Latest / Bloomberg Intelligence / UMB's Kemper, Hagedorn: Reserves Protect Energy Exposure(Audio)

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UMB's Kemper, Hagedorn: Reserves Protect Energy Exposure(Audio) · Bloomberg Intelligence

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  Speaker 1: the financial industry, specifically the financial industry of one company,
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  Speaker 1: you m be Financial, based in Kansas City, Missouri. Shares
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  Speaker 1: are higher by more than nineteen percent so far this year.
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  Speaker 1: They pay a dividend of about one and three quarters
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  Speaker 1: of a percent and joining us now here in the
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  Speaker 1: studio is John Mariner Kemper. He is the chairman, the president,
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  Speaker 1: and the chief executive And Mike Hagadorn he is vice
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  Speaker 1: chairman and executive, vice president and chief financial officer. Gentlemen,
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  Speaker 1: thank you very much for joining us and coming in today. Uh, Marin,
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  Speaker 1: I won't begin by just maybe offering you a chance
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  Speaker 1: to talk a little bit about a gentleman named our
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  Speaker 1: Crosby Kemper, Jr. So that we can understand the genesis
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  Speaker 1: of the bank and United Missouri Bank Shares. How did
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  Speaker 1: that all happen? Oh? Okay, well, yeah, our Crosby would
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  Speaker 1: be my father. He went by Crosby and the R
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  Speaker 1: was Rufus. By the way, in case you're looking for
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  Speaker 1: a name for somebody like your dog, he said he Um.
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  Speaker 1: He was a great guy who's a fantastic banker. UM
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  Speaker 1: our company on the fourth generation to run our company
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  Speaker 1: and UM Kansas City Base went public in the eighties.
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  Speaker 1: UM and uh we made made it past the proverbial
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  Speaker 1: third generation. Uh. You know, we're companies are supposed to
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  Speaker 1: fail in the third generation, so we're officially in the
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  Speaker 1: fourth generation. I've been running the company for since two
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  Speaker 1: thousand four, and um, you know it's a largely a
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  Speaker 1: commercial bank. The bank itself so largely commercial across the Midwest.
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  Speaker 1: We operate in eight states, but about half our income
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  Speaker 1: comes from fee based businesses, and we have several other
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  Speaker 1: businesses that really make up our story. So a strong
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  Speaker 1: commercial bank. We protect our our credit quality through the
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  Speaker 1: diversity of our business. So we have a a institutional
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  Speaker 1: money management business called Scout. We have a fund services
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  Speaker 1: business where we do all the back office work for
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  Speaker 1: hedge funds, mutual fund private equity reads UM and that's
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  Speaker 1: headquartered in Milwaukee. And then we have a healthcare business
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  Speaker 1: where the sixth largest provider of h S a S
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  Speaker 1: in the country. That diversity gives us protection and our
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  Speaker 1: revenue through cycles, and also we believe really allows us
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  Speaker 1: to protect UM how we lend and and the way
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  Speaker 1: we run the bank so that we never find ourselves
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  Speaker 1: reaching because we're a one trick shop reaching for net
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  Speaker 1: inter sinco. So, Mike, you are president and CEO at
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  Speaker 1: umb Bank and you're the interim CFO. How are you
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  Speaker 1: guys doing, How are how is your bottom line, earnings,
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  Speaker 1: revenues and where you going? Yeah, we had a very
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  Speaker 1: strong first quarter. We had record card purchase volume. As
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  Speaker 1: an example, UM our efficiency initiative that we've been talking
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  Speaker 1: about since the end of the third quarter of last
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  Speaker 1: year's bearing fruit as well. And so we had a
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  Speaker 1: very strong on first quarter. And most importantly our balance sheet,
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  Speaker 1: as men are touched on, one of the things that's
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  Speaker 1: important to us is being able to be in a
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  Speaker 1: position where we do not have to make all of
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  Speaker 1: our revenue off the spread side of the business, and
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  Speaker 1: so fees become very important to us UH, and our
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  Speaker 1: balance sheet has grown quite a bit. Our loan growth
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  Speaker 1: over the first quarter of was up and on organic
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  Speaker 1: basis was up sixteen percent. So we we feel very
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  Speaker 1: good about where we're at right now. Mike, can you
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  Speaker 1: speak at all about what you're seeing regarding the energy
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  Speaker 1: industry in some of the states in which you operate,
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  Speaker 1: for example, Oklahoma, Colorado, and Texas. Yeah, most importantly probably Oklahoma.
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  Speaker 1: In Texas, UM three point three percent of our total
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  Speaker 1: loan book is in energy related credits, and as we
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  Speaker 1: disclosed in the first quarter, UH we have reserves over
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  Speaker 1: that of three point one percent UM and on criticized
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  Speaker 1: loans we have almost twelve percent reserved against us, So
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  Speaker 1: we feel very good about the energy holdings that we
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  Speaker 1: have and and even if we did have some hiccups there,
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  Speaker 1: we feel good about the reserves we have against it
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  Speaker 1: and don't have as much exposure to the upstream side
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  Speaker 1: of the business as other players might as well. So,
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  Speaker 1: fourth generation Mariner Camper, where do you want to take
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  Speaker 1: the bank next? What is your big dream vision challenge? Well,
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  Speaker 1: you know, I think we're on the right path as
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  Speaker 1: it is today. Our challenge so we grow about a
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  Speaker 1: billion The bank itself grows about a billion dollars a
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  Speaker 1: year on its own without him and a activity, and
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  Speaker 1: so we'll continue to grow. Our challenge as a company
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  Speaker 1: will be to maintain access to management, how nimble we are,
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  Speaker 1: how responsive we are, which is sort of built who
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  Speaker 1: we are. So our our challenge over time will do
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  Speaker 1: we make sure that we can rely on more people,
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  Speaker 1: uh spread spread accountability and trust across a bigger part
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  Speaker 1: of our population, to continue to execute the same level
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  Speaker 1: of service as we get bigger to either of you
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  Speaker 1: have any thoughts on the changes in which banks are
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  Speaker 1: able to finance themselves now, because preferred securities, I mean,
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  Speaker 1: that's went sort of away with the financial crisis. All right, Well,
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  Speaker 1: I think you know, each each organization has got a
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  Speaker 1: different story. I think is long my opinion, as long
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  Speaker 1: as the the institution has a story. Uh, the capital
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  Speaker 1: access is still pretty robust. Um. Money seems to be
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  Speaker 1: available and cheap and um, and then again depending on
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  Speaker 1: whether you're using your currency. So we have a strong currency,
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  Speaker 1: so we've we've been using our own currency to to
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  Speaker 1: drive our activity. So I don't see that really being
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  Speaker 1: a challenge unless you're unless you're broken. If you're broken,
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  Speaker 1: you've got all sorts of issues. Well, Maynard Camper, thank
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  Speaker 1: you so very much for joining US Chairman, President, CEO,
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  Speaker 1: U and B Financial Corporation along with Mike Hagitor and
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  Speaker 1: President CEO, chief financial Officer on an interim basis for
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  Speaker 1: umb Bank. This is Bloomberg Radio, coming up on taking stock,
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