• Umpqua Holdings Corporation
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  • Umpqua Reports First Quarter 2017 Results
    Company Release - 04/19/2017 16:15

    Net earnings of $46.0 million, or $0.21 per common share
    Quarterly loan and lease growth of $321.0 million, or 7% annualized
    Net interest margin of 3.85%, up 2 basis points from the prior quarter

    PORTLAND, Ore., April 19, 2017 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $46.0 million for the first quarter of 2017, compared to $69.2 million for the fourth quarter of 2016 and $47.5 million for the first quarter of 2016.  Earnings per diluted common share were $0.21 for the first quarter of 2017, compared to $0.31 for the fourth quarter of 2016 and $0.22 for the first quarter of 2016.

    “Despite some of the near-term headwinds we continue to face, I’m pleased with the progress we’ve made so far on the key priorities that we outlined for 2017,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “Loans and leases increased by $321 million, or 7% annualized, during the first quarter, reflecting balanced growth across our commercial, consumer, leasing and commercial real-estate portfolios. There’s strong momentum driving this loan growth, and with a slight expansion in the net interest margin and as we head into the seasonally stronger mortgage banking quarters, I feel good about how we’re positioned for the remainder of the year.”

    Notable items that impacted the first quarter 2017 financial results included:

    • $7.7 million negative adjustment related to the fair value change of the MSR asset, compared to a gain of $16.5 million in the prior quarter and a loss of $20.6 million in the same period of the prior year.
    • $0.7 million negative adjustment related to the fair value change of the debt capital market swap derivatives, compared to a gain of $4.6 million in the prior quarter and a loss of $1.8 million in the same period of the prior year.
    • $1.0 million in merger-related expenses, compared to $3.2 million in the prior quarter and $3.5 million in the same period of the prior year.
    • $0.5 million of exit or disposal costs, compared to $1.2 million in the prior quarter and $0.3 million in the same period of the prior year.
    • $1.6 million net loss on junior subordinated debentures carried at fair value, consistent with the level in the prior quarter and with the same period of the prior year.

    First Quarter 2017 Highlights (compared to prior quarter):

    • Net interest income decreased by $1.1 million, driven by lower accretion of the credit discount recorded on acquired loans and two fewer days in the quarter, partially offset by growth in interest-earning assets and a 2 basis point increase in net interest margin;
    • Provision for loan and lease losses decreased by $1.5 million to $11.7 million, while net charge-offs decreased by $3.5 million to $9.4 million, or 22 basis points of average loans and leases (annualized);
    • Non-interest income decreased by $38.4 million, of which $29.5 million was related to the change in gains or losses associated with the fair value of the mortgage servicing rights ("MSR") asset and debt capital markets swap derivatives.  The remainder of the decline was driven primarily by lower revenues from the origination and sale of mortgages;
    • Non-interest expense decreased by $0.8 million, driven primarily by lower mortgage banking and merger-related expenses, partially offset by higher seasonal payroll taxes;
    • Gross loan and lease growth of $321.0 million, or 7% annualized, to $17.8 billion;
    • Deposit growth of $146.3 million, or 3% annualized, to $19.2 billion;
    • Non-performing assets to total assets decreased to 0.24%;
    • Estimated total risk-based capital ratio of 14.4% and estimated Tier 1 common to risk weighted assets ratio of 11.3%; and
    • Declared quarterly cash dividend of $0.16 per common share.

    Balance Sheet
    Total consolidated assets were $24.9 billion as of March 31, 2017, compared to $24.8 billion as of December 31, 2016 and $23.9 billion as of March 31, 2016.  Including secured off-balance sheet lines of credit at the Company, total available liquidity was $9.4 billion as of March 31, 2017, representing 38% of total assets and 49% of total deposits.

    Gross loans and leases were $17.8 billion as of March 31, 2017, an increase of $321.0 million, or 7% annualized, from $17.5 billion as of December 31, 2016.  This included balanced growth in the Company's commercial, commercial real-estate, leasing & equipment finance and consumer loan portfolios.  During the first quarter of 2017, the Company sold $12.5 million of leases and equipment finance loans. 

    Total deposits were $19.2 billion as of March 31, 2017, an increase of $146.3 million, or 3% annualized, from $19.0 billion as of December 31, 2016.  This increase was primarily attributable to growth in non-interest bearing demand and savings accounts, partially offset by a $187 million decrease in public funds, which was attributable to a combination of seasonal fluctuations and targeted run-off.

    Net Interest Income
    Net interest income was $206.7 million for the first quarter of 2017, a decrease of $1.1 million from the prior quarter.   This decrease was primarily attributable to a $1.3 million linked quarter decrease in interest income arising from the accretion of the credit discount recorded on acquired loans and two fewer days in the quarter.  These were partially offset by the growth in average interest-earning assets and a higher net interest margin.

    The Company’s net interest margin was 3.85% for the first quarter of 2017, up two basis points from 3.83% for the fourth quarter of 2016.  The linked quarter increase reflects higher average yields on taxable investments and interest-bearing cash, partially offset by the lower level of accretion of the credit discount recorded on acquired loans.

    Credit Quality
    Under acquisition accounting, loans (including those considered non-performing) acquired from Sterling were recorded at their estimated fair value, and the related allowance for loan losses was eliminated.  As a result, the Company wrote down the value of the loan and lease portfolio acquired from Sterling as of the acquisition date.  The credit portion of the fair value mark is not reflected in the reported allowance for loan and lease losses, or its related allowance coverage ratios, but we believe should be considered when comparing the current quarter ratios to similar ratios in periods prior to the acquisition of Sterling.

    Loans acquired with significantly deteriorated credit quality are accounted for as purchased credit impaired pools.  Accordingly, loans included in the purchased credit impaired pools are not reported as non-performing loans based upon their individual performance status.

    During the first quarter of 2017, the Company recorded $6.4 million of accretion related to the Sterling credit discount in interest income, compared to $7.7 million in the prior quarter.  As of March 31, 2017, the purchased non-credit impaired loans had approximately $38.5 million of remaining credit discount that will accrete into interest income over the life of the loans, and the purchased credit impaired loan pools had approximately $30.5 million of remaining total discount.

    The allowance for loan and lease losses was $136.3 million, or 0.76% of loans and leases, as of March 31, 2017.  To provide better comparability to prior periods, on a pro-forma basis, this ratio would have been approximately 1.1% after grossing up the allowance for loan and lease losses and the loans and leases by the amount of the credit discount remaining as of quarter-end. This compares to a pro-forma ratio of approximately 1.2% as of December 31, 2016.

    The provision for loan and lease losses was $11.7 million for the first quarter of 2017, a $1.5 million decrease from the prior quarter level, reflecting a lower level of net charge-offs.  As of March 31, 2017, non-performing assets represented 0.24% of total assets, down from 0.25% as of December 31, 2016 and from 0.30% as of March 31, 2016.

    Non-interest Income
    Non-interest income was $60.2 million for the first quarter of 2017, down $38.4 million from the prior quarter, of which $29.5 million was related to the change in gains or losses associated with the fair value of the MSR asset and debt capital markets swap derivatives.  The current quarter's non-interest income included negative adjustments of $7.7 million and $0.7 million related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively, both attributable to the decrease in long-term interest rates during the quarter.  This compares to fair value gains of $16.5 million and $4.6 million for the MSR asset and debt capital market swap derivatives, respectively, during the fourth quarter of 2016. 

    Revenue from the origination and sale of residential mortgages was $24.6 million for the first quarter of 2017, down $7.7 million from the prior quarter.  This decrease was driven by a 29% linked quarter decline in for-sale mortgage origination volume, partially offset by a higher home lending gain on sale margin, which increased by 22 basis points to 3.27% for the first quarter of 2017.  Of the current quarter’s mortgage production, 67% related to purchase activity, as compared to 63% for the prior quarter and 58% for the same period in the prior year.

    Revenue related to the servicing of residential mortgage loans was $9.9 million for the first quarter of 2017, up 3% from the prior quarter, reflecting growth in the residential mortgage loans serviced for others portfolio.

    Gain on loan sales decreased by $2.3 million from the prior quarter to $1.8 million, reflecting a lower level of portfolio loans sales compared to the prior quarter.

    Non-interest Expense
    Non-interest expense was $182.7 million for the first quarter of 2017, down $0.8 million from the prior quarter level.  Mortgage banking expenses decreased by $2.6 million from the prior quarter level, consistent with the lower level of mortgage originations.  Merger-related expenses also decreased by $2.2 million from the prior quarter.  These decreases were partially offset by $4.3 million in higher seasonal payroll taxes. 

    Capital
    As of March 31, 2017, the Company’s book value per share increased to $17.84, from $17.79 in the prior quarter, and its tangible book value per common share1 increased to $9.57, from $9.50 in the prior quarter.

    The Company’s estimated total risk-based capital ratio was 14.4% and its estimated Tier 1 common to risk weighted assets ratio was 11.3% as of March 31, 2017.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of March 31, 2017 are estimates, pending completion and filing of the Company’s regulatory reports.

    1 "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

    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.  The Company believes that these non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

    Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity 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).

    (In thousands, except per share data) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016
    Total shareholders' equity $3,931,150  $3,916,795  $3,920,208  $3,902,158  $3,878,630 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 35,197  36,886  38,753  40,620  42,948 
    Tangible common shareholders' equity $2,108,302  $2,092,258  $2,093,804  $2,073,887  $2,048,031 
    Total assets $24,861,458  $24,813,119  $24,744,214  $24,132,507  $23,935,686 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 35,197  36,886  38,753  40,620  42,948 
    Tangible assets $23,038,610  $22,988,582  $22,917,810  $22,304,236  $22,105,087 
    Common shares outstanding at period end 220,349  220,177  220,207  220,482  220,171 
               
    Common equity ratio 15.81% 15.79% 15.84% 16.17% 16.20%
    Tangible common equity ratio 9.15% 9.10% 9.14% 9.30% 9.26%
    Book value per common share $17.84  $17.79  $17.80  $17.70  $17.62 
    Tangible book value per common share $9.57  $9.50  $9.51  $9.41  $9.30 

    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 customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and 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, and Pivotus Ventures, an innovation studio headquartered in Silicon Valley focused on creating key technologies and business models that transform finance and commerce.  Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit https://www.umpquabank.com/ask-us/investor-relations/.

    Earnings Conference Call Information
    The Company will host its first quarter 2017 earnings conference call on Thursday, April 20, 2017, at 10:00 a.m. PDT (1:00 p.m. EDT).  During the call, the Company will provide an update on recent activities and discuss its first quarter 2017 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (877) 675-4756 ten minutes prior to the start time and enter conference ID: 1062181.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 1062181.  The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at https://www.umpquabank.com/ask-us/investor-relations/.

    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 credit discount accretion related to loans acquired from Sterling Financial Corporation, loan and lease growth, and trends in the loan portfolio mix.  Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; our inability to successfully implement efficiency initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

     
    Umpqua Holdings Corporation
    Consolidated Statements of Income
    (Unaudited)
               
      Quarter Ended % Change
    (In thousands, except per share data) Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Seq.
    Quarter
     Year 
    over 
    Year 
    Interest income:              
    Loans and leases $205,996  $209,812  $212,037  $210,290  $217,928  (2)% (5)%
    Interest and dividends on investments:              
    Taxable 13,931  10,630  10,779  11,963  13,055  31% 7%
    Exempt from federal income tax 2,242  2,229  2,181  2,183  2,235  1% 0%
    Dividends 388  336  332  365  366  15% 6%
    Temporary investments & interest bearing deposits 1,557  1,696  1,090  652  480  (8)% 224%
    Total interest income 224,114  224,703  226,419  225,453  234,064  0% (4)%
    Interest expense:              
    Deposits 9,648  9,288  8,999  8,540  8,413  4% 15%
    Repurchase agreements 30  32  32  32  36  (6)% (17)%
    Term debt 3,510  3,413  3,558  3,848  4,186  3% (16)%
    Junior subordinated debentures 4,201  4,174  3,938  3,835  3,727  1% 13%
    Total interest expense 17,389  16,907  16,527  16,255  16,362  3% 6%
    Net interest income 206,725  207,796  209,892  209,198  217,702  (1)% (5)%
    Provision for loan and lease losses 11,672  13,171  13,091  10,589  4,823  (11)% 142%
    Non-interest income:              
    Service charges on deposits 14,729  15,323  15,762  15,667  14,516  (4)% 1%
    Brokerage revenue 4,122  4,230  4,129  4,580  4,094  (3)% 1%
    Residential mortgage banking revenue, net 26,834  58,448  47,206  36,783  15,426  (54)% 74%
    (Loss) gain on investment securities, net (2)     162  696  nm  (100)%
    Gain on loan sales 1,754  4,060  1,285  5,640  2,371  (57)% (26)%
    Loss on junior subordinated debentures carried at fair value (1,555) (1,589) (1,590) (1,572) (1,572) (2)% (1)%
    BOLI income 2,069  2,107  2,116  2,152  2,139  (2)% (3)%
    Other income 12,274  16,041  11,802  11,247  8,281  (23)% 48%
    Total non-interest income 60,225  98,620  80,710  74,659  45,951  (39)% 31%
    Non-interest expense:              
    Salaries and employee benefits 106,473  105,406  105,341  107,545  106,538  1% 0%
    Occupancy and equipment, net 38,673  37,618  38,181  37,850  38,295  3% 1%
    Intangible amortization 1,689  1,867  1,867  2,328  2,560  (10)% (34)%
    FDIC assessments 4,087  3,985  4,109  3,693  3,721  3% 10%
    Loss (gain) on other real estate owned, net 82  (197) (14) (1,457) 1,389  (142)% (94)%
    Merger related expenses 1,020  3,218  2,011  6,634  3,450  (68)% (70)%
    Goodwill impairment         142  0% nm 
    Other expense 30,690  31,571  29,692  31,918  27,894  (3)% 10%
    Total non-interest expense 182,714  183,468  181,187  188,511  183,989  0% (1)%
    Income before provision for income taxes 72,564  109,777  96,324  84,757  74,841  (34)% (3)%
    Provision for income taxes 26,561  40,502  34,515  30,470  27,272  (34)% (3)%
    Net income 46,003  69,275  61,809  54,287  47,569  (34)% (3)%
    Dividends and undistributed earnings allocated to participating securities 12  33  31  32  29  (64)% (59)%
    Net earnings available to common shareholders $45,991  $69,242  $61,778  $54,255  $47,540  (34)% (3)%
                   
    Weighted average basic shares outstanding 220,287  220,190  220,291  220,421  220,227  0% 0%
    Weighted average diluted shares outstanding 220,779  220,756  220,751  220,907  221,052  0% 0%
    Earnings per common share – basic $0.21  $0.31  $0.28  $0.25  $0.22  (32)% (5)%
    Earnings per common share – diluted $0.21  $0.31  $0.28  $0.25  $0.22  (32)% (5)%
    nm = not meaningful              


    Umpqua Holdings Corporation
    Consolidated Balance Sheets
    (Unaudited)
                 
                % Change
    (In thousands, except per share data) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Seq.
    Quarter
     Year 
    over  
    Year 
    Assets:              
    Cash and due from banks $262,655  $331,994  $364,013  $369,535  $299,871  (21)% (12)%
    Interest bearing cash and temporary investments 421,991  1,117,438  1,102,428  535,828  613,049  (62)% (31)%
    Investment securities:              
    Trading, at fair value 11,241  10,964  10,866  10,188  9,791  3% 15%
    Available for sale, at fair value 3,243,408  2,701,220  2,520,037  2,482,072  2,542,535  20% 28%
    Held to maturity, at amortized cost 4,121  4,216  4,302  4,382  4,525  (2)% (9)%
    Loans held for sale 372,073  387,318  565,624  552,681  659,264  (4)% (44)%
    Loans and leases 17,829,638  17,508,663  17,392,051  17,355,240  16,955,583  2% 5%
    Allowance for loan and lease losses (136,292) (133,984) (133,692) (131,042) (130,243) 2% 5%
    Loans and leases, net 17,693,346  17,374,679  17,258,359  17,224,198  16,825,340  2% 5%
    Restricted equity securities 45,522  45,528  47,537  47,542  47,545  0% (4)%
    Premises and equipment, net 293,133  303,882  306,287  312,647  322,822  (4)% (9)%
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  0% 0%
    Other intangible assets, net 35,197  36,886  38,753  40,620  42,948  (5)% (18)%
    Residential mortgage servicing rights, at fair value 142,344  142,973  114,446  112,095  117,172  0% 21%
    Other real estate owned 6,518  6,738  8,309  16,437  20,411  (3)% (68)%
    Bank owned life insurance 301,777  299,673  297,561  295,444  293,703  1% 3%
    Deferred tax assets, net 8,464  34,322  27,587  63,038  108,865  (75)% (92)%
    Other assets 232,017  227,637  290,454  278,149  240,194  2% (3)%
    Total assets $24,861,458  $24,813,119  $24,744,214  $24,132,507  $23,935,686  0% 4%
    Liabilities:              
    Deposits $19,167,293  $19,020,985  $18,918,780  $18,258,474  $18,162,974  1% 6%
    Securities sold under agreements to repurchase 304,280  352,948  309,463  360,234  325,203  (14)% (6)%
    Term debt 852,308  852,397  902,678  902,999  903,382  0% (6)%
    Junior subordinated debentures, at fair value 263,605  262,209  260,114  258,660  256,917  1% 3%
    Junior subordinated debentures, at amortized cost 100,851  100,931  101,012  101,093  101,173  0% 0%
    Other liabilities 241,971  306,854  331,959  348,889  307,407  (21)% (21)%
    Total liabilities 20,930,308  20,896,324  20,824,006  20,230,349  20,057,056  0% 4%
    Shareholders' equity:              
    Common stock 3,516,537  3,515,299  3,514,858  3,517,240  3,518,792  0% 0%
    Retained earnings 433,417  422,839  388,678  362,258  343,421  3% 26%
    Accumulated other comprehensive (loss) income (18,804) (21,343) 16,672  22,660  16,417  (12)% (215)%
    Total shareholders' equity 3,931,150  3,916,795  3,920,208  3,902,158  3,878,630  0% 1%
    Total liabilities and shareholders' equity $24,861,458  $24,813,119  $24,744,214  $24,132,507  $23,935,686  0% 4%
                   
    Common shares outstanding at period end 220,349  220,177  220,207  220,482  220,171  0% 0%
    Book value per common share $17.84  $17.79  $17.80  $17.70  $17.62  0% 1%
    Tangible book value per common share $9.57  $9.50  $9.51  $9.41  $9.30  1% 3%
    Tangible equity - common $2,108,302  $2,092,258  $2,093,804  $2,073,887  $2,048,031  1% 3%
    Tangible common equity to tangible assets 9.15% 9.10% 9.14% 9.30% 9.26% 0.05  (0.11)
    nm = not meaningful              


    Umpqua Holdings Corporation
    Loan & Lease Portfolio
    (Unaudited)
                   
    (Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Loans & leases:              
    Commercial real estate:              
    Non-owner occupied term, net $3,410,914  $3,330,442  $3,280,660  $3,377,464  $3,202,488  2% 7%
    Owner occupied term, net 2,584,183  2,599,055  2,573,942  2,581,786  2,714,766  (1)% (5)%
    Multifamily, net 2,885,164  2,858,956  2,968,019  3,004,890  2,959,975  1% (3)%
    Commercial construction, net 471,007  463,625  388,934  367,879  338,801  2% 39%
    Residential development, net 145,479  142,984  127,447  111,941  121,025  2% 20%
    Commercial:              
    Term, net 1,620,311  1,508,780  1,480,173  1,440,704  1,412,816  7% 15%
    Lines of credit & other, net 1,114,160  1,116,259  1,142,946  1,116,876  1,036,389  0% 8%
    Leases & equipment finance, net 1,000,376  950,588  927,857  884,506  791,798  5% 26%
    Residential real estate:              
    Mortgage, net 2,916,924  2,887,971  2,868,337  2,882,076  2,879,600  1% 1%
    Home equity lines & loans, net 1,015,138  1,011,844  1,008,219  989,814  943,254  0% 8%
    Consumer & other, net 665,982  638,159  625,517  597,304  554,671  4% 20%
    Total, net of deferred fees and costs $17,829,638  $17,508,663  $17,392,051  $17,355,240  $16,955,583  2% 5%
                   
    Loan & leases mix:              
    Commercial real estate:              
    Non-owner occupied term, net 19% 19% 19% 19% 19%    
    Owner occupied term, net 14% 15% 15% 15% 16%    
    Multifamily, net 16% 16% 17% 17% 17%    
    Commercial construction, net 3% 3% 2% 2% 2%    
    Residential development, net 1% 1% 1% 1% 1%    
    Commercial:              
    Term, net 9% 9% 8% 8% 8%    
    Lines of credit & other, net 6% 6% 7% 6% 6%    
    Leases & equipment finance, net 6% 5% 5% 6% 5%    
    Residential real estate:              
    Mortgage, net 16% 16% 16% 17% 17%    
    Home equity lines & loans, net 6% 6% 6% 6% 6%    
    Consumer & other, net 4% 4% 4% 3% 3%    
    Total 100% 100% 100% 100% 100%    


    Umpqua Holdings Corporation
    Deposits by Type/Core Deposits
    (Unaudited)
                   
    (Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Deposits:              
    Demand, non-interest bearing $6,021,585  $5,861,469  $5,993,793  $5,475,986  $5,460,310  3% 10%
    Demand, interest bearing 2,327,226  2,296,532  2,218,782  2,186,164  2,178,446  1% 7%
    Money market 6,784,442  6,932,717  6,841,700  6,782,232  6,814,160  (2)% 0%
    Savings 1,400,330  1,325,757  1,303,816  1,254,675  1,213,049  6% 15%
    Time 2,633,710  2,604,510  2,560,689  2,559,417  2,497,009  1% 5%
    Total $19,167,293  $19,020,985  $18,918,780  $18,258,474  $18,162,974  1% 6%
                   
    Total core deposits (1) $17,427,832  $17,318,003  $17,257,663  $16,598,065  $16,559,943  1% 5%
                   
    Deposit mix:              
    Demand, non-interest bearing 31% 31% 31% 30% 30%    
    Demand, interest bearing 12% 12% 12% 12% 12%    
    Money market 36% 36% 36% 37% 37%    
    Savings 7% 7% 7% 7% 7%    
    Time 14% 14% 14% 14% 14%    
    Total 100% 100% 100% 100% 100%    
                   
    Number of open accounts:              
    Demand, non-interest bearing 385,859  384,040  382,687  379,996  375,913     
    Demand, interest bearing 81,570  82,520  83,501  84,434  85,731     
    Money market 55,903  56,031  56,128  56,492  56,927     
    Savings 160,323  159,080  158,760  157,849  156,846     
    Time 47,365  47,705  47,689  47,850  47,794     
    Total 731,020  729,376  728,765  726,621  723,211     
                   
    Average balance per account:              
    Demand, non-interest bearing $15.6  $15.3  $15.7  $14.4  $14.5     
    Demand, interest bearing 28.5  27.8  26.6  25.9  25.4     
    Money market 121.4  123.7  121.9  120.1  119.7     
    Savings 8.7  8.3  8.2  7.9  7.7     
    Time 55.6  54.6  53.7  53.5  52.2     
    Total $26.2  $26.1  $26.0  $25.1  $25.1     

    (1) Core deposits are defined as total deposits less time deposits greater than $100,000.

     
    Umpqua Holdings Corporation
    Credit Quality – Non-performing Assets
     (Unaudited)
                   
      Quarter Ended % Change
    (Dollars in thousands) Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Seq.
    Quarter
     Year over
    Year
    Non-performing assets:              
    Loans and leases on non-accrual status $28,915  $27,765  $27,791  $25,136  $30,045  4% (4)%
    Loans and leases past due 90+ days & accruing (1) 23,421  28,369  26,189  23,076  22,144  (17)% 6%
    Total non-performing loans and leases 52,336  56,134  53,980  48,212  52,189  (7)% 0%
    Other real estate owned 6,518  6,738  8,309  16,437  20,411  (3)% (68)%
    Total non-performing assets $58,854  $62,872  $62,289  $64,649  $72,600  (6)% (19)%
                   
    Performing restructured loans and leases $43,184  $40,667  $36,645  $40,848  $31,409  6% 37%
    Loans and leases past due 31-89 days $49,530  $30,425  $39,708  $29,640  $29,054  63% 70%
    Loans and leases past due 31-89 days to total loans and leases 0.28% 0.17% 0.23% 0.17% 0.17%    
    Non-performing loans and leases to total loans and leases (1) 0.29% 0.32% 0.31% 0.28% 0.31%    
    Non-performing assets to total assets (1) 0.24% 0.25% 0.25% 0.27% 0.30%    

    (1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $5.3 million, $10.9 million, $7.3 million, $11.3 million, and $14.2 million at March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.

     
    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
     (Unaudited)
      Quarter Ended % Change
    (Dollars in thousands) Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Seq.
    Quarter
     Year over
    Year
    Allowance for loan and lease losses:              
    Balance beginning of period $133,984  $133,692  $131,042  $130,243  $130,322     
    Provision for loan and lease losses 11,672  13,171  13,091  10,589  4,823  (11)% 142%
    Charge-offs (13,002) (16,303) (13,088) (12,682) (7,850) (20)% 66%
    Recoveries 3,638  3,424  2,647  2,892  2,948  6% 23%
    Net charge-offs (9,364) (12,879) (10,441) (9,790) (4,902) (27)% 91%
    Total allowance for loan and lease losses 136,292  133,984  133,692  131,042  130,243  2% 5%
    Reserve for unfunded commitments 3,495  3,611  3,536  3,531  3,482  (3)% 0%
    Total allowance for credit losses $139,787  $137,595  $137,228  $134,573  $133,725  2% 5%
                   
    Net charge-offs to average loans and leases (annualized) 0.22% 0.29% 0.24% 0.23% 0.12%    
    Recoveries to gross charge-offs 27.98% 21.00% 20.22% 22.80% 37.55%    
    Allowance for loan and lease losses to loans and leases 0.76% 0.77% 0.77% 0.76% 0.77%    
    Allowance for credit losses to loans and leases 0.78% 0.79% 0.79% 0.78% 0.79%    


    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
               
      Quarter Ended % Change
      Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Seq.
    Quarter
     Year  
    over 
    Year 
    Average Rates:              
    Yield on loans and leases 4.65% 4.70% 4.75% 4.81% 5.07% (0.05) (0.42)
    Yield on loans held for sale 3.86% 3.79% 3.79% 3.80% 4.06% 0.07  (0.20)
    Yield on taxable investments 2.10% 1.85% 1.96% 2.14% 2.32% 0.25  (0.22)
    Yield on tax-exempt investments (1) 4.76% 4.72% 4.68% 4.73% 4.73% 0.04  0.03 
    Yield on interest bearing cash and temporary investments 0.79% 0.56% 0.50% 0.51% 0.54% 0.23  0.25 
    Total yield on earning assets (1) 4.18% 4.14% 4.26% 4.39% 4.66% 0.04  (0.48)
                   
    Cost of interest bearing deposits 0.30% 0.28% 0.28% 0.27% 0.27% 0.02  0.03 
    Cost of securities sold under agreements              
    to repurchase and fed funds purchased 0.04% 0.04% 0.04% 0.04% 0.05%   (0.01)
    Cost of term debt 1.67% 1.53% 1.57% 1.72% 1.88% 0.14  (0.21)
    Cost of junior subordinated debentures 4.70% 4.59% 4.36% 4.30% 4.20% 0.11  0.50 
    Total cost of interest bearing liabilities 0.48% 0.46% 0.46% 0.46% 0.47% 0.02  0.01 
                   
    Net interest spread (1) 3.70% 3.68% 3.80% 3.93% 4.19% 0.02  (0.49)
    Net interest margin (1) 3.85% 3.83% 3.95% 4.07% 4.34% 0.02  (0.49)
                   
    Performance Ratios:              
    Return on average assets 0.75% 1.11% 1.01% 0.91% 0.82% (0.36) (0.07)
    Return on average tangible assets 0.81% 1.20% 1.09% 0.99% 0.89% (0.39) (0.08)
    Return on average common equity 4.74% 7.04% 6.28% 5.61% 4.93% (2.30) (0.19)
    Return on average tangible common equity 8.83% 13.19% 11.79% 10.59% 9.34% (4.36) (0.51)
    Efficiency ratio – Consolidated 68.15% 59.65% 62.11% 66.15% 69.48% 8.50  (1.33)
    Efficiency ratio – Bank 65.75% 57.96% 60.45% 64.44% 67.29% 7.79  (1.54)

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

     
    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
           
      Quarter Ended % Change
    (Dollars in thousands) Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Seq.
    Quarter
     Year
    over
    Year 
    Temporary investments & interest bearing cash $804,354  $1,194,904  $874,410  $514,881  $356,674  (33)% 126%
    Investment securities, taxable 2,723,576  2,373,652  2,265,883  2,304,998  2,311,589  15% 18%
    Investment securities, tax-exempt 286,444  287,359  283,818  280,841  287,085  0% 0%
    Loans held for sale 351,570  482,028  481,740  403,964  297,732  (27)% 18%
    Loans and leases 17,598,314  17,386,385  17,400,657  17,234,220  17,008,084  1% 3%
    Total interest earning assets 21,764,258  21,724,328  21,306,508  20,738,904  20,261,164  0% 7%
    Goodwill & other intangible assets, net 1,823,799  1,825,491  1,827,405  1,829,407  1,832,046  0% 0%
    Total assets 24,730,285  24,740,986  24,422,986  23,896,315  23,415,439  0% 6%
                   
    Non-interest bearing demand deposits 5,883,924  5,939,223  5,766,022  5,466,098  5,289,810  (1)% 11%
    Interest bearing deposits 13,119,736  13,026,614  12,836,987  12,644,442  12,411,005  1% 6%
    Total deposits 19,003,660  18,965,837  18,603,009  18,110,540  17,700,815  0% 7%
    Interest bearing liabilities 14,661,558  14,606,120  14,446,687  14,249,349  13,976,678  0% 5%
                   
    Shareholders’ equity - common 3,936,340  3,914,624  3,911,323  3,889,593  3,878,540  1% 1%
    Tangible common equity (1) 2,112,541  2,089,133  2,083,918  2,060,186  2,046,494  1% 3%

    (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
    Residential Mortgage Banking Activity
    (unaudited)
           
      Quarter Ended % Change
    (Dollars in thousands) Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Seq. Quarter Year over Year
    Residential mortgage servicing rights:              
    Residential mortgage loans serviced for others $14,541,171  $14,327,368  $13,880,660  $13,564,242  $13,304,468  1% 9%
    MSR asset, at fair value 142,344  142,973  114,446  112,095  117,172  0% 21%
    MSR as % of serviced portfolio 0.98% 1.00% 0.82% 0.83% 0.88%    
    Residential mortgage banking revenue:              
    Origination and sale $24,647  $32,386  $45,631  $42,083  $28,409  (24)% (13)%
    Servicing 9,858  9,597  9,401  8,640  7,642  3% 29%
    Change in fair value of MSR asset (7,671) 16,465  (7,826) (13,940) (20,625) (147)% (63)%
    Total $26,834  $58,448  $47,206  $36,783  $15,426  (54)% 74%
                   
    Closed loan volume:              
    Closed loan volume - portfolio $245,334  $250,000  $305,648  $365,926  $332,918  (2)% (26)%
    Closed loan volume - for-sale 754,715  1,061,327  1,118,526  1,046,349  764,076  (29)% (1)%
    Closed loan volume - total $1,000,049  $1,311,327  $1,424,174  $1,412,275  $1,096,994  (24)% (9)%
                   
    Gain on sale margin:              
    Based on for-sale volume 3.27% 3.05% 4.08% 4.02% 3.72% 0.22  (0.45)
                   


    Contacts:
    
    Ron Farnsworth
    EVP/Chief Financial Officer
    Umpqua Holdings Corporation
    503-727-4108
    ronfarnsworth@umpquabank.comBradley Howes
    SVP/Director of Investor Relations
    Umpqua Holdings Corporation
    503-727-4226
    bradhowes@umpquabank.com

    Source: Umpqua Holdings Corporation