UMB Financial in Kansas City, Mo., saw second-quarter profit decline as lower revenue from its Scout Investments subsidiary reduced fee income.
Net income for the $18.4 billion-asset company fell 13% to $30.2 million, or 65 cents per share, from a year earlier. That met the average estimate of analysts polled by Bloomberg.
Fee income, the biggest part of UMB's business, declined 11% to $119.6 million, on lower income from trust and securities processing, as a result of lower advisory fee income from Scout Funds. Additionally, UMB reported lower trading and investment banking and brokerage fees. UMB also posted a lower gain on the sale of securities in this year's quarter.
Net interest income grew 13% to $97.4 million. Total loans grew 29% to $8.9 billion, partly due to UMB's May acquisition of Marquette Financial. The net interest margin widened by six basis points to 2.59%.
Noninterest expense rose 3% to $172 million, due to increased salaries and employee benefits from the Marquette acquisition, and higher costs associated with equipment, occupancy, and legal and consulting fees.
UMB also began a cost-cutting program in the quarter, reorganizing technology, operations and related support groups. The moves are expected to produce about $3.6 million in yearly savings. UMB said it would release additional details later this year.
