• Umpqua Holdings Corporation
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  • Umpqua Holdings Reports Fourth Quarter and Full Year 2010 Results
    Company Release - 01/27/2011 08:00

    Fourth quarter 2010 net income of $0.07 per diluted share, operating income of $0.08 per diluted share

    Full year 2010 net income of $0.15 per diluted share, operating income of $0.12 per diluted share

    Non-covered, non-performing assets declined to 1.53% of total assets

    Fourth quarter 2010 net charge-offs of $23.7 million, lowest level since the third quarter of 2008

    PORTLAND, Ore.--(BUSINESS WIRE)-- Umpqua Holdings Corporation (NASDAQ:UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc., today announced fourth quarter 2010 net earnings available to common shareholders of $8.1 million, or $0.07 per diluted common share, compared to a net loss available to common shareholders of $29.9 million, or $0.34 per diluted common share, for the same period in the prior year. For the full year 2010, the Company reported net earnings available to common shareholders of $16.1 million, or $0.15 per diluted common share, compared to a net loss available to common shareholders of $166.3 million, or $2.36 per diluted common share for the prior year.

    Operating income, defined as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment, was $9.0 million, or $0.08 per diluted common share for the fourth quarter of 2010, compared to an operating loss of $27.7 million, or $0.32 per diluted common share, for the same period in the prior year. For the full year 2010, the Company reported operating income of $13.2 million, or $0.12 per diluted common share, compared to an operating loss of $58.0 million, or $0.82 per diluted common share, for the prior year. Operating income or loss is considered a “non-GAAP” financial measure. More information regarding this measurement and reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

    Significant financial statement items for the fourth quarter of 2010 include:

    • Non-covered, non-performing assets ended the quarter at 1.53% of total assets, the lowest level since the second quarter of 2008;
    • Provision for non-covered loan losses of $17.6 million, a 27% decrease, and total net charge-offs of $23.7 million, a 21% decrease, on a sequential quarter basis. Net charge-offs exceeded the provision for non-covered loan losses during the quarter due to improving credit quality of the loan portfolio;
    • The allowance for credit losses ended the quarter at 1.82% of non-covered total loans and leases;
    • Loss on other real estate owned of $4.9 million, compared to gain of $0.3 million for the third quarter of 2010;
    • Non-covered loans ended the quarter at $5.66 billion, a decline of $39.3 million, or 0.7%, on a sequential quarter basis;
    • Core deposits, which are total deposits less time deposits greater than $100,000, increased $187 million, or 2.7%, on a sequential quarter basis, due to continued organic growth initiatives;
    • Total deposits increased $132 million, or 1%, on a sequential quarter basis;
    • The cost of interest bearing deposits for the fourth quarter of 2010 was 0.97%, a decrease of 11 basis points on a sequential quarter basis;
    • Tangible common equity ratio of 8.74%; and
    • Total risk-based capital of 17.46%, and tier 1 common to risk weighted asset ratio of 13.1%.

    “As we close out 2010 it is good to see loan quality trends continue to move in the right direction and loan production strengthen. Umpqua is emerging from this credit cycle with a much stronger balance sheet than when we entered, and anticipates improved operating results as we head into 2011,” said Ray Davis CEO of Umpqua Holdings Corporation. “We are indebted to the hard work of our credit professionals over the past few years, and the continual efforts of the entire Umpqua team in positioning us for future growth.”

    FDIC-assisted acquisitions

    In the first quarter of 2010, Umpqua Bank assumed the banking operations of EvergreenBank (“Evergreen”) and Rainier Pacific Bank (“Rainier”), both located in the greater Seattle-Tacoma area of Washington. In the second quarter of 2010, Umpqua Bank assumed the banking operations of Nevada Security Bank (“Nevada Security”), Reno, Nevada. The operations of Evergreen and Rainier (combined), and Nevada Security, have contributed operating earnings of $9.7 million and $2.3 million, respectively, since their assumptions.The operating systems of all three institutions have been converted onto Umpqua’s platform.

    Asset quality – Non-covered loan portfolio

    Non-performing assets were $178.0 million, or 1.53% of total assets, as of December 31, 2010, compared to $183.6 million, or 1.59% of total assets as of September 30, 2010, and $223.6 million, or 2.38% of total assets as of December 31, 2009. Of this amount, as of December 31, 2010, $138.2 million represented non-accrual loans, $7.1 million represented loans past due greater than 90 days and still accruing interest, and $32.8 million was other real estate owned (“OREO”).

    The Company has aggressively charged-down impaired assets to their disposition values, and the assets are expected to be resolved at those levels, absent further declines in market prices. As of December 31, 2010, the non-performing assets of $178.0 million have been written down by 39%, or $111.8 million, from their original balance of $289.8 million.

    The provision for loan losses for the fourth quarter of 2010 was $17.6 million, the lowest level of provision since the second quarter of 2008, due to improving credit quality of the loan portfolio. Total net charge-offs for the fourth quarter of 2010 were $23.7 million, reducing the allowance for credit losses to 1.82% of non-covered loans and leases at December 31, 2010, as compared to 1.91% of total non-covered loans as of September 30, 2010 and 1.81% of total non-covered loans as of December 31, 2009. The annualized net charge-off rate for the fourth quarter of 2010 was 1.66%.

    Non-covered loans past due 30 to 89 days were $48.2 million, or 0.85% of non-covered loans and leases as of December 31, 2010, as compared to $80.2 million, or 1.41% as of September 30, 2010, and $41.5 million, or 0.69% as of December 31, 2009.

    Since 2007, the Company has been aggressively resolving problems arising from the current economic downturn. The following table recaps the Company’s credit quality trends since the second quarter of 2007 as it relates to the non-covered loan portfolio:

                                     

    Credit quality trends – Non-covered loans

    (Dollars in thousands)

     

    AllowanceNon-covered,
    Provisionfor credit lossesnon-performing
    forNetto non-covered30-89 daysassets to
    loan loss       charge-offs       loans %       past due %       total assets %

    Q2 2007

     

    $3,413

    $31

    1.17 % 0.56 % 0.59 %
    Q3 2007 20,420 865 1.47 % 0.99 % 0.96 %
    Q4 2007 17,814 21,188 1.42 % 0.64 % 1.18 %
    Q1 2008 15,132 13,476 1.45 % 1.13 % 1.06 %
    Q2 2008 25,137 37,976 1.22 % 0.31 % 1.25 %
    Q3 2008 35,454 15,193 1.54 % 1.16 % 1.66 %
    Q4 2008 31,955 30,072 1.58 % 0.96 % 1.88 %
    Q1 2009 59,092 59,871 1.58 % 1.47 % 1.82 %
    Q2 2009 29,331 26,047 1.63 % 0.80 % 1.73 %
    Q3 2009 52,108 47,342 1.71 % 0.76 % 1.70 %
    Q4 2009 68,593 64,072 1.81 % 0.69 % 2.38 %
    Q1 2010 42,106 38,979 1.91 % 0.93 % 1.99 %
    Q2 2010 29,767 26,637 2.00 % 0.70 % 1.90 %
    Q3 2010 24,228 30,044 1.91 % 1.41 % 1.59 %
    Q4 2010   17,567       23,744 1.82 % 0.85 % 1.53 %
    Total

     

    $472,117

          $435,537
     

    Non-covered construction loan portfolio

    Total non-covered construction loans as of December 31, 2010 were $413 million, representing a decrease of 11% since September 30, 2010, and a decrease of 33% from December 31, 2009. Within this portfolio, the residential development loan segment was $148 million, or 3% of the total non-covered loan portfolio. Of this amount, $35 million represented non-performing loans, and $113 million represented performing loans. The residential development loan segment has decreased $78 million, or 35%, since December 31, 2009.

    The remaining $248 million in non-covered construction loans as of December 31, 2010 primarily represents commercial construction projects. Total non-covered, non-performing commercial construction loans were $20.1 million at December 31, 2010, and $8.9 million were past due 30 to 89 days as of December 31, 2010.

    Non-covered commercial real estate loan portfolio

    The total non-covered term commercial real estate loan portfolio was $3.5 billion as of December 31, 2010. Of this total, $2.3 billion are non-owner occupied and $1.2 billion are owner occupied. Of the total term commercial real estate portfolio, $22.9 million, or 0.66%, are past due 30-89 days as of December 31, 2010. Of the total non-covered commercial real estate portfolio, 9% matures in 2011-2012, 18% in years 2013-2014, and 24% in years 2015-2016. The remaining 49% of the portfolio matures in or after the year 2017.

    The portfolio was conservatively underwritten at origination to a minimum debt service coverage ratio of 1.20, and as a result, in many cases, the loan-to-value was substantially less than our in-house maximum of 75%. This underwriting serves to protect against the low capitalization rate environment of the past several years.

    During the past two years, the Company has completed several rounds of stress testing on the commercial real estate portfolio, focusing on items such as capitalization rates, interest rates and vacancy factors. The results of the stress testing showed no significant unidentified risks, unlike our experience in the residential development construction portfolio. As we remain in a difficult economic environment, we anticipate that some borrowers will struggle, but that potential issues within the commercial real estate portfolio will result from individual loans within distinct geographic areas and not represent a systemic weakness in the portfolio. We believe we are well positioned to manage the exposure and work with our customers until the economic climate improves.

    Non-covered restructured loans

    Restructured loans on accrual status were $84.4 million as of December 31, 2010, up 12% from $75.6 million as of September 30, 2010, and down 37% from $134.4 million as of December 31, 2009. The increase during the fourth quarter resulted from certain commercial real estate relationships being restructured in the quarter, and the decrease from the same period in the prior year primarily resulted from payments received and reclassifications of loans previously restructured to non-accrual status. The Company does not enter into restructurings on loans in non-performing status, and generally requires the customer to pledge additional collateral, maintain a minimum debt service coverage ratio of 1.0, and show substantial external sources of repayment prior to the Company agreeing to restructure.

    Additional information related to asset quality

    Additional tables can be found at the end of this earnings release covering the following aspects of the Company's non-covered loan portfolio: residential development loan trends by region, residential development loan stratification by size and by region, non-performing asset detail by type and by region, loans past due 30 to 89 days by type and by region, loans past due 30 to 89 days trends, restructured loans on accrual status by type and by region, commercial real estate by type and region, maturity and year of origination, along with the commercial construction and commercial loan portfolio by type and by region.

    Asset quality – Covered loan portfolio

    Covered non-performing assets were $29.9 million, or 0.26% of total assets, as of December 31, 2010, as compared to $53.8 million, or 0.47% of total assets, as of September 30, 2010. The amount at December 31, 2010 represents OREO. The reduction in covered non-performing assets in the current quarter primarily resulted from the reclassification of the remainder of the impaired loan pools to accrual status. As cash flows and other assets have been received in excess of original estimates, the carrying value of these impaired loan pools have decreased and the total expected cash flows associated with the pool have increased, resulting in accretable yield. The majority of accretable yield available to be recognized into interest income in the future primarily relates to principal expected to be received in excess of the carrying value of these loan pools. Contractual interest income on the underlying loans is included in our estimation of pool level expected future cash flows to be received only to the extent that is expected to be serviced by the borrower.

    As of acquisition date, covered non-performing assets were written-down to their estimated fair value, incorporating our estimate of future expected cash flows until the ultimate resolution of these credits. The estimated credit losses embedded in these acquired non-performing loan portfolios were based on management’s and third-party consultants’ credit reviews of the portfolios performed during the due diligence for the Evergreen, Rainier and Nevada Security transactions. To the extent actual or projected cash flows are less than originally estimated, additional provisions for loan losses on the covered loan portfolio will be recognized; however, these provisions would be mostly offset by a corresponding increase in the FDIC indemnification (loss sharing) asset recognized within non-interest income. To the extent actual or projected cash flows are more than originally estimated, the increase in cash flows is prospectively recognized in interest income; however, the increase in interest income would be offset by a corresponding decrease in the FDIC indemnification (loss sharing) asset recognized within non-interest income.

    Net interest margin

    The Company reported a tax equivalent net interest margin of 4.14% for the fourth quarter of 2010, compared to 4.42% for the third quarter of 2010, and 4.06% for the fourth quarter of 2009. The decrease in net interest margin on a sequential quarter basis resulted primarily from a decline in the average loan to deposit ratio to 69% in the fourth quarter, compared to 74% in the third quarter, along with increased prepayments and related premium amortization on the investment portfolio during the quarter. The increase in net interest margin over the same period prior year results from the increase in average covered loans outstanding, increased yield on the covered loan portfolio as a result of payoffs ahead of expectations and declining costs of interest bearing deposits, partially offset by interest reversals of new non-accrual loans, a decline in non-covered loans outstanding, the impact of holding much higher levels of interest bearing cash, and the purchase of low-yielding taxable investment securities. The increase in net interest margin related to covered loan yields was offset by a corresponding decrease to the change in FDIC indemnification asset in other non-interest income. Interest reversals on new non-accrual loans during the fourth quarter of 2010 were $0.9 million, negatively impacting the net interest margin by 4 basis points. Excluding the reversals of interest, the net interest margin would have been 4.18% during the quarter. For the thirteenth consecutive quarter, the Company has continued to reduce the cost of interest bearing deposits. As a result of these efforts, the cost of interest bearing deposits was 0.97%, 11 basis points lower than the third quarter of 2010 and 38 basis points lower than the fourth quarter of 2009.

    Mortgage banking revenue

    The Company generated a record $7.4 million in total mortgage banking revenue during the fourth quarter of 2010, on record closed loan volume of $281 million. In the fourth quarter of 2010, the Company recognized a decrease in the fair value of the mortgage servicing right assets of $1.0 million, resulting from a relatively stable, but historically low, market for mortgage interest rates. Income from the origination and sale of mortgage loans was $7.4 million in the fourth quarter, representing a 3% increase on a sequential quarter basis. As of December 31, 2010, the Company serviced $1.6 billion of mortgage loans for others, and the related mortgage servicing right asset was valued at $14.5 million, or 0.90% of the total serviced portfolio principal balance.

    Fair value of junior subordinated debentures

    The Company recognized a $0.6 million loss from the change in fair value of junior subordinated debentures during the fourth quarter of 2010. The Company utilizes internal models to determine the valuation of this liability. The majority of the fair value difference over par value relates to the $61.8 million of junior subordinated debentures issued in the third quarter of 2007, which carry interest rate spreads of 135 and 275 basis points over the 3 month LIBOR. As of December 31, 2010, the credit risk adjusted interest spread for potential new issuances was forecasted to be significantly higher than the contractual spread. The difference between these spreads has created a cumulative gain in fair value of the Company’s junior subordinated debentures which results from their carrying amount compared to the estimated amount that would be paid to transfer the liability in an orderly transaction among market participants. Because these instruments are no longer being originated in the market, the quarterly fair value adjustments are difficult to estimate, but are not likely to be volatile in the future, and the cumulative fair value adjustment will continue to reverse and be recognized as a reduction in non-interest income over the remaining period to maturity of each related instrument. As of December 31, 2010, the total par value of junior subordinated debentures carried at fair value was $134.0 million, and the fair value was $80.7 million.

    Non-interest expense

    Total non-interest expense for the fourth quarter of 2010 was $87.9 million, compared to $85.2 million for the third quarter of 2010 and $72.5 million for the fourth quarter of 2009. Included in non-interest expense are several categories which are outside of the operational control of the Company or depend on changes in market values, including FDIC deposit insurance assessments, gain or loss on other real estate owned, as well as infrequently occurring expenses such as merger related costs and goodwill impairments. Excluding these non-controllable or infrequently occurring items, the remaining non-interest expense items totaled $77.8 million for the fourth quarter of 2010, compared to $79.9 million for the third quarter of 2010 and $60.2 million for the fourth quarter of 2009. The decline from the prior quarter results from non-recurring expenses incurred in the third quarter. The increase over the same period prior year relates to increases in variable expenses related to the mortgage banking division’s production, the assumption of Evergreen’s, Rainier’s and Nevada Security’s banking operations, higher loan collection and OREO management expenses, as well as various other growth initiatives underway. During the fourth quarter of 2010, the Company incurred loan collection and OREO management expense of $5.3 million, compared to $4.0 million for the third quarter of 2010, and $2.0 million for the fourth quarter of 2009. Mortgage production related expense was $4.9 million in the fourth quarter of 2010, compared to $4.2 million in the third quarter of 2010, and $3.5 million for the fourth quarter of 2009.

    Total FDIC deposit insurance assessments during the fourth quarter of 2010 were $4.2 million. The increase over the prior quarter’s assessment of $3.9 million is a result of significantly higher average deposit balances in the current quarter.

    Income taxes

    The Company recorded a provision for income taxes of $4.2 million in the fourth quarter of 2010. The change in the effective income tax rate in the quarter reflects the effects of permanent differences on our taxable income year to date.

    Balance sheet

    Total consolidated assets as of December 31, 2010 were $11.7 billion, compared to $11.5 billion on September 30, 2010 and $9.4 billion a year ago. Total gross loans and leases (covered and non-covered), and deposits, were $6.4 billion and $9.4 billion, respectively, as of December 31, 2010, compared to $6.0 billion and $7.4 billion, respectively, as of December 31, 2009.

    The following table presents the year-to-date 2010 organic growth rates, which excludes the effects of the Evergreen, Rainier and Nevada Security FDIC-assisted acquisitions and the related run-off of assumed brokered time deposits, which the Bank is not renewing upon maturity:

                     

    (Dollars in thousands)

    Non-covered

    loans and leases

          Deposits       Assets
    As reported, 12/31/10

    $5,658,987

    $9,433,805

    $11,668,710

    Less: 12/31/09 balances 5,999,267       7,440,434       9,381,373
    Total growth year-to-date

    (340,280)

    1,993,371 2,287,337
     
    Less:

     

    Evergreen acquisition (1) -- 272,142 353,279
    Rainier Pacific acquisition (1) -- 416,430 721,174
    Nevada Security acquisition (1) -- 428,329 437,595
    Add back:

    Run-off of assumed brokered time deposits not renewed

    --       113,734       113,734
    Organic growth

    $(340,280)

         

    $990,204

         

    $888,023

     
    Annualized organic growth rate

    (5.7)%

    13.3%

    9.5%

     

    (1) Excludes run-off of non-brokered deposits occurring in the quarter of acquisition.

     

    Total loans held for investment (including covered and non-covered) decreased $94 million during the fourth quarter of 2010. This decrease is principally attributable to non-covered charge-offs, paydowns on the covered loans, and transfers to other real estate owned.

    Total deposits increased $132 million, or 1%, during the fourth quarter of 2010. Total deposits have increased $2.0 billion, or 27%, since December 31, 2009. The deposits acquired from the Evergreen, Rainier and Nevada Security acquisitions included $135 million of brokered time deposits as of their respective acquisition dates. The Bank is not renewing these brokered deposits as they mature. Excluding the impact of the deposits assumed in acquisitions of and the run-off of brokered time deposits that have matured, total deposits increased $985 million in 2010, representing a 13.3% annualized organic growth rate.

    Due to unattractive bond market conditions since the second half of 2009, the Company has been holding larger levels of interest bearing cash rather than investing all excess liquidity into the bond market. At December 31, 2010, the Company had $892 million of interest bearing cash earning 0.25%, the target Federal Funds Rate. This excess balance sheet liquidity has increased since the prior year, as investment security alternatives in the current market are less attractive given the historically low interest rate environment. However, beginning in the third quarter of 2010 we began purchasing short duration government-sponsored investment securities to match and offset the interest expense associated with the growth in deposits. The Company plans to hold an increased interest bearing cash position relative to historical levels until the investment alternatives in the market improve from both a return and duration standpoint. Including secured off-balance sheet lines of credit, total available liquidity to the Company was $4.8 billion as of December 31, 2010, representing 41% of total assets and 50% of total deposits.

    Capital

    As of December 31, 2010, total shareholders’ equity was $1.64 billion, comprised entirely of common equity. Book value per common share was $14.34, tangible book value per common share was $8.39 and the ratio of tangible common equity to tangible assets was 8.74% (see explanation and reconciliation these items in the Non-GAAP Financial Measures section below).

    In April 2010, the Company’s preferred stock (Common Stock Equivalent Series B) of $198.3 million converted into common stock following the Company's annual shareholder meeting at which shareholders of the Company approved, among other items, an increase in authorized total common shares from 100 million to 200 million.

    The Company’s estimated total risk-based capital ratio as of December 31, 2010 is 17.46%. This represents a slight decrease from September 30, 2010, as a result of asset growth during the quarter. Our total risk-based capital level is well in excess of the regulatory definition of “well-capitalized” of 10.00%. The Company’s estimated Tier 1 common to risk weighted assets ratio is 13.1% as of December 31, 2010. These capital ratios as of December 31, 2010 are estimates pending completion and filing of the Company’s regulatory reports.

    Non-GAAP Financial Measures

    In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Umpqua believes that certain non-GAAP financial measures provide investors with information useful in understanding Umpqua’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

    Umpqua recognizes gains or losses on our junior subordinated debentures carried at fair value resulting from changes in interest rates and the estimated market credit risk adjusted spread that do not directly correlate with the Company’s operating performance. Also, Umpqua incurs significant expenses related to the completion and integration of mergers and acquisitions. Additionally, we may recognize goodwill impairment losses that have no direct effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios. Lastly, Umpqua may recognize one-time bargain purchase gains on certain FDIC-assisted acquisitions that are not reflective of Umpqua’s on-going earnings power. Accordingly, management believes that our operating results are best measured on a comparative basis excluding the impact of gains or losses on junior subordinated debentures measured at fair value, net of tax, merger-related expenses, net of tax, and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains, net of tax. We define operating earnings (loss) as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment, and we calculate operating earnings (loss) per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share.

    The following table provides the reconciliation of earnings (loss) available to common shareholders (GAAP) to operating earnings (loss) (non-GAAP), and earnings (loss) per diluted common share (GAAP) to operating earnings (loss) per diluted share (non-GAAP) for the periods presented:

               
    Quarter ended:

    Sequential

    Quarter

    Year over

    Year

    (Dollars in thousands, except per share data)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
           
    Net earnings (loss) available to common

    shareholders

    $8,140 $8,173 $(29,924) 0% (127)%
    Adjustments:
    Net loss on junior subordinated debentures

    carried at fair value, net of tax (1)

    332 332 2,215 0% (85)%
    Merger related expenses, net of tax (1) 574     986     -- (42)% nm
    Operating earnings (loss) $9,046     $9,491     $(27,709) (5)% (133)%
     

    Earnings (loss) per diluted share:

    Earnings (loss) available to common shareholders $0.07 $0.07 $(0.34) 0% (121)%
    Operating earnings (loss) $0.08 $0.08 $(0.32) 0% (125)%

     

     

     

    Twelve Months Ended:

    Year over

    Year

    (Dollars in thousands, except per share data)Dec 31, 2010     Dec 31, 2009     % Change
     
    Net earnings (loss) available to common

    shareholders

    $16,067 $(166,262) (110)%
    Adjustments:
    Net gain on junior subordinated debentures

    carried at fair value, net of tax (1)

    (2,988) (3,889) (23)%
    Bargain purchase gain on acquisitions, net of tax (1) (3,862) -- nm
    Goodwill impairment -- 111,952 (100)%
    Merger related expenses, net of tax (1) 4,005     164 2342%
    Operating earnings (loss) $13,222     $(58,035) (123)%
     

    Earnings (loss) per diluted share:

    Earnings (loss) available to common shareholders $0.15 $(2.36) (106)%
    Operating earnings (loss) $0.12 $(0.82) (115)%
     

    (1) Income tax effect of pro forma operating earnings adjustments at 40%.

    Management believes pre-tax, pre-credit cost operating income is a useful financial measure because it enables investors to assess the Company’s ability to generate income and capital to cover credit losses through a credit cycle. Management uses this measure to evaluate core operating results exclusive of credit costs, which are market driven or outside of the Company’s control, to monitor how we are growing core pre-tax income of the Company over time, through organic growth and acquisitions. Pre-tax, pre-credit cost operating income is calculated starting with operating earnings (as defined above) and adding back operating provision for income taxes, preferred stock dividends, earnings allocated to participation securities, provision for loan and lease losses, net gains or losses on other real estate owned and credit related external workout costs. For covered losses and expenses that are subject to loss-share, we have also deducted the associated gain recognized on FDIC indemnification asset.

    The following table provides the reconciliation of operating earnings (loss) (non-GAAP) to pre-tax, pre-credit cost operating income (non-GAAP) for the periods presented (the reconciliation of earnings (loss) available to common shareholders (GAAP) to operating earnings (loss) (non-GAAP) is provided in the preceding tables):

                       
    Quarter ended:

    Sequential

    Quarter

    Year over

    Year

    (Dollars in thousands, except per share data)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
     
    Operating earnings (loss) $9,046 $9,491 $(27,709) (5)% (133)%
    Adjustments:
    Non-covered provision for loan and lease losses 17,567 24,228 68,593 (27)% (74)%
    Covered provision for loan and lease losses 4,484 667 -- 572% nm
    Non-covered net loss on other real estate owned 4,555 658 9,094 592% (50)%
    Covered net loss (gain) on other real estate owned 328 (975) -- (134)% nm
    Non-covered loan & OREO workout cost 3,243 1,636 1,991 98% 63%
    Covered loan & OREO workout cost 2,029 2,397 -- (15)% nm

    Covered losses impact on FDIC indemnification asset

    (5,073) (1,985) -- 156% nm
    Operating provision for (benefit from) income taxes 4,807 3,073 (15,367) 56% (131)%

    Dividends and undistributed earnings allocated to participating securities

    18 18 8 0% 125%
    Preferred stock dividends --     --     3,234 nm (100)%
    Pre-tax, pre-credit cost operating income $41,004     $39,208     $39,844 5% 3%
     
     

     

    Twelve Months Ended:Year over

    Year

    (Dollars in thousands, except per share data)Dec 31, 2010     Dec 31, 2009     % Change
     
    Operating earnings (loss) $13,222 $(58,035) (123)%
    Adjustments:
    Non-covered provision for loan and lease losses 113,668 209,124 (46)%
    Covered provision for loan and lease losses 5,151 -- nm
    Non-covered net loss on other real estate owned 8,097 23,204 (65)%
    Covered net gain on other real estate owned (2,172) -- nm
    Non-covered loan & OREO workout cost 9,070 5,857 55%
    Covered loan & OREO workout cost 5,146 -- nm

    Covered losses impact on FDIC indemnification asset

    (6,293) -- nm

    Operating provision for (benefit from) income taxes

    3,908 (43,421) (109)%

    Dividends and undistributed earnings allocated to participating securities

    67 30 123%
    Preferred stock dividends 12,192     12,866 (5)%
    Pre-tax, pre-credit cost operating income $162,056     $149,625 8%
     

    Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy. Tangible common equity is calculated as total shareholders' equity less preferred stock and less goodwill and other intangible assets, net (excluding MSRs). In addition, tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders’ equity divided by tangible assets.

    The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

                     

    (Dollars in thousands, except per share data)

    Dec 31, 2010       Sep 30, 2010       Dec 30, 2009
     
    Total shareholders' equity $1,642,574 $1,650,503 $1,566,517
    Subtract:
    Preferred stock -- -- 204,335
    Goodwill and other intangible assets, net 681,969       683,291       639,634
    Tangible common shareholders' equity $960,605       $967,212       $722,548
     
    Total assets $11,668,710 $11,531,760 $9,381,372
    Subtract:
    Goodwill and other intangible assets, net 681,969       683,291       639,634
    Tangible assets $10,986,741       $10,848,469       $8,741,738
     
    Common shares outstanding at period end 114,536,814 114,531,514 86,785,588
     
    Tangible common equity ratio 8.74% 8.92% 8.27%
    Tangible book value per common share $8.39 $8.44 $8.33
     

    About Umpqua Holdings Corporation

    Umpqua Holdings Corporation (NASDAQ:UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has 184 locations between San Francisco, Calif., and Seattle, Wash., along the Oregon and Northern California Coast, Central Oregon and Northern Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon. Umpqua Bank’s Private Bank Division serves high net worth individuals and non-profits providing customized financial solutions and offerings. Umpqua Holdings Corporation is headquartered in Portland, Ore. For more information, visit www.umpquaholdingscorp.com.

    Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, Jan. 27, 2011, at 10:00 a.m. PST (1:00 p.m. EST) during which the company will discuss fourth quarter and 2010 year end results and provide an update on recent activities. There will be a question-and-answer session following the presentation. Shareholders, analysts and other interested parties are invited to join the call by dialing 800-752-8363 a few minutes before 10:00 a.m. The conference ID is “33772757.” Information to be discussed in the teleconference will be available on the company’s website prior to the call at www.umpquaholdingscorp.com. A rebroadcast can be found approximately two hours after the conference call by dialing 800-642-1687 with the conference ID noted above, or by visiting the Company’s website.

    Forward-Looking Statements

    This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders.These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC.You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements.In this press release we make forward-looking statements about improved credit quality trends, loan production and operating results, our success in resolving remaining credits at the estimated disposition value of related collateral, the mitigating effect of FDIC loss sharing agreements, our expectation that any weakness in our CRE portfolio will arise from local market weakness and not a systemic weakness, valuations of junior subordinated debentures and our plans to hold a large interest bearing cash position, relative to historical levels.Specific risks that could cause results to differ from the forward-looking statements are set forth in our filings with the SEC and include, without limitation, unanticipated weakness in loan demand, deterioration in the economy, material reductions in revenue or material increases in expenses, our inability to effectively manage problem credits, unanticipated further declines in real estate values, certain loan assets become ineligible for loss sharing, unanticipated deterioration in the commercial real estate loan portfolio, and continued negative pressure on interest income associated with our large cash position.

                       
    Umpqua Holdings Corporation
    Consolidated Statements of Operations
    (Unaudited)
    SequentialYear over
    Quarter Ended:QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
    Interest income
    Loans and leases $109,532 $112,652 $88,608 (3)% 24%
    Interest and dividends on investments:
    Taxable 18,323 17,421 16,570 5% 11%
    Exempt from federal income tax 2,184 2,221 2,039 (2)% 7%
    Dividends 5 6 -- (17)% 100%
    Temporary investments & interest bearing cash 633     646     268 (2)% 136%
    Total interest income 130,677 132,946 107,485 (2)% 22%
     

    Interest expense

    Deposits 19,076 19,913 20,190 (4)% (6)%

    Repurchase agreements and fed funds purchased

    135 136 153 (1)% (12)%
    Junior subordinated debentures 1,954 2,047 1,957 (5)% 0%
    Term debt 2,397     2,533     641 (5)% 274%
     
    Total interest expense 23,562 24,629 22,941 (4)% 3%
     
    Net interest income 107,115 108,317 84,544 (1)% 27%
     
    Provision for non-covered loan and lease losses 17,567 24,228 68,593 (27)% (74)%
    Provision for covered loan and lease losses 4,484 667 -- 572% nm
     
    Non-interest income
    Service charges 8,168 8,756 8,392 (7)% (3)%
    Brokerage fees 3,274 2,609 2,480 25% 32%
    Mortgage banking revenue, net 7,389 7,138 4,071 4% 82%
    Net (loss) gain on investment securities (87) 2,287 (600) (104)% (86)%

    Loss on junior subordinated debentures carried at fair value

    (554) (554) (3,691) 0% (85)%
    Change in FDIC indemnification asset (5,370) (11,948) -- (55)% nm
    Other income 2,341     3,845     2,372 (39)% (1)%
     
    Total non-interest income 15,161 12,133 13,024 25% 16%
     
    Non-interest expense
    Salaries and benefits 44,067 42,964 32,153 3% 37%
    Occupancy and equipment 12,344 11,448 10,407 8% 19%
    Intangible amortization 1,357 1,356 2,122 0% (36)%
    FDIC assessments 4,186 3,910 3,180 7% 32%
    Net loss (gain) on other real estate owned 4,883 (317) 9,094 (1640)% (46)%
    Merger related expenses 957 1,643 -- (42)% nm
    Other 20,070     24,166     15,544 (17)% 29%
     
    Total non-interest expense 87,864 85,170 72,500 3% 21%

    Income (loss) before provision for (benefit from) income taxes

    12,361 10,385 (43,525) 19% (128)%
    Provision for (benefit from) income taxes 4,203     2,194     (16,843) 92% (125)%
     
    Net income (loss) 8,158 8,191 (26,682) 0% (131)%

    Dividends and undistributed earnings allocated to participating securities

    18 18 8 0% 125%
    Preferred stock dividend --     --     3,234 0% (100)%

    Net earnings (loss) available to common shareholders

    $8,140     $8,173     $(29,924) 0% (127)%
     
    Weighted average shares outstanding 114,533,505 114,527,619 86,782,397 0% 32%
    Weighted average diluted shares outstanding 114,773,205 114,760,063 86,782,397 0% 32%
    Earnings (loss) per common share – basic $0.07 $0.07 $(0.34) 0% (121)%
    Earnings (loss) per common share – diluted $0.07 $0.07 $(0.34) 0% (121)%
     
    nm = not meaningful
     
                     

    Umpqua Holdings Corporation

    Consolidated Statements of Operations
    (Unaudited)
       
    Twelve Months Ended:
    (Dollars in thousands, except per share data)Dec 31, 2010       Dec 31, 2009       % Change
    Interest income
    Loans and leases $410,132 $355,195 15%
    Interest and dividends on investments:
    Taxable 67,388 60,195 12%
    Exempt from federal income tax 8,839 7,794 13%
    Dividends 14 22 (36)%
    Temporary investments & interest bearing cash 2,223       526 323%
    Total interest income 488,596 423,732 15%
     

    Interest expense

    Deposits 76,241 88,742 (14)%

    Repurchase agreements and fed funds purchased

    517 680 (24)%
    Junior subordinated debentures 7,825 9,026 (13)%
    Term debt 9,229       4,576 102%
     
    Total interest expense 93,812 103,024 (9)%
     
    Net interest income 394,784 320,708 23%
     
    Provision for non-covered loan and lease losses 113,668 209,124 (46)%
    Provision for covered loan and lease losses 5,151 -- nm
     
    Non-interest income
    Service charges 34,874 32,957 6%
    Brokerage fees 11,661 7,597 53%
    Mortgage banking revenue, net 21,214 18,688 14%
    Net gain (loss) on investment securities 1,912 (1,677) (214)%

    Gain on junior subordinated debentures carried at fair value

    4,980 6,482 (23)%
    Bargain purchase gain on acquisitions 6,437 -- nm
    Change in FDIC indemnification asset (16,445) -- nm
    Other income 11,271       9,469 19%
     
    Total non-interest income 75,904 73,516 3%
     
    Non-interest expense
    Salaries and benefits 162,875 126,850 28%
    Occupancy and equipment 45,940 39,673 16%
    Intangible amortization 5,389 6,165 (13)%
    FDIC assessments 15,095 15,825 (5)%
    Net loss on other real estate owned 5,925 23,204 (74)%
    Goodwill impairment -- 111,952 (100)%
    Merger related expenses 6,675 273 2345%
    Other 75,839       55,461 37%
     
    Total non-interest expense 317,738 379,403 (16)%

    Income (loss) before provision for (benefit from) income taxes

     

    34,131 (194,303) (118)%
    Provision for (benefit from) income taxes 5,805       (40,937) (114)%
     
    Net income (loss) 28,326 (153,366) (118)%

     

    Dividends and undistributed earnings allocated to participating securities

    67 30 123%
    Preferred stock dividend 12,192       12,866 (5)%
    Net earnings (loss) available to common shareholders $16,067       $(166,262) (110)%
     
    Weighted average shares outstanding 107,922,560 70,399,201 53%
    Weighted average diluted shares outstanding 108,153,469 70,399,201 54%
    Earnings (loss) per common share – basic $0.15 $(2.36) (106)%
    Earnings (loss) per common share – diluted $0.15 $(2.36) (106)%
     
                       

    Umpqua Holdings Corporation

    Consolidated Balance Sheets
    (Unaudited)
    SequentialYear over
    QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
    Assets:
    Cash and due from banks, non-interest bearing $111,946 $124,633 $113,353 (10)% (1)%
    Cash and due from banks, interest bearing 891,634 933,911 491,462 (5)% 81%
    Temporary investments 545 5,496 598 (90)% (9)%
    Investment securities:
    Trading 3,024 2,155 2,273 40% 33%
    Available for sale 2,919,180 2,599,263 1,795,616 12% 63%
    Held to maturity 4,762 5,108 6,061 (7)% (21)%
    Loans held for sale 75,626 57,407 33,715 32% 124%
    Non-covered loans and leases 5,658,987 5,698,267 5,999,267 (1)% (6)%
    Less: Allowance for loan and lease losses (101,921)     (108,098)     (107,657) (6)% (5)%
    Loans and leases, net 5,557,066 5,590,169 5,891,610 (1)% (6)%
    Covered loans and leases, net 785,898 840,759 -- (7)% nm
    Restricted equity securities 34,475 34,665 15,211 (1)% 127%
    Premises and equipment, net 136,599 133,728 103,266 2% 32%
    Mortgage servicing rights, at fair value 14,454 13,454 12,625 7% 14%
    Goodwill and other intangibles, net 681,969 683,291 639,634 0% 7%
    Non-covered other real estate owned 32,791 32,024 24,566 2% 33%
    Covered other real estate owned 29,863 30,348 -- (2)% nm
    FDIC indemnification asset 146,413 186,600 -- (22)% nm
    Other assets 242,465     258,749     251,382 (6)% (4)%
    Total assets $11,668,710     $11,531,760     $9,381,372 1% 24%
     
    Liabilities:
    Deposits $9,433,805 $9,301,340 $7,440,434 1% 27%
    Securities sold under agreements to repurchase 73,759 55,333 45,180 33% 63%
    Term debt 262,760 268,256 76,274 (2)% 244%
    Junior subordinated debentures, at fair value 80,688 80,146 85,666 1% (6)%
    Junior subordinated debentures, at amortized cost 102,866 102,946 103,188 0% 0%
    Other liabilities 72,258     73,236     64,113 (1)% 13%
    Total liabilities 10,026,136 9,881,257 7,814,855 1% 28%
     
    Shareholders' equity:
    Preferred stock -- -- 204,335 100% (100)%
    Common stock 1,540,928 1,538,818 1,253,288 0% 23%
    Retained earnings 76,701 75,502 83,939 2% (9)%
    Accumulated other comprehensive income 24,945     36,183     24,955 (31)% 0%
    Total shareholders' equity 1,642,574     1,650,503     1,566,517 0% 5%
    Total liabilities and shareholders' equity $11,668,710     $11,531,760     $9,381,372 1% 24%
     
    Common shares outstanding at period end 114,536,814 114,531,514 86,785,588 0% 32%
    Book value per common share $14.34 $14.41 $15.70 0% (9)%
    Tangible book value per common share $8.39 $8.44 $8.33 (1)% 1%
    Tangible equity - common $960,605 $967,212 $722,548 (1)% 33%
    Tangible common equity to tangible assets 8.74% 8.92% 8.27%
     
    nm = not meaningful

     

     
                                         

    Umpqua Holdings Corporation

    Non-covered Loan & Lease Portfolio
    (Unaudited)
    SequentialYear over
    (Dollars in thousands)Dec 31, 2010Sep 30, 2010Dec 31, 2009QuarterYear
    Amount     MixAmount     MixAmount     Mix% Change     % Change

    Non-covered loans & leases:

    Commercial real estate:
    Non-owner occupied $2,251,996 40% $2,307,016 40% $2,386,401 40% (2)% (6)%
    Owner occupied 1,231,479 22% 1,184,803 21% 1,136,703 19% 4% 8%
    Residential real estate 484,185 9% 462,515 8% 443,731 7% 5% 9%
    Construction 412,892 7% 462,801 8% 618,974 10% (11)% (33)%
    Total real estate 4,380,552 77% 4,417,135 78% 4,585,809 76% (1)% (4)%
    Commercial 1,224,416 22% 1,223,012 21% 1,354,469 23% 0% (10)%
    Leases 31,008 1% 32,428 1% 34,528 1% (4)% (10)%
    Installment and other 34,041 1% 36,624 1% 35,863 1% (7)% (5)%
    Deferred loan fees, net (11,030) 0% (10,932) 0% (11,402) 0% 1% (3)%
    Total $5,658,987 100% $5,698,267 100% $5,999,267 100% (1)% (6)%
     
     
    Umpqua Holdings Corporation
    Covered Loan & Lease Portfolio
    (Unaudited)
                                      Sequential
    (Dollars in thousands)Dec 31, 2010Sep 30, 2010

    Quarter

    Amount       MixAmount       Mix% Change
    Covered loans & leases:
    Commercial real estate $573,264 73% $589,782 70% (3)%
    Residential real estate 75,605 10% 81,256 10% (7)%
    Construction 42,213 5% 57,250 7% (26)%
    Total real estate 691,082 88% 728,288 87% (5)%
    Commercial 83,722 11% 100,313 12% (17)%
    Installment and other 11,094 1% 12,158 1% (9)%
    Total $785,898 100% $840,759 100% (7)%
     

    Covered loan & lease portfolio balances represent the loan portfolios acquired through the assumption of EvergreenBank on January 22, 2010, Rainier Pacific Bank on February 26, 2010, and Nevada Security Bank on June 18, 2010, from the FDIC through whole bank purchase and assumption agreements with loss sharing.

                                                   
    Umpqua Holdings Corporation
    Deposits by Type/Core Deposits
    (Unaudited)
    SequentialYear over
    (Dollars in thousands)Dec 31, 2010Sep 30, 2010Dec 31, 2009QuarterYear
    Amount     MixAmount     MixAmount     Mix% Change       % Change

    Deposits:

    Demand, non-interest bearing $1,616,687 17% $1,578,717 17% $1,398,332 19% 2% 15%
    Demand, interest bearing 4,394,773 47% 4,178,332 45% 3,388,696 46% 5% 30%
    Savings 349,695 4% 348,700 4% 297,293 4% 0% 18%
    Time 3,072,650 33% 3,195,591 34% 2,356,113 32% (4)% 30%
    Total $9,433,805 100% $9,301,340 100% $7,440,434 100% 1% 27%
     
    Total core deposits-ending (1) $7,242,749 77% $7,055,676 76% $5,837,024 78% 3% 24%
     

    Number of open accounts:

     

    Demand, non-interest bearing 181,055 183,018 157,199 (1)% 15%
    Demand, interest bearing 77,342 76,202 62,883 1% 23%
    Savings 86,980 87,611 74,884 (1)% 16%
    Time 42,366 44,020 34,249 (4)% 24%
    Total 387,743 390,851 329,215 (1)% 18%
     

    Average balance per account:

    Demand, non-interest bearing $8.9 $8.6 $8.9
    Demand, interest bearing 56.8 54.8 53.9
    Savings 4.0 4.0 4.0
    Time 72.5 72.6 68.8
    Total 24.3 23.8 22.6
     

    (1) Core deposits are defined as total deposits less time deposits greater than $100,000.

                       
    Umpqua Holdings Corporation
    Credit Quality – Non-performing Assets
    (Unaudited)
    SequentialYear over
    Quarter EndedQuarterYear
    (Dollars in thousands)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
     

    Non-covered, non-performing assets:

    Non-covered loans on non-accrual status $138,177 $139,696 $193,118 (1)% (28)%
    Non-covered loans past due 90+ days & accruing 7,071     11,882     5,909 (40)% 20%
    Total non-performing loans 145,248 151,578 199,027 (4)% (27)%
    Non-covered other real estate owned 32,791     32,024     24,566 2% 33%
    Total $178,039     $183,602     $223,593 (3)% (20)%
     
    Performing restructured loans $84,442 $75,577 $134,439 12% (37)%
     
    Past due 30-89 days $48,217 $80,186 $41,458 (40)% 16%
    Past due 30-89 days to total loans and leases 0.85% 1.41% 0.69%
     

    Non-covered, non-performing loans to non-covered loans and leases

    2.57% 2.66% 3.32%
    Non-covered, non-performing assets to total assets 1.53% 1.59% 2.38%
     

    Covered non-performing assets:

    Covered loans on non-accrual status $--     $23,391     $-- (100)% nm
    Total non-performing loans -- 23,391 -- (100)% nm
    Covered other real estate owned 29,863     30,348     -- (2)% nm
    Total $29,863     $53,739     $-- (44)% nm
     

     

    Covered non-performing loans to covered loans and leases

    --% 2.78% --%
    Covered non-performing assets to total assets 0.26% 0.47% --%
     

    Total non-performing assets:

    Loans on non-accrual status $138,177 $163,087 $193,118 (15)% (28)%
    Loans past due 90+ days & accruing 7,071     11,882     5,909 (40)% 20%
    Total non-performing loans 145,248 174,969 199,027 (17)% (27)%
    Other real estate owned 62,654     62,372     24,566 0% 155%
    Total $207,902     $237,341     $223,593 (12)% (7)%
     
    Non-performing loans to loans and leases 2.25% 2.68% 3.32%
    Non-performing assets to total assets 1.78% 2.06% 2.38%
     
                       
    Umpqua Holdings Corporation
    Credit Quality – Allowance for Non-covered Credit Losses
    (Unaudited)
    SequentialYear over
    Quarter EndedQuarterYear
    (Dollars in thousands)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change

    Allowance for non-covered credit losses:

    Balance beginning of period $108,098 $113,914 $103,136

    Provision for non-covered loan and lease losses

    17,567 24,228 68,593 (27)% (74)%
     
    Charge-offs (25,770) (31,418) (65,502) (18)% (61)%
    Recoveries 2,026     1,374     1,430 47% 42%
    Net charge-offs (23,744) (30,044) (64,072) (21)% (63)%
                 

    Total allowance for non-covered loan and lease losses

    101,921 108,098 107,657 (6)% (5)%
     
    Reserve for unfunded commitments 818     797     731

    Total allowance for non-covered credit losses

    $102,739     $108,895     $108,388 (6)% (5)%
     

     

    Net charge-offs to average non-covered loans and leases (annualized)

    1.66% 2.08% 4.19%
    Recoveries to gross charge-offs 7.86% 4.37% 2.18%

    Allowance for credit losses to non-covered loans and leases

    1.82% 1.91% 1.81%
     
     
    Twelve Months Ended:
    (Dollars in thousands)Dec 31, 2010     Dec 31, 2009     % Change

    Allowance for non-covered credit losses:

    Balance beginning of period $107,657 $95,865

    Provision for non-covered loan and lease losses

    113,668 209,124 (46)%
     
    Charge-offs (128,501) (200,867) (36)%
    Recoveries 9,097     3,535 157%
    Net charge-offs (119,404) (197,332) (39)%
           

    Total allowance for non-covered loan and lease losses

    101,921 107,657 (5)%
     
    Reserve for unfunded commitments 818     731

    Total allowance for non-covered credit losses

    $102,739     $108,388 (5)%
     

    Net charge-offs to average non-covered loans and leases (annualized)

    2.06% 3.23%
    Recoveries to gross charge-offs 7.08% 1.76%
     
     
    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
                    Sequential     Year over
    Quarter Ended:QuarterYear
    Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     Change     Change

    Net interest spread:

    Yield on non-covered loans and leases 5.73% 5.77% 5.75% (0.04) (0.02)
    Yield on covered loans and leases 12.86% 13.49% N/A (0.63) nm
    Yield on taxable investments 2.87% 3.51% 4.03% (0.64) (1.16)
    Yield on tax-exempt investments (1) 5.74% 5.71% 5.81% 0.03 (0.07)
    Yield on temporary investments & interest bearing cash 0.25% 0.26% 0.28% (0.01) (0.03)
    Total yield on earning assets (1) 5.05% 5.41% 5.15% (0.36) (0.10)
     
    Cost of interest bearing deposits 0.97% 1.08% 1.35% (0.11) (0.38)

    Cost of securities sold under agreements to repurchase and fed funds purchased

    0.79% 1.00% 1.09% (0.22) (0.31)
    Cost of term debt 3.57% 3.57% 3.33% 0.00 0.24
    Cost of junior subordinated debentures 4.24% 4.45% 4.19% (0.21) 0.05
    Total cost of interest bearing liabilities 1.12% 1.24% 1.45% (0.12) (0.33)
     
    Net interest spread (1) 3.93% 4.17% 3.70% (0.24) 0.23

    Net interest margin – Consolidated (1)

    4.14% 4.42% 4.06% (0.28) 0.08
     

    Net interest margin – Bank (1)

    4.21% 4.49% 4.15% (0.28) 0.06
     

    As reported (GAAP):

    Return on average assets 0.28% 0.29% (1.27)% (0.01) 1.55
    Return on average tangible assets 0.29% 0.31% (1.37)% (0.02) 1.66
    Return on average common equity 1.95% 1.95% (8.41)% 0.00 10.36
    Return on average tangible common equity 3.30% 3.32% (15.39)% (0.02) 18.69
    Efficiency ratio – Consolidated 71.24% 70.09% 73.57% 1.15 (2.33)
    Efficiency ratio – Bank 68.90% 67.07% 67.99% 1.83 0.91
     

    Operating basis (non-GAAP): (2)

    Return on average assets 0.31% 0.34% (1.18)% (0.03) 1.49
    Return on average tangible assets 0.33% 0.36% (1.26)% (0.03) 1.59
    Return on average common equity 2.16% 2.27% (7.78)% (0.11) 9.94
    Return on average tangible common equity 3.67% 3.86% (14.25)% (0.19) 17.92
    Efficiency ratio – Consolidated 70.15% 68.42% 70.91% 1.73 (0.76)
    Efficiency ratio – Bank 68.12% 65.72% 67.99% 2.40 0.13
     

    (1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

    (2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger related expenses, net of tax.

               
    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
     
    Year Ended:
    Dec 31, 2010     Dec 31, 2009     Change

    Net interest spread:

    Yield on non-covered loans and leases 5.77% 5.78% (0.01)
    Yield on covered loans and leases 10.86% N/A nm
    Yield on taxable investments 3.46% 4.34% (0.88)
    Yield on tax-exempt investments (1) 5.76% 5.80% (0.04)
    Yield on temporary investments & interest bearing cash 0.25% 0.27% (0.02)
    Total yield on earning assets (1) 5.15% 5.39% (0.24)
     
    Cost of interest bearing deposits 1.08% 1.56% (0.48)

    Cost of securities sold under agreements to repurchase and fed funds purchased

    0.95% 1.12% (0.17)
    Cost of term debt 3.53% 3.53% (0.00)
    Cost of junior subordinated debentures 4.25% 4.74% (0.49)
    Total cost of interest bearing liabilities 1.24% 1.70% (0.46)
     
    Net interest spread (1) 3.91% 3.69% 0.22
    Net interest margin – Consolidated (1) 4.17% 4.09% 0.08
     
    Net interest margin – Bank (1) 4.24% 4.20% 0.04
     

    As reported (GAAP):

    Return on average assets 0.15% (1.85)% 2.00
    Return on average tangible assets 0.16% (2.01)% 2.17
    Return on average common equity 1.01% (12.63)% 13.64
    Return on average tangible common equity 1.76% (26.91)% 28.67
    Efficiency ratio – Consolidated 66.90% 95.34% (28.44)
    Efficiency ratio – Bank 65.08% 93.77% (28.69)
     

    Operating basis (non-GAAP): (2)

    Return on average assets 0.12% (0.65)% 0.77
    Return on average tangible assets 0.13% (0.70)% 0.83
    Return on average common equity 0.83% (4.41)% 5.24
    Return on average tangible common equity 1.45% (9.39)% 10.84
    Efficiency ratio – Consolidated 67.11% 68.25% (1.14)
    Efficiency ratio – Bank 64.54% 65.08% (0.54)
     

    (1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

    (2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger related expenses, net of tax.

                       
    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
    SequentialYear over
    Quarter Ended:QuarterYear
    (Dollars in thousands)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
     
    Temporary investments & interest bearing cash $1,007,345 $993,092 $384,492 1% 162%
    Investment securities, taxable 2,550,856 1,984,672 1,645,629 29% 55%
    Investment securities, tax-exempt 226,371 230,815 207,984 (2)% 9%
    Loans held for sale 68,982 45,933 43,662 50% 58%
    Non-covered loans and leases 5,691,794 5,718,584 6,072,606 0% (6)%
    Covered loans and leases 809,984     847,704     -- (4)% nm
    Total earning assets 10,355,333 9,820,800 8,354,373 5% 24%
    Goodwill & other intangible assets, net 681,966 684,488 640,995 0% 6%
    Total assets 11,695,980 11,159,310 9,332,737 5% 25%
     
    Non-interest bearing demand deposits 1,624,285 1,565,525 1,392,988 4% 17%
    Interest bearing deposits 7,826,703     7,345,073     5,943,110 7% 32%
    Total deposits 9,450,988 8,910,598 7,336,098 6% 29%
    Interest bearing liabilities 8,343,628 7,863,059 6,260,408 6% 33%
     
    Shareholders’ equity - common 1,659,151 1,660,490 1,412,324 0% 17%
    Tangible common equity (1) 977,185 976,002 771,329 0% 27%
     
    Year Ended:
    (Dollars in thousands)Dec 31, 2010     Dec 31, 2009     % Change
     
    Temporary investments & interest bearing cash $883,324 $193,486 357%
    Investment securities, taxable 1,946,222 1,386,960 40%
    Investment securities, tax-exempt 227,589 198,641 15%
    Loans held for sale 45,185 42,261 7%
    Non-covered loans and leases 5,783,452 6,103,666 (5)%
    Covered loans and leases 681,569     -- nm
    Total earning assets 9,567,341 7,925,014 21%
    Goodwill & other intangible assets, net 674,597 698,223 (3)%
    Total assets 10,830,486 8,975,178 21%
     
    Non-interest bearing demand deposits 1,529,165 1,318,954 16%
    Interest bearing deposits 7,078,815     5,691,785 24%
    Total deposits 8,607,980 7,010,739 23%
    Interest bearing liabilities 7,578,815 6,072,812 25%
     
    Shareholders’ equity - common 1,589,393 1,315,953 21%
    Tangible common equity (1) 914,796 617,730 48%
     

    (1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders’ equity less average goodwill and other intangible assets, net (excluding MSRs).

                       
    Umpqua Holdings Corporation
    Mortgage Banking Activity
    (unaudited)
    SequentialYear over
    Quarter Ended:QuarterYear
    (Dollars in thousands)Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change
     

    Mortgage Servicing Rights (MSR):

    Mortgage loans serviced for others $1,603,414 $1,471,759 $1,277,832 9% 25%
    MSR Asset, at fair value 14,454 13,454 $12,625 7% 14%
     
    MSR as % of serviced portfolio 0.90% 0.91% 0.99%
     

    Mortgage Banking Revenue:

    Origination and sale $7,395 $7,188 $3,804 3% 94%
    Servicing 1,016 1,007 805 1% 26%
    Change in fair value of MSR asset (1,022)     (1,057)     (538) (3)% 90%
    Total $7,389     $7,138     $4,071 4% 82%
     
     
    Closed loan volume $281,086 $231,952 $172,303 21% 63%
     
     
    Year Ended:
    (Dollars in thousands)Dec 31, 2010     Dec 31, 2009     % Change
     

    Mortgage Banking Revenue:

    Origination and sale $21,233 $18,844 13%
    Servicing 3,860 2,993 29%
    Change in fair value of MSR asset (3,879)     (3,149) 23%
    Total $21,214     $18,688 14%
     
    Closed loan volume $785,437 $756,997 4%
     

    Additional tables

    The following tables present additional detail covering the following aspects of the Company's non-covered loan portfolio.

    • Table 1 - Non-covered residential development loan trends by region
    • Table 2 - Non-covered residential development loan stratification by size and by region
    • Table 3 - Non-covered, non-performing asset detail by type and by region
    • Table 4 - Non-covered loans past due 30-89 days by type and by region
    • Table 5 - Non-covered loans past due 30-89 days trends
    • Table 6 - Non-covered restructured loans on accrual status by type and by region
    • Table 7 - Non-covered commercial real estate loan portfolio by type and by region
    • Table 8 - Non-covered commercial real estate loan portfolio by type and by year of maturity
    • Table 9 - Non-covered commercial real estate loan portfolio by type and by year of origination
    • Table 10 - Non-covered commercial construction loan portfolio by type and by region
    • Table 11 - Non-covered commercial loan portfolio by type and by region

    The following is a geographic distribution of the non-covered residential development portfolio as of December 31, 2010, September 30, 2010 and December 31, 2009:

                           

    Table 1 - Non-covered residential development loan trends by region

    (Dollars in thousands)Non-
    % changeperformingPerforming
    BalanceBalanceBalancefromloansLoans
    12/31/09     9/30/10     12/31/10     12/31/09     12/31/10     12/31/10
    Northwest Oregon $88,762 $69,129 $64,263 (28)% $10,191 $54,072
    Central Oregon 9,059 4,079 3,629 (60)% 110 3,519
    Southern Oregon 19,006 8,774 6,256 (67)% 2,122 4,134
    Washington 8,616 7,570 9,308 8% 3,033 6,275
    Greater Sacramento 74,993 52,761 49,329 (34)% 10,761 38,568
    Northern California 25,373     18,072     15,028 (41)% 8,369     6,659
    Total $225,809     $160,385     $147,813 (35)% $34,586     $113,227
    % of total non-covered

    loan portfolio

    4% 3% 3% 2%
     
    Quarter change $ $(32,674) $(15,621) $(12,572)
    Quarter change % (13)% (9)% (8)%
     

    The following is a stratification by size and region of the remaining non-covered performing residential development loans as of December 31, 2010:

     

    Table 2 - Non-covered residential development loan stratification by size and by region

    (Dollars in thousands)
            $250k     $1 million     $3 million     $5 million     $10 million    
    $250ktotototoand
    and less     $1 million     $3 million     $5 million     $10 million     Greater     Total
    Northwest Oregon $1,955 $5,646 $8,189 $10,277 $13,541 $14,464 $54,072
    Central Oregon 384 718 2,417 -- -- -- 3,519
    Southern Oregon 1,174 1,860 1,100 -- -- -- 4,134
    Washington 601 344 5,330 -- -- -- 6,275
    Greater Sacramento 3,308 3,905 1,894 4,780 11,455 13,226 38,568
    Northern California 1,489     1,026     4,144     --     --     --     6,659
    Total $8,911     $13,499     $23,074     $15,057     $24,996     $27,690     $113,227
    % of Total 8% 12% 20% 13% 22% 25% 100%
     

    The following is a distribution of non-covered, non-performing assets by type and by region as of December 31, 2010:

     

    Table 3 - Non-covered, non-performing asset detail by type and by region

    (Dollars in thousands)
        Northwest     Central     Southern         Greater     Northern    
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total

    Non-accrual loans:

    Residential development $10,191 $110 $2,122 $3,033 $10,761 $8,369 $34,586
    Commercial construction 12,726 -- 472 -- 6,817 109 20,124
    Commercial real estate 24,180 4,816 537 1,898 9,010 8,721 49,162
    Commercial 8,296 2,557 1,088 7,203 8,726 6,435 34,305
    Other --     --     --     --     --     --     --
    Total $55,393 $7,483 $4,219 $12,134 $35,314 $23,634 $138,177
     

    Loans 90 days past due:

    Residential development $-- $-- $-- $-- $-- $-- $--
    Commercial construction -- -- -- -- -- -- --
    Commercial real estate 79 -- -- 176 2,753 -- 3,008
    Commercial -- -- -- -- -- -- --
    Other 3,878     --     --     --     185     --     4,063
    Total $3,957 $-- $-- $176 $2,938 $-- $7,071
                                         
    Total non-performing loans $59,350     $7,483     $4,219     $12,310     $38,252     $23,634     $145,248
     

    Other real estate owned:

    Residential development $674 $1,844 $1,368 $112 $-- $1,118 $5,116
    Commercial construction 3,443 539 -- 313 4,392 -- 8,687
    Commercial real estate 5,396 -- 1,656 -- 3,091 5,686 15,829
    Commercial -- -- -- -- -- -- --
    Other 954     --     --     --     481     1,724     3,159
    Total $10,467 $2,383 $3,024 $425 $7,964 $8,528 $32,791
                                         
    Total non-performing assets $69,817     $9,866     $7,243     $12,735     $46,216     $32,162     $178,039
    % of total39%6%4%7%26%18%100%
     

    The Company has aggressively charged-down impaired assets to their disposition values. As of December 31, 2010, the non-performing assets of $178.0 million have been written down by 39%, or $111.8 million, from their original balance of $289.8 million.

    The following is a distribution of non-covered loans past due 30 to 89 days by loan type by region as of December 31, 2010:

                               

    Table 4 - Non-covered loans past due 30-89 days by type and by region

    (Dollars in thousands)
    NorthwestCentralSouthernGreaterNorthern
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total

    Loans 30-89 days past due:

    Residential development $-- $-- $-- $-- $480 $160 $640
    Commercial construction 373 -- -- -- 8,525 -- 8,898
    Commercial real estate 6,636 1,719 -- -- 5,524 9,045 22,924
    Commercial 1,896 -- 17 1,734 2,159 3,616 9,422
    Other 4,222     --     --     300     1,810     1     6,333
    Total $13,127     $1,719     $17     $2,034     $18,498     $12,822     $48,217
     
     

     

    Table 5 - Non-covered loans past due 30-89 days trends

    (Dollars in thousands)
                    Sequential     Year
    QuarterOver Year
    Dec 31, 2010     Sep 30, 2010     Dec 31, 2009     % Change     % Change

    Loans 30-89 days past due:

    Residential development $640 $13,494 $8,950 (95)% (93)%
    Commercial construction 8,898 5,491 1,235 62% 620%
    Commercial real estate 22,924 38,748 18,645 (41)% 23%
    Commercial 9,422 16,465 8,385 (43)% 12%
    Other 6,333     5,988     4,243 6% 49%
    Total $48,217     $80,186     $41,458 (40)% 16%
     

    The following is a distribution of non-covered restructured loans by loan type by region as of December 31, 2010:

     

    Table 6 - Non-covered restructured loans on accrual status by type and by region

    (Dollars in thousands)
        Northwest     Central     Southern         Greater     Northern    
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total

    Restructured loans, accrual basis:

    Residential development $22,277 $-- $-- $5,330 $21,322 $-- $48,930
    Commercial construction -- -- -- -- 5,434 -- 5,434
    Commercial real estate 9,446 -- 3,888 -- 11,820 3,543 28,697
    Commercial -- -- -- -- -- 1,202 1,202
    Other 179     --     --     --     --     --     179
    Total $31,902     $--     $3,888     $5,330     $38,576     $4,745     $84,442
     

    The following is a distribution of the non-covered term commercial real estate portfolio by type and by region as of December 31, 2010:

                               

    Table 7 - Non-covered commercial real estate loan portfolio by type and by region

    (Dollars in thousands)
    NorthwestCentralSouthernGreaterNorthern
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total

    Non-owner occupied:

    Commercial building $134,268 $3,660 $34,948 $37,863 $77,562 $102,485 $390,786
    Medical office 66,564 1,081 15,087 4,172 13,681 12,272 112,857
    Professional office 152,400 7,497 50,722 29,378 119,363 58,609 417,969
    Storage 28,290 789 17,460 -- 17,105 34,113 97,757
    Multifamily 5+ 67,899 742 10,855 5,550 8,079 23,466 116,591
    Resort 5,432 -- 679 -- -- -- 6,111
    Retail 204,502 4,787 30,573 12,334 158,695 57,591 468,482
    Residential 35,278 97 8,769 5,032 8,796 16,428 74,400
    Farmland & agriculture 4,993 188 517 -- 197 18,071 23,966
    Apartments 69,500 -- 9,963 458 17,269 17,607 114,797
    Assisted living 59,774 -- 67,529 1,743 4,309 7,880 141,235
    Hotel/motel 45,747 -- 823 11,355 17,724 5,757 81,406
    Industrial 28,066 2,554 6,343 -- 33,192 22,081 92,236
    RV park 31,559 655 18,307 -- 780 5,353 56,654
    Warehouse 10,125 -- 230 -- 1,148 1,612 13,115
    Other 27,481     491     3,409     1,858     3,515     6,880     43,634
    Total $971,878 $22,541 $276,214 $109,743 $481,415 $390,205 $2,251,996
     

    Owner occupied:

    Commercial building $160,780 $2,737 $28,600 $17,367 $73,444 $106,884 $389,812
    Medical office 93,370 3,814 18,410 531 6,318 26,707 149,150
    Professional office 59,839 2,242 12,044 1,381 22,028 18,139 115,673
    Storage 14,681 146 -- -- 1,837 12,863 29,527
    Multifamily 5+ 801 -- 51 3,145 146 -- 4,143
    Resort 5,596 -- 4,247 -- 3,050 1,038 13,931
    Retail 47,212 2,428 10,833 2,302 46,013 51,152 159,940
    Residential 5,980 -- 2,599 -- 1,698 2,204 12,481
    Farmland & agriculture 9,869 -- 802 2,000 -- 45,676 58,347
    Apartments 1,042 -- 721 -- 642 -- 2,405
    Assisted living 47,558 -- 115 -- 6,799 15,483 69,955
    Hotel/motel 13,139 -- 184 708 -- 34,156 48,187
    Industrial 54,014 1,378 15,104 6,725 8,171 37,193 122,585
    RV park 824 -- 2,489 -- 153 1,139 4,605
    Warehouse 10,774 -- 398 -- -- 6,783 17,955
    Other 27,653     517     --     --     231     4,382     32,783
    Total $553,132 $13,262 $96,597 $34,159 $170,530 $363,799 $1,231,479
                                         
    Total $1,525,010     $35,803     $372,811     $143,902     $651,945     $754,004     $3,483,475
    % of total44%1%11%4%19%21%100%
     

    The following is a distribution of the non-covered term commercial real estate portfolio by type and by year of maturity as of December 31, 2010:

                               

    Table 8 - Non-covered commercial real estate loan portfolio by type and by year of maturity

    (Dollars in thousands)
    2013-2015-2017-2022 &
    2011     2012    

    2014

        2016     2021     Later     Total

    Non-owner occupied:

    Commercial building $22,853 $22,682 $79,639 $82,637 $169,425 $13,550 $390,786
    Medical office 305 549 33,974 14,969 54,618 8,442 112,857
    Professional office 25,820 11,306 94,325 125,222 147,667 13,629 417,969
    Storage 8,371 13 23,901 27,156 37,205 1,111 97,757
    Multifamily 5+ 4,079 2,790 16,877 20,795 65,595 6,455 116,591
    Resort -- -- 809 4,140 1,162 -- 6,111
    Retail 37,900 20,968 98,145 152,987 153,632 4,850 468,482
    Residential 15,877 8,826 13,933 9,513 19,089 7,162 74,400
    Farmland & agriculture 1,237 -- 3,095 6,275 10,583 2,776 23,966
    Apartments 4,981 2,287 7,044 14,689 84,074 1,722 114,797
    Assisted living 6,640 13,674 3,720 66,246 48,771 2,184 141,235
    Hotel/motel 7,635 2,103 18,251 19,847 29,639 3,931 81,406
    Industrial 5,168 7,365 15,734 28,918 29,563 5,488 92,236
    RV park 1,412 2,056 11,260 10,343 29,286 2,297 56,654
    Warehouse 462 635 7,561 1,452 1,930 1,075 13,115
    Other 14,050     3,249     13,487     3,982     5,394     3,472     43,634
    Total $156,790 $98,503 $441,755 $589,171 $887,633 $78,144 $2,251,996
     

    Owner occupied:

    Commercial building $5,374 $16,186 $47,261 $69,550 $197,367 $54,074 $389,812
    Medical office 533 1,841 9,415 7,043 106,839 23,479 149,150
    Professional office 2,105 3,535 20,717 24,965 58,841 5,510 115,673
    Storage 1,456 -- 2,630 7,019 17,412 1,010 29,527
    Multifamily 5+ -- -- 830 51 3,262 -- 4,143
    Resort -- -- 3,954 134 5,596 4,247 13,931
    Retail 7,968 2,829 31,698 36,630 72,216 8,599 159,940
    Residential 1,547 1,507 2,350 1,708 3,826 1,543 12,481
    Farmland & agriculture 3,950 349 12,110 12,505 26,726 2,707 58,347
    Apartments -- -- 40 -- 2,365 -- 2,405
    Assisted living 11,917 -- 12,277 28,411 14,934 2,416 69,955
    Hotel/motel -- 4,089 12,516 15,298 6,434 9,850 48,187
    Industrial 5,011 8,405 14,443 29,394 53,784 11,548 122,585
    RV park 79 40 1,731 384 2,218 153 4,605
    Warehouse 320 1,189 5,192 4,588 6,580 86 17,955
    Other 2,521     60     964     1,524     27,631     83     32,783
    Total $42,781 $40,030 $178,128 $239,204 $606,031 $125,305 $1,231,479
                                         
    Total $199,571     $138,533     $619,883     $828,375     $1,493,664     $203,449     $3,483,475
    % of total5%4%18%24%43%6%100%
     

    The following is a distribution of the non-covered term commercial real estate portfolio by type and by year of origination as of December 31, 2010:

     

    Table 9 - Non-covered commercial real estate loan portfolio by type and by year of origination

    (Dollars in thousands)
        Prior to     2000-     2005-     2007-     2009-    
    2000     2004     2006     2008     2010     Total

    Non-owner occupied:

    Commercial building $7,460 $82,050 $59,593 $146,719 $94,964 $390,786
    Medical office 386 44,662 16,740 29,894 21,175 112,857
    Professional office 7,370 148,548 114,326 81,507 66,218 417,969
    Storage 1,526 45,550 20,381 25,340 4,960 97,757
    Multifamily 5+ 3,065 25,153 18,182 44,174 26,017 116,591
    Resort 714 1,292 -- 679 3,426 6,111
    Retail 9,441 154,190 140,338 132,675 31,838 468,482
    Residential 1,256 7,493 26,135 21,287 18,229 74,400
    Farmland & agriculture 829 1,114 6,105 5,148 10,770 23,966
    Apartments 800 20,208 21,075 19,140 53,574 114,797
    Assisted living 5,888 52,101 46,712 15,553 20,981 141,235
    Hotel/motel 9,615 26,254 19,546 22,585 3,406 81,406
    Industrial 3,806 40,577 33,768 10,107 3,978 92,236
    RV park 2,834 16,820 13,589 10,063 13,348 56,654
    Warehouse 1,056 8,567 2,996 496 -- 13,115
    Other 636     11,872     10,488     19,636     1,002     43,634
    Total $56,682 $686,451 $549,974 $585,003 $373,886 $2,251,996
     

    Owner occupied:

    Commercial building $9,349 $70,494 $77,524 $127,557 $104,888 $389,812
    Medical office 2,190 22,424 9,807 41,323 73,406 149,150
    Professional office 2,857 32,148 35,510 34,148 11,010 115,673
    Storage 525 7,783 9,879 10,686 654 29,527
    Multifamily 5+ 168 830 -- -- 3,145 4,143
    Resort 405 10,494 134 -- 2,898 13,931
    Retail 5,393 36,691 59,884 51,309 6,663 159,940
    Residential 101 5,041 4,941 1,307 1,091 12,481
    Farmland & agriculture 798 14,180 12,605 14,734 16,030 58,347
    Apartments 40 -- 602 914 849 2,405
    Assisted living 4,930 7,505 41,448 13,636 2,436 69,955
    Hotel/motel 5,688 25,515 5,624 1,541 9,819 48,187
    Industrial 2,422 42,161 30,793 15,785 31,424 122,585
    RV park 835 1,557 130 1,949 134 4,605
    Warehouse 108 7,823 2,600 2,776 4,648 17,955
    Other --     2,999     21,586     7,348     850     32,783
    Total $35,809 $287,645 $313,067 $325,013 $269,945 $1,231,479
                                   
    Total $92,491     $974,096     $863,041     $910,016     $643,831     $3,483,475
    % of total3%28%25%26%18%100%
     

    The following is a distribution of the non-covered commercial construction portfolio by type and by region as of December 31, 2010:

                               

    Table 10 - Non-covered commercial construction loan portfolio by type and by region

    (Dollars in thousands)
    NorthwestCentralSouthernGreaterNorthern
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total

    Non-owner occupied:

    Commercial building $897 $-- $2,297 $300 $16,236 $6,147 $25,877
    Medical office 12,458 -- -- -- -- 1,430 13,888
    Professional office 9,294 -- 2,238 -- 8,525 3,020 23,077
    Storage 8,447 -- -- -- -- -- 8,447
    Multifamily 5+ -- -- -- 2,837 7,868 -- 10,705
    Retail 10,968 -- -- -- 2,530 -- 13,498
    Residential 27,156 310 3,822 1,784 22,990 5,996 62,058
    Apartments 13,324 -- -- -- -- -- 13,324
    Assisted living 9,300 -- -- -- 3,747 -- 13,047
    Hotel/motel -- -- -- -- -- -- --
    Industrial -- -- -- -- -- -- --
    Other 124     --     --     --     --     2,980     3,104
    Total $91,968 $310 $8,357 $4,921 $61,896 $19,573 $187,025
     

    Owner occupied:

    Commercial building $12,646 $-- $166 $-- $584 $11,983 $25,379
    Medical office 14,479 -- -- -- -- -- 14,479
    Professional office -- -- -- -- -- -- --
    Storage -- -- -- -- -- -- --
    Multifamily 5+ -- -- -- -- -- -- --
    Retail -- -- -- -- -- -- ---
    Residential 5,346 -- -- -- -- 598 5,944
    Apartments -- -- -- -- -- -- --
    Assisted living 7,342 -- -- -- -- -- 7,342
    Hotel/motel -- -- -- -- -- 5,447 5,447
    Industrial 2,121 -- 77 -- -- -- 2,198
    Other --     --     --     --     --     --     --
    Total $41,934 $-- $243 $-- $584 $18,028 $60,789
                                         
    Total $133,902     $310     $8,600     $4,921     $62,480     $37,601     $247,814
    % of total54%0%4%2%25%15%100%
     

    The following is a distribution of the non-covered commercial loan portfolio by type and by region as of December 31, 2010:

                               

    Table 11 - Non-covered commercial loan portfolio by type and by region

    (Dollars in thousands)
    NorthwestCentralSouthernGreaterNorthern
    Oregon     Oregon     Oregon     Washington     Sacramento     California     Total
     
    Commercial line of credit $101,125 $1,453 $22,531 $22,826 $154,244 $70,140 $372,319
    Asset based line of credit 111,948 118 8,831 13,021 11,245 61,022 206,185
    Term loan 155,608 3,433 27,037 9,753 48,209 99,927 343,967
    Agriculture 25,050 -- 459 -- 332 57,491 83,332
    Municipal 11,858 -- 18,485 -- 37,587 4,064 71,994
    Government guaranteed -- -- -- -- -- 57,529 57,529
    Small business 42,569     --     --     4,769     41,752     --     89,090
    Total $448,158     $5,004     $77,343     $50,369     $293,369     $350,173     $1,224,416
    % of total36%1%6%4%24%29%100%
     

    Source: Umpqua Holdings Corporation


    Contact:

    Umpqua Holdings Corporation

    Ray Davis, President/CEO, 503-727-4101

    raydavis@umpquabank.com

    Ron Farnsworth, EVP/Chief Financial Officer, 503-727-4108

    ronfarnsworth@umpquabank.com