UMBF UMB Financial Corporation

UMB Financial Corporation (NASDAQ: UMBF), a diversified financial holding company, announced earnings for the three months ended September 30, 2011 of $26.0 million or $0.65 per share ($0.64 diluted). This is an increase of $3.2 million, or 14.2 percent, compared to third quarter 2010 earnings of $22.8 million or $0.57 per share ($0.57 diluted). Earnings for the nine months ended September 30, 2011 were $83.2 million or $2.08 per share ($2.06 diluted). This is an increase of $11.2 million, or 15.6 percent, compared to the prior year-to-date earnings of $72.0 million or $1.80 per share ($1.78 diluted).

“Even with continued economic headwinds, UMB’s unique position as a diversified financial services company allows us to post solid results for the quarter with revenue increasing 6.9 percent to $180.0 million,” said Mariner Kemper, Chairman and Chief Executive Officer. “UMB posted loan growth of 4.8 percent in the third quarter of 2011. This is our sixth consecutive quarter of loan growth when the industry as a whole is experiencing flat to declining loan balances.”

Net Interest Income and Margin

Net interest income for the third quarter of 2011 increased $0.7 million, or 0.9 percent, compared to the same period in 2010. Average earning assets increased by $1.0 billion, or 10.1 percent, compared to the third quarter of 2010. This increase was due to a $561.0 million, or 10.8 percent, increase in average total securities, including trading securities and a $220.1 million, or 4.8 percent, increase in average loans. Net interest margin decreased 25 basis points to 2.98 percent for the three months ended September 30, 2011 compared to the same quarter in 2010.

Noninterest Income and Expense

Noninterest income increased $10.9 million, or 12.1 percent, for the three months ended September 30, 2011 compared to the same period in 2010. This increase is primarily attributed to increased trust and securities processing income of $12.1 million, or 30.3 percent, for the three months ended September 30, 2011 compared to the same period in 2010. The increase in trust and securities processing income was primarily due to a $3.7 million, or 30.8 percent, increase in advisory fee income from the Scout Funds; a $1.2 million, or 7.8 percent, increase in fund administration and custody services; and a $6.1 million, or 231.2 percent, increase in fees related to institutional and personal investment management services.

Noninterest expense increased $8.8 million, or 6.7 percent, for the three months ended September 30, 2011 compared to the same period in 2010. The primary driver of this increase is higher salary and benefits expense of $5.9 million, or 8.5 percent, due to higher base salary, commission and employee benefits. Of this increase in salary and benefits expense, approximately $1.7 million, or 28.3 percent, is related to salary and benefits from acquisitions.

“The company’s total revenue increased in the third quarter due to the continued growth in our fee businesses, driven primarily by our recent acquisitions which are performing well,” said Peter deSilva, President and Chief Operating Officer. “Noninterest income increased 12.1 percent and was 56.1 percent of total revenue, compared to 53.5 percent in the same period a year ago. Scout Investments continues to perform well and during the third quarter, launched the Scout Unconstrained Bond Fund to round out our product offering in the fixed income space. This new addition is the second product launched by Scout this year. Additionally, Scout Funds posted $211.2 million in net fund flows during the quarter. Finally, increases in Fund Services revenue and card purchase volume also contributed to our strong noninterest income growth.”

Balance Sheet

Average total assets for the three months ended September 30, 2011 were $12.2 billion compared to $11.0 billion for the same period in 2010, an increase of $1.2 billion, or 10.5 percent. Average earning assets increased by $1.0 billion for the period, or 10.1 percent.

Average loan balances for the three months ended September 30, 2011 increased $220.1 million, or 4.8 percent, to $4.8 billion compared to the same period in 2010. Actual loan balances on September 30, 2011 were $4.8 billion, an increase of $192.5 million, or 4.2 percent, compared to September 30, 2010. Commercial loans increased $167.9 million, or 8.7 percent.

Nonperforming loans decreased to $20.1 million on September 30, 2011 from $25.0 million on September 30, 2010. As a percentage of loans, nonperforming loans decreased to 0.42 percent as of September 30, 2011 compared to 0.55 percent on September 30, 2010. Nonperforming loans are defined as nonaccrual loans and restructured loans. By comparison, the industry median for nonperforming loans as of June 30, 2011 was 3.71 percent. The company’s allowance for loan losses totaled $72.9 million, or 1.53 percent of loans, as of September 30, 2011 compared to $72.7 million, or 1.59 percent of loans, as of September 30, 2010.

For the three months ended September 30, 2011, average securities, including trading securities, totaled $5.7 billion. This is an increase of $561.0 million, or 10.8 percent, from the same period in 2010.

Average total deposits increased $1.2 billion, or 14.2 percent, to $9.5 billion for the three months ended September 30, 2011 compared to the same period in 2010. Average money market accounts increased by $201.1 million, or 11.2 percent, in 2011 as compared to 2010. Average noninterest-bearing demand deposits increased $797.1 million, or 29.4 percent, compared to 2010. Total deposits as of September 30, 2011 were $9.4 billion, compared to $8.6 billion as of September 30, 2010, a 9.2 percent increase. Also, as of September 30, 2011, noninterest-bearing demand deposits were 38.5 percent of total deposits.

“Growth in deposits continues to fuel our balance sheet growth,” said Mike Hagedorn, Chief Financial Officer. “Average deposits increased 14.2 percent, compared to the third quarter 2010 and the related cost of funds declined from 0.48 percent to 0.36 percent. Average equity grew by 7.8 percent compared to the third quarter 2010, and is up 31.4 percent since the beginning of 2008. We are especially pleased with this growth since it was achieved without dilutive measures. We will continue to actively manage our $5.9 billion investment portfolio with a bias toward positioning it for rising interest rates, which is a challenge with the continued volatility in the financial markets.”

As of September 30, 2011, UMB had total shareholders’ equity of $1.2 billion, an increase of 7.3 percent as compared to the same period in 2010.

Year-to-Date

Earnings for the nine months ended September 30, 2011 were $83.2 million or $2.08 per share ($2.06 diluted). This is an increase of $11.2 million, or 15.6 percent, compared to the prior year-to-date earnings of $72.0 million or $1.80 per share ($1.78 diluted).

Net interest income for the nine months ended September 30, 2011 increased $5.6 million, or 2.4 percent, compared to the same period in 2010. Net interest margin decreased to 2.95 percent for the nine months ended September 30, 2011 as compared to 3.24 percent for the same period in 2010.

Noninterest income increased $51.0 million, or 19.2 percent, to $316.6 million for the nine months ended September 30, 2011 as compared to the same period in 2010. Trust and securities processing income increased $43.3 million, or 37.9 percent, for year-to-date September 30, 2011 as compared to the same period in 2010. Bankcard fees increased $6.3 million, or 15.6 percent, compared to 2010. Gains from the sale of securities available for sale of $15.9 million were recognized during the first nine months of 2011 compared to $7.3 million for the first nine months of 2010.

Noninterest expense increased $46.4 million, or 12.4 percent, for the nine months ended September 30, 2011 compared to the same period in 2010. Salary and employee benefit expense increased by $25.9 million, or 13.3 percent. Amortization of intangible assets increased $4.5 million, or 58.6 percent. Processing fees increased $4.4 million, or 13.0 percent. Additionally, during the second quarter, the company established a $7.8 million escrow fund to settle a class action lawsuit.

Conference Call

The company plans to host a conference call to discuss its third quarter financial results on October 26, 2011, at 8:30 a.m. (CDT). Interested parties may access the call by dialing (toll-free) 877-941-8609 or (U.S.) 480-629-9818. The live call can also be accessed by following the link http://event.on24.com/r.htm?e=364793&s=1&k=E90EE7EC07850C7FCB261E0C6A13DDC9 or by visiting the investor relations area of umb.com.

A replay of the conference call may be heard until November 9, 2011, by calling (toll-free) 800-406-7325 or (U.S.) 303-590-3030. The replay pass code required for playback is conference identification number 4477737. The call replay may also be accessed via the company's website, 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, its ability to integrate acquisitions 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.

About UMB:

UMB Financial Corporation (NASDAQ: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, asset management, health spending solutions and related financial services to commercial, institutional and personal customers nationwide. Its banking subsidiaries own and operate 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 mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and Scout Investments, offering equity and fixed income investment strategies for institutions and individual investors. For more information, visit umb.com or follow us on Twitter at @UMBFinancial.

  CONSOLIDATED BALANCE SHEETS    

UMB Financial Corporation

(unaudited, dollars in thousands)     September 30,

Assets

    2011       2010   Loans $ 4,776,071 $ 4,583,562 Allowance for loan losses   (72,876)       (72,719) Net loans   4,703,195       4,510,843 Loans held for sale 11,562 11,256 Investment securities: Available for sale 5,757,923 5,058,667 Held to maturity 88,376 59,910 Trading securities 71,077 40,520 Federal Reserve Bank Stock and other   22,789       22,344 Total investment securities   5,940,165       5,181,441 Federal funds and resell agreements 86,695 22,399 Interest-bearing due from banks 322,993 658,347 Cash and due from banks 383,757 332,699 Bank premises and equipment, net 225,593 215,627 Accrued income 75,189 63,990 Goodwill 211,114 163,584 Other intangibles 88,243 69,723 Other assets   90,578       110,132 Total assets $ 12,139,084     $ 11,340,041    

Liabilities

Deposits: Noninterest-bearing demand $ 3,617,202 $ 2,778,728 Interest-bearing demand and savings 4,434,430 4,278,388 Time deposits under $100,000 635,055 710,991 Time deposits of $100,000 or more   708,336       833,708 Total deposits   9,395,023       8,601,815 Federal funds and repurchase agreements 1,340,693 1,432,179 Short-term debt 30,689 27,847 Long-term debt 7,841 9,040 Accrued expenses and taxes 181,210 148,927 Other liabilities   13,329       30,053 Total liabilities   10,968,785       10,249,861  

Shareholders' Equity

Common stock 55,057 55,057 Capital surplus 721,511 716,278 Retained earnings 682,942 612,265 Accumulated other comprehensive income 77,286 67,399 Treasury stock   (366,497)       (360,819) Total shareholders' equity   1,170,299       1,090,180 Total liabilities and shareholders' equity $ 12,139,084     $ 11,340,041           Consolidated Statements of Income                   UMB Financial Corporation (unaudited, dollars in thousands except share and per share data)       Three Months Ended Nine Months Ended September 30, September 30,

Interest Income

  2011       2010       2011       2010 Loans $ 55,424 $ 56,581 $ 164,519 $ 166,013 Securities: Taxable interest 20,511 22,026 64,896 68,301 Tax-exempt interest 8,825       7,330       25,345       21,675 Total securities income 29,336 29,356 90,241 89,976 Federal funds and resell agreements 45 29 73 137 Interest-bearing due from banks 628 749 2,633 3,099 Trading securities 191       176       682       500 Total interest income 85,624       86,891       258,148       259,725  

Interest Expense

Deposits 6,139 7,900 18,968 25,985 Federal funds and repurchase agreements 339 525 1,405 1,473 Other 72       83       335       441 Total interest expense 6,550       8,508       20,708       27,899 Net interest income 79,074 78,383 237,440 231,826 Provision for loan losses 4,500       7,700       17,200       24,110 Net interest income after provision for loan losses 74,574       70,683       220,240       207,716  

Noninterest Income

Trust and securities processing 51,928 39,843 157,291 114,029 Trading and investment banking 4,952 7,897 20,449 20,454 Service charges on deposits 18,880 19,431 55,669 60,114 Insurance fees and commissions 1,038 1,554 3,407 4,540 Brokerage fees 2,627 1,746 7,540 4,679 Bankcard fees 15,882 14,555 46,869 40,554 Gains on sale of available for sale securities, net 2,411 752 15,891 7,270 Other 3,239       4,306       9,447       13,950 Total noninterest income 100,957       90,084       316,563       265,590  

Noninterest Expense

Salaries and employee benefits 74,905 69,044 220,726 194,849 Occupancy, net 9,398 9,162 28,582 27,007 Equipment 10,424 11,122 32,135 33,205 Supplies and services 5,513 4,822 16,670 14,209 Marketing and business development 4,912 4,426 14,192 12,561 Processing fees 12,704 11,570 38,197 33,812 Legal and consulting 3,272 4,108 9,965 8,500 Bankcard 4,001 4,292 12,072 11,842 Amortization of intangible assets 4,022 3,150 12,187 7,684 Regulatory fees 2,130 3,219 8,241 9,974 Class action litigation settlement - - 7,800 - Other 8,147       5,720       19,758       20,470 Total noninterest expense 139,428 130,635 420,525 374,113   Income before income taxes 36,103 30,132 116,278 99,193 Income tax provision 10,088       7,359       33,072       27,223 Net income $ 26,015     $ 22,773     $ 83,206     $ 71,970  

Per Share Data

Net income - basic $ 0.65 $ 0.57 $ 2.08 $ 1.80 Net income – diluted 0.64 0.57 2.06 1.78 Dividends 0.195 0.185 0.585 0.555 Weighted average shares outstanding 40,020,772 40,081,108 40,057,009 40,083,419                         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, 2010

$ 55,057 $ 712,774 $ 562,748 $ 40,454 $ (355,482) $ 1,015,551 Comprehensive income Net income - - 71,970 - - 71,970

Change in unrealized gains on  securities

- - - 26,945 - 26,945 Total comprehensive income 98,915 Cash dividends ($0.555 per share) - - (22,453) - - (22,453) Purchase of treasury stock - - - - (7,554) (7,554) Issuance of equity awards - (1,617) - - 1,742 125

Recognition of equity based  compensation

- 4,398 - - - 4,398

Net tax benefit related to equity  compensation plans

- 155 - - - 155 Sale of treasury stock - 333 - - 188 521 Exercise of stock options   -       235       -       -       287       522 Balance – September 30, 2010 $ 55,057     $ 716,278     $ 612,265     $ 67,399     $ (360,819)     $ 1,090,180   Balance - January 1, 2011 $ 55,057 $ 718,306 $ 623,415 $ 25,465 $ (361,383) $ 1,060,860 Comprehensive income Net income - - 83,206 - - 83,206

Change in unrealized gains on  securities

- - - 51,821 - 51,821 Total comprehensive income 135,027 Cash dividends ($0.585 per share) - - (23,679) - - (23,679) Purchase of treasury stock - - - - (8,435) (8,435) Issuance of equity awards - (2,244) - - 2,484 240

Recognition of equity based  compensation

- 4,964 - - - 4,964

Net tax benefit related to equity  compensation plans

- 96 - - - 96 Sale of treasury stock - 213 - - 205 418 Exercise of stock options   -       176       -       -       632       808 Balance – September 30, 2011 $ 55,057     $ 721,511     $ 682,942     $ 77,286     $ (366,497)     $ 1,170,299             Average Balances / Yields and Rates               UMB Financial Corporation     (tax - equivalent basis)         (unaudited, dollars in thousands) Three Months Ended September 30,   2011           2010 Average Average Average Average Assets   Balance     Yield/Rate           Balance     Yield/Rate     Loans, net of unearned interest $ 4,790,043 4.60 % $ 4,569,900 4.92 % Securities: Taxable 4,119,391 1.98 4,044,955 2.16 Tax-exempt 1,569,903     3.42 1,089,222     4.14 Total securities 5,689,294 2.37 5,134,177 2.58 Federal funds and resell agreements 49,159 0.36 23,462 0.49 Interest-bearing due from banks 584,130 0.43 365,481 0.81 Trading securities 47,098     1.74 41,197     1.79 Total earning assets 11,159,724 3.21 10,134,217 3.56 Allowance for loan losses (71,513) (70,385) Other assets   1,069,219   938,083 Total assets $ 12,157,430 $ 11,001,915     Liabilities and Shareholders' Equity Interest-bearing deposits $ 5,956,609 0.41 % $ 5,574,615 0.56 % Federal funds and repurchase agreements 1,306,627 0.10 1,459,219 0.14 Borrowed funds 31,155     0.93 36,635     0.90 Total interest-bearing liabilities 7,294,391 0.36 7,070,469 0.48 Noninterest-bearing demand deposits 3,508,183 2,711,061 Other liabilities 183,084 133,474 Shareholders' equity   1,171,772   1,086,911 Total liabilities and shareholders' equity $ 12,157,430 $ 11,001,915 Net interest spread 2.85 % 3.08 % Net interest margin 2.98 3.23     Nine Months Ended September 30,   2011           2010 Average Average Average Average Assets   Balance     Yield/Rate           Balance     Yield/Rate   Loans, net of unearned interest $ 4,716,008 4.67 % $ 4,451,687 4.99 % Securities: Taxable 4,229,389 2.05 3,897,936 2.34 Tax-exempt 1,428,301     3.62 1,016,550     4.42 Total securities 5,657,690 2.45 4,914,486 2.77 Federal funds and resell agreements 29,913 0.33 51,568 0.36 Interest-bearing due from banks 908,528 0.39 619,288 0.67 Trading securities 50,384     1.96 39,281     1.83 Total earning assets 11,362,523 3.19 10,076,310 3.61 Allowance for loan losses (73,109) (67,809) Other assets   1,084,414   946,802 Total assets $ 12,373,828 $ 10,955,303     Liabilities and Shareholders' Equity Interest-bearing deposits $ 6,231,546 0.41 % $ 5,583,440 0.62 % Federal funds and repurchase agreements 1,546,097 0.12 1,398,633 0.14 Borrowed funds 34,917     1.29 43,463     1.36 Total interest-bearing liabilities 7,812,560 0.35 7,025,536 0.53 Noninterest-bearing demand deposits 3,263,666 2,743,050 Other liabilities 172,487 128,129 Shareholders' equity   1,125,115   1,058,588 Total liabilities and shareholders' equity $ 12,373,828 $ 10,955,303 Net interest spread 2.84 % 3.08 % Net interest margin 2.95 3.24               THIRD QUARTER 2011 FINANCIAL HIGHLIGHTS         UMB Financial Corporation (unaudited, dollars in thousands, except share and per share data)   Nine Months Ended September 30   2011         2010     Net interest income $ 237,440 $ 231,826 Provision for loan losses 17,200 24,110 Noninterest income 316,563 265,590 Noninterest expense 420,525 374,113 Income before income taxes 116,278 99,193 Net income 83,206 71,970 Net income per share - Basic 2.08 1.80 Net income per share - Diluted 2.06 1.78 Return on average assets 0.90 % 0.88 % Return on average equity 9.89 % 9.09 %   Three Months Ended September 30 Net interest income $ 79,074 $ 78,383 Provision for loan losses 4,500 7,700 Noninterest income 100,957 90,084 Noninterest expense 139,428 130,635 Income before income taxes 36,103 30,132 Net income 26,015 22,773 Net income per share - Basic 0.65 0.57 Net income per share - Diluted 0.64 0.57 Return on average assets 0.85 % 0.82 % Return on average equity 8.81 % 8.31 %   At September 30 Assets $ 12,139,084 $ 11,340,041 Loans, net of unearned interest 4,776,071 4,583,562 Securities 5,940,165 5,181,441 Deposits 9,395,023 8,601,815 Shareholders' equity 1,170,299 1,090,180 Book value per share 28.97 26.98 Market price per share 32.08 35.51 Equity to assets 9.64 % 9.61 % Allowance for loan losses $ 72,876 $ 72,719 As a % of loans 1.53 % 1.59 % Nonaccrual and restructured loans $ 20,140 $ 25,022 As a % of loans 0.42 % 0.55 % Loans over 90 days past due $ 6,387 $ 7,454 As a % of loans 0.13 % 0.16 % Other real estate owned $ 5,299 $ 5,714 Net loan charge-offs quarter-to-date $ 4,065 $ 5,099 As a % of average loans 0.34 % 0.45 % Net loan charge-offs year-to-date $ 18,276 $ 15,530 As a % of average loans 0.52 % 0.47 %   Common shares outstanding 40,395,963 40,410,612   Average Balances Nine Months Ended September 30 Assets $ 12,373,828 $ 10,955,303 Loans, net of unearned interest 4,716,008 4,451,687 Securities 5,708,074 4,953,767 Deposits 9,495,212 8,326,490 Shareholders' equity 1,125,115 1,058,588   Selected Financial Data                     of Affiliate Banks                         UMB Financial Corporation (unaudited, dollars in thousands) September 30, 2011 Loans Net of Total Unearned Total Shareholders' Missouri     Assets         Interest         Deposits         Equity UMB Bank, n.a. $ 9,868,343 $ 3,863,361 $ 7,787,655 $ 754,460   Colorado                                     UMB Bank Colorado, n. a. 1,506,628 603,193 1,221,624 161,641   Kansas                                     UMB National Bank of America 623,118 203,954 351,789 66,676   Arizona                                     UMB Bank Arizona, n. a. 132,964 114,140 60,293 11,837   Banking - Related Subsidiaries                                     UMB CDC, Inc. UMB Banc Leasing Corp. UMB Financial Services, Inc. UMB Insurance, Inc. UMB Capital Corporation United Missouri Insurance Company UMB Trust Company of South Dakota UMB Fund Services, Inc. Kansas City Realty Company

Kansas City Financial Corporation

UMB Redevelopment Corporation UMB Realty Company, LLC Grand Distribution Services, LLC UMB Distribution Services, LLC J. D. Clark & Co., Inc. UMB Bank & Trust, National Association Scout Distributors, LLC Scout Investments, Inc. Prairie Capital Management, LLC UMB Merchant Banc, LLC