UMB Financial Corp (UMBF) 2009 Q3 法說會逐字稿

Welcome to the UMB Financial Corporation third quarter conference call on the 28th of October, 2009.

Throughout today's recorded presentation, all participants will be in a listen-only mode.

After the presentation, there will be an opportunity to ask questions.

(Operator Instructions).

I will now hand the conference over to Ms.

Abby Wendel, Director of Investor Relations.

Please go ahead.

Good morning, everyone, and thank you for joining us for our conference call and webcast regarding our 2009 third quarter financial results.

Before we begin, let me remind you that our comments in this conference call contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements rely on a number of assumptions concerning future events, and are subject to risks and uncertainties, which could cause actual results to differ materially from those indicated in our statements made during this call.

While management of UMB believes our assumptions are reasonable, UMB cautions that material changes in interest rates, the equity markets, general economic conditions as they relate to the Company's loan and fee-based customers, competition in the financial services industry, the ability to integrate acquisitions and other risks and uncertainties, which are detailed in our filings with the Securities and Exchange Commission, may cause actual results to differ materially from those discussed in this call.

UMB has no duty to update such statements, and undertakes no obligation to update or supplement forward-looking statements that become untrue because of new information, future events, or otherwise.

Our earnings releases (inaudible) our GAAP-based income statement and a reconciliation to the non-GAAP measures discussed in the release, which includes a pretax adjustment to non-interest income and non-interest expense, the tax effect of the adjustment and adjusted net income.

The adjustment was $1.1 million gain on the sale of our securities transfer product.

The reconciliation for these items can be found on our website at UMB.com.

The non-GAAP results are a supplement to the financial statement based upon generally accepted accounting principles.

UMB believes this non-GAAP presentation, and the elimination of these items, is useful in order to focus on more reliable indicators of ongoing operating performance.

By now, we hope most of you on the call or listening to the webcast have had a chance to review our earnings release dated October 27th.

If not, you will find it on our website at UMB.com.

On the call today are Mariner Kemper, Chairman and Chief Executive Officer; Peter deSilva, President and Chief Operating Office; and Mike Hagedorn, our Chief Financial Officer.

The agenda for today's call is as follows.

First, Mariner will highlight our results and update the progress on growing loans and deposits, managing capital and delivering the unparalleled customer experience.

Then Mike will provide additional details on our third quarter results.

Peter will discuss results relating to our strategies of accelerating fee income growth and increasing efficiencies, followed by closing comments from Mariner.

Following that, we'll be happy to answer your questions.

Now, I'll turn the call over to Mariner Kemper.

Thank you, Abby.

Welcome, everyone, and thank you for joining us today.

As you've seen in our press release, UMB delivered solid financial performance in the third quarter.

Double-digit earnings growth is particularly pronounced, given what's been happening in the industry and compared to our earnings in the third quarter of 2008.

We have a strong, diverse revenue base which gives us earnings strength in a challenging economic cycle.

Compared to the same period a year ago, loans and deposits have increased, non-interest income is higher, our efficiency ratio is lower, and we have returned capital to shareholders through share buybacks and a higher dividend.

The economic environment remains challenging.

However, we believe that staying true to our tradition of operating with great liquidity and high asset quality, coupled with our core deposit franchise, serves us well regardless of the economic conditions.

Rather than fixing internal problems, we have been able to focus externally on new business generation.

Turning to specific results, net income increased 10.2% to 24 million or $0.59 per diluted share, an increase from 21.8 million or $0.53 per diluted share for the third quarter of 2008.

On a non-GAAP basis, net income increased 13.9% due to last year's final $1.1 million pretax contingent payment from the sale of our securities transfer product.

Our third quarter financial performance was driven by a 14.5% increase in net interest income, primarily due to a higher average earning asset base.

Non-interest income increased 1.8% and amounted to 51.5% of total revenue.

Our diversity in revenue is essential to maintaining stability and quality.

Now, I'd like to discuss the results against our strategy to grow loans and deposits.

End of period loans increased 2.1% to 4.3 billion.

Excluding indirect auto, this is an increase of 6.6%.

During the quarter, 166 million in indirect auto loan balances ran off.

Following the decision to run off this portfolio in August of 2007, we've seen a steady decline in indirect auto balances.

Even in these challenging economic times, our credit quality remains stable, largely because our underwriting practices are among the strongest in the industry and remain unchanged.

While we have seen a modest increase in our non-performing loans and net charge-offs, we are still well below our peer averages.

For the third quarter of 2009, non-performing loans increased 36 basis points to 0.52%.

The majority of this increase was attributable to a single credit balance -- credit placed on non-accrual this quarter as a part of a Shared National Credit review.

Net charge-offs were 0.42% of average loans compared to 0.21% a year ago.

Of our total net charge-offs, credit card charge-offs made up [60]% and were 4.26% of total credit card loans in the third quarter.

In comparison, credit card portfolio industry-wide charge-offs were 10.9%.

In our commercial loan portfolio, balances exceeded 2 billion despite a reduction in commercial line utilization.

We have the capacity to lend and have grown our commitments by more than 600 million compared to the same quarter last year.

We believe the drop in line utilization is due to the recessionary impact on our customers, as we are seeing fewer businesses draw down on a line for credit.

Looking at other aspects of our loan portfolio, real estate loans increased 258 million or 17.2% driven by growth in our commercial real estate and home equity loan categories.

Although commercial real estate is an area of weakness in the industry, UMB's non-performing commercial real estate loans were only 0.34% of total loans at the end of the quarter.

Our commercial real estate portfolio is largely made up of owner-occupied real estate.

It is not our practice to underwrite speculative real estate or development projects.

Turning to liabilities, at the end of period, deposits increased 11.4% to 7.9 billion.

Non-interest-bearing deposits increased 13.4% and amount to one-third of total deposits, well above the industry average of 14%.

Core deposit funding is a key component of our franchise.

In addition to our traditional source of deposits, we have developed a unique group of businesses that contribute to our core funding stream, including healthcare services, small business banking and private banking.

Combined deposits in these businesses exceeded 832 million this quarter which is 69% higher than this time a year ago.

Just four years ago, the balances in these businesses were a combined 28 million.

This group will continue to be a key area of focus for the Company.

Turning to capital management, our priorities have not changed.

They are first, to invest in growth, either through a reinvestment in a business of ours, through acquisitions that are a good fit both strategically and financially; second, to consider increasing our dividend over time; and third, to repurchase stock when it makes sense to do so.

In the third quarter, we repurchased 226,796 shares at an average price of $39.83 for a total cost of $9 million.

Year-to-date, we have repurchased 689,743 shares at an average price of $38.18.

Also yesterday, our Board increased the regular quarterly dividend by 5.7% to $0.185 per share, equating to a 31.4% dividend payout ratio based on third quarter diluted EPS.

We are unique in this environment and I believe one of the few to be able to increase its dividend.

It marks the ninth increase in our quarterly dividend since July of 2003 with a total increase over this period of 85%, a reflection of our consistent earnings performance and strong capital levels.

Success isn't defined only by financial results alone.

At the foundation of everything we do is attracting and retaining the best quality people, sustaining a performance culture and building our brand.

We deliver the unparalleled customer experience through focus on our people, our customers and our communities.

With that, I'll turn it over to Mike Hagedorn, our CFO, to provide additional detail on our financial results for the quarter.

Mike?

Thanks, Mariner, and welcome, everyone.

As Mariner discussed, core funding is an important part of UMB's business model.

This quarter, our cost of funds was 81 basis points, well below the industry average of 191 basis points.

Low funding costs, coupled with higher average earning assets, allowed UMB to maintain a net interest margin of 3.51% without reaching out on the yield curve, materially altering the duration or mix of our securities portfolio, or changing the quality of our loan portfolio.

Net interest income increased 14.5%, the primary driver of our double-digit earnings growth.

The low interest rate environment resulted in a decline of 4.8% in interest income, but this decline was more than offset by a 51.9% decrease in our net interest expense.

Effectively managing deposit rates and a 16.9% increase in average earning assets contributed to the net interest income performance.

Looking forward, we expect few reductions in our funding costs.

Net interest margin decreased 6 basis points to 3.51% compared to the third quarter of 2008.

Average earning asset yields fell 88 basis points to 4.08% while the cost of interest-bearing liabilities dropped 107 basis points to 0.81%.

Free funds contribution declined to 24 basis points from 49 basis points over the same period last year and was the primary reason for the net interest margin decline.

Despite historically low rates, net interest spread increased 19 basis points to 3.27%.

Compared to the second quarter, improving C&I yields, combined with slight changes in our investment portfolio mix, lifted margin 9 basis points.

Turning to the investment portfolio, 290 million in core portfolio securities rolled off this quarter at an average yield of 3.82%.

In turn, we purchased 719 million of securities at an average yield of 2.66%.

Purchases were considerably higher than the roll off this quarter, as we reduced our overnight position at the Fed.

Over the next three months, 252 million to 310 million of core investments with an average yield of 3.74 to 3.97% will roll off.

Over the next 12 months, 1.1 billion to 1.4 billion of core investments with an average yield of 3.98 to 4.13% will roll off.

In the current lower rate environment, we expect the repricing of these securities to negatively impact our interest income.

In addition, 67% of our total loan portfolio is expected to reprice in the next 12 months.

Non-interest income grew 1.8% or $1.4 million compared to the third quarter in 2008 despite lower equity markets.

As Peter will discuss, trust and securities processing, along with trading and investment banking income, made up the majority of this increase.

Non-interest expense increased 4.9% or $5.4 million to $115.3 million compared to the third quarter last year.

The acquisition of J.D.

Clark, completed in the second quarter of this year, contributed 2.5 million or 46% of the increase to non-interest expense.

Salary and benefit expense increased 3 million with J.D.

Clark accounting for 1.2 million of that increase.

Regulatory fees increased 2.4 million to $3 million, primarily from higher FDIC deposit insurance premiums and the expiration of the FDIC deposit insurance credits.

Although our credit quality remains strong, we felt it prudent to increase our provision this quarter, given the economic environment.

Our provision model methodology takes into consideration not only the inherent loss in our loan portfolio, but also includes a qualitative aspect, which resulted in a $3.8 million increase to our provision this quarter.

The provision, as a percentage of loans, is now 1.36% or 17 basis points higher than in the same period last year.

Turning to the balance sheet, we ended the quarter with more than 10 billion in assets and more than 1 billion in equity.

UMB remains well capitalized with tier one, leverage and total risk-based capital levels of 13.5, 8.2 and 14.5% respectively.

As Mariner mentioned, we continue to buy back shares, increase our dividend and make acquisitions as appropriate, all while growing our capital levels.

Return on average equity and return on average assets during the third quarter of 2009 were 9.43% and 0.97% respectively from 9.25% and 1% for the same period in 2008.

Average loans to average deposits decreased to 58.3% from 64.6%.

The continued runoff in the indirect auto loan portfolio, commercial line utilization and higher deposit levels contributed to the decline.

With that, I'll turn it over to Peter for additional comments on our operating performance.

Thanks, Mike, and good morning, everyone.

Being a well diversified financial services organization continues to be a great strength for UMB.

Our third quarter results demonstrate that well balanced sources of revenues and earnings continues to serve us well.

Trust and securities processing income, which is the largest component of fee income, increased by 1.1 million or 3.5% to 32.6 million from the year-ago period.

Revenue in this segment is largely dependent on three key drivers -- one, new business sold and converted; two, Scout mutual fund flows; and three, performance in the equity and fixed-income markets.

Increased business in both our funds services and asset management segments contributed to the growth this quarter.

Turning to specific results, trust income from UMB Fund Services increased 27.5% or $3 million compared to the third quarter of last year.

Most of this growth was the result of our recent acquisition of J.D.

Clark & Company which closed in the second quarter.

As we've mentioned previously, J.D.

Clark serves the alternative investments marketplace and has added significant scale to our preexisting alternative investments business.

Results to date have exceeded our expectations and we couldn't be more pleased to have the J.D.

Clark associates and customers as part of UMB Fund Services.

In our Asset Management businesses, total assets under management increased 6.2% to 11.3 billion from 10.7 billion in the third quarter of 2008.

The primary driver of this growth was our institutional money management business.

Total assets in the Scout Funds grew 11.8% to 6.3 billion from 5.7 billion at the end of the third quarter of 2008.

Equity and bond fund flows were 274 million during the quarter and stand at 739 million through September 30th.

Positive equity markets also affected assets under management.

As we announced last quarter, we repositioned Scout Investment Advisors to be a subsidiary of UMB Financial Corporation.

This is yet another sign of our commitment to growing our institutional money management business.

Our focus is to build Scout Investment Advisors into a national premier money management firm.

In addition to the positive flows, we are seeing other tangible evidence that our focus is beginning to pay off.

For example, the number of institutional requests for proposals we have received this year versus last year is greater than we have seen in the past.

Winning new mandates has translated into revenue growth of 5.8% in the third quarter of 2009, compared to the second quarter -- same quarter a year ago.

Our Personal Asset Management business also continues to perform well.

Our Investment and Wealth Management business has gained sales leverage over the past nine months with new, recurring sales revenues increasing 24% to $3.3 million compared to 2.6 million for the first nine months of 2008.

New revenues increased more than 57% in the third quarter of 2009 when compared to the third quarter of '08.

Total assets under management in this segment were 3.6 billion at the end of the third quarter.

During 2009, we have invested in this business by hiring seasoned professionals and we are well positioned for further growth.

In looking at our other fee businesses, we continue to expand our position in Healthcare Services.

We achieved the next evolution of this business this past Monday by launching our newest product, Healthcare Exchange.

This product combines claims reimbursement with explanation of benefits and payment status into a single Web portal.

It allows health plans and third-party administrators to work directly with a financial institution for their claims reimbursement needs.

The launch of this innovative product expands our offerings and scale in this business.

Also during the quarter, the number of HSA and FSA accounts grew 29%, with deposits and assets increasing 33% compared with the same period last year.

At the end of the quarter, we had nearly 1.1 million HSA and FSA accounts and more than 185 million in deposits and investment assets.

Year-to-date, healthcare related spending on our healthcare debit cards increased 43% and now makes up more than 50% of our signature-based debit card purchase volume.

Also during the quarter, we were pleased to learn that UMB Healthcare Services was selected by Blue Cross and Blue Shield of Kansas City to provide HSA accounts to its policyholders.

Our products and services make it easy and convenient for customers to access their accounts for their healthcare expenses.

This, combined with our leading technology, factored into Blue Cross and Blue Shield of Kansas City's decision to partner with UMB.

We could not be more pleased about partnering with such a reputable health insurance provider.

As payments continue to shift to electronic transactions, our card businesses are also benefiting.

Commercial cardholder purchase volume posted a strong quarter with total volume of nearly 168 million, an increase of 4.5% compared to last year.

The number of accounts for this segment increased 11.6%.

Total accounts from our consumer card area increased 12.6% due primarily to account growth in our Affinity Card portfolio.

Even as industry headwinds exist, such as pressure on consumers and interchange fees, we believe cards will continue to be a key component of our payments business.

In addition to growing our fee businesses, we continue to focus on improving operational efficiencies and effectively managing expenses.

Throughout the year, we have accomplished several cost-containment initiatives.

A few examples include the outsourcing of statement printing and mailing and the outsourcing of credit card collections.

We have also recognized savings in our telecommunication expenses by renegotiating contracts, migrating to VoIP and moving to a new ATM platform.

These initiatives, along with many others, are helping us to become a more efficient organization.

Our efforts in maximizing efficiencies resulted in a reduction in our efficiency ratio to 71.3% from 73.9% a year ago.

Our efforts have also resulted in improved revenue per FTE and retail cross-sell ratios compared to the same quarter last year.

Revenue per FTE increased 8.9% year-over-year, while our new customer cross-sell ratio improved 13 basis points to 3.18.

Delivering the unparalleled customer experience will continue to improve this ratio over time.

We are pleased with the results in this area thus far.

With that, I'll turn it over to Mariner for his concluding remarks.

Mariner?

Thank you, Peter.

As a final note, I'd like to mention a couple of recognitions we've received in this quarter.

I'm particularly pleased to see that our focus on running our business the right way is earning us recognition in the industry.

We were recently selected by Sandler O'Neill as the top performer in its 2009 Bank and Thrift Small All Stars Report.

Sandler's analysis focuses on growth, profitability, credit quality and capital strength.

We manage our business for the long run and it's gratifying to see the results of our efforts being recognized in such a manner.

Second, our Asset Management Division was recognized among the nation's best in the Bank Insurance Market Research Group's 2009 Who's-Who in Bank Wealth Management Report.

This division was cited as "one of the more robust wealth management businesses in the Midwest."

I couldn't be more proud of our achievements.

For nearly 96 years, UMB has navigated many difficult credit cycles.

The current one is perhaps as challenging as any we've seen in recent memory and similar to other cycles in the past, we adapt to the changing conditions without losing focus on our core principles.

Thank you, all, for being on the call with us today.

And with that, I'll turn it back over to the conference call operator, Carol, to open the call for your questions.

Thank you, sir.

(Operator Instructions).

Your first question comes from Chris McGratty.

Please go ahead.

Good morning, guys.

Good morning, Chris.

Good morning, Chris.

Good morning, Chris.

My quick question on the Shared National Credit exposure.

I think you indicated in the press release the increase in non-performers was [SNC] related.

Can you give me the size of the [SNC] exposure that you guys have?

Well, the credit that was referenced in total currently has roughly about $10 million in outstanding.

The total [SNC] exposure, I don't have it.

It's about $1 billion.

Okay.

And then on that billion-dollar exposure, what would you say you're the lead on or as opposed to a participant?

We are a lead in one of them.

Yes, we're a lead in about $150 million credit (inaudible).

We're largely a participant.

Okay.

So 150 at a billion, you're a lead.

Okay, that's helpful.

And then geographically and maybe by industry [space], can you give any color?

Yes, I would say we operate in that space just like we do with everything else we do.

It's largely in footprint and a very high quality portfolio.

Okay, that's helpful.

Moving onto the investment portfolio, Mike, I guess maybe can you talk to what exactly you've been buying the last few quarters, and then maybe talk to the duration today as it compares to the last few quarters.

Sure.

Let me take the latter half of that question first.

The duration has not materially changed -- slightly, a little less duration, so a few less months actually in total maturity, but not changing in any material way.

So you're going to see us hovering around the high 20 months, 28, 29, 30 months at the most.

Okay.

As far as the actual purchases, we're buying a lot of agency debt.

In fact, within our non-core portfolio, 34% of that portfolio is made up of Fannie and Freddie agency debt.

We're still buying agency debt in the core portfolio too, but that's only 7% of the total holdings.

Okay.

I think what you're seeing and probably what's behind your question is whether or not there's an issue when the government's guarantee runs out in '12 (inaudible) and our belief is the government is not going to let Fannie and Freddie go down.

So we continue to buy those debts, both the mortgage-backs and agency debt purely at sell.

Okay.

And then in terms of funding, I guess funding the purchase just -- maybe you could talk about the funding side of it as well.

Yes, that clearly has not been a problem for us.

As we talked about on the call, we had maintained in the second quarter very large Fed fund overnight positions.

And with the purchases that we made, almost 720 million in the third quarter, we've eroded some of that overnight position with our core portfolio holdings.

So I don't feel the funding for that is an issue at all.

Okay.

And then I guess my last question, in terms of just how the whole balance sheet is and aggregates composed, how are you positioned in asset and liability-sensitive?

Yes, I would say over time, we've probably been more on the liability-sensitive side and now that liability pricing is kind of -- it's going to plateau.

I don't know how much lower you could actually get your cost of funds once you're now at 81 basis points.

It's going to start to switch (inaudible) a little more asset-sensitive.

Okay.

Thanks, guys.

Thank you.

Our next question comes from Julianne Casareno.

Please state your company followed by your question.

Hi, Julianne Casareno, Prospector Partners.

You have 1 billion in [SNC]s outstanding?

No, no, no.

That's -- Julianne -- it's Julianne, right?

Yes.

That's commitments.

So --

Okay.

How much in outstanding?

Between 150 and 200, somewhere around there.

Oh, okay.

So 150 and --

And they are largely relationship.

We're not out purchasing participation.

These are companies we have direct relationships with and we have treasury management business with and such.

We're not out buying participation.

I realize that.

I'm just trying to size the exposure.

You have 150 to 200 million outstanding on 1 billion of commitments?

Yes.

And you're the lead in all of those?

You're the --

No, we're only the lead in one of them.

We only lead one of these credits and that particular credit, it's about $150 million credit that we lead.

I think we take about 30 million of that 150 and that's not all drawn.

So the key numbers are, as Mariner said, 1 billion in commitments, 200 -- 150 to 200 million in drawn.

Against that, we only lead a single credit which is a committed credit of 150 million and we only take a portion of that.

Yes.

Okay.

And in the 1 billion of commitments, how many loans is that?

We'd -- I have to -- if you want more detail on that, we can get out -- you can talk with Abby Wendel, who's our Investor Relations person.

She'll call you.

What were your 30 to 89 days past dues?

I'd have to track that down for you here.

I'd have to track that down for you.

I don't have it at my fingertips.

We'll get that back to you as well.

Okay.

I'll have Abby follow-up with you on that.

Okay.

Yes, the percent of non-performing within 90 days is 0.52%.

Yes.

Yes, I mean the 30 to 89.

Yes, the 30, I don't have at my fingertips.

Okay.

Okay.

And what were assets under management at the end of the quarter?

11.3 billion broken into about 6.5 billion in our mutual fund complex and the rest in a diverse source of assets under management for our Trust and Wealth Management businesses.

Okay.

And that's up from 10 billion.

The 11.3 billion is up from 10 billion?

Up from about 9.7 billion (inaudible).

Up from 9.7 billion, okay.

Okay.

Thank you.

Sure.

Thank you.

Your next question comes from Peyton Green.

Please state your company followed by your question.

Good morning.

I had a question for you on the C&I piece.

To what degree did you all receive payoffs in the C&I book?

Did it actually decline linked quarter or kind of what is the outlook in terms of the next quarter or two?

Well, Peyton; it's Mariner.

How are you?

Our utilization is down.

Certainly, borrowers are not using their lines.

As I mentioned in my comments, our commitments are up significantly, but our balances are relatively flat and the reason for that is utilization is down.

I don't know, does that answer your question?

I mean, any idea of the utilization percentage and the change year-over-year?

Yes, we run normally at 30.5% and we're running at 26.11% right now.

Okay, great.

And then in terms of thinking about how the cycle unfolds, I mean, it would seem like -- I mean, most banks that we've talked to have had more payoffs on the C&I side this quarter than compared to the last several quarters.

What is your outlook for C&I growth going forward?

And it sounds like compared to past cycles, you all are actually seeing more opportunities to grow.

And I was just trying to get some understanding of that and your outlook for that.

So far, we've been able to outpace lower utilization with new business.

Our hope is to be able to do that.

Our pipeline looks good.

We are definitely seizing a wonderful opportunity, a once-in-a-lifetime-type opportunity to pick up market share.

And so we're seeing that -- I can't project whether we'll be able to keep it up, but I would say that the pipeline looks good.

Okay.

And is this from banks bigger than you, smaller than you or --

It's all across the board.

Okay.

And then in terms of the J.D.

Clark acquisition, you all referenced this, but I didn't catch the numbers.

What was the amount of revenue and expense attributable to it in the third quarter?

One second.

Let me get that back in front of me, if I can, Peyton.

Okay.

Well, first, I can tell you it's going exceedingly well.

We're very pleased with the way that's come together for us and the overall alternative investment marketplace is exceeding our expectations as well.

It came back very strong after the reductions we saw about a year ago.

In the third quarter, J.D.

Clark contributed non-interest income of 2.9 million and it had expenses of 2.5 million.

Of that 2.5 million in expenses, 1.2 million was salaries and benes and 850,000 was amortization related to the purchase.

Okay, great.

And then in terms of the RFP process on the asset management business, you mentioned that this was up compared to past levels.

Right.

Any particular type of volume that you might speculate that you might be able to grow the business by compared to times past?

I mean, you all have had pretty strong growth over the years.

It's hard to look forward, but I can give you the numbers.

In 2007 and 2008 for the full year, we responded to about 39 RFPs in each year.

Year-to-date we've seen 48 RFPs and we expect to see more between now and the end of the year.

And we attribute this to the seriousness with which we're taking this business, the fact that we're now global investment performance standard compliant, GIPS compliant, and the emphasis that our sales team is putting on getting the word out about Scout Investment Advisors.

Okay, great.

And then in terms of the Healthcare Services business, I mean, you all have had pretty fantastic growth in that over the years.

With the change that -- I guess, the change in your back-end system, what do you think that allows the growth to do going forward?

Well, one of the things we're trying to do is prepare for whatever eventuality Congress comes up with, but one thing is for sure.

One, we believe FSAs in particular will continue to prosper because there's a real need for them and the need to pay for healthcare is going to be done, we think, through cards in the future.

So that's for certain.

The new product we were just talking about really enabled us for the first time to have explanation of benefits and funding and settlement capabilities all tied together through a single Web portal.

It's hard to project, but we've had good receptivity in the marketplace so far.

We've been able to sign three relationships pretty quickly here in the last 120 days or so and we're getting good reaction to that capability in the marketplace.

Okay.

And then last question, how much is left on the indirect auto book?

162 million, I believe the number is.

I was just looking at it.

Yes, we referenced in the call that 166 had run off in the quarter.

It's actually year-over-year, so we're down to 160 million or so.

Yes, that's right.

160 million.

Okay, great.

Thank you very much.

Thanks, Peyton.

One more question.

Your next question comes from Jay Daniel.

Please state your company followed by your question.

Hi, it's Jay Daniel with Eagle Asset Management.

I've actually got three quickies.

First is I'm wondering what percentage of insider ownership you have right now.

Secondly, I'm wondering if you've got any plans to get out and publicize your story with investors in the next couple of months.

And third, I'm wondering what sort of criteria you might have that would make you interested in a failed bank transaction.

Are those things something that you look at as a means of expansion either later this year or into 2010?

Thank you.

Okay.

Thanks for your questions.

I'm going to ask -- answer the first one, ask you to repeat the second and then answer the third.

The first one is we're approximately 20% in insider ownership total.

And what was the second question?

Getting the story out, story-out road shows.

Road shows.

Oh, are we going to road shows?

How do we get the story out?

We are not big fans of the road show process.

We feel like it's our job to just run the Company and be transparent, so that's our strategy is to be as transparent as possible through efforts like this.

You're certainly welcome to come visit us, but as far as road shows go, we think it's our job to run the Company.

The last question about assisted deals, we are very active in looking for assisted-deal transactions really of any kind, whether it's a quality institution or one that's under the purview of the government under a letter.

So it's either one.

So we're very active and we want to make sure that when we do them that they're a strategic and cultural fit and they don't -- and most importantly, don't change our risk profile.

Okay.

Thank you.

(Operator Instructions).

You have a follow-up question from Julianne Casareno.

Please go ahead.

Actually, I'm off, but thank you very much.

Okay.

All right.

There appear to be no further questions, sir.

please continue.

Thank you very much for your interest in UMB.

The call can be accessed via a replay on our website beginning in about two hours and it will run through November 11th.

And as always, you can contact UMB Investor Relations with any follow-up questions by calling 816-860-1685.

Again, we appreciate your interest and time.

Thank you.

That concludes the UMB Financial Corporation third quarter conference.

Thank you for participating.

You may now disconnect.