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

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh to Washington, d C.

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<v Speaker 1>Bloomber to Boston, Bloomberg twelve to San Francisco, Bloomberg nine

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<v Speaker 1>to the country. See is a general one nineteen and

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<v Speaker 1>around the globe the Bloomberg Radio plus appen Bloomberg dot gone.

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<v Speaker 1>This is taking Stock. Coming up on taking Stock. We're

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<v Speaker 1>going to take stock of the banking industry and the

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<v Speaker 1>financial business all in the Midwest. We're gonna be speaking

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<v Speaker 1>with the chairman, the president, and the chief executive officer

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<v Speaker 1>of U m B Financial Corporation. They're based in Kansas City.

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<v Speaker 1>I sure want to know what they think about the

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<v Speaker 1>FED getting ready to raise interest rates in June, potentially

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<v Speaker 1>what it means for their bottom line. Well, let's get

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<v Speaker 1>to Charlie Pellocky's in the Bloomberg news room with his

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<v Speaker 1>latest business flash. And I think you very much, Kathleen,

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<v Speaker 1>thank you, Phim the Dawin s and Pierre lower Nan

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<v Speaker 1>Stack is higher on this Fed Minutes Wednesday. We are

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<v Speaker 1>brought to you by National Realty Returns on cash and

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<v Speaker 1>rented real estate. Find them at n r i A

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<v Speaker 1>dot net Stocks declined SMP five hundred index heading for

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<v Speaker 1>US seven week low, Federal reserve policy makers signaling a

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<v Speaker 1>willingness to raise borrowing costs in June if the economy

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<v Speaker 1>continues to improve. Stephen Stanley is chief economist at Amerspirepond Securities.

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<v Speaker 1>He was our guest this afternoon right here on taking

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<v Speaker 1>stock ad minutes reiterate that the Fed did not put

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<v Speaker 1>a lot of stock in the low Q one GDP number. UH.

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<v Speaker 1>We know from the statement that they were were weighing

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<v Speaker 1>the strength and labor market conditions as more important than

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<v Speaker 1>the UH low GDP number. So I think that's and

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<v Speaker 1>that's certainly fleshed out quite well in the minute. Right now,

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<v Speaker 1>we've got the tenure down twenty thirty seconds, the old

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<v Speaker 1>one point eight seven percent, gold down eighteen eighty, the

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<v Speaker 1>ounce now declining one and a half percent to twelve

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<v Speaker 1>fifty eight. Crude oil moving Laura as well, giving up

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<v Speaker 1>earlier gains down one percent, now lower by forty six cents.

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<v Speaker 1>On West Texas Intermediate crewed eighty five, Brant crewed at

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<v Speaker 1>sixty two, target falling the most in more than seven years,

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<v Speaker 1>quarterly sales missing analysts estimates, and the discount chain delivering

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<v Speaker 1>a disappointing forecast, target down seven and a half percent. Also,

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<v Speaker 1>while with learnings today Lows had posted first quarter profit

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<v Speaker 1>the top handless estimates, reinforcing the notion that Americans are

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<v Speaker 1>still willing to spend on their homes. Loads up three

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<v Speaker 1>point one percent again, SMP down six the trop of

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<v Speaker 1>three tents of one percent, and at three thirty two

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<v Speaker 1>on Wall Street. Let's take a look at some of

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<v Speaker 1>the other news from around the world on Bloomberg Radio.

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<v Speaker 1>Thank you, Charlie from the Bloomberg News Room. I'm David Garrett.

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<v Speaker 1>This news update is brought to you by the Jeep

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<v Speaker 1>Grand Cherokee, the most awarded suv ever. The Grand Cherokee

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<v Speaker 1>Jeep dealer today. Senator Bernie's Anders is on the campaign

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<v Speaker 1>trail in California. Today, the Sanders supporter says he's ready

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<v Speaker 1>to split from the party to back Sanders if Burne

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<v Speaker 1>doesn't win the nomination. There's already a movement to form

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<v Speaker 1>another party. Meantime, a recent w B Warn't pole has

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<v Speaker 1>Sanders leading GEOP presumptive nominee Donald Trump by double digits

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<v Speaker 1>in New Hampshire. That pole has Hillary Clinton and Trump

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<v Speaker 1>locked in a tight race. Trump is coming to the

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<v Speaker 1>financial rescue of former rival Chris Christie and the New

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<v Speaker 1>Jersey Republican Party. They've incurred big debt from the George

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<v Speaker 1>Washington Bridge scandal as well as the governor's presidential campaign. Tomorrow,

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<v Speaker 1>Trump will attend a twenty five thousand dollar per person

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<v Speaker 1>fundraiser for the state GOP, which has incurred legal fees

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<v Speaker 1>responding to legislative subpoenas in the Bridge case. Trump and

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<v Speaker 1>Christie will headline the event, along with a separate fundraiser

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<v Speaker 1>to pay down Christie's campaign debt. Cyber security experts warned

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<v Speaker 1>lawmakers today hackers are becoming increasingly sophisticated. Speaking at a

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<v Speaker 1>forum today, Director of National Intelligence James Clappers had one

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<v Speaker 1>group in particular poses the biggest threat. Bad cyber actors

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<v Speaker 1>are using precisely these avenues, the stealer once every day,

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<v Speaker 1>the Chinese and particular or cleaning us up. Because we

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<v Speaker 1>know that we're supposed to do these simple things, and

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<v Speaker 1>yet we don't do them. The NYPD, says one of

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<v Speaker 1>its officers, fatally shot a man today on a busy

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<v Speaker 1>Midtown street. Police say the unidentified forty six year old

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<v Speaker 1>became belligerent at a food emporium as he tried to

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<v Speaker 1>buy beer and pulled out an eight inch knife when

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<v Speaker 1>police arrived. It wasn't clear whether the man had a

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<v Speaker 1>history of mental illness or a criminal record. Global News

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<v Speaker 1>twenty four hours a day, powered by our two journalists

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<v Speaker 1>and more than a hundred fifty news bureaus around the world.

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<v Speaker 1>From the Bloomberg News Room, I'm David Gura, Charlie, and

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<v Speaker 1>we thank you, and again recapping a mixed picture for stocks.

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<v Speaker 1>Nastank is higher, the SMP five index down four down,

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<v Speaker 1>industrials down forty six. That is a drop of three

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<v Speaker 1>tenths of one percent. I'm Charlie Pelton. That's a Bloomberg

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<v Speaker 1>Business flash. This is taking Stock with Kathleen Hayes and

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<v Speaker 1>Pin Fox on Bloomberg Radio. Let's take a look at

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<v Speaker 1>the financial industry, specifically the financial industry of one company,

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<v Speaker 1>you m be Financial, based in Kansas City, Missouri. Shares

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<v Speaker 1>are higher by more than nineteen percent so far this year.

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<v Speaker 1>They pay a dividend of about one and three quarters

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<v Speaker 1>of a percent and joining us now here in the

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<v Speaker 1>studio is John Mariner Kemper. He is the chairman, the president,

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<v Speaker 1>and the chief executive And Mike Hagadorn he is vice

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<v Speaker 1>chairman and executive, vice president and chief financial officer. Gentlemen,

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<v Speaker 1>thank you very much for joining us and coming in today. Uh, Marin,

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<v Speaker 1>I won't begin by just maybe offering you a chance

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<v Speaker 1>to talk a little bit about a gentleman named our

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<v Speaker 1>Crosby Kemper, Jr. So that we can understand the genesis

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<v Speaker 1>of the bank and United Missouri Bank Shares. How did

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<v Speaker 1>that all happen? Oh? Okay, well, yeah, our Crosby would

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<v Speaker 1>be my father. He went by Crosby and the R

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<v Speaker 1>was Rufus. By the way, in case you're looking for

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<v Speaker 1>a name for somebody like your dog, he said he Um.

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<v Speaker 1>He was a great guy who's a fantastic banker. UM

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<v Speaker 1>our company on the fourth generation to run our company

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<v Speaker 1>and UM Kansas City Base went public in the eighties.

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<v Speaker 1>UM and uh we made made it past the proverbial

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<v Speaker 1>third generation. Uh. You know, we're companies are supposed to

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<v Speaker 1>fail in the third generation, so we're officially in the

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<v Speaker 1>fourth generation. I've been running the company for since two

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<v Speaker 1>thousand four, and um, you know it's a largely a

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<v Speaker 1>commercial bank. The bank itself so largely commercial across the Midwest.

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<v Speaker 1>We operate in eight states, but about half our income

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<v Speaker 1>comes from fee based businesses, and we have several other

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<v Speaker 1>businesses that really make up our story. So a strong

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<v Speaker 1>commercial bank. We protect our our credit quality through the

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<v Speaker 1>diversity of our business. So we have a a institutional

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<v Speaker 1>money management business called Scout. We have a fund services

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<v Speaker 1>business where we do all the back office work for

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<v Speaker 1>hedge funds, mutual fund private equity reads UM and that's

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<v Speaker 1>headquartered in Milwaukee. And then we have a healthcare business

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<v Speaker 1>where the sixth largest provider of h S a S

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<v Speaker 1>in the country. That diversity gives us protection and our

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<v Speaker 1>revenue through cycles, and also we believe really allows us

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<v Speaker 1>to protect UM how we lend and and the way

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<v Speaker 1>we run the bank so that we never find ourselves

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<v Speaker 1>reaching because we're a one trick shop reaching for net

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<v Speaker 1>inter sinco. So, Mike, you are president and CEO at

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<v Speaker 1>umb Bank and you're the interim CFO. How are you

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<v Speaker 1>guys doing, How are how is your bottom line, earnings,

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<v Speaker 1>revenues and where you going? Yeah, we had a very

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<v Speaker 1>strong first quarter. We had record card purchase volume. As

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<v Speaker 1>an example, UM our efficiency initiative that we've been talking

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<v Speaker 1>about since the end of the third quarter of last

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<v Speaker 1>year's bearing fruit as well. And so we had a

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<v Speaker 1>very strong on first quarter. And most importantly our balance sheet,

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<v Speaker 1>as men are touched on, one of the things that's

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<v Speaker 1>important to us is being able to be in a

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<v Speaker 1>position where we do not have to make all of

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<v Speaker 1>our revenue off the spread side of the business, and

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<v Speaker 1>so fees become very important to us UH, and our

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<v Speaker 1>balance sheet has grown quite a bit. Our loan growth

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<v Speaker 1>over the first quarter of was up and on organic

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<v Speaker 1>basis was up sixteen percent. So we we feel very

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<v Speaker 1>good about where we're at right now. Mike, can you

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<v Speaker 1>speak at all about what you're seeing regarding the energy

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<v Speaker 1>industry in some of the states in which you operate,

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<v Speaker 1>for example, Oklahoma, Colorado, and Texas. Yeah, most importantly probably Oklahoma.

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<v Speaker 1>In Texas, UM three point three percent of our total

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<v Speaker 1>loan book is in energy related credits, and as we

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<v Speaker 1>disclosed in the first quarter, UH we have reserves over

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<v Speaker 1>that of three point one percent UM and on criticized

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<v Speaker 1>loans we have almost twelve percent reserved against us, So

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<v Speaker 1>we feel very good about the energy holdings that we

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<v Speaker 1>have and and even if we did have some hiccups there,

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<v Speaker 1>we feel good about the reserves we have against it

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<v Speaker 1>and don't have as much exposure to the upstream side

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<v Speaker 1>of the business as other players might as well. So,

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<v Speaker 1>fourth generation Mariner Camper, where do you want to take

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<v Speaker 1>the bank next? What is your big dream vision challenge? Well,

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<v Speaker 1>you know, I think we're on the right path as

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<v Speaker 1>it is today. Our challenge so we grow about a

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<v Speaker 1>billion The bank itself grows about a billion dollars a

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<v Speaker 1>year on its own without him and a activity, and

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<v Speaker 1>so we'll continue to grow. Our challenge as a company

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<v Speaker 1>will be to maintain access to management, how nimble we are,

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<v Speaker 1>how responsive we are, which is sort of built who

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<v Speaker 1>we are. So our our challenge over time will do

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<v Speaker 1>we make sure that we can rely on more people,

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<v Speaker 1>uh spread spread accountability and trust across a bigger part

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<v Speaker 1>of our population, to continue to execute the same level

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<v Speaker 1>of service as we get bigger to either of you

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<v Speaker 1>have any thoughts on the changes in which banks are

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<v Speaker 1>able to finance themselves now, because preferred securities, I mean,

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<v Speaker 1>that's went sort of away with the financial crisis. All right, Well,

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<v Speaker 1>I think you know, each each organization has got a

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<v Speaker 1>different story. I think is long my opinion, as long

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<v Speaker 1>as the the institution has a story. Uh, the capital

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<v Speaker 1>access is still pretty robust. Um. Money seems to be

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<v Speaker 1>available and cheap and um, and then again depending on

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<v Speaker 1>whether you're using your currency. So we have a strong currency,

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<v Speaker 1>so we've we've been using our own currency to to

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<v Speaker 1>drive our activity. So I don't see that really being

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<v Speaker 1>a challenge unless you're unless you're broken. If you're broken,

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<v Speaker 1>you've got all sorts of issues. Well, Maynard Camper, thank

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<v Speaker 1>you so very much for joining US Chairman, President, CEO,

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<v Speaker 1>U and B Financial Corporation along with Mike Hagitor and

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<v Speaker 1>President CEO, chief financial Officer on an interim basis for

0:10:55.800 --> 0:11:02.679
<v Speaker 1>umb Bank. This is Bloomberg Radio, coming up on taking stock,

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<v Speaker 1>a look at range bound trading in the stock market,

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<v Speaker 1>digesting the alphabet soup of Zerpe and tarp while also

0:11:11.679 --> 0:11:14.160
<v Speaker 1>tell you about dragons and swans. Next