UMB earnings drop 37 percent as it finds new cost savings

UMB Financial Corp. said its earnings dropped 37 percent in the third quarter, partly from lower fee revenue at its Scout mutual fund group.

The Kansas City-based banking company earned $22.5 million, or 46 cents a share, in July, August and September. A year earlier, it earned $35.6 million, or 79 cents a share.

Loans were up nearly $2 billion from a year ago, which helped UMB earn more interest income. But expenses rose too, including $4.5 million in costs during the quarter to integrate Marquette Financial since its acquisition.

Advisory fees generated by the Scout group were $10.4 million, or 44.7 percent, lower in the quarter compared with a year ago. The fund group has seen customer account withdrawals, which similarly weighed on UMB’s earnings in the second quarter.

UMB said it has identified $29.3 million in costs it can eliminate to boost profits. The total comes in addition to $3.6 million in cost cuts identified in the previous quarter.

“While these initiatives involved difficult decisions, they are the right actions to take to get us closer to our efficiency goals and to operate in a leaner, healthier way,” chief executive Mariner Kemper said in the company’s announcement.

Assets at the end of September totaled $18.6 billion and deposits were $15 billion, up from $12.8 billion a year earlier. UMB said roughly half of its loan growth from a year ago was due to the Marquette acquisition and new lending it has done. The other half was from UMB’s operations.

This story was originally published October 27, 2015 at 4:51 PM with the headline "UMB earnings drop 37 percent as it finds new cost savings."