• Umpqua Holdings Corporation
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  • Umpqua Holdings Reports 13% Increase in Net Income
    Company Release - 07/21/2005 08:00

    PORTLAND, Ore., July 21 /PRNewswire-FirstCall/ -- Umpqua Holdings Corporation (Nasdaq: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced second quarter 2005 net income of $16.0 million, or $0.36 per diluted share, compared to $9.1 million, or $0.32 per diluted share, for the second quarter of 2004. These results reflect earnings per share growth of 13% compared to the same period a year ago.

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

    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. Excluding merger related expenses, the Company reports second quarter 2005 operating earnings of $16.1 million, or $0.36 per diluted share, compared to $9.5 million, or $0.33 per diluted share for the second quarter of 2004, an increase of 9% on a per share basis.

    Umpqua Bank's net interest margin increased to 5.05% for the second quarter of 2005, compared to 4.74% for the same quarter one year ago, principally resulting from recent increases in short-term market interest rates.

    During the second quarter of 2005, the Company recorded a $2.1 million impairment to the value of our mortgage servicing right portfolio. This impairment resulted from a decline in mortgage interest rates, and is included as a charge in mortgage banking revenue on the Company's consolidated statement of income. Excluding mortgage servicing right impairments, mortgage banking revenue was $2.3 million for the second quarter of 2005, compared to $1.5 million for the same quarter one year ago, and $1.6 million for the first quarter of 2005. Offsetting the impairment in the second quarter of 2005 were $1.4 million in gains on the sale of securities, and $0.6 million in gain on the sale of our remaining credit card portfolio, which is reflected in other non-interest income.

    Umpqua Bank, Umpqua Holdings' largest subsidiary, reported an efficiency ratio before merger-related expenses of 52.7% for the second quarter of 2005, compared to 55.1% for the same quarter one year ago, and 53.6% for the first quarter of 2005.

    Total consolidated assets of Umpqua Holdings as of June 30, 2005 were $5.04 billion, compared to $4.98 billion as of March 31, 2005. Total gross loans and deposits were $3.61 billion and $3.97 billion, respectively, as of June 30, 2005, compared to $3.53 billion and $3.95 billion, respectively, as of March 31, 2005.

    Strong loan growth resulted in loans increasing $79.9 million during the second quarter of 2005. Deposits increased $19.3 million during the same period. For the year to date, annualized organic growth rates for loans and deposits were 8% and 9%, 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.

    "This was another strong quarter for the Company with our core business fundamentals as solid as ever," said Ray Davis, president and chief executive officer of Umpqua Holdings Corporation.

    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.

    As of June 30, 2005 total shareholders equity was $714.7 million, and tangible book value per share was $6.92.

    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 Bellevue, 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, July 21, 2005, at 10:00 a.m. PDT where management will discuss operating results for the second 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 866-431-7903, or by visiting that website.

    Umpqua Holdings Corporation
                            Consolidated Statements of Income
                                       (Unaudited)
    
        Dollars in thousands,                       Quarter Ended:
         except per share data      June 30, 2005March 31, 2005June 30, 2004
        Interest income
         Loans and leases               $60,220         $56,936       $32,791
         Investments taxable              6,252           6,549         5,324
         Investments tax exempt             699             713           396
         Temporary investments              454             233            44
         Other interest and dividends        38              43            91
          Total interest income          67,663          64,474        38,646
    
        Interest expense
         Deposits                        13,485          11,324         5,785
         Repurchase agreements and
          fed funds purchased               407             501           184
         Trust preferred securities       2,550           2,394         1,120
         Other borrowings                   139             405           467
          Total interest expense         16,581          14,624         7,556
        Net interest income              51,082          49,850        31,090
        Provision for loan losses         1,400           1,000         1,100
        Non-interest income
         Service charges                  5,426           4,822         3,273
         Brokerage fees                   2,879           3,129         3,014
         Mortgage banking revenue           228           1,350         2,399
         Gain on sale of securities       1,398              --             6
         Other income                     1,993           1,301           514
        Total non-interest income        11,924          10,602         9,206
    
        Non-interest expense
         Salaries and benefits           20,361          20,279        13,753
         Occupancy and equipment          6,109           6,133         4,153
         Other                            9,790           8,922         6,551
         Merger related expenses            161             101           549
        Total non-interest expense       36,421          35,435        25,006
        Income before income taxes and
         discontinued operations         25,185          24,017        14,190
         Provision for income tax         9,179           8,998         5,180
        Income from continuing
         operations                      16,006          15,019         9,010
         Income from discontinued
          operation, net of tax              --              --           121
        Net income                      $16,006         $15,019        $9,131
    
        Weighted average shares
         outstanding                 44,436,323      44,330,626    28,339,080
        Weighted average diluted
         shares outstanding          44,988,322      44,962,502    28,664,279
    
        Earnings per share - Basic:
         Continuing operations            $0.36           $0.34         $0.32
         Discontinued operations          $0.00           $0.00         $0.00
         Net income                       $0.36           $0.34         $0.32
    
        Earnings per share - Diluted:
         Continuing operations            $0.36           $0.33         $0.31
         Discontinued operations          $0.00           $0.00         $0.01
         Net income                       $0.36           $0.33         $0.32
    
    
                               Umpqua Holdings Corporation
                            Consolidated Statements of Income
                                       (Unaudited)
    
        Dollars in thousands, except per                    Six Months Ended:
         share data                                 June 30, 2005June 30, 2004
        Interest income
         Loans and leases                               $117,156        $64,655
         Investments taxable                              12,801          9,843
         Investments tax exempt                            1,412            809
         Temporary investments                               687             84
         Other interest and dividends                         81            162
          Total interest income                          132,137         75,553
        Interest expense
         Deposits                                         24,809         11,675
         Repurchase agreements and
          fed funds purchased                                908            323
         Trust preferred securities                        4,944          2,243
         Other borrowings                                    544            708
         Total interest expense                           31,205         14,949
        Net interest income                              100,932         60,604
        Provision for loan losses                          2,400          2,175
         Non-interest income
         Service charges                                  10,248          6,400
         Brokerage fees                                    6,008          5,905
         Mortgage banking revenue                          1,578          4,048
         Gain on sale of securities                        1,398              6
         Other income                                      3,294          1,059
        Total non-interest income                         22,526         17,418
        Non-interest expense
        Salaries and benefits                             40,640         27,419
         Occupancy and equipment                          12,242          8,268
         Other                                            18,712         12,495
         Merger related expenses                             262            765
        Total noninterest expense                         71,856         48,947
        Income before income taxes and discontinued
         operations                                       49,202         26,900
         Provision for income tax                         18,177          9,643
        Income from continuing operations                 31,025         17,257
         Income from discontinued operations,
          net of tax                                          --            272
        Net income                                       $31,025        $17,529
    
        Weighted average shares outstanding           44,383,766     28,392,198
        Weighted average diluted shares outstanding   44,972,170     28,734,859
    
        Earnings per share - Basic:
         Continuing operations                             $0.70          $0.61
         Discontinued operations                           $0.00          $0.01
          Net income                                       $0.70          $0.62
    
        Earnings per share - Diluted:
         Continuing operations                             $0.69          $0.60
         Discontinued operations                           $0.00          $0.01
         Net income                                        $0.69          $0.61
    
    
                               Umpqua Holdings Corporation
                               Consolidated Balance Sheets
                                       (Unaudited)
    
        Dollars in thousands, except per
         share data                 June 30, 2005March 31, 2005June 30, 2004
        Assets:
         Cash and cash equivalents     $200,748        $203,501      $110,804
         Trading account securities       1,403           1,350         1,089
         Investments available for sale 571,895         639,706       559,013
         Investments held to maturity    11,735          11,793        13,908
         Loans held for sale             20,301          12,398        37,866
         Loans and leases             3,612,004       3,532,061     2,152,417
         Less:  Allowance for loan
          losses                       (44,510)        (45,360)      (27,319)
           Loans and leases, net      3,567,494       3,486,701     2,125,098
         Federal Home Loan Bank stock    14,298          14,220        10,368
         Premises and equipment, net     88,321          87,073        68,526
         Other real estate owned            213             213           724
         Mortgage servicing rights, net   9,268          11,081        11,391
         Goodwill and other intangibles 407,072         407,788       159,575
         Other assets                   145,867         105,830        54,929
        Total assets                 $5,038,615      $4,981,654    $3,153,291
    
        Liabilities:
         Deposits                    $3,972,920      $3,953,670    $2,479,115
         Securities sold under
          agreements to repurchase
          and fed funds purchased       127,449          55,712        77,615
        Borrowings                       13,296          63,373       145,618
        Notes payable for Trust
         preferred securities           165,970         166,134        97,941
        Other liabilities                44,243          45,818        30,963
         Total liabilities            4,323,878       4,284,707     2,831,252
    
        Shareholders' equity:
         Common stock                   563,582         563,319       226,774
         Retained earnings              153,794         140,462       103,754
         Accumulated other
          comprehensive
          Income (loss)                 (2,639)         (6,834)       (8,489)
          Total shareholders' equity    714,737         696,947       322,039
        Total liabilities and
         shareholders' equity        $5,038,615      $4,981,654    $3,153,291
    
    
        Common shares outstanding
         at period end               44,453,407      44,434,655    28,219,677
        Book value per share             $16.08          $15.68        $11.41
        Tangible book value per share     $6.92           $6.51         $5.76
        Tangible equity                $307,665        $289,159      $162,464
    
    
                               Umpqua Holdings Corporation
                                      Loan Portfolio
                                       (Unaudited)
    
        Dollars in thousands       June 30, 2005March 31, 2005June 30, 2004
        Loans and leases by
         purpose:
         Commercial real estate      $1,975,218      $1,897,234    $1,209,975
         Residential real estate        217,245         219,951       105,003
         Construction                   503,599         486,277       196,577
          Total real estate           2,696,062       2,603,462     1,511,555
         Commercial                     837,702         842,999       592,718
         Leases                          16,887          17,423         9,439
         Consumer                        59,571          66,916        35,904
         Other                            1,782           1,261         2,801
        Total loans and leases       $3,612,004      $3,532,061    $2,152,417
    
                                  Quarter Ended   Quarter Ended  Quarter Ended
        Dollars in thousands       June 30, 2005March 31, 2005June 30, 2004
        Allowance for credit losses
         Balance beginning of period    $45,360         $44,229       $26,287
          Provision for credit losses     1,400           1,000         1,100
    
        Charge-offs                     (3,239)           (612)         (415)
        Less: recoveries                    989             743           347
          Net recoveries (charge-offs)  (2,250)             131          (68)
    
         Total Allowance for loan losses 44,510          45,360        27,319
    
        Reserve for unfunded commitments  1,354           1,368            --
         Total Allowance for credit
          losses                        $45,864         $46,728       $27,319
    
        Net charge-offs (recoveries)
         to average                   loans and
         leases (annualized)              0.25%         (0.02)%         0.01%
        Recoveries to gross charge-offs     31%            121%           84%
        Allowance for credit losses to
         loans and leases                 1.27%           1.32%         1.27%
        Allowance for credit losses to
         nonperforming loans and leases    223%            197%          221%
        Nonperforming loans and leases
         To total loans and leases        0.57%           0.67%         0.57%
    
        Nonperforming assets
         Nonperforming loans and
          leases                        $20,606         $23,660       $12,352
         Real estate owned                  213             213           724
        Total nonperforming assets      $20,819         $23,873       $13,076
    
    
                               Umpqua Holdings Corporation
                                      Loan Portfolio
                                       (Unaudited)
    
    
                                                       Six Months    Six Months
                                                         Ended          Ended
        Dollars in thousands                        June 30, 2005June 30, 2004
        Allowance for credit losses
         Balance beginning of period                     $44,229        $25,352
          Provision for credit losses                      2,400          2,175
    
        Charge-offs                                      (3,851)          (862)
        Less: recoveries                                   1,732            654
         Net charge-offs                                 (2,119)          (208)
    
         Total Allowance for loan loss                    44,510         27,319
    
        Reserve for unfunded commitments                   1,354             --
         Total Allowance for credit loss                 $45,864        $27,319
    
        Net charge-offs to average
         loans and leases (annualized)                     0.12%          0.02%
    
        Recoveries to gross charge-offs                      45%            76%
    
                                     Deposits by Type
                                       (Unaudited)
    
        Dollars in      June 30, 2005March 31, 2005June 30, 2004
        thousands      Amount     Mix      Amount     Mix     Amount     Mix
        Demand,
         non interest
         bearing     $977,160    24.6%   $962,912   24.4%    $624,391   25.2%
        Demand,
         interest
         bearing    1,562,189    39.3%  1,563,394   39.5%   1,132,087   45.7%
        Savings       445,319    11.2%    451,733   11.4%     150,436    6.1%
        Time          988,252    24.9%    975,631   24.7%     572,201   23.1%
         Total
          Deposits $3,972,920   100.0% $3,953,670  100.0%  $2,479,115  100.0%
    
    
    
                               Umpqua Holdings Corporation
                                     Selected Ratios
                                       (Unaudited)
    
                                                     Quarter Ended:
                                   June 30, 2005March 31, 2005June 30, 2004
        Net Interest Spread:
         Yield on loans and leases        6.76%           6.62%         6.12%
         Yield on taxable investments     4.27%           4.22%         3.95%
         Yield on tax-exempt
          investments (1)                 6.59%           6.47%         6.77%
         Yield on temporary investments   2.76%           2.48%         0.92%
          Total yield on earning assets   6.36%           6.24%         5.68%
    
         Cost of interest bearing
          deposits                        1.80%           1.57%         1.25%
         Cost of securities sold under
          agreements
          to repurchase and fed funds
          purchased                       2.26%           2.32%         0.85%
         Cost of borrowings               2.06%           1.99%         1.91%
         Cost of trust preferred          6.16%           5.84%         4.60%
          Total cost of interest
           bearing liabilities            2.03%           1.82%         1.42%
    
    
        Net interest spread               4.33%           4.42%         4.26%
    
        Net interest margin               4.81%           4.83%         4.57%
    
        Before Merger Related
         Expenses: (2)
        Return on average assets          1.30%           1.25%         1.23%
        Return on average tangible
         assets                           1.41%           1.36%         1.29%
        Return on average equity          9.17%           8.82%        11.65%
        Return on average tangible
         equity                          21.74%          21.43%        22.76%
    
        After Merger Related
          Expenses: (2)
        Return on average assets          1.29%           1.24%         1.18%
        Return on average tangible
         assets                           1.40%           1.35%         1.25%
        Return on average equity          9.11%           8.78%        11.23%
        Return on average tangible
         equity                          21.61%          21.34%        21.93%
    
        Bank Only Ratios:
        Umpqua Bank efficiency
         ratio before merger
         expenses (2)                    52.71%          53.62%        55.11%
        Umpqua Bank net interest
         margin                           5.05%           5.06%         4.74%
    
        (1) Tax exempt interest has been adjusted to a taxable equivalent basis
        using a 35% tax rate.
        (2) Includes the impact of the gain on sale of, and income from,
        discontinued operations recognized in 2004.
    
    
                               Umpqua Holdings Corporation
                                     Selected Ratios
                                       (Unaudited)
    
                                                             Six Months Ended:
                                                     June 30, 2005June 30, 2004
        Net Interest Spread:
         Yield on loans and leases                         6.69%          6.17%
         Yield on taxable investments                      4.25%          3.91%
         Yield on tax-exempt investments (1)               6.53%          6.69%
         Yield on temporary investments                    2.66%          0.93%
          Total yield on earning assets                    6.30%          5.73%
    
        Cost of interest bearing deposits                  1.69%          1.28%
        Cost of securities sold under
         agreements to repurchase and fed funds purchased  2.30%          0.91%
        Cost of borrowings                                 2.01%          1.86%
        Cost of trust preferred                            6.00%          4.61%
         Total cost of interest bearing liabilities        1.92%          1.44%
    
    
        Net interest spread                                4.38%          4.29%
    
        Net interest margin                                4.82%          4.60%
    
        Before Merger Related Expenses: (2)
        Return on average assets                           1.27%          1.20%
        Return on average tangible assets                  1.39%          1.26%
        Return on average equity                           9.00%         11.12%
        Return on average tangible equity                 21.59%         21.81%
    
        After Merger Related Expenses: (2)
        Return on average assets                           1.27%          1.17%
        Return on average tangible assets                  1.38%          1.23%
        Return on average equity                           8.95%         10.83%
        Return on average tangible equity                 21.48%         21.23%
    
        Bank Only Ratios:
        Umpqua Bank efficiency ratio before
         merger expenses (2)                              53.15%         56.59%
        Umpqua Bank net interest margin                    5.05%          4.77%
    
        (1) Tax exempt interest has been adjusted to a taxable equivalent basis
        using a 35% tax rate.
        (2) Includes the impact of the gain on sale of, and income from,
        discontinued operations.
    
    
                               Umpqua Holdings Corporation
                          Mortgage Banking Statistical Analysis
                                       (unaudited)
    
                                                     Quarter ended:
                                    June 30, 2005March 31, 2005 June 30, 2004
        Dollars in thousands
        Mortgage Servicing Rights (MSR):
        Mortgage loans serviced
         for others                  $1,026,088      $1,052,910    $1,119,351
    
        MSR Asset (gross)               $12,455         $12,157       $11,832
        Less: Valuation reserve         (3,187)         (1,076)         (441)
         MSR Asset (net of reserve)      $9,268         $11,081       $11,391
    
        MSR as % of serviced portfolio    0.90%           1.05%         1.02%
    
    
        Mortgage Banking Revenue:
        Origination and sale             $2,156          $1,397        $1,903
        Servicing                           183             237         (370)
        MSR valuation reserve change    (2,111)           (284)           866
         Total Mortgage Banking Revenue    $228          $1,350        $2,399
    
    
        Diluted earnings per share
         contribution (loss) of
         Mortgage Group                 $(0.02)           $0.00         $0.02
    
    
                                               Year ended:
                                     June 30, 2005   June 30, 2004
        Dollars in thousands
        Mortgage Banking Revenue:
        Origination and sale             $3,553          $3,176
        Servicing                           420           (594)
        MSR valuation reserve change    (2,395)           1,466
        Total Mortgage Banking Revenue   $1,578          $4,048
    
        Diluted earnings per share
         contribution (loss) of
         Mortgage Group                 $(0.02)           $0.03
    
    
    SOURCE  Umpqua Holdings Corporation
        -0-                             07/21/2005
        /CONTACT:  Ray Davis, President/CEO, +1-503-727-4101, or
    raydavis@umpquabank.com, or Dan Sullivan, EVP/CFO, +1-503-727-4103, 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 photodesk@prnewswire.com/
        /Web site:  http://www.umpquaholdingscorp.com /
        (UMPQ)
    
    CO:  Umpqua Holdings Corporation; Umpqua Bank and Strand, Atkinson,
         Williams & York, Inc.
    ST:  Oregon
    IN:  FIN
    SU:  ERN CCA
    
    UC-JB
    -- SFTH050 --
    0251 07/21/200508:00 EDThttp://www.prnewswire.com