UMBF UMB Financial Corporation

UMB Financial Corporation (NASDAQ: UMBF), a multi-bank holding company, will host a conference call to discuss the company's fourth quarter and year-end results on January 23, 2008, at 8:30 a.m. (CST). At that time, UMB Chairman and CEO Mariner Kemper, Chief Operating Officer Peter deSilva and Chief Financial Officer Mike Hagedorn will discuss the company's fourth quarter and record full-year earnings released earlier today and included in this announcement. Following opening remarks, the company's management will host a question-and-answer session for analysts. Other audience members, including company investors and media, may participate in the listen-only call mode. Interested parties may access the call by dialing U.S./Canada (toll-free) 800-218-0530 or access the following Web link at least 10 minutes before the call begins: http://w.on24.com/r.htm?e=99489&s=1&k=1687404DB24DB20851AB9BEB2DDA5198 or visit www.umb.com, investor relations, to access the link to the live call. A replay of the conference call may be heard until February 6, 2008, by calling U.S./Canada (toll-free) 800-405-2236 or 303-590-3000. The replay pass code required for playback is conference ID 11104690#. The call replay may also be accessed via the company's Web site, www.umb.com, by visiting the investor relations' area. The company's fourth quarter and full-year earnings announcement follows: UMB Financial Corporation Reports a 24 percent Increase and Record Full-Year Earnings of $74.2 million for 2007 Selected financial highlights -- Record full-year revenue of $521.5 million -- Record full-year noninterest income of $288.8 million -- Net interest margin for the year increased 6 basis points to 3.44 percent -- Nonperforming loans remained flat at 0.17 percent of loans -- Net chargeoffs for the year remained flat at 0.21 percent of average loans -- Capital remains strong with an equity-to-assets ratio of 9.5 percent UMB Financial Corporation (NASDAQ: UMBF), a multi-bank holding company, announced earnings for the year ended December 31, 2007 of $74.2 million or $1.78 per share ($1.77 diluted). This is an increase of $14.4 million, or 24.2 percent, compared to the prior year earnings of $59.8 million or $1.40 per share ($1.40 diluted). Earnings for the three months ended December 31, 2007 were $15.3 million or $0.37 per share ($0.37 diluted). This is a decrease of $0.5 million, or 3.2 percent, compared to fourth quarter 2006 earnings of $15.8 million or $0.37 per share ($0.37 diluted). The fourth quarter in 2007 included a pre-tax liability accrual of $4.6 million related to the company's estimated share of Visa U.S.A., Inc.'s (Visa) covered litigation provision as well as a $0.7 million net gain on a contingent payment received on the sale of the securities transfer product. Excluding these adjustments, net income for the fourth quarter would have increased 12.6 percent to $17.8 million. A table reconciling GAAP net income for these items for the quarter and year-to-date is included with this release. "This quarter we watched the industry weather some challenging conditions," commented Mariner Kemper, Chairman and CEO of UMB Financial Corporation. "I am extremely proud of the results our associates achieved for the quarter and the year. Our results continued to be fueled by double-digit fee income growth and an increase in net interest income. In addition, we grew average loans 9.0 percent while not wavering from our historically strong underwriting standards. Our financial performance in the current market environment validates our time-tested model of quality, liquidity and capital strength." Net Interest Income Net interest income for the fourth quarter of 2007 increased $4.2 million, or 7.4 percent, compared to the same period in 2006 due primarily to higher average earning assets while increasing net interest margin. Average earning assets increased by $266.0 million, or 3.9 percent, as compared to the fourth quarter of 2006. Most of this increase was due to a $138.5 million, or 3.7 percent, increase in average loans and a $149.1 million, or 5.3 percent, increase in total securities, including trading securities and other. Net interest margin increased 14 basis points to 3.55 percent for the three months ended December 31, 2007 as compared to the same quarter in 2006. Noninterest Income and Expense "Our results for the fourth quarter continue to be driven by the improvement in our fee-based businesses," said Peter deSilva, President and Chief Operating Officer. "Noninterest income increased 12.1 percent for the quarter, and 13.3 percent for the year. This growth was primarily due to the increase in trust and securities processing income from our Asset Management and Fund Services divisions, as well as bankcard fees. Additionally, during the quarter, we announced that our Healthcare Services Division passed $100 million in Health Savings Account (HSA) assets, or an increase of 53 percent over the prior year. Finally, with almost 800,000 healthcare accounts, we are optimistic about the growth opportunity and remain committed to maintaining our leadership position in this important segment." Noninterest income increased $7.9 million, or 12.1 percent, for the three months ended December 31, 2007 compared to the same period in 2006. Trust and securities processing income increased $4.9 million, or 19.2 percent, for the three months ended December 31, 2007 compared to the same period in 2006. This increase was primarily due to a $1.5 million, or 20.0 percent, increase in fee income from the UMB Scout Funds and a $2.3 million, or 29.4 percent, increase in fund administration and distribution services. Deposit service charges were $1.5 million, or 8.4 percent, higher in the fourth quarter 2007 than in the same period in 2006 due mostly to greater individual overdraft and return item charges as well as pricing changes implemented at the beginning of 2007. A $0.7 million net gain was recognized on a contingent payment received on the sale of the securities transfer product, which was completed during the third quarter. In addition, gains on the sale of available-for-sale securities of $1.0 million were recognized during the quarter. Noninterest expense increased $11.3 million, or 11.4 percent, for the three months ended December 31, 2007 compared to the same period in 2006. Salary expense increased by $4.3 million, or 8.6 percent, mostly due to higher employee base salaries, higher commissions and bonuses, and higher cost of benefits. Marketing and business development increased $0.7 million, or 21.3 percent, due to timing of marketing initiatives in the fourth quarter of 2007 compared to the same quarter in 2006. Processing fees increased $1.0 million, or 13.1 percent, due to increased third party custodian fees related to international transactions from mutual fund clients and sub-transfer agency fees paid for the distribution of the UMB Scout Funds. A liability of $4.6 million, which represents more than 40 percent of the noninterest expense increase, was recorded for the estimated company's proportional share of Visa's covered litigation. Excluding this litigation liability, noninterest expense would have increased 6.7 percent. Balance Sheet and Margin "Our balance sheet remains well positioned in this time of economic instability," said Mike Hagedorn, Chief Financial Officer. "Our capital ratios are a reflection of our balance sheet strength. Moreover, our loan portfolio continued to grow in the fourth quarter, with commercial, HELOC and credit cards recording solid gains. Last quarter, we announced the strategic decision to run off our indirect loan portfolio, and continue to monitor our funding needs as a result. We expect this run-off to reduce our reliance on short-term instruments and repurchase agreements, and provide more balance sheet flexibility. Our current balance sheet and funding structure have allowed us to manage our funding costs as rates declined and contributed to margin improvement during the quarter." Average total assets for the three months ended December 31, 2007 were $8.1 billion compared to $7.8 billion for the same period in 2006, an increase of $298.5 million, or 3.8 percent. Average earning assets increased by $266.0 million, or 3.9 percent. Actual loan balances on December 31, 2007 were $3.9 billion, compared to $3.8 billion on December 31, 2006. These balances were as follows: -0- *T Loans by Category December 31, December 31, Change Percent (in thousands) 2007 2006 Change ------------ ------------ ---------- ---------- Commercial, financial and agricultural $1,769,505 $1,564,793 $204,712 13.1% Real estate construction 83,292 84,141 (849) (1.0)% Consumer 795,826 982,325 (186,499) (19.0)% Real estate 1,262,389 1,116,405 145,984 13.1% Leases 6,113 5,781 332 5.7% ------------ ------------ ---------- ---------- Loans before loans held for sale 3,917,125 3,753,445 163,680 4.4% ------------ ------------ ---------- ---------- Loans held for sale 12,240 14,120 (1,880) (13.3)% ------------ ------------ ---------- ---------- Total loans and loans held for sale $3,929,365 $3,767,565 $161,800 4.3% ------------ ------------ ---------- ---------- *T Nonperforming loans were flat at December 31, 2007 and 2006 totaling $6.6 million. As a percentage of total loans, nonperforming loans were 0.17 percent of loans as of December 31, 2007 and 2006. Nonperforming loans are defined as nonaccrual loans and restructured loans. The company's allowance for loan losses totaled $46.0 million, or 1.17 percent of total loans as of December 31, 2007 compared to $44.9 million, or 1.20 percent of total loans as of December 31, 2006. For the three months ended December 31, 2007, average securities, including trading securities and other, totaled $3.0 billion. This is an increase of $149.1 million, or 5.3 percent from the same period in 2006. Average federal funds sold and resell agreements for the fourth quarter decreased $21.7 million, or 7.6 percent over the same period in 2006 to $264.2 million. Average total deposits increased $338.5 million, or 6.1 percent, to $5.9 billion for the three months ended December 31, 2007, compared to the same period in 2006. The increase in deposits came primarily from our public funds, mutual fund processing and treasury management businesses. Average time deposit accounts increased by $112.0 million, or 9.0 percent, for the three months ended December 31, 2007 as compared to 2006. Average money market accounts increased by $199.3 million, or 20.0 percent, in 2007 as compared to 2006. Total deposits as of December 31, 2007 were $6.6 billion, compared to $6.3 billion at December 31, 2006, a 3.8 percent increase. As of December 31, 2007, UMB had total shareholders' equity of $890.6 million, a 4.9 percent increase from the prior year. For the three months ended December 31, 2007, the company repurchased 448,707 shares at an average price of $40.31 per share, for a total cost of $18.1 million. For the year, shares repurchased totaled 1.1 million, which at an average price of $39.37 per share, resulted in a total cost of $43.3 million. The company declared its regular quarterly cash dividend of $0.15 per share to be paid on April 1, 2008, to shareholders of record at of the close of business on March 11, 2008. Year-to-Date Earnings for the year ended December 31, 2007 were $74.2 million or $1.78 per share ($1.77 diluted). This is an increase of $14.4 million, or 24.2 percent, compared to the prior year earnings of $59.8 million or $1.40 per share ($1.40 diluted). Excluding a $7.2 million pre-tax net gain on the sale of the securities transfer product as well as the $4.6 million liability recorded for the company's proportional share of Visa's covered litigation provision, adjusted net income would have totaled $72.6 million or a 21.4 percent increase over 2006. A table reconciling GAAP net income for these items for the quarter and year-to-date is included with this release. Net interest income for the year ended December 31, 2007 increased $15.5 million, or 7.1 percent, compared to the same period in 2006 due primarily to higher average earning assets and rates. Net interest margin increased to 3.44 percent for year ended December 31, 2007 as compared to 3.38 percent for the same period in 2006. Noninterest income increased $33.8 million or 13.3 percent, to $288.8 million for the year ended December 31, 2007 as compared to the same period in 2006. The increase was primarily attributable to higher trust and securities processing income, deposit service charges, trading and investment income and brokerage fees. Trust and securities processing income increased $17.3 million, or 17.6 percent, for year-to-date December 31, 2007 as compared to the same period in 2006. Deposit service charges were $6.3 million, or 8.5 percent, higher for the twelve months ended December 31, 2007 than the same period in 2006 due mostly to greater individual overdraft and return item charges as well as pricing changes implemented at the beginning of the year. A $7.2 million net gain was recognized on the sale of the securities transfer product, which was completed during the third quarter. Excluding this net gain, noninterest income would have increased 10.4 percent. Noninterest expense increased $25.7 million, or 6.8 percent, for the twelve months ended December 31, 2007 compared to the same period in 2006. Salary expense increased by $12.9 million, or 6.7 percent, mostly due to higher employee base salaries, higher commissions and bonuses and higher cost of benefits. Occupancy expense increased $2.5 million, or 8.9 percent, mainly from increased repair and maintenance costs of existing facilities and increased facility security expense. Equipment expense increased by $3.7 million, or 7.6 percent, for the year ended December 31, 2007 as compared to the same period in 2006 due mostly to higher amortization and maintenance costs related to software and associated equipment. A liability of $4.6 million was recorded for the company's proportional share of Visa's covered litigation provision. Excluding this liability, noninterest expense would have increased 5.5 percent. The company plans to host a conference call to discuss its fourth quarter and full-year results on January 23, 2008, at 8:30 a.m. (CST). Interested parties may access the call by dialing U.S./Canada (toll-free) 800-218-0530 or access the following Web link at least 10 minutes before the call begins: http://w.on24.com/r.htm?e=99489&s=1&k=1687404DB24DB20851AB9BEB2DDA5198 or visit www.umb.com, investor relations, to access the link to the live call. A replay of the conference call may be heard until February 6, 2008, by calling U.S./Canada (toll-free) 800-405-2236 or 303-590-3000. The replay pass code required for playback is conference ID 11104690#. The call replay may also be accessed via the company's Web site, www.umb.com, by visiting the investor relations' area. Forward-Looking Statements: This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements rely on a number of assumptions concerning future events and are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated by the forward-looking statements in this Current Report on Form 8-K, any exhibits to this Current Report and other public statements the company may make. While management of UMB believes their assumptions are reasonable, UMB cautions that changes in general economic conditions, changes in interest rates, changes in the securities markets, changes in operations, changes in competition, technology changes, legislative or regulatory changes, the ability of customers to repay loans, changes in loan demand, increases in employee costs, and other risks and uncertainties detailed in UMB's filings with the Securities and Exchange Commission, may cause actual results to differ materially from those discussed in this release. UMB has no duty to update such statements, and undertakes no obligation to update or supplement forward-looking statements that become untrue because of new information, future events or otherwise. Non-GAAP Financial Measures: Certain financial measures contained in this press release exclude net gains associated with the sale of the securities transfer product in July, 2007, as well as a liability accrual related to Visa's covered litigation provision. Financial measures which exclude those items have not been determined in accordance with generally accepted accounting principles and are therefore non-GAAP financial measures. Management of UMB believes that investors' understanding of the company's performance is enhanced by disclosing these non-GAAP financial measures as a reasonable basis for comparison of the company's ongoing results of operations. These non-GAAP measures should not be considered a substitute for GAAP-basis measures and results. Our non-GAAP measures may not be comparable to non-GAAP measures of other companies. The attached Non-GAAP Reconciliation Schedule provides a reconciliation of these non-GAAP financial measures to the most closely analogous measure determined in accordance with GAAP. About UMB: UMB Financial Corporation (NASDAQ: UMBF) is a multi-bank holding company headquartered in Kansas City, Missouri, offering complete banking, asset management, health spending solutions and related financial services to both individual and business customers nationwide. Its banking subsidiaries own and operate 135 banking centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. Subsidiaries of the holding company and the lead bank, UMB Bank, n.a., include an investment services group based in Milwaukee, Wisconsin, single-purpose companies that deal with brokerage services and insurance and a registered investment advisor that manages the company's proprietary mutual funds. -0- *T NON-GAAP RECONCILIATION SCHEDULE UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands) (unaudited) The following tables present the reconciliation of non-GAAP financial measures to reported GAAP financial measures. Three Months Ended Year Ended December 31, December 31, 2007 2007 ------------------- ------------------- Net interest income after provision for loan losses $57,858 $223,351 Noninterest income 72,877 288,788 Noninterest expense 110,018 407,164 Income tax provision 5,418 30,762 ------------------- ------------------- Net income 15,299 74,213 Adjustments ------------------------------ Noninterest income Gain on sale of securities transfer (727) (7,218) Noninterest expense Covered litigation provision 4,628 4,628 ------------------- ------------------- Total Adjustments pre-tax 3,901 (2,590) Income tax provision (1,404) 932 ------------------- ------------------- After tax adjustments to GAAP 2,497 (1,658) ------------------- ------------------- Adjusted net income $17,796 $72,555 =================== =================== The above table presents the variation in net income on an as reported (GAAP) basis and excluding certain gains related to the sale of securities transfer and the covered litigation provision. The press release includes commentary that compares both GAAP and non-GAAP financial measures. *T -0- *T CONSOLIDATED BALANCE SHEETS UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands) (unaudited) December 31, Assets 2007 2006 ----------------------------------------- --------------------------- Loans $3,917,125 $3,753,445 Allowance for loan losses (45,986) (44,926) --------------------------- Net loans 3,871,139 3,708,519 --------------------------- Loans held for sale 12,240 14,120 Investment Securities: Available for sale 3,385,952 3,238,648 Held to maturity 37,658 44,781 Federal Reserve Bank stock and other 19,287 15,490 Trading securities 43,883 64,534 --------------------------- Total investment securities 3,486,780 3,363,453 --------------------------- Federal funds and resell agreements 712,012 848,922 Cash and due from banks 806,600 531,188 Bank premises and equipment, net 235,528 243,216 Accrued income 62,021 57,313 Goodwill 94,512 93,723 Other intangibles 16,463 19,309 Other assets 45,664 38,002 --------------------------- Total assets $9,342,959 $8,917,765 =========================== Liabilities ----------------------------------------- Deposits: Noninterest - bearing demand $2,094,422 $2,293,096 Interest - bearing demand and savings 2,959,109 2,644,125 Time deposits under $100,000 852,837 799,003 Time deposits of $100,000 or more 644,434 572,740 --------------------------- Total deposits 6,550,802 6,308,964 --------------------------- Federal funds and repurchase agreements 1,734,749 1,620,945 Short-term debt 33,753 17,881 Long-term debt 36,032 38,020 Accrued expenses and taxes 76,362 52,381 Other liabilities 20,687 30,699 --------------------------- Total liabilities 8,452,385 8,068,890 --------------------------- Shareholders' Equity ----------------------------------------- Common stock 55,057 55,057 Capital surplus 702,914 699,794 Retained earnings 430,824 380,464 Accumulated other comprehensive income (loss) 12,246 (17,259) Treasury stock (310,467) (269,181) --------------------------- Total shareholders' equity 890,574 848,875 --------------------------- Total liabilities and shareholders' equity $9,342,959 $8,917,765 =========================== *T -0- *T Consolidated Statements of Income UMB Financial Corporation ---------------------------------------------------------------------- (dollars in thousands except share and per share data) (unaudited) Three Months Ended Year Ended December 31, December 31, Interest Income 2007 2006 2007 2006 -------------------------- ------------------------------------------- Loans $67,252 $65,424 $270,638 $238,356 Securities: Taxable Interest 26,377 23,605 97,576 85,585 Tax-exempt interest 6,627 6,060 25,269 23,448 ------------------------------------------- Total securities income 33,004 29,665 122,845 109,033 Federal funds and resell agreements 3,000 3,960 18,659 19,112 Trading securities and other 447 553 2,271 2,582 ------------------------------------------- Total interest income 103,703 99,602 414,413 369,083 ------------------------------------------- Interest Expense -------------------------- Deposits 31,026 27,312 120,217 96,889 Federal funds and repurchase agreements 11,263 15,146 59,250 52,832 Short-term debt 150 190 591 619 Long-term debt 406 313 1,671 1,519 ------------------------------------------- Total interest expense 42,845 42,961 181,729 151,859 ------------------------------------------- Net interest income 60,858 56,641 232,684 217,224 Provision for loan losses 3,000 1,000 9,333 8,734 ------------------------------------------- Net interest income after provision for loan losses 57,858 55,641 223,351 208,490 ------------------------------------------- Noninterest Income -------------------------- Trust and securities processing 30,454 25,551 115,585 98,250 Trading and investment banking 4,541 4,755 19,288 18,192 Service charges on deposits 19,945 18,408 79,880 73,598 Insurance fees and commissions 875 807 3,418 3,956 Brokerage fees 1,999 1,602 8,023 6,228 Bankcard fees 10,541 10,009 39,972 38,759 (Losses) gains on sales of assets and deposits, net (684) 384 (597) 793 Gain on sale of securities transfer 727 - 7,218 - Gains (losses) on sales of securities available for sale 1,007 (3) 1,010 117 Other 3,472 3,499 14,991 15,052 ------------------------------------------- Total noninterest income 72,877 65,012 288,788 254,945 ------------------------------------------- Noninterest Expense -------------------------- Salaries and employee benefits 54,345 50,052 206,883 193,980 Occupancy, net 7,833 7,488 30,255 27,776 Equipment 12,901 12,882 52,711 48,968 Supplies and services 6,108 5,817 23,435 22,805 Marketing and business development 3,869 3,190 15,443 14,835 Processing fees 8,593 7,601 29,861 28,292 Legal and consulting 2,656 2,440 8,451 8,175 Bankcard 2,980 3,610 11,064 13,831 Amortization of other intangibles 721 731 2,943 1,600 Covered litigation provision 4,628 - 4,628 - Other 5,384 4,917 21,490 21,555 ------------------------------------------- Total noninterest expense 110,018 98,728 407,164 381,417 ------------------------------------------- Income before income taxes 20,717 21,925 104,975 82,018 Income tax provision 5,418 6,124 30,762 22,251 ------------------------------------------- Net income $15,299 $15,801 $74,213 $59,767 =========================================== Per Share Data -------------------------- Net income - Basic $0.37 $0.37 $1.78 $1.40 Net income - Diluted 0.37 0.37 1.77 1.40 Dividends 0.15 0.13 0.57 0.52 Weighted average shares outstanding 41,279,865 42,349,000 41,712,223 42,592,960 *T -0- *T Consolidated Statements of Shareholders' Equity UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands) (unaudited) Common Capital Unearned Retained Stock Surplus Compensation Earnings ------- -------- ------------ --------- Balance - January 1, 2006 $27,528 $728,108 $(1,904) $342,675 Comprehensive income (loss) Net income - - - 59,767 Change in unrealized losses on securities - - - - ------- -------- ------------ --------- Total comprehensive income Cash dividends ($0.52 per share) - - - (21,978) Stock split 2 for 1 27,529 (27,529) - - Purchase of treasury stock - - - Issuance of stock awards - (938) - - Adoption of SFAS 123(R) - (1,904) 1,904 - Recognition of stock-based compensation - 1,669 - - Sale of treasury stock - 280 - - Exercise of stock options - 108 - - ------- -------- ------------ --------- Balance - December 31, 2006 55,057 699,794 - 380,464 ------- -------- ------------ --------- Comprehensive income Net income - - - 74,213 Other Comprehensive income Change in unrealized losses on securities - - - - ------- -------- ------------ --------- Total comprehensive income Cash dividends ($0.57 per share) - - - (23,853) Purchase of treasury stock - - - - Issuance of stock awards - (946) - - Recognition of stock-based compensation - 3,383 - - Net tax benefit related to equity compensation plans 26 - - Sale of treasury stock - 321 - - Exercise of stock options - 336 - - ------- -------- ------------ --------- Balance - December 31, 2007 $55,057 $702,914 $- $430,824 ======= ======== ============ ========= Consolidated Statements of Shareholders' Equity UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands) (unaudited) Accumulated Other Comprehensive Treasury Income (Loss) Stock Total ------------- ---------- -------- Balance - January 1, 2006 $(21,550) $(241,394) $833,463 Comprehensive income (loss) Net income - - 59,767 Change in unrealized losses on securities 4,291 - 4,291 ------------- ---------- -------- Total comprehensive income 64,058 Cash dividends ($0.52 per share) - - (21,978) Stock split 2 for 1 - - - Purchase of treasury stock - (29,598) (29,598) Issuance of stock awards - 1,088 150 Adoption of SFAS 123(R) - - - Recognition of stock-based compensation - - 1,669 Sale of treasury stock - 194 474 Exercise of stock options - 529 637 ------------- ---------- -------- Balance - December 31, 2006 (17,259) (269,181) 848,875 ------------- ---------- -------- Comprehensive income Net income - - 74,213 Other Comprehensive income Change in unrealized losses on securities 29,505 - 29,505 ------------- ---------- -------- Total comprehensive income 103,718 Cash dividends ($0.57 per share) - - (23,853) Purchase of treasury stock - (43,309) (43,309) Issuance of stock awards - 1,083 137 Recognition of stock-based compensation - - 3,383 Net tax benefit related to equity compensation plans - - 26 Sale of treasury stock - 181 502 Exercise of stock options - 759 1,095 ------------- ---------- -------- Balance - December 31, 2007 $12,246 $(310,467) $890,574 ============= ========== ======== *T -0- *T Average Balances / Yields and Rates UMB Financial Corporation ---------------------------------------------------------------------- (tax - equivalent basis) ---------------------- (all dollars in thousands)(unaudited) Year Ended December 31, 2007 2006 ----------------------- ----------------------- Average Average Average Average Assets Balance Yield/Rate Balance Yield/Rate ----------- ----------- ----------- ----------- Loans, net of unearned interest $3,901,853 6.94% $3,579,665 6.66% Securities: Taxable 2,061,994 4.73 2,059,946 4.15 Tax-exempt 725,765 5.12 682,363 4.99 ----------- ----------- ----------- ----------- Total securities 2,787,759 4.83 2,742,309 4.36 Federal funds and resell agreements 360,288 5.18 378,028 5.06 Trading securities and other 58,862 4.03 56,639 4.68 ----------- ----------- ----------- ----------- Total earning assets 7,108,762 6.00 6,756,641 5.62 Allowance for loan losses (45,647) (42,214) Other Assets 933,171 868,790 ----------- ----------- Total assets $7,996,286 $7,583,217 ----------- ----------- Liabilities and Shareholders' Equity Interest-bearing deposits $3,936,104 3.05% $3,648,158 2.66% Federal funds and repurchase agreements 1,272,699 4.66 1,148,454 4.60 Borrowed funds 49,777 4.54 51,084 4.19 ----------- ----------- ----------- ----------- Total interest- bearing liabilities 5,258,580 3.46 4,847,696 3.13 Noninterest-bearing demand deposits 1,780,098 1,840,640 Other liabilities 83,530 51,784 Shareholders' equity 874,078 843,097 ----------- ----------- Total liabilities and shareholders' equity $7,996,286 $7,583,217 ----------- ----------- Net interest spread 2.54% 2.49% Net interest margin 3.44 3.38 Three Months Ended December 31, 2007 2006 ----------------------- ----------------------- Average Average Average Average Assets Balance Yield/Rate Balance Yield/Rate ----------- ----------- ----------- ----------- Loans, net of unearned interest $3,915,493 6.82% $3,776,980 6.88% Securities: Taxable 2,188,027 4.78 2,084,945 4.49 Tax-exempt 754,429 5.13 703,908 4.94 ----------- ----------- ----------- ----------- Total securities 2,942,456 4.87 2,788,853 4.60 Federal funds and resell agreements 264,226 4.50 285,880 5.50 Trading securities and other 48,373 3.90 52,869 4.28 ----------- ----------- ----------- ----------- Total earning assets 7,170,548 5.92 6,904,582 5.88 Allowance for loan losses (46,711) (44,261) Other assets 944,979 909,953 ----------- ----------- Total assets $8,068,816 $7,770,274 ----------- ----------- Liabilities and Shareholders' Equity Interest-bearing deposits $4,089,202 3.01% $3,752,809 2.89% Federal funds and repurchase agreements 1,129,856 3.95 1,224,005 4.91 Borrowed funds 51,644 4.27 52,672 3.79 ----------- ----------- ----------- ----------- Total interest- bearing liabilities 5,270,702 3.23 5,029,486 3.39 Noninterest-bearing demand deposits 1,810,307 1,808,153 Other liabilities 93,551 75,846 Shareholders' equity 894,256 856,789 ----------- ----------- Total liabilities and shareholders' equity $8,068,816 $7,770,274 ----------- ----------- Net interest spread 2.69% 2.49% Net interest margin 3.55 3.41 *T -0- *T FOURTH QUARTER 2007 FINANCIAL HIGHLIGHTS UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands, except per share data) (unaudited) Year Ended December 31 2007 2006 ----------------------------------------- ------------- ------------- Net interest income $232,684 $217,224 Provision for loan losses 9,333 8,734 Noninterest income 288,788 254,945 Noninterest expense 407,164 381,417 Income before income taxes 104,975 82,018 Net income 74,213 59,767 Net income per share - Basic 1.78 1.40 Net income per share - Diluted 1.77 1.40 Return on average assets 0.93% 0.79% Return on average equity 8.49% 7.09% Three Months Ended December 31 ----------------------------------------- Net interest income $60,858 $56,641 Provision for loan losses 3,000 1,000 Noninterest income 72,877 65,012 Noninterest expense 110,018 98,728 Income before income taxes 20,717 21,925 Net income 15,299 15,801 Net income per share - Basic 0.37 0.37 Net income per share - Diluted 0.37 0.37 Return on average assets 0.75% 0.81% Return on average equity 6.79% 7.32% At December 31 ----------------------------------------- Assets $9,342,959 $8,917,765 Loans, net of unearned interest 3,917,125 3,753,445 Securities 3,486,780 3,363,453 Deposits 6,550,802 6,308,964 Shareholders' equity 890,574 848,875 Book value per share 21.55 20.08 Market price per share 38.36 36.51 Equity to assets 9.53% 9.52% Allowance for loan losses $45,986 $44,926 As a % of loans 1.17% 1.20% Nonaccrual and restructured loans $6,581 $6,563 As a % of loans 0.17% 0.17% Loans over 90 days past due $2,922 $2,706 As a % of loans 0.07% 0.07% Other real estate owned $1,151 $377 Net loan charge-offs quarter-to-date $3,189 $(387) As a % of average loans 0.33% (0.04)% Net loan charge-offs year-to-date $8,273 $6,992 As a % of average loans 0.21% 0.20% Common shares outstanding 41,327,624 42,266,041 Average Balances Year Ended December 31 ----------------------------------------- Assets $7,996,286 $7,583,217 Loans, net of unearned interest 3,901,853 3,579,665 Securities 2,787,759 2,742,309 Deposits 5,716,202 5,488,798 Shareholders' equity 874,078 843,097 *T -0- *T Selected Financial Data of Affiliate Banks UMB Financial Corporation ---------------------------------------------------------------------- (all dollars in thousands) December 31, 2007 (unaudited) Loans Net of Total Unearned Total Shareholders' Missouri Assets Interest Deposits Equity ---------------------------------------------------------------------- UMB Bank, n.a. $8,122,867 $3,171,357 $5,652,599 $581,985 Colorado ---------------------------------------------------------------------- UMB Bank Colorado, n. a. 810,726 486,372 583,223 137,488 Kansas ---------------------------------------------------------------------- UMB National Bank of America 685,729 219,568 387,074 66,233 Arizona ---------------------------------------------------------------------- UMB Bank Arizona, n. a. 45,810 43,949 9,752 8,813 Banking - Related Subsidiaries ---------------------------------------------------------------------- UMB Community Development Corporation UMB Banc Leasing Corp. UMB Financial Services, Inc. UMB Scout Insurance Services, Inc. UMB Capital Corporation United Missouri Insurance Company UMB Trust Company of South Dakota Scout Investment Advisors, Inc. UMB Fund Services, Inc. UMB Consulting Services, Inc. Kansas City Realty Company Kansas City Financial Corporation UMB Redevelopment Corporation UMB Realty Company, LLC UMB National Sales Corporation Grand Distribution Services, LLC UMB Distribution Service, LLC *T UMB Financial Corporation (NASDAQ: UMBF), a multi-bank holding company, will host a conference call to discuss the company's fourth quarter and year-end results on January 23, 2008, at 8:30 a.m. (CST). At that time, UMB Chairman and CEO Mariner Kemper, Chief Operating Officer Peter deSilva and Chief Financial Officer Mike Hagedorn will discuss the company's fourth quarter and record full-year earnings released earlier today and included in this announcement. Following opening remarks, the company's management will host a question-and-answer session for analysts. Other audience members, including company investors and media, may participate in the listen-only call mode. Interested parties may access the call by dialing U.S./Canada (toll-free) 800-218-0530 or access the following Web link at least 10 minutes before the call begins: http://w.on24.com/r.htm?e=99489&s=1&k=1687404DB24DB20851AB9BEB2DDA5198 or visit www.umb.com, investor relations, to access the link to the live call. A replay of the conference call may be heard until February 6, 2008, by calling U.S./Canada (toll-free) 800-405-2236 or 303-590-3000. The replay pass code required for playback is conference ID 11104690#. The call replay may also be accessed via the company's Web site, www.umb.com, by visiting the investor relations� area. The company's fourth quarter and full-year earnings announcement follows: UMB Financial Corporation Reports a 24 percent Increase and Record Full-Year Earnings of $74.2 million for 2007 Selected financial highlights Record full-year revenue of $521.5 million Record full-year noninterest income of $288.8 million Net interest margin for the year increased 6 basis points to 3.44 percent Nonperforming loans remained flat at 0.17 percent of loans Net chargeoffs for the year remained flat at 0.21 percent of average loans Capital remains strong with an equity-to-assets ratio of 9.5 percent UMB Financial Corporation (NASDAQ: UMBF), a multi-bank holding company, announced earnings for the year ended December 31, 2007 of $74.2 million or $1.78 per share ($1.77 diluted). This is an increase of $14.4 million, or 24.2 percent, compared to the prior year earnings of $59.8 million or $1.40 per share ($1.40 diluted). Earnings for the three months ended December 31, 2007 were $15.3 million or $0.37 per share ($0.37 diluted). This is a decrease of $0.5 million, or 3.2 percent, compared to fourth quarter 2006 earnings of $15.8 million or $0.37 per share ($0.37 diluted). The fourth quarter in 2007 included a pre-tax liability accrual of $4.6 million related to the company�s estimated share of Visa U.S.A., Inc.�s (Visa) covered litigation provision as well as a $0.7 million net gain on a contingent payment received on the sale of the securities transfer product. Excluding these adjustments, net income for the fourth quarter would have increased 12.6 percent to $17.8 million. A table reconciling GAAP net income for these items for the quarter and year-to-date is included with this release. �This quarter we watched the industry weather some challenging conditions,� commented Mariner Kemper, Chairman and CEO of UMB Financial Corporation. �I am extremely proud of the results our associates achieved for the quarter and the year. Our results continued to be fueled by double-digit fee income growth and an increase in net interest income. In addition, we grew average loans 9.0 percent while not wavering from our historically strong underwriting standards. Our financial performance in the current market environment validates our time-tested model of quality, liquidity and capital strength.� Net Interest Income Net interest income for the fourth quarter of 2007 increased $4.2 million, or 7.4 percent, compared to the same period in 2006 due primarily to higher average earning assets while increasing net interest margin. Average earning assets increased by $266.0 million, or 3.9 percent, as compared to the fourth quarter of 2006. Most of this increase was due to a $138.5 million, or 3.7 percent, increase in average loans and a $149.1 million, or 5.3 percent, increase in total securities, including trading securities and other. Net interest margin increased 14 basis points to 3.55 percent for the three months ended December 31, 2007 as compared to the same quarter in 2006. Noninterest Income and Expense �Our results for the fourth quarter continue to be driven by the improvement in our fee-based businesses,� said Peter deSilva, President and Chief Operating Officer. �Noninterest income increased 12.1 percent for the quarter, and 13.3 percent for the year. This growth was primarily due to the increase in trust and securities processing income from our Asset Management and Fund Services divisions, as well as bankcard fees. Additionally, during the quarter, we announced that our Healthcare Services Division passed $100 million in Health Savings Account (HSA) assets, or an increase of 53 percent over the prior year. Finally, with almost 800,000 healthcare accounts, we are optimistic about the growth opportunity and remain committed to maintaining our leadership position in this important segment.� Noninterest income increased $7.9 million, or 12.1 percent, for the three months ended December 31, 2007 compared to the same period in 2006. Trust and securities processing income increased $4.9 million, or 19.2 percent, for the three months ended December 31, 2007 compared to the same period in 2006. This increase was primarily due to a $1.5 million, or 20.0 percent, increase in fee income from the UMB Scout Funds and a $2.3 million, or 29.4 percent, increase in fund administration and distribution services. Deposit service charges were $1.5 million, or 8.4 percent, higher in the fourth quarter 2007 than in the same period in 2006 due mostly to greater individual overdraft and return item charges as well as pricing changes implemented at the beginning of 2007. A $0.7 million net gain was recognized on a contingent payment received on the sale of the securities transfer product, which was completed during the third quarter. In addition, gains on the sale of available-for-sale securities of $1.0 million were recognized during the quarter. Noninterest expense increased $11.3 million, or 11.4 percent, for the three months ended December 31, 2007 compared to the same period in 2006. Salary expense increased by $4.3 million, or 8.6 percent, mostly due to higher employee base salaries, higher commissions and bonuses, and higher cost of benefits. Marketing and business development increased $0.7 million, or 21.3 percent, due to timing of marketing initiatives in the fourth quarter of 2007 compared to the same quarter in 2006. Processing fees increased $1.0 million, or 13.1 percent, due to increased third party custodian fees related to international transactions from mutual fund clients and sub-transfer agency fees paid for the distribution of the UMB Scout Funds. A liability of $4.6 million, which represents more than 40 percent of the noninterest expense increase, was recorded for the estimated company�s proportional share of Visa�s covered litigation. Excluding this litigation liability, noninterest expense would have increased 6.7 percent. Balance Sheet and Margin �Our balance sheet remains well positioned in this time of economic instability,� said Mike Hagedorn, Chief Financial Officer. �Our capital ratios are a reflection of our balance sheet strength. Moreover, our loan portfolio continued to grow in the fourth quarter, with commercial, HELOC and credit cards recording solid gains. Last quarter, we announced the strategic decision to run off our indirect loan portfolio, and continue to monitor our funding needs as a result. We expect this run-off to reduce our reliance on short-term instruments and repurchase agreements, and provide more balance sheet flexibility. Our current balance sheet and funding structure have allowed us to manage our funding costs as rates declined and contributed to margin improvement during the quarter.� Average total assets for the three months ended December 31, 2007 were $8.1 billion compared to $7.8 billion for the same period in 2006, an increase of $298.5 million, or 3.8 percent. Average earning assets increased by $266.0 million, or 3.9 percent. Actual loan balances on December 31, 2007 were $3.9 billion, compared to $3.8 billion on December 31, 2006. These balances were as follows: Loans by Category (in thousands) � December 31,2007 � December 31,2006 � Change � PercentChange Commercial, financial and agricultural $1,769,505 $1,564,793 $204,712 13.1% Real estate construction 83,292 84,141 (849) (1.0)% Consumer 795,826 982,325 (186,499) (19.0)% Real estate 1,262,389 1,116,405 145,984 13.1% Leases 6,113 5,781 332 5.7% Loans before loans held for sale 3,917,125 3,753,445 163,680 4.4% Loans held for sale 12,240 14,120 (1,880) (13.3)% Total loans and loans held for sale $3,929,365 $3,767,565 $161,800 4.3% Nonperforming loans were flat at December 31, 2007 and 2006 totaling $6.6 million. As a percentage of total loans, nonperforming loans were 0.17 percent of loans as of December 31, 2007 and 2006. Nonperforming loans are defined as nonaccrual loans and restructured loans. The company�s allowance for loan losses totaled $46.0 million, or 1.17 percent of total loans as of December 31, 2007 compared to $44.9 million, or 1.20 percent of total loans as of December 31, 2006. For the three months ended December 31, 2007, average securities, including trading securities and other, totaled $3.0 billion. This is an increase of $149.1 million, or 5.3 percent from the same period in 2006. Average federal funds sold and resell agreements for the fourth quarter decreased $21.7 million, or 7.6 percent over the same period in 2006 to $264.2 million. Average total deposits increased $338.5 million, or 6.1 percent, to $5.9 billion for the three months ended December 31, 2007, compared to the same period in 2006. The increase in deposits came primarily from our public funds, mutual fund processing and treasury management businesses. Average time deposit accounts increased by $112.0 million, or 9.0 percent, for the three months ended December 31, 2007 as compared to 2006. Average money market accounts increased by $199.3 million, or 20.0 percent, in 2007 as compared to 2006. Total deposits as of December 31, 2007 were $6.6 billion, compared to $6.3 billion at December 31, 2006, a 3.8 percent increase. As of December 31, 2007, UMB had total shareholders� equity of $890.6 million, a 4.9 percent increase from the prior year. For the three months ended December 31, 2007, the company repurchased 448,707 shares at an average price of $40.31 per share, for a total cost of $18.1 million. For the year, shares repurchased totaled 1.1 million, which at an average price of $39.37 per share, resulted in a total cost of $43.3 million. The company declared its regular quarterly cash dividend of $0.15 per share to be paid on April 1, 2008, to shareholders of record at of the close of business on March 11, 2008. Year-to-Date Earnings for the year ended December 31, 2007 were $74.2 million or $1.78 per share ($1.77 diluted). This is an increase of $14.4 million, or 24.2 percent, compared to the prior year earnings of $59.8 million or $1.40 per share ($1.40 diluted). Excluding a $7.2 million pre-tax net gain on the sale of the securities transfer product as well as the $4.6 million liability recorded for the company�s proportional share of Visa�s covered litigation provision, adjusted net income would have totaled $72.6 million or a 21.4 percent increase over 2006. A table reconciling GAAP net income for these items for the quarter and year-to-date is included with this release. Net interest income for the year ended December 31, 2007 increased $15.5 million, or 7.1 percent, compared to the same period in 2006 due primarily to higher average earning assets and rates. Net interest margin increased to 3.44 percent for year ended December 31, 2007 as compared to 3.38 percent for the same period in 2006. Noninterest income increased $33.8 million or 13.3 percent, to $288.8 million for the year ended December 31, 2007 as compared to the same period in 2006. The increase was primarily attributable to higher trust and securities processing income, deposit service charges, trading and investment income and brokerage fees. Trust and securities processing income increased $17.3 million, or 17.6 percent, for year-to-date December 31, 2007 as compared to the same period in 2006. Deposit service charges were $6.3 million, or 8.5 percent, higher for the twelve months ended December 31, 2007 than the same period in 2006 due mostly to greater individual overdraft and return item charges as well as pricing changes implemented at the beginning of the year. A $7.2 million net gain was recognized on the sale of the securities transfer product, which was completed during the third quarter. Excluding this net gain, noninterest income would have increased 10.4 percent. Noninterest expense increased $25.7 million, or 6.8 percent, for the twelve months ended December 31, 2007 compared to the same period in 2006. Salary expense increased by $12.9 million, or 6.7 percent, mostly due to higher employee base salaries, higher commissions and bonuses and higher cost of benefits. Occupancy expense increased $2.5 million, or 8.9 percent, mainly from increased repair and maintenance costs of existing facilities and increased facility security expense. Equipment expense increased by $3.7 million, or 7.6 percent, for the year ended December 31, 2007 as compared to the same period in 2006 due mostly to higher amortization and maintenance costs related to software and associated equipment. A liability of $4.6 million was recorded for the company�s proportional share of Visa�s covered litigation provision. Excluding this liability, noninterest expense would have increased 5.5 percent. The company plans to host a conference call to discuss its fourth quarter and full-year results on January 23, 2008, at 8:30 a.m. (CST). Interested parties may access the call by dialing U.S./Canada (toll-free) 800-218-0530 or access the following Web link at least 10 minutes before the call begins: http://w.on24.com/r.htm?e=99489&s=1&k=1687404DB24DB20851AB9BEB2DDA5198 or visit www.umb.com, investor relations, to access the link to the live call. A replay of the conference call may be heard until February 6, 2008, by calling U.S./Canada (toll-free) 800-405-2236 or 303-590-3000. The replay pass code required for playback is conference ID 11104690#. The call replay may also be accessed via the company's Web site, www.umb.com, by visiting the investor relations� area. Forward-Looking Statements: This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements rely on a number of assumptions concerning future events and are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated by the forward-looking statements in this Current Report on Form 8-K, any exhibits to this Current Report and other public statements the company may make. While management of UMB believes their assumptions are reasonable, UMB cautions that changes in general economic conditions, changes in interest rates, changes in the securities markets, changes in operations, changes in competition, technology changes, legislative or regulatory changes, the ability of customers to repay loans, changes in loan demand, increases in employee costs, and other risks and uncertainties detailed in UMB�s filings with the Securities and Exchange Commission, may cause actual results to differ materially from those discussed in this release. UMB has no duty to update such statements, and undertakes no obligation to update or supplement forward-looking statements that become untrue because of new information, future events or otherwise. Non-GAAP Financial Measures: Certain financial measures contained in this press release exclude net gains associated with the sale of the securities transfer product in July, 2007, as well as a liability accrual related to Visa�s covered litigation provision. Financial measures which exclude those items have not been determined in accordance with generally accepted accounting principles and are therefore non-GAAP financial measures. Management of UMB believes that investors� understanding of the company�s performance is enhanced by disclosing these non-GAAP financial measures as a reasonable basis for comparison of the company�s ongoing results of operations. These non-GAAP measures should not be considered a substitute for GAAP-basis measures and results. Our non-GAAP measures may not be comparable to non-GAAP measures of other companies. The attached Non-GAAP Reconciliation Schedule provides a reconciliation of these non-GAAP financial measures to the most closely analogous measure determined in accordance with GAAP. About UMB: UMB Financial Corporation (NASDAQ: UMBF) is a multi-bank holding company headquartered in Kansas City, Missouri, offering complete banking, asset management, health spending solutions and related financial services to both individual and business customers nationwide. Its banking subsidiaries own and operate 135 banking centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. Subsidiaries of the holding company and the lead bank, UMB Bank, n.a., include an investment services group based in Milwaukee, Wisconsin, single-purpose companies that deal with brokerage services and insurance and a registered investment advisor that manages the company�s proprietary mutual funds. NON-GAAP RECONCILIATION SCHEDULE � UMB Financial Corporation (all dollars in thousands) (unaudited) � � The following tables present the reconciliation of non-GAAP financial measures to reported GAAP financial measures. � Three Months Ended Year Ended December 31, December 31, 2007 2007 Net interest income after provision for loan losses $57,858 $223,351 Noninterest income 72,877 288,788 Noninterest expense 110,018 407,164 Income tax provision 5,418 30,762 Net income 15,299 74,213 � Adjustments Noninterest income Gain on sale of securities transfer (727) (7,218) Noninterest expense Covered litigation provision 4,628 4,628 Total Adjustments pre-tax 3,901 (2,590) Income tax provision (1,404) 932 After tax adjustments to GAAP 2,497 (1,658) Adjusted net income $17,796 $72,555 � � The above table presents the variation in net income on an as reported (GAAP) basis and excluding certain gains related to the sale of securities transfer and the covered litigation provision. The press release includes commentary that compares both GAAP and non-GAAP financial measures. CONSOLIDATED BALANCE SHEETS � UMB Financial Corporation (all dollars in thousands) (unaudited) � � December 31, Assets 2007 � 2006 � Loans $3,917,125 $3,753,445 Allowance for loan losses (45,986) � (44,926) Net loans 3,871,139 � 3,708,519 Loans held for sale 12,240 14,120 Investment Securities: Available for sale 3,385,952 3,238,648 Held to maturity 37,658 44,781 Federal Reserve Bank stock and other 19,287 15,490 Trading securities 43,883 � 64,534 Total investment securities 3,486,780 � 3,363,453 Federal funds and resell agreements 712,012 848,922 Cash and due from banks 806,600 531,188 Bank premises and equipment, net 235,528 243,216 Accrued income 62,021 57,313 Goodwill 94,512 93,723 Other intangibles 16,463 19,309 Other assets 45,664 � 38,002 Total assets $9,342,959 � $8,917,765 � � Liabilities Deposits: Noninterest - bearing demand $2,094,422 $2,293,096 Interest - bearing demand and savings 2,959,109 2,644,125 Time deposits under $100,000 852,837 799,003 Time deposits of $100,000 or more 644,434 � 572,740 Total deposits 6,550,802 � 6,308,964 Federal funds and repurchase agreements 1,734,749 1,620,945 Short-term debt 33,753 17,881 Long-term debt 36,032 38,020 Accrued expenses and taxes 76,362 52,381 Other liabilities 20,687 � 30,699 Total liabilities 8,452,385 � 8,068,890 � Shareholders' Equity Common stock 55,057 55,057 Capital surplus 702,914 699,794 Retained earnings 430,824 380,464 Accumulated other comprehensive income (loss) 12,246 (17,259) Treasury stock (310,467) � (269,181) Total shareholders' equity 890,574 � 848,875 Total liabilities and shareholders' equity $9,342,959 � $8,917,765 Consolidated Statements of Income � UMB Financial Corporation (dollars in thousands except share and per share data) (unaudited) � � Three Months Ended Year Ended December 31, December 31, Interest Income 2007 � 2006 � 2007 � 2006 Loans $67,252 � $65,424 $270,638 � $238,356 Securities: Taxable Interest 26,377 23,605 97,576 85,585 Tax-exempt interest 6,627 � 6,060 � 25,269 � 23,448 Total securities income 33,004 29,665 122,845 109,033 Federal funds and resell agreements 3,000 3,960 18,659 19,112 Trading securities and other 447 � 553 � 2,271 � 2,582 Total interest income 103,703 � 99,602 � 414,413 � 369,083 � Interest Expense Deposits 31,026 27,312 120,217 96,889 Federal funds and repurchase agreements 11,263 15,146 59,250 52,832 Short-term debt 150 190 591 619 Long-term debt 406 � 313 � 1,671 � 1,519 Total interest expense 42,845 � 42,961 � 181,729 � 151,859 Net interest income 60,858 56,641 232,684 217,224 Provision for loan losses 3,000 � 1,000 � 9,333 � 8,734 Net interest income after provision for loan losses 57,858 � 55,641 � 223,351 � 208,490 � Noninterest Income Trust and securities processing 30,454 25,551 115,585 98,250 Trading and investment banking 4,541 4,755 19,288 18,192 Service charges on deposits 19,945 18,408 79,880 73,598 Insurance fees and commissions 875 807 3,418 3,956 Brokerage fees 1,999 1,602 8,023 6,228 Bankcard fees 10,541 10,009 39,972 38,759 (Losses) gains on sales of assets and deposits, net (684) 384 (597) 793 Gain on sale of securities transfer 727 - 7,218 - Gains (losses) on sales of securities available for sale 1,007 (3) 1,010 117 Other 3,472 � 3,499 � 14,991 � 15,052 Total noninterest income 72,877 � 65,012 � 288,788 � 254,945 � Noninterest Expense Salaries and employee benefits 54,345 50,052 206,883 193,980 Occupancy, net 7,833 7,488 30,255 27,776 Equipment 12,901 12,882 52,711 48,968 Supplies and services 6,108 5,817 23,435 22,805 Marketing and business development 3,869 3,190 15,443 14,835 Processing fees 8,593 7,601 29,861 28,292 Legal and consulting 2,656 2,440 8,451 8,175 Bankcard 2,980 3,610 11,064 13,831 Amortization of other intangibles 721 731 2,943 1,600 Covered litigation provision 4,628 - 4,628 - Other 5,384 � 4,917 � 21,490 � 21,555 � Total noninterest expense 110,018 � 98,728 � 407,164 � 381,417 � Income before income taxes 20,717 21,925 104,975 82,018 Income tax provision 5,418 � 6,124 � 30,762 � 22,251 Net income $15,299 � $15,801 � $74,213 � $59,767 Per Share Data Net income - Basic $0.37 $0.37 $1.78 $1.40 Net income - Diluted 0.37 0.37 1.77 1.40 Dividends 0.15 0.13 0.57 0.52 Weighted average shares outstanding 41,279,865 42,349,000 41,712,223 42,592,960 Consolidated Statements of � � � � Shareholders' Equity � UMB Financial Corporation (all dollars in thousands) (unaudited) � � � � Accumulated Other Common Capital Unearned Retained Comprehensive Treasury Stock Surplus Compensation Earnings Income (Loss) Stock Total Balance - January 1, 2006 $27,528 $728,108 $(1,904) $342,675 $(21,550) $(241,394) $833,463 � Comprehensive income (loss) Net income - - - 59,767 - - 59,767 Change in unrealized losses on securities - - - - 4,291 - 4,291 Total comprehensive income 64,058 Cash dividends ($0.52 per share) - - - (21,978) - - (21,978) Stock split 2 for 1 27,529 (27,529) - - - - - Purchase of treasury stock - - - - (29,598) (29,598) Issuance of stock awards - (938) - - - 1,088 150 Adoption of SFAS 123(R) - (1,904) 1,904 - - - - Recognition of stock-based compensation - 1,669 - - - - 1,669 Sale of treasury stock - 280 - - - 194 474 Exercise of stock options - 108 - - - 529 637 Balance - December 31, 2006 55,057 699,794 - 380,464 (17,259) (269,181) 848,875 � Comprehensive income Net income - - - 74,213 - - 74,213 Other Comprehensive income Change in unrealized losses on securities - - - - 29,505 - 29,505 Total comprehensive income 103,718 Cash dividends ($0.57 per share) - - - (23,853) - - (23,853) Purchase of treasury stock - - - - - (43,309) (43,309) Issuance of stock awards - (946) - - - 1,083 137 Recognition of stock-based compensation - 3,383 - - - - 3,383 Net tax benefit related to equity compensation plans 26 - - - - 26 Sale of treasury stock - 321 - - - 181 502 Exercise of stock options - 336 - - - 759 1,095 Balance - December 31, 2007 $55,057 $702,914 $- $430,824 $12,246 $(310,467) $890,574 Average Balances / Yields and Rates � UMB Financial Corporation (tax - equivalent basis) � � � � (all dollars in thousands)(unaudited) Year Ended December 31, 2007 � 2006 � Average Average Average Average Assets Balance Yield/Rate Balance Yield/Rate Loans, net of unearned interest $3,901,853 6.94 % $3,579,665 6.66 % Securities: Taxable 2,061,994 4.73 2,059,946 4.15 Tax-exempt 725,765 � 5.12 � 682,363 � 4.99 � Total securities 2,787,759 4.83 2,742,309 4.36 Federal funds and resell agreements 360,288 5.18 378,028 5.06 Trading securities and other 58,862 � 4.03 � 56,639 � 4.68 � Total earning assets 7,108,762 6.00 6,756,641 5.62 Allowance for loan losses (45,647 ) (42,214 ) Other Assets 933,171 � 868,790 � Total assets $7,996,286 � $7,583,217 � � � Liabilities and Shareholders' Equity Interest-bearing deposits $3,936,104 3.05 % $3,648,158 2.66 % Federal funds and repurchase agreements 1,272,699 4.66 1,148,454 4.60 Borrowed funds 49,777 � 4.54 � 51,084 � 4.19 � Total interest-bearing liabilities 5,258,580 3.46 4,847,696 3.13 Noninterest-bearing demand deposits 1,780,098 1,840,640 Other liabilities 83,530 51,784 Shareholders' equity 874,078 � 843,097 � Total liabilities and shareholders' equity $7,996,286 � $7,583,217 � Net interest spread 2.54 % 2.49 % Net interest margin 3.44 3.38 � � Three Months Ended December 31, 2007 � 2006 � Average Average Average Average Assets Balance Yield/Rate Balance Yield/Rate Loans, net of unearned interest $3,915,493 6.82 % $3,776,980 6.88 % Securities: Taxable 2,188,027 4.78 2,084,945 4.49 Tax-exempt 754,429 � 5.13 � 703,908 � 4.94 � Total securities 2,942,456 4.87 2,788,853 4.60 Federal funds and resell agreements 264,226 4.50 285,880 5.50 Trading securities and other 48,373 � 3.90 � 52,869 � 4.28 � Total earning assets 7,170,548 5.92 6,904,582 5.88 Allowance for loan losses (46,711 ) (44,261 ) Other assets 944,979 � 909,953 � Total assets $8,068,816 � $7,770,274 � � � Liabilities and Shareholders' Equity Interest-bearing deposits $4,089,202 3.01 % $3,752,809 2.89 % Federal funds and repurchase agreements 1,129,856 3.95 1,224,005 4.91 Borrowed funds 51,644 � 4.27 � 52,672 � 3.79 � Total interest-bearing liabilities 5,270,702 3.23 5,029,486 3.39 Noninterest-bearing demand deposits 1,810,307 1,808,153 Other liabilities 93,551 75,846 Shareholders' equity 894,256 � 856,789 � Total liabilities and shareholders' equity $8,068,816 � $7,770,274 � Net interest spread 2.69 % 2.49 % Net interest margin 3.55 3.41 � FOURTH QUARTER 2007 � � FINANCIAL HIGHLIGHTS � UMB Financial Corporation (all dollars in thousands, except per share data) (unaudited) � Year Ended December 31 2007 � 2006 � Net interest income $232,684 $217,224 Provision for loan losses 9,333 8,734 Noninterest income 288,788 254,945 Noninterest expense 407,164 381,417 Income before income taxes 104,975 82,018 Net income 74,213 59,767 Net income per share - Basic 1.78 1.40 Net income per share - Diluted 1.77 1.40 Return on average assets 0.93 % 0.79 % Return on average equity 8.49 % 7.09 % � Three Months Ended December 31 Net interest income $60,858 $56,641 Provision for loan losses 3,000 1,000 Noninterest income 72,877 65,012 Noninterest expense 110,018 98,728 Income before income taxes 20,717 21,925 Net income 15,299 15,801 Net income per share - Basic 0.37 0.37 Net income per share - Diluted 0.37 0.37 Return on average assets 0.75 % 0.81 % Return on average equity 6.79 % 7.32 % � At December 31 Assets $9,342,959 $8,917,765 Loans, net of unearned interest 3,917,125 3,753,445 Securities 3,486,780 3,363,453 Deposits 6,550,802 6,308,964 Shareholders' equity 890,574 848,875 Book value per share 21.55 20.08 Market price per share 38.36 36.51 Equity to assets 9.53 % 9.52 % Allowance for loan losses $45,986 $44,926 As a % of loans 1.17 % 1.20 % Nonaccrual and restructured loans $6,581 $6,563 As a % of loans 0.17 % 0.17 % Loans over 90 days past due $2,922 $2,706 As a % of loans 0.07 % 0.07 % Other real estate owned $1,151 $377 Net loan charge-offs quarter-to-date $3,189 $(387 ) As a % of average loans 0.33 % (0.04 )% Net loan charge-offs year-to-date $8,273 $6,992 As a % of average loans 0.21 % 0.20 % � Common shares outstanding 41,327,624 42,266,041 � Average Balances Year Ended December 31 Assets $7,996,286 $7,583,217 Loans, net of unearned interest 3,901,853 3,579,665 Securities 2,787,759 2,742,309 Deposits 5,716,202 5,488,798 Shareholders' equity 874,078 843,097 Selected Financial Data � � � of Affiliate Banks � UMB Financial Corporation (all dollars in thousands)(unaudited) � December 31, 2007 � Loans Net of Total Unearned Total Shareholders' Missouri � Assets � Interest � Deposits � Equity UMB Bank, n.a. $8,122,867 $3,171,357 $5,652,599 $581,985 Colorado � � � � � � � � UMB Bank Colorado, n. a. 810,726 486,372 583,223 137,488 � Kansas � � � � � � � � UMB National Bank of America 685,729 219,568 387,074 66,233 � Arizona � � � � � � � � UMB Bank Arizona, n. a. 45,810 43,949 9,752 8,813 � Banking - Related Subsidiaries � � UMB Community Development Corporation UMB Banc Leasing Corp. UMB Financial Services, Inc. UMB Scout Insurance Services, Inc. UMB Capital Corporation United Missouri Insurance Company UMB Trust Company of South Dakota Scout Investment Advisors, Inc. UMB Fund Services, Inc. UMB Consulting Services, Inc. Kansas City Realty Company Kansas City Financial Corporation UMB Redevelopment Corporation UMB Realty Company, LLC UMB National Sales Corporation Grand Distribution Services, LLC UMB Distribution Service, LLC