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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

For the fiscal year ended: December 31, 2002

For the transition period from                          to                         

Commission file number: 0-4887

UMB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

(Registrant’s telephone number, including area code): (816) 860-7000

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $1.00 Par Value

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x  No ¨

As of June 28, 2002, the aggregate market value of common stock outstanding held by nonaffiliates of the registrant was approximately $770,111,596 based on the NASDAQ closing price of that date.

Indicate the number of shares outstanding of the registrant’s classes of common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

Company’s 2003 Proxy Statement dated March 10, 2003—Part III

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PART I

ITEM 1.  BUSINESS

General

UMB Financial Corporation (the “Company”) was organized in 1967 under Missouri law for the purpose of becoming a bank holding company registered under the Bank Holding Company Act of 1956. In 2001, the Company elected to become a financial holding company under the Gramm-Leach-Bliley Act. The Company owns all of the outstanding stock of five commercial banks, a credit card bank, a bank real estate corporation, a reinsurance company, a community development corporation, a consulting company and a mutual fund servicing company.

The Company’s five commercial banks are engaged in general commercial banking business entirely in domestic markets. Two of the banks are in Missouri, and the three remaining banks are in Kansas, Colorado and Nebraska. The Banks offer a full range of banking services to commercial, retail, government and correspondent bank customers. In addition to standard banking functions, the principal affiliate bank, UMB Bank, n.a., provides international banking services, investment and cash management services, data processing services for correspondent banks and a full range of trust activities for individuals, estates, business corporations, governmental bodies and public authorities. The table below sets forth the names and locations of the Company’s affiliate banks as well as their respective total assets, loans, deposits and shareholders’ equity as of December 31, 2002.

SELECTED FINANCIAL DATA OF AFFILIATE BANKS (in thousands)

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UMB, U.S.A. n.a. is a credit card bank located in Nebraska. UMB, U.S.A. n.a. services all incoming credit card requests, performs data entry services on new card requests and evaluates new and existing credit lines.

Other subsidiaries of the Company are UMB Properties, Inc., United Missouri Insurance Company, UMB Community Development Corporation, UMB Consulting Services, Inc., and UMB Fund Services, Inc. UMB Properties, Inc. is a real estate company that leases facilities to certain subsidiaries and acquires and holds land and buildings for anticipated future facilities. United Missouri Insurance Company, an Arizona corporation, is a reinsurance company that reinsures credit life and disability insurance originated by affiliate banks. UMB Community Development Corporation provides low-cost mortgage loans to low- to moderate-income families for acquiring or rehabbing owner-occupied housing in Missouri, Kansas, Illinois, Nebraska, Oklahoma and Colorado. UMB Consulting Services, Inc. offers regulatory and compliance assistance to regional banks. UMB Fund Services, Inc. (formerly known as Sunstone Financial Group Inc.), located in Milwaukee, Wisconsin, is a nationally recognized mutual fund service provider to nearly 40 mutual funds and fund families.

On a full-time equivalent basis at December 31, 2002, the Company and its subsidiaries employed 4,027 persons.

Competition.    The Company faces intense competition from hundreds of financial service providers in the markets served. The Company competes with other financial service providers including banks, savings and loan associations, finance companies, mutual funds, mortgage banking companies and credit unions. Customers for banking services and other financial services offered by the Company are generally influenced by convenience, quality of service, personal contacts, price of services and availability of products.

Available Information.    The Company makes available on its website at www.umb.com, free of charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC. Information contained on the Company’s website is not incorporated by reference into this annual report on Form 10-K.

Monetary Policy and Economic Conditions.    The operations of the Company’s affiliate banks are affected by general economic conditions as well as the monetary policy of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) which affects the supply of money available to commercial banks. Monetary policy measures by the Federal Reserve Board are affected through open market operations in U.S. Government securities, changes in the discount rate on bank borrowings and changes in reserve requirements.

Supervision and Regulation.    As a bank holding company and a financial holding company, the Company and its subsidiaries are subject to extensive regulation and are affected by the enactment of federal and state legislation.

The Company is subject to regulation and examination by the Federal Reserve Board and the Federal Reserve Bank of Kansas City. Its subsidiary banks are subject to regulation and examination by the Office of the Comptroller of the Currency (“OCC”). UMB Scout Insurance Services, Inc. is regulated by state agencies in the states in which it operates. The Company’s brokerage affiliate, UMB Scout Brokerage Services, Inc., is regulated by the Securities and Exchange Commission (“SEC”), the National Association of Securities Dealers, Inc., and the Missouri Division of Securities; it is also subject to certain regulations of the various states in which it transacts business. The Company is subject to the Bank Holding Company Act (“BHCA”), which requires the Company to obtain the prior approval of the Federal Reserve Board to (i) acquire substantially all the assets of any bank, (ii) acquire more than 5% of any class of voting stock of a bank or bank holding company which is not already majority owned, or (iii) merge or consolidate with another bank holding company. The BHCA also imposes significant limitations on the scope and type of activities in which the Company and its subsidiaries may engage. Under the BHCA, a bank holding company is prohibited, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank and from engaging in business other than that of banking, managing and controlling banks or performing services for its banking subsidiaries. However, the BHCA authorizes the Federal Reserve Board to permit bank holding companies to engage in activities, which are so closely related to banking or managing or controlling banks as to be a proper incident thereto. The Federal Reserve Board possesses cease and desist powers over bank holding companies if their actions represent unsafe or unsound practices or violations of law.

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As a result of the enactment of the Interstate Banking and Branching Efficiency Act of 1994 (the “Interstate Banking Act”), bank holding companies may acquire banks in any state, subject to state deposit caps and a 10% nationwide cap. Banks may also merge across state lines, creating interstate branches. Furthermore, a bank may open new branches in a state in which it does not already have banking operations, if the law of that state does not prohibit de novo branching by an out of state bank or if the state has not “opted out” of interstate branching. As a result of the Interstate Banking Act, the Company has many more opportunities for expansion and has potentially greater competition in its market area from nationwide or regional banks.

A bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with the extension of credit, with limited exceptions. There are also various legal restrictions on the extent to which a bank holding company and certain of its non-bank subsidiaries can borrow or otherwise obtain credit from its bank subsidiaries. The Company and its subsidiaries are also subject to certain restrictions on issuance, underwriting and distribution of securities. It is Federal Reserve Board policy that a bank holding company, such as the Company, should serve as a source of managerial and financial strength for each of its subsidiaries, and commit resources to them, even in circumstances in which it might not do so in absence of such policy.

Under the provisions of the Gramm-Leach-Bliley Act (GLBA) the Company is eligible to engage in non-banking activities which are financial in nature by notifying, or in certain cases obtaining the prior approval of, the Federal Reserve Board. Under the GLBA, subsidiaries of financial holding companies engaged in non-bank activities are supervised and regulated by the federal and state agencies, which normally supervise and regulate such functions outside of the financial holding company context. The Company is also subject to a number of restrictions and requirements imposed by the Sarbanes-Oxley Act of 2002 relating to loans to directors or executive officers of the Corporation, the preparation and certification of the Company’s financial statements, the duties of the Company’s audit committee, relations with and functions performed by the Company’s outsider independent auditors, and various accounting and corporate governance matters.

The Company’s bank subsidiaries are subject to a number of laws regulating depository institutions, including the Federal Deposit Insurance Corporation Improvement Act of 1991 which expanded the regulatory and enforcement powers of the federal bank regulatory agencies, required that these agencies prescribe standards relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, and mandated annual examinations of banks by their primary regulators. The Company’s bank subsidiaries are also subject to a number of consumer protection laws and regulations of general applicability, as well as the USA Patriot Act, which is designed to identify, prevent and deter international money laundering and terrorist financing.

All five of the commercial banks owned by the Company are national banks and are subject to supervision and examination by the OCC. UMB, U.S.A. n.a., a credit card bank, is located in the state of Nebraska and is subject to supervision and examination by the OCC. In addition, the national banks are subject to examination by The Federal Reserve System. All affiliate banks are members of and subject to examination by the Federal Deposit Insurance Corporation.

Payment of dividends by the affiliate banks to the parent company is subject to various regulatory restrictions. For national banks, the governing regulatory agency must approve the declaration of any dividends generally in excess of the sum of net income for that year and retained net income for the preceding two years. At December 31, 2002, approximately $10,737,000 of the equity of the affiliate banks was available for distribution as dividends to the parent company without prior regulatory approval or without reducing the capital of the respective affiliate banks below prudent levels.

The Company is required to maintain minimum amounts of capital to total “risk weighted” assets, as defined by the banking regulators. At December 31, 2002, the Company is required to have minimum Tier 1 and

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Total capital ratios of 4.00% and 8.00%, respectively. The Company’s actual ratios at that date were 17.98% and 18.88%, respectively. The company’s leverage ratio at December 31, 2002, was 10.04%.

As of December 31, 2002, the most recent notification from the Office of Comptroller of the Currency categorized the Company’s most significant affiliate banks as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the affiliate banks must maintain total risk-based, Tier 1 risk-based and Tier 1 leverage ratios of 10.0%, 6.0% and 5.0%, respectively. There are no conditions or events since that notification that management believes have changed the affiliate banks’ category.

Financial information regarding segments is included in Item 8, pages 52 through 54 of this report.

Statistical Disclosure.    The information required by Guide 3, “Statistical Disclosure by Bank Holding Companies,” has been included in Items 6, 7, and 7A, pages 9 through 32 of this report.

Executive Officers.    The following are the executive officers of the Company, each of whom is elected annually, and there are no arrangements or understandings between any of the persons so named and any other person pursuant to which such person was elected as an officer.

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ITEM 2.  PROPERTIES

The Company’s headquarters building, the UMB Bank Building, is located at 1010 Grand Boulevard in downtown Kansas City, Missouri, and was opened in July 1986. Of the total 250,000 square feet, the offices of the parent company and customer service functions of UMB Bank, n.a. comprise 175,000 square feet. The remaining 75,000 square feet are available for lease to third parties. The Company’s principal law firm and principal accounting firm are lessees.

UMB Fund Services, Inc., a subsidiary of the Company leases 83,315 square feet in Milwaukee, Wisconsin, at which its fund services operations is headquartered.

The banking facility of UMB Bank, n.a. at 928 Grand Boulevard principally houses that bank’s support functions and is connected to the headquarters building by an enclosed pedestrian walkway. UMB Bank, n.a. also leases 40,000 square feet of space in the Equitable Building, in St. Louis, in the heart of the downtown commercial sector. A full service banking center, operations and administrative offices are housed at this location.

At December 31, 2002, the Company’s affiliate banks operated a total of five main banking houses and 155 detached facilities, the majority of which are owned by them or a non-bank subsidiary of the Company and leased to the respective bank. The Company constructed a 180,000 square foot operations center in downtown Kansas City, Missouri. The Company moved its operational and item processing functions, as well as management information systems, to this building in the second quarter of 1999.

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Additional information with respect to premises and equipment is presented in Item 8, pages 38 and 46 of this report.

In the opinion of the management of the Company, the physical properties of the Company and its subsidiaries are suitable and adequate and are being fully utilized.

ITEM 3.   LEGAL PROCEEDINGS

In the normal course of business, the Company and its subsidiaries had certain lawsuits pending against them at December 31, 2002. In the opinion of management, after consultation with legal counsel, none of these suits will have a significant effect on the financial condition of the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the shareholders for a vote during the fourth quarter ending December 31, 2002

PART II

ITEM 5.   MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company’s stock is traded on the NASDAQ National Market System under the symbol “UMBF.” As of February 14, 2003, the Company had 2,113 shareholders. Company stock information for each full quarter period within the two most recent fiscal years is set forth in the table below.

Information concerning restrictions on the ability of the Registrant to pay dividends and the Registrant’s subsidiaries to transfer funds to Registrant is contained in Item 1, page 5 and Item 8, pages 48 and 49 of this report. Information concerning securities the Company issued under equity compensation plans is contained in Item 12, page 66 of this report.

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ITEM 6.   SELECTED FINANCIAL DATA

For a discussion of factors that may materially affect the comparability of the information below, please see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, pages 10 through 26, of this report.

FIVE YEAR FINANCIAL SUMMARY

(in thousands except per share data)

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ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following presents management’s discussion and analysis of the Company’s consolidated financial condition and results of operations. This review highlights the major factors affecting results of operations and any significant changes in financial conditions for the three-year period ending December 31, 2002. It should be read in conjunction with the accompanying consolidated financial statements and other financial statistics appearing elsewhere in the report.

The discussion contains forward-looking statements of expected future developments. We wish to ensure such statements are accompanied by meaningful cautionary statements pursuant to safe harbor established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may refer to projections of future financial performance and financial items, plans and objectives of future operations, and other matters. These forward-looking statements reflect management’s expectations and are based on currently available data; however, actual future results are subject to future events and uncertainties, which could materially affect actual performance and cause future results to differ materially from those referred to in the forward-looking statements. Such future events and uncertainties include, but are not limited to, changes in: loan demand, the ability of customers to repay loans, consumer saving habits, employee costs, pricing, interest rates, competition, legal or regulatory requirements or restrictions, U.S. or international economic or political conditions such as inflation or fluctuation in interest rates or in the values of securities traded in the equity markets. Any forward-looking statements should be read in conjunction with information about risks and uncertainties set forth in this report. Forward-looking statements speak only as of the date they are made, and the Company does not intend to review or revise any particular forward-looking statement in light of events that occur thereafter or to reflect the occurrence of unanticipated events.

Earnings Summary

The Company recorded consolidated net income of $57.2 million for the year ended December 31, 2002. This represents a 12.4% decrease over 2001. Net income for 2001 increased slightly over 2000. Earnings per share for the year ended December 31, 2002, were $2.59 per share compared to $2.95 in 2001 and $2.91 in 2000. Earnings per share for 2002 decreased 11.9% over 2001 per share earnings, which had increased 1.4% over 2000.

The Federal Reserve Board reduced the interest rate 11 times in 2001, for a total of 475 basis points (4.75%). These reductions, caused repricing pressures on loans and securities and thus contributed significantly to a decrease in interest income for 2002 and 2001. Although, this decrease in interest income was positively offset by a decrease in interest expense, the Company’s net interest income declined to $218.0 million in 2002 compared to $239.7 million in 2001, and $234.4 million in 2000.

The Company had an increase of 3.9% in noninterest income in 2002 as compared to 2001 and a 13.3% increase in 2001 compared to 2000. A contributing factor to the increase in 2002 and 2001 was the acquisition in 2001 of Sunstone Financial Group, Inc (now known as UMB Fund Services, Inc). This acquisition has and is expected to continue to help the Company build its fee-based business.

Noninterest expense declined in 2002 by 2.3% compared to 2001 and increased in 2001 by 4.2% compared to 2000. In 2001, the Company recorded a year-end charge of approximately $3.8 million related to the write off and depreciation of certain non-strategic assets, primarily real estate. Also, amortization of goodwill was discontinued in 2002 due to the issuance of Statement of Financial Accounting Standards (“SFAS”) No. 142. This change in accounting standards resulted in a reduction of expense of $5.65 million in 2002. Also, in 2001, the Company had higher staffing costs due to the Company’s new acquisitions.

The results of operations for the year 2000 through May 18, 2001 were affected by the consolidation of the Company’s subsidiary eScout LLC (eScout). The sale of a portion of the Company’s ownership in eScout on May 18, 2001 put the Company in a minority ownership position. The results of eScout are no longer included in the

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consolidated results of the Company. The Company recorded a gain of $1.7 million in 2001 on the sale of part of its ownership interest in eScout.

Results of Operations

Net Interest Income

Net interest income is a significant source of the Company’s earnings and represents the amount by which interest income on earning assets exceeds the interest expense paid on liabilities. The volume of interest earning assets and the related funding sources, the overall mix of these assets and liabilities and the rates paid on each, affects net interest income. Table 1 summarizes the change in net interest income resulting from changes in volume and rates for 2002, 2001 and 2000.

Net interest margin is calculated as net interest income on a fully tax equivalent basis (FTE) as a percentage of average earning assets. A critical component of net interest income and related net interest margin is the percentage of earning assets funded by interest free funding sources. Table 2 analyzes net interest rate margin for the three years ended December 31, 2000, 2001 and 2002. Net interest income, average balance sheet amounts and the corresponding yields earned and rates paid for the years 1998 through 2002 are presented in a table following the footnotes to the consolidated financial statements. Net interest income is presented on a tax-equivalent basis to adjust for the tax-exempt status of earnings from certain loans and investments, primarily obligations of state and local governments.

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TABLE 1

RATE-VOLUME ANALYSIS (in thousands)

This analysis attributes changes in net interest income either to changes in average balances or to changes in average rates for earning assets and interest-bearing liabilities. The change in net interest income is due jointly to both volume and rate and has been allocated to volume and rate in proportion to the relationship of the absolute dollar amount of change in each. All rates are presented on a tax-equivalent basis and give effect to the disallowance of interest expense, for federal income tax purposes, related to certain tax-free assets. The loan average balances and rates include nonaccrual loans and loan fees.

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TABLE 2

ANALYSIS OF NET INTEREST MARGIN (in thousands)

Average earning assets increased by approximately 6.0% in 2002 compared to an increase of 3.1% in 2001. These assets totaled $6.7 billion in 2002 compared to $6.3 billion in 2001 and $6.2 billion in 2000. The increase in average earning assets for 2002 compared to 2001 was entirely attributable to the Company’s investment security portfolio, which increased by 21.3%. Average loans decreased by 9.5% in 2002 compared to the prior year. The increase in the security portfolio was the result of a need to invest increases in deposits and fed funds purchased and repurchase agreements, and the reinvestment of loan paydowns and repayments. Average loans declined due to loan customers continuing to reduce the amount of their debt and the effect of auto manufacturer financing. During 2001, average loans decreased from 2000 by 2.5% compared to a 10.7% increase from 2000 in investment securities. During 2001, the increase in the security portfolio was the result of a need to invest increases in deposits.

The Company’s net interest spread was 3.06% in 2002, 3.21% in 2001 and 2.96% in 2000. Net interest spread is calculated as the difference between the yield earned on earning assets and the rate paid on interest-bearing liabilities. The decrease in net interest spread for 2002 was the result of lower rates earned on total earning assets, which decreased from 6.28% in 2001 to 4.59%, or 171 basis points, compared to a decrease of 154 basis points in the cost of funds. This change was the result of both a decrease in interest rates and a change in the mix of earnings assets. For the same reasons, the net interest margin declined in 2002 to 3.46% compared to 4.00% in 2001 and 4.07% in 2000. During 2002 loans comprised 39% of earning assets as compared with 46% during 2001 and 49% during 2000. Loan balances declined due to loan payoffs, customers reducing their debt in a declining economy and the effect of auto manufacturer financing. Also loan rates declined 162 basis points (1.62%) in 2002 compared to 2001 and declined 79 basis points (0.79%) in 2001 compared to 2000. During 2002, investment securities comprised 57% of earning assets as compared with 50% during 2001 and 46% in 2000. Investment securities increased due to the decline in loan balances and the increase in deposits, fed funds purchased and repurchase agreements. In 2001, the cost of funds decreased by 123 basis points (1.23%) compared to 2000.

Provision and Allowance for Loan Losses

The allowance for loan losses (“ALL”) represents management’s judgement of the losses inherent in the Company’s loan portfolio. The provision for loan losses is the amount necessary to adjust its ALL to the level considered appropriate by management. The adequacy of the ALL is reviewed quarterly, considering such items as historical loss trends, a review of individual loans, current economic conditions, loan growth and characteristics, industry or segment concentration and other factors. Bank regulatory agencies require that the adequacy of the ALL be maintained on a bank-by-bank basis for each of the Company’s subsidiaries. The

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Company utilizes a centralized credit administration function, which provides information on affiliate bank risk levels, delinquencies, an internal ranking system and overall credit exposure. In addition, loan requests are centrally reviewed to ensure the consistent application of the loan policy and standards.

The Company’s allowance for loan losses was $37.3 million at December 31, 2002 compared to $35.6 million at year-end 2001 and $32.0 million at year-end 2000. This represents an allowance to total loans of 1.4%, 1.3% and 1.0% as of December 31, 2002, 2001 and 2000, respectively. The Company’s net charge-off’s in 2002 were $15.0 million, compared to $11.1 million in 2001 and $8.4 million in 2000. The allowance for loan losses increased as a result of increases in net losses, and may continue to increase due to the impact that the slow economy may have on the ability of customers to service debt. At December 31, 2002, the allowance for loan losses exceeded total non-performing loans by $26.6 million.

As shown in Table 3, the ALL has been allocated to various loan portfolio segments. The Company manages the ALL against the risk in the entire loan portfolio and therefore, the allocation of the ALL to a particular loan segment may change in the future. In the opinion of management, the ALL is appropriate based on the inherent losses in the loan portfolio at December 31, 2002. Significant changes in general economic conditions and the ability of specific customers to repay loans could impact the level of the provision for loan losses required in future years.

TABLE 3

ALLOCATION OF ALLOWANCE FOR LOAN LOSSES (in thousands)

This table presents an allocation of the allowance for loan losses by loan categories. The breakdown is based on a number of qualitative factors; therefore, the amounts presented are not necessarily indicative of actual future charge-offs in any particular category.