UMB Financial Corporation (NASDAQ:UMBF) Q2 2019 Earnings Conference Call - Final Transcript
Jul 31, 2019 • 09:30 am ET
be clear, we wouldn't expect this level of compression from each 25 basis points rate cut. Of course, the ultimate outcome for NIM will depend on a variety of factors such as the pace at which LIBOR moves, loan growth, the potential variability in our aviation trust business and our overall balance sheet mix and need for funding.
Moving back to the income statement, Mariner already discussed some of the opportunities we're seeing in fee income. More detail on the specific drivers are shown on Slides 19 and 20. Without the impact of $3.4 million in lower market valuations on our COLI investments discussed in the slides and press release, and the swing in the gains or losses on securities sold in both quarters, fee income increased from the linked quarter.
Slide 21 contains detailed drivers of the quarterly changes in non-interest expense, which was $193.4 million for the second quarter, a 1.4% increase on a linked-quarter basis. We had increases of $2.4 million in business development expense and $1.9 million in legal and consulting expense related to multiple technology and product initiatives. Expenses for these projects can be lumpy and move around a bit each quarter.
Salary and benefits expense decreased $1.6 million from the first quarter, driven largely by lower payroll taxes and a reduction in deferred compensation expense, the offset for the additional COLI income I mentioned. These items were partially offset by increased bonus and commission expense related to performance-based compensation, particularly in our bond trading and corporate trust businesses. Several of our expense categories including bonus and commissions, processing fees and bankcard expenses are variable in nature and tend to correlate with volume or revenue-based activities. Finally, our effective tax rate was 15.5% for the second quarter. For the full-year 2019, we expect our tax rate to be between 15% and 16%.
That concludes our prepared remarks, and I'll now turn it back over to the operator to begin the Q&A portion of the call.