• Umpqua Holdings Corporation
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  • Umpqua Holdings Reports Q1 2006 $0.39 Diluted Earnings Per Share, an 18% Increase Over Q1 2005
    Company Release - 04/20/2006 08:00
                     Annualized Loan Growth Remains Strong at 18%

    PORTLAND, Ore., April 20 /PRNewswire-FirstCall/ -- Umpqua Holdings Corporation (Nasdaq: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced first quarter 2006 net income of $17.4 million, or $0.39 per diluted share, compared to $15.0 million, or $0.33 per diluted share, for the first quarter of 2005.

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

    Core earnings per diluted share were $0.39 for the first quarter of 2006, compared to $0.34 for the first quarter of 2005, an increase of 15%. The Company defines core earnings as net income excluding certain non-core items that fluctuate significantly or occur infrequently. These non-core items include merger-related expenses, significant infrequent gains and losses or expenses that are not reflective of continuing operations. The following table illustrates our core earnings per diluted share.

    
                                       Three months ended      Year over Year
                                                                   Quarter
         Core earnings per              Q1     Q4     Q1     Variance    Variance
         diluted share:                2006   2005   2005       $           %
    
           Net income                 $0.39  $0.42  $0.33     $0.06        18%
        less non-core items,
         after tax:
           MSR valuation recovery
           (impairment)                  --     --     --        --
           Securities gains (losses)     --     --     --        --
           Corporate state tax credit    --   0.01     --        --
           Discontinued operations       --     --     --        --
           Merger related expense        --     --  (0.01)     0.01
             Core earnings            $0.39  $0.41  $0.34     $0.05        15%
    
    

    Total consolidated assets of Umpqua Holdings as of March 31, 2006 were $5.48 billion, compared to $4.98 billion a year ago, an increase of 10%. Total gross loans and leases, and deposits, were $4.10 billion and $4.23 billion, respectively, as of March 31, 2006, compared to $3.53 billion and $3.95 billion, respectively, a year ago. These represent annual growth rates of 16% for loans and 7% for deposits. During the first quarter of 2006, gross loans and leases increased $175 million, and deposits decreased $57 million.

    During the first quarter of 2006, the Company had net recoveries of $0.6 million, or 0.06% of average loans and leases on an annualized basis. Nonperforming loans and leases were $7.8 million at March 31, 2006, representing only 0.19% of total loans and leases. This represents a significant decline from $23.7 million in nonperforming loans and leases a year ago. Based on the quality of the loan portfolio and net recoveries for the quarter, there was no substantial provision for credit losses during the first quarter of 2006, compared to $1.0 million for the same period a year ago. The allowance for credit losses was 1.13% of total loans and leases at March 31, 2006.

    "This has been another solid quarter with a number of key accomplishments, including 18% earnings growth, strong loan production, two new store openings and the announcement of the Western Sierra Bancorp acquisition," said Ray Davis, president and chief executive officer of Umpqua Holdings Corporation. "We will continue our de novo strategy throughout 2006, and expect strong performance from our new neighborhood store concept, which is an evolution of our innovative approach to banking and a key part of our goal to remain a community bank at any size."

    Umpqua Bank, Umpqua Holdings' largest subsidiary, reported the net interest margin decreased to 4.95% for the first quarter of 2006, compared to 5.06% for first and fourth quarters of 2005. The decline in margin resulted from recent increases in short-term market interest rates, which led to an increase in deposit and borrowing costs. The yield on earning assets increased 19 basis points on a sequential quarter basis. However, the margin on new net asset growth this quarter was lower than the sequential quarter margin, resulting in the overall decline of 11 basis points.

    Umpqua Bank reported an efficiency ratio of 53.97% for the first quarter of 2006, consistent with the same quarter a year ago in which a 53.76% ratio was reported.

    As of March 31, 2006 total shareholders' equity was $750.8 million, and tangible book value per share was $7.66. As previously announced, the Company declared a quarterly cash dividend of $0.12 per share for the first quarter of 2006.

    On February 8, 2006, the Company announced the signing of a definitive agreement to acquire Western Sierra Bancorp and its principal operating subsidiaries, Western Sierra Bank, Central California Bank, Lake Community Bank and Auburn Community Bank. At the time of the announcement, Western Sierra Bancorp had total assets of approximately $1.3 billion and 31 branches located throughout Northern California. This transaction is expected to close in the second quarter of 2006.

    Non-GAAP Financial Measures

    In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Umpqua believes that providing non-GAAP financial measures provides investors with information useful in understanding Umpqua's financial performance. Umpqua provides measures based on "core earnings," which exclude merger-related expenses, significant infrequent gains, losses or expenses that are not reflective of continuing operations, and "tangible equity" which excludes intangible assets. Core earnings per diluted share is calculated by dividing core earnings by the same diluted share total used in determining diluted earnings per share.

    A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables or where the non-GAAP measure is presented.

    Historically, the Company has provided average balance and other summary data separately on Form 8K. Average balances are now presented on the last page of this press release. Accordingly, we have discontinued issuance of a separate Form 8K.

    About Umpqua Holdings Corporation

    Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has 96 locations between Sacramento, Calif. and Bellevue, Wash., along the Oregon and Northern California Coast and in Central Oregon. Recently recognized as the most admired banking services company in Oregon by Oregon executives and by BusinessWeek magazine as one of the "best ideas" of 2005, Umpqua Bank continues to gain attention for its innovative customer experience. Umpqua Holdings also owns a 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, Ore. For more information, visit www.umpquaholdingscorp.com.

    Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, April 20, 2006, at 10:00 a.m. PDT where management will discuss operating results for the first quarter of 2006. 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 888-795-2173 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 800-945-1674, or by visiting that website.

    
                             Umpqua Holdings Corporation
                          Consolidated Statements of Income
                                     (Unaudited)
    
                                                     Quarter Ended:
        Dollars in thousands,           March 31,      December 31,   March 31,
         except per share data            2006            2005          2005
        Interest income
         Loans and leases                $73,120         $68,980       $56,936
         Investments - taxable             6,711           6,909         6,549
         Investments - tax exempt            722             705           713
         Other interest                      149             281           233
         Dividends                            44              43            43
          Total interest income           80,746          76,918        64,474
    
        Interest expense
         Deposits                         21,038          18,668        11,324
         Repurchase agreements and
          fed funds purchased              2,389             788           501
         Trust preferred securities        3,012           2,887         2,394
         Other borrowings                     28              26           405
    
          Total interest expense          26,467          22,369        14,624
    
        Net interest income               54,279          54,549        49,850
    
        Provision for loan losses             21              68         1,000
        Non-interest income
         Service charges                   5,484           5,671         4,822
         Brokerage fees                    2,368           2,574         3,129
         Mortgage banking revenue          1,844           1,592         1,350
         Gain on sale of securities           --              13            --
         Other income                      2,506           1,624         1,301
    
        Total non-interest income         12,202          11,474        10,602
    
        Non-interest expense
         Salaries and benefits            21,801          21,119        20,279
         Occupancy and equipment           7,168           6,160         6,133
         Other                             9,760          10,838         8,922
         Merger related expenses             251              --           101
    
        Total non-interest expense        38,980          38,117        35,435
    
        Income before income taxes        27,480          27,838        24,017
        Provision for income tax          10,053           9,051         8,998
    
        Net income                       $17,427         $18,787       $15,019
    
        Weighted average shares
         outstanding                  44,658,423      44,514,893    44,330,626
        Weighted average diluted
         shares outstanding           45,029,063      45,078,683    44,962,502
    
        Earnings per share - Basic         $0.39           $0.42         $0.34
        Earnings per share - Diluted       $0.39           $0.42         $0.33
    
    
                             Umpqua Holdings Corporation
                             Consolidated Balance Sheets
                                     (Unaudited)
    
        Dollars in thousands,           March 31,      December 31,   March 31,
         except per share data            2006            2005          2005
    
        Assets:
         Cash and cash equivalents      $122,470        $161,754      $203,501
         Trading account securities          372             601         1,350
         Investments available
          for sale                       648,487         671,868       639,706
         Investments held to maturity      7,633           8,677        11,793
         Loans held for sale              11,760           9,061        12,398
         Loans and leases              4,096,194       3,921,631     3,532,061
         Less:  Allowance
          for loan losses                (44,546)        (43,885)      (45,360)
          Loans and leases, net        4,051,648       3,877,746     3,486,701
         Federal Home Loan Bank stock     14,264          14,263        14,220
         Premises and equipment, net      88,857          88,865        87,073
         Other real estate owned              69           1,123           213
         Mortgage servicing
          rights, net                     11,203          10,890        11,081
         Goodwill and other
          intangibles                    408,156         408,503       407,788
         Other assets                    110,925         107,288       105,830
    
        Total assets                  $5,475,844      $5,360,639    $4,981,654
    
        Liabilities:
         Deposits                     $4,229,648      $4,286,266    $3,953,670
         Securities sold under
          agreements to repurchase
          and fed funds purchased        272,990         113,865        55,712
        Borrowings                         3,111           3,184        63,373
        Notes payable for Trust
         preferred securities            165,643         165,725       166,134
        Other liabilities                 53,670          53,338        45,818
         Total liabilities             4,725,062       4,622,378     4,284,707
    
        Shareholders' equity:
         Common stock                    567,369         564,579       563,319
         Retained earnings               195,639         183,591       140,462
         Accumulated other
          comprehensive loss             (12,226)         (9,909)       (6,834)
           Total shareholders' equity    750,782         738,261       696,947
    
        Total liabilities and
         shareholders' equity         $5,475,844      $5,360,639    $4,981,654
    
    
        Common shares outstanding
         at period end                44,721,027      44,556,269    44,434,655
        Book value per share              $16.79          $16.57        $15.68
        Tangible book value per share      $7.66           $7.40         $6.51
        Tangible equity                 $342,626        $329,758      $289,159
    
    
                             Umpqua Holdings Corporation
                                    Loan Portfolio
                                     (Unaudited)
    
        Dollars in thousands           March 31,      December 31,   March 31,
        Loans and leases by purpose:     2006            2005          2005
    
         Commercial real estate       $2,225,533      $2,127,940    $1,897,234
         Residential real estate         216,740         219,254       219,951
         Construction                    712,454         652,023       486,277
          Total real estate            3,154,727       2,999,217     2,603,462
         Commercial                      877,102         853,212       842,999
         Leases                           16,959          17,385        17,423
         Consumer                         46,593          50,361        66,916
         Other                               813           1,456         1,261
         Total loans and leases       $4,096,194      $3,921,631    $3,532,061
    
    
                                         Quarter         Quarter       Quarter
                                          Ended           Ended         Ended
        Dollars in thousands             March 31,     December 31,    March 31,
                                           2006            2005          2005
        Allowance for credit losses
         Balance beginning of period     $43,885         $43,603       $44,229
          Provision for credit losses         21              68         1,000
    
        Charge-offs                         (613)           (612)         (612)
        Less recoveries                    1,253             826           743
          Net recoveries                     640             214           131
    
        Total Allowance for
         loan losses                      44,546          43,885        45,360
    
        Reserve for unfunded commitments   1,642           1,601         1,368
         Total Allowance for
          credit losses                  $46,188         $45,486       $46,728
    
        Net recoveries to average
         loans and leases (annualized)     0.06%           0.02%         0.02%
        Recoveries to gross charge-offs     204%            135%          121%
        Allowance for credit losses to
         loans and leases                  1.13%           1.16%         1.32%
        Allowance for credit losses to
         nonperforming loans and leases     592%            706%          197%
        Nonperforming loans and leases
         To total loans and leases         0.19%           0.16%         0.67%
    
        Nonperforming assets
         Nonperforming loans and leases   $7,796          $6,440       $23,660
         Real estate owned                    69           1,123           213
        Total nonperforming assets        $7,865          $7,563       $23,873
    
    
                                   Deposits by Type
                                     (Unaudited)
    
                                March 31,         December 31,         March 31,
                                  2006                2005               2005
        Dollars in
         thousands            Amount    Mix      Amount    Mix      Amount    Mix
        Demand, non
         interest-bearing    $990,803  23.4%    $987,714  23.0%    $962,912  24.4%
        Demand,
         interest-bearing   1,768,347  41.8%   1,771,716  41.3%  1 ,563,394  39.5%
        Savings               355,280   8.4%     401,632   9.4%     451,733  11.4%
        Time                 1,115,21  26.4%   1,125,204  26.3%     975,631  24.7%
        Total Deposits     $4,229,648 100.0%  $4,286,266 100.0%  $3,953,670 100.0%
    
    
                             Umpqua Holdings Corporation
                                   Selected Ratios
                                     (Unaudited)
    
                                                     Quarter Ended:
                                         March 31,      December 31,   March 31,
                                           2006            2005          2005
        Net Interest Spread:
         Yield on loans and leases         7.37%           7.22%         6.62%
         Yield on taxable investments      4.44%           4.39%         4.22%
         Yield on tax-exempt
          investments (1)                  5.59%           5.68%         6.47%
         Yield on temporary investments    4.28%           3.78%         2.48%
          Total yield on
           earning assets (1)              6.96%           6.77%         6.24%
    
        Cost of interest-bearing
         deposits                          2.63%           2.35%         1.57%
        Cost of securities sold
         under agreements to repurchase
         and fed funds purchased           4.14%           2.99%         2.32%
        Cost of borrowings                 3.62%           3.22%         1.99%
        Cost of trust preferred
         securities                        7.37%           6.91%         5.84%
          Total cost of interest
           bearing liabilities             2.94%           2.59%         1.82%
    
    
        Net interest spread (1)            4.02%           4.18%         4.42%
    
        Net interest margin (1)            4.69%           4.81%         4.83%
    
        Return on average assets           1.31%           1.42%         1.24%
        Return on average tangible
         assets                            1.41%           1.54%         1.35%
        Return on average equity           9.50%          10.20%         8.78%
        Return on average tangible
         equity                           21.04%          23.01%        21.34%
    
        Bank Only Ratios:
        Umpqua Bank efficiency ratio      53.97%          52.93%        53.76%
        Umpqua Bank net interest
         margin (1)                        4.95%           5.06%         5.06%
    
        (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:
        Dollars in thousands           March 31,      December 31,   March 31,
                                         2006            2005          2005
    
    
        Loans held for sale              $9,551         $13,913       $13,735
        Loans and leases              4,015,579       3,778,273     3,475,172
        Earning assets                4,721,904       4,525,657     4,215,935
        Goodwill & other
         intangibles                    408,212         406,792       408,160
        Total assets                  5,411,419       5,232,214     4,908,401
    
        Non interest bearing
         demand deposits                968,506       1,017,971       894,916
        Interest bearing deposits     3,243,784       3,148,531     2,927,914
        Total deposits                4,212,290       4,166,502     3,822,830
        Interest bearing
         liabilities                  3,646,484       3,422,088     3,264,258
    
        Total shareholders' equity      744,190         730,741       693,551
        Tangible equity                 335,978         323,949       285,391
    
    
                             Umpqua Holdings Corporation
                        Mortgage Banking Statistical Analysis
                                     (unaudited)
    
                                                     Quarter Ended:
                                         March 31,      December 31,   March 31,
        Dollars in thousands               2006            2005          2005
    
        Mortgage Servicing
         Rights (MSR):
        Mortgage loans serviced
         for others                    $1,014,680      $1,016,092    $1,052,910
    
        MSR Asset (gross)                 $13,610         $13,264       $12,157
        Less: Valuation reserve            (2,407)         (2,374)       (1,076)
         MSR Asset (net of reserve)       $11,203         $10,890       $11,081
    
        MSR as % of serviced portfolio      1.10%           1.07%         1.05%
    
        Dollars in thousands,
         except per share data
        Mortgage Banking Revenue:
        Origination and sale               $1,523          $1,610        $1,397
        Servicing                             354             214           237
        MSR valuation reserve change          (33)           (232)         (284)
         Total Mortgage Banking Revenue    $1,844          $1,592        $1,350
    
        Diluted earnings per share
         contribution of Mortgage
         Banking Group                        $--             $--           $--
    
    SOURCE  Umpqua Holdings Corporation
        -0-                             04/20/2006
        /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;
         Strand, Atkinson, Williams & York, Inc.
    ST:  Oregon, California
    IN:  FIN
    SU:  ERN CCA
    
    JA-MW
    -- SFTH024 --
    2609 04/20/200608:00 EDThttp://www.prnewswire.com