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

of U m B Financial Corporation. They're based in Kansas City. I sure want to know what they think about the FED getting ready to raise interest rates in June, potentially what it means for their bottom line. Well, let's get to Charlie Pellocky's in the Bloomberg news room with his latest business flash. And I think you very much, Kathleen, thank you, Phim the Dawin s and Pierre lower Nan Stack is higher on this Fed Minutes Wednesday. We are brought to you by National Realty Returns on cash and

rented real estate. Find them at n r i A dot net Stocks declined SMP five hundred index heading for US seven week low, Federal reserve policy makers signaling a willingness to raise borrowing costs in June if the economy continues to improve. Stephen Stanley is chief economist at Amerspirepond Securities. He was our guest this afternoon right here on taking stock ad minutes reiterate that the Fed did not put

a lot of stock in the low Q one GDP number. UH. We know from the statement that they were were weighing the strength and labor market conditions as more important than the UH low GDP number. So I think that's and that's certainly fleshed out quite well in the minute. Right now, we've got the tenure down twenty thirty seconds, the old one point eight seven percent, gold down eighteen eighty, the ounce now declining one and a half percent to twelve

fifty eight. Crude oil moving Laura as well, giving up earlier gains down one percent, now lower by forty six cents. On West Texas Intermediate crewed eighty five, Brant crewed at sixty two, target falling the most in more than seven years, quarterly sales missing analysts estimates, and the discount chain delivering

a disappointing forecast, target down seven and a half percent. Also, while with learnings today Lows had posted first quarter profit the top handless estimates, reinforcing the notion that Americans are still willing to spend on their homes. Loads up three point one percent again, SMP down six the trop of three tents of one percent, and at three thirty two on Wall Street. Let's take a look at some of the other news from around the world on Bloomberg Radio.

Thank you, Charlie from the Bloomberg News Room. I'm David Garrett. This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by four capability. Drive one at your local Jeep dealer today. Senator Bernie's Anders is on the campaign trail in California. Today, the Sanders supporter says he's ready to split from the party to back Sanders if Burne

doesn't win the nomination. There's already a movement to form another party. Meantime, a recent w B Warn't pole has Sanders leading GEOP presumptive nominee Donald Trump by double digits in New Hampshire. That pole has Hillary Clinton and Trump locked in a tight race. Trump is coming to the financial rescue of former rival Chris Christie and the New Jersey Republican Party. They've incurred big debt from the George

Washington Bridge scandal as well as the governor's presidential campaign. Tomorrow, Trump will attend a twenty five thousand dollar per person fundraiser for the state GOP, which has incurred legal fees responding to legislative subpoenas in the Bridge case. Trump and Christie will headline the event, along with a separate fundraiser to pay down Christie's campaign debt. Cyber security experts warned

lawmakers today hackers are becoming increasingly sophisticated. Speaking at a forum today, Director of National Intelligence James Clappers had one group in particular poses the biggest threat. Bad cyber actors are using precisely these avenues, the stealer once every day, the Chinese and particular or cleaning us up. Because we know that we're supposed to do these simple things, and yet we don't do them. The NYPD, says one of its officers, fatally shot a man today on a busy

Midtown street. Police say the unidentified forty six year old became belligerent at a food emporium as he tried to buy beer and pulled out an eight inch knife when police arrived. It wasn't clear whether the man had a history of mental illness or a criminal record. Global News twenty four hours a day, powered by our two journalists and more than a hundred fifty news bureaus around the world.

From the Bloomberg News Room, I'm David Gura, Charlie, and we thank you, and again recapping a mixed picture for stocks. Nastank is higher, the SMP five index down four down, industrials down forty six. That is a drop of three tenths of one percent. I'm Charlie Pelton. That's a Bloomberg Business flash. This is taking Stock with Kathleen Hayes and Pin Fox on Bloomberg Radio. Let's take a look at the financial industry, specifically the financial industry of one company,

you m be Financial, based in Kansas City, Missouri. Shares are higher by more than nineteen percent so far this year. They pay a dividend of about one and three quarters of a percent and joining us now here in the studio is John Mariner Kemper. He is the chairman, the president, and the chief executive And Mike Hagadorn he is vice chairman and executive, vice president and chief financial officer. Gentlemen,

thank you very much for joining us and coming in today. Uh, Marin, I won't begin by just maybe offering you a chance to talk a little bit about a gentleman named our Crosby Kemper, Jr. So that we can understand the genesis of the bank and United Missouri Bank Shares. How did that all happen? Oh? Okay, well, yeah, our Crosby would be my father. He went by Crosby and the R was Rufus. By the way, in case you're looking for a name for somebody like your dog, he said he Um.

He was a great guy who's a fantastic banker. UM our company on the fourth generation to run our company and UM Kansas City Base went public in the eighties. UM and uh we made made it past the proverbial third generation. Uh. You know, we're companies are supposed to fail in the third generation, so we're officially in the fourth generation. I've been running the company for since two thousand four, and um, you know it's a largely a

commercial bank. The bank itself so largely commercial across the Midwest. We operate in eight states, but about half our income comes from fee based businesses, and we have several other businesses that really make up our story. So a strong commercial bank. We protect our our credit quality through the diversity of our business. So we have a a institutional

money management business called Scout. We have a fund services business where we do all the back office work for hedge funds, mutual fund private equity reads UM and that's headquartered in Milwaukee. And then we have a healthcare business where the sixth largest provider of h S a S

in the country. That diversity gives us protection and our revenue through cycles, and also we believe really allows us to protect UM how we lend and and the way we run the bank so that we never find ourselves reaching because we're a one trick shop reaching for net inter sinco. So, Mike, you are president and CEO at umb Bank and you're the interim CFO. How are you guys doing, How are how is your bottom line, earnings, revenues and where you going? Yeah, we had a very

strong first quarter. We had record card purchase volume. As an example, UM our efficiency initiative that we've been talking about since the end of the third quarter of last year's bearing fruit as well. And so we had a

very strong on first quarter. And most importantly our balance sheet, as men are touched on, one of the things that's important to us is being able to be in a position where we do not have to make all of our revenue off the spread side of the business, and so fees become very important to us UH, and our balance sheet has grown quite a bit. Our loan growth over the first quarter of was up and on organic basis was up sixteen percent. So we we feel very

good about where we're at right now. Mike, can you speak at all about what you're seeing regarding the energy industry in some of the states in which you operate, for example, Oklahoma, Colorado, and Texas. Yeah, most importantly probably Oklahoma.

In Texas, UM three point three percent of our total loan book is in energy related credits, and as we disclosed in the first quarter, UH we have reserves over that of three point one percent UM and on criticized loans we have almost twelve percent reserved against us, So we feel very good about the energy holdings that we have and and even if we did have some hiccups there, we feel good about the reserves we have against it and don't have as much exposure to the upstream side

of the business as other players might as well. So, fourth generation Mariner Camper, where do you want to take the bank next? What is your big dream vision challenge? Well, you know, I think we're on the right path as it is today. Our challenge so we grow about a billion The bank itself grows about a billion dollars a year on its own without him and a activity, and

so we'll continue to grow. Our challenge as a company will be to maintain access to management, how nimble we are, how responsive we are, which is sort of built who

we are. So our our challenge over time will do we make sure that we can rely on more people, uh spread spread accountability and trust across a bigger part of our population, to continue to execute the same level of service as we get bigger to either of you have any thoughts on the changes in which banks are able to finance themselves now, because preferred securities, I mean, that's went sort of away with the financial crisis. All right, Well, I think you know, each each organization has got a

different story. I think is long my opinion, as long as the the institution has a story. Uh, the capital access is still pretty robust. Um. Money seems to be available and cheap and um, and then again depending on whether you're using your currency. So we have a strong currency, so we've we've been using our own currency to to drive our activity. So I don't see that really being a challenge unless you're unless you're broken. If you're broken,

you've got all sorts of issues. Well, Maynard Camper, thank you so very much for joining US Chairman, President, CEO, U and B Financial Corporation along with Mike Hagitor and President CEO, chief financial Officer on an interim basis for umb Bank. This is Bloomberg Radio, coming up on taking stock, a look at range bound trading in the stock market, digesting the alphabet soup of Zerpe and tarp while also tell you about dragons and swans. Next