Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 250

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 250
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.8 billion were transferred from the AFS classification to the HTM classification as the Company has the positive intent and ability to hold these securities to maturity.  The transfers of securities were made at fair value at the time of transfer.  See further information in Note 4, “Securities” in the Notes to the Consolidated Financial Statements. 

The Company’s AFS securities portfolio comprised 56.9% of the Company’s investment securities portfolio at December 31, 2024, compared to 53.3% at December 31, 2023.  The Company’s AFS securities portfolio provides liquidity as a result of the composition and average life of the underlying securities.  This liquidity can be used to fund loan growth or to offset the outflow of traditional funding sources.  The average life of the AFS securities portfolio increased from 52.6 months at December 31, 2023 to 56.0 months at December 31, 2024. In addition to providing a potential source of liquidity, the AFS securities portfolio can be used as a tool to manage interest rate sensitivity.  The Company’s goal in the management of its AFS securities portfolio is to maximize return within the Company’s parameters of liquidity goals, interest rate risk and credit risk.  

Management expects collateral pledging requirements for public funds, loan demand, and deposit funding to be the primary factors impacting changes in the level of AFS securities.  There were $10.5 billion of securities pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase agreements at December 31, 2024.  

The Company’s HTM securities portfolio consists of U.S. agency-backed securities, mortgage-backed securities, general obligation bonds, and private placement bonds.  The Company’s HTM portfolio, net of the ACL totaled $5.4 billion as of December 31, 2024, a decrease of $312.3 million from December 31, 2023.  The average life of the HTM portfolio was 9.1 years at December 31, 2024, compared to 8.4 years at December 31, 2023.

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The securities portfolio generates the Company’s second largest component of interest income.  The AFS, HTM, and Other securities portfolios achieved an average yield on a tax-equivalent basis of 2.96% for 2024, compared to 2.66% in 2023