• Umpqua Holdings Corporation
email this
  • Umpqua Holdings Reports 13% Increase in Operating Earnings
    Company Release - 04/21/2005 08:00

    Annualized Deposit Growth of 17%, Net Interest Margin Expansion

    PORTLAND, Ore., April 21 /PRNewswire-FirstCall/ -- Umpqua Holdings Corporation (Nasdaq: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced first quarter 2005 operating earnings of $15.1 million, or $0.34 per diluted share, compared to $8.5 million, or $0.30 per diluted share for the first quarter of 2004, an increase of 13% on a per share basis.

    Operating earnings are defined as the Company's net income before deduction of merger-related expenses, net of tax, which are reported in periods with merger-related costs.

    Including merger related expenses, the Company reports first quarter 2005 net income of $15.0 million, or $0.33 per diluted share, compared to $8.4 million, or $0.29 per diluted share, for the first quarter of 2004. These results reflect earnings per share growth of 14% compared to the same period a year ago.

    Umpqua Bank's net interest margin increased to 5.06% for the first quarter of 2005, compared to 4.80% for the same quarter one year ago, and 4.96% for the fourth quarter of 2004, principally resulting from recent increases in short-term market interest rates.

    Umpqua Bank, Umpqua Holdings' largest subsidiary, reported an efficiency ratio before merger-related expenses of 53.6% for the first quarter of 2005, compared to 58.2% for the same quarter one year ago. The Company incurred approximately $0.4 million in additional professional fee expense during the first quarter of 2005 as compared to the fourth quarter of 2004.

    Total consolidated assets of Umpqua Holdings as of March 31, 2005 were $4.98 billion, compared to $4.87 billion at December 31, 2004. Total gross loans and deposits were $3.53 billion and $3.95 billion, respectively, as of March 31, 2005, compared to $3.47 billion and $3.80 billion, respectively, as of December 31, 2004.

    Strong loan growth, net of scheduled and accelerated pay-downs, resulted in net loans increasing $64 million during the first quarter of 2005. Deposits increased $155 million during the same period. These represent annualized organic growth rates for loans and deposits of 8% and 17%, respectively. Organic growth is defined as growth excluding the increase related to acquisitions on the Company's balance sheet, with all growth subsequent to the acquisition date included as organic.

    "As expected, our net interest margin expanded and our efficiency ratio remained low, which led to a strong quarter for operating earnings per share in spite of additional costs related to Sarbanes-Oxley compliance," said Ray Davis, President and Chief Executive Officer of Umpqua Holdings Corporation. "In addition, we had 17% annualized deposit growth, realized expected synergies from the Humboldt acquisition and continue to experience strong loan production," Davis added.

    As previously announced, the Company completed the sale of its merchant card processing portfolio during the fourth quarter of 2004. In accordance with generally accepted accounting principles, the financial results related to the merchant card processing operations, including the gain on sale, have been classified as a discontinued operation.

    At March 31, 2005 total shareholders equity was $697 million, and tangible book value per share was $6.51.

    About Umpqua Holdings Corporation

    Umpqua Holdings Corporation 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 93 locations between Sacramento, Calif. and Vancouver, Wash., along the Oregon and Northern California Coast and in Central Oregon. In 2004, Umpqua Bank launched the Connect Volunteer Network, an innovative, paid volunteer program focused on youth and education. Bank associates volunteered at more than 100 organizations in the program's first year. Umpqua Holdings also owns retail brokerage subsidiary Strand, Atkinson, Williams & York, Inc., which has locations in Umpqua Bank stores and in dedicated offices throughout Oregon and Southwest Washington. Umpqua Bank's 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 21, 2005, at 10:00 a.m. PDT where management will discuss operating results for the first quarter of 2005. 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 888-791-5525 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 866-361-4938, or by visiting that website.

    Umpqua Holdings Corporation
                          Consolidated Statements of Income
                                     (Unaudited)
                                                          Quarter ended:
        Dollars in thousands,                     March 31,  Dec. 31,  March 31,
         except per share data                       2005      2004       2004
    
        Interest income
          Loans and leases                        $56,936    $55,261    $31,865
          Investments taxable                       6,549      6,892      4,590
          Investments tax exempt                      713        768        413
          Temporary investments                       233        296         23
          Other interest and dividends                 43         23         16
    
            Total interest income                  64,474     63,240     36,907
    
        Interest expense
          Deposits                                 11,324     10,383      5,889
          Repurchase agreements and
           fed funds purchased                        501        266        139
          Trust preferred securities                2,394      2,333      1,123
          Other borrowings                            405        584        241
    
            Total interest expense                 14,624     13,566      7,392
    
        Net interest income                        49,850     49,674     29,515
    
        Provision for loan losses                   1,000      3,667      1,075
        Non-interest income
          Service charges                           4,822      5,434      3,127
          Brokerage fees                            3,129      3,188      2,891
          Mortgage banking revenue                  1,350      1,665      1,649
          Other income                              1,301      2,197        545
        Total non-interest income                  10,602     12,484      8,212
    
        Non-interest expense
          Salaries and benefits                    20,279     20,248     13,665
          Occupancy and equipment                   6,133      5,809      4,115
          Other                                     8,922      9,820      5,946
          Merger related expenses                     101      2,656        216
    
        Total non-interest expense                 35,435     38,533     23,942
        Income before income taxes
         and discontinued operations               24,017     19,958     12,710
          Provision for income tax                  8,998      7,170      4,463
    
        Income from continuing operations          15,019     12,788      8,247
    
          Gain on sale of
           discontinued operation, net of tax          --      3,375         --
    
          Income from discontinued operation,
           net of tax                                  --        106        151
    
        Net income                                $15,019    $16,269     $8,398
    
        Weighted average shares outstanding    44,330,626 44,121,546 28,445,316
        Weighted average
         diluted shares outstanding            44,962,502 44,870,939 28,819,200
    
        Earnings per share - Basic:
          Continuing operations                     $0.34      $0.29      $0.29
          Discontinued operations                   $0.00      $0.08      $0.01
            Net income                              $0.34      $0.37      $0.30
    
        Earnings per share - Diluted:
          Continuing operations                     $0.33      $0.28      $0.29
          Discontinued operations                   $0.00      $0.08      $0.00
            Net income                              $0.33      $0.36      $0.29
    
    
                             Umpqua Holdings Corporation
                             Consolidated Balance Sheets
                                     (Unaudited)
    
         Dollars in thousands,                March 31,    Dec. 31,    March 31,
         except per share data                  2005         2004        2004
        Assets:
          Cash and cash equivalents           $203,501     $118,207    $105,913
          Trading account securities             1,350        1,577       1,094
          Investments available for sale       639,706      675,984     502,807
          Investments held to maturity          11,793       11,807      14,594
          Loans held for sale                   12,398       20,791      31,526
          Loans and leases                   3,532,061    3,467,904   2,073,875
          Less:  Allowance for loan losses     (45,360)     (44,229)    (26,287)
            Loans and leases, net            3,486,701    3,423,675   2,047,588
          Federal Home Loan Bank stock          14,220       14,218       7,239
          Premises and equipment, net           87,073       85,681      67,504
          Other real estate owned                  213          979       1,711
          Mortgage servicing rights, net        11,081       11,154      10,959
          Goodwill and other intangibles       407,788      408,460     159,661
          Other assets                         105,830      100,502      47,186
    
        Total assets                        $4,981,654   $4,873,035  $2,997,782
    
        Liabilities:
          Deposits                          $3,953,670   $3,799,107  $2,428,926
          Securities sold under
           agreements to repurchase
           and fed funds purchased              55,712       88,267      58,906
          Borrowings                            63,373       88,451      55,620
          Notes payable for
           Trust preferred securities          166,134      166,256      97,941
          Other liabilities                     45,818       43,341      26,152
            Total liabilities                4,284,707    4,185,422   2,667,545
    
        Shareholders' equity:
          Common stock                         563,319      560,611     232,118
          Retained earnings                    140,462      128,112      96,317
          Accumulated other comprehensive
            Income (loss)                       (6,834)      (1,110)      1,802
            Total shareholders' equity         696,947      687,613     330,237
        Total liabilities
         and shareholders' equity           $4,981,654   $4,873,035  $2,997,782
    
    
        Common shares outstanding
         at period end                      44,434,655   44,211,075  28,489,267
        Book value per share                    $15.68       $15.55      $11.59
        Tangible book value per share            $6.51        $6.31       $5.99
        Tangible equity                       $289,159     $279,153    $170,576
    
    
                             Umpqua Holdings Corporation
                                    Loan Portfolio
                                     (Unaudited)
    
        Dollars                              March 31,  December 31,  March 31,
         in thousands                          2005         2004         2004
    
        Loans and leases by purpose:
        Commercial real estate             $1,897,234   $1,874,646  $1,121,008
        Residential real estate               219,951      217,990      94,479
        Construction                          486,277      461,096     230,674
          Total real estate                 2,603,462    2,553,732   1,446,161
        Commercial                            842,999      823,364     578,823
        Leases                                 17,423       18,357      10,214
        Consumer                               66,916       71,174      37,131
        Other                                   1,261        1,277       1,546
        Total loans and leases             $3,532,061   $3,467,904  $2,073,875
    
    
                                              Quarter      Quarter     Quarter
                                               Ended        Ended       Ended
        Dollars                              March 31,   December 31,  March 31,
         in thousands                           2005         2004        2004
    
        Allowance for credit losses
          Balance beginning of period         $44,229      $43,374     $25,352
            Provision for credit losses         1,000        3,667       1,075
    
        Charge-offs                              (612)      (3,443)       (447)
        Less: recoveries                          743          631         307
            Net recoveries (charge-offs)          131       (2,812)       (140)
    
          Total Allowance for loan losses      45,360       44,229      26,287
    
        Reserve for unfunded commitments        1,368        1,338          --
          Total Allowance for credit losses   $46,728      $45,567     $26,287
    
        Net (recoveries) charge-offs to average
         loans and leases (annualized)        (0.02)%        0.33%       0.03%
        Recoveries to gross charge-offs          121%          18%         69%
        Allowance for credit losses to
         loans and leases                       1.32%        1.31%       1.27%
        Allowance for credit losses to
         nonperforming loans and leases          197%         202%        223%
        Nonperforming loans and leases
         To total loans and leases              0.67%        0.65%       0.57%
    
        Nonperforming assets
          Nonperforming loans and leases      $23,660      $22,573     $11,800
          Real estate owned                       213          979       1,711
        Total nonperforming assets            $23,873      $23,552     $13,511
    
    
                             Umpqua Holdings Corporation
                                   Selected Ratios
                                     (Unaudited)
    
                                                          Quarter ended:
                                                  March 31,  Dec. 31,  March 31,
                                                    2005       2004       2004
        Net Interest Spread:
          Yield on loans and leases                 6.62%      6.44%      6.23%
          Yield on taxable investments              4.29%      4.10%      3.87%
          Yield on tax-exempt investments (A)       6.49%      7.29%      6.71%
          Yield on temporary investments            2.48%      1.92%      0.91%
            Total yield on earning assets           6.24%      6.02%      5.78%
    
          Cost of interest bearing deposits         1.57%      1.41%      1.31%
          Cost of securities sold under agreements
           to repurchase and fed funds purchased    2.32%      1.32%      1.02%
          Cost of borrowings                        1.99%      2.63%      1.77%
          Cost of trust preferred                   5.84%      5.58%      4.61%
           Total cost of
            interest bearing liabilities            1.82%      1.66%      1.47%
    
    
        Net interest spread                         4.42%      4.36%      4.31%
    
        Net interest margin                         4.83%      4.74%      4.63%
    
        Before Merger Related Expenses:(B)
        Return on average assets                    1.25%      1.45%      1.17%
        Return on average tangible assets           1.36%      1.58%      1.23%
        Return on average equity                    8.82%     10.52%     10.58%
        Return on average tangible equity          21.43%     26.46%     20.84%
    
        After Merger Related Expenses:(B)
        Return on average assets                    1.24%      1.32%      1.15%
        Return on average tangible assets           1.35%      1.44%      1.21%
        Return on average equity                    8.78%      9.53%     10.42%
        Return on average tangible equity          21.34%     23.96%     20.52%
    
        Bank Only Ratios:
        Umpqua Bank efficiency ratio
         before merger expenses:(B)                53.62%     48.40%     58.16%
        Umpqua Bank net interest margin             5.06%      4.96%      4.80%
    
        (A) Tax exempt interest has been adjusted to a taxable equivalent basis
            using a 35% tax rate.
        (B) Includes the impact of the gain on sale of, and income from,
            discontinued operations recognized in 2004.
    
    
                                   Deposits by Type
                                     (Unaudited)
    
        Dollars in           March 31,           Dec. 31,           March 31,
         thousands             2005               2004               2004
                         Amount    Mix      Amount    Mix      Amount    Mix
        Demand,
         non interest
         bearing        $962,912  24.4%    $891,731   23.5%   $592,762   24.4%
        Demand,
         interest
         bearing       1,563,394  39.5%   1,504,396   39.6%  1,069,064   44.0%
        Savings          451,733  11.4%     452,684   11.9%    166,481    6.9%
        Time             975,631  24.7%     950,296   25.0%    600,619   24.7%
          Total
           Deposits   $3,953,670 100.0%  $3,799,107  100.0% $2,428,926  100.0%
    
    
                             Umpqua Holdings Corporation
                        Mortgage Banking Statistical Analysis
                                     (unaudited)
    
                                                        Quarter ended:
        Dollars in                            March 31,    Dec. 31,    March 31,
         thousands                              2005        2004        2004
    
        Mortgage Servicing Rights (MSR):
        Mortgage loans serviced for others  $1,052,910  $1,066,905   $1,151,714
    
        MSR Asset (gross)                      $12,157     $11,946      $12,266
        Less: Valuation reserve                 (1,076)       (792)     (1,307)
          MSR Asset (net of reserve)           $11,081     $11,154      $10,959
    
        MSR as % of serviced portfolio           1.05%       1.05%        0.95%
    
    
        Mortgage Banking Revenue:
        Origination and sale                    $1,397      $1,447       $1,273
        Servicing                                  237         250        (224)
        MSR valuation reserve change              (284)        (32)         600
          Total Mortgage Banking Revenue        $1,350      $1,665       $1,649
    
    
        Diluted earnings per share
         contribution of Mortgage Group          $0.00       $0.00        $0.01
    
    
    SOURCE  Umpqua Holdings Corporation
        -0-                             04/21/2005
        /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/
        /Web site:  http://www.umpquaholdingscorp.com/
        (UMPQ)
    
    CO:  Umpqua Holdings Corporation
    ST:  Oregon
    IN:  FIN
    SU:  ERN CCA
    
    EB
    -- SFTH029 --
    8396 04/21/200508:00 EDThttp://www.prnewswire.com