UMB Financial Corporation’s UMBF strong balance sheet position and efforts to diversify operations will continue to aid its top-line growth. Also, its enhanced capital position makes it well poised to undertake expansion moves. However, escalating expenses and intense competition might impede bottom-line growth.
Backed by loan growth, UMB Financial’s net interest income (NII) continues to witness improvement. While the company’s low-cost deposit base aided net interest margin in the prior years, the same declined in the first nine months of 2019 due to challenging rate environment. The company has a healthy balance sheet position, and with lower tax rates and easing of regulations, loan and deposit balances are likely to grow further. This is expected to continue benefiting NII.
Moreover, UMB Financial has been making efforts to diversify operations to non-interest sources of revenues. This will reduce the bank’s exposure to interest rates in order to balance the risks related to the rate environment.
Notably, the company’s several credit metrics have been improving and steadily moving toward normalized levels. Also, UMB Financial’s strong capital position will help it to undertake opportunistic expansion moves. Further, on the back of consistent earnings growth, the bank’s capital deployment activities seem sustainable.
However, UMB Financial’s costs remain elevated due to investments in newer technologies and building distribution networks. Also, the bank faces intense competition in its business operations. With increased market share of fintech companies and online service providers, financials of traditional banks like UMB Financial are hampered as new entrants are not subject to the same level of regulations and supervisions.
Further, as of Sep 30, 2019, nearly 73% of the bank’s loans comprised total commercial loans (commercial as well as commercial real estate lending). Such high exposure to commercial loans can be risky for the company amid a challenging economy and competitive markets.
Shares of UMB Financial have gained 12.9% over the past year compared with the industry’s growth of 20.3%. Reflecting analysts’ optimism, the Zacks Consensus Estimate for 2019 earnings of $4.76 has moved marginally upward over the past 30 days. The stock currently carries a Zacks Rank #3 (Hold).
Key Picks
Eagle Bancorp Montana, Inc.’s EBMT 2019 earnings estimates have moved 6% north in the past 60 days. Further, the company’s shares have rallied 29.3% in the past year. At present, it sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TD Ameritrade Holding Corporation’s AMTD 2019 earnings estimates have moved slightly north in the past 60 days. Moreover, the Zacks Rank #1 stock has gained 2.1% in the past year.
Enova International, Inc.’s ENVA earnings estimates have moved 7.3% upward for 2019 in the past 30 days. Moreover, the Zacks Rank #1 stock has gained 19.9% in the past year.
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Yesterday at 5:42 p.m., a US Bank representative reported to the Gillette Police Department (GPD) that a white envelope containing suspected marijuana was dropped in the weekend depository.
According to Lt. Brent Wasson, the suspected marijuana was accompanied by a deposit slip with customer information.
The bank has declined to turn over customer information to GPD so any investigation cannot proceed at this time, Wasson said. The bank did leave the suspected marijuana in police custody.
UMB Financial Corporation’s UMBF strong balance sheet position and efforts to diversify operations will continue to aid its top-line growth. Also, its enhanced capital position makes it well poised to undertake expansion moves. However, escalating expenses and intense competition might impede bottom-line growth.
Backed by loan growth, UMB Financial’s net interest income (NII) continues to witness improvement. While the company’s low-cost deposit base aided net interest margin in the prior years, the same declined in the first nine months of 2019 due to challenging rate environment. The company has a healthy balance sheet position, and with lower tax rates and easing of regulations, loan and deposit balances are likely to grow further. This is expected to continue benefiting NII.
Moreover, UMB Financial has been making efforts to diversify operations to non-interest sources of revenues. This will reduce the bank’s exposure to interest rates in order to balance the risks related to the rate environment.
Notably, the company’s several credit metrics have been improving and steadily moving toward normalized levels. Also, UMB Financial’s strong capital position will help it to undertake opportunistic expansion moves. Further, on the back of consistent earnings growth, the bank’s capital deployment activities seem sustainable.
However, UMB Financial’s costs remain elevated due to investments in newer technologies and building distribution networks. Also, the bank faces intense competition in its business operations. With increased market share of fintech companies and online service providers, financials of traditional banks like UMB Financial are hampered as new entrants are not subject to the same level of regulations and supervisions.
Further, as of Sep 30, 2019, nearly 73% of the bank’s loans comprised total commercial loans (commercial as well as commercial real estate lending). Such high exposure to commercial loans can be risky for the company amid a challenging economy and competitive markets.
Shares of UMB Financial have gained 12.9% over the past year compared with the industry’s growth of 20.3%. Reflecting analysts’ optimism, the Zacks Consensus Estimate for 2019 earnings of $4.76 has moved marginally upward over the past 30 days. The stock currently carries a Zacks Rank #3 (Hold). Key Picks
Eagle Bancorp Montana, Inc.’s EBMT 2019 earnings estimates have moved 6% north in the past 60 days. Further, the company’s shares have rallied 29.3% in the past year. At present, it sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TD Ameritrade Holding Corporation’s AMTD 2019 earnings estimates have moved slightly north in the past 60 days. Moreover, the Zacks Rank #1 stock has gained 2.1% in the past year.
Enova International, Inc.’s ENVA earnings estimates have moved 7.3% upward for 2019 in the past 30 days. Moreover, the Zacks Rank #1 stock has gained 19.9% in the past year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
Phila Siu, also known as Bobby, has been a journalist since 2009. He has reported on human rights, security, politics, and society in Hong Kong, mainland China and Southeast Asia. He holds a bachelor's degree in journalism from Hong Kong Baptist University and a human rights law master's degree from the University of Hong Kong.
The Federal Deposit Insurance Corp. has approved its ninth — and presumably final — de novo of 2019.
Organizers of Bank of St. George in Utah received conditional approval for deposit insurance from the FDIC on Dec. 17. The group is required to raise $18 million in initial capital before opening.
Bruce Jensen is set to become the de novo’s CEO. Organizers aim to open the only locally headquartered bank in St. George, which the Census Bureau recently identified as the nation’s third-fastest-growing city.
Bank of St. George applied with the FDIC and the Utah Department of Financial Institutions in April.
The FDIC approved 15 deposit insurance applications last year, though three of the proposed banks — Community Bank of the Carolinas, Spirit Community Bank and Tarpon Coast Bank — did not open.
One proposed bank approved this year — Silver River Community Bank in Ocala, Fla. — will not open, according to the FDIC.
It's not possible to invest over long periods without making some bad investments. But you have a problem if you face massive losses more than once in a while. So spare a thought for the long term shareholders of Data Deposit Box Inc. (FRA:2DD); the share price is down a whopping 94% in the last three years. That'd be enough to cause even the strongest minds some disquiet. And more recent buyers are having a tough time too, with a drop of 78% in the last year. Unfortunately the share price momentum is still quite negative, with prices down 50% in thirty days.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
Data Deposit Box isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years, Data Deposit Box's revenue dropped 25% per year. That's definitely a weaker result than most pre-profit companies report. And as you might expect the share price has been weak too, dropping at a rate of 62% per year. Never forget that loss making companies with falling revenue can and do cause losses for everyday investors. There is a good reason that investors often describe buying a sharply falling stock price as 'trying to catch a falling knife'. Think about it.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Data Deposit Box shareholders are down 78% for the year, but the broader market is up 24%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 62% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. You could get a better understanding of Data Deposit Box's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
Following the recent incidence of fraud at the Punjab and Maharashtra Cooperative Bank (PMC Bank), which caused panic among some sections of the depositors, the government is vetting a proposal from the Deposit Insurance and Credit Guarantee Corporation (DICGC) to increase the deposit insurance limit.
Sources in the know of the development said, the DICGC — a subsidiary of the Reserve Bank of India (RBI) — had sent a proposal to the government for increasing the deposit insurance cover to between ₹3 lakh and ₹5 lakh. At present, deposits up to ₹1 lakh are insured by the DICGC. Sources said the decision was taken after consultation with the RBI. The final call on the extent of deposits that will be insured would be taken by the government.
For deposit insurance to increase, the DICGC Act needs to be amended, for which Cabinet approval is required. Sources indicated that it would take some time before the Act was amended.
The last time the insurance cover was increased was in May 1993, when it was raised from ₹30,000 to the current ₹1 lakh. Since its inception in January 1968, when the cover was ₹5,000, the amount insured has been increased on four occasions — first in April 1970, then in January 1976, subsequently in July 1980 and lastly, in May 1993.
The demand for increase in deposit insurance grew stronger after the RBI imposed various restrictions, including a cap on deposit withdrawal, for accounts held with the PMC Bank in the last week of September due to financial irregularities. This caused panic among depositors and there were rumours about the safety of the banking system.
This prompted the RBI to issue statements twice in the last three months, assuring that the the Indian banking system was ‘safe and stable.’
The RBI also increased the deposit withdrawal limit of PMC Bank in several phases to ₹50,000. With the withdrawal cap raised to ₹50,000, more than 78% of the depositors of PMC Bank would be able to withdraw their entire account balance, the RBI had said.
The DICGC insures all bank deposits, such as savings, fixed, current and recurring, but not deposits of foreign governments and of central/ State governments, deposits of State Land Development Banks with the State co-operative banks, inter-bank deposits, deposits received outside India and those specifically exempted by the Corporation with the prior approval of the banking regulator.
Following the recent incidence of fraud at the Punjab and Maharashtra Cooperative Bank (PMC Bank), which caused panic among some sections of the depositors, the government is vetting a proposal from the Deposit Insurance and Credit Guarantee Corporation (DICGC) to increase the deposit insurance limit.
Sources in the know of the development said, the DICGC — a subsidiary of the Reserve Bank of India (RBI) — had sent a proposal to the government for increasing the deposit insurance cover to between ₹3 lakh and ₹5 lakh. At present, deposits up to ₹1 lakh are insured by the DICGC. Sources said the decision was taken after consultation with the RBI. The final call on the extent of deposits that will be insured would be taken by the government.
For deposit insurance to increase, the DICGC Act needs to be amended, for which Cabinet approval is required. Sources indicated that it would take some time before the Act was amended.
The last time the insurance cover was increased was in May 1993, when it was raised from ₹30,000 to the current ₹1 lakh. Since its inception in January 1968, when the cover was ₹5,000, the amount insured has been increased on four occasions — first in April 1970, then in January 1976, subsequently in July 1980 and lastly, in May 1993.
The demand for increase in deposit insurance grew stronger after the RBI imposed various restrictions, including a cap on deposit withdrawal, for accounts held with the PMC Bank in the last week of September due to financial irregularities. This caused panic among depositors and there were rumours about the safety of the banking system.
This prompted the RBI to issue statements twice in the last three months, assuring that the the Indian banking system was ‘safe and stable.’
The RBI also increased the deposit withdrawal limit of PMC Bank in several phases to ₹50,000. With the withdrawal cap raised to ₹50,000, more than 78% of the depositors of PMC Bank would be able to withdraw their entire account balance, the RBI had said.
The DICGC insures all bank deposits, such as savings, fixed, current and recurring, but not deposits of foreign governments and of central/ State governments, deposits of State Land Development Banks with the State co-operative banks, inter-bank deposits, deposits received outside India and those specifically exempted by the Corporation with the prior approval of the banking regulator.
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