UMB Financial Corporation Confirms Conference Call to Discuss Fourth Quarter and Year-end Earnings

Business Wire, Jan 22, 2008

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.