UMB Financial
Annual Report 2013

Plain-text annual report

Quality endures. 2013 ANNUAL REPORT UMB Financial Corporation We are a diversified financial services holding company aligned into four strategic business segments to best serve our customers and achieve long-term growth opportunities. Revenue by Segment Net Income by Segment $83.0M $6.1M Asset Servicing As of December 31, 2013 Total Revenue Market Cap Total Assets $495.6M $85.6M Banking $120.1M $14.2M $126.4M $28.1M Payment Solutions Institutional Investment Management $825.1M Earnings Per Share (Diluted) $3.20 $2.9B 5-Year Earnings Per Share Growth (CAGR) (Diluted) 6.10% 16.9B Dividends Per Share $.87 Assets Under Management $41.4B Price to Earnings Ratio 19.78 Percentage Noninterest Bearing Deposits 38.0% Percent Revenue From Fees 59.6% i Our Footprint We serve customers across the entire country. Headquarters Banking Presence Scout Investments Prairie Capital Fund Services Payment Solutions Corporate & Personal Trust NASDAQ UMBF Capital Raised (4.5M Shares Issued) $231.4M Headquarters KC, MO Years in Business 101 Locations / ATMs 112/309 UMBF Online UMBFinancial.com Acquisitions Last Ten Years 23 Online Banking UMB.com Associates 3,498 Follow UMB ii Industry Industry totals represent the most recently reported quarterly data available as of 2/10/14. Source: SNL Financial -33.3% Dividend Growth Third quarter through 12/31/13 2.21% Nonperforming Loans To Total Loans 80.7% Loans-To-Deposits Ratio 13.35% Tier 1 Capital Ratio +24.4% Noninterest Income Growth During the past five years. UMBF As of December 31, 2013 +125% Dividend Growth UMB increased its quarterly dividend 4.7 percent in 2013, the 13th time since July 2003, a total increase of 125 percent. .47% Nonperforming Loans To Total Loans UMB has maintained high asset quality through all kinds of economic conditions. 47.8% Loans-To-Deposits Ratio We are in the business of lending money and have plenty of liquidity to meet our customers’ needs. 13.61% Tier 1 Capital Ratio Unlike the industry, our Tier 1 capital ratio remains strong without needing government assistance. +58.6% Noninterest Income Growth Our noninterest income over the last five years again outpaced the industry, demonstrating that our diversified business model remains effective. iii Quality Standards For more than 100 years, we have been guided by doing what’s right, not what’s popular and it has served our company well in all types of economic climates. Quality People 3,498 associates come to work every day to deliver the unparalleled customer experience to each other and our customers. Quality Products We are nimble enough to provide our customers with the products they need to help their businesses grow. Quality Service Our brand promise, Count on more®, underpins our every action. Quality Relationships Most financial services companies say they “know” their customers, but at UMB the depth of our relationships sets us apart from the competition. Quality Balance Sheet Our balance sheet has grown 54.1 percent in the past five years, and provides us with the strength and stability to service our customers’ needs. Quality Growth Net income in 2013 reached a record $134 million, or a five-year CAGR of 6.4 percent. 1 MARINER KEMPER Chairman & Chief Executive Officer Enduring quality drives success. Dear Fellow Shareholders, In reporting strong performance for UMB in 2013, with double-digit growth in loans and fee income, we are most proud of something more enduring: the quality of who we are as a company. As a financial services company with diverse relationships across many walks of life, we have seen enough economic and financial cycles to know a range of diversified quality products and services, backed by the latest technologies and very personal attention. This kind of quality builds strong, long- term relationships. UMB is recognized for our stability and integrity by our customers, the industry and the capital markets. The outcome is what you see in UMB’s that enduring quality is what matters. financial results: a balance sheet that So we focus on ensuring that UMB and gives us the strength to serve customers’ our customers will continue to thrive needs in any economy, and long-term over the long haul. growth in revenue, earnings and market value to benefit our shareholders. The pages that follow provide a thorough report on UMB’s 2013 results, Looking at the business environment insights from our leadership team and for 2014 and beyond, we see potential detailed financial statements. In this letter, I would like to comment on the broader environment and our longer- term prospects. challenges in two main areas: economic cycles and regulatory expansion. I want to briefly address each of these—and assure you that UMB is The future is bright for UMB, and it’s because we are driven by values that have sustained this company for more than a century. Quality, for UMB, means doing what is right, not what is popular. It starts with high standards and committed people, who deliver prepared to continue to deliver exceptional performance. Much as we all desire calm waters, economic cycles have always been the norm. In recent years, we experienced the Great Recession in 2007-08 with moderate growth since then. The stock 2 market took a dive in late 2007 and has roared back since early 2009. Interest rates, after a long decline, are being held artificially low through Far from solving that big-bank problem, since 2008, we have seen less than a dozen of the largest banks grow to control fully two-thirds of total U.S. monetary policy. banking assets. When will the economy take a turn? No one knows, but history teaches us that these factors do move up and down—so we can be confident that change is in our collective future. We have positioned UMB to endure economic swings with a solid balance sheet and extraordinary credit quality —and to benefit when interest rates begin to move up. As for UMB, we are confident our company will continue to thrive and grow. Our business model is solid, and we are tough competitors, in fact, with great advantages over the large banks. Our 3,498 associates are committed to delivering the unparalleled customer experience. Our relationships are deep. And we are well-positioned for the future. As to the second big challenge, the saddened by the recent passing of philosophy of expanding regulatory my father, R. Crosby Kemper, Jr. His On a final note, we are all profoundly intervention is affecting all areas of our economy—including financial services. In the last four years, we have increased our own audit and compliance departments by 62 percent in total with additional increases expected in 2014. We do believe, however, that policy- makers in Washington overreacted following the financial crisis. The signature “reform,” the Dodd-Frank Act, so far has spawned more than 9,000 pages of new regulations, which will take 24 million hours a year for private enterprise to comply. Piling on more regulation not only imposes higher costs of doing business, which ultimately are passed on to the consumer, but also has a counterproductive impact. To see the failure, you do not have to look further than Washington’s posturing about “too big to fail” banks. tremendous impact on the growth of UMB, the Kansas City community and the entire Midwest will be recognized for generations to come. We will diligently work to continue his legacy of supporting the businesses, residents and communities in which we work and live. See In Memoriam on page 39. These enduring values have not only driven UMB’s success in the past— they will drive our future success. Thank you for your loyalty as part of our quality story at UMB. Sincerely, Mariner Kemper Chairman & Chief Executive Officer March 1, 2014 3 MARINER KEMPER Chairman & Chief Executive Officer PETER J. DESILVA President & Chief Operating Officer MICHAEL D. HAGEDORN Vice Chairman, Chief Financial Officer & Chief Administrative Officer 4 What does our future hold? To answer questions on the minds of shareholders, we sat down with maintaining top-tier credit quality, as always. Total assets grew 13.3 percent. UMB’s executive management team: Mariner Kemper, Peter deSilva and Mike Hagedorn. Excerpts of that conversation follow: What is your view of UMB’s 2013 performance—and what can we expect in 2014? Mariner: UMB delivered strong growth in 2013 by sticking to the values that have guided us through 100 years in banking and financial services—doing the right thing for customers. Our solid growth in 2013 was the result of consistent execution across UMB’s businesses, especially our single- minded focus on delivering what we call the unparalleled customer experience. We are very proud of our UMB associates and the momentum we have generated. For 2014, we expect UMB to continue to deliver growth in both our core banking and fee-based businesses. Peter: UMB is reaping the benefits of longstanding customer relationships we have built across our businesses. In 2013, growth initiatives in lending Fee-based services, including all UMB asset management businesses, produced 7.4 percent growth in noninterest income as total assets under management grew 27.9 percent during 2013. Mike: Our business model as a diversified financial services company is paying off in growing revenue and net income, while managing risk and stabilizing earnings through the low end of the interest rate cycle. The essential points in our time-tested model are dedication to high-quality credit, growth of diverse revenue streams, low-cost funding through deposits, and commitment to a strong balance sheet. This model is working—that is the bottom line. Fee-based financial services contributed 59.6 percent of UMB’s revenue in 2013—a standout in the industry. How are these businesses performing? Mike: Strategically, these fee-based businesses are especially important because the revenue streams they resulted in a 14.7 percent increase in contribute allow us to maintain high as-stated loans for UMB Bank, while standards of credit quality on the 5 Net Interest Income Millions of Dollars Noninterest Income Millions of Dollars Net Income Millions of Dollars Net Interest Income Millions of Dollars Net Interest Income Millions of Dollars Noninterest Income Millions of Dollars Noninterest Income Millions of Dollars Net Income Net Income Millions of Dollars Millions of Dollars $333 $320 $317 $311 $303 $492 $458 $414 $360 $310 $134 $123 $107 $90 $91 $311 $311 $303 $303 $333 $333 $320 $320 $317 $317 $492 $492 $458 $458 $414 $414 $360 $360 $310 $310 $134 $134 $123 $123 $107 $107 $90 $90 $91 $91 09 10 11 12 13 09 10 11 12 13 09 10 11 12 13 09 09 10 10 11 11 12 12 13 13 09 09 10 10 11 11 12 12 13 13 09 09 10 10 11 11 12 12 13 13 350 300 250 200 150 100 50 0 500 400 300 200 100 0 150 150 120 120 90 90 60 60 30 30 0 0 lending side without reaching for 150 350 350 yields. We can also deploy cash flows 300 300 from our fee-based businesses into 120 90 lending, generating higher average yields and supporting UMB’s ability to grow. 200 150 200 150 250 250 60 Payment Solutions delivered strong 500 500 growth in credit and debit card purchase volumes, resulting in a 6.6 percent increase in interchange revenue. 400 400 UMB Healthcare Services is an area that we have invested in and feel 300 300 200 200 100 100 strongly about, and we were able to 30 Peter: We were pleased with the performance of all of our fee-based businesses in 2013. Our Institutional 50 50 0 0 0 grow our HSA and FSA accounts by 33 percent in 2013. In addition to 100 100 providing fee income, these healthcare 0 0 Investment Management segment made up of Scout Investments led the way, achieving very strong net inflows of more than $5 billion, which deposits support the lending activities of the bank as a core funding vehicle. On balance, we were very pleased with the performance of all of our was a record for Scout. The business fee-based businesses and look for was buoyed by the success of Scout’s strong contributions again in 2014. fixed-income products, including our unconstrained bond strategy. We are also pleased the Scout International Fund, led by Jim Moffett, celebrated its 20th anniversary with more than $10 billion under management. UMB Fund Services, which makes up our Asset Servicing segment, provides back office technology and administrative services to asset managers. This segment had a very strong year with good growth in new business and great How did UMB Bank achieve strong loan growth in 2013, and what do you expect in 2014? Mariner: We have taken some strategic steps that produced growth in lending: • First, we have expanded into high- quality transactional loan opportunities, a relatively new area for us, while adhering to the highest standards in our underwriting. customer satisfaction. • Second, while we are not a big commercial real estate lender and 6 “The essential points in our time-tested model are dedication to high-quality credit, growth of diverse revenue streams, low-cost funding through deposits, and commitment to a strong balance sheet.” Mike Hagedorn don’t do speculative deals, we have at the end of 2013 compared to year- increased lending on real estate, end 2008. We are reaping the benefits with the right parameters in place. of building solid long-term relationships • Third, we have built a very strong and operating from financial strength. lending team and structured good incentives to reward them for bringing in quality business. Capable, dedicated lenders are growing the business. • And, fourth, because our How do you plan to keep the momentum in loan growth for 2014 and beyond? commitment to credit quality permeates everything we do, our Mariner: We are in a good position to continue growing loans. Lending lending growth is comprised of long-term relationships. We are not “reaching” for lower-quality credits, so the customers we serve are here for the long haul. is very competitive, and our value proposition resonates with customers because UMB is still committed to relationship banking. In many of our As a result, we have been able to achieve continued loan growth because of our relationships and emphasis on credit quality. When competitors had to pull back during the financial crisis to fix their loan problems, the quality of UMB’s portfolio enabled us to commit to growth. We continue to outperform in as-stated loan growth, ranking in the top 10 percent of banks in 2013 with a 14.7 percent increase. If you look at a five-year time horizon, UMB’s loans were 46.9 percent higher 2013 Earnings Growth 9.2% 6.0% 2013 Revenue Growth 7 LEADING THE FINANCIAL SERVICES INDUSTRY +220.3% Ten Year Total Return UMBF Total Return for the years 2003 through 2013 was 220.3 percent. In that same period, total returns for the S&P 500 Stock Index and the SNL US Banks Index were +104.3 percent and -6.3 percent, respectively. Source: SNL Financial $41.4B Total Assets Under Management During the past five years, we have grown total AUM 326.8 percent from $9.7 billion to $41.4 billion due to our acquisitions, organic growth, market performance and net flows. 59.6% Percent Revenue From Fees With nearly 60 percent of our revenue derived from our fee-based businesses, we have the flexibility to grow net income in all rate environments. 8 Total Return UMBF vs. S&P 500 and S&P Banks Index $ 200 $ 150 $ 100 $ 50 08 $126 $99 $82 09 $146 $111 $88 10 $149 $86 $80 11 S&P 500 $228 SNL US Banks $159 UMBF $144 13 $172 $116 $96 12 This summarizes the cumulative return experienced by UMBF shareholders for the years 2008 through 2013, compared to the S&P 500 Stock Index and the SNL US Banks Index. In all cases, the return assumes a reinvestment of dividends. Source: SNL Financial markets, we compete with large national banks that can’t do relationship banking and lending the way we do. We still have officers in the field, we go on customer visits, we like to walk the shop floors and listen, and we build enduring, long- term relationships. That’s different from the shorter-term approach our large competitors take. Our strength is building time-tested relationships with customers—and our results show that it works. 250 200 150 Peter: In addition to long-term relationships, UMB has a very low cost of funds, which helps us gain market share in a competitive lending market, and our bankers are very 100 50 motivated. Geographically, we have increased penetration across our footprint, particularly in metropolitan areas such as Kansas City, Denver, St. Louis and Phoenix. In 2013, we also entered the Dallas market and launched a division to expand lending to agribusinesses. So we expect continued success, going forward, in growing our high-quality loan portfolio. 9 In this low interest rate environment, how should shareholders think about yields on earning assets? And are you positioning UMB for an upturn in interest rates? Mariner: The monetary authorities have created an ultra-low rate environment, and the Federal Reserve has started its tapering of the asset purchase program. As a result, rates have stayed very low since 2008 and no one knows when they will move up. Low yields continue to be a tough issue for all banks. UMB has two advantages in working to enhance yields, and they are unique. First, as a result of rapid growth in deposits, UMB has about 50 percent of our earning assets in fixed-income securities. We have embarked on a rotation of assets out of securities into high-quality loans, so the overall yield is increasing and net interest income margins are growing. Second, as Peter mentioned, UMB’s low cost of funds helps us compete very well in lending. Mike: As for anticipating the upturn in interest rates, UMB focuses intently Nonperforming Loans Our credit quality metrics continue to outpace the industry. 4% 3% 2% 1% 2.21% Industry Average 0.47% UMBF 09 10 11 12 13 on risk management. In the history of banking, there are many examples plans. The Institutional Investment Management segment depends to a when people have said short-term degree on performance of the markets, rates are low, there’s no yield, so I’m and no one knows whether the coming going to ‘go long’ on the investment portfolio because that’s where the yield is—and then rates go up and it’s year will bring more volatility or a positive market trend. Scout Investments has positioned its offering very well for a bloodbath. We’re not going to do institutional and individual investors, with that. In positioning the bank’s balance diversified products and a disciplined, sheet for a rise in rates, we are very sensitive to the assets involved. As we rotate funds from short-term securities into loans, we are getting the longer durations and better yields, but the credit quality is very good. Overall, our portfolio has a relatively neutral position, right in the middle— not too long so you get caught in the trap if rates rise fast, and not too short so you miss out on yields while long-term focus on total returns. Our equity and fixed-income managers have earned the respect of the industry, and in 2013 assets under management grew to more than $31 billion. In 2013, we also grew our international assets under management. We see global expansion as a source of growth in both Scout Investments and UMB Fund Services, since so much investment activity, roughly two-thirds of the world’s market waiting for the cycle to turn. capitalization, is overseas. How about growth in non-bank financial services? What initiatives are you taking in asset management Tell us more about the business model. Why do you focus on revenue diversity, with so much emphasis and other businesses? on fee-based services? Peter: We are very focused on sales growth for our non-bank services in Mariner: UMB is unique. We’re more than just a bank—we’re a financial services 2014, and each segment has its own company that owns a good-sized regional 10 “UMB is unique. We’re more than just a bank—we’re a financial services company that owns a good-sized regional bank, an institutional asset management company, a fund services business, and a payments platform.” Mariner Kemper 2013 Noninterest Income Growth 2013 Net Interest Income Growth 7.4% 4.1% 9.2% 2013 Net Income Growth 40% 60% 60% Noninterest Income 40% Net Interest Income bank, an institutional asset management company, a fund services business, and a payments platform. That diversification, with nearly 60 percent of revenue coming from non-bank services, is key to UMB’s success. This did not come about by accident— it’s a core strategy backed by years of investment and organic growth. Precisely because UMB’s hallmark is our commitment to high standards of asset quality, we have built our presence in these attractive, fee-based services to stabilize and balance our returns throughout the interest rate cycle. Cash flows from these businesses, combined with industry-leading low- cost deposits, enable UMB to remain the high-quality lender that we always have been. With diversified sources of revenue, we operate from a position of strength. There are a lot of organizations that would love to be where we are. Many banks in our size category are trying to figure out how we’ve done it—they would like to emulate it. What they will figure out is that you can’t create this overnight. It takes a different way of thinking about the business than a 11 Total Assets Under Management Billions of Dollars Total Assets Under Management Billions of Dollars Average Shareholder Equity Average Shareholder Equity Millions of Dollars Millions of Dollars $41.4 $41.4 $33.1 $33.1 $27.9 $28.0 $27.9 $28.0 $1,337 $1,337 $1,258 $1,258 $1,139 $1,139 $1,067 $1,067 $1,007 $1,007 $12.7 $12.7 09 10 09 11 10 12 11 13 12 13 09 10 09 11 10 12 11 13 12 13 traditional bank manager’s approach, 50 50 along to maintaining a very strong balance 1500 1500 and the business comes from deep relationships. You can’t go build Scout Investments and its reputation 40 40 in a short period of time. It is hard to 30 30 sheet. The financial crisis in 2008 proved the wisdom of safeguarding against economic and market cycles, because 1200 1200 UMB was able to keep growing while 900 900 build a fund services business, or any other institutions had to pull back. 20 20 of the other segments. So replicating UMB’s business model is not easy. It took this company 100 years to 10 10 be excellent at it. 0 0 600 600 Mike: The goal of the capital raise was to give UMB the flexibility of a very strong 300 300 position going forward, and the offering 0 0 You issued 4.5 million shares in 2013 and raised $231.4 million in capital. Why did you decide to raise capital, and what do you plan to do with those proceeds? Mariner: UMB is a growth company— that’s how we think of ourselves. Our balance sheet has been growing for the past decade. Particularly in recent years, we have achieved strong growth in loans, and we expect to continue that. So this was the impetus for raising capital. We decided to raise our capital level to support the growth we continue to see in UMB’s balance sheet. We’ve had a commitment all enabled us to stay in the top half of our industry in Tier 1 Risk-Based Capital Ratio. There was no regulatory need— we raised capital to support our growth, not to address any issues. Importantly, our goal was an increase in permanent capital, in the form of common equity, which we see as a gold standard. When investors took a look during the equity raise in September, the response to our value proposition was so strong that our offering was very successful, and this reinforced the value of UMB’s stock. 2013 Book Value Increase 5.0% 12 “Many banks in our size category are trying to figure out how we’ve done it—they would like to emulate it. What they will figure out is that you can’t create this overnight.” Mariner Kemper Would you talk about the strength of struck the global financial system in your balance sheet, and how it sets 2008 taught us the dangers of that you apart? Mike: UMB is known as a very well- capitalized, safe-and-sound financial approach. UMB stuck to our principles, and avoided the issues of the crisis. Even as we grow, we pay close attention to the asset quality and institution. Our commitment to a financial strength that ensure flexibility strong balance sheet is a core element for the future. Our balance sheet also of UMB’s business model. It’s part of reflects shared values—we’ve found our DNA. There have been times in that customers seeking a long-term economic history when some banks financial partner, as well as shareholders, and financial companies placed their place a high value on the safety built bets on riskier businesses or growth into UMB’s approach. for growth’s sake. The calamity that Risk-Based Capital Ratios Risk-Based Capital Ratios Net Interest Margin Net Interest Margin 14.43% 14.43% 13.61% 13.61% 3.43 3.43 3.21 3.21 2.94 2.94 2.75 2.75 2.55 2.55 8% 8% 8.41% 8.41% 4% 4% 4% 4% Tier 1 Leverage Tier 1 Leverage Tier 1 Capital Tier 1 Capital Total Risk-based Total Risk-based 09 09 10 10 11 11 12 12 13 13 Regulatory Minimum UMB Regulatory Minimum UMB 13 “Service is personal, so all of our associates are engaged in the pursuit of the unparalleled customer experience. ” Peter deSilva As revenue grows dramatically, is it a challenge to contain expenses we are providing just a good level of service, a really great level of service or for UMB? Peter: We have grown rapidly compared to our peers, including several important acquisitions. As the organization and revenue grow, of course, additional costs are a natural by-product of our continued growth. However, it goes without saying that we strive to achieve operating leverage through managing an unparalleled level of service. This is why we survey our customers to measure how we are doing, to see if we’re making progress. The unparalleled customer experience is always aspirational —it’s a pursuit and something that will never end. Peter: Listening has a lot to do with the unparalleled customer experience. For every customer, an unparalleled experience is different. So for one, it expenses and increasing revenue. is a UMB personal banker remembering Our approach is flexible: While managing costs, we also will deploy resources strategically to take advantage of opportunities to accelerate growth and to capture higher returns. Both sides contribute to growing net income. UMB has identified “the unparalleled customer experience” as a competitive advantage—what does that mean, and how do you achieve it? Mariner: Our vision to create the unparalleled customer experience is broader than just a one-time interaction at the point of sale. It encompasses the whole process. Every touchpoint that we have with a customer affects whether they feel 14 her customer’s name when she comes to the window. For others, it is user-friendly mobile technology to help manage their daily financial lives. We launched a blog in 2013 (visit http://blog.UMB.com) to put a human face on UMB—it’s full of our people sharing financial advice, perspectives on the economy and behind-the-scenes views. Service is personal, so all of our associates are engaged in the pursuit of the unparalleled customer experience. You’ve talked about how important UMB associates are to success. What’s your approach to recruiting and retaining the best people? Mariner: I particularly value our 3,498 associates. It’s important to me to get out, visit and know the teams we have Customer Satisfaction is correlated closely with financial returns. While slightly softer in 2013, UMB continues to post above-average customer satisfaction scores in the industry. $106.5M $122.7M $134.0M Net Income in Millions $89.5M $91.0M 56% 63% 67% 67% 65% Customer Satisfaction 09 10 11 12 13 in place. This group of people, both individually and taken as a whole, represent UMB’s biggest strategic advantage. They are our differentiation passion to delivering our Count on more brand promise. That’s the key to great relationships with customers and, therefore, good business for from other financial service companies. many years to come. What’s more, there is a proven correlation between the level of associate satisfaction and the customer satisfaction a company can deliver— and, in turn, customer satisfaction is correlated closely with financial returns. Our people appreciate that we have a strong moral compass and ethical standards that create trust. We spend time talking with our associates, measuring what affects these intangibles of our business, and figuring out how to maintain and improve UMB as a great place to work. Peter: Even as UMB grows larger, we want to keep the right atmosphere. We work hard to be responsive to individual needs, encouraging market Thank you all for your interest, support and loyalty. Sincerely, Mariner Kemper Chairman & Chief Executive Officer Peter J. deSilva President & Chief Operating Officer based approaches to different needs of our operating environments. At UMB, we are lucky to have some of Michael D. Hagedorn Vice Chairman, Chief Financial Officer & Chief Administrative Officer the best associates in the industry— and we’d like to say thank you for their hard work, dedication and March 1, 2014 15 Banking $13.6B Liquidity in Total Deposits We remain a highly liquid company, with more than enough capacity to meet loan demand, which grew 14.7 percent in 2013. .23% Quality Assets We continue to have an industry leading net charge off ratio. In 2013, it was nearly 19 basis points below the industry average. Source: SNL Financial, as of December 31, 2013 13.61% Strong Capital Position We remain a well capitalized financial services company. Our capital raise in 2013 allows us the flexibility to invest in growing our businesses. Funds deposited into UMB Bank are FDIC insured. Investments are not deposits in UMB Bank, n.a. or any other financial institution and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 16 UMB offers a comprehensive suite of commercial, small business and consumer banking services, as well as full-service investment and private wealth management capabilities. Diverse Revenue Streams Our business strategies begin by focusing on the diverse and growing needs of our customers. Percent of Noninterest Income 54.1% Trust & Securities Processing 17.1% Deposit Service Charges 12.6% Bankcard Fees 4.2% Trading & Investment Banking 3.9% Equity Earnings on Alternative Investments 3.3% Other 2.3% Brokerage Fees 1.7% Gains on Securities Sales 0.8% Insurance Fees $11.9B Average Total Deposits $6.2B Average Loans We experienced 13.4 percent core deposit growth. Average loans grew 18.5 percent in 2013. Loan Composition Deposit Composition UMB was again named one of America’s Best Banks by Forbes for the fifth straight year. Data is based on regulatory filings of public banks and thrifts through the third quarter of 2013. ©2013, Forbes Loan Composition Media LLC. Used with permission. Deposit Composition Loan Composition Deposit Composition Loan Composition Deposit Composition Deposit Composition Loan Composition +16.8% 51.0% Commercial & Industrial 51.0% Commercial & Industrial 26.1% Commercial Real Estate 26.1% Commercial Real Estate 8.7% HELOC Total debit and credit card 8.7% HELOC 6.5% Credit Cards purchase volume grew 6.5% Credit Cards 4.4% Consumer Real Estate year-over-year to $6.8 billion. 4.4% Consumer Real Estate 2.3% Real Estate Construction 1.0% Consumer 2.3% Real Estate Construction 1.0% Consumer 51.3% Interest-Bearing Demand 51.3% Interest-Bearing Demand and Savings Deposits and Savings Deposits 38.0% Noninterest-Bearing 38.0% Noninterest-Bearing Demand Deposits Demand Deposits 10.7% Time Deposits 10.7% Time Deposits 17 51.0% Commercial & Industrial 51.0% Commercial & Industrial 26.1% Commercial Real Estate 26.1% Commercial Real Estate 8.7% HELOC 8.7% HELOC 6.5% Credit Cards 6.5% Credit Cards 4.4% Consumer Real Estate 4.4% Consumer Real Estate 2.3% Real Estate Construction 1.0% Consumer 2.3% Real Estate Construction 1.0% Consumer 51.3% Interest-Bearing Demand 51.3% Interest-Bearing Demand and Savings Deposits and Savings Deposits 38.0% Noninterest-Bearing 38.0% Noninterest-Bearing Demand Deposits 10.7% Time Deposits Demand Deposits 10.7% Time Deposits Commercial Banking Our commercial model is the hallmark of our business, providing both sophisticated banking solutions and personal attention. $5.0B Total Commercial and Commercial Real Estate loans in 2013. Commercial & Industrial Loans Billions of Dollars $3.3 $2.9 $2.2 $2.0 $1.9 $1.1 $4.6 $4.1 $3.5 $2.9 $2.9 09 10 11 12 13 09 10 11 12 13 09 3.5 Commercial Real Estate Loans Billions of Dollars 3.0 $4.6 $4.1 $3.5 $2.9 $2.9 $3.3 $2.9 $2.2 $2.0 $1.9 $1.7 $1.4 $1.4 $1.3 2.5 2.0 1.5 $1.1 1.0 0.5 0.0 09 10 11 12 13 09 10 11 12 13 09 10 11 12 13 2.0 1.5 1.0 0.5 0.0 5 4 3 2 1 0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 5 4 3 2 1 0 2.0 1.5 .47% 1.0 Nonperforming loan ratio versus the industry average of 2.21 percent. 0.5 Data from SNL Financial as of 2/10/14 0.0 61% Commercial 30% Real Estate - Commercial 4% Consumer - Other 3% Real Estate - Residential 2% Real Estate - Construction 18 $1.7 $1.4 $1.4 Partnering with NorthPoint Development Since 2013 UMB agreed to finance NorthPoint’s first spec building $1.3 at the 1,000-acre Logistics Park Kansas City adjacent to the BNSF Railway Co. intermodal facility in Edgerton, KS. The facility will eventually reach 10 million square feet as BNSF’s Kansas City container traffic is projected to grow from approximately 300,000 containers a year to more than a million containers annually in 20 years. 10 12 11 13 “UMB took the time to understand the project and its potential for market expansion in Kansas City. After meeting personally with the UMB leadership team, they got it and wanted to be a part of this opportunity. It was essential to have a stable financial partner show commitment from the very beginning.” Nathaniel Hagedorn CEO, NorthPoint Development Commercial Lender-Originated Loans $667M In new line of credit commitments for 2013. +22.1% Increase in average commercial earning assets. $11.3B Corporate Trust Assets Under Administration Top 50 U.S. Banks for Farm Lending. Top 25 U.S. Banks for Automated Clearing House origination. Source: ABA Source: NACHA $1.26B Total commercial cardholder purchase volume. Billions of Dollars $1.26 $1.17 $1.04 $.82 $.65 09 10 11 12 13 +8.1% Commercial card purchase volume experienced a strong increase over last year. UMB Sponsors Local PGA TOUR Professional $1.4 $1.4 $2.9 $3.3 $1.7 $1.3 $1.1 $1.9 $2.2 $2.0 “UMB has been a long-time supporter of communities throughout the Midwest, and I couldn’t think of a better sponsor to represent throughout the tour. From a values and community involvement standpoint, UMB is exactly the kind of company you hope takes an interest in your talent and chooses to show their support for you.” 13 09 10 13 12 11 11 09 12 10 Brice Garnett Gallatin, MO UMB Expands to Dallas In 2013, UMB opened its first Dallas Commercial Banking office. UMB has served clients in Texas for the past 30 years. $4.6B Total commercial deposits grew 13.4 percent in 2013. Billions of Dollars $4.6 $4.1 $3.5 $2.9 $2.9 09 10 11 12 13 5 4 3 2 1 0 19 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2.0 1.5 1.0 0.5 0.0 Consumer & Small Business Banking Our wide variety of products and services are customizable for any consumer or small business need, and we have the scale to continue to help as you grow. #1 Kansas City market share leader in deposits for the third year in a row at more than 16.5 percent. #1 First in average account tenure relative to national competitors. Source: FDIC 2013 Market Share Report Source: Fiserv #3 Ranked third in overall lowest account attrition relative to national competitors. Source: Fiserv 80% 80 percent satisfaction index score for UMB retail banking, compared to 78 percent for the banking industry in 2013, according to a national comparison. 22% Since 2009, home equity line commitments have grown nearly 22 percent. $566.1M Home Equity Line of Credit balances in 2013. “UMB provided us with very creative and strong business suggestions that we were able to implement. No other bank took the time to truly investigate and present to us. Our relationship has been very positive, and we would certainly recommend UMB to any business looking for a true banking partner.” Mike Mastous President, Delta Disaster Services of Denver 20 “I have banked with UMB for almost 10 years and, even though I am no longer located near a UMB banking center, I continue this relationship because of the customer service. One of UMB’s front-line banking professionals is the best I’ve ever seen in my 25-year career.” Scott Roller UMB Customer +10% Mobile banking grew 10 percent and online banking customers grew 8 percent more than 2012. $3.7B Total Consumer and Small Business Deposits at the end of 2013. $161.8M Small Business loans on average grew 24 percent. Private Wealth Management UMB’s Private Wealth Management team is focused on understanding each client’s personal story. Our comprehensive solutions in private banking, investment management, trust management and estate planning are backed by the resources and experience of a multi-billion dollar asset management firm, ensuring advisors can put the focus where it belongs—on the client. Your Story. Our Focus.TM Private Banking Focuses on You Let our dedicated Private Bankers design a plan that fits your personal credit and banking needs for today, and tomorrow. Investment Management Services Should Be Customizable Employing our suite of investment products and solutions, we can tailor a plan designed to achieve your unique objectives. Trust Management Requires Experience Managing Risk Creates Confidence Discover the confidence that comes with personalized trust and custodial services backed by the experience of serving clients for more than a century. From estate planning to wealth transfer, our specialized knowledge and innovative strategies can help you protect what’s most important. Assets Under Management by Type $10.2B Assets Under Management Billions of Dollars Excluding Scout Investments $10.2B $2.9B $7.3B $8.8B $2.2B $6.6B $7.6B $2.0B $5.6B $6.8B $1.7B $5.1B $4.5B 52.4% Investment Advisory 31.2% Trust 9.5% Charitable 4.2% IRAs 2.7% Other 47.7% Private Banking Deposits 5-year compound annual growth rate. Prairie Capital Management Private Wealth & Institutional Asset Management 35.1% Private Banking Loan 5-year compound annual growth rate. Average Private Banking Deposits Millions of Dollars Average Private Banking Loans Millions of Dollars $850 $821 $645 $390 $255 $293 $212 $151 $127 $97 09 10 11 12 13 09 10 11 12 13 21 09 10 11 12 13 08 09 10 11 12 19.0% Year-over-year increase in average production per Financial Advisor. $2.93B $1.90B $2.15B 34.7% 33.0% 20.0% 8.7% 3.6% $4.41B 47.3% $3.90B 26.5% 18.2% 3.3% 4.7% Institutional Investment Management $31.2B Total Assets Under Management Scout Investments assets under management continued to grow, ending 2013 at $31.2 billion—$7.7 billion higher than 2012. $11.3B International Equity Strategy The Scout International Equity Strategy reached more than $11 billion in strategy assets, which include the fund and separate accounts, as of December 31, 2013. $5.3B Total Net Flows Scout Investments realized total net flows in funds and separate accounts in excess of $5.3 billion in 2013. 22 Scout Investments, a global asset manager, provides equity and fixed income strategies to institutional and individual investors. Our investment teams, supported by distribution, provide candid market insights and seek to outperform over market cycles. To learn more visit ScoutInv.com. $19.9B $10.2B $19.7B $10.9B $31.2B $15.4B $15.8B $23.5B $12.2B $11.3B Total Assets Under Management Billions of Dollars Reams Fixed Income Strategies Scout Equity Strategies Scout Equity Strategies - International Equity - International Equity ADR - Emerging Markets - Global Equity - Equity Opportunity - Mid Cap Equity - Small Cap Equity $31.2B $19.9B $10.2B $19.7B $10.9B $23.5B $12.2B Reams Fixed Income Strategies $15.4B - Low Duration - Intermediate - Core - Core Plus - Long Duration $15.8B - Unconstrained $6.9B $6.9B $9.7B $8.8B $11.3B 09 10 11 Client Assets by Type 12 13 $6.9B $9.7B $8.8B 09 10 11 12 13 Top Contributors to Net Strategy Flows $3.7B Scout Unconstrained Bond Strategy $1.5B 34.7% Scout Mid Cap Equity Strategy 33.0% $1.90B 20.0% 8.7% 3.6% 08 Equity Opportunity Strategy $4.41B 47.3% Top 10% $3.90B Scout ranked 48th out of 787 fund companies in $2.93B Net Fund Flows during 2013. $2.15B Source: Strategic Insight Simfund 26.5% 18.2% 3.3% 4.7% 09 10 11 12 49% Mutual Funds 17% Public 10% Non-Profit / Other 9% Corporate 9% Sub-Advisory 4% Endowment & Foundations 2% Taft-Hartley Launched the Equity Opportunity Strategy in November 2013. The strategy focuses on companies that use leverage in their capital structure. 23 Celebrated the 20th anniversary of the Scout International Fund and Strategy in September 2013. Congratulations to the veteran team, and to Jim Moffett, lead portfolio manager for more than two decades of seasoned insights and consistent returns. Payment Solutions +16.2% 5-Year Compound Annual Growth Rate Our total purchase volume has shown strong growth from $3.2 billion in 2008 to $6.8 billion in 2013. $6.8B Total Purchase Volume UMB experienced continued growth in purchase volume as the amount of total purchase spend on UMB cards increased again in 2013, driven by Healthcare Services activity. +31.2% 5-Year Compound Annual Growth Rate UMB Payment Solutions grew to 1.1 billion in total average annual deposits in 2013. 24 UMB is pioneering solutions to improve the way our customers do business. We ensure Commercial, Small Business, Institutional, Healthcare and Correspondent Bank customers have the tools to succeed. Total Purchase Volume Total purchase volume increased to $6.79 billion in 2013, continuing the positive trend from $3.46 billion in 2009. $4.28B $3.46B Healthcare Retail Debit Commercial Credit Retail Credit Private Label Credit Other 27.1% 35.9% 19.1% 11.1% 3.5% 3.2% $6.79B 43.6% $5.81B $5.22B $6.01 34.7% $5.39 31.9% 21.5% 28.0% $4.28 $3.20 27.1% 35.9% 13 19.1% 11.1% 3.5% 3.3% 20.6% 39.4% 19.5% 11.8% 5.1% 3.6% $3.43 18.6% 11.8% 2.0% 2.6% 30.1% 19.3% 16.4% 3.1% 3.1% 26.3% 19.2% 14.4% 2.8% 5.4% 09 10 11 12 Health Savings Account Deposits & Assets Millions of Dollars $642 $431 $323 $280 $191 09 10 11 12 13 700 800 “My client was a little hesitant to switch to a new HSA administrator since it can be an administrative nightmare. However, Heather Harte and UMB made it so easy. Heather is phenomenal! She helped our client every step of the way—from day one to implementation. My client is happy they made the change to UMB. I would recommend UMB over any other bank out there.” 600 500 400 100 300 200 0 Mercy Ibarra Senior Account Executive MJ Insurance, Inc. $3.0B Total card spending for all Health Savings Accounts and Flexible $1.04 Spending Arrangements. $1.26 $1.17 $.82 $.65 09 10 11 4.2M 12 13 Healthcare spending account cards (includes single use cards). #27 27th largest issuer of Commercial Cards. Source: Nilson 2013 $22B Acting as Program Administrator, UMB’s FDIC Sweep Program hit a record high of more than $22 billion in 2013. 25 1.5 1.2 0.9 0.6 0.3 0.0 08 09 10 11 12 Number of HSA and FSA Accounts In Millions 4.17 $6.01 $5.39 8.4% 3.14 2.47 1.81 1.34 $4.28 $3.43 3.1% 28.0% 30.1% 3.1% 19.3% 16.4% 5.4% 31.9% 26.3% 2.8% 19.2% 14.4% $3.20 3.6% 20.6% 39.4% 5.1% 19.5% 11.8% 3.3% 27.1% 35.9% 3.5% 19.1% 11.1% 09 10 11 12 13 08 09 10 11 12 $6.79 43.6% $5.81 $5.22 $4.28 $3.43 20.6% 39.4% 19.5% 11.8% 5.1% 3.2% 09 10 11 12 13 21.5% 18.6% 11.8% 2.0% 2.6% 6.5M Commercial Credit Card Transactions 22.0% 19.4% 13.3% 2.2% 8.4% 34.7% 22.0% 2.2% 19.4% 13.3% Asset Servicing +23% Assets Under Administration Total assets under administration grew from $156.0 billion to $191.0 billion in 2013. $6.39B Investment Managers Series Trust Assets Assets in the Investment Managers Series Trusts grew 90.2 percent, from $3.36 billion to $6.39 billion as of December 31, 2013. The Investment Managers Series Trust II was launched in 2013, due to the success of the original Investment Managers Series Trust. +48% Fund Accounting/Administration Assets Serviced 48 percent increase in mutual fund accounting/administration assets serviced. 26 UMB Fund Services (UMBFS) offers a broad suite of administrative services for mutual funds and alternative investments such as hedge funds, as well as turnkey solutions such as series trust and collective trust services. $162.4B $179.3B $191.0B Total Assets Under Administration Includes fund clients receiving custody services from UMB Bank, n.a. $206.4B $191.0B $156.0B 09 10 11 12 13 $206.4 $191.1 $179.3 $162.4 $155.8 09 10 11 12 13 Mutual Fund Services - Fund Accounting / Administration - Transfer Agency - Distribution Services 1 - Custody 2 - Cash Management 2 Alternative Investment Services - Financial Statements - Performance Reporting - Tax Preparation & Compliance - Audit Coordination - Offshore Fund Services - Regulatory Administration - Custody 2 1 Services provided by UMB Distribution Services, LLC 2 Services provided by UMB Bank, n.a. Investment Managers Series Trust Assets Billions of Dollars $6.4 $3.4 $1.6 $.72 $.33 09 10 11 12 13 Through the Investment Managers Series Trusts, UMB Fund Services helped clients launch 17 new mutual funds in 2013. 8 7 6 5 4 3 2 1 0 47.3% 26.5% 18.2% 3.3% 4.7% “Highly Commended” Our alternative investments division was Highly Commended at the 2013 HFMWeek Awards as a top administrator under $2.15B $30 billion for funds of hedge funds. $1.90B 34.7% $4.41B +20% $3.90B $2.93B Transfer Agency revenue increased 20 percent in 2013. 33.0% 20.0% 8.7% 3.6% 08 09 10 11 12 200+ UMBFS is currently serving more than 200 client firms. Includes fund clients receiving custody services from UMB Bank, n.a. “Top Ten” UMBFS was named a “Top Ten Workplace” for the fourth straight year by the Milwaukee Journal Sentinel. 27 SELECTED FINANCIAL HIGHLIGHTS Dividends Declared Per Share Dividends Declared Per Share Dollars Dollars $.79 $.79 $.75 $.75 $.71 $.71 Return On Average Assets Return On Average Assets Return On Average Equity Return On Average Equity Diluted Earnings Per Share Diluted Earnings Per Share Dollars Dollars .89% .92% .89% .86% .92% .89% .89% .86% .82% .82% 8.9% 9.4% 9.8% 8.9% 10.0% 9.4% 10.0% 9.8% $3.20 $3.20 $3.04 $3.04 $.87 $.87 $.83 $.83 8.5% 8.5% $2.64 $2.64 $2.26 $2.20 $2.26 $2.20 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 Return On Average Assets Return On Average Assets Return On Average Equity Return On Average Equity Diluted Earnings Per Share Diluted Earnings Per Share Dollars Dollars Dividends Declared Per Share Dollars Dividends Declared Per Share Dollars 2.5 8 8 1.0 1.0 0.8 0.8 12 10 12 10 3.5 3.0 .89% .92% .89% .86% .89% .86% .92% .89% .82% .82% 8.9% 9.4% 9.8% 8.9% 10.0% 9.4% 10.0% 9.8% 0.6 0.6 $3.20 $3.20 $3.04 $3.04 8.5% 8.5% $2.64 $2.64 0.4 0.4 $2.26 $2.20 $2.26 $2.20 0.2 0.2 0.0 0.0 $.87 $.87 2.0 $.83 $.83 6 $.71 $.79 6 $.79 $.75 $.75 $.71 4 2 0 4 2 0 1.5 1.0 0.5 0.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0.0 0.0 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 09 10 11 09 12 10 13 11 12 13 1.0 1.0 0.8 0.8 28 1.0 1.0 0.8 0.8 12 10 8 6 4 2 0 12 10 8 6 4 2 0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0.6 0.6 0.6 0.6 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.0 0.0 0.0 0.0 FIVE-YEAR FINANCIAL SUMMARY Dollars In Thousands Except Per Share Data Earnings Interest income Interest expense Net interest income Provision for loan losses Noninterest income Noninterest expense Net income Average Balances Assets Loans, net of unearned interest Securities Interest-bearing due from banks Deposits Long-term debt Shareholders’ equity Year-End Balances Assets Loans, net of unearned interest Securities Interest-bearing due from banks Deposits Long-term debt Shareholders’ equity Nonperforming loans Allowance for loan losses Per Share Data Earnings - basic Earnings - diluted Cash dividends Dividend payout ratio Book value Market price High Low Close Ratios Return on average assets Return on average equity As a % of loans: Allowance for loan losses Nonperforming loans Risk-based capital ratio: Tier 1 Total Average equity to average assets $ 2013 348,341 15,072 333,269 17,500 491,833 624,178 133,965 15,030,762 6,221,318 7,034,542 663,818 11,930,318 4,748 1,337,107 16,911,852 6,521,869 7,051,127 2,093,467 13,640,766 5,055 1,506,065 30,706 74,751 $ $ 3.25 3.20 0.87 26.77 % 33.30 65.44 43.27 64.28 0.89 % 10.02 1.15 0.47 13.61 14.43 8.90 Please refer to 10-K filing for additional information. 2012 2011 2010 $ 339,685 19,629 320,056 17,500 458,122 590,454 122,717 $ 343,653 26,680 316,973 22,200 414,332 562,746 106,472 $ 346,507 35,894 310,613 31,510 360,370 512,622 91,002 $ 2009 356,217 53,232 302,985 32,100 310,176 460,585 89,484 13,389,192 5,251,278 6,528,523 547,817 10,521,658 5,879 1,258,284 14,927,196 5,690,626 7,134,316 720,500 11,653,365 5,879 1,279,345 28,103 71,426 12,417,274 4,756,165 5,774,217 837,807 9,593,638 11,284 1,138,625 13,541,398 4,970,558 6,277,482 1,164,007 10,169,911 6,529 1,191,132 25,581 72,017 11,108,233 4,490,587 5,073,839 593,518 8,451,966 19,141 1,066,872 12,404,932 4,598,097 5,742,104 848,598 9,028,741 8,884 1,060,860 25,142 73,952 10,110,655 4,383,551 4,382,179 492,915 7,584,025 32,067 1,006,591 11,663,355 4,332,228 5,003,720 1,057,195 8,534,488 25,458 1,015,551 23,263 64,139 $ $ 3.07 3.04 0.83 27.04 % 31.71 $ $ 2.66 2.64 0.79 29.70 % 29.46 $ $ 2.27 2.26 0.75 33.04 % 26.24 $ $ 52.61 37.68 43.82 45.20 30.49 37.25 44.51 31.88 41.44 2.22 2.20 0.71 31.98 % 25.11 49.75 33.65 39.35 0.92 % 9.75 0.86 % 9.35 0.82 % 8.53 0.89 % 8.89 1.26 0.49 11.05 11.92 9.40 1.45 0.52 11.20 12.20 9.17 1.61 0.55 11.30 12.45 9.60 1.49 0.54 13.11 14.18 9.96 29 CONSOLIDATED BALANCE SHEETS Dollars in Thousands Except Per Share Data December 31, December 31, Assets Loans Allowance for loan losses Net loans Loans held for sale Investment securities: Available for sale Held to maturity (market value of $231,510 and $129,495 respectively) Trading securities Federal Reserve Bank stock and other Total investment securities Federal funds sold and securities purchased under agreements to resell Interest-bearing due from banks Cash and due from banks Bank premises and equipment, net Accrued income Goodwill Other intangibles Other assets Total assets Liabilities Deposits: Noninterest-bearing demand Interest-bearing demand and savings Time deposits under $100,000 Time deposits of $100,000 or more Total deposits Federal funds purchased and repurchase agreements Short-term debt Long-term debt Accrued expenses and taxes Other liabilities Total liabilities Shareholders’ Equity $ 2013 6,520,512 (74,751) 6,445,761 1,357 6,762,411 209,770 28,464 50,482 7,051,127 87,018 2,093,467 521,001 249,689 78,216 209,758 55,585 118,873 2012 $ 5,686,749 (71,426) 5,615,323 3,877 6,937,463 114,756 55,764 26,333 7,134,316 89,868 720,500 667,774 244,600 69,749 209,758 68,803 102,628 $ 16,911,852 $ 14,927,196 $ $ 5,189,998 7,001,126 491,792 957,850 13,640,766 1,583,218 107 5,055 153,450 23,191 4,920,581 5,450,450 540,269 742,065 11,653,365 1,787,270 - 5,879 182,468 18,869 15,405,787 13,647,851 Common stock, $1.00 par value; 80,000,000 shares authorized, 55,056,730 shares issued and 45,221,237 and 40,340,878 shares outstanding, respectively. Capital surplus Retained earnings Accumulated other comprehensive income Treasury stock, 9,835,493 and 14,715,852 shares, at cost, respectively Total shareholders' equity 55,057 882,407 884,630 (32,640) (283,389) 1,506,065 55,057 732,069 787,015 85,588 (380,384) 1,279,345 Total liabilities and shareholders' equity $ 16,911,852 $ 14,927,196 Please refer to 10-K filing for additional information. 30 CONSOLIDATED STATEMENT OF INCOME Dollars in Thousands Except Per Share and Share Data Years Ended December 31, Interest Income Loans Securities: Available for sale - taxable interest Available for sale - tax-exempt interest Held to maturity - tax-exempt interest Total securities income Federal funds and resell agreements Interest-bearing due from banks Trading securities Total interest income Interest Expense Deposits Federal funds and repurchase agreements Other Total interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest Income Trust and securities processing Trading and investment banking Service charges on deposit accounts Insurance fees and commissions Brokerage fees Bankcard fees Gains on sales of securities available for sale Equity earnings on alternative investments Other Total noninterest income Noninterest Expense Salaries and employee benefits Occupancy, net Equipment Supplies and services Marketing and business development Processing fees Legal and consulting Bankcard Amortization of other intangible assets Regulatory fees Class action litigation settlement Other Total noninterest expense Income before income taxes Income tax expense Net Income Per Share Data Net income - basic Net income - diluted Dividends Weighted average shares outstanding Please refer to 10-K filing for additional information. 2013 2012 2011 $ 229,665 $ 217,391 $ 219,076 75,202 37,113 3,286 115,601 193 1,918 964 81,013 35,960 2,264 119,237 121 1,789 1,147 85,120 33,079 1,687 119,886 102 3,284 1,305 348,341 339,685 343,653 13,183 1,739 150 15,072 333,269 17,500 315,769 265,948 20,641 84,133 3,727 11,470 62,031 8,542 19,048 16,293 491,833 339,691 39,291 49,207 20,387 22,703 57,791 18,703 18,381 13,218 9,129 - 35,677 624,178 183,424 49,459 133,965 3.25 3.20 0.87 41,275,839 17,416 1,884 329 19,629 320,056 17,500 302,556 225,094 30,359 78,694 4,095 11,105 60,567 20,232 422 27,554 458,122 319,852 37,927 43,465 21,045 24,604 51,191 17,980 18,154 14,775 9,447 - 32,014 590,454 170,224 47,507 122,717 3.07 3.04 0.83 40,034,428 $ $ 24,628 1,712 340 26,680 316,973 22,200 294,773 208,392 27,720 74,659 4,375 9,950 59,767 16,125 3 13,341 414,332 294,756 38,406 42,728 22,166 20,150 49,985 15,601 15,600 16,100 10,395 7,800 29,059 562,746 146,359 39,887 106,472 2.66 2.64 0.79 40,034,435 $ $ $ $ 31 EXECUTIVE LEADERSHIP As of December 31, 2013 Dana Abraham President, Private Wealth Management Craig Anderson President, Commercial Banking Jim Cornelius President, Institutional Banking & Investor Services Peter deSilva President & Chief Operating Officer Todd Duncan President, Institutional Asset Management Mike Hagedorn Vice Chairman, Chief Financial Officer, & Chief Administrative Officer Darren Herrmann Senior Vice President, Treasurer Daryl Hunt Executive Vice President, Operations & Technology Group Andy Iseman Chief Executive Officer, Scout Investments Brian Kaufman Managing Director, Prairie Capital Management Mariner Kemper Chairman & Chief Executive Officer David Kling Executive Vice President, Chief Risk Officer Heather Miller Executive Vice President, Sales, Marketing & Communication Christine Pierson Executive Vice President, Consumer Services Dennis Rilinger Executive Vice President, General Counsel Jim Sangster Vice Chairman, UMB Bank, n.a. Larry Smith Executive Vice President, Organizational Effectiveness & Chief Human Resources Officer Scott Stengel Senior Vice President, Deputy General Counsel Chris Swett Executive Vice President, Chief Credit Officer Tom Terry Chief Lending Officer Dennis Triplett Chief Executive Officer, UMB Healthcare Services Brian Walker Chief Accounting Officer Clyde Wendel Vice Chairman, UMB Bank, n.a. John Zader Chief Executive Officer, UMB Fund Services 32 BOARD OF DIRECTORS & ADVISORY BOARDS As of December 31, 2013 UMB Financial Corporation Paul D. Bartlett, Jr. 1 Chairman of the Board Bartlett and Company Warner L. Baxter President and CEO Ameren Missouri Thomas E. Beal 1 President Beal Properties, Inc. David R. Bradley, Jr. 4 President, Publisher & Editor Publisher and Editor News-Press and Gazette Company Nancy K. Buese 5 Senior Vice President and CFO MarkWest Energy Partners, LP Peter J. deSilva 2 President UMB Bank, n.a. President and COO UMB Financial Corporation Terrence P. Dunn 3 CEO & President J.E. Dunn Construction Group, Inc. K.C. Gallagher 5 Vice Chairman Gallagher Industries, Inc. Chief Executive Officer Little Pub Holdings, LLC Peter J. Genovese 1 Vice Chairman UMB Financial Corporation Gregory M. Graves 4 Chairman, CEO and President Burns and McDonnell Engineering Company, Inc. Michael D. Hagedorn 1,2 Vice Chairman Chief Financial Officer Chief Administrative Officer UMB Financial Corporation Alexander C. Kemper Chairman & CEO C2FO Chairman The Collectors Fund Mariner Kemper 2 Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation R. Crosby Kemper 1, 6 Chairman Emeritus UMB Financial Corporation Richard F. Jones President and CEO Fidelity Security Life Insurance Co. Kris A. Robbins 5, 4 Principal KARobbins, LLC Thomas D. Sanders 4 Consultant to Senior Management MMC Corporation L. Joshua Sosland 3 Vice President Sosland Companies, Inc. Paul Uhlmann III 3 President The Uhlmann Company Thomas J. Wood III 3 General Partner Wood Family Partnerships UMB Bank, n.a. Craig L. Anderson President Commercial Banking UMB Financial Corporation Alexander C. Kemper Chairman & CEO C2FO Chairman The Collectors Fund Mariner Kemper Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation R. Crosby Kemper 1, 6 Chairman Emeritus UMB Financial Corporation Greg S. Maday Chief Executive Officer SpecChem, LLC Patrick J. McCown Chief Executive Officer McCown Gordon Construction Jonathan D. Mize President and COO Blish-Mize Company Don R. Armacost, Jr. President and CEO Peterson Manufacturing Company Timothy R. Murphy President and CEO Murphy-Hoffman Company David F. Ball President and CEO Ball’s Price Chopper & Hen House Markets Steven J. Bresky President and CEO Seaboard Corporation Peter J. deSilva President UMB Bank, n.a. President and COO UMB Financial Corporation Jerry L. Garland President and CEO Associated Wholesale Grocers, Inc. Peter J. Genovese 1 Vice Chairman UMB Financial Corporation Jeffrey B. Hanes Investor Marilyn B. Hebenstreit Vice Chairman Bartlett and Company Chairman Linda Hall Library H. Tyler Nottberg Chief Executive Officer US Engineering Douglas F. Page 1 Executive Vice President UMB Bank, n.a. Stephen R. Plaster Evergreen Investments, LLC James D. Rine 1 President Kansas City Region UMB Bank, n.a. Dave G. Ruf 1 Ruf Enterprises James A. Sangster Vice Chairman UMB Bank, n.a. Christian R. Swett 1 Executive Vice President & Chief Credit Officer UMB Financial Corporation H. Stephen Talge 1 President Dazey Corporation Thomas S. Terry 1 Executive Vice President & Chief Lending Officer UMB Bank, n.a. William D. Wagner Wagner Investments, LP Clyde F. Wendel Executive Vice President Institutional Asset Management Vice Chairman UMB Bank, n.a. UMB Advisory Boards Kansas City Region Kansas Rick S. Bennett Senior Vice President Consumer Services UMB Bank, n.a. Terry A. Calaway Retired President Johnson County Community College Patrick J. Crilly President Commercial Claims, Inc. Justin D. Hill President The Lawrence Paper Company R. Crosby Kemper 6 Chairman Emeritus UMB Financial Corporation Donald G. Laffoon President and CEO Electrical Corporation of America Steve J. McDonald President Geiger Ready Mix Leo J. Nunnink Community Bank President Johnson/Wyandotte Counties UMB Bank, n.a. Richard S. O’Neill Chairman of the Board O’Neill Automotive, Inc. Richard S. O’Neill, Jr. President O’Neill Automotive, Inc. Ronald D. Petering President Shafer, Kline & Warren, Inc. 1Advisory Director 2Executive Committee 3Governance Committee 4Compensation Committee 5Audit Committee 6Deceased 33 James D. Rine President Kansas City Region UMB Bank, n.a. James A. Sangster Vice Chairman UMB Bank, n.a. Dave W. Scheer President and CEO Inland Truck Parts Company Frank L. Thompson President Overland Park Jeep, Inc. David E. Willson President Camp David, Inc. Richard L. Wiseman Owner Porter Funeral Homes & Crematory Metro Dan E. Axtell President Lexington Plumbing & Heating, Inc. R. Philip Bixby President and CEO Kansas City Life Insurance Co. Thomas E. Brusnahan Community Bank President UMB Bank, n.a. Peter J. deSilva President UMB Bank, n.a. President and COO UMB Financial Corporation Brian M. Hutchin Community Bank President UMB Bank, n.a. Alexander C. Kemper Chairman & CEO C2FO Chairman The Collectors Fund Mariner Kemper Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation R. Crosby Kemper 6 Chairman Emeritus UMB Financial Corporation ADVISORY BOARDS Jonathan Lambert President Pacific Mutual Door Company Todd E. Bleakley Manager Bleakley Development Company, LLC Catherine Tivol Maslan Chief Executive Officer Tivol Plaza, Inc Jeanette E. Prenger President/Owner ECCO Select Russell D. Redburn Chairman and CEO Central Power Systems & Services Randall C. Reed President Randy Reed Automotive, Inc. James D. Rine President Kansas City Region UMB Bank, n.a. John Russ Community Bank President UMB Bank, n.a. James A. Sangster Vice Chairman UMB Bank, n.a. Phillip (Flip) Short President Signature DNA R. Bradley Speaks President Speaks Legacy Chapel Timothy L. Vance President Vance Brothers, Inc. Kent H. Vipond President and CEO CDM Investment Group William S. Walker President The G.W. Van Keppel Company Jeffrey D. Yowell President and CEO DATACORE Marketing, LLC South Ray Adams Chairman Adams Automotive Group Don R. Armacost, Jr. President and CEO Peterson Manufacturing Company Trey Bowen Vice President Superior Bowen Asphalt, LLC James M. Brosnahan Senior Vice President Senior Loan Officer UMB Bank, n.a. Kevin F. Clune President Clune and Company, LC Terry Crabtree Retired Peter J. deSilva President UMB Bank, n.a. President and COO UMB Financial Corporation E. Frank Ellis Chairman and CEO Swope Community Enterprises Steven A. Erickson Community Bank President UMB Bank, n.a. Jonathan L. Freiden Co-Chief Executive Officer US Toy Company James S. Gutschow Chief Financial Officer John A. Marshall Company Edwin J. Holland President Food Service Division Treat America Food Services Michael Hoehn President and COO Automatic Systems, Inc. (LICO Steel, Inc.) Mariner Kemper Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation R. Crosby Kemper 6 Chairman Emeritus UMB Financial Corporation David T. Raden President Tucker Midwest, Inc. 34 James D. Rine President Kansas City Region UMB Bank, n.a. John E. Robertson President RMF Steel Thomas D. Sanders Consultant to Senior Management MMC Corporation James A. Sangster Vice Chairman UMB Bank, n.a. Miles E. Schnaer President Crown Automotive Organization St. Joseph, Missouri Brian Bradley President News-Press and Gazette Company James P. Clayton President Clayton Paper & Distribution, Inc. David W. Cripe Community Bank President UMB Bank, n.a. James T. Graves Retired of Counsel Scopelitis, Garvin, Light, Hanson & Feary, PC Edward Lawrence Hausman Retired President Al J. Mueller Construction Company Kevin P. Lilly President and CEO St. Joseph Beverage, LLC Robert S. Meyers Retired James D. Rine President Kansas City Region UMB Bank, n.a. Harry A. Roberts HAR Business Development Consulting LLC Mary Carol Roever Retired Interim Dean Craig School of Business Missouri Western State University James A. Sangster Vice Chairman UMB Bank, n.a. Kevin W. Speltz President Clipper Distributing Company, LLC Western Regions Arizona Region Craig L. Anderson President Commercial Banking UMB Financial Corporation Ricardo DeAvila Managing Director Alerion Capital Group LLC Peter J. Genovese Vice Chairman UMB Financial Corporation Frank Phillips Giltner III Senior Vice President Shamrock Foods Company Brian M. Goodwin Goodwin Consult LLC Mariner Kemper Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation K. David Lindner Partner Squire, Sanders & Dempsey, LLP Mark C. Loftin President Loftin Equipment Company & Bay City Electric Works James S. Patterson Chairman & CEO Arizona Region UMB Bank, n.a. William Riley Chief Executive Officer Thermo King West Richard Trueblood Chief Financial Officer Advent Solar Colorado Region Sue Allon Vice Chairman Stewart Lender Services ADVISORY BOARDS Craig L. Anderson President Commercial Banking UMB Financial Corporation Buck Blessing Chief Executive Officer Griffis/Blessing, Inc. Kevin V. Duncan Executive Vice President Duncan Oil, Inc. K.C. Gallagher Vice Chairman Gallagher Industries, LLC Chief Executive Officer Little Pub Holdings, LLC R. Thayer Tutt, Jr. President and CIO El Pomar Foundation Ned C. Voth President Jordan’s Building Center Midwest Regions Greater Missouri Region Boonville, Missouri Larry E. Grissum Partner/Owner Grissum Farms, Inc. Steve Hamline President – West Region J.E. Dunn Construction Company Kenneth Huth Partner Huth Farms, LLC Robert G. Jaster Mariner Kemper Chairman & CEO UMB Bank, n.a. Chairman & CEO UMB Financial Corporation R. Crosby Kemper 6 Chairman Emeritus UMB Financial Corporation Roger Knoph Chief Executive Officer EnviroTech Services, Inc. Steve Lockton Executive Vice President Lockton Companies, LLC Peter J. Neidecker Executive Vice President Mountainside Medical, LLC Thomas R. O’Donnell Managing Partner Holland & Hart Michael L. Raisch President Nuvola Solutions, Inc. Dean P. Pisciotta President Brakes Plus, Inc. Rose M. Robeson Senior Vice President & CFO DCP Midstream Partners Jon M. Robinson Chairman & CEO Colorado Region UMB Bank, n.a. Marty L. James President North Central Missouri Region UMB Bank, n.a. Gill Jewett Retired Accountant and Farmer Gill Jewett Tax Service Charles P. Malone Retired Certified Public Accountant Megan B. McGuire Attorney City of Boonville Lewis W. Miller Retired Harold W. Schnetzler Retired Past Owner Schnetzler IGA Grocery Todd B. Snapp President Snapp Hardware, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Carthage, Missouri Ann Marie Baker President Southwest Missouri Region UMB Bank, n.a. Edgar B. Freund, CLU, CHFC Agent State Farm Insurance Company 35 Mark R. Gier Chief Financial Officer ICS Logistics LLC William E. Michel Retired Veterinarian E. Elliott Potter General Partner Potter Family Limited Partnership Peter Richardson Dr. Peter Richardson & Associates David G. Sanders Retired Grain Dealer Janet K. Stafford Community Bank President UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Columbia, Missouri Charles P. Bondurant V, MD Physicians Resources, Inc. Susan L. Horak Owner/Broker RE Max Boone Realty Robert A. Hurdle Stephen C. Knorr Vice President Government Relations University of Missouri Tony Mayfield President Central Missouri Region UMB Bank, n.a. Jeffrey W. Parker, MD Columbia Orthopaedic Group George Pfenenger Chief Executive Officer Socket Telecom Trent Stober, P.E. Vice President HDR Engineering Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Kurt Wallace President/Owner Wallace Architects Ft. Scott, Kansas Cynthia J. Bowman Community Bank President UMB Bank, n.a. J. Frank Halsey President Mid-Continental Restoration Marty L. James President North Central Missouri Region UMB Bank, n.a. Debra K. McKenney Co-Owner Fort Scott Broadcasting CP Communications David R. Shepherd President Shepherd Team Auto Plaza Gary A. Palmer Owner Captured Images Director of Development Fort Scott Community College Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Jefferson City, Missouri Carrie O. Carroll Owner/Manager Carrie’s Hallmark Shop William A. Crede Partner & CEO America Building Products James M. Cunningham III Community Bank President UMB Bank, n.a. F. Joe Delong III President Delong’s, Inc. Sherry L. Doctorian Partner Armstrong Teasdale LLP Robert L. Hawkins, Jr. Retired Lawyer Tony Mayfield President Central Missouri Region UMB Bank, n.a Bryan M. Pope, DDS Retired Dentist ADVISORY BOARDS Larry V. Schepers Retired UMB Bank, n.a. Rod Smith Sports Director KRCG TV 13 Jason E. Thompson President/General Manager Harold G. Butzer, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Joplin, Missouri Ann Marie Baker President Southwest Missouri Region UMB Bank, n.a. Rick Brown Dealer Roper Honda Robert W. Heiniger, Jr. President CES, Inc. Eric A. Reisinger Community Bank President UMB Bank, n.a. Hal D. Roper President Roper GMC - Buick, Inc. Randy Roper Vice President Roper GMC - Buick, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Monett, Missouri Ann Marie Baker President Southwest Missouri Region UMB Bank, n.a. Lisa Balmas Community Bank President UMB Bank, n.a. Melissa A. Beckwith Investments The Honorable Michael D. Garrett Municipal Judge City of Monett Steven R. Kay Vice President Kay Concrete Materials Company William H. Medlin Retired Howard F. Randall President General Investments, Inc. Michael A. Scabarozi Vice President International Dehydrated Foods, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a Northeast Charles Bindemann Retired Guy E. Callison Owner Swine Assurance Productions, Inc. J. Cecil Fisher Owner Fisher Farms Robert L. Hawkins, Jr. Retired Lawyer Marty L. James President North Central Missouri Region UMB Bank, n.a. Bob D. Swartz, DDS Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. North Central Marty L. James President North Central Missouri Region UMB Bank, n.a. R. Crosby Kemper 6 Chairman Emeritus UMB Financial Corporation John M. Perry, DVM Hampton Feedlot, Inc. Phillip J. Smith Community Bank President UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Jennifer L. Waugh Jennifer L. Waugh, CPA Springfield, Missouri Ann Marie Baker President Southwest Missouri Region UMB Bank, n.a. William H. Darr Vice Chairman American Dehydrated Foods, Inc./ International Dehydrated Foods, Inc. Harold D. Garrison Consultant Peter J. Genovese Vice Chairman UMB Financial Corporation John T. Gentry President and Chairman Positronic Industries Donald E. Golik Retired Chairman of the Board Paul Mueller Company R.E. (Mike) Baker President Pepsi Cola Bottling of Brookfield Louis A. Griesemer President Springfield Underground, Inc. James Brinkley Co-Owner Brinkley Angus Ranch S. Miles Dickson, DVM Co-Owner Highland Vet Clinic Wayne A. Foster President Wayne Foster Farms, Inc. 36 Brian K. Hammons President and CEO Hammons Products Company Rex W. Kay President Kay Concrete Materials Company Alvin Rohrs President and CEO Enactus David A. Trottier Retired Chairman Summer Fresh Supermarkets, Inc. ADVISORY BOARDS Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Warrensburg, Missouri The Honorable Joe Dandurand Missouri Deputy Attorney General Tony Mayfield President Central Missouri Region UMB Bank, n.a Douglas E. Mitchell Owner Legal Investigative Services, Inc. Ernest B. Staashelm Community Bank President UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Gregory B. Vinardi Business Advisor & Investor Deleta Williams Retired State Representative Warsaw, Missouri William G. Bunch Owner Bunch Family Farms, LLC Mid Missouri Autosports.com, Inc. John Cook President Cook Auction Company, Inc. Scotty E. Henderson Owner and Manager Henderson Ranch and Cattle Company Thomas A. Hill Retired UMB Bank, n.a. Shawn H. Hilty Owner/Operator Hilty Farms Stanfred L. Hilty Owner/Operator Hilty Farms Kenneth F. Kammeyer Retired Jerry D. Lumpe Retired Tony Mayfield President Central Missouri Region UMB Bank, n.a James A. Miller Director Reser Funeral Home Davis-Miller Funeral Home Paul Ross Retired Ernest B. Staashelm Community Bank President UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Martha M. Weaver Retired TRISTAR Sporting Arms, Ltd. Kansas Region Abilene, Kansas Stewart R. Etherington President Etherington and Company Realtors Wendell D. Gugler Retired Christopher A. Howell President Western Kansas Region UMB Bank, n.a. Alfred P. Jones Retired Dale Koop President Crop Service Center, Inc. W. Patrick Robson President Robson Oil Company Daryl D. Roney Community Bank President Abilene Banking Center UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Atchison, Kansas Wayne Basso President Eastern Kansas Region UMB Bank, n.a. Jonathan D. Mize Executive Vice President Blish-Mize Company Eric A. Niemann Owner Niemann Farms, LLC Larry Schaffer President Chase Technology Kenneth L. Stielow President Bar S Ranch, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a Howard M. Wehrman President MHW Enterprises, Inc. Anthony H. Witt, Jr. Witt Farm Company Salina, Kansas Ross Doyen Farmer and Cattleman Robert W. Exline, Jr. President Exline, Inc. C.N. Hoffman III Farmer/Rancher William C. Hoffman Investor Christopher A. Howell President Western Kansas Region UMB Bank, n.a. Douglas W. Rempp President/Owner McDonalds of Salina Richard A. Renfro Retired UMB President Jon H. Starks Community Bank President UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a. Topeka, Kansas Ronald D. Andersen President ANCO, Inc. Wayne F. Basso President Eastern Kansas Region UMB Bank, n.a. Manhattan, Kansas Wayne Basso President Eastern Kansas Region UMB Bank, n.a. H. Alan Bell Retired Donald E. Ince Retired Robert K. Larsen Retired Farming/Investments Barry J. Sarvis Pharmacist/President Barry’s Drug Center & Dunne’s Pharmacy Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a David L. Urban Community Bank President Manhattan Banking Center UMB Bank, n.a. Russell, Kansas D. Leonard Brown Farmer and Rancher Wesley M. Clark Community Bank President Russell Banking Center UMB Bank, n.a. Christopher A. Howell President Western Kansas Region UMB Bank, n.a. Morris F. Krug President Krug Farms, Inc. Earl D. Merkel, MD Russell Regional Hospital 37 S. Lucky DeFries Stockholder Coffman, DeFries and Northern, P.A. John R. Dietrick CEO and General Counsel Creative Business Solutions Stuart G. Douthett President Douthett & Company, CPA, PA Jerry Glasgow President Performance Tire and Wheel DeWitt M. Harkness President Wolfe’s Camera Shops, Inc. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a Wichita, Kansas William J. Hampel President Hampel Oil Distributors, Inc. Christopher A. Howell President Western Kansas Region UMB Bank, n.a. William L. Oliver, Jr. Attorney Martin, Pringle, Oliver, Wallace and Bauer LLP William L. Phillips Chief Executive Officer Vornado Air, LLC Howard Redburn Central Power Systems & Services William R. Summers Senior Vice President Wichita Banking Center UMB Bank, n.a. Gil Trout Chairman & CEO Kansas/Greater Missouri Region UMB Bank, n.a Dan J. Waller Vice President Conco Construction ADVISORY BOARDS Nebraska Region W. Thomas Chulick President Midwest Regions Chairman & CEO St. Louis Region UMB Bank, n.a. Chad A. Denton President CFO Services Mark S. Eldridge President and CEO The Growth Coach Joel T. Falk President Nebraska Region UMB Bank, n.a. Richard Kusleika President/Owner Standard Heating & Air Conditioning, Inc. Mitch Lane Chief Executive Officer Echo Group, Inc. Thomas C. Macy Chief Executive Officer Nebraska Orthopaedic Hospital Mark Morris President Mechanical Sales, Inc. Joel Larmore Chairman and CEO Rehab Visions, Inc. Pam Stanek President The Interior Design Firm Eric Stueckrath Chief Executive Officer Outlook Nebraska Steve Walenz President Sierra Juliet, Inc. Oklahoma Region Craig L. Anderson President Commercial Banking UMB Financial Corporation Gentner F. Drummond Attorney at Law Drummond Law Robert J. Fisher, Jr. President Oklahoma National Stock Yards Company Gerald N. Furseth Owner Gerald N. Furseth - Oil and Gas Producer Royce M. Hammons Chairman & CEO Oklahoma Region UMB Bank, n.a. David R. Hardy Executive Vice President UMB Bank, n.a. Jack S. Henley Managing Member Henley and Johnson, PLLC James C. Kneale Retired President and COO ONEOK, Inc. Ralph L. Mason Senior Partner Mason-Harrison-Ratliff Tom J. McDaniel President American Fidelity Foundation Frank A. Sewell President Oklahoma City UMB Bank, n.a. William F. Shdeed Attorney at Law Roger N. Simons Chairman Simons Investment Company Eastern Regions St. Louis, Missouri – City Theodore M. Armstrong Financial/Board Consultant Warner Baxter President and CEO Ameren Missouri Vincent J. Bommarito Chief Executive Officer Tony’s Restaurants, Inc. Louis G. Chiodini President Chiodini Associates W. Thomas Chulick President Midwest Regions Chairman & CEO St. Louis Region UMB Bank, n.a. 38 Richard G. Engelsmann Chairman Beltservice Corporation Thomas F. Feldmann President and CEO Lionmark Construction Companies Peter J. Genovese Vice Chairman UMB Financial Corporation Todd J. Korte President and CEO The Korte Company J. Michael Medart President and CEO Medart, Inc. Patrick Morris President Morris Transportation & MBC, LLC David H. Naunheim President and Chief Lending Officer St. Louis Region UMB Bank, n.a. Scott Negwer President Negwer Materials, Inc. Kathleen T. Osborn Executive Director Regional Business Council St. Louis, Missouri – County Megan P. Bittle Chief Operating Officer RSI Kitchen and Bath Vincent P. Bommarito Executive Chef Tony’s Restaurants, Inc. W. Thomas Chulick President Midwest Regions Chairman & CEO St. Louis Region UMB Bank, n.a. Peter J. Genovese Vice Chairman UMB Financial Corporation John M. Gunther President Gunther Salt Company John J. Inkley, Jr. Partner Armstrong Teasdale LLP Bart J. Margiotta President Priority Properties ADVISORY BOARDS June McAllister Fowler Vice President Corporate and Public Communications BJC HealthCare Thomas H. Renner, Jr. Owner Shiloh Valley Equipment Company/ Renner Stock Farms Tim M. Murch President MMMM Donald P. Rigney Executive Vice President and COO Empire Comfort Systems, Inc. David H. Naunheim President and Chief Lending Officer St. Louis Region UMB Bank, n.a. Ronald G. Skaggs Executive Vice President Commercial Banking UMB Bank, n.a. St. Charles, Missouri Gregory Aman Senior Vice President Private Banking Client Manager UMB Bank, n.a. Charles C. Blossom Partner Affirmative Solutions W. Thomas Chulick President Midwest Regions Chairman & CEO St. Louis Region UMB Bank, n.a. Julia M. Eckstein Director St. Charles County Department of Community Health and Environment Peter J. Genovese Vice Chairman UMB Financial Corporation David H. Naunheim President and Chief Lending Officer St. Louis Region UMB Bank, n.a. Harlan Pals Chairman/Principal Pals Group Scott T. Rupp Vice President Business Development UMB Bank, n.a. Kim Scheidegger York President - Commercial Leasing Corporate Group, Inc. Robert Topping Owner RT Management Services Maurice D. Newberry Vice Chairman Nesher, LLC Stephen E. Ricci President and CEO Ricci Associates, Inc. dba RAI Insurance Group Illinois P. Douglas Becherer President Drs. Becherer & Associates, Ltd. Pamela A. Burnham President Von Alst Operating, LLC W. Thomas Chulick President Midwest Regions Chairman & CEO St. Louis Region UMB Bank, n.a. Georgia Costello, Ph.D. President Southwestern Illinois College Larry Eckert President Bethel-Eckert Enterprises, Inc. Peter J. Genovese Vice Chairman UMB Financial Corporation Nick Gojmeric President Collision Plus Auto Body Centers Larry McCulley President and CEO Southern Illinois Healthcare Foundation David H. Naunheim President and Chief Lending Officer St. Louis Region UMB Bank, n.a. Maurice E. Netemeyer President Aviston Lumber Company 39 In Memoriam R. Crosby Kemper, Jr. 1927-2014 We join many friends and colleagues in mourning the loss of R. Crosby Kemper, Jr., UMB’s Chief Executive Officer for 30 years, who passed away on January 2, 2014. He was a visionary, leader, philanthropist and mentor who embodied the values that continue to shape UMB. In five decades with the company, starting at age 22 as a night clerk and rising to become the long-time Chairman & CEO, Mr. Kemper drove the growth of UMB Bank and the diversified financial services business of UMB Financial. He retired in 2004. Giving purposefully and willingly of his time, influence and resources, Mr. Kemper served in leadership roles for a wide range of community organizations. He helped make Kansas City what it is today by spearheading the founding of Agriculture Future of America, the Kansas City Symphony, the Kemper Museum of Contemporary Art and the Metropolitan Performing Arts Fund. Additional history, photographs and tributes are online at www.RCrosbyKemperJr.com. CORPORATE INFORMATION Notice of Annual Meeting Tuesday, April 22, 2014 UMB Financial Corporation 1010 Grand Boulevard Kansas City, MO 64106 10-K Request We will furnish, without charge, a copy of our 2013 Report to the SEC (Form 10-K) to any shareholder upon written request. Please specify Form 10-K when requesting. The report and 10-K filing will also be available online at UMBFinancial.com. Transfer Agent Computershare Trust Company, n.a. P.O. Box 43078 Providence, RI 02940-3078 800.884.4225 UMB Financial Corporation 1010 Grand Boulevard Post Office Box 419226 Kansas City, MO 64141-6226 UMB.com Stock Quotation Symbol UMBF NASDAQ OMX Investor Relations Abby Wendel Senior Vice President, Investor Relations Financial information Brian Walker Chief Financial Officer & Chief Accounting Officer To contact us, please call 816.860.7000 or 800.821.2171 For other inquiries Marketing Communication Marketing@UMB.com Printed on recycled paper. We’re proud that UMB recycled 362 tons of paper in 2013. This saved an estimated: 8,688 trees, 8,272,954 gallons of waste water, 695,694 pounds of solid waste and 3,453,985 kilowatts of energy. The paper, paper mill and printer for this publication are all certified to meet the strict standards of the Forest Stewardship Council (FSC), which promotes environmentally appropriate, socially beneficial and economically viable management of the world’s forests. Cautionary Notice About Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. All forward-looking statements are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Our actual future objectives, strategies, plans, prospects, performance, condition, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events, circumstances, or aspirations to differ from those in forward-looking statements are described in our Annual Report on Form 10-K for the year ended December 31, 2013, our subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or other applicable documents that are filed or furnished with the Securities and Exchange Commission (SEC). Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other applicable document that is filed or furnished with the SEC. “UMB”, “COUNT ON MORE”, “SCOUT”, “SCOUT INVESTMENTS”, “JD CLARK & COMPANY”, the UMB design logo, the UMB Count on More design logo, and the Scout design logo – Reg. U.S. Pat. & Tm. Off. These names and design logos are registered trademarks of UMB Financial Corporation. 40 A FOCUS ON QUALITY Long-term results are more important than short-term gains, and we’ve built our company to endure for the next 100 years. At UMB Financial, we believe that quality endures. It is the standard by which we measure everything. UMB Financial Corporation (NASDAQ: UMBF) Credit Ratings as of 2/05/14 Credit Ratings Long-term Issuer Short-term / Commercial Paper Bank Individual Bank Support Credit Ratings (Subsidiaries) UMB Bank, National Association Certificate of Deposit Bank Individual Bank Support S&P A- / Outlook Stable Fitch A+ / Outlook Stable A-2 - - S&P - - - F1 a+ 5 Fitch AA- a+ 5 At UMB, we promise that our customers can Count on more from us. A key component of that includes investing in and supporting our local communities. We partner with organizations to support initiatives and programs that respond in meaningful ways to our community needs. Our support is concentrated in the following areas: • Agricultural Sustainability • Arts Cultivation • Diversity • Education • Environmental Stewardship • Healthy Living • Self-Sufficient Communities 35.2K In honor of UMB’s 100-year anniversary, associates volunteered more than 35,000 hours throughout our footprint. $770K Estimated economic value of UMB associates’ volunteer hours in 2013. Based on the 2013 national value of volunteer time at $22.14 per hour, IndependentSector.org. 9.7K $1.2M Hours of qualified volunteer time off 2013. More than $1.2 million donated by UMB in 2013. g r e b n e s o R d d o T : y h p a r g o t o h P e v i t u c e x E | . c n I , s i s e n e G : n g i s e D d n a t p e c n o C | n o i t a r o p r o C l i i a c n a n F B M U 4 1 0 2 t h g i r y p o C © 41 UMBFinancial.com 

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