UMB FINANCIAL CORP - 10-Q Quarterly Report

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-4887

UMB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Missouri

43-0903811

(State or other jurisdiction of

incorporation or organization)

(I.R.S. – Employer

Identification Number)

1010 Grand Boulevard

Kansas City, Missouri 64106

(Address of principal executive offices and Zip Code)

(816) 860-7000

(Registrant’s telephone number, including area code)

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

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

As of April 30, 2005, UMB Financial Corporation had 21,631,176 shares of common stock outstanding.

UMB FINANCIAL CORPORATION

FORM 10-Q

INDEX


PART I – FINANCIAL INFORMATION		3

ITEM 1. FINANCIAL STATEMENTS		3

CONDENSED CONSOLIDATED BALANCE SHEETS		3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME		4

STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY		5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS		6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS		7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		17

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		31

ITEM 4. CONTROLS AND PROCEDURES		36

PART II - OTHER INFORMATION		37

ITEM 1. LEGAL PROCEEDINGS		37

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		37

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		37

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS		37

ITEM 5. OTHER INFORMATION		37

ITEM 6. EXHIBITS		38

SIGNATURES		39

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT		40

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT		41

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002		42

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002		43

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UMB FINANCIAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, dollars in thousands, except per share data)


	March 31,						December 31, 2004
	2005			2004			December 31, 2004
ASSETS
Loans:
Commercial, financial and agricultural	$	1,291,305		$	1,120,242		$	1,204,629
Real estate construction		31,123			25,052			27,205
Consumer		907,721			920,276			968,681
Real estate		686,788			601,912			663,555
Leases		5,575			6,563			5,154
Allowance for loan losses		(40,880	)		(44,142	)		(42,723	)

Net loans		2,881,632			2,629,903			2,826,501
Securities available for sale:
U.S. Treasury		731,784			881,315			736,632
U.S. Agencies		544,465			727,796			1,420,532
State and political subdivisions		458,178			370,209			452,907
Mortgage backed		935,344			902,803			978,833
Commercial paper		14,972			—			—

Total securities available for sale		2,684,743			2,882,123			3,588,904
Securities held to maturity:
State and political subdivisions (market value of $144,083, $312,915 and $168,324 respectively)		142,735			278,341			166,065
Federal Reserve Bank stock and other		11,976			8,621			9,042
Federal funds sold		272,883			—			—
Securities purchased under agreements to resell		24,651			196,902			293,599
Interest bearing due from banks		1,834			1,834			1,834
Trading securities		56,723			92,731			60,221

Total earning assets		6,077,177			6,090,455			6,946,166
Cash and due from banks		465,857			420,835			497,382
Bank premises and equipment, net		222,917			218,422			226,239
Accrued income		38,102			39,563			36,590
Goodwill on purchased affiliates		59,115			57,428			59,115
Other intangibles		4,673			5,415			4,859
Other assets		47,092			30,725			34,655

Total assets	$	6,914,933		$	6,862,843		$	7,805,006

LIABILITIES
Deposits:
Noninterest-bearing demand	$	1,874,871		$	1,919,224		$	1,993,281
Interest-bearing demand and savings		2,265,229			2,164,563			2,433,885
Time deposits under $100,000		612,312			691,762			630,988
Time deposits of $100,000 or more		241,017			187,136			325,550

Total deposits		4,993,429			4,962,685			5,383,704
Federal funds purchased and repurchase agreements		1,004,023			959,454			1,506,000
Short-term debt		10,170			33,289			39,426
Long-term debt		39,733			18,666			21,051
Accrued expenses and taxes		25,731			32,001			21,530
Other liabilities		26,864			32,824			14,113

Total liabilities		6,099,950			6,038,919			6,985,824

SHAREHOLDERS’ EQUITY
Common stock, $1.00 par value; authorized 33,000,000 shares, 27,528,365 issued, 21,630,069, 21,673,446 and 21,641,053 shares outstanding, respectively		27,528			27,528			27,528
Capital surplus		726,673			726,406			726,595
Retained earnings		312,807			287,760			305,986
Accumulated other comprehensive (loss)/income		(21,026	)		10,037			(10,619	)
Treasury stock, 5,898,296, 5,854,919 and 5,887,312 shares, at cost, respectively		(230,999	)		(227,807	)		(230,308	)

Total shareholders’ equity		814,983			823,924			819,182

Total liabilities and shareholders’ equity	$	6,914,933		$	6,862,843		$	7,805,006

See Notes to Condensed Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands except share and per share data)


	Three Months Ended March 31,
	2005		2004
INTEREST INCOME
Loans	$	37,859	$	32,647
Securities:
Taxable interest		16,664		15,137
Tax-exempt interest		4,372		4,995

Total securities income		21,036		20,132
Federal funds and resell agreements		1,315		896
Trading securities and other		520		467

Total interest income		60,730		54,142

INTEREST EXPENSE
Deposits		9,727		6,400
Federal funds and repurchase agreements		6,231		2,372
Short-term debt		69		49
Long-term debt		275		242

Total interest expense		16,302		9,063

Net interest income		44,428		45,079
Provision for loan losses		750		1,802

Net interest income after provision for loan losses		43,678		43,277

NONINTEREST INCOME
Trust and securities processing		20,498		19,114
Trading and investment banking		4,657		5,087
Service charges on deposits		17,976		18,812
Insurance fees and commissions		828		878
Brokerage fees		1,550		2,601
Bankcard fees		7,622		7,475
Gain on sale of other assets, net		2,592		—
Gain on sale of employee benefit accounts		3,600		764
Gain on sales of securities available for sale, net		—		141
Other		4,237		3,740

Total noninterest income		63,560		58,612

NONINTEREST EXPENSE
Salaries and employee benefits		52,060		48,747
Occupancy, net		6,417		6,353
Equipment		10,476		10,764
Supplies and services		5,549		5,574
Marketing and business development		2,960		3,508
Processing fees		5,564		5,249
Legal and consulting		1,827		2,248
Amortization of other intangibles		186		186
Other		6,286		5,323

Total noninterest expense		91,325		87,952

Income before income taxes		15,913		13,937
Income tax provision		4,333		3,179

NET INCOME	$	11,580	$	10,758

PER SHARE DATA
Net income - basic	$	0.54	$	0.50
Net income - diluted		0.53		0.49
Dividends		0.22		0.21

Weighted average shares outstanding		21,636,200		21,686,928

See Notes to Condensed Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

(unaudited, dollars in thousands)


	Common Stock		Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total
Balance - January 1, 2004	$	27,528	$	726,405	$	281,556		$	3,183		$	(226,749	)	$	811,923
Comprehensive income
Net income		—		—		10,758			—			—			10,758
Other comprehensive income, change in unrealized gains (losses) on securities of $10,932 net of tax of $3,988 and the reclassification adjustment included in net income of $141 net of tax $51		—		—		—			6,854			—			6,854

Total comprehensive income															17,612
Cash dividends ($0.21 per share)		—		—		(4,554	)		—			—			(4,554	)
Purchase of treasury stock		—		—		—			—			(1,101	)		(1,101	)
Sale of treasury stock		—		—		—			—			3			3
Exercise of stock options		—		1		—			—			40			41

Balance - March 31, 2004	$	27,528	$	726,406	$	287,760		$	10,037		$	(227,807	)	$	823,924

Balance - January 1, 2005	$	27,528	$	726,595	$	305,986		$	(10,619	)	$	(230,308	)	$	819,182
Comprehensive income
Net income		—		—		11,580			—			—			11,580
Other comprehensive income, change in unrealized gains (losses) on securities of $16,480 net of tax of $6,073		—		—		—			(10,407	)		—			(10,407	)

Total comprehensive income															1,173
Cash dividends ($0.22 per share)		—		—		(4,759	)		—			—			(4,759	)
Purchase of treasury stock		—		—		—			—			(835	)		(835	)
Recognition of restricted stock compensation		—		18		—			—			23			41
Sale of treasury stock		—		39		—			—			39			78
Exercise of stock options		—		21		—			—			82			103

Balance - March 31, 2005	$	27,528	$	726,673	$	312,807		$	(21,026	)	$	(230,999	)	$	814,983

See Notes to Condensed Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, dollars in thousands)


	Three Months Ended March 31,
	2005			2004
Operating Activities
Net Income	$	11,580		$	10,758
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		750			1,802
Depreciation and amortization		7,716			7,835
Deferred income taxes		1,108			(2,928	)
Net decrease/(increase) in trading securities and other earning assets		3,498			(31,951	)
Gains on sales of securities available for sale		—			141
Amortization of securities premiums, net of discount accretion		3,571			7,421
Gains on sales of other assets		(2,592	)		—
Changes in:
Accrued income		(1,512	)		865
Accrued expenses and taxes		4,201			2,842
Other assets and liabilities, net		12,602			18,719

Net cash provided by operating activities	$	40,922		$	15,504

Investing Activities
Proceeds from maturities of securities held to maturity	$	23,476		$	27,600
Proceeds from sales of securities available for sale		—			10,977
Proceeds from maturities of securities available for sale		6,701,240			2,668,779
Purchases of securities held to maturity		(3,818	)		(189	)
Purchases of securities available for sale		(5,816,392	)		(2,151,080	)
Net (increase)/decrease in loans		(55,881	)		47,093
Net (increase)/decrease in fed funds and resell agreements		(3,935	)		79,813
Purchases of bank premises and equipment		(5,070	)		(6,790	)
Net change in unsettled securities transactions		(7,294	)		9,993
Proceeds from sales of bank premises and equipment		3,428			—

Net cash provided by investing activities	$	835,754		$	686,196

Financing Activities
Net decrease in demand and savings deposits	$	(287,066	)	$	(466,516	)
Net decrease in time deposits		(103,209	)		(206,924	)
Net decrease in fed funds/ repurchase agreements		(501,977	)		(214,473	)
Net decrease in short-term debt		(29,256	)		(37,315	)
Proceeds from long-term debt		19,000			2,650
Repayment of long-term debt		(318	)		(264	)
Cash dividends		(4,762	)		(4,554	)
Proceeds from exercise of stock options and sales of treasury shares		222			44
Purchases of treasury stock		(835	)		(1,101	)

Net cash used in financing activities	$	(908,201	)	$	(928,453	)

Decrease in cash and due from banks	$	(31,525	)	$	(226,753	)
Cash and due from banks at beginning of period		497,382			647,588

Cash and due from banks at end of period	$	465,857		$	420,835

See Notes to Condensed Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2005

1. Financial Statement Presentation

The condensed consolidated financial statements include the accounts of UMB Financial Corporation and its subsidiaries (collectively, the “Company”) after elimination of all material intercompany transactions. In the opinion of management of the Company, all adjustments, which were of a normal recurring nature and necessary for a fair presentation of the financial position and results of operations, have been made. The results of operations and cash flows for the interim periods presented may not be indicative of the results of the full year. The financial statements should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and in conjunction with the Company’s 2004 Annual Report on Form 10-K.

2. Summary of Accounting Policies

The Company is a multi-bank holding company, which offers a wide range of banking and other financial services to its customers through its branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Arizona, Nebraska and Wisconsin. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also impact reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Following is a summary of the more significant accounting policies to assist the reader in understanding the financial presentation.

Consolidation

The Company and its subsidiaries are included in the condensed consolidated financial statements (reference hereinafter to the “Company” in these Notes to Condensed Consolidated Financial Statements include wholly owned subsidiaries). Intercompany accounts and transactions have been eliminated.

Revenue Recognition

Interest on loans and securities is recognized based on rate times the principal amount outstanding. Interest accrual is discontinued when, in the opinion of management, the likelihood of collection becomes doubtful. Other noninterest income is recognized as services are performed or revenue-generating transactions are executed.

Cash and Due From Banks

Cash on hand, cash items in the process of collection, and amounts due from correspondent banks and the Federal Reserve Bank are included in cash and due from banks.

Loans

Affiliate banks enter into lease financing transactions that are generally recorded under the financing method of accounting. Income is recognized on a basis that results in an approximate level rate of return over the life of the lease.

A loan is considered to be impaired when management believes it is probable that it will be unable to collect all principal and interest due according to the contractual terms of the loan. If a loan is impaired, the Company records a loss valuation allowance equal to the carrying amount of the loan in excess of the present value of the estimated future cash flows discounted at the loan’s effective rate, based on the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Real estate and consumer loans are collectively evaluated for impairment. Commercial loans are evaluated for impairment on a loan-by-loan basis.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

The adequacy for the allowance for loan losses is based on management’s continuing evaluation of the pertinent factors underlying the quality of the loan portfolio, including actual loan loss experience, current economic conditions, detailed analysis of individual loans for which full collectibility may not be assured, determination of the existence and realizable value of the collateral and guarantees securing such loans. The actual losses, notwithstanding such considerations, however, could differ from the amounts estimated by management.

Securities

Debt securities available for sale principally include U.S. Treasury and agency securities and mortgage-backed securities. Securities classified as available for sale are measured at fair value. Unrealized holding gains and losses are excluded from earnings and reported in accumulated other comprehensive income/(loss) until realized. Realized gains and losses on sales are computed by the specific identification method at the time of disposition and are shown separately as a component of noninterest income.

Securities held to maturity are carried at amortized historical cost based on management’s intention, and the Company’s ability, to hold them to maturity. The Company classifies certain securities of state and political subdivisions as held to maturity. Certain significant unforeseeable changes in circumstances may cause a change in the intent to hold these securities to maturity. For example, such changes may include deterioration in the issuer’s credit-worthiness that is expected to continue or a change in tax law that eliminates the tax-exempt status of interest on the security.

The securities portfolio contains securities that have unrealized losses that are not deemed to be other-than-temporarily impaired. There are U.S. Treasury obligations, federal agency mortgage backed securities and municipal securities that have had unrealized losses for greater than 12 months. These unrealized losses are a result of interest rate volatility in the markets and are not related to the credit quality of the investments. The Company has the ability and the intent to hold these investments until a recovery of fair value is achieved, which may be maturity. Therefore, management does not consider these securities to be other-than-temporarily impaired as of March 31, 2005.

Trading securities, generally acquired for subsequent sale to customers, are carried at market value. Market adjustments, fees and gains or losses on the sale of trading securities are considered to be a normal part of operations and are included in trading and investment banking income.

On the Statements of Changes in Consolidated Shareholders’ Equity, beginning Other Comprehensive Income consists only of unrealized gains (losses) on securities.

Goodwill and Other Intangibles

Goodwill is tested periodically for impairment. The Company has elected November 30 as its annual measurement date for testing impairment and as a result of the impairment tests performed on that date in 2004, 2003 and 2002, no impairment charge was recorded. Other intangible assets are amortized over a period of 10 years.

Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation, which is computed primarily on the straight line method. Bank premises are depreciated over 20 to 40 year lives, while equipment is depreciated over lives of 3 to 20 years. Gains and losses from the sale of bank premises and equipment are included in gain on sale of other assets, net.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

Impairment of Long-Lived Assets

Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes a comparison of future cash flows expected to be generated by the asset or group of assets to their current carrying value. If the carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying value exceeds fair value.

Taxes

The Company recognizes certain income and expenses in different time periods for financial reporting and income tax purposes. The provision for deferred income taxes is based on the liability method and represents the change in the deferred income tax accounts during the year excluding the tax effect of the change in net unrealized gain/(loss) on securities available for sale.

Per Share Data

Basic income per share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted income per share includes the diluted effect of 84,202 and 73,351 shares issueable upon the exercise of stock options granted by the Company at March 31, 2005 and 2004, respectively.

Accounting for Stock-Based Compensation

In accordance with Statement of Financial Accounting Standard, (SFAS) No. 123, “Accounting for Stock-based Compensation”, the Company has elected to account for stock-based compensation using the intrinsic value method under the provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees”. The following table illustrates the effect on net income and earnings per share, if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.


	Three Months Ended March 31,
*(dollars in thousands)*	2005		2004
Net income, as reported	$	11,580	$	10,758
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		115		90

Pro forma net income	$	11,465	$	10,668

Earnings per share:
Basic-as reported		0.54		0.50
Basic-pro forma		0.53		0.49
Diluted-as reported		0.53		0.49
Diluted-pro forma		0.53		0.49

Reclassification

Certain reclassifications were made to the 2004 Condensed Consolidated Financial Statements to conform to the current year presentation.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

3. New Accounting Pronouncements

Consolidation of Variable Interest Entities In January 2003, the Financial Accounting Standards Board, (FASB) issued FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities”, which was revised by FIN 46 (R) (Revised December 1, 2003), “Consolidation of Variable Interest Entities”. FIN 46 requires consolidation by business enterprises of variable interest entities that meet certain requirements. FIN 46 (R) changes the effective date of FIN 46 for certain entities. Public companies shall apply either FIN 46 or FIN 46 (R) to their interests in special purpose entities (SPE) as of the first interim or annual period ending after December 15, 2003. The decision to apply FIN 46 or FIN 46 (R) may be made on an SPE by SPE basis. The Company’s adoption of FIN 46 and FIN 46 (R) did not have a significant impact on its Condensed Consolidated Financial Statements.

Share-Based Payment In December 2004, the FASB issued SFAS No. 123 (R), “Share-Based Payment”. SFAS No. 123 (R) establishes accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services. SFAS No. 123 (R) focuses primarily on accounting for transactions with employees, and carries forward without change prior guidance for share-based payments for transactions with non-employees.

SFAS No. 123 (R) eliminates the intrinsic value measurement objective in APB Opinion No. 25 and generally requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant. The standard requires grant date fair value to be estimated using either an option-pricing model which is consistent with the terms of the award or a market observed price, if such a price exists. Such cost must be recognized over the period during which an employee is required to provide service in exchange for the award over the requisite service period (which is usually the vesting period). The standard also requires the Company to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur.

The Company is required to apply SFAS No. 123 (R) to all awards granted, modified or settled in the first fiscal year after June 15, 2005. The Company is also required to use either the “modified prospective method” or the “modified retrospective method”. Under the modified prospective method, the Company must recognize compensation cost for all awards granted after the Company adopts the standard and for the unvested portion of previously granted awards that are outstanding on that date.

Under the modified retrospective method, the Company must restate its previously issued Condensed Consolidated Financial Statements to recognize the amounts the Company previously calculated and reported on a pro forma basis, as if the prior standard had been adopted.

Under both methods, the Company is permitted to use either a straight line or an accelerated method to amortize the cost as an expense for awards with graded vesting. The standard permits and encourages early adoption.

The Company has commenced its analysis of the impact of SFAS No. 123 (R), and has decided to use the modified prospective method. The Company cannot currently quantify with precision the effect that this standard would have on the financial position or results of operations in the future.

Exchange of Nonmonetary Assets – an amendment of Accounting Principles Board (APB) Opinion No. 29 In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets an amendment of APB No. 29”. This Statement amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. The Statement specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The statement is effective for nonmonetary asset exchanges occurring in the first fiscal period beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal period beginning after the date this statement is issued. Retroactive application is not permitted. Management is analyzing the requirements of this new statement and believes that its adoption will not have a significant impact on the Company’s Condensed Consolidated Financial Statements.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

Accounting for Conditional Asset Retirement Obligations – an Interpretation of FASB Statement No. 143 In March, 2005 the FASB issued FIN 47, “Accounting for Conditional Asset Retirement Obligation – an Interpretation of FASB Statement No. 143”. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred – generally upon acquisition, construction or development and (or) through the normal operations of the asset. Examples would be federal or state requirements to the cleanup of hazardous environmental materials or site and asbestos cleanup. The interpretation is effective no later than the end of the fiscal year ending after December 15, 2005 (December 31, 2005 for calendar year interpretations). The Company’s adoption of FIN 47 will not have a significant impact on its Condensed Consolidated Financial Statements

4. Allowance for Loan Losses

This table provides an analysis of the allowance for loan losses for the three months ended March 31, 2005 and 2004 (dollars in thousands):


	Three Months Ended March 31,
	2005			2004
Allowance - January 1,	$	42,723		$	43,494
Additions (deductions):
Charge-offs	$	(3,117	)	$	(2,603	)
Recoveries		524			1,449

Net charge-offs	$	(2,593	)	$	(1,154	)

Provision charged to expense		750			1,802

Allowance - March 31,	$	40,880		$	44,142

Impaired loans under SFAS No. 114. SFAS No. 114, “Accounting by Creditors for Impairment of a Loan” requires that impaired loans be measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, at the loan’s observable market price, or at the fair value of the collateral securing the loan. The summary below provides an analysis of impaired loans under SFAS No. 114 for the three months ended March 31, 2005 and 2004 and December 31, 2004 (dollars in thousands):


	Three Months Ended March 31,				December 31, 2004
	2005		2004		December 31, 2004
Total impaired loans as of March 31 and December 31	$	8,044	$	10,638	$	10,007
Amount of impaired loans which have a related allowance		1,204		1,625		2,603
Amount of related allowance		980		1,098		2,330
Remaining impaired loans with no allowance		6,840		9,013		7,405
Average recorded investment in impaired loans during the period		9,026		10,682		10,169

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

5. Goodwill and other intangibles

Changes in the carrying amount of goodwill for the three months ended March 31, 2005 and 2004 by operating segment are as follows (dollars in thousands):


	Consumer Services		Asset Management		Investment Services Group		Total
Balances as of January 1, 2004	$	34,743	$	10,479	$	12,206	$	57,428
Goodwill acquired during period		—		—		—		—

Balances as of March 31, 2004	$	34,743	$	10,479	$	12,206	$	57,428

Balances as of January 1, 2005	$	34,981	$	10,479	$	13,655	$	59,115
Goodwill acquired during period		—		—		—		—

Balances as of March 31, 2005	$	34,981	$	10,479	$	13,655	$	59,115

Following are the intangible assets that continue to be subject to amortization as of March 31, 2005 and 2004 (dollars in thousands):


	As of March, 31, 2005
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Core deposit intangible assets	$	16,777	$	16,730	$	47
Other intangible assets		7,200		2,574		4,626

Total	$	23,977	$	19,304	$	4,673


	As of March, 31, 2004
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Core deposit intangible assets	$	16,777	$	16,718	$	59
Other intangible assets		7,200		1,844		5,356

Total	$	23,977	$	18,562	$	5,415


	As of December 31, 2004
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Core deposit intangibles assets	$	16,777	$	16,727	$	50
Other intangible assets		7,200		2,391		4,809

Total	$	23,977	$	19,118	$	4,859


Estimated amortization expense of intangible assets on future years:
For the year ended December 31, 2005	$	742
For the year ended December 31, 2006		742
For the year ended December 31, 2007		742
For the year ended December 31, 2008		742
For the year ended December 31, 2009		734

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

6. Commitments, Contingencies and Guarantees

In the normal course of business, the Company is a party to financial instruments with off-balance-sheet risk in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, commercial letters of credit, standby letters of credit, and futures contracts. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contract or notional amount of those instruments reflects the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss, in the event of nonperformance by the other party to the financial instruments for commitments to extend credit, commercial letters of credit, and standby letters of credit is represented by the contract or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the agreement. These conditions generally include, but are not limited to, each customer being current as to repayment terms of existing loans and no deterioration in the customer’s financial condition. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The interest rate is generally a variable rate. If the commitment has a fixed interest rate, the rate is generally not set until such time as credit is extended. For credit card customers, the Company has the right to change or terminate terms or conditions of the credit card account at any time. Since a large portion of the commitments and unused credit card lines are never actually drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on an individual basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, real estate, plant and equipment, stock, securities and certificates of deposit.

Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, as a general rule, drafts will be drawn when the underlying transaction is consummated as intended.

Standby letters of credit are conditional commitments issued by the Company payable upon the non-performance of a customer’s obligations to a third party. The Company issues standby letters of credit for terms ranging from three months to three years. The maximum liability to the Company under standby letters of credit at March 31, 2005 and 2004 were $207.9 million and $172.0 million, respectively. As of March 31, 2005 and 2004, standby letters of credit totaling $45.5 million and $26.7 million, respectively were with related parties to the Company.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. The Company holds collateral supporting those commitments when deemed necessary. Collateral varies but may include such items as those described for commitments to extend credit.

Futures contracts are contracts for delayed delivery of securities or money market instruments in which the seller agrees to make delivery at a specified future date, of a specified instrument, at a specified yield. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in securities values and interest rates. Instruments used in trading activities are carried at market value and gains and losses on futures contracts are settled in cash daily. Any changes in the market value are recognized in trading and investment banking income.

The Company’s use of futures contracts is very limited. The Company uses contracts to offset interest rate risk on specific securities held in the trading portfolio. Open futures contract positions averaged $42.5 million and $40.6 million during the three months ended March 31, 2005 and 2004, respectively. Net futures activity resulted in gains of $0.5 million for the three months ended March 31, 2005 and losses of $0.7 million for the same period in 2004. The Company controls the credit risk of its futures contracts through credit approvals, limits and monitoring procedures.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

The Company also enters into foreign exchange contracts on a limited basis. For operating purposes, the Company maintains certain balances with foreign banks. Foreign exchange contracts are purchased on a monthly basis to avoid foreign exchange risk on these foreign balances. The Company will also enter into foreign exchange contracts to facilitate foreign exchange needs of customers. The Company will enter into a contract to buy or sell a foreign currency at a future date only as part of a contract to sell or buy the foreign currency at the same future date to a customer. During the three months ended March 31, 2005, contracts to purchase and to sell foreign currency averaged approximately $16.3 million compared to $14.8 million during the same period in 2004. The net gains on these foreign exchange contracts for the three months ended March 31, 2005 and 2004 were $0.4 million and $0.4 million, respectively.

With respect to group concentrations of credit risk, most of the Company’s business activity is with customers in the states of Missouri, Kansas, Colorado, Oklahoma, Nebraska and Illinois. At March 31, 2005, the Company did not have any significant credit concentrations in any particular industry.

In the normal course of business, the Company and its subsidiaries are named defendants in various lawsuits and counter-claims. In the opinion of management, after consultation with legal counsel, none of these lawsuits are expected to have a materially adverse effect on the financial position or results of operations of the Company.

Contract or Notional Amount (dollars in thousands)


	March 31,				December 31, 2004
	2005		2004		December 31, 2004
Commitments to extend credit for loans (excluding credit card loans)	$	1,038,635	$	820,543	$	1,061,788
Commitments to extend credit under credit card loans		915,396		905,173		900,284
Commercial letters of credit		13,037		8,212		12,589
Standby letters of credit		207,875		171,996		203,791
Futures contracts		41,000		42,900		44,000
Forward foreign exchange contracts		13,073		5,417		13,015
Spot foreign exchange contracts		10,253		5,595		6,539

7. Business Segment Reporting

The Company has strategically aligned its operations into six major lines of business, as shown below (collectively, “Business Segments”). The Business Segments are differentiated based on the products and services provided. Lines of business financial results produced by the Company’s internal management accounting system are evaluated regularly by the Executive Committee in deciding how to allocate resources and access performance per individual Business Segment. The management accounting system assigns balance sheet and income statement items to each line of business using methodologies that are refined on an ongoing basis. The Business Segments were redefined during the fourth quarter of 2004, breaking Commercial Banking into three separate sectors: Commercial Banking and Lending; Corporate Services and Banking Services. This breakout was done to better reflect how the Company will go to market with its products and services as well as adding more granularity to better identify the primary drivers of its profitability. In addition, the Company merged consumer oriented business lines into the Retail Banking Business Segment and created Consumer Services. Finally, to reflect its desire to focus on both Personal and Institutional lines of business, the Company’s Trust and Wealth Management Business Segment has been renamed Asset Management. For comparability purposes, amounts in all periods are based on methodologies in effect at March 31, 2005 consistent with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”.

The Company utilizes a funds transfer pricing model to neutralize the interest rate risk affecting the financial results of the business segments on a stand-alone basis. This model records cost of funds or credit for funds using matched maturity funding for certain assets and liabilities, or a blended rate based on various maturities for the remaining assets and liabilities. The allowance for loan losses is allocated using specifically identified reserves assigned to loans where available, with general reserves assigned to the remaining loan portfolio based on

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

historical losses, economic outlook and other factors. The related loan loss provision is assigned based on the amount necessary to maintain reserves adequate for each line of business. Noninterest income and noninterest expense directly attributable to a line of business is assigned to that line of business. Direct expenses incurred by areas whose services support the overall Company are allocated to the Business Segments based on standard unit costs applied to actual volume measurements. Administrative expenses are allocated based on the estimated time expended for each segment. Any remaining expenses, such as corporate overhead, are assigned based on the ratio of an individual business segment’s noninterest expense to total noninterest expense incurred by all business lines. Virtually all interest rate risk is assigned to the Treasury and Other business segment that is the offset to the funds transfer pricing charges and credits assigned to each business segment.

The following summaries provide information about the activities of each line of business:

Commercial Banking and Lending serves the commercial lending/leasing as well as the capital markets needs of the Company’s middle market businesses and governmental entities by offering various products and services. The commercial loan and leasing group provides services including commercial loans and lines of credit, letters of credit, and loan syndication services. Capital markets provides consultative services for companies that need non-traditional banking services such as asset based financing, asset securitization, equity and mezzanine financing, factoring, private and public placement of senior debt, as well as merger and acquisition consulting.

Corporate Services meets the treasury management, treasury services as well as the corporate trust and security transfer needs of its commercial clients. Treasury management products and services include account reconciliation services, automated clearing house, controlled disbursements, lockbox services and various card products and services. Corporate Trust services include serving as corporate and municipal bond trustee as well as the paying agent/registrar for issued bonds and notes. Securities Transfer services include dividend disbursing/reinvestment, employee stock purchase plans, proxy services, as well as acting as transfer agent.

Banking Services provides products and services to both the Company’s customer base as well as selling the same products and services through its correspondent banking network which comprises nearly 53% of banks in the Midwest and 12% of the nation’s banks. Products and services include bank stock loans, cash letter collections, FiServ account processing, international payments, foreign exchange, investment portfolio accounting and safekeeping. Additionally, consulting services are provided on a variety of issues including compliance, human resources, management, investment portfolio and asset/liability management.

Consumer Services delivers a full range of products and services through the Company’s bank branch and ATM network. These services are distributed over a six state area, as well as through online and telephone banking. Consumer Services is a major provider of funds for the Company. This line of business offers a variety of consumer products, including deposit accounts, installment loans, credit cards, home equity lines of credit, residential mortgages, and brokerage and insurance services for individuals.

Asset Management provides a full spectrum of trust and custody services to both personal and institutional clients of the Company focusing on estate planning, trust, retirement planning and investment management services to individuals and institutional customers. The private client services division offers full trust and personal banking services to high net worth individuals. The investment advisor income from the Company’s proprietary funds, UMB Scout Funds, are also included in this segment.

Investment Services Group provides a full range of services for mutual funds, hedge funds, separate accounts and commingled funds to a wide range of investment advisors, independent money managers, broker/dealers, banks, third-party administrators, insurance companies and other financial service providers. Services provided include fund administration and accounting, transfer agency, distribution services, marketing, shareholder communications, custody and cash management.

Treasury and Other Adjustments includes asset and liability management activities and other miscellaneous items of a corporate nature not allocated to specific business lines. Corporate eliminations and taxes are also allocated to this segment.

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005

Business Segment Information

Line of business/segment financial results were as follows (dollars in thousands):


	Three Months Ended March 31,
	Commercial Banking and Lending				Corporate Services
	2005		2004		2005		2004
Net interest income	$	10,986	$	11,198	$	10,018	$	10,513
Provision for loan losses		487		507		—		—
Noninterest income		313		252		14,975		15,983
Depreciation and amortization		358		345		1,643		1,342
Noninterest expense		6,761		5,933		17,687		17,369
Income taxes		—		—		—		—

Net income (loss)	$	3,693	$	4,665	$	5,663	$	7,785

Average assets	$	1,767,000	$	1,763,000	$	47,000	$	140,000
Expenditures for additions to premises and equipment		145		201		1,462		1,265

	Banking Services				Consumer Services
	2005		2004		2005		2004
Net interest income	$	1,049	$	1,685	$	19,727	$	19,214
Provision for loan losses		—		—		263		1,295
Noninterest income		7,582		8,829		17,650		14,280
Depreciation and amortization		351		275		3,947		3,851
Noninterest expense		7,546		6,979		33,153		31,231
Income taxes		—		—		—		—

Net income (loss)	$	734	$	3,260	$	14	$	(2,883	)

Average assets	$	61,000	$	95,000	$	1,080,000	$	1,046,000
Expenditures for additions to premises and equipment		154		202		2,419		3,637

	Asset Management				Investment Services Group
	2005		2004		2005		2004
Net interest income	$	53	$	164	$	2,247	$	1,922
Provision for loan losses		—		—		—		—
Noninterest income		12,493		11,335		8,697		8,272
Depreciation and amortization		409		363		659		584
Noninterest expense		11,597		9,166		7,772		7,768
Income taxes		—		—		—		—

Net income (loss)	$	540	$	1,970	$	2,513	$	1,842

Average assets	$	12,000	$	9,000	$	26,000	$	24,000
Expenditures for additions to premises and equipment		308		262		464		451

UMB FINANCIAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2005


	Treasury and Other Adjustments						Total Consolidated Company
	2005			2004			2005		2004
Net interest income	$	348		$	383		$	44,428	$	45,079
Provision for loan losses		—			—			750		1,802
Noninterest income		1,850			(339	)		63,560		58,612
Depreciation and amortization		349			1,075			7,716		7,835
Noninterest expense		(907	)		1,671			83,609		80,117
Income Taxes		4,333			3,179			4,333		3,179

Net income (loss)	$	(1,577	)	$	(5,881	)	$	11,580	$	10,758

Average assets	$	4,175,000		$	4,090,000		$	7,168,000	$	7,167,000
Expenditures for additions to premises and equipment		118			771			5,070		6,790

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following financial review presents management’s discussion and analysis of the condensed consolidated financial condition and results of operations of the Company. This review highlights the material changes in the results of operations and changes in financial condition for the three-month period ended March 31, 2005. It should be read in conjunction with the accompanying condensed consolidated financial statements, notes to condensed consolidated financial statements and other financial statistics appearing elsewhere in this report. Results of operations for the periods included in this review are not necessarily indicative of results to be attained during any future period.

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report and the documents incorporated herein by reference contain forward-looking statements of expected future developments within the meaning of and pursuant to the safe harbor provisions established by Section 21E of the Securities Exchange Act of 1934, as amended 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 and in documents incorporated herein by reference. 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.

Overview

Management believes the two factors having the greatest impact on the Company’s operating earnings are the low rate environment and the overall health of the equity and financial markets.

The sustained low interest rate environment adversely impacts the Company’s net interest income as its balance sheet is structured to be both very short in duration and liquid. Management believes that strong liquidity and capital are necessary given the types of products and services the Company offers, particularly as it relates to

treasury and cash management products and services. A strong liquidity and capital position provide assurances that the cash needs of the Company can be met. In an increasing rate environment, this position should benefit the Company if assets can be repriced more quickly than deposits. In the recent rising rate environment, the Company’s liabilities have repriced more quickly and by a larger magnitude than assets having the effect of a reduction of net interest income. This effect is due to the Company’s large proportion of short-term liabilities that reprice frequently, as well as the flattening of the yield curve. Table 2 appearing in the “Results of Operations – Net Interest Income” section of the management’s Discussion and Analysis shows the impact of this repricing trend. However, there are factors that lead Management to believe that this trend will reverse. First, management believes that interest rates will continue to increase at a measured pace and then stabilize. Secondly, the Company expects the growth in the loan portfolio to continue throughout the year. Finally, management has adopted a portfolio modification plan by extending the average life of the investment portfolio. (See discussion under “Securities” on page 27) The Company intends to implement this extension strategy over the course of the next two years. See Item 3, Quantitative Disclosures about Market Risk discusses in detail the impact of rising and declining rates on net interest income.

Management continues to focus on diversifying the revenue sources so that the net income of the Company is less susceptible to changes in interest rates. Management has also focused on reducing expenses that are not necessary to the delivery of products and services to the Company’s customer base.

As some of the Company’s fee-based business is the direct result of the market value of its customer’s investments, the overall health of the equity and financial markets plays an important role in the recognition of fee income, particularly in the trust, mutual fund servicing and investment management areas of the Company. If the overall equity and financial markets improve, the basis on which certain fee income is calculated should grow.

The Company’s goal is to differentiate itself from its large super-regional and national competitors through superior service, attention to detail, customer knowledge and responsiveness. The Company’s size allows it to meet this goal and at the same time offer the wide range of products most customers need. This strategy has worked especially well during a period of bank consolidation and should continue to be a benefit. In addition to commercial loan growth in Kansas City, the Company has experienced growth in markets outside of the Kansas City metropolitan area and is developing its customer base in these regions. The Company believes that there is demand in these markets for bank services delivered with a customer-centric focus.

Earnings Summary

The Company recorded consolidated net income of $11.6 million for the three-months ended March 31, 2005 compared to $10.8 million for the same period a year earlier. This represents a 7.64% increase over the three-month period ended March 31, 2004, which was primarily driven by increases in noninterest income. Basic earnings per share for the first quarter 2005 were $0.54 per share ($0.53 per share full-diluted) compared to $0.50 per share ($0.49 per share fully-diluted) for the first quarter 2004. Return on average assets and return on average common shareholders’ equity for the three-month period ended March 31, 2005 was 0.66% and 5.70% respectively, as compared to 0.60% and 5.26% for the three-month period ended March 31, 2004.

Net interest income for the first quarter of 2005 decreased 1.44% from the first quarter 2004. The decline in net interest income was primarily the result of interest-bearing liability yields increasing faster then earning asset yields. This situation occurred due to a flattening yield curve.

Provision for loan losses declined $1.1 million in the first quarter of 2005 due to an adequate reserve for loan losses compared to management’s estimate of inherent losses within the loan portfolio.

Noninterest income increased $4.9 million in the first quarter of 2005 primarily due to two transactions. First, a $2.4 million gain was recognized on a condemnation sale of a downtown Kansas City branch. Additionally, there was a $2.8 million increase related to the sale of employee benefit accounts to Marshall & Ilsley Trust Company, n.a. The Company accrued a final earnout payment in the amount of $3.6 million in the first quarter of 2005. In the first quarter of 2004, a gain on sale of employee benefit accounts of $0.76 million was recorded for the difference between the $3.1 million in gross proceeds and associated costs of $2.4 million.

Noninterest expense increased $3.4 million in the first quarter of 2005, compared to the first quarter of 2004, primarily due to the $4.2 million associated with costs of the voluntary separation program initiated by the Company in the first quarter of 2005.

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. For the three-month period ended March 31, 2005 net interest income decreased $.65 million due to increases in interest expense exceeding increases in interest income and one less day in 2005 due to leap year in 2004. Table 1 shows the impact of earnings asset rate increases as compared to interest-bearing liabilities. Analysis of changes in net interest income in Table 2 also shows that the net interest income declined due to an unfavorable rate variance offsetting a favorable volume variance for the same period.

Management believes that the overall outlook in its net interest income is positive. Commercial and consumer loans are expected to continue to grow. Loan-related earning assets tend to have a higher spread than those earned in the Company’s investment portfolio. Further, management believes that the lag between liability costs and asset yields should not continue. Additional improvement in net interest income will be obtained once rates stabilize. If interest rates continue to rise at a measured pace and given the term and changing mix of the Company’s balance sheet, the Company’s net interest income should increase.

Further, management has adopted a portfolio modification plan designed to improve interest income by extending the average life of the investment portfolio. The Company intends to implement this extension strategy over the course of the next two years. This plan calls for a modest extension of 6-12 months, to the portfolio average life. Implementation of this plan is subject to market conditions including sufficient supply of securities with acceptable risk/reward characteristics. The effectiveness of this plan is uncertain as it is dependent upon future market conditions including interest rate changes.

Table 1

AVERAGE BALANCES/YIELDS AND RATES (tax equivalent basis) (unaudited, dollars in thousands)

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed in both dollars and rates. All average balances are daily average balances. The average yield on earning assets without the tax-equivalent basis adjustment would have been 3.88% for the three-months ended March 31, 2005 and 3.44% for the same period in 2004:


	Three Months Ended March 31,
	2005					2004
	Average Balance			Average Yield/Rate		Average Balance			Average Yield/Rate
Assets
Loans, net of unearned interest	$	2,864,770		5.37	%	$	2,698,063		4.88	%
Securities:
Taxable		2,633,108		2.57			2,630,895		2.31
Tax-exempt		580,097		4.57			637,500		4.84

Total securities		3,213,205		2.93			3,268,395		2.81
Federal funds and resell agreements		210,718		2.53			301,776		1.19
Other earning assets		61,561		3.50			66,477		2.91

Total earning assets		6,350,254		4.02			6,334,711		3.61
Allowance for loan losses		(41,485	)				(43,918	)
Other assets		859,517					876,540

Total assets	$	7,168,286				$	7,167,333

Liabilities and Shareholders’ Equity
Interest-bearing deposits	$	3,222,178		1.22	%	$	3,223,156		0.80	%
Federal funds and repurchase agreements		1,165,526		2.17			1,148,070		0.83
Borrowed funds		35,640		3.91			44,654		2.62

Total interest-bearing liabilities		4,423,344		1.49			4,415,880		0.83
Noninterest-bearing demand deposits		1,881,065					1,885,264
Other liabilities		40,116					43,789
Shareholders’ equity		823,761					822,400

Total liabilities and shareholders’ equity	$	7,168,286				$	7,167,333

Net interest spread				2.53	%				2.78	%
Net interest margin				2.98					3.04

Table 2 presents the dollar amount of change in the net interest income and margin due to volume and rate. Table 2 also reflects the effect that interest free funds have on net interest margin. Interest free funds (total earning assets less interest-bearing liabilities) increased $8.1 million for the three-month period ended March 31, 2005 compared to the same period in 2004.

Table 2

ANALYSIS OF CHANGES IN NET INTEREST INCOME AND MARGIN (unaudited, dollars in thousands)

ANALYSIS OF CHANGES IN NET INTEREST INCOME


	Three Months Ended March 31, 2005 and 2004
	Volume			Rate			Total
Change in interest earned on:
Loans	$	2,320		$	3,115		$	5,212
Securities:
Taxable		13			1,514			1,527
Tax-exempt		(377	)		(246	)		(623	)
Federal funds sold and resell agreements		(571	)		990			419
Other		(42	)		95			53

Interest income		1,343			5,468			6,588
Change in interest incurred on:
Interest-bearing deposits		(3	)		3,330			3,327
Federal funds purchased and repurchase agreements		93			3,766			3,859
Other borrowed funds		(88	)		141			53

Interest expense		2			7,237			7,239

Net interest income	$	1,341		$	(1,769	)	$	(651	)

ANALYSIS OF NET INTEREST MARGIN


	Three Months Ended March 31,
	2005			2004			Change
Average earning assets	$	6,350,254		$	6,334,711		$	15,543
Interest-bearing liabilities		4,423,344			4,415,880			7,464

Interest free funds	$	1,926,910		$	1,918,831		$	8,079

Free funds ratio (free funds to earning assets)		30.34	%		30.29	%		0.05	%

Tax-equivalent yield on earning assets		4.02	%		3.61	%		0.41	%
Cost of interest-bearing liabilities		1.49			0.83			0.67

Net interest spread		2.53	%		2.78	%		(0.26	)%
Benefit of interest free funds		0.45			0.26			0.20

Net interest margin		2.98	%		3.04	%		(0.06	)%

Provision and Allowance for Loan Losses

The allowance for loan losses (“ALL”) represents management’s judgment 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 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 recorded a provision for loan losses of $0.7 million for the first quarter 2005 compared to $1.8 million for the first quarter 2004. This decreased ALL from 1.65% of total loans to 1.40% for the three-months ended 2004 and 2005. This decrease was due to both a decline in nonperforming loans in 2005 and a trend of sustained low charge-offs in 2003 and 2004.

Table 3 presents a summary of the Company’s ALL for the first quarter ended March 31, 2005 and first quarter ended March 31, 2004 and for the year ended December 31, 2004. Also please see “Credit Risk Management” under Risk Management section of Item 3 in this report for information relating to non-accrual, past due, restructured loans and other credit risk matters.

Table 3

ANALYSIS OF ALLOWANCE FOR LOAN LOSSES (dollars in thousands)


	Three Months Ended March 31,						Year Ended December 31, 2004
	2005			2004			Year Ended December 31, 2004
Allowance-January 1	$	42,723		$	43,494		$	43,494
Provision for loan losses		750			1,802			5,370
Charge-offs:
Commercial	$	(1,462	)	$	(469	)	$	(2,150	)
Consumer:
Bankcard		(1,287	)		(1,442	)		(5,541	)
Other		(365	)		(688	)		(2,050	)
Real estate		(3	)		(4	)		(4	)
Agricultural		—			—			—

Total charge-offs	$	(3,117	)	$	(2,603	)	$	(9,745	)
Recoveries:
Commercial	$	21		$	876		$	1,257
Consumer:
Bankcard		230			261			1,129
Other		273			312			1,217
Real estate		—			—			1
Agricultural		—			—			—

Total recoveries	$	524		$	1,449		$	3,604

Net charge-offs	$	(2,593	)	$	(1,154	)	$	(6,141	)

Allowance-end of period	$	40,880		$	44,142		$	42,723

Average loans, net of unearned interest	$	2,864,770		$	2,698,063		$	2,781,084
Loans at end of period, net of unearned interest		2,922,512			2,674,045			2,869,224
Allowance to loans at end of period		1.40	%		1.65	%		1.49	%
Allowance as a multiple of net charge-offs		3.94	x		9.56	x		6.96	x
Net charge-offs to:
Provision for loan losses		345.73	%		64.04	%		114.36	%
Average loans		0.09			0.04			0.22

Noninterest Income

A key objective of the Company is the growth of noninterest income to enhance profitability as fee-based services are non-credit related, provide steady income and are not directly affected by fluctuations in interest rates. Fee-based services provide the opportunity to offer multiple products and services to customers and, therefore, more closely align the customer with the Company. The Company’s ongoing focus is to develop and offer multiple products and services to its customers, the quality of which will differentiate it from the competition. Fee-based services that have been emphasized include trust and securities processing, securities trading/brokerage, asset management and cash management. The Company is developing a Health Savings Account solution that management believes has the potential to be a source of noninterest income growth. Management believes that it can offer these products and services both efficiently and profitably as most of these are driven off of common platforms and support structures.

Table 4

SUMMARY OF NONINTEREST INCOME (dollars in thousands)


	Three Months Ended March 31,
	2005		2004
Trust and securities processing fees	$	20,498	$	19,114
Trading and investment banking		4,657		5,087
Service charge on deposit accounts		17,976		18,812
Insurance fees and commissions		828		878
Brokerage fees		1,550		2,601
Bankcard fees		7,622		7,475
Gains on sale of other assets		2,592		—
Gain on sale of employee benefit accounts		3,600		764
Gains on sales of securities available for sale, net		—		141
Other		4,237		3,740

Total noninterest income	$	63,560	$	58,612

Noninterest income (summarized in Table 4) increased 8.44% for the first quarter 2005 compared to the same period in 2004. The increase in 2005 is primarily from two transactions. First, a $2.4 million gain on a condemnation sale of a downtown Kansas City branch was recognized. Second, there was a $2.8 million increase in

gain in 2005 as compared to 2004 on the sale of employee benefit accounts to Marshall & Ilsley Trust Company, n.a. (Marshall & Ilsley). The Company accrued a final earnout payment of $3.6 million in the first quarter of 2005. In the first quarter of 2004, a gain of $0.76 million was recorded on the sale of such employee benefit accounts for the difference between the $3.1 million in gross proceeds offset by associated costs of $2.4 million. The earnout payment was based upon gross revenues of those employee benefit accounts retained by Marshall & Ilsley during certain periods after the closing date. In addition to these gains, trust and securities processing income increased by approximately $1.4 million in 2005 over the same period in 2004. These increases in noninterest income were offset by decreases in other categories of noninterest income, most notably brokerage fees as explained below.

Trust and securities processing consists of fees earned on personal and corporate trust accounts, custody of securities services, trust investments and money management services and servicing of mutual fund assets. These fees increased $1.4 million in the first quarter of 2005 compared to the first quarter of 2004. The increase is primarily attributable to $1.0 million in higher fee income related to the UMB Scout Funds as compared to the same period last year. Assets inside the UMB Scout Funds grew from approximately $2.1 billion at March 31, 2004 to $2.6 billion at March 31, 2005. Additional increases in income are primarily attributable to fund administration fees. Management believes that if the securities market and public and market confidence in mutual funds continue to rebound, as is anticipated by most analysts, the Company’s fees for custody of securities and the servicing of mutual fund assets would increase. In addition, management believes that the overall quality and performance of both its investment management and UMB Scout Funds will continue to attract both increased and new investable dollars to it as assets under management. The Company continues to put a special emphasis on selling the UMB Scout Funds through its institutional channels by the establishment of a dedicated sales force. Although any forecast of future growth of such funds is uncertain, it is believed that the continued efforts of the sales force will positively affect such future growth.

Trading and investment banking consists mostly of fees earned from the sale of bonds to the Company’s correspondent banking market and through its brokerage operations. Fees decreased $0.4 million for the first quarter of 2005 compared to first quarter of 2004. The decrease is primarily attributable to lower sales of agency and mortgage backed securities.

Service charges on deposit accounts decreased $0.8 million for the three-months ended March 31, 2005 compared to the same period in 2004. This decrease was primarily attributable to a $2.7 million decrease in corporate service charge income and a $.3 million decrease in cash management income. Most of this decrease is due to an increase in the earnings credit rate allowed on compensating balances. This decrease in corporate service charge income was partially offset by a $2.2 million increase of deposit overdraft and insufficient fund fee income due to a fee increase in May 2004 and the centralization and automation of the related decision making process in September 2004. Management believes that cash management income will continue to be challenged due to a shift of customer payments from paper to electronic. Management has assigned 27% of its discretionary capital expenditure budget in 2005 to upgrade its product capabilities. Although the Company has focused significant resources into maintaining its cash management income levels, the external challenges facing the Company make the impact of these changes to its income uncertain.

Brokerage fee income relates primarily to fee income from the sale of annuity and mutual fund products. Brokerage fee income decreased by $1.1 million, or 40% from 2004. This large decrease is primarily attributable to a $0.7 million decrease in 12b-1 fees primarily related to employee benefit accounts that were sold in February 2004 to Marshall & Ilsley. Additionally, overall brokerage fees decreased by approximately $0.5 million due to decreased demand for annuity products.

Gain on sale of employee benefit accounts is up due to the final earnout payment related to the sale of employee benefit accounts to Marshall & Ilsley recorded in the first quarter of 2005 for $3.6 million. Under the terms of the contract for the sale of the employee benefit accounts, this final earnout payment was due to the Company based upon gross revenues received by those employee benefit accounts retained by Marshall & Ilsley from February 2004 to February 2005.

Gain on sale of other assets is up primarily because the Company recorded a $2.4 million gain on the sale of a banking facility to the city of Kansas City under threat of condemnation for purposes of a new downtown arena.

In April 2005, Management announced that it is in the process of selling seven branches in six locations. These sales should be completed by the third quarter. Gain is expected to be recorded on the sale of these locations and operational efficiencies are expected to be achieved.

Noninterest Expense

Table 5

SUMMARY OF NONINTEREST EXPENSE (dollars in thousands)


	Three Months Ended March 31,
	2005		2004
Salaries and employee benefits	$	52,060	$	48,747
Occupancy, net		6,417		6,353
Equipment		10,476		10,764
Supplies and services		5,549		5,574
Marketing and business development		2,960		3,508
Processing fees		5,564		5,249
Legal and consulting		1,827		2,248
Amortization of other intangibles		186		186
Other		6,286		5,323

Total noninterest expense	$	91,325	$	87,952

Noninterest expense increased $3.4 million for the three months ended March 31, 2005 compared to the same period in 2004. This increase is primarily attributable to the Voluntary Separation Program (VSP) offered by the Company to certain employees for early retirement. The costs of this program related to the 99 employees who accepted the offer was $4.3 million in the first quarter of 2005. This cost was offset by other decreases in salary and benefits primarily attributable to reduced headcount related to employees serving employee benefit accounts that were sold to Marshall & Ilsley in February 2004.

Salaries and employee benefits increased $3.3 million for the three months ended March 31, 2005 compared to the same period in 2004. In January 2005, the Company offered a VSP to certain employees. Most eligible employees had until March 31, 2005 to accept the terms of such program. In the first quarter of 2005, a charge of $4.3 million was taken related to such program. Without the cost of this program, salaries would have declined by approximately $1.0 million over 2004 primarily due to lower staffing levels in 2005. The number of full-time equivalent employees declined by 169 to 3,536 at March 31, 2005 as compared to 3,705 at March 31, 2004. Management anticipates salary expense to be lower for the remainder of 2005 as 75% of the employees who accepted the VSP will not be replaced.

Marketing and business development decreased by approximately $0.5 million, or 15.6%, from 2004. This is primarily attributable to a plan by management to lower overall advertising costs of the company in 2005 as compared to 2004.

Other expenses are higher than 2004 by approximately $1.0 million or 18%. This is partially attributable to a $0.3 million increase in deposit account chargeoffs. Additionally, there was a $0.4 million increase in the fees paid to brokerage companies to list the UMB Scout Funds on their systems. This cost increase is directly related to the higher trust fee income from the increase in assets under management from the UMB Scout Funds. Expenses related to bankcard income have also increased due to increased competition resulting in higher commercial and new customer rebates.

Income Tax Expense

Income tax expense increased by $1.2 million, or 36%, over 2004. The effective tax rate is 27.2% in 2005 as compared to 22.8% in 2004. The increase in effective tax rate is primarily attributable to tax-exempt income representing a smaller percentage of total income in 2005 as compared to 2004. Additionally, federal rehabilitation tax credits recognized in the first quarter of 2004 were not available in 2005.

Strategic Lines of Business

The Company’s operations are strategically aligned into six major lines of business: Commercial Banking and Lending, Corporate Services, Banking Services, Consumer Services, Asset Management, and Investment Services Group. The lines of business in the first quarter of 2004 were Commercial Banking, Retail Banking, Trust and Wealth Management, and Investments Services Group. This change was made by management in the fourth quarter of 2004 to better reflect the current organizational structure. This resulted in breaking Commercial Banking into three separate sectors: Commercial Banking and Lending, Corporate Services, and Banking Services. This breakout was done to better reflect how the Company markets its products and services as well as adding more granularity to better identify the primary drivers of its profitability. In addition, the Company merged consumer oriented business lines into the Retail Banking Business Segment and created Consumer Services. Finally, to reflect its desire to focus on both Personal and Institutional lines of business, the Trust and Wealth Management Business Segment has been renamed Asset Management. Under Statement of Financial Accounting Standards (SFAS) No. 131, “Disclosures about Segments of an Enterprise and Related Information”, the prior year information has been reclassified to conform to the 2005 reporting structure. The lines of business are differentiated by both the customers and the products and services offered. The Treasury and Other Adjustments category includes items not directly associated with the other lines of business.

Table 6

NET INCOME (LOSS) BY LINE OF BUSINESS (dollars in thousands):


	Three Months Ended March 31,
	2005			2004
Line of Business
Commercial Banking & Lending	$	3,693		$	4,665
Corporate Services		5,663			7,785
Banking Services		734			3,260
Consumer Services		14			(2,883	)
Asset Management		540			1,970
Investment Services Group		2,513			1,842
Treasury and Other Adjustments		(1,577	)		(5,881	)

Total Consolidated Company	$	11,580		$	10,758

Commercial Banking and Lending’s net income decreased $1.0 million, or 20.8% for the first quarter of 2005 compared to the first quarter of 2004. Net interest income decreased 1.9% compared to 2004 due to the sustained low rate environment and the corresponding impact of slower repricing of earning assets compared to repricing of liabilities in a rising rate environment. Provision for loan losses is down slightly due to the allowance for loan loss reserve being adequately funded for the current loan portfolio mix and a reduction in non-performing loans. Noninterest income increased 24.2% primarily from increased loan fees generated from increased new loan volume over the past quarter. If interest rates increase, as expected by most economists, the most significant impact will occur on this business segment, causing net interest income to rise. Because deposit service charges are also affected by interest rates due to the earnings credit on commercial accounts, noninterest income is expected to decrease in a rising rate environment. Management believes the decrease in deposit service charges would be more than offset by the increase in net interest income. Management also believes that an anticipated improving economy would spur an increase in both loan commitments and outstanding loan balances which would generate increased net interest income. Noninterest expense increased $.8 million, or 13.4% due to increased advertising and contributions being devoted to this segment to attract new customers. Additionally, the recognition of expense related to the VSP caused an increase in salaries and benefits for the 1^st quarter of 2005.

Corporate Services’ net income decreased $2.1 million, or 27.3% in the first quarter of 2005 compared to the same period in 2004. Net interest income decreased $0.5 million, or 4.7% due to increases in interest bearing

deposits of approximately 10% and the corresponding effect of slower repricing of earning assets in a rising rate environment. Noninterest income decreased $1.0 million, or 6.3%. The increase in the earnings credit applied to deposit accounts has negatively affected service charge expense. This increase in service charges was partially offset by increases in credit card service income and corporate trust income. Noninterest expense increased by $0.6 million, or 3.3% compared to 2004. This increase was primarily due to an increase in depreciation and salaries. Management believes interest rates will continue to rise in 2005 which will put continued pressure on deposit service charges due to increasing earnings credits. The company is continuing to focus significant resources in this segment to develop new products to meet the changing customer needs. Management also believes Corporate Trust will gain market share in areas where the company has a physical presence outside of Kansas and Missouri due to enhanced marketing efforts.

Banking Services’ net income decreased $2.5 million, or 77.5% compared to the first quarter of 2004. The decrease is due to decreases in net interest income of $.6 million and decreases in noninterest income of $1.3 million and increases in noninterest expense of $.6 million. Net interest income decreased primarily because of a 36% decline in the correspondent bank deposit balances as compared to first quarter of 2004 and a shift in deposit mix from noninterest bearing deposits to interest bearing repurchase agreements. If this trend continues, future increases in interest rates would continue to have an adverse effect on net interest income. Noninterest income is down due to decreases in bond trading income and deposit service charge income. Noninterest expense increased because of increases in salary due to the VSP and increases in pricing from the Federal Reserve Bank. Management believes that reorganizing the Banking Services group around delivering 12 major UMB product sets through its community bank relationships should improve income within this segment.

Consumer Services’ net income increased $2.9 million from the first quarter of 2004. Net interest income increased 2.67%. This is due to a shift of deposits from interest bearing to noninterest bearing resulting in a reduction of interest expense along with a corresponding increase in average consumer loans of approximately 5%. Provision for loan losses decreased $1.0 million due to the allowance for loan loss reserve being adequately funded for the current loan portfolio mix and a reduction in non-performing loans. Noninterest income increased $3.4 million or 23.6% primarily due to the gain on the sale of a downtown Kansas City branch building of $2.4 million. Additionally, increases in overdraft and insufficient funds fee income of $1.5 million were recognized due to fee increases initiated in 2004. Noninterest expense increased $2.0 million, or 5.8% due to an increase in salaries and benefits from the VSP. Management believes this segment will continue to improve net interest margin by growing noninterest bearing deposits and having an additional sales focus on variable rate loan products. Management believes that there will be an increase in noninterest expense in 2005 due to additional branch openings and expansions. Management will continue to evaluate operational efficiencies and branch realignment to offset these increased expenses.

Asset Management’s net income decreased $1.4 million in the first quarter of 2005 compared to the same period in 2004. Noninterest income increased $1.2 million, or 10.2% offset by a 2.4 million, or 26.0% increase in noninterest expense. An increase in cash inflows of approximately $500 million into the UMB Scout Funds has increased fee income compared to the same period last year. The increased size of the funds has also increased distribution, accounting, and legal expenses related to the funds since these fees are directly related to the size of the funds. Noninterest expense increased due to a $1.1 million increase in salary and benefits from the VSP and higher commissions. Further, fees paid to distributors to list the UMB Scout Funds have increased by $0.7 million as these fees are based on asset values. Legal and consulting fees associated with the UMB Scout Funds have also increased by $0.4 million due primarily to proxy related expenditures. Management will continue to focus sales efforts to increase cash inflows into the UMB Scout Funds. In March 2005, the UMB Scout Funds held a shareholder meeting to approve changes to the individual fund structures and organization. The most significant change related to fee unbundling. In the past, Scout Investment Advisors, a wholly-owned subsidiary of the Company, collected a fee from the funds and was responsible for paying expenses on behalf of the funds. Effective April 1, 2005, Scout Investment Advisors will be paid an advisory fee and the individual funds will be responsible for paying direct expenses including accounting, administration, transfer agency and legal fees. Although this reduces the overall fee collected by Scout Investment Advisors, the Company anticipates that the decrease in related expenses will be even greater. Therefore, overall net income should increase.

Investment Services Group’s net income increased $.7 million in the first quarter of 2005 compared to the same period in 2004. Net interest income rose $.3 million, or 16.9% due to increases in average deposits

corresponding to a positive repricing of assets in this segment. Noninterest income increased $.4 million, or 5.1% primarily from increased fund service income from new clients added in late 2004 and early 2005. Management believes the new clients added will continue to increase fee income during 2005 subject to uncertainties in the mutual fund markets.

The net loss for the Treasury and Other category was $1.6 million for the first quarter of 2005, compared to a net loss of $5.9 million for the same period in 2004. The net loss for all years includes unallocated income tax expense for the consolidated Company. Noninterest income is up $2.1 million due primarily to the gain recognized from the sale of employee benefit accounts to Marshall & Ilsley.

Balance Sheet Analysis

Table 7

SELECTED BALANCE SHEET INFORMATION (dollars in thousands)


	March 31,				December 31, 2004
	2005		2004		December 31, 2004
Total assets	$	6,914,933	$	6,862,843	$	7,805,006
Loans, net of unearned interest		2,922,512		2,674,045		2,869,224
Total investment securities		2,839,454		3,169,085		3,764,011
Total earning assets		6,077,177		6,090,455		6,946,166
Total deposits		4,993,429		4,962,685		5,383,704
Total borrowed funds		1,053,926		1,011,409		1,566,477

Loans

Total loan balances have increased $248.5 million compared to March 31, 2004, and $53.3 million compared to December 31, 2004. These increases were a result of increased focus on new commercial and consumer loan relationships, as well as a slightly higher overall loan demand due to the improved economy.

Loans represent the Company’s largest source of interest income. In addition to growing the Commercial Loan Portfolio, management plans to focus on its consumer and middle market business as these market niches represent its best opportunity to cross-sell fee-related services, such as cash management. In addition, management has developed a new incentive plan for loan officers, as well as increased loan authority for regional presidents.

Nonaccrual, past due and restructured loans are discussed under “Credit Risk Management” within the quantitative and qualitative disclosure about market risk in Item 3 of this report.

Securities

The Company’s security portfolio provides liquidity as a result of the composition and average life of the underlying securities. This liquidity can be used to fund loan growth or to offset the outflow of traditional funding sources. In addition to providing a potential source of liquidity, the security portfolio can be used as a tool to manage interest rate sensitivity. The Company’s goal in the management of its securities portfolio is to maximize return within the Company’s parameters of liquidity goals, interest rate risk and credit risk. The Company maintains very high liquidity levels while investing in only high-grade securities. The security portfolio generates the Company’s second largest component of interest income.

Securities available for sale and securities held to maturity comprised 47%, 52% and 54% respectively, of the earning assets as of March 31, 2005, March 31, 2004 and December 31, 2004. Securities totaled $2.8 billion as of March 31, 2005 compared to $3.2 billion as of March 31, 2004 and $3.8 billion at December 31, 2004. Loan demand is expected to be the primary factor impacting changes in the level of security holdings.

Further, Management has adopted a portfolio modification plan designed to improve interest margin which it intends to implement over the course of the next two years. This plan calls for a modest extension of 6-12 months, to the portfolio average life. Implementation of this plan is subject to market conditions including sufficient supply of securities with acceptable risk/reward characteristics. The effectiveness of this plan is uncertain as it is dependent on future market conditions including interest rate changes.

Deposits and Borrowed Funds

Deposits increased $30.7 million from March 31, 2004, and decreased $390.3 million from December 31, 2004. Noninterest bearing deposits decreased $44.4 million and $118.4 million, and interest bearing deposits increased $100.7 and decreased $168.7 million compared to March 31, 2004, and December 31, 2004, respectively.

Deposits represent the Company’s primary funding source for its asset base. In addition to the core deposits garnered by the Company’s retail branch structure, the Company continues to focus on its cash management services, as well as its trust and mutual fund servicing lines of business in order to attract and retain additional core deposits and commercial funding customers. Management believes it is one of the Company’s core competencies given both its scale and competitive product mix.

Borrowed funds increased $42.5 million from the first quarter 2004, and decreased $512.6 million from December 31, 2004. Borrowed funds are typically higher at year end due to repurchase agreements related to public funds. Borrowings other than repurchase agreements are a function of the source and use of funds and will fluctuate to cover short term gaps in funding.

Federal funds purchased and securities sold under agreement to repurchase totaled $1.0 billion at March 31, 2005, compared to $959.5 million at March 31, 2004 and $1.5 billion at December 31, 2004. Repurchase agreements are transactions involving the exchange of investment funds by the customer for securities by the Company under an agreement to repurchase the same or similar issues at an agreed-upon price and date.

Capital and Liquidity

The Company places a significant emphasis on the maintenance of a strong capital position, which promotes investor confidence, provides access to funding sources under favorable terms, and enhances the Company’s ability to capitalize on business growth and acquisition opportunities. Higher levels of liquidity, however, bear corresponding costs, measured in terms of lower yields on short-term, more liquid earning assets and higher expenses for extended liability maturities. Management manages capital for each subsidiary based upon the subsidiary’s respective risks and growth opportunities as well as regulatory requirements.

Total shareholders’ equity was $814.9 million at March 31, 2005, compared to $823.9 million at March 31, 2004 and $819.2 million at December 31, 2004. The Company’s Board of Directors authorized at its April 29, 2004 and April 18, 2003 meetings the repurchase of the Company’s common stock up to one million shares during the 12 months following each respective meeting. During the three months ended March 31, 2005 and 2004, the Company acquired 15,294 shares and 22,123 shares, respectively, of its common stock. The Company has not made any purchases other than through these plans. On April 26, 2005, the Company announced a plan to repurchase up to an one million shares of common stock. This plan will terminate on April 26, 2006.

Risk-based capital guidelines established by regulatory agencies set minimum capital standards based on the level of risk associated with a financial institution’s assets. A financial institution’s total capital is required to equal at least 8% of risk-weighted assets. At least half of that 8% must consist of Tier 1 core capital, and the remainder may be Tier 2 supplementary capital. The risk-based capital guidelines indicate the specific risk weightings by type of asset. Certain off-balance-sheet items (such as standby letters of credit and binding loan commitments) are multiplied by credit conversion factors to translate them into balance sheet equivalents before assigning them specific risk weightings. Due to the Company’s high level of core capital and substantial portion of earning assets invested in government securities, the Tier 1 capital ratio of 18.80% and total capital ratio of 19.79% substantially exceed the regulatory minimums.

For further discussion of capital and liquidity, please see “Liquidity Risk” under Risk Management of Item 3 in this report.

Table 8

The Company’s capital position is summarized in the table below and exceeds regulatory requirements:


	Three Months Ended March 31,
	2005		2004
RATIOS
Return on average assets	0.66	%	0.60	%
Return on average equity	5.70		5.26
Average equity to assets	11.49		11.47
Tier 1 risk-based capital ratio	18.80		20.23
Total risk-based capital ratio	19.79		21.41
Leverage ratio	10.87		10.57

The Company’s per share data is summarized in the table below.


	Three Months Ended March 31,
	2005			2004
Per Share Data
Earnings basic	$	0.54		$	0.50
Earnings diluted		0.53			0.49
Cash dividends		0.22			0.21
Dividend payout ratio		40.74	%		42.00	%
Book value	$	37.68		$	38.02

Off-balance Sheet Arrangements

The Company’s main off-balance sheet arrangements are loan commitments, commercial and standby letters of credit, futures contracts and forward exchange contracts, which have maturity dates rather than payment due dates. Please see note 6, “Commitments, Contingencies and Guarantees” in the Notes to Condensed Consolidated Financial Statements for detailed information on these arrangements. There was no material change from December 31, 2004.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of financial condition and results of operations discusses the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to customers and suppliers, allowance for loan losses, bad debts, investments, financing operations, long-lived assets, contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which have formed the basis for making such judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from the recorded estimates under different assumptions or conditions.

Management believes that the Company’s critical accounting policies are those relating to: allowance for loan losses; goodwill and other intangibles; impairment of long-lived assets; revenue recognition; and, accounting for stock-based compensation.

The allowance for loan losses represents management’s judgment of the losses inherent in the Company’s loan portfolio. The adequacy is reviewed quarterly, considering such items as historical trends, a review of individual loans, current economic conditions, loan growth and characteristics. The allowance for loan losses are maintained on a bank-by-bank basis, however, the Company uses a centralized credit administration function, which provides information on affiliate bank risk levels, delinquencies, and internal ranking systems.

Goodwill is tested annually for impairment. As a result of those tests, the Company has not recorded an impairment charge. The Company is amortizing other intangibles over their estimated useful life of 10 years.

Long-lived assets including goodwill, other intangible assets and premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or a group of assets may not be recoverable. Goodwill and other intangibles were addressed above. The impairment review for long-lived assets other than goodwill includes a comparison of future cash flows expected to be generated by the asset or group of assets to their current carrying value. If the carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and with interest charges) an impairment loss is recognized to the extent the carrying value exceeds its fair value.

Revenue recognition is the recording of interest on loans and securities and is recognized based on the rate multiplied by the principal amount outstanding. Interest accrual is discontinued when, in the opinion of management, the likelihood of collection becomes doubtful. Other noninterest income is recognized as services are performed or revenue-generating transactions are executed.

Stock-based compensation is recognized using the intrinsic value method for disclosure purposes. Pursuant to the requirements of FAS123, pro forma, net income and net earnings per share are disclosed in Note 2 of the Condensed Consolidated Financial Statements and discloses the impact on earnings as if the fair value method had been applied. Please see the discussion on FAS123(R) issued December, 2004, under Note 3, “New Accounting Pronouncements” in the Notes to the Condensed Consolidated Financial Statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange prices, commodity prices or equity prices. Financial instruments that are subject to market risk can be classified either as held for trading or held for purposes other than trading.

The Company is subject to market risk primarily through the effect of changes in interest rates of its assets held for purposes other than trading. The following discussion of interest risk, however, combines instruments held for trading and instruments held for purposes other than trading because the instruments held for trading represent such a small portion of the Company’s portfolio that the interest rate risk associated with them is immaterial.

Interest Rate Risk

Like all banks, the Company is subject to a major risk exposure through changing interest rates. To minimize the effect of interest rate changes to net interest income and exposure levels to economic losses, the Company manages its exposure to changes in interest rates through asset and liability management within guidelines established by its Funds Management Committee (“FMC”) and approved by the Company’s Board of Directors. The FMC has the responsibility for approving and ensuring compliance with asset/liability management policies, including interest rate exposure. The Company uses the following methods (simulation tools) for measuring and analyzing consolidated interest rate risk Market Value of Equity Modeling (“Net Portfolio Value”), Net Interest Income Simulation Analysis, and Repricing Mismatch Analysis. The Company does not use hedges or swaps to manage interest rate risk except for the use of future contracts to offset interest rate risk on specific securities held in its trading portfolio.

Market Value of Equity (Net Portfolio Value) Modeling

The Company uses the Net Portfolio Value to measure and manage interest rate sensitivity. The Net Portfolio Value measures the degree to which the market values of the Company’s assets and liabilities will change given a change in interest rates. This model is designed to represent, as of the respective date selected, the increase or decrease in the market value of assets and liabilities that would result from a hypothetical change in interest rates on such date. The Company uses a hypothetical rate change (rate shock) of 100 basis points and 200 basis points up or down. To perform these calculations, the Company uses the current loan, investment and deposit portfolios. The Company then makes certain cash flow assumptions regarding non-maturity deposits based on historical analysis, and management’s outlook. The Company also analyzes loan prepayments and other market risks from industry estimates of prepayment yields and other market changes. Given the low level of current interest rates, the down 200 basis point scenario cannot be completed as of March 31, 2004. Table 9 sets forth, for March 31, 2005 and 2004 and December 31, 2004, the increase or decrease (as applicable) in Net Portfolio Value that would be caused by the following hypothetical immediate changes in interest rates on such date: an immediate increase of 200 basis points; an immediate increase of 100 basis points; an immediate decrease in 200 basis points; and an immediate decrease of 100 basis points. Table 9 includes both instruments entered into for trading purposes and the instruments entered into for other than trading purposes, since the former represents such a small portion of the Company’s portfolio that any difference in the interest rate risk associated with it (as compared with the risk associated with instruments entered into for other than trading purposes) is immaterial.

Net portfolio value as of March 31, 2005 is flat compared to March 31, 2004 and December 31, 2004 at both the 100 and 200 basis points increases. The Company should benefit from rate increases because a majority of its earning assets and deposits have been repriced. The indicated benefit from rising rate on Net Portfolio Value may not necessarily translate into improved earnings over the near-term.

Table 9

MARKET RISK (dollars in thousands)


	Net Portfolio Value
Hypothetical change in interest rate (in Basis Points) (Rate Shock)	March 31, 2005							March 31, 2004							December 31, 2004
	Amount		Dollar Change			Percent Change		Amount		Dollar Change			Percent Change		Amount		Dollar Change			Percent Change
200	$	1,784,371	$	185,652		11.61	%	$	1,794,276	$	176,137		10.89	%	$	1,817,077	$	201,738		12.49	%
100		1,691,545		92,826		5.81			1,706,208		88,069		5.44			1,716,208		100,869		6.24
Static		1,598,719		—		—			1,618,139		—		—			1,615,339		—		—
(100)		1,468,808		(129,911	)	(8.13	)		1,493,535		(124,604	)	(7.70	)		1,468,201		(147,318	)	(9.11	)
(200)		1,338,896		(259,823	)	(16.25	)		—		—		—			1,321,062		(294,277	)	(18.22	)

Net Interest Income Modeling

Another tool used to measure interest rate risk and the effect of interest rate changes on net interest income and net interest margin is Net Interest Income Simulation Analysis. This analysis incorporates substantially all of the Company’s assets and liabilities together with forecasted changes in the balance sheet and assumptions that reflect the current interest rate environment. Through these simulations, management estimates the impact on net interest income of a 200 basis point upward or downward gradual change of market interest rates over a one year period. These simulations include assumptions about how the balance sheet is likely to change with changes in loan and deposit growth. Assumptions are made to project rates for new loans and deposits based on historical analysis, management outlook and repricing strategies. Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other market changes. Since the results of these simulations can be significantly influenced by assumptions utilized, management evaluates the sensitivity of the simulation results to changes in assumptions. Due to the low level of interest rates, the scenarios that simulate a 100 basis point and a 200 basis point decrease could not be completed as of March 31, 2004. Table 10 shows the net interest income increase or decrease over the next twelve months as of March 31, 2005 and 2004 and December 31, 2004. The three periods show that if rates rise 100 or 200 basis points, net interest income will increase.

Table 10

MARKET RISK (dollars in thousands)


Hypothetical change in interest rate (in Basis Points) (Rate Shock)	March 31, 2005 Amount of change			March 31, 2004 Amount of change		December 31, 2004 Amount of change
200	$	3,669		$	5,015	$	4,753
100		1,834			2,508		2,377
Static		—			—		—
(100)		(2,239	)		—		(3,160	)
(200)		(4,477	)		—		(6,320	)

Repricing Mismatch Analysis

The Company also evaluates its interest rate sensitivity position in an attempt to maintain a balance between the amount of interest-bearing assets and interest-bearing liabilities which are expected to mature or reprice at any point in time. While a traditional repricing mismatch analysis (“gap analysis”) provides a snapshot of interest rate risk, it does not take into consideration that assets and liabilities with similar repricing characteristics may not in fact reprice at the same time or the same degree. Also, it does not necessarily predict the impact of changes in general levels of interest rates on net interest income.

Management attempts to structure the balance sheet to provide for the repricing of approximately equal amounts of assets and liabilities within specific time intervals. The Company is in a positive gap position because assets maturing or repricing exceed liabilities.

Trading Account

The Company’s subsidiary UMB Bank, n.a. carries taxable governmental securities in a trading account that is maintained according to a Board-approved policy and relevant procedures. The policy limits the amount and type of securities that can be carried in the trading account as well as requiring that any limits under applicable law and regulations also be complied with, and mandates the use of a value at risk methodology to manage price volatility risks within financial parameters. The risk associated with the carrying of trading securities is offset by the sale of exchange traded financial futures contracts, with both the trading account and futures contracts marked to market daily.

This account had a balance of $56.7 million as of March 31, 2005 compared to $92.7 million as of March 31, 2004 and $60.2 million as of December 31, 2004.

The Manager of the Investment Banking Division of UMB Bank, n.a. presents documentation of the methodology used in determining value at risk at least annually to the Board for approval in compliance with OCC Banking Circular 277, Risk Management of Financial Derivatives, and other banking laws and regulations. The aggregate value at risk is reviewed quarterly. The aggregate value at risk in the trading account was negligible as of March 31, 2005 and 2004 and December 31, 2004.

Other Market Risk

The Company does not have material commodity price risks or derivative risks. The Company also has foreign currency risks as a result of foreign exchange contracts. Please see Note 6 “Commitments, Contingencies and Guarantees” in the notes to the Condensed Consolidated Financial Statements.

Credit Risk Management

Credit risk represents the risk that a customer or counterparty may not perform in accordance with contractual terms. Credit risk is inherent in the financial services business and results from extending credit to customers. The 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 has an internal loan review staff that operates independently of the affiliate banks. This review team performs periodic examinations of each bank’s loans for credit quality, documentation and loan administration. The respective regulatory authority of each affiliate bank also reviews loan portfolios.

Another means of ensuring loan quality is diversification. By keeping its loan portfolio diversified, the Company has avoided problems associated with undue concentrations of loans within particular industries. The Company has no significant exposure to highly leveraged transactions and has no foreign credits in its loan portfolio.

A primary indicator of credit quality and risk management is the level of nonperforming loans. Nonperforming loans include both nonaccrual loans and restructured loans. The Company’s nonperforming loans decreased $3.5 million at March 31, 2005, compared to March 31, 2004 and decreased $1.0 million compared to December 31, 2004.

The Company had no other real estate owned as of March 31, 2005 compared to $58 thousand as of March 31, 2004 and none as of December 31, 2004. Loans past due more than 90 days totaled $3.4 million as of March 31, 2005, compared to $3.3 million as of March 31, 2004 and $3.0 million as of December 31, 2004.

A loan is generally placed on nonaccrual status when payments are past due 90 days or more and/or when management has considerable doubt about the borrower’s ability to repay on the terms originally contracted. The accrual of interest is discontinued and recorded thereafter only when actually received in cash.

TABLE 11

LOAN QUALITY (dollars in thousands)


	March 31,						December 31, 2004
	2005			2004			December 31, 2004
Nonaccrual loans	$	8,797		$	12,233		$	9,752
Restructured loans		294			353			298

Total nonperforming loans		9,091			12,586			10,050
Other real estate owned		—			58			—

Total nonperforming assets	$	9,091		$	12,644		$	10,050

Loans past due 90 days or more	$	3,446		$	3,269		$	3,028
Allowance for Loans Losses		40,880			44,142			42,723

Ratios
Nonperforming loans as a % of loans		0.31	%		0.47	%		0.35	%
Nonperforming assets as a % of loans plus other real estate owned		0.31			0.47			0.35
Nonperforming assets as a % of total assets		0.13			0.18			0.13
Loans past due 90 days or more as a % of loans		0.12			0.12			0.11
Allowance for loan losses as a % of loans		1.40			1.65			1.49
Allowance for loan losses as a multiple of nonperforming loans		4.50	x		3.51	x		4.25	x

Liquidity Risk

Liquidity represents the Company’s ability to meet financial commitments through the maturity and sale of existing assets or availability of additional funds. The most important factor in the preservation of liquidity is maintaining public confidence that facilitates the retention and growth of a large, stable supply of core deposits and wholesale funds. Ultimately, public confidence is generated through profitable operations, sound credit quality and a strong capital position. The primary source of liquidity for the Company is regularly scheduled payments on and maturity of assets, which include $2.7 billion of high-quality securities available for sale. The liquidity of the Company and its affiliate banks is also enhanced by its activity in the federal funds market and by its core deposits. Neither the Company nor its subsidiaries are active in the debt market. The traditional funding source for the Company’s subsidiary banks has been core deposits. The Company has not issued any debt since 1993 when $25 million of medium-term notes were issued to fund bank acquisitions. Prior to being paid off in February 2003 these notes were rated A3 by Moody’s Investor Service and A- by Standard and Poor’s. Based upon regular contact with investment banking firms, management is confident in its ability to raise debt or equity capital on favorable terms, should the need arise.

The Company also has other commercial commitments that may impact liquidity. These commitments include unused commitments to extend credit, standby letters of credit and financial guarantees, and commercial letters of credit. The total amount of these commercial commitments at March 31, 2005 was $2.2 billion. Since many of these commitments expire without being drawn upon, the total amount of these commercial commitments does not necessarily represent the future cash requirements of the Company.

The Company’s cash requirements consist primarily of dividends to shareholders, debt service and treasury stock purchases. Management fees and dividends received from subsidiary banks traditionally have been sufficient to satisfy these requirements and are expected to be sufficient in the future. The Company’s subsidiary banks are subject to various rules regarding payment of dividends to the Company. For the most part, all banks can pay dividends at least equal to their current year’s earnings without seeking prior regulatory approval. From time to time, approvals have been requested to allow a subsidiary bank to pay a dividend in excess of its current earnings. All such requests have been approved.

Operational Risk

The Company is exposed to numerous types of operational risk. Operational risk generally refers to the risk of loss resulting from the Company’s operations, including, but not limited to: the risk of fraud by employees or persons outside the Company; the execution of unauthorized transactions by employees or others; errors relating to transaction processing and systems; and breaches of the internal control system and compliance requirements. This risk of loss also includes the potential legal or regulatory actions that could arise as a result of an operational deficiency, or as a result of noncompliance with applicable regulatory standards. Included in the legal and regulatory issues with which the Company must comply are a number of recently imposed rules resulting from the enactment of the Sarbanes-Oxley Act of 2002.

The Company operates in many markets and places reliance on the ability of its employees and systems to properly process a high number of transactions. In the event of a breakdown in the internal control systems, improper operation of systems or improper employee actions, the Company could suffer financial loss, face regulatory action and suffer damage to its reputation. In order to address this risk, management maintains a system of internal controls with the objective of providing proper transaction authorization and execution, safeguarding of assets from misuse or theft, and ensuring the reliability of financial and other data.

The Company maintains systems of controls that provide management with timely and accurate information about the Company’s operations. These systems have been designed to manage operational risk at appropriate levels given the Company’s financial strength, the environment in which it operates, and considering factors such as competition and regulation. The Company has also established procedures that are designed to ensure that policies relating to conduct, ethics and business practices are followed on a uniform basis. In certain cases, the Company has experienced losses from operational risk. Such losses have included the effects of operational errors that the Company has discovered and included as expense in the statement of income. While there can be no assurance that the Company will not suffer such losses in the future, management continually monitors and works to improve its internal controls, systems and corporate-wide processes and procedures. Furthermore, management believes the plans to streamline the organization through further systems integration and policies enacted to push down reporting accountabilities further in the organization have improved the Company’s ability to identify and limit operational risk.

ITEM 4. CONTROLS AND PROCEDURES

At the end of the period covered by this Report, the Company’s Chief Executive Officer and Chief Financial Officer has each evaluated the effectiveness of the Company’s “Disclosure Controls and Procedures” and believes as of the date of evaluation, that the Company’s disclosure controls and procedures are reasonably designed to be effective for the purposes for which they are intended. As such term is used above, the Company’s Disclosure Controls and Procedures are controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms. Disclosure Controls and Procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

No significant changes in the Company’s disclosure controls or in other factors occurred that could significantly affect such controls during the previous quarter or after the date that the Company’s Chief Executive Officer and Chief Financial Officer conducted their evaluations of the Disclosure Controls and Procedures.

While the Company believes that its existing disclosure controls and procedures have been effective to accomplish the Company’s objectives, the Company intends to continue to examine, refine, and formalize its disclosure controls and procedures and to monitor ongoing developments in this area.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Following table provides information about purchases by the Company during the quarter ended March 31, 2005, of equity securities that are registered by the Company:

ISSUER PURCHASE OF EQUITY SECURITIES


Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)		( c ) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1-January 31, 2005	2,100	$	53.64	2,100	932,659
February 1-February 29, 2005	12,800		54.71	12,800	919,859
March 1-March 31, 2005	394		55.84	394	919,465

On April 29, 2004, the Company announced a plan to purchase up to one million shares of common stock. This plan terminated on April 29, 2005. The Company has not made any repurchases other than through this plan. All shares purchased under the share repurchase plan are within the scope of Rule 10b-18 promulgated under the Securities Exchange Act of 1934. Rule 10b-18 provides a safe harbor for purchases in a given day if the Company satisfies the manner, timing and volume conditions of the rule when purchasing its own common shares. On April 26, 2005 the Company announced a plan to repurchase up to one million shares of common stock. This plan will terminate on April 26, 2006.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

a) The following exhibits are filed herewith:

3.1 Articles of Incorporation restated as of March 6, 2003, and filed with the Missouri Secretary of State on April 2, 2003, incorporated by reference to Exhibit 3(i) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, and filed with the Commission on May 12, 2003.

ii.

3.2 Bylaws, restated as of January 25, 2005 incorporated by reference to Exhibit 3.2 to the Company’s annual report on form 10-K for the year ended December 31, 2004 and filed with the Commission on March 14, 2005.

iii.

4 Description of the Registrant’s common stock in Amendment No. 1 on Form 8, incorporated by reference to its General Form for Registration of Securities on Form 10 dated March 5, 1993.

iv.

31.1 CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act.

31.2 CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act.

vi.

32.1 CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

vii.

32.2 CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		UMB FINANCIAL CORPORATION

		/s/ Christopher G. Treece
		Christopher G. Treece
		Senior Vice President, Controller

		Date: May 6, 2005

Three Months Ended

March 31,

Aggregate amortization expense