UMB earnings fall 33% because of acquisition costs
04/22/2014 8:46 AM
04/22/2014 8:58 PM
UMB Financial Corp. on Tuesday reported a 33 percent drop in first-quarter earnings, which the Kansas City-based banking company attributed largely to costs tied to a previous transaction.
Profits totaled $23.4 million, or 52 cents a share, in the first three months of the year, compared with $34.9 million, or 87 cents a share, a year earlier.
UMB said its earnings suffered from $15 million the company set aside to cover potential costs tied to its earlier purchase of Prairie Capital Management. It created the reserve after sellers challenged the calculation of amounts owed them. There also was a smaller cost tied to a bonus related to the transaction.
“Since we acquired it in 2010, Prairie Capital has been a high-performing business unit, one that is important to our long-term strategies as a diversified financial holding company,” chief executive Mariner Kemper said in the announcement.
Otherwise, UMB said, its operations were performing well, with a 14.8 percent increase in loans on an annual basis compared with a year ago. Higher trust and securities processing revenues also increased, pushing up non-interest income 1.6 percent compared with a year ago.
Assets at the end of March totaled $15.9 billion, including $6.76 billion in loans and $7.05 billion in securities. Deposits totaled $12.3 billion.
The profits equaled a 0.58 percent rate of return on average assets during the quarter.
UMB shares fell 35 cents to $60.52.
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