• Umpqua Holdings Corporation
email this
  • Umpqua Reports Second Quarter 2017 Results
    Company Release - 07/19/2017 16:15

    Net earnings of $56.8 million, or $0.26 per common share
    Strong quarterly loan and lease growth of $491.5 million, or 11% annualized
    Net interest margin of 3.91%, up 6 basis points from the prior quarter

    PORTLAND, Ore., July 19, 2017 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $56.8 million for the second quarter of 2017, increased from $46.0 million for the first quarter of 2017 and from $54.3 million for the second quarter of 2016.  Earnings per diluted common share increased to $0.26 for the second quarter of 2017, compared to $0.21 for the first quarter of 2017 and $0.25 for the second quarter of 2016.

    “Our performance during the second quarter reflects the success in executing on the key priorities and strategic initiatives we outlined earlier this year,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation.  “We delivered another quarter of strong loan and deposit growth, highlighted by 20% annualized growth in our commercial loan portfolio.  This balanced growth, along with a higher net interest margin and seasonally stronger mortgage banking revenues, drove the improvement in our second quarter financial results.  Looking ahead, we’ll continue to focus on initiatives that enhance the customer experience, diversify our revenue and deliver improved financial performance for shareholders.”

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

    • $8.3 million negative adjustment related to the fair value change of the MSR asset, compared to negative adjustments of $7.7 million in the prior quarter and $13.9 million in the same period of the prior year.
    • $756,000 negative adjustment related to the fair value change of the debt capital market swap derivatives, compared to negative adjustments of $727,000 in the prior quarter and $1.5 million in the same period of the prior year.
    • $1.6 million in merger-related expenses, compared to $1.0 million in the prior quarter and $6.6 million in the same period of the prior year.
    • $742,000 of exit or disposal costs, compared to $468,000 in the prior quarter and $1.4 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.

    Second Quarter 2017 Highlights (compared to prior quarter):

    • Net interest income increased by $5.4 million, driven by growth in interest-earning assets and a 6 basis point increase in net interest margin;
    • Provision for loan and lease losses decreased by $1.0 million to $10.7 million, and net charge-offs remained at 0.22% of average loans and leases (annualized);
    • Non-interest income increased by $10.9 million, driven primarily by higher revenues from the origination and sale of residential mortgages;
    • Non-interest expense increased by $1.3 million, driven primarily by higher salaries and employee benefits expense, reflecting higher mortgage banking-related compensation, consistent with the increase in mortgage originations, and annual merit increases;
    • Gross loan and lease growth of $491.5 million, or 11% annualized;
    • Deposit growth of $292.7 million, or 6% annualized;
    • Non-performing assets to total assets decreased to 0.23%;
    • Estimated total risk-based capital ratio of 14.1% and estimated Tier 1 common to risk weighted assets ratio of 11.1%;
    • Declared quarterly cash dividend of $0.16 per common share; and
    • Repurchased 225,000 shares of common stock for $3.9 million.

    Balance Sheet
    Total consolidated assets were $25.3 billion as of June 30, 2017, compared to $24.9 billion as of March 31, 2017 and $24.1 billion as of June 30, 2016.  Including secured off-balance sheet lines of credit at the Company, total available liquidity was $9.3 billion as of June 30, 2017, representing 37% of total assets and 48% of total deposits.

    Gross loans and leases were $18.3 billion as of June 30, 2017, an increase of $491.5 million, or 11% annualized, from $17.8 billion as of March 31, 2017.  This increase reflects balanced growth across the Company's commercial, multi-family and consumer loan portfolios.  During the second quarter of 2017, the Company sold $14.6 million of leases and equipment finance loans and $28.8 million of portfolio residential mortgage loans. 

    Total deposits were $19.5 billion as of June 30, 2017, an increase of $292.7 million, or 6% annualized, from $19.2 billion as of March 31, 2017.  This increase was primarily attributable to growth in demand and time accounts.

    Net Interest Income
    Net interest income was $212.1 million for the second quarter of 2017, an increase of $5.4 million, or 3%, from the prior quarter.   This increase was primarily attributable to the strong growth in average interest-earning assets, both in loans and leases and investment securities, along with a 6 basis point increase in net interest margin.  Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) decreased by $494,000 from the prior quarter level.

    The Company’s net interest margin was 3.91% for the second quarter of 2017, up 6 basis points from 3.85% for the first quarter of 2017.  The linked quarter increase was driven primarily by a lower mix of interest-bearing cash along with higher average yields on loans and leases and interest-bearing cash.

    Credit Quality
    The allowance for loan and lease losses was $136.9 million, or 0.75% of loans and leases, as of June 30, 2017.  During the second quarter of 2017, the Company recorded $5.9 million of accretion related to the credit discount on acquired loans from Sterling, compared to $6.4 million in the prior quarter.  As of June 30, 2017, the Sterling purchased non-credit impaired loans had approximately $34.1 million of remaining credit discount that will accrete into interest income over the life of the loans, and the Sterling purchased credit impaired loan pools had approximately $28.0 million of remaining total discount.

    The provision for loan and lease losses was $10.7 million for the second quarter of 2017, a $1.0 million decrease from the prior quarter level, and net charge-offs remained at 0.22% of average loans and leases (annualized).  As of June 30, 2017, non-performing assets represented 0.23% of total assets, down from 0.24% as of March 31, 2017 and from 0.27% as of June 30, 2016.

    Non-interest Income
    Non-interest income was $71.1 million for the second quarter of 2017, up $10.9 million from the prior quarter.  The current quarter's non-interest income included negative adjustments of $8.3 million and $756,000 related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively, both primarily attributable to the decrease in long-term interest rates during the quarter.  This compares to fair value losses of $7.7 million and $727,000 for the MSR asset and debt capital market swap derivatives, respectively, during the first quarter of 2017. 

    Net revenue from the origination and sale of residential mortgages was $32.4 million for the second quarter of 2017, up $7.7 million from the prior quarter.  This increase was driven primarily by a 22% linked quarter increase in for-sale mortgage origination volume, along with a 26 basis point increase in home lending gain on sale margin to 3.53% for the second quarter of 2017.  Of the current quarter’s mortgage production, 77% related to purchase activity, as compared to 67% for the prior quarter and 70% for the same period in the prior year.

    Other income increased by $1.7 million from the prior quarter, reflecting stronger debt capital markets swap activity, and gain on loan sales increased by $1.6 million from the prior quarter, driven by a higher level of portfolio loans sales compared to the prior quarter.

    Non-interest Expense

    Non-interest expense was $184.0 million for the second quarter of 2017, up $1.3 million from the prior quarter level.  This increase was driven primarily by higher salaries and employee benefits, reflecting higher mortgage banking-related compensation, consistent with the increase in mortgage originations, and annual merit increases which took effect in April.  These were partially offset by a decrease in seasonal payroll taxes and lower occupancy and equipment expense. 

    Capital
    As of June 30, 2017, the Company’s book value per share increased to $17.98, from $17.84 in the prior quarter, and its tangible book value per common share1 increased to $9.71, from $9.57 in the prior quarter.  During the second quarter of 2017, the Company repurchased 225,000 shares of common stock for $3.9 million.

    The Company’s estimated total risk-based capital ratio was 14.1% and its estimated Tier 1 common to risk weighted assets ratio was 11.1% as of June 30, 2017.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of June 30, 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 useful 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) Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016
    Total shareholders' equity $3,958,845  $3,931,150  $3,916,795  $3,920,208  $3,902,158 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 33,508  35,197  36,886  38,753  40,620 
    Tangible common shareholders' equity $2,137,686  $2,108,302  $2,092,258  $2,093,804  $2,073,887 
    Total assets $25,257,784  $24,861,458  $24,813,119  $24,744,214  $24,132,507 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 33,508  35,197  36,886  38,753  40,620 
    Tangible assets $23,436,625  $23,038,610  $22,988,582  $22,917,810  $22,304,236 
    Common shares outstanding at period end 220,205  220,349  220,177  220,207  220,482 
               
    Common equity ratio 15.67% 15.81% 15.79% 15.84% 16.17%
    Tangible common equity ratio 9.12% 9.15% 9.10% 9.14% 9.30%
    Book value per common share $17.98  $17.84  $17.79  $17.80  $17.70 
    Tangible book value per common share $9.71  $9.57  $9.50  $9.51  $9.41 

    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 umpquabank.com.

    Earnings Conference Call Information

    The Company will host its second quarter 2017 earnings conference call on Thursday, July 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 second quarter 2017 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (877) 440-5784 ten minutes prior to the start time and enter conference ID: 5028748.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 5028748.  The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at umpquabank.com.

    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 fee revenue and operating efficiency initiatives and the credit discount accretion related to loans acquired from Sterling.  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; the effect of interest rate increases on the cost of deposits; 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) Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Interest income:              
    Loans and leases $212,998  $205,996  $209,812  $212,037  $210,290  3% 1%
    Interest and dividends on investments:              
    Taxable 15,220  13,931  10,630  10,779  11,963  9% 27%
    Exempt from federal income tax 2,237  2,242  2,229  2,181  2,183  0% 2%
    Dividends 360  388  336  332  365  (7)% (1)%
    Temporary investments and interest bearing deposits 324  1,557  1,696  1,090  652  (79)% (50)%
    Total interest income 231,139  224,114  224,703  226,419  225,453  3% 3%
    Interest expense:              
    Deposits 10,641  9,648  9,288  8,999  8,540  10% 25%
    Repurchase agreements and federal funds purchased 321  30  32  32  32  970% 903%
    Term debt 3,662  3,510  3,413  3,558  3,848  4% (5)%
    Junior subordinated debentures 4,437  4,201  4,174  3,938  3,835  6% 16%
    Total interest expense 19,061  17,389  16,907  16,527  16,255  10% 17%
    Net interest income 212,078  206,725  207,796  209,892  209,198  3% 1%
    Provision for loan and lease losses 10,657  11,672  13,171  13,091  10,589  (9)% 1%
    Non-interest income:              
    Service charges on deposits 15,478  14,729  15,323  15,762  15,667  5% (1)%
    Brokerage revenue 3,903  4,122  4,230  4,129  4,580  (5)% (15)%
    Residential mortgage banking revenue, net 33,894  26,834  58,448  47,206  36,783  26% (8)%
    Gain (loss) on investment securities, net 35  (2)     162  nm (78)%
    Gain on loan sales 3,310  1,754  4,060  1,285  5,640  89% (41)%
    Loss on junior subordinated debentures carried at fair value (1,572) (1,555) (1,589) (1,590) (1,572) 1% 0%
    BOLI income 2,089  2,069  2,107  2,116  2,152  1% (3)%
    Other income 13,982  12,274  16,041  11,802  11,247  14% 24%
    Total non-interest income 71,119  60,225  98,620  80,710  74,659  18% (5)%
    Non-interest expense:              
    Salaries and employee benefits 108,561  106,473  105,406  105,341  107,545  2% 1%
    Occupancy and equipment, net 36,955  38,673  37,618  38,181  37,850  (4)% (2)%
    Intangible amortization 1,689  1,689  1,867  1,867  2,328  0% (27)%
    FDIC assessments 4,447  4,087  3,985  4,109  3,693  9% 20%
    (Gain) loss on other real estate owned, net (457) 82  (197) (14) (1,457) (657)% (69)%
    Merger related expenses 1,640  1,020  3,218  2,011  6,634  61% (75)%
    Other expense 31,186  30,690  31,571  29,692  31,918  2% (2)%
    Total non-interest expense 184,021  182,714  183,468  181,187  188,511  1% (2)%
    Income before provision for income taxes 88,519  72,564  109,777  96,324  84,757  22% 4%
    Provision for income taxes 31,707  26,561  40,502  34,515  30,470  19% 4%
    Net income 56,812  46,003  69,275  61,809  54,287  23% 5%
    Dividends and undistributed earnings allocated to participating securities 14  12  33  31  32  17% (56)%
    Net earnings available to common shareholders $56,798  $45,991  $69,242  $61,778  $54,255  23% 5%
                   
    Weighted average basic shares outstanding 220,310  220,287  220,190  220,291  220,421  0% 0%
    Weighted average diluted shares outstanding 220,753  220,779  220,756  220,751  220,907  0% 0%
    Earnings per common share – basic $0.26  $0.21  $0.31  $0.28  $0.25  24% 4%
    Earnings per common share – diluted $0.26  $0.21  $0.31  $0.28  $0.25  24% 4%
    nm = not meaningful              


    Umpqua Holdings Corporation
    Consolidated Statements of Income
    (Unaudited)
         
      Six Months Ended % Change
    (In thousands, except per share data) Jun 30, 2017 Jun 30, 2016 Year
    over
    Year
    Interest income      
    Loans and leases $418,994  $428,218  (2)%
    Interest and dividends on investments:      
    Taxable 29,151  25,018  17 %
    Exempt from federal income tax 4,479  4,418  1 %
    Dividends 748  731  2 %
    Temporary investments and interest bearing deposits 1,881  1,132  66 %
    Total interest income 455,253  459,517  (1)%
    Interest expense      
    Deposits 20,289  16,953  20 %
    Repurchase agreements and federal funds purchased 351  68  416 %
    Term debt 7,172  8,034  (11)%
    Junior subordinated debentures 8,638  7,562  14 %
    Total interest expense 36,450  32,617  12 %
    Net interest income 418,803  426,900  (2)%
    Provision for loan and lease losses 22,329  15,412  45 %
    Non-interest income      
    Service charges on deposits 30,207  30,183  0 %
    Brokerage revenue 8,025  8,674  (7)%
    Residential mortgage banking revenue, net 60,728  52,209  16 %
    Gain on investment securities, net 33  858  (96)%
    Gain on loan sales 5,064  8,011  (37)%
    Loss on junior subordinated debentures carried at fair value (3,127) (3,144) (1)%
    BOLI Income 4,158  4,291  (3)%
    Other income 26,256  19,528  34 %
    Total non-interest income 131,344  120,610  9 %
    Non-interest expense      
    Salaries and employee benefits 215,034  214,083  0 %
    Occupancy and equipment, net 75,628  76,145  (1)%
    Intangible amortization 3,378  4,888  (31)%
    FDIC assessments 8,534  7,414  15 %
    Gain on other real estate owned, net (375) (68) 451 %
    Merger related expenses 2,660  10,084  (74)%
    Goodwill impairment   142  nm 
    Other expense 61,876  59,812  3 %
    Total non-interest expense 366,735  372,500  (2)%
    Income before provision for income taxes 161,083  159,598  1 %
    Provision for income taxes 58,268  57,742  1 %
    Net income 102,815  101,856  1 %
    Dividends and undistributed earnings      
    allocated to participating securities 26  61  (57)%
    Net earnings available to common shareholders $102,789  $101,795  1 %
           
    Weighted average basic shares outstanding 220,298  220,324  0 %
    Weighted average diluted shares outstanding 220,790  221,001  0 %
    Earnings per common share – basic $0.47  $0.46  2 %
    Earnings per common share – diluted $0.47  $0.46  2 %
    nm = not meaningful      


    Umpqua Holdings Corporation
    Consolidated Balance Sheets
    (Unaudited)
                 
                % Change
    (In thousands, except per share data) Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Seq.
    Quarter
     Year
    over
    Year
    Assets:              
    Cash and due from banks $320,027  $262,655  $331,994  $364,013  $369,535  22% (13)%
    Interest bearing cash and temporary investments 295,937  421,991  1,117,438  1,102,428  535,828  (30)% (45)%
    Investment securities:              
    Trading, at fair value 11,467  11,241  10,964  10,866  10,188  2% 13%
    Available for sale, at fair value 3,132,566  3,243,408  2,701,220  2,520,037  2,482,072  (3)% 26%
    Held to maturity, at amortized cost 4,017  4,121  4,216  4,302  4,382  (3)% (8)%
    Loans held for sale 451,350  372,073  387,318  565,624  552,681  21% (18)%
    Loans and leases 18,321,142  17,829,638  17,508,663  17,392,051  17,355,240  3% 6%
    Allowance for loan and lease losses (136,867) (136,292) (133,984) (133,692) (131,042) 0% 4%
    Loans and leases, net 18,184,275  17,693,346  17,374,679  17,258,359  17,224,198  3% 6%
    Restricted equity securities 45,511  45,522  45,528  47,537  47,542  0% (4)%
    Premises and equipment, net 288,853  293,133  303,882  306,287  312,647  (1)% (8)%
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  0% 0%
    Other intangible assets, net 33,508  35,197  36,886  38,753  40,620  (5)% (18)%
    Residential mortgage servicing rights, at fair value 141,832  142,344  142,973  114,446  112,095  0% 27%
    Other real estate owned 4,804  6,518  6,738  8,309  16,437  (26)% (71)%
    Bank owned life insurance 303,894  301,777  299,673  297,561  295,444  1% 3%
    Deferred tax assets, net   8,464  34,322  27,587  63,038  (100)% (100)%
    Other assets 252,092  232,017  227,637  290,454  278,149  9% (9)%
    Total assets $25,257,784  $24,861,458  $24,813,119  $24,744,214  $24,132,507  2% 5%
    Liabilities:              
    Deposits $19,459,950  $19,167,293  $19,020,985  $18,918,780  $18,258,474  2% 7%
    Securities sold under agreements to repurchase 330,189  304,280  352,948  309,463  360,234  9% (8)%
    Term debt 852,219  852,308  852,397  902,678  902,999  0% (6)%
    Junior subordinated debentures, at fair value 265,423  263,605  262,209  260,114  258,660  1% 3%
    Junior subordinated debentures, at amortized cost 100,770  100,851  100,931  101,012  101,093  0% 0%
    Deferred tax liability, net 34,296          100% 100%
    Other liabilities 256,092  241,971  306,854  331,959  348,889  6% (27)%
    Total liabilities 21,298,939  20,930,308  20,896,324  20,824,006  20,230,349  2% 5%
    Shareholders' equity:              
    Common stock 3,514,094  3,516,537  3,515,299  3,514,858  3,517,240  0% 0%
    Retained earnings 454,802  433,417  422,839  388,678  362,258  5% 26%
    Accumulated other comprehensive (loss) income (10,051) (18,804) (21,343) 16,672  22,660  (47)% (144)%
    Total shareholders' equity 3,958,845  3,931,150  3,916,795  3,920,208  3,902,158  1% 1%
    Total liabilities and shareholders' equity $25,257,784  $24,861,458  $24,813,119  $24,744,214  $24,132,507  2% 5%
                   
    Common shares outstanding at period end 220,205  220,349  220,177  220,207  220,482  0% 0%
    Book value per common share $17.98  $17.84  $17.79  $17.80  $17.70  1% 2%
    Tangible book value per common share $9.71  $9.57  $9.50  $9.51  $9.41  1% 3%
    Tangible equity - common $2,137,686  $2,108,302  $2,092,258  $2,093,804  $2,073,887  1% 3%
    Tangible common equity to tangible assets 9.12% 9.15% 9.10% 9.14% 9.30% (0.03) (0.18)


    Umpqua Holdings Corporation
    Loan and Lease Portfolio
    (Unaudited)
                   
    (Dollars in thousands) Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Loans and leases:              
    Commercial real estate:              
    Non-owner occupied term, net $3,401,679  $3,410,914  $3,330,442  $3,280,660  $3,377,464  0 % 1 %
    Owner occupied term, net 2,593,395  2,584,183  2,599,055  2,573,942  2,581,786  0 % 0 %
    Multifamily, net 2,964,851  2,885,164  2,858,956  2,968,019  3,004,890  3 % (1)%
    Commercial construction, net 464,690  471,007  463,625  388,934  367,879  (1)% 26 %
    Residential development, net 165,956  145,479  142,984  127,447  111,941  14 % 48 %
    Commercial:              
    Term, net 1,686,597  1,620,311  1,508,780  1,480,173  1,440,704  4 % 17 %
    Lines of credit and other, net 1,153,409  1,114,160  1,116,259  1,142,946  1,116,876  4 % 3 %
    Leases and equipment finance, net 1,082,651  1,000,376  950,588  927,857  884,506  8 % 22 %
    Residential real estate:              
    Mortgage, net 3,021,331  2,916,924  2,887,971  2,868,337  2,882,076  4 % 5 %
    Home equity lines and loans, net 1,056,848  1,015,138  1,011,844  1,008,219  989,814  4 % 7 %
      Consumer and other, net 729,735  665,982  638,159  625,517  597,304  10 % 22 %
    Total, net of deferred fees and costs $18,321,142  $17,829,638  $17,508,663  $17,392,051  $17,355,240  3 % 6 %
                   
    Loan and leases mix:              
    Commercial real estate:              
      Non-owner occupied term, net 19% 19% 19% 19% 19%    
      Owner occupied term, net 14% 14% 15% 15% 15%    
      Multifamily, net 16% 16% 16% 17% 17%    
    Commercial construction, net 3% 3% 3% 2% 2%    
    Residential development, net 1% 1% 1% 1% 1%    
    Commercial:              
    Term, net 9% 9% 9% 8% 8%    
    Lines of credit and other, net 6% 6% 6% 7% 6%    
    Leases and equipment finance, net 6% 6% 5% 5% 6%    
    Residential real estate:              
    Mortgage, net 16% 16% 16% 16% 17%    
    Home equity lines and loans, net 6% 6% 6% 6% 6%    
      Consumer and other, net 4% 4% 4% 4% 3%    
    Total 100% 100% 100% 100% 100%    



    Umpqua Holdings Corporation
    Deposits by Type/Core Deposits
    (Unaudited)
                   
    (Dollars in thousands) Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Deposits:              
    Demand, non-interest bearing $6,112,480  $6,021,585  $5,861,469  $5,993,793  $5,475,986  2 % 12 %
    Demand, interest bearing 2,371,386  2,327,226  2,296,532  2,218,782  2,186,164  2 % 8 %
    Money market 6,755,707  6,784,442  6,932,717  6,841,700  6,782,232  0 % 0 %
    Savings 1,427,677  1,400,330  1,325,757  1,303,816  1,254,675  2 % 14 %
    Time 2,792,700  2,633,710  2,604,510  2,560,689  2,559,417  6 % 9 %
    Total $19,459,950  $19,167,293  $19,020,985  $18,918,780  $18,258,474  2 % 7 %
                   
    Total core deposits (1) $17,561,956  $17,427,832  $17,318,003  $17,257,663  $16,598,065  1 % 6 %
                   
    Deposit mix:              
    Demand, non-interest bearing 32% 31% 31% 31% 30%    
    Demand, interest bearing 12% 12% 12% 12% 12%    
    Money market 35% 36% 36% 36% 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 389,767  385,859  384,040  382,687  379,996     
    Demand, interest bearing 80,594  81,570  82,520  83,501  84,434     
    Money market 55,795  55,903  56,031  56,128  56,492     
    Savings 161,369  160,323  159,080  158,760  157,849     
    Time 47,339  47,365  47,705  47,689  47,850     
    Total 734,864  731,020  729,376  728,765  726,621     
                   
    Average balance per account:              
    Demand, non-interest bearing $15.7  $15.6  $15.3  $15.7  $14.4     
    Demand, interest bearing 29.4  28.5  27.8  26.6  25.9     
    Money market 121.1  121.4  123.7  121.9  120.1     
    Savings 8.8  8.7  8.3  8.2  7.9     
    Time 59.0  55.6  54.6  53.7  53.5     
    Total $26.5  $26.2  $26.1  $26.0  $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) Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Non-performing assets:              
    Loans and leases on non-accrual status $26,566  $28,915  $27,765  $27,791  $25,136  (8)% 6 %
    Loans and leases past due 90+ days and accruing (1) 27,252  23,421  28,369  26,189  23,076  16 % 18 %
    Total non-performing loans and leases 53,818  52,336  56,134  53,980  48,212  3 % 12 %
    Other real estate owned 4,804  6,518  6,738  8,309  16,437  (26)% (71)%
    Total non-performing assets $58,622  $58,854  $62,872  $62,289  $64,649  0 % (9)%
                   
    Performing restructured loans and leases $52,861  $43,029  $40,667  $36,645  $40,848  23 % 29 %
    Loans and leases past due 31-89 days $31,153  $49,530  $30,425  $39,708  $29,640  (37)% 5 %
    Loans and leases past due 31-89 days to total loans and leases 0.17% 0.28% 0.17% 0.23% 0.17%    
    Non-performing loans and leases to total loans and leases (1) 0.29% 0.29% 0.32% 0.31% 0.28%    
    Non-performing assets to total assets (1) 0.23% 0.24% 0.25% 0.25% 0.27%    

    (1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $16.3 million, $5.3 million, $10.9 million, $7.3 million, and $11.3 million at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively.


    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
     (Unaudited)
      Quarter Ended % Change
    (Dollars in thousands) Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Seq.
    Quarter
     Year over
    Year
    Allowance for loan and lease losses:              
    Balance beginning of period $136,292  $133,984  $133,692  $131,042  $130,243     
    Provision for loan and lease losses 10,657  11,672  13,171  13,091  10,589  (9)% 1 %
    Charge-offs (13,944) (13,002) (16,303) (13,088) (12,682) 7 % 10 %
    Recoveries 3,862  3,638  3,424  2,647  2,892  6 % 34 %
    Net charge-offs (10,082) (9,364) (12,879) (10,441) (9,790) 8 % 3 %
    Total allowance for loan and lease losses 136,867  136,292  133,984  133,692  131,042  0 % 4 %
    Reserve for unfunded commitments 3,816  3,495  3,611  3,536  3,531  9 % 8 %
    Total allowance for credit losses $140,683  $139,787  $137,595  $137,228  $134,573  1 % 5 %
                   
    Net charge-offs to average loans and leases (annualized) 0.22% 0.22% 0.29% 0.24% 0.23%    
    Recoveries to gross charge-offs 27.70% 27.98% 21.00% 20.22% 22.80%    
    Allowance for loan and lease losses to loans and leases 0.75% 0.76% 0.77% 0.77% 0.76%    
    Allowance for credit losses to loans and leases 0.77% 0.78% 0.79% 0.79% 0.78%    


    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
    (Unaudited)
      Six Months Ended % Change
    (Dollars in thousands) Jun 30, 2017 Jun 30, 2016 Year over Year
    Allowance for loan and lease losses:    
    Balance beginning of period $133,984  $130,322   
    Provision for loan and lease losses 22,329  15,412  45%
    Charge-offs (26,946) (20,532) 31%
    Recoveries 7,500  5,840  28%
    Net charge-offs (19,446) (14,692) 32%
    Total allowance for loan and lease losses 136,867  131,042  4%
    Reserve for unfunded commitments 3,816  3,531  8%
    Total allowance for credit losses $140,683  $134,573  5%
           
    Net charge-offs to average loans and leases (annualized) 0.22% 0.17%  
    Recoveries to gross charge-offs 27.83% 28.44%  



    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
               
      Quarter Ended % Change
      Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Average Rates:              
    Yield on loans and leases 4.67% 4.65% 4.70% 4.75% 4.81% 0.02  (0.14)
    Yield on loans held for sale 3.26% 3.86% 3.79% 3.79% 3.80% (0.60) (0.54)
    Yield on taxable investments 2.07% 2.10% 1.85% 1.96% 2.14% (0.03) (0.07)
    Yield on tax-exempt investments (1) 4.64% 4.76% 4.72% 4.68% 4.73% (0.12) (0.09)
    Yield on interest bearing cash and temporary investments 1.03% 0.79% 0.56% 0.50% 0.51% 0.24  0.52 
    Total yield on earning assets (1) 4.26% 4.18% 4.14% 4.26% 4.39% 0.08  (0.13)
                   
    Cost of interest bearing deposits 0.33% 0.30% 0.28% 0.28% 0.27% 0.03  0.06 
    Cost of securities sold under agreements              
    to repurchase and fed funds purchased 0.32% 0.04% 0.04% 0.04% 0.04% 0.28  0.28 
    Cost of term debt 1.72% 1.67% 1.53% 1.57% 1.72% 0.05   
    Cost of junior subordinated debentures 4.88% 4.70% 4.59% 4.36% 4.30% 0.18  0.58 
    Total cost of interest bearing liabilities 0.52% 0.48% 0.46% 0.46% 0.46% 0.04  0.06 
                   
    Net interest spread (1) 3.74% 3.70% 3.68% 3.80% 3.93% 0.04  (0.19)
    Net interest margin (1) 3.91% 3.85% 3.83% 3.95% 4.07% 0.06  (0.16)
                   
    Performance Ratios:              
    Return on average assets 0.92% 0.75% 1.11% 1.01% 0.91% 0.17  0.01 
    Return on average tangible assets 0.99% 0.81% 1.20% 1.09% 0.99% 0.18   
    Return on average common equity 5.76% 4.74% 7.04% 6.28% 5.61% 1.02  0.15 
    Return on average tangible common equity 10.67% 8.83% 13.19% 11.79% 10.59% 1.84  0.08 
    Efficiency ratio – Consolidated 64.71% 68.15% 59.65% 62.11% 66.15% (3.44) (1.44)
    Efficiency ratio – Bank 62.45% 65.75% 57.96% 60.45% 64.44% (3.30) (1.99)
                   

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


    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
         
      Six Months Ended % Change
      Jun 30, 2017 Jun 30, 2016 Year over
    Year
    Average Rates:      
    Yield on loans and leases 4.66% 4.94% (0.28)
    Yield on loans held for sale 3.54% 3.91% (0.37)
    Yield on taxable investments 2.09% 2.23% (0.14)
    Yield on tax-exempt investments (1) 4.70% 4.73% (0.03)
    Yield on interest bearing cash and temporary investments 0.82% 0.52% 0.30 
    Total yield on earning assets (1) 4.23% 4.53% (0.30)
           
    Cost of interest bearing deposits 0.31% 0.27% 0.04 
    Cost of securities sold under agreements      
    to repurchase and fed funds purchased 0.19% 0.04% 0.15 
    Cost of term debt 1.70% 1.80% (0.10)
    Cost of junior subordinated debentures 4.79% 4.25% 0.54 
    Total cost of interest bearing liabilities 0.50% 0.46% 0.04 
           
    Net interest spread (1) 3.73% 4.07% (0.34)
    Net interest margin (1) 3.89% 4.21% (0.32)
           
    Performance Ratios:      
    Return on average assets 0.84% 0.87% (0.03)
    Return on average tangible assets 0.90% 0.94% (0.04)
    Return on average common equity 5.25% 5.27% (0.02)
    Return on average tangible common equity 9.76% 9.97% (0.21)
    Efficiency ratio – Consolidated 66.38% 67.75% (1.37)
    Efficiency ratio – Bank 64.05% 65.81% (1.76)

                                   
    (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) Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Jun 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Temporary investments and interest bearing cash $125,886  $804,354  $1,194,904  $874,410  $514,881  (84)% (76)%
    Investment securities, taxable 3,008,079  2,723,576  2,373,652  2,265,883  2,304,998  10 % 31 %
    Investment securities, tax-exempt 292,553  286,444  287,359  283,818  280,841  2 % 4 %
    Loans held for sale 392,183  351,570  482,028  481,740  403,964  12 % (3)%
    Loans and leases 18,024,651  17,598,314  17,386,385  17,400,657  17,234,220  2 % 5 %
    Total interest earning assets 21,843,352  21,764,258  21,724,328  21,306,508  20,738,904  0 % 5 %
    Goodwill and other intangible assets, net 1,822,032  1,823,799  1,825,491  1,827,405  1,829,407  0 % 0 %
    Total assets 24,792,869  24,730,285  24,740,986  24,422,986  23,896,315  0 % 4 %
                   
    Non-interest bearing demand deposits 5,951,670  5,883,924  5,939,223  5,766,022  5,466,098  1 % 9 %
    Interest bearing deposits 13,037,064  13,119,736  13,026,614  12,836,987  12,644,442  (1)% 3 %
    Total deposits 18,988,734  19,003,660  18,965,837  18,603,009  18,110,540  0 % 5 %
    Interest bearing liabilities 14,659,650  14,661,558  14,606,120  14,446,687  14,249,349  0 % 3 %
                   
    Shareholders’ equity - common 3,956,777  3,936,340  3,914,624  3,911,323  3,889,593  1 % 2 %
    Tangible common equity (1) 2,134,745  2,112,541  2,089,133  2,083,918  2,060,186  1 % 4 %


           
    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
      Six Months Ended% Change
    (Dollars in thousands) Jun 30, 2017 Jun 30, 2016 Year over Year
    Temporary investments and interest bearing cash $463,245  $435,777  6 %
    Investment securities, taxable 2,866,614  2,308,294  24 %
    Investment securities, tax-exempt 289,515  283,963  2 %
    Loans held for sale 371,989  350,848  6 %
    Loans and leases 17,812,660  17,121,152  4 %
    Total interest earning assets 21,804,023  20,500,034  6 %
    Goodwill and other intangible assets, net 1,822,910  1,830,726  0 %
    Total assets 24,761,749  23,655,877  5 %
           
    Non-interest bearing demand deposits 5,917,984  5,377,954  10 %
    Interest bearing deposits 13,078,171  12,527,723  4 %
    Total deposits 18,996,155  17,905,677  6 %
    Interest bearing liabilities 14,660,598  14,113,013  4 %
           
    Shareholders’ equity - common 3,946,615  3,884,067  2 %
    Tangible common equity (1) 2,123,705  2,053,341  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) Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Seq.
    Quarter
     Year over
    Year
    Residential mortgage servicing rights:              
    Residential mortgage loans serviced for others $14,797,242  $14,541,171  $14,327,368  $13,880,660  $13,564,242  2 % %
    MSR asset, at fair value 141,832  142,344  142,973  114,446  112,095  0 % 27 %
    MSR as % of serviced portfolio 0.96% 0.98% 1.00% 0.82% 0.83%    
    Residential mortgage banking revenue:              
    Origination and sale $32,385  $24,647  $32,386  $45,631  $42,083  31 % (23)%
    Servicing 9,839  9,858  9,597  9,401  8,640  0 % 14 %
    Change in fair value of MSR asset (8,330) (7,671) 16,465  (7,826) (13,940) 9 % (40)%
    Total $33,894  $26,834  $58,448  $47,206  $36,783  26 % (8)%
                   
    Closed loan volume:              
    Closed loan volume - portfolio $312,022  $245,334  $250,000  $305,648  $365,926  27 % (15)%
    Closed loan volume - for-sale 918,200  754,715  1,061,327  1,118,526  1,046,349  22 % (12)%
    Closed loan volume - total $1,230,222  $1,000,049  $1,311,327  $1,424,174  $1,412,275  23 % (13)%
                   
    Gain on sale margin:              
    Based on for-sale volume 3.53% 3.27% 3.05% 4.08% 4.02% 0.26  (0.49)
                   
      Six Months Ended % Change        
    (Dollars in thousands) Jun 30, 2017 Jun 30, 2016 Year over
    Year
            
    Residential mortgage banking revenue:              
    Origination and sale $57,032  $70,492  (19)%        
    Servicing 19,697  16,282  21 %        
    Change in fair value of MSR asset (16,001) (34,565) (54)%        
    Total $60,728  $52,209  16 %        
                   
    Closed loan volume:              
    Closed loan volume - portfolio $557,356  $698,844  (20)%        
    Closed loan volume - for-sale 1,672,915  1,810,425  (8)%        
    Closed loan volume - total $2,230,271  $2,509,269  (11)%        
                   
    Gain on sale margin:              
    Based on for-sale volume 3.41% 3.89% (0.48)        
                   
    nm = not meaningful              


    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