839,717 2,336,574
Securities held to maturity:
State and political subdivisions $316,328 $317,452 $311,757
U.S. Agencies 0 86,234 0
____________________________________
Total securities held to maturity (market value
of $314,189, $401,823 & $313,173, respectively) 316,328 403,686 311,757
____________________________________
Federal funds and resell agreements 163,013 153,638 89,165
Trading securities and other earning assets 69,166 42,768 86,011
____________________________________
Total earning assets $5,120,238 $4,757,979 $5,243,348
____________________________________
Cash and due from banks 557,290 572,411 696,407
Bank premises and equipment, net 150,977 137,629 147,576
Accrued income 76,458 74,328 79,149
Premium on and intangibles of purchased banks $71,132 $74,541 $74,739
Other Assets 58,678 51,401 40,109
____________________________________
Total assets $6,034,773 $5,668,289 $6,281,328
========== ========== ==========
LIABILITIES
Deposits:
Noninterest-bearing demand 1,362,690 1,342,765 1,634,960
Interest-bearing demand and savings $2,022,420 $1,890,974 $1,877,019
Time deposits under $100,000 955,534 946,161 977,666
Time deposits of $100,000 or more 266,809 178,390 324,038
____________________________________
Total deposits 4,607,453 4,358,290 4,813,683
Federal funds and repurchase agreements $745,271 $605,157 $721,340
Short-term debt 1,673 2,104 501
Long-term debt 56,920 46,172 40,736
Accrued expenses and taxes 44,365 36,463 63,135
Other liabilities 25,162 18,710 19,493
____________________________________
Total liabilities $5,480,844 $5,066,896 $5,658,888
____________________________________
Common stock repurchase commitment 0 0 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 522,822 442,579 522,892
Retained earnings 161,805 199,539 136,943
Net unrealized gain (loss) on securities available for sale (13,162) (2,661) 3,612
Unearned ESOP shares (16,253) 0 0
Treasury stock, 3,387,367, 1,858,105 and
1,972,239 shares, at cost, respectively (123,831) (58,742) (63,555)
Common stock repurchase commitment, 1,068,533
shares at December 31, 1995 0 0 (46,481)
____________________________________
Total shareholders' equity 553,929 601,393 575,959
____________________________________
Total liabilities and shareholders' equity $6,034,773 $5,668,289 $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 Six Months
INTEREST INCOME 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Loans $53,632 $54,946 $109,065 $105,344
Securities:
Taxable interest 30,193 27,086 $61,421 $56,121
Tax-exempt interest 3,594 3,604 7,169 7,092
________________________________________________
Total securities income 33,787 30,690 68,590 63,213
Federal funds and resell agreements 3,338 2,329 $5,562 $7,010
Trading securities and other 1,066 897 2,025 1,869
________________________________________________
Total interest income 91,823 88,862 185,242 177,436
________________________________________________
INTEREST EXPENSE
Deposits 30,177 30,958 62,143 62,610
Federal funds and repurchase
agreements 9,921 7,334 $18,576 $15,179
Short-term debt 8 9 19 21
Long-term debt 1,048 907 2,102 1,824
________________________________________________
Total interest expense 41,154 39,208 82,840 79,634
________________________________________________
Net interest income 50,669 49,654 102,402 97,802
Provision for loan losses 1,828 925 6,655 1,851
________________________________________________
Net interest income after provision $48,841 $48,729 $95,747 $95,951
________________________________________________
NONINTEREST INCOME
Trust income 10,579 8,967 20,796 17,378
Securities processing 2,524 2,980 4,806 5,590
Trading and investment banking 3,412 2,766 $6,976 $5,517
Service charges on deposits 8,321 7,729 16,788 15,983
Other service charges and fees 3,641 2,801 6,932 5,604
Bankcard fees 1,446 1,749 $2,784 $3,393
Net investment security gains 468 866 469 1,283
Other 1,609 1,094 12,435 4,819
________________________________________________
Total noninterest income 32,000 28,952 71,986 59,567
________________________________________________
NONINTEREST EXPENSE
Salaries and employee benefits 32,103 30,980 63,928 62,021
Occupancy, net 4,328 3,824 8,723 7,627
Equipment 5,675 5,259 11,102 10,448
Supplies and services 4,658 4,670 $9,553 $9,267
Bankcard processing 1,480 1,819 3,157 2,475
Marketing and business development 3,835 3,378 7,141 6,557
FDIC and regulatory fees 330 3,127 $659 $6,154
Other 6,763 6,790 14,126 13,941
________________________________________________
Total noninterest expense 59,172 59,847 118,389 118,490
________________________________________________
Income before income taxes 21,669 17,834 49,344 37,028
Income tax provision 7,126 5,739 16,805 12,078
________________________________________________
NET INCOME $14,543 $12,095 $32,539 $24,950
======== ======== ======== ========
PER SHARE DATA
Net income $0.76 $0.58 $1.69 $1.20
Dividends $0.20 $0.18 $0.40 $0.36
Weighted average shares outstanding 19,023,962 20,800,185 19,220,40 20,830,618
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
________________________
Operating Activities
<S> <C> <C>
Net Income $32,539 $24,950
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Provision for loan losses 6,655 1,851
Depreciation and amortizaton 11,976 11,329
Deferred income taxes and investment tax credits (3,811) (2,518)
Net (increase) decrease in trading securities 16,845 (11,786)
Gains on sales of securities available for sale (469) (2,794)
Losses on sales of securities available for sale 1 1,511
Amortization of securities premium,
net of discount accretion 11,404 18,028
Earned ESOP shares 1,065 -
Decrease in interest receivable 2,691 6,891
Decrease in interest payable (3,419) (438)
Other, net (14,072) 2,349
________________________
Net cash provided by operating activities $61,405 $49,373
________________________
Investing Activities
Proceeds from maturities of investment securities $54,700 $50,572
Proceeds from sales of securities available for sale $1,349 $231,136
Proceeds from maturities of securities available for sale 1,162,384 677,943
Purchases of investment securities (60,402) (70,642)
Purchases of securities available for sale (1,000,266) (436,438)
Net increase in loans (22,501) (82,931)
Net (increase) decrease in federal funds and resell agreemen (73,848) 380,461
Purchases of bank premises and equipment (11,861) (15,211)
Proceeds from sales of bank premises and equipment 207 64
________________________
Net cash provided by investing activities $49,762 $734,954
________________________
Financing Activities
Net decrease in demand and savings deposits (126,869) (757,888)
Net decrease in time deposits ($79,361) ($16,656)
Net increase (decrease) in federal funds and repurchase agre $23,931 ($195,846)
Net increase in short term borrowings 1,172 1,232
Repayment of long term debt (1,097) (158)
Cash dividends (7,677) (7,570)
Proceeds from exercise of stock options 239 64
Purchases of treasury stock (60,622) (5,907)
________________________
Net cash used in financing activities ($250,284) ($982,729)
________________________
Decrease in cash and due from banks (139,117) (198,402)
Cash and due from banks at beginning of year $696,407 $770,813
________________________
Cash and due from banks at end of period $557,290 $572,411
======== ========
<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) 0
Net income 0 0 24,950 0 0 0
Cash Dividends 0 0 (7,570) 0 0 0
Purchase of treasury stock 0 0 0 0 (5,907) 0
Exercise of stock options 0 (27) 0 0 91 0
Net unrealized gain on securities available for sale 0 0 0 32,550 0 0
______________________________________________________________________
Balance - June 30, 1995 $20,678 $442,579 $199,539 ($2,661) ($58,742) $0
======== ======== ======== ======== ======== ========
Balance - December 31, 1995 $22,548 $522,892 $136,943 $3,612 ($63,555) (46,481)
Net income 0 0 32,539 0 0 0
Cash dividends 0 0 ( 7,677) 0 0 0
Shares purchased by ESOP 0 0 0 0 0 16,530
Guaranteed ESOP obligation 0 0 0 0 0 (17,281)
Earned ESOP shares 0 37 0 0 0 1,028
Purchase of treasury stock 0 0 0 0 (60,622) 29,951
Exercise of stock options 0 (107) 0 0 346 0
Net unrealized loss on securities available for sale 0 0 0 (16,774) 0 0
________________________________________________________________________
Balance - June 30, 1996 $22,548 $522,822 $161,805 ($13,162) ($123,831) ($16,253)
<FN> ======== ======== ======== ======== ======== ========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 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 six
months ended June 30, 1996 and 1995 (in thousands):
Six Months Ended June 30,
1996 1995
________________________
Balance January 1 $32,685 $32,527
Additions:
Provision for loan losses 6,655 1,851
________________________
$39,340 $34,378
________________________
Deductions:
Charge-offs (5,904) (3,632)
Less recoveries on loans
previously charged-off 1,141 1,012
________________________
Net charge-offs ($4,763) ($2,620)
________________________
Balance, June 30 $34,577 $31,758
======== ========
<PAGE>
UMB FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1996
4. Allowance for Loan Losses: (Continued)
At June 30, 1996 the amount of loans that are considered to be impaired under
SFAS No. 114 was $12,979,000. All of these loans are currently on a nonaccrual
basis. Included in the impaired loans is $12,775,000 of loans for which
the related allowance for loan losses is $2,284,000. The remaining
$204,000 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 June 30, 1996
was approximately $6,570,000.
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>
1996 1995
Average Average Average Average
Assets Balance Yield/Rate Balance Yield/Rate
<S> <C> <C> <C> <C>
Loans, net of unearned interest $2,417,560 9.11 $2,339,472 9.13
Securities:
Taxable 2,214,524 5.58 2,161,735 5.24
Tax-exempt 313,771 6.78 307,109 6.81
________________________________________________
Total securities $2,528,295 5.73 $2,468,844 5.43
Federal funds and resell agreements 212,830 5.26 239,706 5.90
Other earning assets 70,940 6.02 61,903 6.40
________________________________________________
Total earning assets $5,229,625 7.28 $5,109,925 7.16
Allowance for loan losses (33,890) (32,259)
Other assets 996,482 992,608
____________ ____________
Total assets $6,192,217 $6,070,274
======== ========
Liabilities and Shareholders' Equity
Interest-bearing deposits $3,319,346 3.76 $3,410,253 3.70
Federal funds and repurchase agreements 776,185 4.81 574,377 5.33
Borrowed funds 58,517 7.29 47,384 7.85
________________________________________________
Total interest-bearing liabilities $4,154,048 4.01 $4,032,014 3.98
Noninterest-bearing demand deposits 1,398,189 1,389,933
Other liabilities 65,337 63,635
Shareholders' equity 574,643 584,692
____________ ____________
Total liabilities and shareholders' equity $6,192,217 $6,070,274
======== ========
Net interest spread 3.27 3.18
Net interest margin 4.09 4.02
</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 Six Months Ended
June 30, 1996 vs. 1995 June 30, 1996 vs. 1995
Volume Rate Total Volume Rate Total
Change in interest earned on: ________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Loans $1,143 ($2,586) ($1,443) $3,814 ($237) $3,577
Securities:
Taxable 1,251 1,856 3,107 1,441 3,859 5,300
Tax-exempt 119 (280) (161) 249 (39) 210
Federal funds sold 1,374 (365) 1,009 (735) (713) (1,448)
Other 188 (23) 165 279 (120) 159
________________________________________________________________________
Interest income 4,075 (1,398) 2,677 5,048 2,750 7,798
Change in interest paid on:
Interest-bearing deposits ($273) ($508) ($781) ($1,585) $1,118 ($467)
Federal funds purchased 3,718 (1,131) 2,587 4,975 (1,578) 3,397
Borrowed funds 200 (60) 140 415 (139) 276
________________________________________________________________________
Interest expense $3,645 ($1,699) $1,946 $3,805 ($599) $3,206
________________________________________________________________________
Net interest income $430 $301 $731 $1,243 $3,349 $4,592
======== ======== ======== ======== ======== ========
ANALYSIS OF NET INTEREST MARGIN
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
1996 1995 Change 1996 1995 Change
________________________________________________________________________
Average earning assets $5,229,439 $4,959,382 $270,057 $5,229,625 $5,109,925 $119,700
Interest-bearing liabilities 4,179,882 3,883,837 296,045 4,154,048 4,032,014 122,034
________________________________________________________________________
Interest free funds $1,049,557 $1,075,545 ($25,988) $1,075,577 $1,077,911 ($2,334)
========= ========= ========= ========= ========= =========
Free funds ratio 20.07 21.69 (1.62) 20.57 21.09 (0.52)
(free funds to earning assets)
Tax-equivalent yield on earning assets 7.21 7.37 (0.16) 7.28 7.16 0.12
Cost of interest-bearing liabilities 3.96 4.05 (0.09) 4.01 3.98 0.03
________________________________________________________________________
Net interest spread 3.25 3.32 (0.07) 3.27 3.18 0.09
Benefit of interest free funds 0.79 0.88 (0.09) 0.82 0.84 (0.02)
________________________________________________________________________
Net interest margin 4.04 4.20 (0.16) 4.09 4.02 0.07
========= ========= ========= ========= ========= =========
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
Summary
UMB Financial Corporation (the Company) earned net income of $14,543,000 for
the three months ended June 30, 1996, compared to $12,095,000
for the same period last year. This represents per share earnings of $0.76
for the second quarter of 1996 compared to $0.58 for the second quarter of
1995, an increase of 31.03%. On a year to date basis, 1996 earnings were
$32,539,000, or $1.69 per share, compared to $24,950,000 or $1.20
per share for the prior year. Return on average assets was
1.06% and return on average equity was 11.39% for the six months ended
June 30, 1996.
The Company's improved performance has been primarily driven by increases
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 decreased slightly during both periods.
Results of Operations
Net interest income totaled $50,669,000 for the second quarter of 1996,
a 2.0% increase over 1995 second quarter net interest income
of $49,654,000. This change is consistent with the year to date
increase in net interest income which totaled $102,402,000 for the first
half of 1996 compared to $97,802,000 for the same period of 1995.
The Company's yield on interest earning assets was 7.28% as of June 30, 1996,
compared to 7.16% for the first six months of 1995. This increase
has resulted from higher interest rates and change in the mix of the
Company's assets.
The provision for loan losses for the three months ended June 30, 1996 was
$1,828,000 compared to $925,000 for the same period of 1995. The increase in
provision was the result of increased net loan charge-offs, primarily
related to bankcard loans. Net loan charge-offs for the second quarter of 1996
were $2,654,000 compared to $1,452,000 for the same period last year.
This increase is consistent with the 1996 year to date provision which
increased to $6,655,000 from $1,851,000 for the same period in 1995.
Non interest income totaled $32,000,000 for the second quarter of 1996
compared to $28,952,000 for the same period of 1995. The largest
components of these changes were increases in trust income and service charges.
These increases in non interest income were partially offset by decreases in
income from securities processing and decreases in gains on securities sales.
For the first half of 1996 non interest income increased to $71,986,000
from $59,567,000 a year earlier. Contributing to the six month 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.
Non interest expense was $59,172,000 for the three months ended June 30, 1996,
compared to $59,847,000 for the same period of 1995. For the first six
months of 1996 non interest expense amounted to $118,389,000 compared to
$118,490,000 for the first six months of 1995. In comparing the quarter and
year to date results, the Company incurred marginal increases in staffing
related costs 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 SIX MONTHS ENDED JUNE 30, 1996
Financial Condition
Total assets were $6.035 billion at June 30, 1996, compared to $5.668 billion
at June 30, 1995. The increase in assets during the twelve month period
ended June 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 $2.470 billion as of June 30, 1996,
from $2.350 billion at June 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 $2.452 billion at June 30, 1996
compared to $2.243 billion at June 30, 1995. Increases in securities and loans
were funded by an increase in deposits.
Non accrual and restructured loans totaled $15,501,000, 0.63% of loans, and
loans past due 90 days or more were $5,704,000, 0.23% of loans at
June 30, 1996. The increase in nonaccrual 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 June 30, 1996, the Company's allowance for loan losses was $34,577,000
or 1.40% of outstanding loans, compared to 1.35% one year earlier.
Other real estate owned totaled $0.4 million at June 30, 1996 compared to
$4.5 million a year earlier.
<PAGE>
UMB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE
FOR THE SIX MONTHS ENDED JUNE 30, 1996
Liquidity and Capital Resources
The Company's liquidity position continues to be strong. At June 30, 1996,
the Company's average loan to deposit ratio was 51.2% compared to
48.7% at June 30, 1995. At June 30, 1996, the average life of the securities
portfolio was 24 months and 32% 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 $554 million at June 30, 1996 compared to
$601 million at June 30, 1995 and $576 million at year end 1995.
During the twelve months ended June 30, 1996, the Company increased its
treasury stock holding by $65 million. Management will continue to
consider treasury stock purchases depending on price, availability
and alternative uses of funds. At June 30, 1996, the net unrealized loss on
securities available for sale was $13.2 million, compared to a loss of
$2.6 million at June 30, 1995, and a 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.
The Company's capital position is summarized in the table below and far
exceeds regulatory requirements.
Six Months Ended
June 30,
1996 1995
RATIOS
Return on average assets 1.06% 0.83%
Return on average equity 11.39 8.61
Average equity to assets 9.28 9.63
Tier 1 risk-based capital ratio 16.36 17.08
Total risk-based capital ratio 17.50 18.13
Leverage ratio 8.32 9.47
PER SHARE DATA
Earnings $ 1.69 $ 1.20
Cash dividends 0.40 0.36
Dividend payout ratio 23.67% 30.00%
Book value $ 29.49 $ 29.05
<PAGE>
UMB FINANCIAL CORPORATION
OTHER INFORMATION
FOR THE SIX MONTHS ENDED JUNE 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
June 30, 1996 Form 10-Q.
b) Reports on Form 8-K:
Form 8-K dated April 29, 1996, regarding UMB Financial Corporation's
authorization to purchase one million shares of the Company's
common stock.
<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: August 14, 1996
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