Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 303

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 303
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 individual borrower credit risk based on their loan to collateral position.  Any borrower position where the underlying value of collateral is below the fair value of the loan is considered out-of-margin and inherently higher risk.The following table provides a summary of the amortized cost balance by risk rating for asset-based loans as of December 31, 2024 and 2023 (in thousands): 

        Asset-based lending

        Risk
         
        December 31, 2024

        December 31, 2023

        In-margin
         
        $
        469,194

        $
        498,786

        Out-of-margin

        —

        —

        Total
         
        $
        469,194

        $
        498,786

      Commercial real estateA discussion of the credit quality indicators that impact each type of collateral securing Commercial real estate loans is included below:Owner-occupied Owner-occupied loans are secured by commercial real estate.  These loans are often longer tenured and susceptible to multiple economic cycles.  The loans rely on the owner-occupied operations to service debt which cover a broad spectrum of industries.  Real estate debt can carry a significant amount of leverage for a borrower to maintain.Non-owner-occupied Non-owner-occupied loans are secured by commercial real estate.  These loans are often longer tenured and susceptible to multiple economic cycles.  The key element of risk in this type of lending is the cyclical nature of real estate markets.  Although national conditions affect the overall real estate industry, the effect of national conditions on local markets is equally important.  Factors such as unemployment rates, consumer demand, household formation, and the level of economic activity can vary widely from state to state and among metropolitan areas.  In addition to geographic considerations, markets can be defined by property type.  While all sectors are influenced by economic conditions, some sectors are more sensitive to certain economic factors than others.Farmland Farmland loans are secured by real estate used for agricultural purposes such as crop and livestock production. Assets used as collateral are long-term assets that carry the ability to have longer amortizations and 

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maturities.  Longer terms carry the risk of added susceptibility to market conditions. The limited purpose of some Agriculture-related collateral affects credit risk because such collateral may have limited or no other uses to support values when loan repayment problems emerge.5+ Multi-family 5+ multi-family loans are secured by a multi-family residential property. The primary risks associated with this type of collateral are largely driven