WILMINGTON – A Missouri-based bank has opened a new office in the Wilmington suburbs that is aimed at building its trust and asset-backed securities business.
Although not a name brand here, UMB Bank, based in Kansas City, Mo., is the 56th largest bank by asset in the country, with a wide presence across the Midwest – its $37 billion in assets puts it just slightly larger than the U.S. subsidiary of Wilmington mainstay Barclays Bank.
UMB has increasingly been moving into so-called ABS products, which include a wide range of financial products from consumer debt to physical assets like real estate, planes or even solar panels, as it searched for fee income amid a time of low interest rates. It bulked up its operations beginning last year, catching many in the niche industry by surprise, and it is now adding the important Delaware Statutory Trust services through an office at the Silverside Carr Corporate Center just north of the city.
“The Wilmington office is an important step for our fast-growing corporate trust group,” said Mark Flannagan, executive vice president at UMB, in a statement announcing the move. “Offering Delaware Statutory Trust services rounds out our full-service offering and further streamlines the client experience across a wide range of deals.”
As evidence of UMB’s seriousness of the endeavor, it hired Kristin Moore, a longtime trust services executive at WSFS Bank, to open the new office and lead it as a senior vice president. She told Delaware Business Times that even she was not too familiar with UMB before last year.
“I think a lot of folks in the industry were like, ‘Who are these guys and where did they come from?” she said.
Intrigued by their quick growth, Moore researched the bank and reached out to Stuart Mitchell, senior vice president and head of ABS product development at UMB, about why they didn’t have a Delaware office. He told her that they were planning one and she was on their shortlist of target candidates.
“It was really kind of kismet,” she added.
Moore, who said that she was seeking a new career challenge after 25 years in the industry, was energized about helping UMB break into Delaware and keep its industry momentum.
For nearly four decades, Delaware has been at the forefront of trust formation in the United States after it created the Delaware Statutory Trust, also known as a DST. It allows multiple investors to hold a piece of an income-producing asset with the same protections of a limited liability company (LLC) or a limited partnership (LP).
Banks, non-bank lenders, governments and other companies bundle together assets for sale to investors in a process known as securitization. It allows the originator to recoup initial investments to free cash flow for new deals, while investors can reap long-term rewards from interest and principal payments. DSTs have become a common way to structure those deals.
Although other states have largely replicated what Delaware established in 1988 and refined in 2002, the First State continues to be a major destination for formation due to its high-quality judiciary, ease of accessibility to major metro markets and a state government that has stayed abreast of changes in the industry.
“I think it’s also the fact that Delaware created the structure,” Moore said, noting that many of the 1998 Delaware Business Trust Act authors are still in the market. “The availability of that pool of knowledge is huge.”
To date, the UMB Delaware office counts only two employees, but Moore anticipates growing its headcount soon. Employees from the bank’s other offices have also been assisting as Moore gets up and running – they’ve already handled their first products.
Moore said that she anticipates UMB to be competitive in the trust and ABS market because of its commitment.
“They haven’t just kind of dipped their toes in the water of ABS, they’ve jumped into the deep end,” she said.
