Welcome to the Fourth Quarter and Year-End 2011 Earnings Results Conference Call. [Operator Instructions] This conference is being recorded today, Wednesday January 25, 2012. I would now like to turn the conference over to Abby Wendel, Director, Investor Relations. Please go ahead, ma'am.

Thank you. Good morning, everyone, and thank you for joining us for our conference call and webcast regarding our fourth quarter and full year 2011 financial results. Before we begin, let me remind you that our comments on 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. By now, we hope most of you on the call or listening via webcast have had a chance to review our earnings release which was issued last evening. 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 Officer; and Mike Hagedorn, our Chief Financial Officer. The agenda for today’s call is as follows: Mariner will provide high-level commentary on our results, and Mike will review the details of our financials. Then Peter will review key fee income business drivers. 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. I’m very pleased to talk with you today about both our fourth quarter and full year 2011 results. Not only did we see improvement in our fourth quarter results but we also achieved record revenue and net income on a full year basis. For the year, we surpassed $100 million in earnings for the first time in our history. Net income was $106.5 million on total revenue of $731.3 million. Diluted EPS was $2.64 per share for the quarter. We generated net income of $23.3 million or $0.58 per diluted share on total revenue of $177.3 million. We continue to execute on our strategies to accelerate fee business growth, grow loans and deposits, maximize efficiencies, and deploy capital effectively by sticking to our business model and doing what we believe is right. As you have come to expect from us, we manage the company for the decades, not for the quarter, and return consistent results to shareholders. Non-interest income was the primary driver behind the increase in total revenue and net income compared to the same period a year ago. Non-interest income increased 3.2% to $97.8 million for the quarter, and 15% to $414.3 million for 2011, both led by increases in trusts and securities processing revenue. Later in the call, Mike will provide additional detail on our revenue and Peter will discuss with you the drivers affecting these businesses. Fortunately, we do not have to rely entirely on spread income to grow the company, and we were pleased that non-interest income comprised 55.1% of total revenue. In a time when loan growth is difficult to come by, I’m proud to report that we once again ended the period with increased loan balances. Net loans for December 31,…

Thanks, Mariner, and welcome, everyone. Picking up where Mariner left off in this discussion of the balance sheet, the increase in our balance sheet from $12.4 billion to $13.5 billion was driven primarily by deposit growth. As you know, we typically experience a seasonal influx of public funds in the fourth quarter, which started approximately $200 million higher than last year. These balances currently are about $140 million higher than historical levels. The rate environment and less attractive yield opportunities have resulted in additional funds remaining in deposit [indiscernible] accounts. When combined with increases in deposits from other funding sources, average deposits had increased 13.5% at year end. Non-interest bearing deposits comprise nearly 39% of our total deposits, which puts us in the top 3% of the industry according to SNL Financial. Our high percentage of free funds is a competitive advantage and is reflected in our low overall cost of funds which was 0.32% for the fourth quarter and 0.35% for the year. This advantage will be even more important when rates begin to rise. Allowance for loan losses is $72 million and allowances as a percent of total loans is now 1.45% compared to 1.61% a year ago. Our allowance for loan loss coverage is more than 2.5x the amount of non-performing loans while the median industry allowance reported for the third quarter would cover just over half of non-performing loans. During 2011 we had gains on the sale of investment securities of $16.1 million. We harvest gains as part of our overall intentional approach to manage the investment portfolio when interest rates in the economy make this a prudent decision. Through gains we're able to offset lower margin associated with holding shorter-duration securities. In effect, we trade one type of risk for another by supplementing what we…

Thank you, Mike. Welcome, everyone. As you’ve seen in our press release, our results continue to demonstrate the long-term value of our diversified business model. To provide additional context, I’d like to discuss the sources and drivers of our fee income, beginning with our Asset Management and Asset Servicing businesses. As noted in previous calls, revenue in these areas is largely dependent on 3 key drivers: first, new business; second, mutual funds and separate account net flows; and third, equity and fixed income market performance. Our asset management businesses have fared well over the past few quarters despite turbulence in the markets. We ended the year with total company assets under management of $28 billion, a slight increase over 2010. Despite the market headwinds, Scout Investments had a very good year. Net flows from the Scout Funds and fixed income separately managed accounts were just over $1.1 billion for the year. The Scout Mid Cap and the Scout International Funds accounted for substantially all of the net flows for the year. During the fourth quarter the Scout Funds experienced net outflows of $2 million. However, during the quarter the fund’s assets under management increased $469 million due to market appreciation. At the end of 2011 total assets in Scout mutual funds stood at $8.7 billion. Scout fixed income separately managed accounts had $10.4 billion in assets under management and Scout equity separately managed accounts had $583 million. A growth strategy within Scout investments is to launch select new products as appropriate to round out our product offering. We launched 2 new funds in 2011: First, the Scout Global Equity Fund. This fund combines the strengths and stock selection capabilities of Scout’s 5 equity teams. And second, the Scout Unconstrained Bond fund. This fixed income fund is allowed to pursue investment…

Thank you, Peter. In closing, we are pleased to report a record year for UMB. We believe we win in all economic environments by sticking to what we’ve always done. We’ve increased capital, our dividend, and grown our balance sheet throughout a time when our industry was under significant pressure. Over the past several years, we’ve invested in people and technology. We recognize that this has a short-term negative impact based on the investments we’ve made but we think that these investments will pay off in the long term. We’re cautiously optimistic about what we’re seeing, and while there are signs of slight economic recovery, we will continue to focus on our business and achieve solid results. We appreciate your interest, and I’m going to turn the call over to the operator. Thanks again.

[Operator Instructions] And our first question comes from the line of Christopher McGratty with KBW.

Peter, just a question, I missed the numbers on the debit card. Could you just review what was in the numbers and what was the impact on Durbin?

Sure, so we disclosed last quarter that the full year impact from Durbin we estimated to be $9.1 million on an annualized basis. If you look at it 2 different ways, in the fourth quarter of 2011 our total debit interchange was $12.9 million versus $14.3 million in the fourth quarter of 2010 or a $1.4 million reduction or roughly 9.5%. On a link quarter basis we had $12.9 million in the fourth quarter of 2011 versus $15.9 million in the third quarter of 2011 or a $3 million reduction, of which about $2.3 million of that $3 million reduction on a link quarter basis was related to Durbin.

So the $9 million is the number that we should use before any kind of mitigation?

Correct.

All right. And then the only other question I had was in terms of pipeline for growth. You continue to put up pretty good growth in this environment. What’s the kind of outlook? Should we assume similar type growth organically for ’12?

Are you talking about any specific part of the company?

I’m talking just loan growth.

Loan growth...

I mean, you put up -- the growth accelerated a bit this quarter.

Sure. As we've kind of -- as we said in the past, our loan growth to date has really been mostly about our pipeline and our market share gains. No economic activity really to speak of driving loan growth. But we expect to continue to deliver loan growth through those similar efforts in 2012.

[Operator Instructions] And our next question comes from the line of Ebrahim Poonawala from Morgan Keegan.

Mariner, you mentioned about pricing competition in your markets. And if you could give some color in terms of where is the competition coming from. Is it the larger banks? And where you’re booking these loans in terms of if you could give some color on pricing today versus maybe 3, 6 months ago?

The competitors are somewhat different from market to market, but for the most part we are competing with the larger banks. And the mix is somewhat different from market to market so there’s no silver bullet as it relates to who our competitors are. The pressure does continue downward on pricing and terms. I feel like we're -- it seems like we might be bottoming out on that pressure, but it is -- if you talk about 6 months ago to where we are today there certainly has been more pricing pressure. The -- it’s pretty much obvious, right, what the -- our alternatives are as an industry. So if you think about putting your funding into investment securities versus loans there’s obvious room for pressure on loan pricing. And I mean -- and I mentioned that the -- our ability to compete has a lot to do with having very competitive cost of funding with the larger banks.

Well, just, I guess in instances where you win over them it’s primarily due to better pricing?

Well, I wouldn't -- it’s never better. We never sell on better pricing. So we can match pricing, and we win with better service.

And I’m showing no further questions in the queue, and turn the call back over to Abby Wendel for any closing comments.

Thank you very much for your interest in UMB. This call can be accessed via a replay at our website beginning in about 2 hours, and it will run through February 8th. 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. Ladies and gentlemen, if you’d like to listen to a replay of today’s conference please dial (303) 590-3030 or 1 (800) 406-7325 and enter the pass code 4503730. That does conclude today’s fourth quarter and year-end 2011 earnings results conference call. Thank you for your participation. You may now disconnect.