With nearly 40 years of experience at UMB, 15 of which have been in the credit world, and as current chief credit officer, to say that Tom Terry knows UMB’s approach to credit is an understatement. Here, he shares how credit fits within UMB, where the credit culture stands today and where it may be headed in the future.

I started my career at UMB right out of college as a commercial banker. I was young and looking for stability in my career and found UMB through my dad, who had worked here for 33 years in the trust department. I had personally seen how much he believed in his job, enjoyed his colleagues, and loved working for the company, and it made an impression. Since joining, I’ve had the opportunity to grow in my knowledge, experience and career as UMB has grown.

While there has been enormous change and evolution for the company during the past four decades, there are many critical items that have stayed the same. These foundational practices have been instrumental to preserving our lending approach, risk profile and protecting us from industry fads, including the Great Recession, while managing consistent, significant growth. At the heart of these practices is our approach to credit.

Rooted in commercial banking experience

Since its inception and at its core, UMB is a commercial bank, so our decision-making processes are run through a commercial lens. This focus on, and experience with, commercial banking is notable in our leaders – both the corporation and bank CEOs, Mariner Kemper and Jim Rine, respectively, began their careers in the commercial space – as well as our entire credit team.

Each of our regional credit officers (RCOs) worked as commercial bankers before moving into credit. This direct experience working in the field and first-hand knowledge of what it takes to earn a customer’s trust and get a deal done gives our RCOs a unique perspective when they evaluate opportunities from our bankers.

Access to decision-makers

Another way UMB is different from other banks is the extent to which our RCOs work collaboratively with the bankers early in the process. They will meet and engage with potential and current customers. Their comfort level with these types of interactions stems largely from their previous experiences as commercial bankers and makes us stand out from our competitors.

Often, a client will only encounter a credit officer when problems arise, but our team is there from day one to ask questions and to develop a deeper understanding of their business. This helps us make credit decisions quickly and adjust the course nimbly if and when we need to. Our dedication to direct access to decision-makers extends beyond the credit team, too. Others within the C-suite, particularly Mariner and Jim, make it a priority to personally meet with prospects and customers.

Trust is a two-way street

We work diligently to get to know the key players in the businesses we engage with. We look beyond the names, titles and balance sheets to understand not just what makes the business operate, but what motivates the people. One of my favorite sayings is, “Businesses don’t pay the loan back, people do.” While this may sound simplistic, it speaks to the importance of mutual understanding and trust, which are imperative in any banking relationship and the foundation of credit decisioning.

Our credit philosophy yields tangible results for our bottom line. For instance, since 2004, we have consistently reported positive annual loan growth on an increasingly growing loan book. Our 20-year compound annual growth rate (CAGR) is 11.4% – which is exceptional amongst our peers. Over this same period of time our average annual net charge-offs were 27 basis points. In 2024, UMB’s average net charge-offs were just 10 basis points compared to 68 basis points for the industry. To experience industry leading growth coupled with industry leading credit quality is something of which we are very proud.

Even as we evolve, adapt and grow, we remain rooted in the “who” in our credit culture and why that has been key to our success. You have likely heard of the “Five Cs of Credit” – character, capacity, capital, collateral and conditions. We use these pillars as our evaluation framework and they help us balance risks related to different loans, lines of credit and clients. The most important facet we review is the character of our clients. And, as I noted before, it’s difficult to know someone’s character unless you know them as a person, not just as numbers on a screen.

Forward focused

It may come as a surprise to some that a 112-year-old financial institution with a well-earned reputation of being financially sound and making consistent credit decisions, also considers itself a growth company—yet, we do. And one of the primary reasons we are able to think of ourselves this way is largely due to our credit approach.

Throughout our history, we’ve remained true to our core values, one of which is building and maintaining trust-based relationships with our customers. We know who we are, our customers know who we are, and we know who our customers are. Because of that, there are rarely any significant surprises.

Another one of our core values that has kept us strong throughout the years is our commitment to being nimble, flexible and responsive. When multiple banks are competing for one company’s business, we’re often the first to come forward with an approved deal, and this is due to how we go to market. We’re able to move with a sense of urgency that most banks don’t have, because we know ourselves so well and take the time to know our clients and prospects well.

Our credit approach is part of our DNA

We all know our DNA uniquely makes us who we are as individuals—the same is true for UMB. Our credit approach has been passed down through the generations and that will continue. We are extremely intentional in preserving, educating and sharing this as part of who we are, and I see both the current and next generation of leaders committed to this. Access to leadership, disciplined underwriting and consistency are why we win.

If you are interested in learning more about how UMB can help your business as a financial partner, visit our website.