• Umpqua Holdings Corporation
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  • Umpqua Reports Quarterly and Annual Results
    Company Release - 01/25/2017 16:15

    Fourth quarter 2016 net earnings of $0.31 per share and full-year 2016 of $1.05 per share Operating earnings1 of $0.27 per share for fourth quarter 2016 and $1.19 per share for full-year 2016

    PORTLAND, Ore., Jan. 25, 2017 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $69.2 million for the fourth quarter of 2016, up from $61.8 million for the third quarter of 2016 and $62.9 million for the fourth quarter of 2015.  Earnings per diluted common share were $0.31 for the fourth quarter of 2016, up from $0.28 for the third quarter of 2016 and $0.28 for the fourth quarter of 2015.

    For the twelve months ended December 31, 2016, the Company reported net earnings available to common shareholders of $232.8 million, or $1.05 per diluted common share, up from $222.2 million, or $1.01 per diluted common share, for the twelve months ended December 31, 2015.

    “We continued to build positive momentum during 2016; restructuring the balance sheet, entering new markets, expanding our product offerings, and enhancing the digital customer experience, while streamlining operations and demonstrating expense discipline,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation.  “With all of the heavy lifting we completed over the past two years, I believe there is now a tremendous opportunity in front of us.  Given Umpqua's unique franchise and strong brand recognition, combined with the size of the balance sheet and attractive footprint, I feel we are well-positioned to capitalize on that opportunity.  I look forward to sharing more details over the coming year.”

    Reconciliation of Net Earnings (GAAP) to Operating Earnings (non-GAAP):
    The Company’s financial results include several significant items which have been excluded in the presentation of operating earnings, which is a non-GAAP financial measure.  A summary of these items, and a reconciliation of earnings available to common shareholders (GAAP) to operating earnings (non-GAAP), is presented below.  More information is provided in the non-GAAP financial measures section of this release, which we urge you to read.

      Quarter Ended
    (In thousands, except per share data) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
    Net earnings available to common shareholders $69,242  $61,778  $54,255  $47,540  $62,923 
    Adjustments:          
    (Gain) loss from change in fair value of MSR asset (16,465) 7,826  13,940  20,625  469 
    Gain on investment securities, net     (162) (696) (2,567)
    Net loss on junior subordinated debentures carried at fair value 1,589  1,590  1,572  1,572  1,589 
    (Gain) loss from change in fair value of swap derivatives (4,601) (182) 1,493  1,793  (715)
    Merger related expenses 3,218  2,011  6,634  3,450  3,712 
    Goodwill impairment       142   
    Exit or disposal costs 1,207  1,728  1,434  347   
    Total pre-tax adjustments (15,052) 12,973  24,911  27,233  2,488 
    Income tax effect (1) 6,020  (5,188) (9,965) (10,836) (995)
    Net adjustments (9,032) 7,785  14,946  16,397  1,493 
    Operating earnings $60,210  $69,563  $69,201  $63,937  $64,416 
               
    Earnings per diluted share:          
    Earnings available to common shareholders $0.31  $0.28  $0.25  $0.22  $0.28 
    Operating earnings $0.27  $0.32  $0.31  $0.29  $0.29 
               
    (1)  Income tax effect of operating earnings adjustments at 40% for tax-deductible items.

    Full-Year 2016 Highlights (comparisons are to prior year):

    • Total revenue of $1.1 billion, unchanged from prior year as increased mortgage banking revenues were offset by lower average yields on interest-earning assets, along with a lower level of interest income arising from the accretion of the credit discount recorded on acquired loans;
    • Total non-interest expense decreased by 3%, reflecting lower merger-related expenses and lower salaries and benefits expense, partially offset by higher mortgage banking expenses due to the increase in mortgage originations;
    • Gross loan and lease growth of $642 million, or 4% (excluding the impact of loan sales, loan growth of $1.3 billion, or 8%); 
    • Deposit growth of $1.3 billion, or 7%; and
    • Paid dividends of $0.64 per common share, repurchased 635,000 shares of stock, and grew tangible book value1 by 4%, or $0.34 per share.

    Fourth Quarter 2016 Highlights (comparisons are to prior quarter):

    • Total revenue increased by $15.8 million:
      - Net interest income decreased by $2.1 million, reflecting lower accretion of the credit discount recorded on acquired loans, lower prepayment fee income and higher premium amortization on investment securities, partially offset by growth in in interest-earning assets;
      - Non-interest income increased by $17.9 million, driven primarily by gains related to fair value changes of the mortgage servicing rights ("MSR") asset and debt capital market swap derivatives, partially offset by lower revenues from the origination and sale of mortgages due to a decrease in the home lending gain on sale margin;
    • Non-interest expense increased by $2.3 million due primarily to higher merger-related and other expense;
    • Gross loans and leases grew to $17.5 billion;
    • Deposits grew to $19.0 billion;
    • Stable asset quality, with non-performing assets to total assets of 0.25%;
    • Estimated total risk-based capital ratio of 14.6% and estimated Tier 1 common to risk weighted assets ratio of 11.4%; 
    • Declared quarterly cash dividend of $0.16 per common share; and
    • Repurchased 75,000 shares of common stock for $1.3 million.

    Balance Sheet
    Total consolidated assets increased to $24.8 billion as of December 31, 2016, compared to $24.7 billion as of September 30, 2016 and $23.4 billion as of December 31, 2015.  Including secured off-balance sheet lines of credit, the Company had total available liquidity of $9.2 billion as of December 31, 2016, representing 37% of total assets and 49% of total deposits.

    Gross loans and leases were up 1% from the prior quarter to $17.5 billion as of December 31, 2016, driven by growth in the commercial and commercial real estate portfolios, partially offset by a decline in multi-family loans.  During the fourth quarter of 2016, the Company sold $26.9 million of leasing and equipment finance loans.

    Total deposits increased 1% from the prior quarter to $19.0 billion as of December 31, 2016.  This increase was primarily attributable to growth in interest bearing demand and money market accounts, partially offset by lower non-interest bearing demand deposits.

    Net Interest Income
    Net interest income was $207.8 million for the fourth quarter of 2016, down $2.1 million from the prior quarter.  This decrease was primarily attributable to a $1.4 million linked quarter decrease in interest income arising from the accretion of the credit discount recorded on acquired loans, as well as lower prepayment fee income and lower average yields on loans and leases and taxable investments.  These items were partially offset by growth in average interest-earning assets.

    The Company’s net interest margin was 3.83% for the fourth quarter of 2016, down from 3.95% for the third quarter of 2016.  The linked quarter decrease reflects the lower level of accretion of the credit discount recorded on acquired loans, as well as lower average yields on taxable investments and loans and leases.  The lower average yield on taxable investments was primarily attributable to $1.1 million increase in premium amortization from faster prepayment speeds on the Company's agency mortgage-backed securities portfolio.  This trend occurred prior to the increase in long-term mortgage interest rates late in the quarter.

    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 fourth quarter of 2016, the Company reported $7.7 million of accretion related to the Sterling credit discount in interest income, as compared to $9.1 million in the prior quarter.  As of December 31, 2016, the purchased non-credit impaired loans had approximately $43.9 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 $32.2 million of remaining total discount.

    The allowance for loan and lease losses was $134.0 million, or 0.77% of loans and leases, as of December 31, 2016.  To provide better comparability to prior periods, this pro-forma ratio would have been approximately 1.2% 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 1.3% as of September 30, 2016.

    The provision for loan and lease losses increased slightly from the prior quarter to $13.2 million, driven primarily by higher net charge-offs, which increased to $12.9 million for the fourth quarter of 2016, compared to $10.4 million for the third quarter of 2016.  As of December 31, 2016, non-performing assets represented 0.25% of total assets, unchanged from September 30, 2016 and down from 0.28% as of December 31, 2015. 

    Non-interest Income
    Non-interest income was $98.6 million for the fourth quarter of 2016, up $17.9 million from the prior quarter.  This increase reflects income of $16.5 million and $4.6 million related to the fair value change of the MSR asset and the debt capital market swap derivatives, respectively, both attributable to the increase in long-term interest rates late in the quarter.  This compares to a loss of $7.8 million on the MSR asset, and a gain of $0.2 million on the debt capital markets swap derivative, for the third quarter of 2016.

    Excluding the impacts of the changes in fair value on the MSR asset and debt capital markets swap derivative, non-interest income decreased by $10.8 million from the prior quarter, driven primarily by lower revenue from the origination and sale of residential mortgages.  This decrease was driven by a lower home lending gain on sale margin, which decreased to 3.05%, compared to 4.08% in the prior quarter, along with a 5% linked quarter decrease in for sale mortgage originations.  The decrease in home lending gain on sale margin was attributable to the dramatic increase in mortgage rates and a decline in the overall locked loan pipeline.  Of the current quarter’s mortgage production, 63% related to purchase activity, as compared to 68% for the prior quarter and 63% for the same period in the prior year.

    Revenue related to the servicing of residential mortgage loans increased by 2% from the prior quarter, reflecting growth in the residential mortgage loans serviced for others portfolio.

    Non-interest Expense
    Non-interest expense was $183.5 million for the fourth quarter of 2016, which included $3.2 million of merger-related expenses and $1.2 million of exit or disposal costs.  This compares to $181.2 million, including $2.0 million of merger-related expenses and $1.7 million of exit or disposal costs for the third quarter of 2016.

    Excluding the impact of merger-related and exit or disposal costs, non-interest expense increased by $1.6 million from the prior quarter.  The linked quarter increase was driven primarily by higher expenses across several categories, including employee group insurance and benefits, severance, technology and marketing expense, as well as lower cost deferrals.  This was partially offset by a $2.9 million linked quarter decline in mortgage banking expenses, consistent with the lower level of mortgage origination volume in the quarter.

    Capital
    As of December 31, 2016, the Company’s tangible book value per common share1 decreased slightly to $9.50.  During the fourth quarter of 2016, the Company repurchased 75,000 shares of common stock for $1.3 million.  For the twelve months ended 2016, the Company repurchased 635,000 shares for $9.8 million.

    The Company’s estimated total risk-based capital ratio was 14.6% and its estimated Tier 1 common to risk weighted assets ratio was 11.4% as of December 31, 2016.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of December 31, 2016 are estimates, pending completion and filing of the Company’s regulatory reports.

    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 certain 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.

    The Company incurs significant expenses related to the completion and integration of mergers and acquisitions.  It also recognizes gains or losses on its junior subordinated debentures carried at fair value resulting from changes in interest rates and the estimated market credit risk adjusted spread that do not directly correlate with the Company’s operating performance.  Additionally, it may recognize goodwill impairment losses that have no direct effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios.  The Company recognizes gains and losses related to the change in the fair value of its MSR, which are primarily tied to movements in interest rates, and are not indicative of the fundamental operating activities for the period. It also recognizes gains or losses related to the change in the fair value of its swap derivatives, which are driven by movements in interest rates and are beyond our control. On occasion, the Company may sell certain securities in its investment portfolio, and recognize an associated gain or loss, which can be highly discretionary based on the timing of the sales, market opportunities, and interest rates, and therefore are not reflective of the Company's operating performance. The Company also may incur expenses related to the exit or disposal of certain business activities, such as the consolidation of bank branches, which do not reflect the on-going operating performance of the Company. Lastly, the Company may recognize one-time bargain purchase gains on certain acquisitions that are not reflective of the Company’s on-going earnings power.

    Accordingly, management believes that our operating results are best measured on a comparative basis excluding the after-tax impact of merger-related expenses, gains or losses on junior subordinated debentures measured at fair value, gains or losses from the change in fair value of the MSR, gains or losses from the change in fair value of swap derivatives, net gains or losses on investment securities, exit or disposal costs and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains. The Company defines operating earnings as earnings available to common shareholders before these items, and calculates operating earnings per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share.

    The following table provides the reconciliation of earnings available to common shareholders (GAAP) to operating earnings (non-GAAP), and earnings per diluted common share (GAAP) to operating earnings per diluted share (non-GAAP) for the periods presented:

      Quarter Ended % Change
    (Dollars in thousands, except per share data) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year
    over
    Year
    Net earnings available to common shareholders $69,242  $61,778  $54,255  $47,540  $62,923  12% 10%
    Adjustments:              
    (Gain) loss from change in fair value of MSR asset (16,465) 7,826  13,940  20,625  469  (310)% nm
    Gain on investment securities, net     (162) (696) (2,567) 0% (100)%
    Net loss on junior subordinated debentures carried at fair value 1,589  1,590  1,572  1,572  1,589  0% 0%
    (Gain) loss from change in fair value of swap derivatives (4,601) (182) 1,493  1,793  (715) nm 543%
    Merger related expenses 3,218  2,011  6,634  3,450  3,712  60% (13)%
    Goodwill impairment       142    nm nm
    Exit or disposal costs 1,207  1,728  1,434  347    (30)% nm
    Total pre-tax adjustments (15,052) 12,973  24,911  27,233  2,488  (216)% (705)%
    Income tax effect(1) 6,020  (5,188) (9,965) (10,836) (995) (216)% (705)%
    Net adjustments (9,032) 7,785  14,946  16,397  1,493  (216)% (705)%
    Operating earnings $60,210  $69,563  $69,201  $63,937  $64,416  (13)% (7)%
                   
    Earnings per diluted share:              
    Earnings available to common shareholders $0.31  $0.28  $0.25  $0.22  $0.28  11% 11%
    Operating earnings $0.27  $0.32  $0.31  $0.29  $0.29  (16)% (7)%
                   
      Year Ended %
    Change
            
      Dec 31,
    2016
     Dec 31,
    2015
     Year
    over 
    Year
            
    Net earnings available to common shareholders $232,815  $222,182  5%        
    Adjustments:              
    Loss from change in fair value of MSR asset 25,926  20,723  25%        
    Gain on investment securities, net (858) (2,922) (71)%        
    Net loss on junior subordinated debentures carried at fair value 6,323  6,306  0%        
    Gain from change in fair value of swap derivatives (1,497) (162) 824%        
    Merger related expenses 15,313  45,582  (66)%        
    Goodwill impairment 142    nm        
    Exit or disposal costs 4,716    nm        
    Total pre-tax adjustment 50,065  69,527  (28)%        
    Income tax effect (19,969) (27,811) (28)%        
    Net adjustments 30,096  41,716  (28)%        
    Operating earnings $262,911  $263,898  0%        
                   
    Earnings per diluted share:              
    Earnings available to common shareholders $1.05  $1.01  4%        
    Operating earnings $1.19  $1.19  0%        
                   
    (1)  Income tax effect of operating earnings adjustments at 40% for tax-deductible items.  
    nm = not meaningful.  

    The following tables provide the reconciliation of non-interest income (GAAP) to non-interest income, on an operating basis, (non-GAAP), and non-interest expense (GAAP) to non-interest expense, on an operating basis, (non-GAAP) for the periods presented:

      Quarter ended
    (Dollars in thousands) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
    Non-interest income (GAAP) $98,620  $80,710  $74,659  $45,951  $69,345 
    Adjustments:          
      (Gain) loss from change in fair value of MSR asset (16,465) 7,826  13,940  20,625  469 
      (Gain) loss from change in fair value of swap derivatives (4,601) (182) 1,493  1,793  (715)
      Net loss on junior subordinated debentures carried at fair value 1,589  1,590  1,572  1,572  1,589 
      Gain on investment securities, net     (162) (696) (2,567)
    Non-interest income (operating basis) $79,143  $89,944  $91,502  $69,245  $68,121 
               
      Quarter ended
      Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
    Non-interest expense (GAAP) $183,468  $181,187  188,511  $183,989  $185,911 
    Adjustments:          
      Merger related expenses (3,218) (2,011) (6,634) (3,450) (3,712)
      Goodwill impairment       (142)  
      Exit or disposal costs (1,207) (1,728) (1,434) (347)  
    Non-interest expense (operating basis) $179,043  $177,448  $180,443  $180,050  $182,199 
               
      Year Ended      
    (Dollars in thousands) Dec 31,
    2016
     Dec 31,
    2015
          
    Non-interest income (GAAP) $299,940  $275,724       
    Adjustments:          
      Loss from change in fair value of MSR asset 25,926  20,723       
      Gain from change in fair value of swap derivatives (1,497) (162)      
      Net loss on junior subordinated debentures carried at fair value 6,323  6,306       
      Gain on investment securities, net (858) (2,922)      
    Non-interest income (operating basis) $329,834  $299,669       
               
      Year Ended      
      Dec 31,
    2016
     Dec 31,
    2015
          
    Non-interest expense (GAAP) $737,155  $763,642       
    Adjustments:          
      Merger related expenses (15,313) (45,582)      
      Goodwill impairment (142)        
      Exit or disposal costs (4,716)        
    Non-interest expense (operating basis) $716,984  $718,060       

    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).

    (Dollars in thousands, except per share data) Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015
    Total shareholders' equity $3,916,795  $3,920,208  $3,902,158  $3,878,630  $3,849,334 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,793 
    Other intangible assets, net 36,886  38,753  40,620  42,948  45,508 
    Tangible common shareholders' equity $2,092,258  $2,093,804  $2,073,887  $2,048,031  $2,016,033 
    Total assets $24,813,119  $24,744,214  $24,132,507  $23,935,686  $23,406,381 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,793 
    Other intangible assets, net 36,886  38,753  40,620  42,948  45,508 
    Tangible assets $22,988,582  $22,917,810  $22,304,236  $22,105,087  $21,573,080 
    Common shares outstanding at period end 220,177  220,207  220,482  220,171  220,171 
               
    Common equity ratio 15.79% 15.84% 16.17% 16.20% 16.45%
    Tangible common equity ratio 9.10% 9.14% 9.30% 9.26% 9.35%
    Book value per common share $17.79  $17.80  $17.70  $17.62  $17.48 
    Tangible book value per common share $9.50  $9.51  $9.41  $9.30  $9.16 

    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 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 fourth quarter 2016 earnings conference call on Thursday, January 26, 2017, at 10:00 a.m. PT (1:00 p.m. ET).  During the call, the Company will provide an update on recent activities and discuss its fourth quarter and full-year 2016 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (877) 718-5106 ten minutes prior to the start time and enter conference ID: 4736138.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 4736138.  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/.  A slide presentation to accompany the call will also be posted on the website before the call.

    Forward-Looking Statements
    This press release and our earnings call and related slide presentation include 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. We make forward-looking statements about credit discount accretion on acquired loans and 2017 initiatives and growth opportunities.  Specific risks that could cause results to differ from these forward-looking statements include our ability to successfully develop and market new products and technology.  Additional 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; significant volatility in interest rates; unanticipated weakness in loan demand or loan pricing; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; unanticipated increases in the cost of deposits; changes in laws or regulations; changes in regulatory or compliance costs; and changes in general economic conditions.

    Umpqua Holdings Corporation
    Consolidated Statements of Income
    (Unaudited)
               
      Quarter Ended % Change
    (In thousands, except per share data) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year
    over
    Year
    Interest income:              
    Loans and leases $209,812  $212,037  $210,290  $217,928  $219,440  (1)% (4)%
    Interest and dividends on investments:              
    Taxable 10,630  10,779  11,963  13,055  12,654  (1)% (16)%
    Exempt from federal income tax 2,229  2,181  2,183  2,235  2,363  2% (6)%
    Dividends 336  332  365  366  326  1% 3%
    Temporary investments & interest bearing deposits 1,696  1,090  652  480  422  56% 302%
    Total interest income 224,703  226,419  225,453  234,064  235,205  (1)% (4)%
    Interest expense:              
    Deposits 9,288  8,999  8,540  8,413  7,905  3% 17%
    Repurchase agreements 32  32  32  36  39  0% (18)%
    Term debt 3,413  3,558  3,848  4,186  3,885  (4)% (12)%
    Junior subordinated debentures 4,174  3,938  3,835  3,727  3,542  6% 18%
    Total interest expense 16,907  16,527  16,255  16,362  15,371  2% 10%
    Net interest income 207,796  209,892  209,198  217,702  219,834  (1)% (5)%
    Provision for loan and lease losses 13,171  13,091  10,589  4,823  4,545  1% 190%
    Non-interest income:              
    Service charges on deposits 15,323  15,762  15,667  14,516  15,039  (3)% 2%
    Brokerage revenue 4,230  4,129  4,580  4,094  4,061  2% 4%
    Residential mortgage banking revenue, net 58,448  47,206  36,783  15,426  32,440  24% 80%
    Gain on investment securities, net     162  696  2,567  0% (100)%
    Gain on loan sales 4,060  1,285  5,640  2,371  1,729  216% 135%
    Loss on junior subordinated debentures carried at fair value (1,589) (1,590) (1,572) (1,572) (1,589) 0% 0%
    BOLI income 2,107  2,116  2,152  2,139  1,841  0% 14%
    Other income 16,041  11,802  11,247  8,281  13,257  36% 21%
    Total non-interest income 98,620  80,710  74,659  45,951  69,345  22% 42%
    Non-interest expense:              
    Salaries and employee benefits 105,406  105,341  107,545  106,538  106,203  0% (1)%
    Occupancy and equipment, net 37,618  38,181  37,850  38,295  38,722  (1)% (3)%
    Intangible amortization 1,867  1,867  2,328  2,560  2,806  0% (33)%
    FDIC assessments 3,985  4,109  3,693  3,721  3,742  (3)% 6%
    (Gain) loss on other real estate owned, net (197) (14) (1,457) 1,389  (242) 1,307% (19)%
    Merger related expenses 3,218  2,011  6,634  3,450  3,712  60% (13)%
    Goodwill impairment       142    nm nm
    Other expense 31,571  29,692  31,918  27,894  30,968  6% 2%
    Total non-interest expense 183,468  181,187  188,511  183,989  185,911  1% (1)%
    Income before provision for income taxes 109,777  96,324  84,757  74,841  98,723  14% 11%
    Provision for income taxes 40,502  34,515  30,470  27,272  35,704  17% 13%
    Net income 69,275  61,809  54,287  47,569  63,019  12% 10%
    Dividends and undistributed earnings allocated to participating securities 33  31  32  29  96  6% (66)%
    Net earnings available to common shareholders $69,242  $61,778  $54,255  $47,540  $62,923  12% 10%
                   
    Weighted average basic shares outstanding 220,190  220,291  220,421  220,227  220,202  0% 0%
    Weighted average diluted shares outstanding 220,756  220,751  220,907  221,052  220,930  0% 0%
    Earnings per common share – basic $0.31  $0.28  $0.25  $0.22  $0.29  11% 7%
    Earnings per common share – diluted $0.31  $0.28  $0.25  $0.22  $0.28  11% 11%
    nm = not meaningful              
                   


    Umpqua Holdings Corporation
    Consolidated Statements of Income
    (Unaudited)
         
      Year Ended % Change
    (In thousands, except per share data) Dec 31, 2016 Dec 31, 2015 Year
    over
    Year
    Interest income:      
    Loans and leases $850,067  $869,433  (2)%
    Interest and dividends on investments:      
    Taxable 46,427  47,842  (3)%
    Exempt from federal income tax 8,828  9,647  (8)%
    Dividends 1,399  708  98%
    Temporary investments & interest bearing deposits 3,918  2,236  75%
    Total interest income 910,639  929,866  (2)%
    Interest expense:      
    Deposits 35,240  29,839  18%
    Repurchase agreements 132  173  (24)%
    Term debt 15,005  14,470  4%
    Junior subordinated debentures 15,674  13,750  14%
    Total interest expense 66,051  58,232  13%
    Net interest income 844,588  871,634  (3)%
    Provision for loan and lease losses 41,674  36,589  14%
    Non-interest income:      
    Service charges on deposits 61,268  59,740  3%
    Brokerage revenue 17,033  18,481  (8)%
    Residential mortgage banking revenue, net 157,863  124,722  27%
    Gain on investment securities, net 858  2,922  (71)%
    Gain on loan sales 13,356  22,380  (40)%
    Loss on junior subordinated debentures carried at fair value (6,323) (6,306) 0%
    BOLI income 8,514  8,351  2%
    Other income 47,371  45,434  4%
    Total non-interest income 299,940  275,724  9%
    Non-interest expense:      
    Salaries and employee benefits 424,830  430,936  (1)%
    Occupancy and equipment, net 151,944  142,975  6%
    Intangible amortization 8,622  11,225  (23)%
    FDIC assessments 15,508  13,480  15%
    (Gain) loss on other real estate owned, net (279) 1,894  (115)%
    Merger related expenses 15,313  45,582  (66)%
    Goodwill Impairment 142    nm
    Other expense 121,075  117,550  3%
    Total non-interest expense 737,155  763,642  (3)%
    Income before provision for income taxes 365,699  347,127  5%
    Provision for income taxes 132,759  124,588  7%
    Net income 232,940  222,539  5%
    Dividends and undistributed earnings allocated to participating securities 125  357  (65)%
    Net earnings available to common shareholders $232,815  $222,182  5%
           
    Weighted average basic shares outstanding 220,282  220,327  0%
    Weighted average diluted shares outstanding 220,908  221,045  0%
    Earnings per common share – basic $1.06  $1.01  5%
    Earnings per common share – diluted $1.05  $1.01  4%
    nm = not meaningful      


    Umpqua Holdings Corporation
    Consolidated Balance Sheets
    (Unaudited)
                 
                % Change
    (In thousands, except per share data) Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Seq.
    Quarter
     Year
    over
    Year
    Assets:              
    Noninterest bearing cash $331,994  $364,013  $369,535  $299,871  $277,645  (9)% 20%
    Interest bearing deposits and temporary investments 1,117,438  1,102,428  535,828  613,049  496,080  1% 125%
    Investment securities:              
    Trading, at fair value 10,964  10,866  10,188  9,791  9,586  1% 14%
    Available for sale, at fair value 2,701,220  2,520,037  2,482,072  2,542,535  2,522,539  7% 7%
    Held to maturity, at amortized cost 4,216  4,302  4,382  4,525  4,609  (2)% (9)%
    Loans held for sale 387,318  565,624  552,681  659,264  363,275  (32)% 7%
    Loans and leases 17,508,663  17,392,051  17,355,240  16,955,583  16,866,536  1% 4%
    Allowance for loan and lease losses (133,984) (133,692) (131,042) (130,243) (130,322) 0% 3%
    Loans and leases, net 17,374,679  17,258,359  17,224,198  16,825,340  16,736,214  1% 4%
    Restricted equity securities 45,528  47,537  47,542  47,545  46,949  (4)% (3)%
    Premises and equipment, net 303,882  306,287  312,647  322,822  328,734  (1)% (8)%
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,793  0% 0%
    Other intangible assets, net 36,886  38,753  40,620  42,948  45,508  (5)% (19)%
    Residential mortgage servicing rights, at fair value 142,973  114,446  112,095  117,172  131,817  25% 8%
    Other real estate owned 6,738  8,309  16,437  20,411  22,307  (19)% (70)%
    Bank owned life insurance 299,673  297,561  295,444  293,703  291,892  1% 3%
    Deferred tax assets, net 34,322  27,587  63,038  108,865  138,082  24% (75)%
    Other assets 227,637  290,454  278,149  240,194  203,351  (22)% 12%
    Total assets $24,813,119  $24,744,214  $24,132,507  $23,935,686  $23,406,381  0% 6%
    Liabilities:              
    Deposits $19,020,985  $18,918,780  $18,258,474  $18,162,974  $17,707,189  1% 7%
    Securities sold under agreements to repurchase 352,948  309,463  360,234  325,203  304,560  14% 16%
    Term debt 852,397  902,678  902,999  903,382  888,769  (6)% (4)%
    Junior subordinated debentures, at fair value 262,209  260,114  258,660  256,917  255,457  1% 3%
    Junior subordinated debentures, at amortized cost 100,931  101,012  101,093  101,173  101,254  0% 0%
    Other liabilities 306,854  331,959  348,889  307,407  299,818  (8)% 2%
    Total liabilities 20,896,324  20,824,006  20,230,349  20,057,056  19,557,047  0% 7%
    Shareholders' equity:              
    Common stock 3,515,299  3,514,858  3,517,240  3,518,792  3,520,591  0% 0%
    Retained earnings 422,839  388,678  362,258  343,421  331,301  9% 28%
    Accumulated other comprehensive (loss) income (21,343) 16,672  22,660  16,417  (2,558) (228)% 734%
    Total shareholders' equity 3,916,795  3,920,208  3,902,158  3,878,630  3,849,334  0% 2%
    Total liabilities and shareholders' equity $24,813,119  $24,744,214  $24,132,507  $23,935,686  $23,406,381  0% 6%
                   
    Common shares outstanding at period end 220,177  220,207  220,482  220,171  220,171  0% 0%
    Book value per common share $17.79  $17.80  $17.70  $17.62  $17.48  0% 2%
    Tangible book value per common share $9.50  $9.51  $9.41  $9.30  $9.16  0% 4%
    Tangible equity - common $2,092,258  $2,093,804  $2,073,887  $2,048,031  $2,016,033  0% 4%
    Tangible common equity to tangible assets 9.10% 9.14% 9.30% 9.26% 9.35% (0.04) (0.25)


    Umpqua Holdings Corporation
    Loan & Lease Portfolio
    (Unaudited)
                   
    (Dollars in thousands) Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Loans & leases:              
    Commercial real estate:              
    Non-owner occupied term, net $3,330,442  $3,280,660  $3,377,464  $3,202,488  $3,226,836  2% 3%
    Owner occupied term, net 2,599,055  2,573,942  2,581,786  2,714,766  2,582,874  1% 1%
    Multifamily, net 2,858,956  2,968,019  3,004,890  2,959,975  3,151,516  (4)% (9)%
    Commercial construction, net 463,625  388,934  367,879  338,801  271,119  19% 71%
    Residential development, net 142,984  127,447  111,941  121,025  99,459  12% 44%
    Commercial:              
    Term, net 1,508,780  1,480,173  1,440,704  1,412,816  1,408,676  2% 7%
    Lines of credit & other, net 1,116,259  1,142,946  1,116,876  1,036,389  1,036,733  (2)% 8%
    Leases & equipment finance, net 950,588  927,857  884,506  791,798  729,161  2% 30%
    Residential real estate:              
    Mortgage, net 2,887,971  2,868,337  2,882,076  2,879,600  2,909,306  1% (1)%
    Home equity lines & loans, net 1,011,844  1,008,219  989,814  943,254  923,667  0% 10%
      Consumer & other, net 638,159  625,517  597,304  554,671  527,189  2% 21%
    Total, net of deferred fees and costs $17,508,663  $17,392,051  $17,355,240  $16,955,583  $16,866,536  1% 4%
                   
    Loan & leases mix:              
    Commercial real estate:              
      Non-owner occupied term, net 19% 19% 19% 19% 19%    
      Owner occupied term, net 15% 15% 15% 16% 15%    
      Multifamily, net 16% 17% 17% 17% 19%    
    Commercial construction, net 3% 2% 2% 2% 2%    
    Residential development, net 1% 1% 1% 1% 1%    
    Commercial:              
    Term, net 9% 8% 8% 8% 9%    
    Lines of credit & other, net 6% 7% 6% 6% 6%    
    Leases & equipment finance, net 5% 5% 6% 5% 4%    
    Residential real estate:              
    Mortgage, net 16% 16% 17% 17% 17%    
    Home equity lines & loans, net 6% 6% 6% 6% 5%    
      Consumer & other, net 4% 4% 3% 3% 3%    
      Total 100% 100% 100% 100% 100%    



    Umpqua Holdings Corporation
    Deposits by Type/Core Deposits
    (Unaudited)
                   
    (Dollars in thousands) Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Deposits:              
    Demand, non-interest bearing $5,861,469  $5,993,793  $5,475,986  $5,460,310  $5,318,591  (2)% 10%
    Demand, interest bearing 2,296,532  2,218,782  2,186,164  2,178,446  2,157,376  4% 6%
    Money market 6,932,717  6,841,700  6,782,232  6,814,160  6,599,516  1% 5%
    Savings 1,325,757  1,303,816  1,254,675  1,213,049  1,136,809  2% 17%
    Time 2,604,510  2,560,689  2,559,417  2,497,009  2,494,897  2% 4%
    Total $19,020,985  $18,918,780  $18,258,474  $18,162,974  $17,707,189  1% 7%
                   
    Total core deposits (1) $17,318,003  $17,257,663  $16,598,065  $16,559,943  $16,102,743  0% 8%
                   
    Deposit mix:              
    Demand, non-interest bearing 31% 31% 30% 30% 30%    
    Demand, interest bearing 12% 12% 12% 12% 12%    
    Money market 36% 36% 37% 37% 37%    
    Savings 7% 7% 7% 7% 6%    
    Time 14% 14% 14% 14% 15%    
    Total 100% 100% 100% 100% 100%    
                   
    Number of open accounts:              
    Demand, non-interest bearing 384,040  382,687  379,996  375,913  371,745     
    Demand, interest bearing 82,520  83,501  84,434  85,731  86,745     
    Money market 56,031  56,128  56,492  56,927  57,194     
    Savings 159,080  158,760  157,849  156,846  154,176     
    Time 47,705  47,689  47,850  47,794  47,672     
    Total 729,376  728,765  726,621  723,211  717,532     
                   
    Average balance per account:              
    Demand, non-interest bearing $15.3  $15.7  $14.4  $14.5  $14.3     
    Demand, interest bearing 27.8  26.6  25.9  25.4  24.9     
    Money market 123.7  121.9  120.1  119.7  115.4     
    Savings 8.3  8.2  7.9  7.7  7.4     
    Time 54.6  53.7  53.5  52.2  52.3     
    Total $26.1  $26.0  $25.1  $25.1  $24.7     
                             
    (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) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year
    over
    Year
    Non-performing assets:              
    Loans and leases on non-accrual status $27,765  $27,791  $25,136  $30,045  $29,215  0% (5)%
    Loans and leases past due 90+ days & accruing (1) 28,369  26,189  23,076  22,144  15,169  8% 87%
    Total non-performing loans and leases 56,134  53,980  48,212  52,189  44,384  4% 26%
    Other real estate owned 6,738  8,309  16,437  20,411  22,307  (19)% (70)%
    Total non-preforming assets $62,872  $62,289  $64,649  $72,600  $66,691  1% (6)%
                   
    Performing restructured loans and leases $40,667  $36,645  $40,848  $31,409  $31,355  11% 30%
    Loans and leases past due 31-89 days $30,425  $39,708  $29,640  $29,054  $28,423  (23)% 7%
    Loans and leases past due 31-89 days to total loans and leases 0.17% 0.23% 0.17% 0.17% 0.17%    
    Non-performing loans and leases to total loans and leases (1) 0.32% 0.31% 0.28% 0.31% 0.26%    
    Non-performing assets to total assets (1) 0.25% 0.25% 0.27% 0.30% 0.28%    
                        
    (1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $10.9 million, $7.3 million, $11.3 million, $14.2 million, and $19.2 million at December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015, respectively.


    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
     (Unaudited)
                   
      Quarter Ended % Change
    (Dollars in thousands) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year over
    Year
    Allowance for loan and lease losses:            
    Balance beginning of period $133,692  $131,042  $130,243  $130,322  $130,133     
    Provision for loan and lease losses 13,171  13,091  10,589  4,823  4,545  1% 190%
    Charge-offs (16,303) (13,088) (12,682) (7,850) (7,108) 25% 129%
    Recoveries 3,424  2,647  2,892  2,948  2,752  29% 24%
    Net charge-offs (12,879) (10,441) (9,790) (4,902) (4,356) 23% 196%
    Total allowance for loan and lease losses 133,984  133,692  131,042  130,243  130,322  0% 3%
    Reserve for unfunded commitments 3,611  3,536  3,531  3,482  3,574  2% 1%
    Total allowance for credit losses $137,595  $137,228  $134,573  $133,725  $133,896  0% 3%
                   
    Net charge-offs to average loans and leases (annualized) 0.29% 0.24% 0.23% 0.12% 0.10%    
    Recoveries to gross charge-offs 21.00% 20.22% 22.80% 37.55% 38.72%    
    Allowance for loan and lease losses to loans and leases 0.77% 0.77% 0.76% 0.77% 0.77%    
    Allowance for credit losses to loans and leases 0.79% 0.79% 0.78% 0.79% 0.79%    
                   


    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
    (Unaudited)
      Year Ended % Change
    (Dollars in thousands) Dec 31, 2016 Dec 31, 2015 Year over Year
    Allowance for credit losses:    
    Balance beginning of period $130,322  $116,167   
    Provision for loan and lease losses 41,674  36,589  14%
    Charge-offs (49,923) (35,571) 40%
    Recoveries 11,911  13,137  (9)%
    Net charge-offs (38,012) (22,434) 69%
    Total allowance for loan and lease losses 133,984  130,322  3%
    Reserve for unfunded commitments 3,611  3,574  1%
    Total allowance for credit losses $137,595  $133,896  3%
           
    Net charge-offs to average loans and leases 0.22% 0.14%  
    Recoveries to gross charge-offs 23.86% 36.93%  




    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
               
      Quarter Ended % Change
      Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year
    over 
    Year
    Average Rates:              
    Yield on loans and leases 4.70% 4.75% 4.81% 5.07% 5.21% (0.05) (0.51)
    Yield on loans held for sale 3.79% 3.79% 3.80% 4.06% 3.83%   (0.04)
    Yield on taxable investments 1.85% 1.96% 2.14% 2.32% 2.26% (0.11) (0.41)
    Yield on tax-exempt investments (1) 4.72% 4.68% 4.73% 4.73% 4.76% 0.04  (0.04)
    Yield on temporary investments & interest bearing cash 0.56% 0.50% 0.51% 0.54% 0.28% 0.06  0.28 
    Total yield on earning assets (1) 4.14% 4.26% 4.39% 4.66% 4.69% (0.12) (0.55)
                   
    Cost of interest bearing deposits 0.28% 0.28% 0.27% 0.27% 0.26%   0.02 
    Cost of securities sold under agreements              
    to repurchase and fed funds purchased 0.04% 0.04% 0.04% 0.05% 0.05%   (0.01)
    Cost of term debt 1.53% 1.57% 1.72% 1.88% 1.73% (0.04) (0.20)
    Cost of junior subordinated debentures 4.59% 4.36% 4.30% 4.20% 3.96% 0.23  0.63 
    Total cost of interest bearing liabilities 0.46% 0.46% 0.46% 0.47% 0.44%   0.02 
                   
    Net interest spread (1) 3.68% 3.80% 3.93% 4.19% 4.25% (0.12) (0.57)
    Net interest margin (1) 3.83% 3.95% 4.07% 4.34% 4.39% (0.12) (0.56)
                   
    As reported (GAAP):              
    Return on average assets 1.11% 1.01% 0.91% 0.82% 1.08% 0.10  0.03 
    Return on average tangible assets 1.20% 1.09% 0.99% 0.89% 1.17% 0.11  0.03 
    Return on average common equity 7.04% 6.28% 5.61% 4.93% 6.49% 0.76  0.55 
    Return on average tangible common equity 13.19% 11.79% 10.59% 9.34% 12.41% 1.40  0.78 
    Efficiency ratio – Consolidated 59.65% 62.11% 66.15% 69.48% 64.02% (2.46) (4.37)
    Efficiency ratio – Bank 57.96% 60.45% 64.44% 67.29% 62.40% (2.49) (4.44)
                   
    Operating basis (non-GAAP): (2)              
    Return on average assets 0.97% 1.13% 1.16% 1.10% 1.10% (0.16) (0.13)
    Return on average tangible assets 1.05% 1.22% 1.26% 1.19% 1.20% (0.17) (0.15)
    Return on average common equity 6.12% 7.08% 7.16% 6.63% 6.64% (0.96) (0.52)
    Return on average tangible common equity 11.47% 13.28% 13.51% 12.57% 12.70% (1.81) (1.23)
    Efficiency ratio – Consolidated 62.15% 58.96% 59.78% 62.49% 63.00% 3.19  (0.85)
    Efficiency ratio – Bank 60.67% 57.66% 58.48% 60.89% 61.72% 3.01  (1.05)

    (1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
    (2) Operating earnings is calculated as earnings available to common shareholders excluding the after-tax impact of merger-related expenses, gains or losses on junior subordinated debentures carried at fair value, gains or losses from the change in fair value of the MSR, gains or losses from the change in fair value of the swap derivative, net gains or losses in investment securities, exit or disposal costs, bargain purchase gain on acquisitions and goodwill impairment.


    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
         
      Year Ended % Change
      Dec 31, 2016 Dec 31, 2015 Year over
    Year
    Average Rates:      
    Yield on loans and leases 4.83% 5.38% (0.55)
    Yield on loans held for sale 3.84% 3.72% 0.12 
    Yield on taxable investments 2.07% 2.13% (0.06)
    Yield on tax-exempt investments (1) 4.71% 4.73% (0.02)
    Yield on temporary investments & interest bearing cash 0.53% 0.26% 0.27 
    Total yield on earning assets (1) 4.36% 4.74% (0.38)
           
    Cost of interest bearing deposits 0.28% 0.24% 0.04 
    Cost of securities sold under agreements      
    to repurchase and fed funds purchased 0.04% 0.05% (0.01)
    Cost of term debt 1.67% 1.57% 0.10 
    Cost of junior subordinated debentures 4.37% 3.90% 0.47 
    Total cost of interest bearing liabilities 0.46% 0.42% 0.04 
           
    Net interest spread (1) 3.90% 4.32% (0.42)
    Net interest margin (1) 4.04% 4.44% (0.40)
           
    As reported (GAAP):      
    Return on average assets 0.97% 0.97%  
    Return on average tangible assets 1.04% 1.06% (0.02)
    Return on average common equity 5.97% 5.82% 0.15 
    Return on average tangible common equity 11.25% 12.08% (0.83)
    Efficiency ratio – Consolidated 64.15% 66.27% (2.12)
    Efficiency ratio – Bank 62.35% 64.57% (2.22)
           
    Operating basis (non-GAAP): (2)      
    Return on average assets 1.09% 1.15% (0.06)
    Return on average tangible assets 1.18% 1.26% (0.08)
    Return on average common equity 6.74% 6.91% (0.17)
    Return on average tangible common equity 12.70% 14.35% (1.65)
    Efficiency ratio – Consolidated 60.81% 61.04% (0.23)
    Efficiency ratio – Bank 59.40% 59.76% (0.36)

                                   
    (1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
    (2) Operating earnings is calculated as earnings available to common shareholders excluding the after-tax impact of merger-related expenses, gains or losses on junior subordinated debentures carried at fair value, gains or losses from the change in fair value of the MSR, gains or losses from the change in fair value of the swap derivative, net gains or losses in investment securities, exit or disposal costs, bargain purchase gain on acquisitions and goodwill impairment.


    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
           
      Quarter Ended % Change
    (Dollars in thousands) Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Mar 31,
    2016
     Dec 31,
    2015
     Seq.
    Quarter
     Year
    over
    Year
    Temporary investments & interest bearing cash $1,194,904  $874,410  $514,881  $356,674  $608,250  37% 96%
    Investment securities, taxable 2,373,652  2,265,883  2,304,998  2,311,589  2,293,429  5% 3%
    Investment securities, tax-exempt 287,359  283,818  280,841  287,085  302,443  1% (5)%
    Loans held for sale 482,028  481,740  403,964  297,732  334,404  0% 44%
    Loans and leases 17,386,385  17,400,657  17,234,220  17,008,084  16,514,770  0% 5%
    Total interest earning assets 21,724,328  21,306,508  20,738,904  20,261,164  20,053,296  2% 8%
    Goodwill & other intangible assets, net 1,825,491  1,827,405  1,829,407  1,832,046  1,835,821  0% (1)%
    Total assets 24,740,986  24,422,986  23,896,315  23,415,439  23,196,052  1% 7%
                   
    Non-interest bearing demand deposits 5,939,223  5,766,022  5,466,098  5,289,810  5,285,992  3% 12%
    Interest bearing deposits 13,026,614  12,836,987  12,644,442  12,411,005  12,249,333  1% 6%
    Total deposits 18,965,837  18,603,009  18,110,540  17,700,815  17,535,325  2% 8%
    Interest bearing liabilities 14,606,120  14,446,687  14,249,349  13,976,678  13,812,645  1% 6%
                   
    Shareholders’ equity - common 3,914,624  3,911,323  3,889,593  3,878,540  3,847,587  0% 2%
    Tangible common equity (1) 2,089,133  2,083,918  2,060,186  2,046,494  2,011,766  0% 4%


    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
      Year Ended% Change
    (Dollars in thousands) Dec 31, 2016 Dec 31, 2015 Year over Year
    Temporary investments & interest bearing cash $736,854  $869,253  (15)%
    Investment securities, taxable 2,314,062  2,275,512  2%
    Investment securities, tax-exempt 284,780  310,684  (8)%
    Loans held for sale 416,724  333,455  25%
    Loans and leases 17,258,081  15,938,127  8%
    Total interest earning assets 21,010,501  19,727,031  7%
    Goodwill & other intangible assets, net 1,828,575  1,980,905  (8)%
    Total assets 24,121,462  22,905,541  5%
           
    Non-interest bearing demand deposits 5,616,585  5,015,508  12%
    Interest bearing deposits 12,730,866  12,235,302  4%
    Total deposits 18,347,451  17,250,810  6%
    Interest bearing liabilities 14,320,838  13,833,245  4%
           
    Shareholders’ equity - common 3,898,599  3,820,505  2%
    Tangible common equity (1) 2,070,024  1,839,600  13%

    (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) Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Seq.
    Quarter
     Year over
    Year
    Residential mortgage servicing rights:              
    Residential mortgage loans serviced for others $14,327,368  $13,880,660  $13,564,242  $13,304,468  $13,047,266  3% 10%
    MSR asset, at fair value 142,973  114,446  112,095  117,172  131,817  25% 8%
    MSR as % of serviced portfolio 1.00% 0.82% 0.83% 0.88% 1.01%    
    Residential mortgage banking revenue:              
    Origination and sale $32,386  $45,631  $42,083  $28,409  $25,363  (29)% 28%
    Servicing 9,597  9,401  8,640  7,642  7,546  2% 27%
    Change in fair value of MSR asset 16,465  (7,826) (13,940) (20,625) (469) (310)% nm
    Total $58,448  $47,206  $36,783  $15,426  $32,440  24% 80%
                   
    Closed loan volume:              
    Closed loan volume - portfolio $250,000  $305,648  $365,926  $332,918  $352,465  (18)% (29)%
    Closed loan volume - for-sale 1,061,327  1,118,526  1,046,349  764,076  794,820  (5)% 34%
    Closed loan volume - total $1,311,327  $1,424,174  1,412,275  1,096,994  $1,147,285  (8)% 14%
                   
    Gain on sale margin:              
    Based on for-sale volume 3.05% 4.08% 4.02% 3.72% 3.19% (1.03) (0.14)
                   
      Year Ended % Change        
      Dec 31, 2016 Dec 31, 2015 Year over
    Year
            
    Residential mortgage banking revenue:              
    Origination and sale $148,509  $117,432  26%        
    Servicing 35,280  28,013  26%        
    Change in fair value of MSR asset (25,926) (20,723) 25%        
    Total $157,863  $124,722  27%        
                   
    Closed loan volume:              
    Closed loan volume - portfolio $1,254,492  $1,556,414  (19)%        
    Closed loan volume - for-sale 3,990,278  3,497,920  14%        
    Closed loan volume - total $5,244,770  $5,054,334  4%        
                   
    Gain on sale margin:              
    Based on for-sale volume 3.72% 3.36% 0.36         
                   


    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