• Umpqua Holdings Corporation
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  • Umpqua Holdings Corporation Continues Strong Earnings Growth in the First Quarter While Completing Integration
    Company Release - 04/15/2003 03:00

    PORTLAND, Ore.--(BUSINESS WIRE)--April 15, 2003--Umpqua Holdings Corporation (Nasdaq:UMPQ), parent company of Umpqua Bank and of Strand, Atkinson, Williams & York, Inc. today announced operating earnings of $8.79 million, a 78% increase over the same period one year ago, or $0.31 per diluted share for the first quarter of 2003.

    Operating earnings are defined as the company's earnings before deduction of merger related expenses, and are only reported in quarters in which significant merger related activities occur. Net income is operating earnings minus merger related expenses.

    Net income for the first quarter of 2003 was $8.38 million or $0.29 per diluted share compared to $6.7 million or $0.28 for the fourth quarter of 2002.

    The following table presents a reconciliation of net income to operating earnings, with merger related expenses displayed for each period presented:

    
    (Dollars in 000's, except per share data)   Q1 2003  Q4 2002  Q1 2002
                                                ------- --------  -------
    Net Income                                  $8,380$  6,715$ 3,961
    
    Add Back: Merger related expense, net of tax   409       748      973
                                                ------- --------  -------
        Operating Earnings                      $8,789$  7,463$ 4,934
                                                ======= ========  =======
    Earnings per diluted share:
    ---------------------------
        Net Income                              $ 0.29$   0.28$  0.20
    
        Operating Earnings                      $ 0.31$   0.31$  0.24

    "It was another quarter of strong financial performance," said Ray Davis, President and Chief Executive Officer of Umpqua Holdings Corporation. "With the integration of Centennial Bancorp virtually complete, we continue to strengthen our foundation for future growth in earnings this year. In addition, with the opening of our new flagship store in Portland's Pearl District, we continue to build on our reputation as a leader in the delivery of financial services."

    The acquisition of Centennial Bancorp, which closed on November 15, 2003, was accounted for under the purchase accounting method, and Centennial Bancorp's results are included from the date of closing.

    Total consolidated assets of Umpqua Holdings as of March 31, 2003 were $2.65 billion, compared to $2.56 billion at December 31, 2002. Total gross loans and deposits were $1.82 billion and $2.18 billion, respectively, as of March 31, 2003, compared to $1.78 billion and $2.10 billion, respectively, as of December 31, 2002.

    The following table presents annualized 2003 growth, based on these first quarter achievements:

    
                                                            Annualized
    (dollars in thousands) Mar 31, 2003Dec 31, 2002      Growth Rate
                          --------------- --------------- ----------------
    Loans and Leases          $1,823,311$1,778,315             10.1%
    Deposits                  $2,178,769$2,103,790             14.3%
    Assets                    $2,645,915$2,555,964             14.1%
    

    Demand Deposits grew 9.8% over the last 90 days alone and now constitute 24.9% of Umpqua Bank's deposit base.

    Non-interest income for the first quarter of 2003 grew to $10.29 million, an increase of 12% over the fourth quarter of 2002 and an increase of 59% over the first quarter of 2002. This is due largely to the continuation of strong mortgage banking revenue. Revenue from mortgage banking was $4.28 million in the first quarter of 2003, compared to $3.99 million in the fourth quarter of 2002 and $1.68 million in the first quarter of 2002.

    Umpqua Bank, Umpqua Holdings largest subsidiary, achieved an efficiency ratio before merger-related expenses of 55.10% for the quarter ended March 31, 2003 compared to 52.88% for the quarter ended December 31, 2002 and 58.35% for the quarter ended March 31, 2002.

    Including non-performing assets acquired as part of the Centennial acquisition, the Bank's non-performing loans stand at $17.82 million at March 31, 2003, representing 0.98% of total loans compared to 1.03% at December 31, 2002 and 0.45% at March 31, 2002.

    "The results of this quarter are indicative of the excellent leadership and commitment of our management team and employees to deliver positive returns for our shareholders and superior service to our customers during an aggressive integration period," said Davis.

    About Umpqua Holdings Corporation

    Umpqua Holdings Corporation (Nasdaq:UMPQ) is the parent company of Umpqua Bank, an Oregon state-chartered bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has 66 stores throughout Oregon and Southwest Washington. Umpqua Holdings also owns a retail brokerage subsidiary, Strand, Atkinson, Williams & York, Inc. which has nine locations throughout Oregon and Southwest Washington and offers brokerage services within Umpqua Bank stores. Additionally, Umpqua Holdings Private Client Services Division provides tailored financial services and products to individual private customers. Umpqua Holdings Corporation is headquartered in Portland, Ore. For more information, visit www.umpquabank.com/investor.

    Umpqua Holdings Corporation will conduct a quarterly earnings conference call Tuesday, April 15, 2003, at 10:00 a.m. PST where the Company will discuss first-quarter results and provide an update on the progress of the Centennial Bancorp conversion. 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 888/913-9967 a few minutes before 10:00 a.m. The password is "UMPQUA." A rebroadcast can be found approximately one hour after the conference call by dialing 888/568-0438, or by visiting www.umpquabank.com/investor.

    This press release includes forward-looking statements. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Form 10-K for Umpqua Holdings Corporation for the year ended December 31, 2002. These risk factors include, but are not limited to, the level of commercial activity, general market conditions, prevailing interest rates, the company's ability to continue generating loans, the ability to execute our community-based banking strategies, and intense competition within the banking industry, which the company believes will increase. Specific risks in this press release include timely completion of the Centennial Bancorp integration, the timing and amount of consolidated savings and additional acquisition charges, management of non-performing assets and future growth in assets and earnings.

    Umpqua Holdings Corporation
                      Consolidated Statements of Income
                                 (unaudited)
    
    
                                                 Quarter ended:
                                       -----------------------------------
    Dollars in thousands, except        March 31,    December   March 31,
     per-share data                       2003      31, 2002      2002
                                       ----------- ----------- -----------
    Interest income
    -----------------------------------
      Loans and leases                    $31,383$26,340$19,931
      Investments taxable                   2,967       2,659       2,285
      Investments tax exempt                  802         790         729
      Temporary investments                   151         247         105
      Other interest and dividends             14          22          15
                                       ----------- ----------- -----------
        Total interest income              35,317      30,058      23,065
    Interest expense
    -----------------------------------
      Deposits                              6,480       5,769       5,284
      Repurchase agreements and
        fed funds purchased                   109         114          81
      Trust preferred securities              937         839           -
      Other borrowings                        212         213         330
                                       ----------- ----------- -----------
        Total interest expense              7,738       6,935       5,695
    Net interest income                    27,579      23,123      17,370
    Provision for credit losses             1,475       1,384       1,004
    Non-interest income
    -----------------------------------
      Service charges                       3,020       2,541       2,084
      Brokerage fees                        1,939       2,208       2,174
      Mortgage banking revenue              4,279       3,989       1,679
      Other income                          1,052         418         543
                                       ----------- ----------- -----------
    Total non-interest income              10,290       9,156       6,480
    Non-interest expense
    -----------------------------------
      Salaries and benefits                12,899      10,877       8,709
      Occupancy and equipment               3,582       2,936       2,099
      Other                                 6,200       5,221       4,109
      Merger related expenses                 638       1,231       1,521
                                       ----------- ----------- -----------
    Total non-interest expense             23,319      20,265      16,438
    Income before income taxes             13,075      10,630       6,408
    Income taxes                            4,695       3,915       2,447
                                       ----------- ----------- -----------
    Net income                             $8,380$6,715$3,961
                                       =========== =========== ===========
    
    Weighted average shares
      Outstanding                      28,157,475  24,054,398  19,960,668
    
    Weighted average diluted
      shares outstanding               28,570,144  24,364,161  20,204,142
    
    Basic earnings per share                $0.30$0.28$0.20
    Diluted earnings per share              $0.29$0.28$0.20Umpqua Holdings Corporation
                          Consolidated Balance Sheets
                                  (unaudited)
    
    
    
    Dollars in thousands, except per-   March 31,    December   March 31,
     share data                           2003       31, 2002     2002
                                       ----------- ----------- -----------
    Assets:
      Cash and cash equivalents          $154,274$120,542$97,211
      Trading account securities              670       1,905         861
      Investments available for sale      355,079     331,160     172,076
      Investments held to maturity         18,251      18,455      19,113
      Loans held for sale                  42,239      62,349      29,314
      Loans and leases                  1,823,311   1,778,315   1,041,553
      Less:  Allowance for credit
       losses                             (24,538)    (24,731)    (14,271)
                                       ----------- ----------- -----------
        Loans and leases, net           1,798,773   1,753,584   1,027,282
      Federal Home Loan Bank stock          4,828       6,589       8,291
      Premises and equipment, net          61,339      58,585      39,310
      Other real estate owned               3,430       2,209       1,430
      Mortgage servicing rights, net       10,179       9,316       5,991
      Goodwill and other intangibles      161,181     160,967      26,169
      Other assets                         35,672      30,303      10,124
                                       ----------- ----------- -----------
                                       $2,645,915$2,555,964$1,437,172
                                       =========== =========== ===========
    
    Liabilities:
      Deposits                         $2,178,769$2,103,790$1,207,513
      Securities sold under agreements
       to repurchase and fed funds
       purchased                           34,675      31,232      29,216
      Borrowings                           24,162      24,219      35,068
      Other borrowings                          -       5,000           -
      Trust preferred securities           75,000      75,000           -
      Other liabilities                    34,840      28,564      27,461
                                       ----------- ----------- -----------
        Total liabilities               2,347,446   2,267,805   1,299,258
    
    Shareholders' equity:
      Common stock                        228,899     225,380      92,469
      Retained earnings                    66,724      59,475      44,197
      Accumulated other comprehensive
        Income                              2,846       3,304       1,248
                                       ----------- ----------- -----------
        Total shareholders' equity        298,469     288,159     137,914
                                       ----------- ----------- -----------
    Total liabilities and
     shareholders' equity              $2,645,915$2,555,964$1,437,172
                                       =========== =========== ===========
    
    Common shares outstanding at
     period End                        28,234,620  27,980,591  19,970,763
    Book value per share                   $10.57$10.30$6.91
    Tangible book value per share           $4.86$4.55$5.60
    Tangible equity                      $137,288$127,192$111,745Umpqua Holdings Corporation
                                Loan Portfolio
    
    
    
                                      March 31,   December 31,   March 31,
    Dollars in thousands                2003         2002          2002
                                     -------------------------------------
    Loans and leases by purpose:
      Commercial real estate             $841,492$817,691$584,184
      Residential real estate              79,636      79,708      69,777
      Construction                        281,223     270,116      80,455
                                     -------------------------------------
        Total real estate               1,202,351   1,167,515     734,416
      Commercial                          566,677     554,748     245,722
      Leases                                9,271       6,698       3,905
      Consumer                             44,959      48,647      56,829
      Other                                    53         707         681
                                     -------------------------------------
    Total loans and leases             $1,823,311$1,778,315$1,041,553
                                     =====================================
    
                                                 Quarter Ended
                                      March 31,   December 31,   March 31,
                                        2003         2002          2002
                                     -------------------------------------
    Allowance for credit losses
      Balance beginning of period         $24,731$15,038$13,221
        Provision for credit losses         1,475       1,384       1,004
        Loan charge-offs, net              (1,668)     (1,547)         46
        Acquisitions                            -       9,856           -
                                     -------------------------------------
      Balance end of period               $24,538$24,731$14,271
                                     =====================================
    
    Net charge-offs to average
      loans and leases (annualized)          0.38%       0.44%      -0.02%
    Allowance for credit losses to
      loans and leases                       1.35%       1.39%       1.37%
    Allowance for credit losses to
      non-performing loans and leases         138%        134%        304%
    Non-performing loans and leases
      to total loans and leases              0.98%       1.03%       0.45%
    
    Non-performing assets
      Non-performing loans and leases     $17,816$18,395$4,693
      Real estate owned                     3,430       2,209       1,430
                                     -------------------------------------
    Total non-performing assets           $21,246$20,604$6,123
                                     -------------------------============
    
    
    
                                        Deposits by Type
    
                            March 31,      December 31,       March 31,
                              2003            2002              2002
                            -------------------------------------------
     Demand, non interest
      bearing               $  543,319$   494,810$   268,428
     Demand, interest
      bearing                  843,187          814,494           445,726
     Savings                   167,715          162,043            76,000
     Time                      624,548          632,443           417,359
                            -------------------------------------------
     Total Deposits         $ 2,178,769$ 2,103,790$ 1,207,513Umpqua Holdings Corporation
                                Selected Ratios
    
    
                                                    Quarter ended:
                                            ------------------------------
                                            March 31,  December  March 31,
    Consolidated Ratios                       2003     31, 2002    2002
    -------------------                     ---------- --------- ---------
    Net Interest Spread:
      Yield on loans and leases                  6.95%     7.21%     7.82%
      Yield on investments (1)                   4.98%     4.91%     6.54%
      Yield on temporary investments             1.17%     1.44%     1.58%
                                            ---------- --------- ---------
        Total yield on earning assets            6.51%     6.61%     7.48%
    
      Cost of interest bearing deposits          1.61%     1.74%     2.30%
      Cost of securities sold under
       agreements to re-purchase and
       Fed funds purchased                       1.43%     1.44%     1.27%
      Cost of borrowings                         3.56%     3.76%     4.00%
      Cost of trust preferred                    5.07%     5.33%     0.00%
                                            ---------- --------- ---------
        Total cost of interest bearing
         liabilities                             1.78%     1.92%     2.32%
    
    
    Net interest spread                          4.73%     4.69%     5.16%
    
    Net interest margin                          5.10%     5.10%     5.66%
    
    Before Merger Related Expenses:
    ----------------------------------------
    Return on average assets                     1.38%     1.43%     1.42%
    Return on average equity                    12.17%    13.75%    14.45%
    Return on average tangible equity           27.04%    23.76%    17.79%
    
    After Merger Related Expenses:
    ----------------------------------------
    Return on average assets                     1.32%     1.29%     1.14%
    Return on average equity                    11.61%    12.36%    11.60%
    Return on average tangible equity           25.78%    21.38%    14.28%
    
    Bank only Ratios
    ----------------------------------------
    Umpqua Bank efficiency ratio before
     merger expenses                            55.10%    52.88%    58.35%
    Umpqua Bank net interest margin              5.27%     5.28%     5.66%
    
    (1) Tax-exempt interest has been adjusted to a taxable equivalent
        basis using a 35% tax rate.
    
    
        CONTACT: Umpqua Holdings CorporationRay Davis, 503/546-2490
                 raydavis@umpquabank.com
                  or
                 Dan Sullivan, 503/546-2492
                 dansullivan@umpquabank.com
    
        SOURCE: Umpqua Holdings Corporation