Company: UMBFO
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028420
Chunk: 342

Company: UMB FINANCIAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 342
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 for an upfront premium.  Interest rate floor spreads designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates fall below the purchased floor rate on the contract in exchange for an upfront premium, and involve payment of variable-rate amounts to the counterparty if interest rates fall below the sold floor rate on the contract. As of December 31, 2024, the Company had 13 interest rate floors and floor spreads with an aggregate notional amount of $3.0 billion that were designated as cash flow hedges of interest rate risk.  As of December 31, 2023, the Company had three interest rate floors and floor spreads with an aggregate notional amount of $1.0 billion that were designated as cash flow hedges of interest rate risk.  In 2020, the Company terminated an interest rate floor designated as a cash flow hedge.  As of December 31, 2024 there was no gross unrealized gain on the terminated interest rate floor remaining in AOCI.  As of December 31, 2023, the gross unrealized gain on the terminated interest rate floor remaining in AOCI was $2.7 million, or $2.0 million net of tax.  The unrealized gain was reclassified into Interest income as the underlying forecasted transactions impact earnings through the original maturity of the hedged forecasted transactions. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and is subsequently reclassified into interest expense and interest income in the period during which the hedged forecasted transaction affects earnings.  Amounts reported in AOCI related to interest rate swap derivatives will be reclassified to Interest expense as interest payments are received or paid on the Company’s hedged items.  Amounts reported in AOCI related to interest rate floor and floor spread derivatives will be reclassified to Interest income as interest payments are received or paid on the Company’s items.  The Company expects to reclassify $0.8 million from AOCI as a reduction to Interest expense and $9.4 million from AOCI as a reduction to Interest income during the next 12 months.  As of December 31, 2024, the Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of 11.7 years.Non-designated Hedges The remainder of the Company’s derivatives are not designated in qualifying hedging relationships.