UMBF UMB Financial Corporation

Selected first quarter financial highlights:

• Average loans for the three months ended March 31, 2014, increased 14.9 percent to $6.7 billion compared to the three months ended March 31, 2013
• Net loans on March 31, 2014 increased 12.5 percent year-over-year and 14.8 percent linked quarter annualized
• Average total deposits for the three months ended March 31, 2014, increased 12.8 percent to $13.1 billion compared to the three months ended March 31, 2013
• Nonperforming loans decreased to 0.45 percent of loans as of March 31, 2014, from 0.46 percent of loans as of March 31, 2013
• Noninterest income increased 1.6 percent from the first quarter 2013 to $123.0 million
• Total company assets under management increased by 23.1 percent from the first quarter 2013 to $43.1 billion
• Tier 1 capital ratio remains strong at 13.35 percent

UMB Financial Corporation (Nasdaq: UMBF), a diversified financial holding company, announced earnings for the three months ended March 31, 2014 of $23.4 million or $0.52 per share ($0.52 diluted). This is a decrease of $11.5 million, or 33.0 percent, compared to first quarter 2013 earnings of $34.9 million or $0.88 per share ($0.87 diluted).

“There are four key items to understanding first quarter net income,” said Mariner Kemper, Chairman and Chief Executive Officer. “These four items, two of which were expenses directly related to acquisitions, are worth examining to explain the difference. First, we established a $15 million contingency reserve based on the probability we will resolve objections to our calculation of an earn-out amount owed to the sellers of Prairie Capital Management, and a related incentive bonus calculation. Second, we recognized a contingent consideration liability adjustment for acquisitions of $4.5 million in expense compared to $3.3 million in expense for the first quarter a year ago. Third, we recognized $1.5 million in gains on the sale of securities available for sale this quarter compared to $5.9 million in the first quarter 2013. And finally, we had an unrealized gain of $2.5 million on Prairie Capital Management investments in the first quarter 2014. Since we acquired it in 2010, Prairie Capital has been a high performing business unit, one that is important to our long term strategies as a diversified financial holding company.”

“Notwithstanding the volatility in earnings related to acquisitions, our ongoing operations are performing well,” Kemper continued. “End of period net loans increased 14.8 percent on a linked quarter annualized basis, driven by increases in the commercial and industrial and commercial real estate portfolios. Average loans increased 14.9 percent to $6.7 billion for the first quarter of 2014 and marked the sixteenth consecutive quarter of year-over-year loan growth for the company. I am also pleased with the performance of our asset management and asset servicing businesses. Their contribution to the 14.8 percent increase in trust and securities processing revenue helped lift noninterest income 1.6 percent compared to the first quarter 2013.”

Net Interest Income and Margin

Net interest income for the first quarter of 2014 increased $6.0 million, or 7.5 percent, compared to the same period in 2013. Average earning assets increased by $1.7 billion, or 12.4 percent, compared to the first quarter of 2013. This increase was due to an $864.1 million, or 14.9 percent, increase in average loans and a $723.5 million increase in average interest bearing due from banks. Net interest margin decreased 12 basis points to 2.39 percent for the three months ended March 31, 2014, compared to the same quarter in 2013.

Noninterest Income and Expense

Noninterest income increased $1.9 million, or 1.6 percent, for the three months ended March 31, 2014, compared to the same period in 2013. Trust and securities processing income increased $9.3 million, or 14.8 percent, for the three months ended March 31, 2014, compared to the same period in 2013. The increase in trust and securities processing income was due to a $4.3 million, or 20.4 percent, increase in advisory fee income from the Scout Funds, a $3.0 million, or 15.4 percent, increase in fees related to institutional and personal investment management services, and a $1.4 million, or 6.9 percent, increase in fund administration and custody services. Equity earnings on alternative investments increased $2.5 million due to unrealized gains on Prairie Capital Management (PCM) equity method investments for the three months ended March 31, 2014, compared to the same period in 2013. These increases were offset by a decrease of $2.8 million, or 39.2 percent, in trading and investment banking income and a decrease in gains on securities available for sale of $4.4 million during the first quarter of 2014, compared to the same period in 2013.

Noninterest expense increased $21.9 million, or 14.5 percent, for the three months ended March 31, 2014, compared to the same period in 2013. A $15.0 million contingency reserve was recorded in the first quarter of 2014. On March 28, 2014, the company received objections to its calculation of an earn-out amount owed to the sellers of PCM, and a related incentive bonus calculation. The company disputes this claim, but based on the probability of a future resolution, a contingency reserve was recorded. The increase in noninterest expense is also driven by higher salary and benefits expense of $5.2 million, or 6.2 percent. This increase is due to increases in salaries and wages of $2.7 million, or 5.3 percent, a $1.2 million, or 7.6 percent, increase in commissions and bonuses, and a $1.3 million, or 7.4 percent, increase in employee benefits expense. Other expense increased $1.9 million, or 22.8 percent, primarily due to fair value adjustments to the contingent consideration liabilities on acquisitions. In the first quarter of 2014, these adjustments totaled $4.5 million compared to $3.3 million for the same period in 2013.

“With 59 percent of our revenue coming from noninterest income this quarter, our fee businesses continue to set us apart from the competition,” said Peter deSilva, President and Chief Operating Officer. “Scout Investments, which comprises our Institutional Investment Management segment, recorded net inflows of $699.5 million for the quarter, bringing total assets under management in this segment to $32.2 billion. Healthcare Services within our Payment Solutions segment continues to be a strategic source of deposits and account transaction fees. Healthcare deposits in the first quarter increased 31.3 percent to $751.0 million, compared to the first quarter of 2013, and total accounts topped four million at March 31, 2014, a 29.7 percent increase compared to total healthcare accounts at March 31, 2013. In our Asset Servicing segment, the pretax profit margin improved to 24.1 percent for the first quarter 2014 compared to 5.1 percent in the same period a year ago. We remain enthusiastic about all of our fee-based segments, including the businesses acquired in the past few years.”

Balance Sheet

Average total assets for the three months ended March 31, 2014 were $16.5 billion compared to $14.8 billion for the same period in 2013, an increase of $1.7 billion, or 11.6 percent. Average earning assets increased by $1.7 billion for the period, or 12.4 percent.

Average loan balances for the three months ended March 31, 2014 increased $864.1 million, or 14.9 percent, to $6.7 billion compared to the same period in 2013. Actual loan balances on March 31, 2014 were $6.8 billion, an increase of $748.4 million, or 12.5 percent, compared to March 31, 2013. This increase was driven by an increase in commercial and industrial loans of $303.5 million, or 9.5 percent, an increase in construction real estate loans of $101.1 million, or 119.1 percent, and an increase in commercial real estate loans of $267.6 million, or 18.5 percent.

Nonperforming loans increased to $30.2 million on March 31, 2014 from $27.6 million on March 31, 2013. As a percentage of loans, nonperforming loans decreased to 0.45 percent as of March 31, 2014, compared to 0.46 percent on March 31, 2013. Nonperforming loans are defined as nonaccrual loans and restructured loans on nonaccrual. The company’s allowance for loan losses totaled $75.5 million, or 1.12 percent of loans, as of March 31, 2014, compared to $69.9 million, or 1.16 percent of loans, as of March 31, 2013.

For the three months ended March 31, 2014, average securities, including trading securities, totaled $7.0 billion. This is an increase of $111.5 million, or 1.6 percent, from the same period in 2013.

Average total deposits increased $1.5 billion, or 12.8 percent, to $13.1 billion for the three months ended March 31, 2014, compared to the same period in 2013. Average noninterest-bearing demand deposits increased $541.0 million, or 11.7 percent, compared to 2013. Average interest-bearing deposits increased by $949.9 million, or 13.5 percent, in 2014 as compared to 2013. Total deposits as of March 31, 2014 were $12.3 billion, compared to $12.6 billion as of March 31, 2013, a 2.3 percent decrease. Also, as of March 31, 2014, noninterest-bearing demand deposits were 43.2 percent of total deposits.

“With net interest income up 7.5 percent for the quarter compared to the first quarter of 2013, execution of our strategies to grow earning assets and reinvest maturing investment balances into loans, which carry higher yields, is clearly paying off,” said Brian Walker, Chief Financial Officer. “Also, yield on the investment portfolio was flat from the first quarter 2013 to the first quarter 2014, slowing margin compression on earning assets.”

As of March 31, 2014, UMB had total shareholders’ equity of $1.5 billion, an increase of 20.0 percent as compared to the same period in 2013. This increase is primarily attributable to the common stock issuance the company completed in September 2013.

Conference Call

The company plans to host a conference call to discuss its 2014 first quarter earnings results on April 23, 2014, at 8:30 a.m. (CT).

Interested parties may access the call by dialing (toll-free) 877-941-8609 or (U.S.) 480-629-9692. The live call can also be accessed by visiting the investor relations area of umbfinancial.com or by using the following the link:

http://event.on24.com/r.htm?e=778291&s=1&k=0AB8AFBF09FE19C5BD923E2AAA4A960B

A replay of the conference call may be heard until May 9, 2014, by calling (toll-free) 800-406-7325 or (U.S.) 303-590-3030. The replay pass code required for playback is conference identification number 4678180. The call replay may also be accessed via the company's website umbfinancial.com by visiting the investor relations area.

Forward-Looking Statements:

This release contains, and our other communications may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2013, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the SEC. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors. For more information, visit umbfinancial.com, umb.com, blog.umb.com or follow us on Twitter at @UMBBank, Facebook at facebook.com/UMBBank and LinkedIn at linkedin.com/company/umb-bank.

    CONSOLIDATED BALANCE SHEETS       UMB Financial Corporation (unaudited, dollars in thousands)     March 31,

Assets

  2014       2013   Loans

$

6,759,089

$

6,010,681

Allowance for loan losses  

(75,514)

     

(69,881)

Net loans  

6,683,575

     

5,940,800

Loans held for sale

1,108

6,305

Investment securities: Available for sale

6,734,931

6,841,584

Held to maturity

219,724

129,498

Trading securities

43,055

72,588

Federal Reserve Bank stock and other

 

54,551

     

26,127

Total investment securities  

7,052,261

     

7,069,797

Federal funds and resell agreements

108,986

19,046

Interest-bearing due from banks

770,458

1,631,163

Cash and due from banks

593,956

319,535

Bank premises and equipment, net

247,770

244,678

Accrued income

75,384

70,510

Goodwill

209,758

209,758

Other intangibles

52,483

65,348

Other assets  

150,091

     

128,530

Total assets

$

15,945,830

   

$

15,705,470

   

Liabilities

Deposits: Noninterest-bearing demand

$

5,303,067

$

5,597,601

Interest-bearing demand and savings

5,747,984

5,895,219

Time deposits under $100,000

458,484

525,174

Time deposits of $100,000 or more  

756,236

     

541,464

Total deposits  

12,265,771

     

12,559,458

Federal funds and repurchase agreements

1,973,736

1,659,343

Short-term debt -

415

Long-term debt

5,815

4,393

Accrued expenses and taxes

118,918

152,114

Other liabilities  

39,392

     

44,189

Total liabilities  

14,403,632

     

14,419,912

  Shareholders' Equity Common stock

55,057

55,057

Capital surplus

883,195

732,209

Retained earnings

897,826

813,245

Accumulated other comprehensive (loss) income

(13,297)

63,572

Treasury stock  

(280,583)

     

(378,525)

Total shareholders' equity  

1,542,198

     

1,285,558

Total liabilities and shareholders' equity

$

15,945,830

   

$

15,705,470

      Consolidated Statements of Income       UMB Financial Corporation (unaudited, dollars in thousands except share and per share data) Three Months Ended March 31,

Interest Income

  2014       2013 Loans

$

58,900

   

$

54,720

Securities: Taxable interest

18,961

18,465

Tax-exempt interest  

9,907

     

9,760

Total securities income

28,868

28,225

Federal funds and resell agreements

33

24

Interest-bearing due from banks

1,123

669

Trading securities  

123

     

264

Total interest income  

89,047

     

83,902

 

Interest Expense

Deposits

3,059

3,792

Federal funds and repurchase agreements

481

567

Other  

62

     

60

Total interest expense  

3,602

     

4,419

Net interest income

85,445

79,483

Provision for loan losses  

4,500

     

2,000

Net interest income after provision for loan losses  

80,945

     

77,483

 

Noninterest Income

Trust and securities processing

71,563

62,312

Trading and investment banking

4,323

7,109

Service charges on deposits

21,558

21,523

Insurance fees and commissions

603

961

Brokerage fees

1,815

2,946

Bankcard fees

15,623

16,439

Gains on sale of available for sale securities, net

1,470

5,893

Equity earnings on alternative investments

2,530

-

Other  

3,479

     

3,833

Total noninterest income  

122,964

     

121,016

 

Noninterest Expense

Salaries and employee benefits

88,881

83,702

Occupancy, net

9,705

9,887

Equipment

12,663

11,934

Supplies and services

4,637

4,487

Marketing and business development

4,602

4,272

Processing fees

13,651

14,090

Legal and consulting

3,372

3,600

Bankcard

3,688

4,547

Amortization of intangible assets

3,102

3,456

Regulatory fees

2,516

1,911

Contingency reserve

15,000

-

Other  

10,424

     

8,492

Total noninterest expense  

172,241

     

150,378

  Income before income taxes

31,668

48,121

Income tax provision  

8,255

     

13,180

Net income

$

23,413

   

$

34,941

 

Per Share Data

Net income - basic

$

0.52

$

0.88

Net income – diluted

0.52

0.87

Dividends

0.225

0.215

Weighted average shares outstanding

44,742,068

39,881,505

      Condensed Statements of Consolidated Comprehensive Income UMB Financial Corporation (unaudited, dollars in thousands, except per share data) Three Months Ended March 31, 2014     2013 Net Income $ 23,413     $ 34,941 Other comprehensive income, net of tax: Unrealized gains on securities: Change in unrealized holding gains (losses), net 32,459 (27,048) Less: Reclassifications adjustment for gains included in net income   (1,470)       (5,893) Change in unrealized gains (losses) on securities during the period 30,989 (32,941) Income tax (expense) benefit   (11,646)       10,925 Other comprehensive income (loss)   19,343       (22,016) Comprehensive income $ 42,756     $ 12,925                           Consolidated Statements of Shareholders' Equity                               UMB Financial Corporation (unaudited, dollars in thousands, except per share data)     Accumulated Other Common Capital Retained Comprehensive Treasury   Stock       Surplus       Earnings       Income       Stock       Total Balance - January 1, 2013 $ 55,057 $ 732,069 $ 787,015 $ 85,588 $ (380,384) $ 1,279,345 Total Comprehensive income 34,941 (22,016) 12,925 Cash dividends ($0.215 per share) - - (8,711) - - (8,711) Purchase of treasury stock - - - - (1,656) (1,656) Issuance of equity awards - (2,592) - - 3,041 449 Recognition of equity based compensation - 1,913 - - - 1,913 Net tax benefit related to equity compensation plans - 332 - - - 332 Sale of treasury stock - 42 - - 24 66 Exercise of stock options   -       445       -       -       450       895 Balance – March 31, 2013 $ 55,057     $ 732,209     $ 813,245     $ 63,572     $ (378,525)     $ 1,285,558   Balance - January 1, 2014

$

55,057

$

882,407

$

884,630

$

(32,640)

$

(283,389)

$

1,506,065 Total Comprehensive income 23,413 19,343 42,756 Cash dividends ($0.225 per share) - - (10,217) - - (10,217) Purchase of treasury stock - - - - (2,867) (2,867) Issuance of equity awards - (3,648) - - 4,117 469 Recognition of equity based compensation - 2,212 - - - 2,212 Net tax benefit related to equity compensation plans - 1,068 - - - 1,068 Sale of treasury stock - 143 - - 77 220 Exercise of stock options   -       1,013       -       -       1,479       2,492 Balance – March 31, 2014 $ 55,057    

$

883,195    

$

897,826    

$

(13,297)    

$

(280,583)    

$

1,542,198           Average Balances / Yields and Rates               UMB Financial Corporation (tax - equivalent basis)         (unaudited, dollars in thousands) Three Months Ended March 31,   2014       2013 Average Average Average Average Assets   Balance     Yield/Rate         Balance     Yield/Rate Loans, net of unearned interest

$

6,678,932

3.58

%

$

5,814,855

3.82

%

Securities: Taxable

4,887,151

1.57

4,871,926

1.54

Tax-exempt

2,109,901

   

2.93

1,994,620

   

3.07

Total securities

6,997,052

1.98

6,866,546

1.98

Federal funds and resell agreements

27,155

0.49

19,140

0.51

Interest-bearing due from banks

1,696,482

0.27

972,962

0.28

Trading securities

38,590

   

1.48

57,565

   

2.09

Total earning assets

15,438,211

2.48

13,731,068

2.64

Allowance for loan losses

(74,997)

(71,504)

Other assets  

1,141,037

 

1,123,453

Total assets

$

16,504,251

$

14,783,017

    Liabilities and Shareholders' Equity Interest-bearing deposits

$

7,968,400

0.16

%

$

7,018,471

0.22

%

Federal funds and repurchase agreements

1,667,764

0.12

1,673,062

0.14

Borrowed funds

5,705

   

4.41

5,392

   

4.51

Total interest-bearing liabilities

9,641,869

0.15

8,696,925

0.21

Noninterest-bearing demand deposits

5,167,513

4,626,556

Other liabilities

147,147

177,139

Shareholders' equity  

1,547,722

 

1,282,397

Total liabilities and shareholders' equity

$

16,504,251

$

14,783,017

Net interest spread

2.33

%

2.43

%

Net interest margin

2.39

2.51

          FIRST QUARTER 2014 FINANCIAL HIGHLIGHTS       UMB Financial Corporation (unaudited, dollars in thousands, except share and per share data)   Three Months Ended March 31   2014         2013   Net interest income

$

85,445

$

79,483

Provision for loan losses

4,500

2,000

Noninterest income

122,964

121,016

Noninterest expense

172,241

150,378

Income before income taxes

31,668

48,121

Net income

23,413

34,941

Net income per share - Basic

0.52

0.88

Net income per share - Diluted

0.52

0.87

Return on average assets

0.58

%

0.96

%

Return on average equity

6.13

%

11.05

%

  At March 31 Assets

$

15,945,830

$

15,705,470

Loans, net of unearned interest

6,759,089

6,010,681

Securities

7,052,261

7,069,797

Deposits

12,265,771

12,559,458

Shareholders' equity

1,542,198

1,285,558

Book value per share

33.94

31.73

Market price per share

64.70

49.07

Equity to assets

9.67

%

8.19

%

Allowance for loan losses

$

75,514

$

69,881

As a % of loans

1.12

%

1.16

%

Nonaccrual and restructured loans

$

30,153

$

27,580

As a % of loans

0.45

%

0.46

%

Loans over 90 days past due

$

5,101

$

5,756

As a % of loans

0.08

%

0.10

%

Other real estate owned

$

1,286

$

3,565

Net loan charge-offs quarter-to-date

$

3,737

$

3,545

As a % of average loans

0.23

%

0.25

%

  Common shares outstanding

45,433,101

40,520,464

  Average Balances Three Months Ended March 31 Assets

$

16,504,251

$

14,783,017

Loans, net of unearned interest

6,678,932

5,814,855

Securities

7,035,642

6,924,111

Deposits

13,135,913

11,645,027

Shareholders' equity

1,547,722

1,282,397

    Business Segment Information UMB Financial Corporation (unaudited, dollars in thousands)         Three Months Ended March 31, 2014 Bank    

PaymentSolutions

   

InstitutionalInvestmentManagement

   

AssetServicing

      Total Net interest income $ 71,121     $ 12,388     $ (2)     $ 1,938 $ 85,445 Provision for loan losses 2,426 2,074 - - 4,500 Noninterest income 47,420 20,235 34,095 21,214 122,964 Noninterest expense   107,753       21,015       25,894       17,579       172,241 Income before taxes 8,362 9,534 8,199 5,573 31,668 Income tax expense   1,942       2,609       2,184       1,520       8,255 Net income $ 6,420     $ 6,925     $ 6,015     $ 4,053     $ 23,413   Average assets $ 12,299,000 $ 1,952,000 $ 74,000 $ 2,179,000 $ 16,504,000     Three Months Ended March 31, 2013 Bank    

PaymentSolutions

   

InstitutionalInvestmentManagement

   

AssetServicing

      Total Net interest income $ 67,260 $ 11,548 $ - $ 675 $ 79,483 Provision for loan losses 309 1,691 - - 2,000 Noninterest income 52,748 19,437 28,552 20,279 121,016 Noninterest expense   91,536       20,117       18,845       19,880       150,378 Income before taxes 28,163 9,177 9,707 1,074 48,121 Income tax expense   7,705       2,534       2,667       274       13,180 Net income $ 20,458     $ 6,643     $ 7,040     $ 800     $ 34,941   Average assets $ 11,306,000 $ 1,698,000 $ 78,000 $ 1,701,000 $ 14,783,000

UMB Financial CorporationMedia Contact:Kelli Christman, 816-860-5088orInvestor Relations Contact:Abby Wendel, 816-860-1685