• Umpqua Holdings Corporation
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  • Umpqua Holdings Reports Operating Earnings Per Share in Line With Targets and Strong Balance Sheet Growth
    Company Release - 04/15/2004 05:00
      Core Operating Earnings Growth Offsets Decline in Mortgage Banking Results

    PORTLAND, Ore., April 15 /PRNewswire-FirstCall/ -- Umpqua Holdings Corporation (Nasdaq: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced first quarter 2004 operating earnings of $8.5 million, or $0.30 per diluted share, compared to $8.8 million, or $0.31 per diluted share for the first quarter of 2003.

    (Logo: http://www.newscom.com/cgi-bin/prnh/20030917/SFW078LOGO )

    Operating earnings are defined as the Company's earnings before deduction of merger-related expenses, which are reported in periods with merger-related costs. Net income is operating earnings minus merger-related expenses. There were $131,000 in merger-related expenses, after tax, recorded in the first quarter of 2004.

    Net income for the first quarter of 2004 was $8.4 million or $0.29 per diluted share consistent with the first quarter of 2003.

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

    
        (Dollars in thousands, except
         per share data)                Q1 2004          Q4 2003       Q1 2003
    
        Net Income                       $8,398          $8,591        $8,380
    
        Add Back:  Merger related
         expense, net of tax                131              --           409
    
          Operating Earnings             $8,529          $8,591        $8,789
    
        Earnings per diluted share:     Q1 2004         Q4 2003       Q1 2003
          Net Income                      $0.29           $0.30         $0.29
          Operating Earnings              $0.30           $0.30         $0.31
    
    

    "Earnings contribution from the Company's mortgage group was $0.01 per diluted share in the first quarter of 2004, down from $0.05 per share for the first quarter of 2003," said Ray Davis, president and chief executive officer of Umpqua Holdings Corporation. "Excluding the impact of the mortgage group, core operating earnings increased by $0.03 per diluted share, or 12% from the same period a year ago." The following table presents a reconciliation of core operating earnings per share to total:

    
        Operating Earnings per diluted share:    Q1 2004    Q1 2003    Variance
          Core excluding mortgage group           $0.29      $0.26       $0.03
          Mortgage group                           0.01       0.05       (0.04)
            Total                                 $0.30      $0.31      $(0.01)
    
    

    Total non-interest income for the first quarter of 2004 decreased $1.7 million, or 17% when compared to the first quarter of 2003. This resulted from the reduction in mortgage banking revenue of $2.6 million, which was partially offset by growth in other categories of the Company of $0.9 million.

    The Company's brokerage subsidiary, Strand, Atkinson, Williams & York, Inc., reported gross revenue of $3.0 million, an increase of 49% for the quarter compared with the first quarter of 2003.

    Umpqua Bank, Umpqua Holdings' largest subsidiary, reports an efficiency ratio before merger-related expenses of 58.16% for the quarter ended March 31, 2004, compared to 56.9% for the quarter ended December 31, 2003 and 54.98% for the quarter ended March 31, 2003.

    Total consolidated assets of Umpqua Holdings as of March 31, 2004 were $3.00 billion, compared to $2.96 billion at December 31, 2003 and $2.65 billion at March 31, 2003. Total gross loans and leases, and deposits were $2.07 billion and $2.43 billion, respectively, as of March 31, 2004, compared to $2.00 billion and $2.38 billion, respectively, as of December 31, 2003.

        The following table presents first quarter 2004 annualized growth rates:
    
    
        (Dollars in thousands)     March 31, 2004Dec. 31, 2003      Growth Rate
        Loans and Leases             $2,073,875      $2,003,587           14%
        Deposits                     $2,428,926      $2,378,192            9%
        Assets                       $2,997,782      $2,963,815            5%
    
    

    Total loans increased by $70.3 million during the quarter, while non-performing assets decreased by $0.4 million during the same period. The Bank's non-performing assets stand at $13.5 million at March 31, 2004, representing 0.57% of total loans, compared to 0.98% at March 31, 2003.

    About Umpqua Holdings Corporation

    Umpqua Holdings Corporation 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 64 stores throughout Oregon and Southwest Washington. The bank was named #1 on "The 100 Best Companies to Work For in Oregon" large companies list for 2004 by Oregon Business Magazine. Umpqua Holdings also owns a retail brokerage subsidiary, Strand, Atkinson, Williams & York, Inc. which has 16 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 customers. 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, April 15, 2004, at 10:00 a.m. PDT where the Company will discuss operating results for the first quarter of 2004. 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 888-282-0171 a few minutes before 10:00 a.m. The password is "UMPQUA." Information to be discussed in the teleconference will be available on the Company's website prior to the call at www.umpquaholdingscorp.com. A rebroadcast can be found approximately one hour after the conference call by dialing 800-873-2158, or by visiting that website.

    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 certain risk factors, including those set forth from time to time in the company's filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Specific risks in this press release include the company's expected continued growth in 2004.

    Umpqua Holdings Corporation
                            Consolidated Statements of Income
                                       (unaudited)
    
                                                    Quarter ended:
        Dollars in thousands,          March 31,     December 31,     March 31,
         except per share data            2004            2003           2003
        Interest income
          Loans and leases              $31,865         $31,940       $31,383
          Investments taxable             4,590           4,166         2,967
          Investments tax exempt            413             442           802
          Temporary investments              23              45           151
          Other interest and dividends       16              15            14
    
            Total interest income        36,907          36,608        35,317
        Interest expense
          Deposits                        5,889           5,405         6,480
          Repurchase agreements and
           fed funds purchased              139             130           109
          Trust preferred securities      1,123             929           937
          Other borrowings                  241             340           212
    
            Total interest expense        7,392           6,804         7,738
    
        Net interest income              29,515          29,804        27,579
    
        Provision for credit losses       1,075           1,075         1,475
        Noninterest income
          Service charges                 3,127           3,188         2,914
          Brokerage fees                  2,891           2,554         1,939
          Mortgage banking revenue        1,649           1,200         4,279
          Gain on sale of securities         --               2             7
          Other income                      793             760         1,045
    
        Total noninterest income          8,460           7,704        10,184
        Noninterest expense
          Salaries and benefits          13,665          13,583        12,899
          Occupancy and equipment         4,115           3,770         3,582
          Other                           5,946           6,077         6,094
          Merger related expenses           216              --           638
    
        Total noninterest expense        23,942          23,430        23,213
    
        Income before income taxes       12,958          13,003        13,075
        Provision for income tax          4,560           4,412         4,695
        Net income                       $8,398          $8,591        $8,380
    
        Weighted average shares
        outstanding                  28,445,316      28,389,064    28,157,475
        Weighted average diluted
        shares outstanding           28,819,200      28,802,165    28,570,144
    
        Basic earnings per share          $0.30           $0.30         $0.30
        Diluted earnings per share        $0.29           $0.30         $0.29
    
    
                               Umpqua Holdings Corporation
                               Consolidated Balance Sheets
                                       (unaudited)
    
        Dollars in thousands,            March 31,    December 31,   March 31,
         except per share data            2004            2003         2003
        Assets:
          Cash and cash equivalents       $105,913     $134,006     $154,274
          Trading account securities         1,094        1,265          670
          Investments available for sale   502,807      501,904      355,079
          Investments held to maturity      14,594       14,612       18,251
          Loans held for sale               31,526       37,798       42,239
          Loans and leases               2,073,875    2,003,587    1,823,311
          Less:  Allowance for credit
           losses                          (26,287)     (25,352)     (24,538)
            Loans and leases, net        2,047,588    1,978,235    1,798,773
          Federal Home Loan Bank stock       7,239        7,168        4,828
          Premises and equipment, net       67,504       63,328       61,339
          Other real estate owned            1,711        2,529        3,430
          Mortgage servicing rights, net    10,959       10,608       10,179
          Goodwill and other intangibles   159,661      159,585      161,181
          Other assets                      47,186       52,777       35,672
                                        $2,997,782   $2,963,815   $2,645,915
        Liabilities:
          Deposits                      $2,428,926   $2,378,192   $2,178,769
          Securities sold under
           agreements to repurchase
           and fed funds purchased          58,906       83,531       34,675
          Borrowings                        55,620       55,000       24,162
          Notes payable for Trust
           preferred securities             97,941       97,941       75,000
          Other liabilities                 26,152       30,182       34,840
            Total liabilities            2,667,545    2,644,846    2,347,446
    
        Shareholders' equity:
          Common stock                     232,118      230,773      228,899
          Retained earnings                 96,317       89,058       66,724
          Accumulated other comprehensive
            Income (loss)                    1,802         (862)       2,846
            Total shareholders' equity     330,237      318,969      298,469
        Total liabilities and
         shareholders' equity           $2,997,782   $2,963,815   $2,645,915
    
    
        Common shares outstanding
         at period end                  28,489,267   28,411,816   28,234,620
        Book value per share                $11.59       $11.23       $10.57
        Tangible book value per share        $5.99        $5.61        $4.86
        Tangible equity                   $170,576     $159,384     $137,288
    
    
                               Umpqua Holdings Corporation
                                      Loan Portfolio
    
        Dollars in thousands          March 31,       December 31,      March 31,
                                        2004              2003            2003
        Loans and leases by purpose:
          Commercial real estate     $1,121,008       $1,072,191       $841,492
          Residential real estate        94,479           84,423         79,636
          Construction                  230,674          232,849        281,223
            Total real estate         1,446,161        1,389,463      1,202,351
          Commercial                    578,823          565,652        566,677
          Leases                         10,214           10,918          9,271
          Consumer                       37,131           36,790         44,959
          Other                           1,546              764             53
        Total loans and leases       $2,073,875       $2,003,587    $ 1,823,311
    
                                        Quarter          Quarter        Quarter
                                         Ended            Ended          Ended
        Dollars in thousands            March 31,       December 31,    March 31,
                                          2004             2003           2003
        Allowance for credit losses
          Balance beginning of period   $25,352          $25,312        $24,731
            Provision for credit losses   1,075            1,075          1,475
    
          Charge-offs                      (447)          (1,591)        (1,975)
          Less:  recoveries                 307              556            307
            Net charge-offs                (140)          (1,035)        (1,668)
    
          Balance end of period         $26,287          $25,352        $24,538
    
        Net charge-offs to average
         loans and leases (annualized)    0.03%            0.21%          0.38%
    
        Recoveries to gross charge-offs  68.68%           34.95%         15.54%
    
        Allowance for credit losses to
         loans and leases                 1.27%            1.27%          1.35%
    
        Allowance for credit losses to
         nonperforming loans and leases    223%             222%           138%
    
        Nonperforming loans and leases
         to total loans and leases        0.57%            0.57%          0.98%
    
        Nonperforming assets
          Nonperforming loans and
           leases                       $11,800          $11,425        $17,816
          Real estate owned               1,711            2,529          3,430
        Total nonperforming assets      $13,511          $13,954        $21,246
    
    
                                     Deposits by Type
    
        Dollars in      March 31, 2004December 31, 2003March 31, 2003
         thousands      Amount     Mix      Amount     Mix       Amount     Mix
        Demand, non
         interest
         bearing       $592,762   24.4%   $589,901   24.8%    $543,319   24.9%
        Demand,
         interest
         bearing      1,069,064   44.0%  1,048,733   44.1%     843,187   38.7%
        Savings         166,481    6.9%    145,960    6.1%     167,715    7.7%
        Time            600,619   24.7%    593,598   25.0%     624,548   28.7%
          Total
           Deposits  $2,428,926  100.0% $2,378,192  100.0%  $2,178,769  100.0%
    
    
    
                               Umpqua Holdings Corporation
                                     Selected Ratios
                                                    Quarter ended:
                                        March 31,      December 31,    March 31,
                                          2004            2003           2003
        Net Interest Spread:
          Yield on loans and leases       6.23%           6.38%         6.95%
          Yield on investments (1)        4.09%           3.92%         4.98%
          Yield on temporary investments  0.91%           0.77%         1.17%
            Total yield on earning assets 5.78%           5.85%         6.51%
    
          Cost of interest bearing
           deposits                       1.31%           1.23%         1.61%
          Cost of securities sold
           under agreements to
           repurchase and fed funds
           purchased                      1.02%           1.01%         1.43%
          Cost of borrowings              1.76%           1.90%         3.56%
          Cost of trust preferred         4.61%           4.70%         5.07%
          Total cost of interest
           bearing liabilities            1.47%           1.39%         1.78%
    
        Net interest spread               4.31%           4.45%         4.73%
    
        Net interest margin               4.63%           4.77%         5.10%
    
        Before Merger Related Expenses:
        Return on average assets          1.17%           1.19%         1.38%
        Return on average equity         10.58%          10.85%        12.17%
        Return on average tangible
         equity                          20.84%          22.10%        27.04%
    
        After Merger Related Expenses:
        Return on average assets          1.15%           1.19%         1.32%
        Return on average equity         10.42%          10.85%        11.61%
        Return on average tangible
         equity                          20.52%          22.10%        25.78%
    
        Bank Only Ratios:
        Umpqua Bank efficiency ratio
         before merger expenses          58.16%          56.89%        54.98%
        Umpqua Bank net interest margin   4.80%           4.91%         5.27%
    
        (1) Tax exempt interest has been adjusted to a taxable equivalent basis
            using a 35% tax rate.
    
    
    SOURCE  Umpqua Holdings Corporation
        -0-                             04/15/2004
        /CONTACT:  Ray Davis, President/CEO, +1-503-546-2490, or
    raydavis@umpquabank.com, or Dan Sullivan, EVP/CFO, +1-503-546-2492, or
    dansullivan@umpquabank.com, both of Umpqua Holdings Corporation/
        /Photo:  http://www.newscom.com/cgi-bin/prnh/20030917/SFW078LOGO
                  AP Archive:  http://photoarchive.ap.org
                  PRN Photo Desk, 888-776-6555 or 212-782-2840/
        /Web site:  http://www.umpquaholdingscorp.com /
        (UMPQ)
    
    CO:  Umpqua Holdings Corporation; Umpqua Bank; Strand, Atkinson, Williams &
         York, Inc.
    ST:  Oregon
    IN:  FIN
    SU:  ERN CCA
    
    JP-MW 
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