Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 160

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1B
Chunk 160
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 presented previously for a summary of current risk in the Company’s portfolio.  Changes in economic forecasts will affect all portfolio segments, updated financial records from borrowers will affect portfolio segments by risk rating, updated credit scores will affect consumer credit cards, payment performance will affect consumer and commercial credit card portfolio segments, and updated bond credit ratings will affect held-to-maturity securities.  The Company actively monitors all credit quality indicators for risk changes that will influence the current estimate. Expected credit losses are estimated over the contractual term of the loans, adjusted for prepayments when appropriate.  The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a concessionary loan term has been granted to a borrower experiencing financial difficulty or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancelable by the Company. Credit card receivables do not have stated maturities.  In determining the estimated life of a credit card receivable, management first estimates the future cash flows expected to be received and then applies those expected future cash flows to the credit card balance.  Expected credit losses for credit cards are determined by estimating the amount and timing of principal payments expected to be received as payment for the balance outstanding as of the reporting period until the expected payments have been fully allocated.  The ACL is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments.   Loans that do not share risk characteristics are evaluated on an individual basis.  Loans evaluated individually include loans on nonaccrual, loans that include modifications deemed concessionary made to borrowers experiencing financial difficulty, or any loans specifically identified, and are excluded from the collective evaluation.  When it is determined that payment of interest or recovery of all principal is questionable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for undiscounted selling costs as appropriate.  All loans are classified as collateral dependent if placed on non-accrual or include modifications made to borrowers experiencing financial difficulty.  

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ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANSThe following tables provide a rollforward of the allowance for credit losses by portfolio segment for the year ended December 31, 2024, 2023, and 2022 (in thousands): 

        Year Ended December 31, 2024

        Commercial and industrial

        Specialty lending