• Umpqua Holdings Corporation
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  • Umpqua Holdings Reports Fourth Quarter and Full Year 2011 Results
    Company Release - 01/25/2012 16:05

    Fourth quarter 2011 operating earnings (1) of $0.19 per diluted share, a 138% increase over same period prior year

    Full year 2011 operating earnings of $0.66 per diluted share, a 450% increase over prior year

    Non-covered, non-performing assets decreased 29% year-over-year to 1.09% of total assets

    Fourth quarter 2011 non-covered net charge-offs decreased 53% over prior quarter and 72% over prior year

    Non-covered loans and leases grew $229 million, or 4%, over prior year

    Fourth quarter 2011 net interest margin at 4.13%, core net interest margin (1) at 3.87%

    PORTLAND, Ore.--(BUSINESS WIRE)-- Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc., today announced fourth quarter 2011 net earnings available to common shareholders of $21.3 million, or $0.19 per diluted common share, compared to net earnings available to common shareholders of $21.8 million, or $0.19 per diluted common share for the third quarter of 2011, and $8.1 million, or $0.07 per diluted common share, for the same period in the prior year. For the full year 2011, the Company reported net earnings available to common shareholders of $74.1 million, or $0.65 per diluted common share, compared to net earnings available to common shareholders of $16.1 million, or $0.15 per diluted common share for the prior year.

    Operating earnings (1), 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, were $21.6 million, or $0.19 per diluted common share for the fourth quarter of 2011, compared to operating earnings of $22.1 million, or $0.19 per diluted common share for the third quarter of 2011, and $9.0 million, or $0.08 per diluted common share, for the same period in the prior year. For the full year 2011, the Company is reporting operating earnings of $75.7 million, or $0.66 per diluted common share, compared to operating earnings of $13.2 million, or $0.12 per diluted common share for the prior year.

    Significant financial statement items for the fourth quarter of 2011 include:

    • Non-covered loans and leases grew $60 million, primarily comprised of commercial & industrial and residential real estate loans, and total non-covered loan commitments increased $27 million;
    • Record mortgage banking revenue of $9.4 million on closed loan volume of $363 million;
    • Non-covered, non-performing assets continues to decline, down to 1.09% of total assets;
    • Provision for non-covered loan losses and net charge-offs of $6.6 million;
    • The allowance for non-covered credit losses ended the quarter at 1.59% of total non-covered loans and leases;
    • Net interest margin increased to 4.13% on a sequential quarter basis, primarily due to increased loan disposal gains within the covered loan portfolio and increased average non-covered loan balances, partially offset by lower investment and non-covered loan yields;
    • Core net interest margin (1) decreased 7 basis points to 3.87% in the fourth quarter due to lower investment and non-covered loan yields;
    • The cost of interest bearing deposits for the fourth quarter of 2011 was 0.58%, representing a decrease of 19 basis points on a sequential quarter basis;
    • Repurchased 2.4 million shares of common stock at a weighted average price of $11.65 per share;
    • Tangible common equity ratio of 9.14%; and
    • Total risk-based capital of 16.94%, and tier 1 common to risk weighted asset ratio of 12.76%.

    Highlights for the full year of 2011 include:

    • Non-covered loans and leases grew $229 million, or 4%, and total non-covered loan commitments increased $353 million;
    • Provision for non-covered loan losses declined 59% year over year to $46.2 million;
    • Net charge-offs declined 54% year over year to $55 million;
    • Non-covered non-performing assets declined 29%, to 1.09% of total assets;
    • Net interest margin increased 2 basis points to 4.19% and core net interest margin (1) increased 3 basis points to 3.95% over prior year.

    “During 2011, the Company reported improved earnings, credit quality, loan growth and shareholder return,” said Ray Davis, CEO of Umpqua Holdings Corporation. “We recognize challenges still exist within the economy, yet we remain energized about our ability to advance our strategic initiatives and deliver better returns to our shareholders.”

    (1) Operating earnings and Core net interest margin are considered “non-GAAP” financial measures. More information regarding these measurements and a reconciliation to the comparable GAAP measurements are provided under the heading Non-GAAP Financial Measures below.

    Asset quality – Non-covered loan portfolio

    Non-covered, non-performing assets were $125.6 million, or 1.09% of total assets, as of December 31, 2011, compared to $146.4 million, or 1.24% of total assets as of September 30, 2011, and $178.0 million, or 1.53% of total assets as of December 31, 2010. Of this amount, as of December 31, 2011, $80.6 million represented non-accrual loans, $10.8 million represented loans past due greater than 90 days and still accruing interest, and $34.2 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, 2011, the non-covered, non-performing assets of $125.6 million have been written down by 38%, or $76.3 million, from their current par balance of $201.9 million.

    The provision for non-covered loan losses for the fourth quarter of 2011 was $6.6 million, a 27% decrease from the prior quarter, and a 62% decrease from the same period of the prior year. This reflects continued improvement and stabilization of credit quality and the decline of non-performing loans. Total net charge-offs for the fourth quarter of 2011 declined to $6.6 million, the lowest level of net charge-offs since the third quarter of 2007, reducing the allowance for credit losses to 1.59% of non-covered loans and leases at December 31, 2011, as compared to 1.61% of total non-covered loans as of September 30, 2011 and 1.82% of total non-covered loans as of December 31, 2010. The annualized net charge-off rate for the fourth quarter of 2011 was 0.45%.

    Non-covered loans past due 30 to 89 days were $35.2 million, or 0.60% of non-covered loans and leases as of December 31, 2011, as compared to $49.2 million, or 0.84% of non-covered loans and leases as of September 30, 2011, and $48.2 million, or 0.85% of non-covered loans and leases as of December 31, 2010.

    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)

     

    Allowance for
        non-coveredNon-coveredNon-covered,
    Provision forNon-coveredcredit lossesloansnon-performing
    non-coveredNetto non-covered30-89 daysassets to
    loan losses   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 %
    Q1 2011 15,030 19,118 1.75% 1.25 % 1.53 %
    Q2 2011 15,459 15,497 1.72% 0.76 % 1.37 %
    Q3 2011 9,089 13,952 1.61% 0.84 % 1.24 %
    Q4 2011   6,642 6,606 1.59% 0.60 % 1.09 %
    Total $ 518,337 $490,710
     

    Non-covered construction loan portfolio

    Total non-covered construction loans declined to $277 million as of December 31, 2011, representing a decrease of 7% since September 30, 2011, and a decrease of 33% from December 31, 2010. Within this portfolio, the residential development loan segment was $90 million, or 2% of the total non-covered loan portfolio. Of this amount, $15.8 million represented non-performing loans and $34.0 million were classified as performing restructured loans. The residential development loan segment has decreased $58 million, or 39%, since December 31, 2010.

    The remaining $187 million in non-covered construction loans as of December 31, 2011, primarily represent commercial construction projects. Of this amount, $3.9 million represented non-performing loans and $20.0 million were classified as performing restructured loans.

    Non-covered commercial real estate loan portfolio

    The total non-covered term commercial real estate loan portfolio was $3.56 billion as of December 31, 2011. Of this total, $2.40 billion are non-owner occupied and $1.16 billion are owner occupied. Of the total term commercial real estate portfolio, $44.5 million were on non-accrual status, no amounts were past due 90 days or more and accruing interest, and $18.5 million were past due 30-89 days as of December 31, 2011. Of the total non-covered commercial real estate portfolio, 6% matures in 2012, 7% in 2013, 18% in years 2014-2015, and 21% in years 2016-2017. The remaining 48% of the portfolio matures in or after the year 2018.

    Non-covered restructured loans

    Non-covered restructured loans on accrual status were $80.6 million as of December 31, 2011, as compared to $80.6 million as of September 30, 2011 and $84.4 million as of December 31, 2010.

    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: 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 $19.5 million, or 0.17% of total assets, as of December 31, 2011, as compared to $23.0 million, or 0.20% of total assets, as of September 30, 2011, and $29.9 million, or 0.26% of total assets, as of December 31, 2010. The total non-performing assets balance for all periods presented represents covered OREO.

    In accordance with the guidance governing the accounting for purchased loan portfolios with evidence of credit deterioration subsequent to origination, the covered loans acquired have been assembled into pools of loans. As a result, individual loans underlying the loan pools are not reported as non-performing. Rather, accretable yield of the pool is recognized to the extent pool level expected future cash flows discounted at the effective rate exceed the carrying value of the pool. To the extent discounted expected future cash flows are less than the carrying value of the pool, provisions for covered credit losses are recognized as a charge to earnings, but the adjusted carrying value of the loan pool continues to accrete into income at the effective rate.

    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 due diligence. 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 4.13% for the fourth quarter of 2011, as compared to 4.12% for the third quarter of 2011, and 4.14% for the fourth quarter of 2010. The increase in net interest margin in the current quarter over the prior quarter resulted primarily from the increase in average non-covered loans outstanding, increase in loan disposal gains from the covered loan portfolio and a decrease in the cost of interest bearing deposits, partially offset by the decrease in interest bearing cash, the decline in non-covered loan yields and the decline in investment yields. The decrease in net interest margin in the current quarter over the same quarter of the prior year resulted primarily from a decrease in covered loans, a decrease in loan disposal gains from the covered loan portfolio, the decline in non-covered loan yields and the decline in investment yields, partially offset by the decrease in interest bearing cash, the increase in average investment security balances, increased average non-covered loans outstanding and declining cost of interest bearing deposits.

    Loan disposal activities within the covered loan portfolio, either through loans being paid off in full or transferred to OREO, result in gains within covered loan interest income to the extent assets received in satisfaction of debt (such as cash or the net realizable value of OREO received) exceed the allocated carrying value of the loan disposed of from the pool. Loan disposal activities contributed $6.7 million of interest income in the fourth quarter of 2011, as compared to $4.8 million in the third quarter of 2011 and $13.3 million in the fourth quarter of 2010. While dispositions of covered loans positively impact net interest margin, we recognize a corresponding decrease to the change in FDIC indemnification asset at the incremental loss-sharing rate within other non-interest income. Excluding the impact of covered loan disposal gains, consolidated net interest margin would have been 3.88% for the current quarter, 3.94% for the prior quarter, and 3.64% in the same quarter of the prior year.

    Interest and fee recoveries on non-accrual loans during the fourth quarter of 2011 were $0.2 million, positively impacting the net interest margin by 1 basis point, as compared to reversals of $0.1 million for the third quarter of 2011 and $0.9 million in the fourth quarter of 2010. Excluding the impact of loan disposal gains and interest and fee reversals on non-accrual loans, our core net interest margin was 3.87% for the fourth quarter of 2011, 3.94% for the third quarter of 2011 and 3.67% for the fourth quarter of 2010. Core net interest margin 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.

    For the seventeenth consecutive quarter, the Company has reduced the cost of interest bearing deposits. As a result of these efforts, the cost of interest bearing deposits was 0.58% for the fourth quarter of 2011, 19 basis points lower than the third quarter of 2011 and 39 basis points lower than the fourth quarter of 2010. Management closely and continually monitors market deposit rates and develops our pricing strategy to ensure we are competitive in the market and in-line with our liquidity position and funding needs.

    Mortgage banking revenue

    The Company recorded a record $9.4 million in total mortgage banking revenue during the fourth quarter of 2011, on closed loan volume of $363 million. This represents a 32% increase in revenue over the third quarter of 2011 and a 27% increase in revenue over the same period of the prior year. In the fourth quarter of 2011, the Company recognized a decrease in the fair value of the mortgage servicing right assets in the income statement of $1.0 million. The decline is primarily related to historically low mortgage rates during the quarter that have led to elevated levels of refinancing activity. Income from the origination and sale of mortgage loans was $9.2 million in the fourth quarter, representing a 26% increase over the prior quarter, and a 24% increase as compared to the same quarter of the prior year. As of December 31, 2011, the Company serviced $2.0 billion of mortgage loans for others, and the related mortgage servicing right asset is valued at $18.2 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 2011. 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, 2011, the credit risk adjusted interest spread for potential new issuances was estimated 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.

    As these instruments are no longer being originated or actively traded in the primary or secondary markets, the quarterly fair value adjustments are difficult to estimate. We utilize an income approach valuation technique to determine the fair value of these liabilities using our estimation of market discount rate assumptions. The Company monitors activity in the trust preferred and related markets, to the extent available, changes related to the current and anticipated future interest rate environment, and considers our entity-specific creditworthiness, to validate the reasonableness of the credit risk adjusted spread and effective yield utilized in our discounted cash flow model. Absent changes to the significant inputs utilized in the discounted cash flow model used to measure the fair value of these instruments at each reporting period, the cumulative discount for each junior subordinated debenture will reverse over time, ultimately returning the carrying values of these instruments to their notional values at their expected redemption dates. As of December 31, 2011, the total par value of junior subordinated debentures carried at fair value was $134.0 million, and the fair value was $82.9 million.

    Non-interest expense

    Total non-interest expense for the fourth quarter of 2011 was $85.3 million, compared to $86.2 million for the third quarter of 2011 and $87.9 million for the fourth quarter of 2010. Included in non-interest expense are several categories that are outside of the operational control of the Company or depend on changes in market values, including FDIC deposit insurance assessments and gain or loss on other real estate owned, as well as infrequently occurring expenses such as merger related costs. Excluding these non-controllable, valuation related or infrequently occurring items, the remaining non-interest expense items totaled $79.6 million for the fourth quarter of 2011, as compared to $77.3 million for the third quarter of 2011, and $77.8 million for the fourth quarter of 2010. The increase in non-interest expense in the current period over the prior quarter primarily relates to increased salaries and benefits expense related to mortgage and commercial banking loan production and the full-phase in of costs related to ten new stores opened in the second half of 2011.

    During the fourth quarter of 2011, the Company incurred external loan collection and OREO management expense of $4.4 million, compared to $3.7 million for the third quarter of 2011, and $5.0 million for the fourth quarter of 2010. Mortgage production related expense was $6.5 million in the fourth quarter of 2011, compared to $5.3 million in the third quarter of 2011, and $4.9 million for the fourth quarter of 2010.

    Total FDIC deposit insurance assessments during the fourth quarter of 2011 were $2.2 million, compared to $1.9 million in the prior quarter, and $4.2 million for the fourth quarter of 2010. The decrease in the deposit insurance expense in the current quarter as compared to the same period of the prior year resulted from a structural change in the deposit assessment calculation and rate schedule effective in the second quarter of 2011.

    Income taxes

    The Company recorded a provision for income taxes of $10.7 million in the fourth quarter of 2011, representing an effective tax rate of 33.4% on an annualized basis. 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, 2011 were $11.6 billion, compared to $11.8 billion on September 30, 2011 and $11.7 billion a year ago. Total gross loans and leases (covered and non-covered), and deposits, were $6.5 billion and $9.2 billion, respectively, as of December 31, 2011, as compared to $6.5 billion and $9.4 billion, respectively, as of September 30, 2011, and $6.4 billion and $9.4 billion, respectively, as of December 31, 2010.

    Total non-covered loans held for investment increased $60.0 million during the fourth quarter of 2011. This increase is principally due to new loan production in the current period, and primarily relates to growth in the commercial & industrial and residential real estate segments of our loan portfolio. Excluding non-covered charge-offs of $9.1 million, the non-covered loan portfolio increased $69.1 million in the current quarter. Covered loans declined $49.7 million during the fourth quarter of 2011. The covered loan portfolio will continue to run-off over time as borrower payments are received and as we work out and resolve troubled credits.

    Total deposits decreased $167.7 million, or 2%, on a sequential quarter basis, and $197.1 million, or 2%, from the same period of the prior year. The decline in deposits primarily results from the run-off of higher priced time deposits. The increase in securities sold under agreements to repurchase over the past year results from the FDIC discontinuing the allowance of collateralization for uninsured non-public funds deposits, while various customers still require some form of collateralization based on their business requirements.

    Due to the significant amount of liquidity in the banking system and generally 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, 2011, the Company had $446 million of interest bearing cash earning 0.25%, the target Federal Funds Rate. Over the course of the year, for interest bearing cash in excess of our internal target balance range, we have purchased short duration government-sponsored investment securities to match and offset the interest expense associated with the growth in our deposits. The Company’s available for sale investment portfolio was $3.2 billion as of December 31, 2011, representing a 9% increase over the prior year. 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 and to fund anticipated future loan production. Including secured off-balance sheet lines of credit, total available liquidity to the Company was $4.8 billion as of December 31, 2011, representing 41% of total assets and 51% of total deposits.

    Capital

    As of December 31, 2011, total shareholders’ equity was $1.7 billion, comprised entirely of common equity. Book value per common share was $14.91, tangible book value per common share was $8.87 and the ratio of tangible common equity to tangible assets was 9.14% (see explanation and reconciliation of these items in the Non-GAAP Financial Measures section below). In the fourth quarter the Company repurchased 2.4 million shares of common stock at an aggregate cost of $27.6 million (average price of $11.65 per share). The Company may repurchase up to 12.6 million of additional shares under the share repurchase plan, and will remain opportunistic based on market conditions.

    The Company’s estimated total risk-based capital ratio as of December 31, 2011 is 16.94%. This represents a decrease from September 30, 2011, as a result of increased risk weighted assets primarily due to non-covered loan growth and the decrease in capital due to the common stock repurchased during the quarter. Our total risk-based capital level is substantially 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 12.76% as of December 31, 2011. These capital ratios as of December 31, 2011 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 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 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 available to common shareholders (GAAP) to operating earnings (non-GAAP), and earnings per diluted common share (GAAP) to operating earnings per diluted share (non-GAAP) for the periods presented:

         
    Sequential

    Year over

    Quarter ended:QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
       
    Net earnings available to common shareholders $21,279$21,757$8,140 (2)% 161%
    Adjustments:

     

    Net loss on junior subordinated debentures

    carried at fair value, net of tax (1)

    332 332 332 0% 0%
    Merger related expenses, net of tax (1) 34   31   574 10% (94)%
    Operating earnings $21,645   $22,120   $9,046 (2)% 139%
     

    Earnings per diluted share:

    Earnings available to common shareholders $0.19$0.19$0.07 0% 171%
    Operating earnings $0.19$0.19$0.08 0% 138%
     
    Year over
    Year Ended:Year
    (Dollars in thousands, except per share data)

    Dec 31, 2011

      Dec 31, 2010   % Change  
     
    Net earnings available to common shareholders $74,140$16,067 361%
    Adjustments:
    Net loss (gain) on junior subordinated debentures

    carried at fair value, net of tax (1)

    1,318 (2,988) (144)%
    Bargain purchase gain on acquisitions, net of tax (1) -- (3,862) (100)%
    Merger related expenses, net of tax (1) 216   4,005 (95)%
    Operating earnings $75,674   $13,222 472%
     

    Earnings per diluted share:

    Earnings available to common shareholders $0.65$0.15 333%
    Operating earnings $0.66$0.12 450%
     

    (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 often 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 participating 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 the FDIC indemnification asset.

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

         
    SequentialYear over
    Quarter ended:QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
       
    Operating earnings $21,645$22,120$9,046 (2)% 139%
    Adjustments:
    Provision for non-covered loan and lease losses 6,642 9,089 17,567 (27)% (62)%
    Provision for covered loan and lease losses 698 4,420 4,484 (84)% (84)%
    Net loss on non-covered other real estate owned 1,723 2,289 4,555 (25)% (62)%
    Net loss on covered other real estate owned 1,703 4,755 328 (64)% 419%
    Non-covered loan & OREO workout costs 2,149 1,725 3,242 25% (34)%
    Covered loan & OREO workout costs 2,281 1,974 1,749 16% 30%
    Covered losses impact on FDIC

    indemnification asset

    (3,746) (8,919) (4,849) (58)% (23)%
    Operating provision for income taxes 10,966 10,959 4,807 0% 128%
    Dividends and undistributed earnings allocated to

    participating securities

    103   105   18 (2)% 472%
    Pre-tax, pre-credit cost operating income $44,164   $48,517   $40,947 (9)% 8%
     
       
    Year over
    Year Ended:Year
    (Dollars in thousands, except per share data)Dec 31, 2011   Dec 31, 2010   % Change
     
    Operating earnings $75,674$13,222 472%
    Adjustments:
    Provision for non-covered loan and lease losses 46,220 113,668 (59)%
    Provision for covered loan and lease losses 16,141 5,151 213%
    Net loss on non-covered other real estate owned 10,690 8,097 32%
    Net loss (gain) on covered other real estate owned 7,481 (2,172) (444)%
    Non-covered loan & OREO workout costs 8,909 9,078 (2)%
    Covered loan & OREO workout costs 8,243 5,192 59%
    Covered losses impact on FDIC indemnification asset (25,492) (6,375) 300%
    Operating provision for income taxes 37,765 3,908 866%
    Dividends and undistributed earnings allocated to

    participating securities

    356 67 431%
    Preferred stock dividends --   12,192 (100)%
    Pre-tax, pre-credit cost operating income $185,987   $162,028 15%
     

    Management believes core net interest income and core net interest margin are useful financial measures because they enable investors to evaluate the underlying growth or compression in these values excluding interest income adjustments related to credit quality. Management uses these measures to evaluate core net interest income operating results exclusive of credit costs, in order to monitor our effectiveness in growing higher interest yielding assets and managing our cost of interest bearing liabilities over time. Core net interest income is calculated as net interest income, adjusting tax exempt interest income to its taxable equivalent, adding back interest and fee reversals related to new non-accrual loans during the period, and deducting the interest income gains recognized from loan disposition activities within covered loan pools. Core net interest margin is calculated by dividing annualized core net interest income by a period’s average interest earning assets.

    The following table provides the reconciliation of net interest income (GAAP) to core net interest income (non-GAAP), and net interest margin (GAAP) to core net interest margin (non-GAAP) for the periods presented:

         
    SequentialYear over
    Quarter ended:QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
       
    Net interest income $106,655$107,534$107,115 (1)% 0%

    Tax equivalent adjustment (1)

    1,091   1,053   1,066 4% 2%

    Net interest income – tax equivalent basis (1)

    107,746 108,587 108,181 (1)% 0%
     
    Adjustments:

    Interest and fee recoveries or reversals on non-accrual loans

    (167) 149 938 (212)% (118)%
    Covered loan disposal gains (6,660)   (4,793)   (13,272) 39% (50)%

    Core net interest income – tax equivalent basis (1)

    $100,919   $103,943   $95,847 (3)% 5%
     
    Average interest earning assets $10,348,231$10,455,398$10,355,332 (1)% 0%
     

    Net interest margin – consolidated (1)

    4.13% 4.12% 4.14%

    Core net interest margin – consolidated (1)

    3.87% 3.94% 3.67%
     
       
    Year over
    Year Ended:Year
    (Dollars in thousands, except per share data)Dec 31, 2011   Dec 31, 2010   % Change
     
    Net interest income $428,452$394,784 9%

    Tax equivalent adjustment (1)

    4,296   4,270 1%

    Net interest income – tax equivalent basis (1)

    432,748 399,054 8%
     
    Adjustments:
    Interest and fee reversals on non-accrual loans 1,751 3,259 (46)%
    Covered loan disposal gains (26,327)   (26,945) (2)%

    Core net interest income – tax equivalent basis (1)

    $408,172   $375,368 9%
     
    Average interest earning assets $10,332,242$9,567,341 8%
     

    Net interest margin – consolidated (1)

    4.19% 4.17%

    Core net interest margin – consolidated (1)

    3.95% 3.92%
     

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

    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). 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, 2011   Sep 30, 2011   Dec 31, 2010
     
    Total shareholders' equity $1,672,413$1,695,120$1,642,574
    Subtract:
    Goodwill and other intangible assets, net 677,224   678,448   681,969
    Tangible common shareholders' equity $995,189   $1,016,672   $960,605
     
    Total assets $11,563,355$11,772,883$11,668,710
    Subtract:
    Goodwill and other intangible assets, net 677,224   678,448   681,969
    Tangible assets $10,886,131   $11,094,435   $10,986,741
     
    Common shares outstanding at period end 112,164,891 114,538,536 114,536,814
     
    Tangible common equity ratio 9.14% 9.16% 8.74%
    Tangible book value per common share $8.87$8.88$8.39
     

    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 locations between San Francisco, California, and Seattle, Washington, 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 Private Bank serves high net worth individuals and non-profits, providing trust and investment services. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquaholdingscorp.com.

    Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, January 26, 2012, at 10:00 a.m. PST (1:00 p.m. EST) during which the company will discuss fourth quarter and 2011 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 888-349-9618 a few minutes before 10:00 a.m. The conference ID is “7348653.” A re-broadcast will be available approximately two hours after the conference call by dialing 888-203-1112 and entering passcode “7348653” or by visiting www.umpquaholdingscorp.com. Information to be discussed in the teleconference will be available on the company’s website after the market closes on Wednesday, January 25, 2012.

    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 continuing to advance our strategic initiatives, our pricing strategy,our success in resolving remaining credits at the estimated disposition value of related collateral, the mitigating effect of FDIC loss sharing agreements on the covered loan portfolio, loan production, 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, lack of strategic growth opportunities or our failure to execute on those opportunities,our inability to effectively manage problem credits,certain loan assets becoming ineligible for loss sharing, unanticipated deterioration in the commercial real estate loan portfolio, unanticipated increases in the cost of deposits and continued negative pressure on interest income associated with our large cash position.

     
    Umpqua Holdings Corporation
    Consolidated Statements of Operations
    (Unaudited)
        Sequential   Year over
    Quarter Ended:QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
    Interest income    
    Non-covered loans and leases $80,607$81,041$83,269 (1)% (3)%
    Covered loans and leases 21,288 20,950 26,263 2% (19)%
    Interest and dividends on investments:
    Taxable 17,462 21,932 18,323 (20)% (5)%
    Exempt from federal income tax 2,174 2,136 2,184 2% 0%
    Dividends 3 2 5 50% (40)%
    Temporary investments & interest bearing deposits 383   466   633 (18)% (39)%
    Total interest income 121,917 126,527 130,677 (4)% (7)%
    Interest expense
    Deposits 10,800 14,579 19,076 (26)% (43)%
    Repurchase agreements and fed funds purchased 134 152 135 (12)% (1)%
    Term debt 2,333 2,332 2,397 0% (3)%
    Junior subordinated debentures 1,995   1,930   1,954 3% 2%
    Total interest expense 15,262 18,993 23,562 (20)% (35)%
    Net interest income 106,655 107,534 107,115 (1)% 0%
    Provision for non-covered loan and lease losses 6,642 9,089 17,567 (27)% (62)%
    Provision for covered loan and lease losses 698 4,420 4,484 (84)% (84)%
    Non-interest income
    Service charges 7,886 8,849 8,168 (11)% (3)%
    Brokerage fees 3,019 3,115 3,274 (3)% (8)%
    Mortgage banking revenue, net 9,384 7,084 7,389 32% 27%
    Net (loss) gain on investment securities (43) 1,813 (87) (102)% (51)%
    Loss on junior subordinated debentures
    carried at fair value (554) (554) (554) 0% 0%
    Change in FDIC indemnification asset (5,133) 1,611 (5,370) (419)% (4)%
    Other income 3,569   2,860   2,341 25% 52%
    Total non-interest income 18,128 24,778 15,161 (27)% 20%
    Non-interest expense
    Salaries and employee benefits 46,039 45,023 44,067 2% 4%
    Net occupancy and equipment 13,417 12,803 12,344 5% 9%
    Intangible amortization 1,224 1,222 1,357 0% (10)%
    FDIC assessments 2,207 1,867 4,186 18% (47)%
    Net loss on non-covered other real estate owned 1,723 2,289 4,555 (25)% (62)%
    Net loss on covered other real estate owned 1,703 4,755 328 (64)% 419%
    Merger related expenses 57 51 957 12% (94)%
    Other expense 18,969   18,214   20,070 4% (5)%
    Total non-interest expense 85,339 86,224 87,864 (1)% (3)%
    Income before provision for income taxes 32,104 32,579 12,361 (1)% 160%
    Provision for income taxes 10,722   10,717   4,203 0% 155%
    Net income 21,382 21,862 8,158 (2)% 162%
    Dividends and undistributed earnings
    allocated to participating securities 103   105   18 (2)% 472%
    Net earnings available to common shareholders $21,279   $21,757   $8,140 (2)% 161%
     
    Weighted average basic shares outstanding 113,164,505 114,540,500 114,533,505 (1)% (1)%
    Weighted average diluted shares outstanding 113,320,750 114,691,063 114,773,205 (1)% (1)%
    Earnings per common share – basic $0.19$0.19$0.07 0% 171%
    Earnings per common share – diluted $0.19$0.19$0.07 0% 171%
     
     

    Umpqua Holdings Corporation

    Consolidated Statements of Operations
    (Unaudited)
         
    Year Ended:
    (Dollars in thousands, except per share data)Dec 31, 2011   Dec 31, 2010   % Change
    Interest income
    Loans and leases $319,702$336,320 (5)%
    Covered loans and leases 86,011 73,812 17%
    Interest and dividends on investments:
    Taxable 85,785 67,388 27%
    Exempt from federal income tax 8,653 8,839 (2)%
    Dividends 12 14 (14)%
    Temporary investments & interest bearing cash 1,590   2,223 (28)%
    Total interest income 501,753 488,596 3%
    Interest expense
    Deposits 55,743 76,241 (27)%
    Repurchase agreements and fed funds purchased 539 517 4%
    Term debt 9,255 9,229 0%
    Junior subordinated debentures 7,764   7,825 (1)%
    Total interest expense 73,301 93,812 (22)%
    Net interest income 428,452 394,784 9%
    Provision for non-covered loan and lease losses 46,220 113,668 (59)%
    Provision for covered loan and lease losses 16,141 5,151 213%
    Non-interest income
    Service charges 33,096 34,874 (5)%
    Brokerage fees 12,787 11,661 10%
    Mortgage banking revenue, net 26,550 21,214 25%
    Net gain on investment securities 7,376 1,912 286%
    (Loss) gain on junior subordinated debentures
    carried at fair value (2,197) 4,980 (144)%
    Bargain purchase gain on acquisitions -- 6,437 (100)%
    Change in FDIC indemnification asset (6,168) (16,445) (62)%
    Other income 12,674   11,271 12%
    Total non-interest income 84,118 75,904 11%
    Non-interest expense
    Salaries and employee benefits 179,480 162,875 10%
    Net occupancy and equipment 51,284 45,940 12%
    Intangible amortization 4,948 5,389 (8)%
    FDIC assessments 10,768 15,095 (29)%
    Net loss on non-covered other real estate owned 10,690 8,097 32%
    Net loss (gain) on covered other real estate owned 7,481 (2,172) (444)%
    Merger related expenses 360 6,675 (95)%
    Other expense 73,960   75,839 (2)%
    Total non-interest expense 338,971 317,738 7%
    Income before provision for income taxes 111,238 34,131 226%
    Provision for income taxes 36,742   5,805 533%
    Net income 74,496 28,326 163%
    Dividends and undistributed earnings
    allocated to participating securities 356 67 431%
    Preferred stock dividend --   12,192 (100)%
    Net earnings available to common shareholders $74,140   $16,067 361%
     
    Weighted average basic shares outstanding 114,219,871 107,922,560 6%
    Weighted average diluted shares outstanding 114,408,580 108,153,469 6%
    Earnings per common share – basic $0.65$0.15 333%
    Earnings per common share – diluted $0.65$0.15 333%
     
             
    Umpqua Holdings Corporation
    Consolidated Balance Sheets
    (Unaudited)
     
    SequentialYear over
    QuarterYear
    (Dollars in thousands, except per share data)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
    Assets:
    Cash and due from banks $152,265$151,548$111,946 0% 36%
    Interest bearing deposits 445,954 767,617 891,634 (42)% (50)%
    Temporary investments 547 552 545 (1)% 0%
    Investment securities:
    Trading, at fair value 2,309 2,481 3,024 (7)% (24)%
    Available for sale, at fair value 3,168,578 3,090,064 2,919,180 3% 9%
    Held to maturity, at amortized cost 4,714 4,877 4,762 (3)% (1)%
    Loans held for sale 98,691 94,295 75,626 5% 30%
    Non-covered loans and leases 5,888,098 5,828,114 5,658,987 1% 4%
    Allowance for non-covered loan and lease losses (92,968)   (92,932)   (101,921) 0% (9)%
    Loans and leases, net 5,795,130 5,735,182 5,557,066 1% 4%
    Covered loans and leases, net 622,451 672,130 785,898 (7)% (21)%
    Restricted equity securities 32,581 32,709 34,475 0% (5)%
    Premises and equipment, net 152,366 146,887 136,599 4% 12%
    Mortgage servicing rights, at fair value 18,184 16,612 14,454 9% 26%
    Goodwill and other intangibles, net 677,224 678,448 681,969 0% (1)%
    Non-covered other real estate owned 34,175 34,787 32,791 (2)% 4%
    Covered other real estate owned 19,491 23,039 29,863 (15)% (35)%
    FDIC indemnification asset 91,089 106,378 146,413 (14)% (38)%
    Other assets 247,606   215,277   242,465 15% 2%
    Total assets $11,563,355   $11,772,883   $11,668,710 (2)% (1)%
     
    Liabilities:
    Deposits $9,236,690$9,404,410$9,433,805 (2)% (2)%
    Securities sold under agreements to repurchase 124,605 146,361 73,759 (15)% 69%
    Term debt 255,676 256,198 262,760 0% (3)%
    Junior subordinated debentures, at fair value 82,905 82,324 80,688 1% 3%
    Junior subordinated debentures, at amortized cost 102,544 102,624 102,866 0% 0%
    Other liabilities 88,522   85,846   72,258 3% 23%
    Total liabilities 9,890,942 10,077,763 10,026,136 (2)% (1)%
     
    Shareholders' equity:
    Common stock 1,514,913 1,541,753 1,540,928 (2)% (2)%
    Retained earnings 123,726 110,237 76,701 12% 61%
    Accumulated other comprehensive income 33,774   43,130   24,945 (22)% 35%
    Total shareholders' equity 1,672,413   1,695,120   1,642,574 (1)% 2%
    Total liabilities and shareholders' equity $11,563,355   $11,772,883   $11,668,710 (2)% (1)%
     
    Common shares outstanding at period end 112,164,891 114,538,536 114,536,814 (2)% (2)%
    Book value per common share $14.91$14.80$14.34 1% 4%
    Tangible book value per common share $8.87$8.88$8.39 0% 6%
    Tangible equity - common $995,189$1,016,672$960,605 (2)% 4%
    Tangible common equity to tangible assets 9.14% 9.16% 8.74%
     
             
    Umpqua Holdings Corporation
    Non-covered Loan & Lease Portfolio
    (Unaudited)
     
    SequentialYear over
    (Dollars in thousands)Dec 31, 2011Sep 30, 2011Dec 31, 2010QuarterYear
    Amount   MixAmount   MixAmount   Mix% Change   % Change

    Non-covered loans & leases:

         
    Commercial real estate:
    Non-owner occupied $2,395,919 41% $2,393,732 41% $2,399,665 42% 0% 0%
    Owner occupied 1,162,376 20% 1,149,242 20% 1,083,810 19% 1% 7%
    Residential real estate 566,357 10% 535,837 9% 484,185 9% 6% 17%
    Construction 277,210 5% 299,599 5% 412,892 7% (7)% (33)%
    Total real estate 4,401,862 75% 4,378,410 75% 4,380,552 77% 1% 0%
    Commercial 1,427,865 24% 1,397,910 24% 1,224,416 22% 2% 17%
    Leases 29,845 1% 30,028 1% 31,008 1% (1)% (4)%
    Installment and other 39,606 1% 33,016 1% 34,041 1% 20% 16%
    Deferred loan fees, net (11,080) 0% (11,250) 0% (11,030) 0% (2)% 0%
    Total $5,888,098 100% $5,828,114 100% $5,658,987 100% 1% 4%
     
     
    Umpqua Holdings Corporation
    Covered Loan & Lease Portfolio, Net
    (Unaudited)
            Sequential   Year over
    (Dollars in thousands)Dec 31, 2011Sep 30, 2011Dec 31, 2010QuarterYear
    Amount   MixAmount   MixAmount   Mix% Change   % Change

    Covered loans & leases:

         
    Commercial real estate $468,800 75% $500,476 74% $573,264 73% (6)% (18)%
    Residential real estate 63,598 10% 69,079 10% 75,605 10% (8)% (16)%
    Construction 28,898 5% 32,165 5% 42,213 5% (10)% (32)%
    Total real estate 561,296 90% 601,720 90% 691,082 88% (7)% (19)%
    Commercial 53,610 9% 62,279 9% 83,722 11% (14)% (36)%
    Installment and other 7,545 1% 8,131 1% 11,094 1% (7)% (32)%
    Total $622,451 100% $672,130 100% $785,898 100% (7)% (21)%
     

    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, 2011Sep 30, 2011Dec 31, 2010QuarterYear
    Amount   MixAmount   MixAmount   Mix% Change   % Change

    Deposits:

         
    Demand, non-interest bearing $1,913,121 21% $1,940,865 21% $1,616,687 17% (1)% 18%
    Demand, interest bearing 993,579 11% 889,643 9% 927,224 10% 12% 7%
    Money market 3,661,785 40% 3,676,265 39% 3,467,549 37% 0% 6%
    Savings 386,528 4% 384,540 4% 349,695 4% 1% 11%
    Time 2,281,677 25% 2,513,097 27% 3,072,650 33% (9)% (26)%
    Total $9,236,690 100% $9,404,410 100% $9,433,805 100% (2)% (2)%
     

    Total core deposits-ending (1)

    $7,607,185 82% $7,591,561 81% $7,242,749 77% 0% 5%
     

    Number of open accounts:

    Demand, non-interest bearing 180,271 182,207 175,421 (1)% 3%
    Demand, interest bearing 49,144 45,846 45,016 7% 9%
    Money market 40,545 41,524 40,391 (2)% 0%
    Savings 84,519 84,404 86,773 0% (3)%
    Time 32,153 34,336 41,832 (6)% (23)%
    Total 386,632 388,317 389,433 0% (1)%
     

    Average balance per account:

    Demand, non-interest bearing $10.6$10.7$9.2
    Demand, interest bearing 20.2 19.4 20.6
    Money market 90.3 88.5 85.8
    Savings 4.6 4.6 4.0
    Time 71.0 73.2 73.5
    Total $23.9$24.2 24.2
     

    (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, 2011   Sep 30, 2011   Dec 31, 2010% Change% Change
     

    Non-covered, non-performing assets:

    Non-covered loans on non-accrual status $80,562$99,856$138,177 (19)% (42)%
    Non-covered loans past due 90+ days & accruing 10,821   11,716   7,071 (8)% 53%
    Total non-performing loans 91,383 111,572 145,248 (18)% (37)%
    Non-covered other real estate owned 34,175   34,787   32,791 (2)% 4%
    Total $125,558   $146,359   $178,039 (14)% (29)%
     
    Non-covered performing restructured loans $80,563$80,590$84,441 0% (5)%
     
    Non-covered loans past due 30-89 days $35,227$49,205$48,217 (28)% (27)%
    Non-covered loans past due 30-89 days to

    non-covered loans and leases

    0.60% 0.84% 0.85%
     
    Non-covered, non-performing loans to
    non-covered loans and leases 1.55% 1.91% 2.57%
    Non-covered, non-performing assets to total assets 1.09% 1.24% 1.53%
     

    Covered non-performing assets:

    Covered loans on non-accrual status $--   $--   $-- nm nm
    Total non-performing loans -- -- -- nm nm
    Covered other real estate owned 19,491   23,039   29,863 (15)% (35)%
    Total $19,491   $23,039   $29,863 (15)% (35)%
     
    Covered non-performing loans to
    covered loans and leases --% --% --%
    Covered non-performing assets to total assets 0.17% 0.20% 0.26%
     

    Total non-performing assets:

    Loans on non-accrual status $80,562$99,856$138,177 (19)% (42)%
    Loans past due 90+ days & accruing 10,821   11,716   7,071 (8)% 53%
    Total non-performing loans 91,383 111,572 145,248 (18)% (37)%
    Other real estate owned 53,666   57,826   62,654 (7)% (14)%
    Total $145,049   $169,398   $207,902 (14)% (30)%
     
    Non-performing loans to loans and leases 1.40% 1.72% 2.25%
    Non-performing assets to total assets 1.25% 1.44% 1.78%
     

    nm = not meaningful

     
     
    Umpqua Holdings Corporation
    Credit Quality – Allowance for Non-covered Credit Losses
    (Unaudited)  
            Sequential   Year over
    Quarter EndedQuarterYear
    (Dollars in thousands)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change

    Allowance for non-covered credit losses:

    Balance beginning of period $92,932$97,795$108,098
    Provision for non-covered loan and

    lease losses

    6,642 9,089 17,567 (27)% (62)%
     
    Charge-offs (9,112) (16,453) (25,770) (45)% (65)%
    Recoveries 2,506   2,501   2,026 0% 24%
    Net charge-offs (6,606) (13,952) (23,744) (53)% (72)%
             
    Total allowance for non-covered loan

    and lease losses

    92,968 92,932 101,921 0% (9)%
     
    Reserve for unfunded commitments 940   971   818 (3)% 15%
    Total allowance for non-covered

    credit losses

    $93,908   $93,903   $102,739 0% (9)%
     
    Net charge-offs to average non-covered
    loans and leases (annualized) 0.45% 0.96% 1.66%
    Recoveries to gross charge-offs 27.50% 15.20% 7.86%
    Allowance for non-covered credit losses to
    non-covered loans and leases 1.59% 1.61% 1.82%

     

     
    Year Ended:
    (Dollars in thousands)Dec 31, 2011   Dec 31, 2010   % Change  

    Allowance for non-covered credit losses:

    Balance beginning of period $101,921$107,657

    Provision for non-covered loan and lease losses

    46,220 113,668 (59)%
     
    Charge-offs (65,051) (128,501) (49)%
    Recoveries 9,878   9,097 9%
    Net charge-offs (55,173) (119,404) (54)%
         

    Total allowance for non-covered loan and lease losses

    92,968 101,921 (9)%
     
    Reserve for unfunded commitments 940   818 15%

    Total allowance for non-covered credit losses

    $93,908   $102,739 (9)%
     
    Net charge-offs to average non-covered
    loans and leases 0.96% 2.06%
    Recoveries to gross charge-offs 15.19% 7.08%
     
     
    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
        Sequential   Year over
    Quarter Ended:QuarterYear
    Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   Change   Change

    Average Rates:

       
    Yield on non-covered loans and leases 5.36% 5.51% 5.73% (0.15) (0.37)
    Yield on covered loans and leases 12.96% 12.04% 12.86% 0.92 0.10
    Yield on taxable investments 2.42% 2.96% 2.87% (0.54) (0.45)

    Yield on tax-exempt investments (1)

    5.63% 5.77% 5.74% (0.14) (0.11)
    Yield on temporary investments & interest bearing cash 0.25% 0.25% 0.25% 0.00 0.00

    Total yield on earning assets (1)

    4.72% 4.84% 5.05% (0.12) (0.33)
     
    Cost of interest bearing deposits 0.58% 0.77% 0.97% (0.19) (0.39)
    Cost of securities sold under agreements
    to repurchase and fed funds purchased 0.38% 0.49% 0.79% (0.11) (0.41)
    Cost of term debt 3.62% 3.61% 3.57% 0.01 0.05
    Cost of junior subordinated debentures 4.28% 4.15% 4.24% 0.13 0.04
    Total cost of interest bearing liabilities 0.76% 0.93% 1.12% (0.17) (0.36)
     

    Net interest spread (1)

    3.96% 3.91% 3.93% 0.05 0.03

    Net interest margin – Consolidated (1)

    4.13% 4.12% 4.14% 0.01 (0.01)
     

    Net interest margin – Bank (1)

    4.20% 4.19% 4.21% 0.01 (0.01)
     

    As reported (GAAP):

    Return on average assets 0.73% 0.74% 0.28% (0.01) 0.45
    Return on average tangible assets 0.77% 0.78% 0.29% (0.01) 0.48

    Return on average common equity

    5.03% 5.11% 1.95% (0.08) 3.08
    Return on average tangible common equity 8.43% 8.55% 3.30% (0.12) 5.13
    Efficiency ratio – Consolidated 67.79% 64.65% 71.24% 3.14 (3.45)
    Efficiency ratio – Bank 65.56% 62.41% 68.90% 3.15 (3.34)
     

    Operating basis (non-GAAP): (2)

    Return on average assets 0.74% 0.75% 0.31% (0.01) 0.43
    Return on average tangible assets 0.79% 0.80% 0.33% (0.01) 0.46
    Return on average common equity 5.11% 5.20% 2.16% (0.09) 2.95
    Return on average tangible common equity 8.57% 8.70% 3.67% (0.13) 4.90
    Efficiency ratio – Consolidated 67.45% 64.35% 70.15% 3.10 (2.70)
    Efficiency ratio – Bank 65.51% 62.37% 68.12% 3.14 (2.61)
     
    (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, 2011   Dec 31, 2010   Change

    Average Rates:

     
    Yield on non-covered loans and leases 5.52% 5.77% (0.25)
    Yield on covered loans and leases 12.17% 10.86% 1.31
    Yield on taxable investments 2.89% 3.46% (0.57)
    Yield on tax-exempt investments (1) 5.78% 5.76% 0.02
    Yield on temporary investments & interest bearing cash 0.25% 0.25% 0.00
    Total yield on earning assets (1) 4.90% 5.15% (0.25)
     
    Cost of interest bearing deposits 0.74% 1.08% (0.34)
    Cost of securities sold under agreements
    to repurchase and fed funds purchased 0.48% 0.95% (0.47)
    Cost of term debt 3.59% 3.53% 0.06
    Cost of junior subordinated debentures 4.22% 4.25% (0.03)
    Total cost of interest bearing liabilities 0.91% 1.24% (0.33)
     
    Net interest spread (1) 3.99% 3.91% 0.08
    Net interest margin – Consolidated (1) 4.19% 4.17% 0.02
     
    Net interest margin – Bank (1) 4.26% 4.24% 0.02
     

    As reported (GAAP):

    Return on average assets 0.64% 0.15% 0.49
    Return on average tangible assets 0.68% 0.16% 0.52
    Return on average common equity 4.43% 1.01% 3.42
    Return on average tangible common equity 7.47% 1.76% 5.71
    Efficiency ratio – Consolidated 65.58% 66.90% (1.32)
    Efficiency ratio – Bank 63.26% 65.08% (1.82)
     

    Operating basis (non-GAAP): (2)

    Return on average assets 0.65% 0.12% 0.53
    Return on average tangible assets 0.69% 0.13% 0.56
    Return on average common equity 4.53% 0.83% 3.70
    Return on average tangible common equity 7.63% 1.45% 6.18
    Efficiency ratio – Consolidated 65.24% 67.11% (1.87)
    Efficiency ratio – Bank 63.19% 64.54% (1.35)
     
    (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)
        Sequential   Year over
    Quarter Ended:QuarterYear
    (Dollars in thousands)Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
       
    Temporary investments & interest bearing cash $610,019$741,030$1,007,345 (18)% (39)%
    Investment securities, taxable 2,886,030 2,964,361 2,550,856 (3)% 13%
    Investment securities, tax-exempt 231,934 221,218 226,371 5% 2%
    Loans held for sale 112,191 71,527 68,982 57% 63%
    Non-covered loans and leases 5,855,751 5,767,172 5,691,794 2% 3%
    Covered loans and leases 651,506   690,090   809,984 (6)% (20)%
    Total interest earning assets 10,348,231 10,455,398 10,355,332 (1)% 0%
    Goodwill & other intangible assets, net 677,735 678,967 681,966 0% (1)%
    Total assets 11,606,524 11,708,079 11,695,980 (1)% (1)%
     
    Non-interest bearing demand deposits 1,920,594 1,829,245 1,624,285 5% 18%
    Interest bearing deposits 7,349,759   7,558,357   7,826,703 (3)% (6)%
    Total deposits 9,270,353 9,387,602 9,450,988 (1)% (2)%
    Interest bearing liabilities 7,932,082 8,121,323 8,343,628 (2)% (5)%
     
    Shareholders’ equity - common 1,679,369 1,688,082 1,659,151 (1)% 1%
    Tangible common equity (1) 1,001,634 1,009,115 977,185 (1)% 3%
     
      Year Ended:
    (Dollars in thousands)Dec 31, 2011   Dec 31, 2010   % Change
       
    Temporary investments & interest bearing cash $638,524$883,324 (28)%
    Investment securities, taxable 2,968,501 1,946,222 53%
    Investment securities, tax-exempt 224,085 227,589 (2)%
    Loans held for sale 70,335 45,185 56%
    Non-covered loans and leases 5,723,771 5,783,452 (1)%
    Covered loans and leases 707,026   681,569 4%
    Total interest earning assets 10,332,242 9,567,341 8%
    Goodwill & other intangible assets, net 679,588 674,597 1%
    Total assets 11,600,430 10,830,486 7%
     
    Non-interest bearing demand deposits 1,782,354 1,529,165 17%
    Interest bearing deposits 7,519,624   7,078,815 6%
    Total deposits 9,301,978 8,607,980 8%
    Interest bearing liabilities 8,074,364 7,578,815 7%
     
    Shareholders’ equity - common 1,671,893 1,589,393 5%
    Tangible common equity (1) 992,305 914,796 8%

    (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, 2011   Sep 30, 2011   Dec 31, 2010% Change% Change
       

    Mortgage Servicing Rights (MSR):

    Mortgage loans serviced for others $2,009,849$1,848,220$1,603,414 9% 25%
    MSR asset, at fair value 18,184 16,612 14,454 9% 26%
    MSR as % of serviced portfolio 0.90% 0.90% 0.90%
     

    Mortgage Banking Revenue:

    Origination and sale $9,181$7,309$7,395 26% 24%
    Servicing 1,250 1,205 1,016 4% 23%
    Change in fair value of MSR asset (1,047)   (1,430)   (1,022) (27)% 2%
    Total $9,384   $7,084   $7,389 32% 27%
     
     
    Closed loan volume$363,189$279,578$281,086 30% 29%
     
       
    Year Ended:
    (Dollars in thousands)Dec 31, 2011   Dec 31, 2010   % Change
     

    Mortgage Banking Revenue:

    Origination and sale $24,824$21,233 17%
    Servicing 4,714 3,860 22%
    Change in fair value of MSR asset (2,988)   (3,879) (23)%
    Total $26,550   $21,214 25%
     
    Closed loan volume$994,517$785,437 27%
     

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

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

    The following is a distribution of non-covered, non-performing assets by type and by region as of December 31, 2011:

     
    Table 1 - 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 $9,226 $-- $-- $4,172$63$2,375$15,836
    Commercial construction 921 -- 568 -- 1,859 -- 3,348
    Commercial real estate 27,183 617 2,286 1,159 7,494 5,747 44,486
    Commercial 6,181 1,961 334 1,271 1,462 5,683 16,892
    Other -- -- -- -- -- -- --
    Total $43,511$2,578$3,188$6,602$10,878$13,805$80,562
     

    Loans 90 days past due & accruing:

    Residential development $-- $-- $-- $-- $-- $-- $--
    Commercial construction -- -- -- -- 575 -- 575
    Commercial real estate -- -- -- -- -- -- --
    Commercial -- -- -- -- 47 2,529 2,576
    Other 5,590 200 449 2 578 851 7,670
    Total $5,590$200$449$2$1,200$3,380$10,821
                 
    Total non-performing loans $49,101$2,778$3,637$6,604$12,078$17,185$91,383
     

    Other real estate owned:

    Residential development $1,487$944$1,457$589$3,494$784$8,755
    Commercial construction 2,383 400 -- -- 3,166 -- 5,949
    Commercial real estate 4,673 140 786 -- 7,618 2,700 15,917
    Commercial 50 306 -- 521 -- -- 877
    Other 2,099 -- 212 -- 366 -- 2,677
    Total $10,692$1,790$2,455$1,110$14,644$3,484$34,175
                 
    Total non-performing assets $59,793$4,568$6,092$7,714$26,722$20,669$125,558
    % of total48%4%5%6%21%16%100%
     

    The Company has aggressively charged-down impaired assets to their disposition values. As of December 31, 2011, the non-covered, non-performing assets of $125.6 million have been written down by 38%, or $76.3 million, from their current par balance of $201.9 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, 2011:

     
    Table 2 – Non-covered loans past due 30-89 days by type and by region
    (Dollars in thousands)      
      Northwest   Central   SouthernGreaterNorthern  
    Oregon   Oregon   Oregon   Washington   Sacramento   California   Total

    Loans 30-89 days past due:

    Residential development $-- $-- $-- $-- $4,171 $-- $4,171
    Commercial construction -- -- -- 662 -- -- 662
    Commercial real estate 1,721 -- 1,029 -- 6,867 8,886 18,503
    Commercial 901 -- 264 -- 6,077 2,125 9,367
    Other 1,780   --   130   10   4   600   2,524
    Total $4,402   $--   $1,423   $672   $17,119   $11,611   $35,227
     

    The following is a distribution of non-covered loans past due 30 to 89 days by loan type as of December 31, 2011, September 30, 2011 and December 31, 2010:

     

    Table 3 – Non-covered loans past due 30-89 days trends

    (Dollars in thousands)
          Sequential   Year
    QuarterOver Year
    Dec 31, 2011   Sep 30, 2011   Dec 31, 2010   % Change   % Change
    Loans 30-89 days past due:
    Residential development $4,171$1,319$640 (216)% 552%
    Commercial construction 662 583 8,898 14% (93)%
    Commercial real estate 18,503 30,159 22,924 (39)% (19)%
    Commercial 9,367 8,919 9,422 5% (1)%
    Other 2,524   8,225   6,333 (69)% (60)%
    Total $35,227   $49,205   $48,217 (28)% (27)%
     

    The following is a distribution of non-covered restructured loans by loan type by region as of December 31, 2011:

     
    Table 4 – 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 $14,195$943 $-- $-- $18,826 $-- $33,964
    Commercial construction 8,967 -- -- -- 8,171 2,858 19,996
    Commercial real estate 10,148 -- 5,243 -- 4,618 2,602 22,611
    Commercial -- -- -- -- 3,191 672 3,863
    Other --   --   --   --   --   129   129
    Total $33,310   $943   $5,243   $--   $34,806   $6,261   $80,563
     

    The following is a distribution of the non-covered term commercial real estate portfolio by type and by region as of December 31, 2011:

     
    Table 5 – Non-covered commercial real estate loan portfolio by type and by region
    (Dollars in thousands)      
      Northwest   Central   SouthernGreater   Northern
    Oregon   Oregon   Oregon   Washington   Sacramento   California   Total

    Non-owner occupied:

    Commercial building $137,362$4,938$29,425$51,557$56,891$127,825$407,998
    Medical office 87,420 217 8,991 -- 8,683 15,614 120,925
    Professional office 152,048 4,980 51,580 19,961 105,690 59,489 393,748
    Storage 40,786 144 15,899 4,044 11,261 45,352 117,486
    Multifamily 5+ 69,555 485 13,477 9,721 17,978 40,599 151,815
    Resort 124 -- 666 -- -- 392 1,182
    Retail 180,805 6,040 30,990 12,309 167,227 64,638 462,009
    Residential 28,773 96 7,711 4,225 4,534 20,377 65,716
    Farmland & agriculture 2,228 11 -- -- -- 16,324 18,563
    Apartments 67,575 -- 9,134 15,557 17,857 15,833 125,956
    Assisted living 111,688 -- 56,978 190 10,310 22,359 201,525
    Hotel/motel 60,842 -- 817 690 17,294 41,804 121,447
    Industrial 42,674 2,301 4,717 5,339 29,804 22,006 106,841
    RV park 33,425 -- 18,934 -- 3,023 6,073 61,455
    Warehouse 10,107 -- -- -- 617 2,196 12,920
    Other 18,591   245   1,057   302   1,517   4,621   26,333
    Total $1,044,003$19,457$250,376$123,895$452,686$505,502$2,395,919
     

    Owner occupied:

    Commercial building $198,831$2,925$36,580$21,835$63,927$130,793$454,891
    Medical office 95,204 3,593 24,664 930 8,872 26,623 159,886
    Professional office 73,623 2,190 10,351 2,197 19,953 21,008 129,322
    Storage -- -- -- -- -- -- --
    Multifamily 5+ 758 -- 42 3,740 -- 134 4,674
    Resort 8,730 -- 4,201 -- 2,771 780 16,482
    Retail 42,710 620 12,280 3,568 42,739 49,647 151,564
    Residential 3,709 142 2,146 -- 771 2,917 9,685
    Farmland & agriculture 7,002 -- 1,252 1,825 -- 51,936 62,015
    Apartments 418 -- 694 -- -- 29 1,141
    Assisted living -- -- -- -- -- -- --
    Hotel/motel -- -- -- -- -- -- --
    Industrial 53,584 637 11,744 7,280 11,097 35,361 119,703
    RV park 663 -- 951 -- -- 1,812 3,426
    Warehouse 9,857 -- 607 -- -- 6,489 16,953
    Other 29,617   --   130   943   --   1,944   32,634
    Total $524,706$10,107$105,642$42,318$150,130$329,473$1,162,376
                             
    Total $1,568,709   $29,564   $356,018   $166,213   $602,816   $834,975   $3,558,295
    % of total44%1%10%5%17%23%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, 2011:

     
    Table 6 – Non-covered commercial real estate loan portfolio by type and by year of maturity
    (Dollars in thousands)      
          2014-2016-2018-2023 &  
    20122013201520172022LaterTotal

    Non-owner occupied:

    Commercial building $31,552$33,706$65,672$87,428$174,157$15,483$407,998
    Medical office 10,510 5,940 10,610 20,702 62,425 10,738 120,925
    Professional office 26,415 54,669 84,886 92,952 122,141 12,685 393,748
    Storage 481 17,367 21,487 22,705 53,867 1,579 117,486
    Multifamily 5+ 4,175 6,733 28,182 22,799 82,717 7,209 151,815
    Resort -- 666 516 -- -- -- 1,182
    Retail 23,093 38,843 134,311 132,076 127,023 6,663 462,009
    Residential 15,402 7,411 7,987 10,649 18,076 6,191 65,716
    Farmland & agriculture 459 1,172 6,726 2,123 4,459 3,624 18,563
    Apartments 4,456 5,902 22,338 15,113 76,330 1,817 125,956
    Assisted living 27,420 4,464 31,014 60,355 76,167 2,105 201,525
    Hotel/motel 7,399 8,084 37,476 15,548 40,438 12,502 121,447
    Industrial 5,633 6,529 25,597 31,537 28,366 9,179 106,841
    RV park 638 4,202 13,463 10,057 30,327 2,768 61,455
    Warehouse 1,008 4,352 2,082 1,188 3,273 1,017 12,920
    Other 3,964 1,691 4,349 9,549 3,143 3,637 26,333
    Total $162,605$201,731$496,696$534,781$902,909$97,197$2,395,919
     

    Owner occupied:

    Commercial building $16,781$26,134$46,190$78,576$230,720$56,490$454,891
    Medical office 1,837 363 8,651 14,648 115,961 18,426 159,886
    Professional office 3,122 10,220 18,919 35,003 55,337 6,721 129,322
    Storage -- -- -- -- -- -- --
    Multifamily 5+ -- 566 891 42 3,175 -- 4,674
    Resort -- 102 3,461 3,963 4,856 4,100 16,482
    Retail 9,829 12,432 29,313 45,353 47,035 7,602 151,564
    Residential 1,025 782 4,314 493 1,236 1,835 9,685
    Farmland & agriculture 3,568 3,115 11,435 9,440 27,824 6,633 62,015
    Apartments -- -- 29 694 418 -- 1,141
    Assisted living -- -- -- -- -- -- --
    Hotel/motel -- -- -- -- -- -- --
    Industrial 5,847 4,348 21,116 25,660 56,738 5,994 119,703
    RV park 82 774 1,123 299 299 849 3,426
    Warehouse 874 -- 6,876 4,362 4,673 168 16,953
    Other 3,194 754 661 3,514 24,243 268 32,634
    Total $46,159$59,590$152,979$222,047$572,515$109,086$1,162,376
                 
    Total $208,764$261,321$649,675$756,828$1,475,424$206,283$3,558,295
    % of total6%7%18%21%42%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, 2011:

     
    Table 7 – Non-covered commercial real estate loan portfolio by type and by year of origination
    (Dollars in thousands)
    Prior to   2001-   2006-     2008-   2010-  
    2001   2005   2007     2009   2011   Total

    Non-owner occupied:

    Commercial building $8,000$89,342$80,574$136,106$93,976$407,998
    Medical office 2,516 53,002 12,393 32,832 20,182 120,925
    Professional office 11,909 179,541 57,218 72,878 72,202 393,748
    Storage 2,401 44,234 28,801 18,754 23,296 117,486
    Multifamily 5+ 2,701 30,432 24,269 31,551 62,862 151,815
    Resort 392 124 -- 666 -- 1,182
    Retail 12,269 212,146 110,638 74,826 52,130 462,009
    Residential 1,099 10,953 16,753 16,574 20,337 65,716
    Farmland & agriculture 1,310 3,240 1,304 10,099 2,610 18,563
    Apartments 911 21,443 20,694 35,808 47,100 125,956
    Assisted living 12,539 70,761 45,015 41,645 31,565 201,525
    Hotel/motel 16,235 51,303 12,200 37,788 3,921 121,447
    Industrial 2,510 58,166 11,396 6,251 28,518 106,841
    RV park 3,043 19,540 13,000 11,087 14,785 61,455
    Warehouse 987 8,406 3,527 -- -- 12,920
    Other 67   8,550   10,046     5,504   2,166   26,333
    Total $78,889$861,183$447,828$532,369$475,650$2,395,919
     

    Owner occupied:

    Commercial building $14,206$84,620$112,144$141,000$102,921$454,891
    Medical office 3,474 21,532 25,308 88,381 21,191 159,886
    Professional office 3,914 46,627 30,724 21,054 27,003 129,322
    Storage -- -- -- -- -- --
    Multifamily 5+ 158 1,457 -- -- 3,059 4,674
    Resort 690 9,603 -- 2,841 3,348 16,482
    Retail 7,391 44,487 69,090 22,099 8,497 151,564
    Residential 448 4,500 2,971 1,033 733 9,685
    Farmland & agriculture 2,555 3,502 11,441 20,473 24,044 62,015
    Apartments -- -- -- -- -- --
    Assisted living -- -- -- -- -- --
    Hotel/motel -- 13,183 3,357 8,161 1,470 26,171
    Industrial 3,597 47,526 14,767 24,907 28,906 119,703
    RV park 788 1,190 299 144 1,005 3,426
    Warehouse 103 8,248 3,193 4,888 521 16,953

    Other

    --   4,975   25,690     1,019   950   32,634
    Total $37,353$278,267$296,321$327,839$222,596$1,162,376

     

                           
    Total $116,242   $1,139,450   $744,149     $860,208   $698,246   $3,558,295
    % of total3%32%21%24%20%100%
     

    The following is a distribution of the non-covered commercial construction portfolio by type and by region as of December 31, 2011:

     
    Table 8 – Non-covered commercial construction loan portfolio by type and by region
    (Dollars in thousands)      
      Northwest   Central   SouthernGreaterNorthern  
    Oregon   Oregon   Oregon   Washington   Sacramento   California   Total

    Non-owner occupied:

    Commercial building $7,408 $-- $2,705$562$11,166$836$22,677
    Medical office -- -- -- -- -- -- --
    Professional office -- -- -- -- -- 1,897 1,897
    Storage 5,387 -- -- -- -- -- 5,387
    Multifamily 5+ 4,990 -- -- 6,072 -- -- 11,062
    Retail 13,743 -- -- -- 2,030 -- 15,773
    Residential 18,958 -- 5,154 3,950 19,853 5,007 52,922
    Apartments 24,637 -- -- -- -- -- 24,637
    Assisted living -- -- -- -- 5,854 -- 5,854
    Hotel/motel -- -- -- -- -- -- --
    Industrial -- -- -- -- -- -- --
    Other 87   --   --   --   --   5,783   5,870
    Total $75,210 $-- $7,859$10,584$38,903$13,523$146,079
     

    Owner occupied:

    Commercial building $5,443 $-- $1,087 $-- $575$4,645$11,750
    Medical office 430 -- -- -- -- -- 430
    Professional office -- -- -- -- -- -- --
    Storage -- -- -- -- -- -- --
    Multifamily 5+ -- -- -- -- -- -- --
    Retail -- -- -- -- -- -- ---
    Residential 1,455 -- -- -- -- 578 2,033
    Apartments -- -- -- -- -- -- --
    Assisted living -- -- -- -- -- -- --
    Hotel/motel -- -- -- -- -- -- --
    Industrial 2,521 -- 71 -- -- -- 2,592
    Other --   --   --   --   --   2,182   2,182
    Total $9,849 $-- $1,158 $-- $575$7,405$18,987
                             
    Total $85,059   $--   $9,017   $10,584   $39,478   $20,928   $165,066
    % of total52%0%5%6%24%13%100%
     

    The following is a distribution of the non-covered commercial loan portfolio by type and by region as of December 31, 2011:

     
    Table 9 – Non-covered commercial loan portfolio by type and by region
    (Dollars in thousands)      
      Northwest   Central   SouthernGreaterNorthern  
    Oregon   Oregon   Oregon   Washington   Sacramento   California   Total
     
    Commercial line of credit $184,047$530$15,990$12,377$146,643$112,920$472,507
    Asset based line of credit 143,684 1,857 15,941 23,262 11,123 52,220 248,087
    Term loan 154,282 2,310 20,640 28,561 79,406 87,773 372,972
    Agriculture 21,027 148 1,087 1,917 336 67,363 91,878
    Municipal 16,923 -- 16,274 -- 36,765 3,585 73,547
    Government guaranteed -- -- -- -- -- 84,221 84,221
    Small business 25,569   1,246   14,903   5,452   11,979   25,504   84,653
    Total $545,532   $6,091   $84,835   $71,569   $286,252   $433,586   $1,427,865
    % of total38%1%6%5%20%30%100%
     

    Umpqua Holdings Corporation
    Ray Davis, President/CEO, 503-727-4101
    raydavis@umpquabank.com
    or
    Ron Farnsworth, EVP/Chief Financial Officer, 503-727-4108
    ronfarnsworth@umpquabank.com

    Source: Umpqua Holdings Corporation