A note from our CFO
This year, UMB has celebrated many achievements in reaching our 100-year milestone. One thing we are particularly proud of is our ongoing effort to be transparent in our communication.
You may have read the news articles about two specific things: depositor exiting UMB‡ and our capital raise project‡. First and foremost, I want to clearly state that these two topics are completely unrelated. Anyone who has ever been through a common stock offering knows it’s not something you can pull off in a couple of days. The timing of the two events was unfortunate, because it created incorrect assumptions. We did not execute a capital raise because of the depositor.
To comply with securities rules related to our stock offering, we were limited in what we could say about the depositor. However, now that we are on the other side, I would like to take the opportunity to provide more context.
A few notes on the depositor. The organization is still a UMB customer. We previously disclosed that the deposits would move over the next 120 days, and as of today, the deposits remain on our balance sheet. Additionally, the customer will continue to work with UMB on their asset servicing business even after the deposits have exited.The decision to move the deposits off of our balance sheet was a result of ongoing dialogue we have had with the customer for the past couple of years. UMB has had a longstanding risk management strategy, and during a review of potential deposit concentrations, we approached the customer to reduce their deposits. They did so, but because of continued growth in the customer’s business, the deposits began increasing again. UMB will continue to monitor our deposit concentrations and will continue to make decisions that are best for our company and our shareholders. We have multiple unique sources of deposits: Institutional Banking and Investment Services (IBIS), Fund Services and Health Savings Accounts (HSAs) just to name a few, so it is important that we are continuously monitoring and adjusting as appropriate.
- Capital Raise
Our company has been growing steadily over the past few years and that is evident in our financial results. We have experienced robust balance sheet growth, especially in loans. After we completed our recent forecasts, it was clear that the expectations for growth would continue. We needed to grow our capital to support our balance sheet growth. We plan to use the money raised to support our continued growth and for general corporate purposes.When I tell my kids what I’ve been up to the last couple of months, I essentially tell them that I went to New York and asked strangers and current shareholders to invest in our company. And based on our consistent and stable growth for more than 100 years, they gave us more than $200 million.A simple analogy—but it essentially describes our capital raise campaign. Also important to note, the majority of the investors are new to UMB which validates our current investors, and is a testament to the work our associates have been doing over the last century.
I hope this gives you some color to our recent news. It’s a fantastic time for UMB and I look forward to what the next 100 years will bring!
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. Hagedorn is vice chairman, chief financial officer and chief administrative officer of UMB Financial Corporation. He joined UMB in March 2005. He is responsible for corporate and regional finance, corporate treasury, audit, compliance, regulatory reporting, strategic planning, investor and government relations, mergers and acquisitions, management reporting, corporate development, corporate security, properties, enterprise project management, corporate legal, management information systems and the operations technology group.