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August Outlook by the Numbers

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Do you have questions on the housing market, labor market and interest rates? Check out UMB Investment Management team’s August 2017 Outlook by the Numbers for a quick snapshot on these and other economic drivers.

Also, be sure to review the following videos, articles and interviews for more market and wealth management information…

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*Bloomberg Radio with Pimm Fox and Lisa Abramowicz (audio): UMB’s Mathews: People Conflated Trump Bump With Earnings Rally ‡

*CNBC (video): Tech leadership names will likely rotate

*BloombergMaybe ETFs Aren’t the Reason You Can’t Find Any Stocks to Buy

*CNBC (video): Avoid the Political Distractions

*Ingram’s Magazine: Gray Expectations

*Colorado Biz Magazine: How to Stay Cool as Markets Heat Up

Interested in learning more about our Private Wealth Management division? See what we mean when we say, “Your story. Our focus.

Follow UMB‡ on LinkedIn to stay informed of the latest economic trends.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Inside UMB: Finding a Career Match

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Ram Shankar joined us one year ago today as executive vice president and chief financial officer for UMB Financial Corporation. As our CFO, he is responsible for corporate and regional finance, corporate treasury, regulatory reporting, strategic planning, and investor relations, as well as management and board reporting. Watch the below video and read his Kansas City Business Journal Newsmaker profile to learn more about why Ram says this is his “dream job.”

Are you looking for your dream job? Visit our careers page to search current openings.

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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UMB Leadership Series: Dave Bonner

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Every year, UMB presents Leadership Awards to a select group of associates who best demonstrate the attributes and behaviors our company values most. The UMB Leadership Series highlights our award winners who are leading the way at UMB.  

Dave Bonner, Vice President/Director of Operations, was honored with a Leadership Award for nurturing relationships by demonstrating dignity and respect. In the Q&A session below, Dave explains the importance of building relationships – based on common core values and goals – to achieve success in the business world.

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How would you describe your leadership style?
I would describe my leadership style as participative. Everyone’s voice deserves to be heard. I’m fortunate to be surrounded by talented and knowledgeable team members. We strive toward a common goal of providing the best service to our customers.

What is one characteristic you believe every leader should possess?
It’s difficult to pick one; however, possessing common core values are important for earning respect and fostering an environment in which team members share ideas and feedback.

How do you effectively manage the needs of a business while still nurturing relationships? 
Positive associate experiences and relationships are critical for high-performing companies. They are key building blocks for success and stability and assist in motivation, goal achievement, professional growth and customer satisfaction.

Leaders must nurture and maintain credibility within their teams to gain trust and support during times of change. UMB is committed to delivering the unparalleled customer experience to both our customers and our associates. Focusing on this concept of putting customers first – both internally and externally – fosters an environment of success for our associates, customers and business goals. In the highly competitive banking industry, this is one way UMB sets itself apart.

Is there a person who has had an impact on you as a leader?
My dad was my inspiration. He was humble and had a strong work ethic. He instilled many important values within me that shaped my personal and professional life.

What are some tips on continuing to grow and develop as a leader?
Listen, learn and adapt.

Any parting words of advice?
It’s alright to create fires, as long as they’re controlled and managed.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Monthly Media Update – July

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NPR discusses the fears of a emerging farm crisis with our ag division, CNBC Powerlunch and Bloomberg Radio talk to UMB’s CIO, our Colorado Springs community bank president supports the city’s downtown redevelopment, and why hospitals are spending millions of dollars developing electronic health records are a few media coverage highlights from July.

Stay informed on industry trends and noteworthy company news by visiting our UMB in the News section on umb.com, which is updated weekly for timely viewing.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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CEO Corner: UMBF Earnings Summary

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Yesterday we shared our earnings report for the second quarter of 2017. I’m pleased to share some high-level results and notable milestones achieved during the second quarter.

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Loan growth

Increasing loan balances are a driver of revenue growth for our company, and we again delivered solid results with average balances for the second quarter increasing 9.4 percent year-over-year, led by C&I loans.

Key Metrics

Our ongoing efforts to drive positive operating leverage are paying off. For the first half of 2017, revenue growth outpaced operating expense growth, resulting in increased operating leverage of 3.7 percent. On a year-over-year quarterly basis, operating leverage was 4.7 percent, as revenue increased 10.6 percent while expenses increased 5.9 percent. We remain focused on generating and improving the positive operating leverage as we continue to invest in our business to drive revenue growth.

Over the past 13 years, our net charge-off (NCO) ratio has averaged 0.29 percent, while our loan book has more than tripled. More recently, NCOs have averaged just 0.23 percent quarterly over the past five years.

That said, credit trends can be inconsistent from one quarter to another, and, as such, NCOs for the second quarter came in at $10 million, or 0.37 percent of loans. The increase in commercial charge-offs was driven primarily by one credit to a manufacturing and distribution company, which accounted for more than half the charge-offs in the quarter. We periodically have anomalies in our charge-offs – however, given what we know today and the characteristics of our portfolio, we expect our NCOs to return to a level more in-line with historical rates.

Milestones

Several of our businesses hit remarkable milestones during the second quarter.

  • Healthcare Services saw their number of health savings accounts (HSAs) pass the 1 million mark and posted a 30 percent increase in deposits compared to one year ago. Healthcare Services now holds $1.8 billion in deposits and represents 11.5 percent of our total deposits. In general, HSAs continue to show impressive growth, and as the fifth largest HSA provider (by accounts) in the U.S., we are in an extremely strong position to capitalize on this industry trend.
  • Fund Services had a great quarter as well, as assets under administration topped the $200 billion mark. The team brought in new servicing and custody business during the quarter, which helped drive a $1 million improvement in revenue compared to first quarter.
  • Finally, we saw tremendous growth in our Agribusiness division. According to the American Bankers Association’s Top Farm Lenders list, UMB ranked as the No. 20 Ag lender in the nation, which is a remarkable jump from 2012, when we ranked No. 49.

I would like to thank our dedicated associates for their commitment to customer service. And, of course, none of this would be possible without the trust and support of our clients.


Mariner is the chairman and chief executive officer of UMB Financial Corporation and UMB Bank, n.a. He joined UMB in 1997. Mr. Kemper is active in both civic and philanthropic endeavors. One of the causes he is most passionate about is the arts. He currently serves as a trustee and executive committee member for the Denver Art Museum and is a past board member for The Arts Council of Metropolitan Kansas City.



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A Look at Mariner Kemper’s Office Art Collection

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What kind of art do you think President and CEO Mariner Kemper keeps in his office? Take a look at the fun and historical art adorning the walls of his bank office in this Denver Business Journal  report by Monica Mendoza.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Corporate Earnings and Fidget Spinners

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What do corporate profits and fidget spinners have in common?

Happiness.

While parents may never understand fidget spinners, kids sure love them. Trendy toys make kids happy, even if we don’t understand the intrigue. While we expect fidget spinner fascination to wane and follow the path of prior fads, such as the pet rock, Furbys and silly bands, we expect the opposite of corporate earnings.

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We believe corporate earnings are moving to trend status and have the staying power to grow for the next eight quarters. And this will translate to happiness in the market. Stock markets do well when corporate earnings are stronger than expected, as earnings are the lifeblood of the market.

July 10 marks the unofficial start to second quarter earnings season, and we expect earnings growth momentum to continue based on the following data.

Shift from Earnings Recession to Earnings Expansion

Beginning in the fourth quarter of 2014, corporate earnings evaporated, starting an earnings recession that lasted until the third quarter of 2016 when earnings finally posted a slightly positive gain.

The first quarter of 2017 recorded strong earnings growth of 17.8 percent and sales growth of 8.5 percent. Wage inflation, commodity costs, margins, and share repurchases boosted (and will continue to boost) earnings growth.

Additionally, easy year-over-year comparisons helped these numbers, as earnings declined 5.0 percent last year during the same time period.

(Click to Enlarge)

Industries We’re Watching

Technology and finance sectors are expected to have the highest growth rates among all S&P 500 sectors.

  • Strong demand for cloud-based services and cell phones are leading growth for technology.
  • In the finance sector, the recent increase in interest rates bode well for banks as expanding margins can make more profit on the money they lend out relative to their interest paid on deposits such as checking/savings accounts. Additionally, higher rates should help offset weaker than expected loan growth trends.

Key Drivers: A Look Ahead

Sustainable corporate earnings growth is driven by economic activity and GDP growth, and corporate earnings are highly correlated. Economic global growth continues to improve, with China and Europe’s economic data showing signs of green shoots, and we see a pick-up in domestic growth as well.

We expect second quarter earnings to increase eight percent and revenue growth to grow four percent.

Timing the Earnings Tailwind

The promise of fiscal stimulus is a tailwind for corporate earnings. Tax reform, reduced regulation and infrastructure spending have the potential to increase earnings by 10 to 15 percent.

However, there are two issues with fiscal stimulus. The first is timing—how quickly will things develop? Given current conditions, it appears this will be a 2018 event.

Secondly, fiscal stimulus has a short-term impact on economies and markets. Historically, when you are late in an economic cycle like we are now, fiscal stimulus is effective for only four or five quarters.

Therefore, while potential fiscal stimulus is positive for the long-term, investors will have to exercise some patience and understand that they may be shorter-lived when they are realized.

The Broader View

We have a positive view on the economy and expect GDP to grow at 2.2 percent in 2017. Over time, S&P 500 revenue growth has had a multiplier of 1.5 times GDP growth. This GDP multiplier, plus an expected rebound in oil, supports our 5 percent revenue growth for 2017.

All things considered, we believe the next few quarters of corporate earnings are going to be a trend that will bode well for the markets. Meanwhile, children will continue to play with their fidget spinners – or the next greatest fad – and everyone will be happy.

Follow UMB‡ and KC Mathews‡ on LinkedIn to stay informed of the latest economic trends.

Interested in learning more about our Private Wealth Management division? See what we mean when we say, “Your story is our focus.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


K.C. Mathews is executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute.

Will Reese is a senior securities analyst for the Private Wealth Management division at UMB. He has an Bachelor of Science degree in psychology from the University of Kansas and a Master of Business Administration degree with an emphasis in finance from Avila University. In his role, Will monitors and maintains departmental equity working lists, recommends stocks for external clients, and provides equity research and analysis for internal customers.




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Summer InSight: Retirement, Cash Flow, Loans and the Economy

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Summertime marks the mid-point of the year, so now is a good time to take a moment to check in on your full financial picture, including a review of your goals and progress you’ve made toward milestones. Statistics show almost four million Americans anticipate retiring in the next 15 years, and there are key considerations that can help anyone prepare, whether retirement is right around the corner or 20 years away.

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We encourage everyone to have a solid plan for retirement, which begins with understanding your core numbers: anticipated age of retirement, how much income you’ll need to maintain your current lifestyle after retirement, and the value of your assets and cash savings. Having a clear picture of your current and future states makes establishing priorities simpler. Keeping these numbers in mind as you make other financial decisions ensures your goals and choices remain in alignment.

While retirement planning is critical for your future, there will always be plenty of present-day matters to attend to. This issue of InSight covers several topics related to life events and the economy. Beth Brown, senior vice president and senior wealth advisor, discusses steps to consider when you are faced with an unexpected financial windfall to help ensure your plan supports your objectives. Shelly Addington, vice president and private banking client manager, provides an educational construction loan overview, including what you can expect from the process from start to finish. And KC Mathews, UMB Bank executive vice president and chief investment officer, delivers an economic analysis that covers the impacts of political and policy shifts.

For more details on these and other financial matters, read the full Insight issue or visit our Private Wealth Management page.


Dana Abraham is president of the Personal Banking Division and is responsible for the delivery of comprehensive financial services for consumers across UMB's footprint. She joined UMB in 2005 and has more than 20 years of experience in the financial services industry. Dana earned a bachelor’s degree in business administration with a concentration in both accounting and economics from the University of Louisiana. She is a graduate of Leadership Overland Park and Kansas City Tomorrow Leadership programs.



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UMB Leadership Series: Vicky Hales

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Every year, UMB presents Leadership Awards to a select group of associates who best demonstrate the attributes and behaviors our company values the most. While many of our associates admire, learn from, and are inspired by award winners like Vicky Hales – who was recognized this year in the “Actively Promotes UMB in the Community” category – it’s easy to think of them only as the person they are in the present. However, the narrative of her career has an origin story and an arc that is anchored to the events, experiences and mentors that she has encountered along the way.

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In 1990, Vicky started her career with UMB as a teller in Belleville, Illinois, and in mid-1993, she moved North to the Swansea, Illinois UMB branch to work as the assistant manager. It was there Vicky says she met the first of her mentors, Cathy Hayden who introduced Vicky to the concept of “the unparalleled customer experience.”

“Of course we didn’t call it that back then,” she says, “but that’s exactly what we were doing. Cathy, helped me develop the skills that enabled me to think outside the box in order to be able to provide ‘TUCE’ for my clients.”

Several years later, Vicky continued to build on her career successes, and earned a role as a regional trainer with the responsibility of developing a training program from scratch. This is where she met her next mentor, Joe Thompson.

“Joe was the regional manager of the St. Louis region at the time. He trusted me to take ownership of the creation of a training program that, before I started, had not existed. Joe also helped me to understand and develop the skills to navigate the different dynamics in a work place in order to accomplish goals.”

While many think of navigating group dynamics as only applying to teams you’re working on, Vicky says that it also applies to teams you’re leading, and an important component of that is understanding how to set expectations.

“If you’re out at night and see people on the street, you’ll notice that they naturally shy away from following poorly lit paths because it’s unclear about what’s at the end or how it will get them to where they want to go. Similarly, in my role, I always want illuminate the path to our goal so that people see clearly how we can get there. That means setting clear expectations, and gaining buy-in, from the team about the best way to reach a target.  If you are successful at setting the expectation and gaining the team’s buy-in then driving performance is simply encouragement and celebrating the milestones along the way.  Regular coaching helps too so that you can help remove roadblocks as they arise.”

Most recently Vicky has worked with Consumer Director of the West Territory, Alex Rasmussen.

“Since I’ve met him, he’s always inspired me to reach for the top.  Once he challenged me about why I wasn’t number one in the company, and guess what? I became #1 in the company that year.  He is the very definition of a great leader.”

Today, Vicky says that she has several management philosophies that she tries to live by.

The first of which is next to her desk, and pinned to the right of a picture of Michael Jordan. It states, “The first responsibility of a leader is to define reality.  The last is to say thank you.  In between, the leader is a servant.”

-Max De Pree
Leadership is an Art

The second one is paraphrased to use the feminine pronoun vs the masculine one and says, “A good manager is a woman who isn’t worried about her own career but rather the careers of those who work for her.”

-H.M.S. Burns President
Shell Oil Co.

“By keeping these close to my desk,” says Vicky, “it helps remind me that I’m most proud when I’m serving my team to help them reach goals that are meaningful to them.  Whether it’s a production goal or a promotion, it’s gratifying to me to see their success, and that I’m hopefully passing on the lessons that I’ve learned from the many great leaders who have inspired me.”

Interested in learning more about careers at UMB? See what we mean when we say, “Be Part of Something More.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Meet the Leadership, Begonya Klumb, CEO of UMB Healthcare Services

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Begonya Klumb is one of the most influential business women in Kansas City, and that’s not just our opinion. She has been recognized by KC Business Magazine, the KC Business Journal as well as American Banker Magazine‡ who named her one of the Most Powerful Women in Banking Top 25 Women to Watch.

We recently talked with Begonya to learn more about her background, inspiration, and passion for giving back to her community.

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Tell us about yourself.

I was born and raised in a very happy home in Spain, where my parents still live. I’m blessed to come from a close-knit and supportive family. My maternal grandmother was an important influence on me. She built the family business, a shoe manufacturing and export company. She was extremely business-minded, and had a strong personality. Until her last days, people in town called her “la Jefa,” “the Boss”!  I admire her deeply—she was the inspiration for me to study business and economics.

What was the most important business lesson your grandmother taught you?

People matter most. Her business was one of the largest employers in our small community. The way she treated individuals and their families affected her ability to run the business. She cared and it showed. Employees were eager to work hard for her, and they remained very loyal. To this day, more than 20 years after her passing, people in town will stop me to share stories about my grandmother.

How did you land in the U.S.?

Love! My husband was a student at the London School of Economics when we met. We married and lived in Europe for a few years before coming to the United States in 2001. I attended Yale University for an MBA, and we decided to make our home in Kansas City, where he was born.

We have two children, ages nine and eleven. We’re at that point in our lives where we run the circuit of school activities, soccer games and piano lessons. Weekends are busy, with family, which is perfect.

How has your career evolved at UMB, and what is your day to day like?

Prior to my current role, I served in a number of positions at UMB including Chief Strategy Officer, Director of Corporate Strategy and Development, Director of Financial Planning & Analysis, Director of Mergers & Acquisitions and Director of Corporate Strategy and Investor Relations.

Today, I am the CEO of UMB Healthcare Services. Day-to-day I’m responsible for managing all aspects of the business, which includes nearly $2 billion in assets and deposits.

When your daughter is grown and reflecting back like you are now, what would you hope she says about you to her children?

Your grandmother was part of a generation of business leaders who addressed biases that you will never even notice, because they no longer exist.

What advice would you give to future female business leaders?

Lead from the front.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.pulation Survey/Housing Vacancy Survey, Series H-111, U.S. Census Bureau, Washington, DC 20233.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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