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UMB Financial Hits New 52-Week High

Zacks Equity Research

Shares of UMB Financial Corporation (UMBF) reached a new 52-week high, touching $61.44 in the first half of the trading session on Aug 16. However, the stock closed at $60.57, reflecting a year-to-date return of 36.0%. The trading volume for the session was 77,485 shares.

Despite the strong price appreciation, this Zacks Rank #2 (Buy) bank has considerable upside left, given its positive estimate revisions over the last 30 days and expected long-term earnings growth rate of 6.00%.

Growth Drivers

UMB Financial’s impressive price performance came on the back of its second-quarter 2013 results, which include positive earnings surprise of 4.17%.

On Jul 23, UMB Financial declared second-quarter earnings of 74 cents per share, beating the Zacks Consensus Estimate of 72 cents. Moreover, net income of $29.9 million marked a 2.6% year-over-year increase.

Increases in both net interest income and non-interest income were partially offset by higher operating expenses. Net interest income was $82.3 million, up 2.4% compared with the prior-year quarter. Non-interest income was $113.6 million, up 3.0% from second-quarter 2012.

Net loans were $6.3 billion, increasing 19.5% from the year-ago quarter. Notably, this was the 13th consecutive year of loan growth for UMB Financial. Moreover, Tier 1 capital ratio remained strong at 10.72%.

However, rising expenses and continued pressure on net interest margin remain as plausible concerns for UMB Financial. Notably, net interest margin was 2.56% in the reported quarter, down 26 basis points from 2.82% in second-quarter 2012.

Estimate Revisions Show Potency

In the last 30 days, the Zacks Consensus Estimate for 2013 increased 2.6% to $3.12 per share. For 2014, the Zacks Consensus Estimate advanced 2.2% to $3.24 per share over the same time frame.

Better performing banks worth considering include First Interstate Bancsystem Inc. (FIBK), Firstbank Corporation (FBMI) and PrivateBancorp, Inc. (PVTB). All these stocks carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on UMBF

Read the Full Research Report on FIBK

Read the Full Research Report on PVTB

Read the Full Research Report on FBMI

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