Moody’s puts UMB on review for downgrade

Moody’s Investors Service said it placed its ratings for UMB Financial Corp., including its A3 local-currency long-term issuer rating, (P)A3 local-currency senior unsecured shelf rating, A3 local-currency subordinate rating, (P)A3 local-currency subordinate shelf rating, (P)Baa1 local-currency preferred stocks shelf rating and (P)Baa2 local-currency preferred stocks non-cumulative shelf rating, on review for downgrade. The agency revised the outlook to rating under review from stable.

“Today's rating action reflects UMB's high reliance on more confidence-sensitive uninsured deposit funding, its high amount of unrealized losses in its available-for-sale (AFS) and held-to-maturity (HTM) securities portfolios. Although UMB's proportion of market funding over total assets is low, the share of deposits, which are above the Federal Deposit Insurance Corp.'s (FDIC) insurance threshold is material, making the bank's funding profile more sensitive to rapid and large withdrawals from depositors,” Moody’s said in a press release.

However, the agency noted UMB’s asset quality performance is solid and it has access to the Federal Reserve’s and Treasury Department’s new Bank Term Funding Program, offering loans of up to one year in length to banks and other eligible depository institutions pledging qualifying assets owned before the facility's announcement date.

“The review will focus on the bank's variations in deposit amounts since the start of the year as well as the stickiness of its deposits going forward,” Moody’s said.

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