UMB Financial in Kansas City, Mo., is succeeding in growing loans, but it is problems are picking up, too.
On Tuesday, the $13.2 billion-asset company (UMBF) reported average loan balances for the second quarter of $5.2 billion, a 10.4% increase from a year earlier and up 2% from the first quarter. The increase is primarily in commercial loans, which increased 31% from a year earlier.
"This is our ninth consecutive quarter growing loans, and compares favorably to the industry, which, through July 20, had reported an average increase in loan balances of just 1.7 percent for the second quarter," said Mariner Kemper, chairman and chief executive, in a press release on Tuesday.
The company's nonperforming loans nearly doubled from a year earlier and increased 20% from the first quarter to $30.6 million. To be sure, the company's credit problems are small. Despite the increase, nonperforming loans accounted for 0.58% of total loans.
For the quarter, the company reported earnings of $29.2 million, as its provision for loan losses fell and its noninterest income ticked up.
The earnings were up 10.8% from a year earlier. The company also reported earnings of $75.5 million for the first half of the year, or 32.1% increase from a year earlier.
The largest quarterly gains were in noninterest income, which totaled $110 million, up 2.2% from a year earlier. The company reported modest increases in its trust and securities processing, trading and investment banking, brokerage fees and service charges on deposits categories. Those gains, however, were tempered by a 46% decrease in gain on sale of securities, which totaled $3.2 million. UMB sold $16.5 million of securities in the first quarter.
UMB's for loan losses was $4.5 million, down 20% from a year earlier and unchanged from the first quarter. The company's allowance for loan losses made up 1.37% of loans, compared to 1.53% a year earlier.
UMB's shares were down 1.9% midday Wednesday, to $49.54.