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Happy Thanksgiving

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Happy Thanksgiving to our associates, clients and the communities we serve.

Happy New Year

Fun Fact – Abraham Lincoln declared Thanksgiving as a national holiday in 1863. It was celebrated on the last Thursday of November until 1939 when Franklin D. Roosevelt moved it to the second to last week in November to encourage retail sales during the Great Depression.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.

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Fiduciaries: what are they and why do you need them?

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One of the most important items in your estate planning process is naming the fiduciaries who will execute your wishes and manage your assets when needed. First, you may be wondering what exactly is a fiduciary. Very simply, a fiduciary is a third-party representative who is appointed to act on behalf of someone else.

Two of the most common fiduciaries in estate planning are the personal representative, the person who handles the assets that are included in someone’s last will and testament; and a trustee, someone who handles the assets that have been placed in a trust.

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So, why do you need a fiduciary and how do you choose the right one? Here are some things to keep in mind.

  • Carefully select a fiduciary that you trust to execute your plans.

    Handling an estate may seem like a simple process that anyone can easily manage. However, don’t underestimate both the amount of work and the expertise needed to carry out required duties.

    First, there are a variety of laws that must be navigated, including complicated probate laws. Additionally, accounting for estates and trusts can be extremely technical and require excellent record keeping and tracking. Your fiduciaries must be able to show through proper accounting that they have handled and managed the estate and its assets in an accurate, fair and unbiased manner. If you pick someone who is lacking in knowledge or organizational skills they are at risk for liability and personal fines.

    Tax planning is also a necessary expertise—it’s imperative that an estate is run in a tax-efficient manner. Fiduciaries must understand how their actions affect the estate or trust as well as the beneficiaries. This includes how assets are invested and distributed since trusts are subject to different tax rates and laws than individuals or corporations.

  • There may be disagreements.

    Secondly, you may truly believe that your family members and friends will easily work together and agree on how your assets should be handled. Unfortunately, this is rarely the case. Appointing a family member or friend frequently causes tension or distress that may not have existed before. If not handled properly, this can easily result in stress, damaged relations or, in some cases, legal action between or against your loved ones.

  • You don’t have to be wealthy to use a professional fiduciary.

    Employing a professional fiduciary is cost-effective, and something you should think about even if you do not consider yourself to be a high-net-worth individual. Your immediate reaction may be that it’s more expensive to hire a fiduciary to handle everything, rather than seeking individual counsel from different experts as needed. However, in many cases, a fiduciary’s cost will be equal to or less expensive.

At the end of the day, it’s in your best interest to carefully research your options to select the appropriate fiduciary for your own unique situation. Designating the right person to efficiently and quickly handle these details in a difficult time is truly one of the best gifts you can leave behind.

 

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.


Mr. Tjaden serves as executive vice president and chief fiduciary officer. He is responsible for supervising all fiduciary activities and staff for UMB, including offices in Kansas City, St. Louis, Denver, Phoenix and Salina, as well as the Trust Company in South Dakota. Mr. Tjaden oversees Personal Trust, Custody, Foundations, Trust Legal and Business Support Services within the Private Wealth Management division. He joined UMB in 1977. Mr. Tjaden earned a bachelor’s degree in business administration and political science from Kansas State University. He also earned a Juris Doctor and a master’s in business administration from the University of Kansas. Additionally, Mr. Tjaden is a Certified Trust and Financial Advisor and a member of the Estate Planning Society, the Johnson County Bar Association and the Kansas Bar Association.

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Is Amazon the new Christie’s?

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Would you like to add a Norman Rockwell original to your shopping basket? Well, now you can.

Amazon recently launched a new platform where you can purchase fine art just like you would buy toys, books or laundry detergent on their site. On Amazon Art, you can choose from a wide array of options in price, artists and quality.

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Buying art online

 

 

Research on internet art purchasing shows that online sales tend to be in the $5,000 and under price range and are usually the works of living artists with or without a significant resume. Online buyers also tend to view their pieces as more decorative versus a long-term investment.

 

 

 

There are both benefits and drawbacks to buying fine art online. If you’re thinking about purchasing a piece of art from an online source, consider these benefits:

  • Easy access to more artists: The online option increased the market for sellers by providing an inexpensive, easily-accessible platform and fronting with a brand name.
  • Pick your price point: Sites now offer options that range from $20 to $4 million, so there is something for everyone. With a broader selection of pieces, you will be able to stick to a price point that fits your budget.
  • Customized shopping: Some sites are very user-friendly and give you the option to shop by color, price, size, etc. These sites will only continue to evolve, which will force all players to keep improving their online customer experience to be competitive.

On the flip side, there could be some risk to buying art online:

  • Value risk: Basically, are you getting what you paid for? This is something to think about because there may not be an opportunity to verify authenticity or provenance (or origin) before buying a piece.
  • Transactional risk: Depending on the online seller or site, there may not be a guarantee to return a piece you purchase if you learn it’s not authentic, is misrepresented, etc.
  • Lack of References: Check references before buying a significant piece. Call the gallery directly or arrange to view the piece on site.  While we encourage this practice, you may or may not have this option depending on the online seller.
  • Hidden Costs: You may also encounter added expenses, such as shipping, handling, administrative fees or insurance.

When you look for your next piece of art, keep your options open and these tips in mind. If you are thinking about buying a significant piece, you may find traditional shopping methods are best.  But if you’re interested in looking online, there are many options to choose from ­– just remember to proceed with caution.

 

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.


Jan Leonard is senior vice president and managing director for charitable trusts, private foundations and fine art services. She joined UMB in 2003 and has more than 25 years of experience in the management of private and public organizations. Leonard earned a bachelor’s degree from Arkansas Tech University and a master’s degree in business administration from Ottawa University in Ottawa, Kan. She is also a graduate of the Cannon School of Foundation Management.

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Connecting the Dots: Commercial client forum

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You’ve probably attended industry or community events with time set aside for networking. But, have you ever met at your company’s bank for an event dedicated solely to networking and sharing ideas? Earlier this year, UMB’s commercial banking team brought together a group of our clients to share ideas and perspectives about everything from succession planning to product evolution and other leadership topics. We sat down with Brian Beaird, senior vice president in UMB’s Commercial Banking department, to discuss this informative client forum.

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What was your goal with the forum?

We wanted to bring in a handful of our clients so they could discuss leadership topics and expand their business networks. The goal was to create meaningful opportunities to develop relationships beyond traditional commercial banking interactions. We wanted to connect our clients to others like them so they could discuss real-life challenges and take away tangible ideas to consider for their businesses.

Who did you invite to this event?

We invited senior leadership from ten middle market clients across our eight-state footprint. The clients represented various industries, from construction to non-profits. They also represented various types of leadership within the company. Three of the businesses are family run, ranging from first to third generation leadership.

Specifically, what did the attendees discuss?

In addition to the general leadership topics, we utilized articles from the Harvard Business Review to guide our discussion. The articles created a framework for facilitated discussion that created unique perspectives based on the various styles of leadership in the room and industry-specific scenarios that enabled group members to think differently about their business.

What surprised you about their conversations?

The clients who attended provided a unique perspective that helps us to better understand how various industries are performing and how they are projected to perform. Additionally, it was interesting to watch the attendees make connections to similar issues they’ve experienced, even if they were in different industries. For example, one attendee was concerned with an aspect of his company’s succession plan. Another attendee had a very similar experience in his company and the two were able to talk after the forum and exchange ideas on how to help solve the problem.

What was the outcome of these meetings?

The companies we bring in for these forums are geographically separated, but they have begun to do business together and leverage the experiences of the group as an information source for decision-making. Two attendees have actually developed a business partnership as a direct result of this meeting.

Having done two of these forums since last fall, we continue to follow up with the attendees to ensure the conversation continues. In fact, one member requested that we help lead a strategic off-site meeting for their company.

The most important takeaway we’ve seen from these meetings is the company leaders have realized it’s important for them to branch outside of their networks like this on a regular basis. Communicating with other companies outside the standard, day-to-day business interactions can help you create partnerships you may never have developed otherwise. You may even be able to learn from the experiences of other companies and apply them to your own.

 

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.


Mr. Beaird is a senior vice president in UMB’s Commercial Banking department. He is responsible for commercial banking strategy, which focuses on the development of growth through our people and various markets. He joined UMB in 2009 and has 14 years of experience in the financial services industry. He earned an MBA and a master’s degree in human resources from Webster University in Kansas City, MO. Mr. Beaird is also the co-founder of the Kids to Kings youth basketball organization.

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Watching the Forecast: Ag interest rates may soon rise

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If you are an agribusiness leader, you have many variables to consider in today’s market. Weather patterns spanning across the too wet/too dry continuum continue to baffle producers. Grain and commodity prices have started to gain strength, and both are up from recent levels but are still below the highs of the past several years. And land prices continue to hold (for now) at historically high levels in many areas of the country.

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These factors are all important, but there is one other variable that may be the most important when planning for your financial future: interest rates. With historically low rates currently being offered for operating lines of credit, as well as some floating rate term debt financing that has been put in place during the last four to five years, it’s important to remember that interest rates can change as fast and dramatically as corn prices.

As the American economy improves and the Federal Reserve Bank looks at beginning to ease its securities purchasing, the stage is set for a return to “normal” interest scenarios during the next couple of years. As that happens, producers with large floating rate exposure can expect to see their interest expense double or even triple during that same time frame. The range between fixedand floating rates will also expand, returning to levels similar to those before the financial crisis. When that happens, borrowers with only floating rates will be at the mercy of the financial markets in terms of controlling their interest expense.

Reviewing your balance sheets and future cash flows now – with an eye toward the next several years – can both produce large potential interest expense savings and protect against possible loan repayment challenges. As you look ahead, here are four steps to better financial planning:

  1. Review your current debt and forecast projected debt levels for the next four years. Include your amounts, repayments required, current rates, and most importantly, whether your rates are fixed or floating.
  2. Optimize how you use your fixed assets (land or equipment) for securing the minimum level of total debt anticipated each year. This should be done regardless of whether it is presently for revolving/working capital lines or fixed assets.
  3. Determine your available cash flow for debt service during the next four years.
  4. Structure new fixed-rate debt now by using a conservative debt service coverage ratio (1.3 to 1 or greater).

By fixing rates now, with proper use of fixed assets as collateral, and carefully forecasting future operational cash flows, you can effectively lock in today’s historically low rates, save tens of thousands of dollars or more in interest expense, and be far better prepared to manage other variables that may come into play.

 

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.


Mr. Watson serves as president of the UMB Agribusiness Division. He joined UMB in August of 2005 and has also served as the president of the UMB Kansas region. Watson is a graduate of Wabash College in Crawfordsville, Indiana with a major in Psychology. He has also attended The Colorado School of Banking, The National Commercial Lending School (where he has also been an instructor), and the Stonier Graduate School of Banking.

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The business of doing good: How to manage your non-profit’s finances (Part 3)

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Recently, UMB hosted a group of almost 40 representatives from Colorado Springs non-profits to talk about a variety of financial management tips for non-profit organizations. In my previous blog posts I highlighted two topics that came up during the conversation: streamlined fundraising processes and supporter/employee enthusiasm. The third subject we discussed was the idea that non-profits need a bank that acts as an extension of the organization.

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Most people probably don’t automatically make the connection between a bank and a non-profit, but the two organizations can work together to create a productive partnership. An important part of the support non-profits need to thrive is the relationship they have with their bank. Since funding is the primary way to ensure that the non-profit can continue to operate, good financial management is key. A strong relationship between a non-profit and their bank may give the staff peace of mind and help them to focus on doing good things for their community and less about their financial management.

Some challenges that non-profits face include getting sufficient funding, board and associate development and staff retention. Your bank may be able to direct you to resources that can help you overcome these challenges:

A good relationship with your bank can also help your organization achieve a sound financial structure. In addition to keeping the organization up and running, a solid balance sheet could help attract new leadership to your organization. One of our non-profit clients came to us with a potential board member who was interested in joining the organization’s investment board. The potential board member was passionate about the organization but concerned about their investment risk management. After talking with UMB and the non-profit leadership about the investment risk, he was no longer worried and joined the board because he could focus on his passion for the organization.

Non-profits offer many invaluable services to their communities. While these organizations differ from for-profit businesses in their mission and goals, they have the same business principles. Treating the financial management of a non-profit like a business helps the organization in the long run because they’re able to focus on serving the needs of their community.

 

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.


Mr. Doyle is community bank president for UMB’s Colorado Springs region. He is responsible for guiding strategic direction in the Colorado Springs region as a member of the Colorado management team. He joined UMB in 2011 and has eight years of experience in the financial services industry. He earned a bachelor’s degree in finance from Florida State University in Tallahassee, Fla. and a master’s degree in business administration from Oral Roberts University in Tulsa, Okla.

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Veterans Day

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Veterans DayHappy Veterans Day

To those who have or are currently serving our country, we thank you for defending and protecting our nation. Your invaluable contributions and sacrifices are greatly appreciated and never forgotten.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.

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Infographic: 1913 vs. 2013 (Part 3)

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What does your grocery budget look like today? Imagine what it would’ve been in 1913!

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1913 vs. 2013 Infographic Part 3

1913 vs. 2013 Part 1 and Part 2.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.

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Janet Yellen: The Next Chairperson of the Federal Reserve

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Janet who? Janet Yellen, the seemingly-unknown current vice-chairperson of the Federal Reserve(the Fed), was nominated by the President to succeed Ben Bernanke after several White House favorites were first considered. Bernanke, the current chairman of the Fed, is vacating the position he has held since 2006 at the end of January 2014.

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Yellen now awaits the Senate confirmation process, which she should easily glide through as the Republicans appeared to support her as a candidate while the President sought alternative contenders earlier in the process. She appears to have a very good track record on judging appropriate policy. Whether a dove (low rates and inflation) or a hawk (inflation a threat), what’s important is supporting the appropriate policy at the appropriate time…which she has done. She is battled-tested, having worked in key policy roles through both the Asian financial crisis in 1997and the recent global financial crisis.  She has spent most of the past two decades as a leading voice within the Fed, initially as a member of the Federal Reserve Board of Governors, then as president and chief executive officer of the San Francisco Federal Reserve Board, and over the past four years as vice chairman of the Federal Reserve.

We think Yellen, like Bernanke, may view the risk of the economy becoming stuck in a low-to-moderate growth path great enough to provide ongoing risk insurance, such as delaying the tapering of quantitative easing or even, if necessary, providing additional stimulus.

Yellen is characterized by those who know her as a brilliant thinker who focuses on the human side of economics.  As vice chair of the Fed, she was credited with forming the Fed’s communication policy including the chairman’s quarterly press conference. This press conference – and communication in general – may become more critical as we transition from a period of large-scale asset purchases to one of strong “forward guidance” from the Fed. Yellen has also been a proponent of maintaining the Fed’s zero interest rate policy and continuing the Fed’s asset purchase program.

If confirmed, she will be the first women to lead the Fed.  We think she is extremely qualified and will do an exceptional job.  We don’t expect much change with respect to the current Fed policy, and neither does the market. Upon her nomination in early October, the market let out a big yawn; markets didn’t move much then and haven’t since.

 

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 joined UMB in 2002. As 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 has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. 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. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.

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My Home is Worth What? (Hometown Perspective: Denver)

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UMB serves communities across an eight-state footprint. Each region is different, with its own personality and local economy. With that in mind, we’re launching a new Hometown Perspective series where you can gain insight into UMB and the communities we serve.

HomeAs a recent home buyer in Denver, I was pleasantly surprised to see that my home had increased in value by almost 40 percent over the last several months. No, I’m not a real estate genius with an uncanny ability to spot a home at low price and flip it for a profit.  Actually, I bought my home with the idea that I would live there for the rest of my life.

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So why do I care about a rise in home value if I’m not planning to sell any time soon, if ever? The answer is that my home is a series of projects and this boost in value gives me the equity to spend on home improvements. I will be able to add a floor over the subfloor in the living room and remodel the kitchen with new cabinets and a double oven with a warming drawer. This has been the plan all along but now I can complete these projects much sooner than I expected.

 

So if you’re like many in the Denver area and your home has increased in value recently, what should you do? Put a “For Sale” sign in your front yard? Head to your local bank and apply for a Home Equity Line of Credit (HELOC)? It all depends on your own situation and your long-term plan.

  • Selling

    If you’re thinking about selling your home because the value has increased, you might consider sprucing it up a bit and then contacting your realtor. Add a coat of paint to some of the walls or have the carpet professionally cleaned. Then call up a real estate professional to work with you on selling your home.

  • Renovating

    If you plan to stick with your home for the long haul, it might be a good time to consider using your equity to start a remodeling project. If you have any questions or concerns, reach out to a trusted source of advice like your financial advisor or local banker.  They are usually well-equipped with experience, knowledge and tools that can help you decide.

Whatever you choose to do, be cautious and don’t jump into any big decisions without doing research. Look up the value of your home on sites like Zillow* and Trulia*. If you’re planning to apply for a HELOC, talk to a financial professional at your local bank about how much of your home’s value to borrow. You might even consider getting multiple opinions. If you plan to sell, you can consult your realtor on the best steps to take to prepare your home and when is the best time to put it on the market.

While you can work with a good real estate market to your advantage, your home is an asset that you should use wisely.

 

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 Bank, n.a. has provided these links for informational purposes only, and in no way endorses or insures the accuracy of the information contained therein.


Ms. Hales is vice president, financial center manager for the UMB financial center located in the Capitol Hill neighborhood in Denver, Colo. She is responsible for planning and executing sales routines with branch staff, coaching all team members. She joined UMB in 1990 and has 23 years of experience in the financial services industry.

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