Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 152

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1B
Chunk 152
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 or weaknesses that jeopardize the liquidation of the debt.  Loans in this category are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.  Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard.•Doubtful – This rating represents an asset that has all the weaknesses inherent in an asset classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable.  The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage of strengthening the asset, its classification as an estimated loss is deferred until its more exact status may be determined.  Pending factors include proposed merger, acquisition, liquidation procedures, capital injection, or perfecting liens.Commercial and industrialA discussion of the credit quality indicators that impact each type of collateral securing Commercial and industrial loans is included below:Equipment, accounts receivable, and inventory General commercial and industrial loans are secured by working capital assets and non-real estate assets.  The general purpose of these loans is for financing capital expenditures and current operations for commercial and industrial entities.  These assets are short-term in nature.  In the case of accounts receivable and inventories, the repayment of debt is reliant upon converting assets into cash or through goods and services being sold and collected.  Collateral-based risk is due to aged short-term assets, which can be indicative of underlying issues with the borrower and lead to the value of the collateral being overstated.Agriculture Agricultural loans are secured by non-real estate agricultural assets.  These include shorter-term assets such as equipment, crops, and livestock.  The risks associated with loans to finance crops or livestock include the borrower’s ability to successfully raise and market the commodity.  Adverse weather conditions and other natural perils can dramatically affect farmers’ or ranchers’ production and ability to service debt.  Volatile commodity prices present another significant risk for agriculture borrowers.  Market price volatility and production cost volatility can affect both revenues and expenses.Overdrafts Commercial overdrafts are typically short-term and unsecured.  Some commercial borrowers tie their overdraft obligation to their line of credit, so any draw on the line of credit will satisfy the overdraft.Based on the factors noted above for each type of collateral, the Company assigns risk ratings to borrowers based on their most recently assessed