Blog   Tagged ‘invest’

A note from our CFO

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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.

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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.

  • Depositor
    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 president and chief executive officer of UMB Bank and vice chairman of UMB Financial Corporation. Prior to this role, Hagedorn served as chief financial officer and chief administrative officer of UMB Financial Corporation. He joined UMB in March 2005.

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Your culture drives innovation

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Mike Hagedorn is back to expand on the idea of company culture. This time, he highlights the importance of allowing your culture to drive innovation.

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Mr. Hagedorn is president and chief executive officer of UMB Bank and vice chairman of UMB Financial Corporation. Prior to this role, Hagedorn served as chief financial officer and chief administrative officer of UMB Financial Corporation. He joined UMB in March 2005.

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Building long-term wealth with your HSA

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So you know what a health savings account (HSA) is and that you can use it for long-term savings. Now what? How exactly do you use your HSA as a savings tool? You can use them as a compliment to your retirement strategy to build wealth for qualified2 medical expenses, including tax-free Medicare premiums.

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Don’t sell yourself short

According to the Devenir Year-End 2012 survey, the average HSA individual account balance was $1,807. Most people aren’t taking full advantage of their HSA. The IRS allows a maximum HSA contribution of $3,250 for individuals1 or $6,450 for family1 coverage for 2013 (plus a catch-up amount of $1,000 more for people over 55 years old).

Medical costs are a major financial burden for retirees. Fidelity’s widely-recognized annual study shows an average healthy couple retiring in 2012 at age 65 needed $240,000 for out-of-pocket health care costs (after Medicare and not including long-term care costs).

Everyone faces the possibility of high medical costs in their later years so you should start planning sooner rather than later. Starting to save earlier adds more to savings, and delays limit the amount of the nest egg. Long-term returns may vary, but like all savings plans, it’s always a good idea to start early.

Gain triple tax advantages

It’s also a good idea to always first take advantage of any offered match for your HSA or 401(k). While many further invest in their 401k or IRAs, your HSA may be a more appealing choice in terms of flexibility, tax advantages and long-term growth potential.

It’s important to consider taxes in long-term investing because of the compounding of savings. The comparison chart below shows the key tax considerations for each type of account.

 Building long-term wealth with your HSA

 * Not taxed if funds are withdrawn for qualified medical expenses.
**  Tax references are at the federal level.  States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. If you have questions about your tax implications, consult your tax advisor.
***
Investment products are not FDIC insured, have no bank guarantee, and may lose value.

HSAs have the potential to offer triple tax advantages for individuals – something not seen in other retirement accounts. Only an HSA offers tax benefits at deposit**, during the account’s life and upon a qualified2 medical expense withdrawal. So a person saving for future medical needs can avoid taxes at all three stages in this life cycle.

Invest for long-term growth

Major HSA providers now offer multiple investment options. Learn more about what kind of investment options are available with your employer’s HSA. If your HSA encourages long-term savings, consider participating in the multiple investment options available. And take advantage of any tools offered by your employer to help you plan for the future, including investment objectives, risk tolerance and mix of assets across all accounts.

You have an opportunity to prepare for future health care expenses during retirement or later in life. Start learning more about your employer’s HSA and how you can use it to your advantage.

 

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.

 

1 If you do not meet HSA eligibility requirements for the full tax year, you may not be able to contribute the maximum amount. Please consult your tax advisor or employer for more information.

2 Qualified medical expenses are those defined under Section 213(d) of the Internal Revenue Code.

 

Investments in securities, whether through a Money Market Sweep Account or through a Self-directed Brokerage Account are:

Not FDIC-Insured • May Lose Value • No Bank Guarantee.

 Securities  through your self-directed HSA brokerage account are offered through UMB Financial Services, Inc., member FINRA (www.finra.org), SIPC (www.sipc.com).  UMB Financial Services Inc. is a subsidiary of UMB Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks.


Dennis Triplett is chief executive officer of UMB Healthcare Services. He is responsible for the strategic direction in healthcare banking and manages the sales and marketing activities, plus product development and relationship management. Dennis has more than 29 years of experience in the banking industry. He currently serves as board chairman for the Employers Council on Flexible Compensation, chairman of America’s Health Insurance Plans’ HSA Leadership Council and a charter member of the American Bankers Association’s HSA Council.

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