• Umpqua Holdings Corporation
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  • Umpqua Reports Third Quarter 2017 Results
    Company Release - 10/18/2017 16:15

    Net earnings of $61.3 million, or $0.28 per common share 
    Quarterly loan and lease growth of $356.6 million, or 8% annualized 
    Quarterly deposit growth of $392.0 million, or 8% annualized

    PORTLAND, Ore., Oct. 18, 2017 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $61.3 million for the third quarter of 2017, compared to $56.8 million for the second quarter of 2017 and $61.8 million for the third quarter of 2016.  Earnings per diluted common share were $0.28 for the third quarter of 2017, compared to $0.26 for the second quarter of 2017 and $0.28 for the third quarter of 2016.

    “The improvement in our third quarter financial performance reflects strong growth in both loans and deposits, continuing on the early success of our balanced growth initiatives,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation.  “Mortgage banking remained seasonally strong in the quarter, and we managed operating expenses effectively.  Our core growth markets remain vibrant, and we are in good position to generate positive operating leverage from the revenue and efficiency strategies organized under the Umpqua Next Gen initiative.”

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

    • $9.2 million negative adjustment related to the fair value change of the MSR asset, compared to negative adjustments of $8.3 million in the prior quarter and $7.8 million in the same period of the prior year.
    • $153,000 negative adjustment related to the fair value change of the debt capital market swap derivatives, compared to a negative adjustment of $756,000 in the prior quarter and a gain of $182,000 in the same period of the prior year.
    • $6.7 million in merger-related expenses associated with final work on a non-customer facing system conversion, compared to $1.6 million in the prior quarter and $2.0 million in the same period of the prior year.
    • $1.6 million of exit or disposal costs, compared to $742,000 in the prior quarter and $1.7 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.

    Third Quarter 2017 Highlights (compared to prior quarter):

    • Net interest income increased by $8.4 million, or 4%, driven by growth in loans and leases, combined with a 3 basis point increase in net interest margin resulting primarily from higher accretion of the credit discount;
    • Provision for loan and lease losses increased by $1.3 million primarily from continued loan growth, and net charge-offs declined by two basis points to 0.20% of average loans and leases (annualized);
    • Non-interest income increased by $4.3 million, driven primarily by higher gains from portfolio loan sales;
    • Non-interest expense increased by $4.3 million, driven primarily by $5.0 million of higher merger-related expenses associated with final work on a non-customer facing system conversion;
    • Gross loan and lease growth of $356.6 million, or 8% annualized;
    • Deposit growth of $392.0 million, or 8% annualized;
    • Non-performing assets to total assets increased to 0.30%, primarily driven by two larger non-performing loans;
    • Estimated total risk-based capital ratio of 14.1% and estimated Tier 1 common to risk weighted assets ratio of 11.1%; and
    • Increased the quarterly cash dividend by 12.5% to $0.18 per common share.

    Balance Sheet
    Total consolidated assets were $25.7 billion as of September 30, 2017, compared to $25.3 billion as of June 30, 2017 and $24.7 billion as of September 30, 2016.  Including secured off-balance sheet lines of credit, total available liquidity was $9.5 billion as of September 30, 2017, representing 37% of total assets and 48% of total deposits.

    Gross loans and leases were $18.7 billion as of September 30, 2017, an increase of $356.6 million, or 8% annualized, from $18.3 billion as of June 30, 2017.  This increase reflects balanced growth across the Company's commercial, leasing, commercial real-estate and consumer loan portfolios.  During the third quarter of 2017, the Company sold $19.2 million of leases and equipment finance loans and $72.5 million of portfolio residential mortgage loans. 

    Total deposits were $19.9 billion as of September 30, 2017, an increase of $392.0 million, or 8% annualized, from $19.5 billion as of June 30, 2017.  This increase was primarily attributable to growth in non-interest bearing demand accounts.

    Net Interest Income
    Net interest income was $220.5 million for the third quarter of 2017, an increase of $8.4 million, or 4%, from the prior quarter.   This increase was primarily attributable to the strong growth in loans and leases, along with a 3 basis point increase in net interest margin.  Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) increased by $2.1 million from the prior quarter level, driven by higher accretion on credit impaired loans.

    The Company’s net interest margin was 3.94% for the third quarter of 2017, up 3 basis points from 3.91% for the second quarter of 2017.  The linked quarter increase reflects the higher level of accretion on credit impaired loans, along with slightly higher average yields on loans and leases.  This was partially offset by a 3 basis point increase in the cost of funds, and a higher mix of interest-bearing cash, relative to the prior quarter.

    Credit Quality
    The allowance for loan and lease losses was $139.5 million, or 0.75% of loans and leases, as of September 30, 2017.  During the third quarter of 2017, the Company recorded $8.0 million of accretion related to the credit discount on acquired loans from Sterling, compared to $5.9 million in the prior quarter.  This increase was driven primarily by a higher level of accretion on credit impaired loans associated with higher pay-offs.  As of September 30, 2017, the Sterling purchased non-credit impaired loans had approximately $29.8 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 $27.3 million of remaining total discount.

    The provision for loan and lease losses was $12.0 million for the third quarter of 2017, a $1.3 million increase from the prior quarter level, driven primarily by strong loan and lease growth.  Net charge-offs decreased by two basis points to 0.20% of average loans and leases (annualized) for the third quarter of 2017.  As of September 30, 2017, non-performing assets increased to 0.30% of total assets, from 0.23% as of June 30, 2017 and from 0.25% as of September 30, 2016.  This increase reflects two larger loans which moved to non-accrual status during the quarter.

    Non-interest Income
    Non-interest income was $75.4 million for the third quarter of 2017, up $4.3 million from the prior quarter.  The current quarter's non-interest income included negative adjustments of $9.2 million and $153,000 related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively.  This compares to fair value losses of $8.3 million and $756,000 for the MSR asset and debt capital market swap derivatives, respectively, during the second quarter of 2017. 

    Net revenue from the origination and sale of residential mortgages was $32.8 million for the third quarter of 2017, up slightly from the prior quarter.  For-sale mortgage origination volume decreased by 3% from the prior quarter, while the home lending gain on sale margin increased by 15 basis points to 3.68% for the third quarter of 2017.  Of the current quarter’s mortgage production, 74% related to purchase activity, compared to 77% for the prior quarter and 68% for the same period in the prior year.

    Gain on loan sales increased by $4.7 million from the prior quarter, reflecting a higher level of portfolio loans sales compared to the prior quarter.

    Non-interest Expense

    Non-interest expense was $188.4 million for the third quarter of 2017, up $4.3 million from the prior quarter level.  This increase was driven primarily by higher merger-related expenses related to final work on a non-customer facing system conversion, consistent with Company's prior guidance.  These were partially offset by a decrease in services, marketing and communications expense. 

    Capital
    As of September 30, 2017, the Company’s book value per share increased to $18.10, from $17.98 in the prior quarter, and its tangible book value per common share1 increased to $9.83, from $9.71 in the prior quarter.  During the third quarter of 2017, the Company increased its quarterly cash dividend by 12.5% to $0.18 per common share.

    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 September 30, 2017.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of September 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) Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016
    Total shareholders' equity $3,985,260  $3,958,845  $3,931,150  $3,916,795  $3,920,208 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 31,819  33,508  35,197  36,886  38,753 
    Tangible common shareholders' equity $2,165,790  $2,137,686  $2,108,302  $2,092,258  $2,093,804 
    Total assets $25,695,663  $25,257,784  $24,861,458  $24,813,119  $24,744,214 
    Subtract:          
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651 
    Other intangible assets, net 31,819  33,508  35,197  36,886  38,753 
    Tangible assets $23,876,193  $23,436,625  $23,038,610  $22,988,582  $22,917,810 
    Common shares outstanding at period end 220,225  220,205  220,349  220,177  220,207 
               
    Common equity ratio 15.51% 15.67% 15.81% 15.79% 15.84%
    Tangible common equity ratio 9.07% 9.12% 9.15% 9.10% 9.14%
    Book value per common share $18.10  $17.98  $17.84  $17.79  $17.80 
    Tangible book value per common share $9.83  $9.71  $9.57  $9.50  $9.51 

    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 third quarter 2017 earnings conference call on Thursday, October 19, 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 third quarter 2017 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (800) 210-9006 ten minutes prior to the start time and enter conference ID: 7723316.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 7723316.  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 ability to effectively manage problem credits; our ability 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) Sep 30,
    2017
     Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Interest income:              
    Loans and leases $223,321  $212,998  $205,996  $209,812  $212,037  5% 5%
    Interest and dividends on investments:                
    Taxable 13,979  15,220  13,931  10,630  10,779  (8)% 30%
    Exempt from federal income tax 2,125  2,237  2,242  2,229  2,181  (5)% (3)%
    Dividends 357  360  388  336  332  (1)% 8%
    Temporary investments and interest bearing deposits 934  324  1,557  1,696  1,090  188% (14)%
    Total interest income 240,716  231,139  224,114  224,703  226,419  4% 6%
    Interest expense:                
    Deposits 12,052  10,641  9,648  9,288  8,999  13% 34%
    Repurchase agreements and federal funds purchased 81  321  30  32  32  (75)% 153%
    Term debt 3,491  3,662  3,510  3,413  3,558  (5)% (2)%
    Junior subordinated debentures 4,628  4,437  4,201  4,174  3,938  4% 18%
    Total interest expense 20,252  19,061  17,389  16,907  16,527  6% 23%
    Net interest income 220,464  212,078  206,725  207,796  209,892  4% 5%
    Provision for loan and lease losses 11,997  10,657  11,672  13,171  13,091  13% (8)%
    Non-interest income:                
    Service charges on deposits 15,849  15,478  14,729  15,323  15,762  2% 1%
    Brokerage revenue 3,832  3,903  4,122  4,230  4,129  (2)% (7)%
    Residential mortgage banking revenue, net 33,430  33,894  26,834  58,448  47,206  (1)% (29)%
    (Loss) gain on investment securities, net (6) 35  (2)     (117)% nm 
    Gain on loan sales 7,969  3,310  1,754  4,060  1,285  141% 520%
    Loss on junior subordinated debentures carried at fair value (1,590) (1,572) (1,555) (1,589) (1,590) 1% 0%
    BOLI income 2,041  2,089  2,069  2,107  2,116  (2)% (4)%
    Other income 13,877  13,982  12,274  16,041  11,802  (1)% 18%
    Total non-interest income 75,402  71,119  60,225  98,620  80,710  6% (7)%
    Non-interest expense:                
    Salaries and employee benefits 108,732  108,561  106,473  105,406  105,341  0% 3%
    Occupancy and equipment, net 37,648  36,955  38,673  37,618  38,181  2% (1)%
    Intangible amortization 1,689  1,689  1,689  1,867  1,867  0% (10)%
    FDIC assessments 4,405  4,447  4,087  3,985  4,109  (1)% 7%
    (Gain) loss on other real estate owned, net (99) (457) 82  (197) (14) (78)% 607%
    Merger related expenses 6,664  1,640  1,020  3,218  2,011  306% 231%
    Other expense 29,315  31,186  30,690  31,571  29,692  (6)% (1)%
    Total non-interest expense 188,354  184,021  182,714  183,468  181,187  2% 4%
    Income before provision for income taxes 95,515  88,519  72,564  109,777  96,324  8% (1)%
    Provision for income taxes 34,182  31,707  26,561  40,502  34,515  8% (1)%
    Net income 61,333  56,812  46,003  69,275  61,809  8% (1)%
    Dividends and undistributed earnings allocated to participating securities 14  14  12  33  31  0% (55)%
    Net earnings available to common shareholders $61,319  $56,798  $45,991  $69,242  $61,778  8% (1)%
                     
    Weighted average basic shares outstanding 220,215  220,310  220,287  220,190  220,291  0% 0%
    Weighted average diluted shares outstanding 220,755  220,753  220,779  220,756  220,751  0% 0%
    Earnings per common share – basic $0.28  $0.26  $0.21  $0.31  $0.28  8% 0%
    Earnings per common share – diluted $0.28  $0.26  $0.21  $0.31  $0.28  8% 0%
                   
    nm = not meaningful              


    Umpqua Holdings Corporation
    Consolidated Statements of Income
    (Unaudited)
         
      Nine Months Ended % Change
    (In thousands, except per share data) Sep 30, 2017 Sep 30, 2016 Year
    over
    Year
    Interest income      
    Loans and leases $642,315  $640,255  0%
    Interest and dividends on investments:       
    Taxable 43,130  35,797  20%
    Exempt from federal income tax 6,604  6,599  0%
    Dividends 1,105  1,063  4%
    Temporary investments and interest bearing deposits 2,815  2,222  27%
    Total interest income 695,969  685,936  1%
    Interest expense       
    Deposits 32,341  25,952  25%
    Repurchase agreements and federal funds purchased 432  100  332%
    Term debt 10,663  11,592  (8)%
    Junior subordinated debentures 13,266  11,500  15%
    Total interest expense 56,702  49,144  15%
    Net interest income 639,267  636,792  0%
    Provision for loan and lease losses 34,326  28,503  20%
    Non-interest income       
    Service charges on deposits 46,056  45,945  0%
    Brokerage revenue 11,857  12,803  (7)%
    Residential mortgage banking revenue, net 94,158  99,415  (5)%
    Gain on investment securities, net 27  858  (97)%
    Gain on loan sales 13,033  9,296  40%
    Loss on junior subordinated debentures carried at fair value (4,717) (4,734) 0%
    BOLI income 6,199  6,407  (3)%
    Other income 40,133  31,330  28%
    Total non-interest income 206,746  201,320  3%
    Non-interest expense       
    Salaries and employee benefits 323,766  319,424  1%
    Occupancy and equipment, net 113,276  114,326  (1)%
    Intangible amortization 5,067  6,755  (25)%
    FDIC assessments 12,939  11,523  12%
    Gain on other real estate owned, net (474) (82) 478%
    Merger related expenses 9,324  12,095  (23)%
    Goodwill impairment   142  nm 
    Other expense 91,191  89,504  2%
    Total non-interest expense 555,089  553,687  0%
    Income before provision for income taxes 256,598  255,922  0%
    Provision for income taxes 92,450  92,257  0%
    Net income 164,148  163,665  0%
    Dividends and undistributed earnings       
    allocated to participating securities 40  92  (57)%
    Net earnings available to common shareholders $164,108  $163,573  0%
            
    Weighted average basic shares outstanding 220,270  220,313  0%
    Weighted average diluted shares outstanding 220,793  220,936  0%
    Earnings per common share – basic $0.75  $0.74  1%
    Earnings per common share – diluted $0.74  $0.74  0%
           
    nm = not meaningful      


    Umpqua Holdings Corporation
    Consolidated Balance Sheets
    (Unaudited)
                 
                % Change
    (In thousands, except per share data) Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Seq.
    Quarter
     Year
    over
    Year
    Assets:              
    Cash and due from banks $304,760  $320,027  $262,655  $331,994  $364,013  (5)% (16)%
    Interest bearing cash and temporary investments 540,806  295,937  421,991  1,117,438  1,102,428  83% (51)%
    Investment securities:                
    Trading, at fair value 11,919  11,467  11,241  10,964  10,866  4% 10%
    Available for sale, at fair value 3,047,358  3,132,566  3,243,408  2,701,220  2,520,037  (3)% 21%
    Held to maturity, at amortized cost 3,905  4,017  4,121  4,216  4,302  (3)% (9)%
    Loans held for sale 417,470  451,350  372,073  387,318  565,624  (8)% (26)%
    Loans and leases 18,677,762  18,321,142  17,829,638  17,508,663  17,392,051  2% 7%
    Allowance for loan and lease losses (139,503) (136,867) (136,292) (133,984) (133,692) 2% 4%
    Loans and leases, net 18,538,259  18,184,275  17,693,346  17,374,679  17,258,359  2% 7%
    Restricted equity securities 45,509  45,511  45,522  45,528  47,537  0% (4)%
    Premises and equipment, net 276,316  288,853  293,133  303,882  306,287  (4)% (10)%
    Goodwill 1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  0% 0%
    Other intangible assets, net 31,819  33,508  35,197  36,886  38,753  (5)% (18)%
    Residential mortgage servicing rights, at fair value 141,225  141,832  142,344  142,973  114,446  0% 23%
    Other real estate owned 4,160  4,804  6,518  6,738  8,309  (13)% (50)%
    Bank owned life insurance 305,572  303,894  301,777  299,673  297,561  1% 3%
    Deferred tax assets, net     8,464  34,322  27,587  nm  (100)%
    Other assets 238,934  252,092  232,017  227,637  290,454  (5)% (18)%
    Total assets $25,695,663  $25,257,784  $24,861,458  $24,813,119  $24,744,214  2% 4%
    Liabilities:                
    Deposits $19,851,910  $19,459,950  $19,167,293  $19,020,985  $18,918,780  2% 5%
    Securities sold under agreements to repurchase 321,542  330,189  304,280  352,948  309,463  (3)% 4%
    Term debt 852,306  852,219  852,308  852,397  902,678  0% (6)%
    Junior subordinated debentures, at fair value 266,875  265,423  263,605  262,209  260,114  1% 3%
    Junior subordinated debentures, at amortized cost 100,690  100,770  100,851  100,931  101,012  0% 0%
    Deferred tax liability, net 51,423  34,296        50% 100%
    Other liabilities 265,657  256,092  241,971  306,854  331,959  4% (20)%
    Total liabilities 21,710,403  21,298,939  20,930,308  20,896,324  20,824,006  2% 4%
    Shareholders' equity:                
    Common stock 3,516,558  3,514,094  3,516,537  3,515,299  3,514,858  0% 0%
    Retained earnings 476,226  454,802  433,417  422,839  388,678  5% 23%
    Accumulated other comprehensive (loss) income (7,524) (10,051) (18,804) (21,343) 16,672  (25)% (145)%
    Total shareholders' equity 3,985,260  3,958,845  3,931,150  3,916,795  3,920,208  1% 2%
    Total liabilities and shareholders' equity $25,695,663  $25,257,784  $24,861,458  $24,813,119  $24,744,214  2% 4%
                     
    Common shares outstanding at period end 220,225  220,205  220,349  220,177  220,207  0% 0%
    Book value per common share $18.10  $17.98  $17.84  $17.79  $17.80  1% 2%
    Tangible book value per common share $9.83  $9.71  $9.57  $9.50  $9.51  1% 3%
    Tangible equity - common $2,165,790  $2,137,686  $2,108,302  $2,092,258  $2,093,804  1% 3%
    Tangible common equity to tangible assets 9.07% 9.12% 9.15% 9.10% 9.14% (0.05) (0.07)


    Umpqua Holdings Corporation
    Loan and Lease Portfolio
    (Unaudited)
                   
    (Dollars in thousands) Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Loans and leases:              
    Commercial real estate:              
    Non-owner occupied term, net $3,475,243  $3,401,679  $3,410,914  $3,330,442  $3,280,660  2% 6%
    Owner occupied term, net 2,467,995  2,593,395  2,584,183  2,599,055  2,573,942  (5)% (4)%
    Multifamily, net 2,993,203  2,964,851  2,885,164  2,858,956  2,968,019  1% 1%
    Commercial construction, net 521,666  464,690  471,007  463,625  388,934  12% 34%
    Residential development, net 186,400  165,956  145,479  142,984  127,447  12% 46%
    Commercial:                
    Term, net 1,819,664  1,686,597  1,620,311  1,508,780  1,480,173  8% 23%
    Lines of credit and other, net 1,134,045  1,153,409  1,114,160  1,116,259  1,142,946  (2)% (1)%
    Leases and equipment finance, net 1,137,732  1,082,651  1,000,376  950,588  927,857  5% 23%
    Residential real estate:                
    Mortgage, net 3,094,361  3,021,331  2,916,924  2,887,971  2,868,337  2% 8%
    Home equity lines and loans, net 1,079,931  1,056,848  1,015,138  1,011,844  1,008,219  2% 7%
    Consumer and other, net 767,522  729,735  665,982  638,159  625,517  5% 23%
    Total, net of deferred fees and costs $18,677,762  $18,321,142  $17,829,638  $17,508,663  $17,392,051  2% 7%
                   
    Loan and leases mix:              
    Commercial real estate:              
    Non-owner occupied term, net 19% 19% 19% 19% 19%    
    Owner occupied term, net 13% 14% 14% 15% 15%    
    Multifamily, net 16% 16% 16% 16% 17%    
    Commercial construction, net 3% 3% 3% 3% 2%    
    Residential development, net 1% 1% 1% 1% 1%    
    Commercial:                        
    Term, net 10% 9% 9% 9% 8%    
    Lines of credit and other, net 6% 6% 6% 6% 7%    
    Leases and equipment finance, net 6% 6% 6% 5% 5%    
    Residential real estate:                        
    Mortgage, net 16% 16% 16% 16% 16%    
    Home equity lines and loans, net 6% 6% 6% 6% 6%    
    Consumer and other, net 4% 4% 4% 4% 4%    
    Total 100% 100% 100% 100% 100%    
                        



    Umpqua Holdings Corporation
    Deposits by Type/Core Deposits
    (Unaudited)
                   
    (Dollars in thousands) Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 % Change
      Amount Amount Amount Amount Amount Seq.
    Quarter
     Year
    over
    Year
    Deposits:              
    Demand, non-interest bearing $6,571,471  $6,112,480  $6,021,585  $5,861,469  $5,993,793  8% 10%
    Demand, interest bearing 2,394,240  2,371,386  2,327,226  2,296,532  2,218,782  1% 8%
    Money market 6,700,261  6,755,707  6,784,442  6,932,717  6,841,700  (1)% (2)%
    Savings 1,444,801  1,427,677  1,400,330  1,325,757  1,303,816  1% 11%
    Time 2,741,137  2,792,700  2,633,710  2,604,510  2,560,689  (2)% 7%
    Total $19,851,910  $19,459,950  $19,167,293  $19,020,985  $18,918,780  2% 5%
                     
    Total core deposits (1) $18,005,730  $17,561,956  $17,427,832  $17,318,003  $17,257,663  3% 4%
                   
    Deposit mix:              
    Demand, non-interest bearing 33% 32% 31% 31% 31%    
    Demand, interest bearing 12% 12% 12% 12% 12%    
    Money market 34% 35% 36% 36% 36%    
    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 394,755  389,767  385,859  384,040  382,687     
    Demand, interest bearing 79,899  80,594  81,570  82,520  83,501     
    Money market 55,659  55,795  55,903  56,031  56,128     
    Savings 162,556  161,369  160,323  159,080  158,760     
    Time 47,129  47,339  47,365  47,705  47,689     
    Total 739,998  734,864  731,020  729,376  728,765     
                   
    Average balance per account:              
    Demand, non-interest bearing $16.6  $15.7  $15.6  $15.3  $15.7     
    Demand, interest bearing 30.0  29.4  28.5  27.8  26.6     
    Money market 120.4  121.1  121.4  123.7  121.9     
    Savings 8.9  8.8  8.7  8.3  8.2     
    Time 58.2  59.0  55.6  54.6  53.7     
    Total $26.8  $26.5  $26.2  $26.1  $26.0     

    (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) Sep 30,
    2017
     Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Non-performing assets:              
    Loans and leases on non-accrual status $44,573  $26,566  $28,915  $27,765  $27,791  68% 60%
    Loans and leases past due 90+ days and accruing (1) 29,073  27,252  23,421  28,369  26,189  7% 11%
    Total non-performing loans and leases 73,646  53,818  52,336  56,134  53,980  37% 36%
    Other real estate owned 4,160  4,804  6,518  6,738  8,309  (13)% (50)%
    Total non-performing assets $77,806  $58,622  $58,854  $62,872  $62,289  33% 25%
                     
    Performing restructured loans and leases $45,813  $52,861  $43,029  $40,667  $36,645  (13)% 25%
    Loans and leases past due 31-89 days $32,251  $31,153  $49,530  $30,425  $39,708  4% (19)%
    Loans and leases past due 31-89 days to total loans and leases 0.17% 0.17% 0.28% 0.17% 0.23%    
    Non-performing loans and leases to total loans and leases (1) 0.39% 0.29% 0.29% 0.32% 0.31%    
    Non-performing assets to total assets (1) 0.30% 0.23% 0.24% 0.25% 0.25%    

    (1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $12.3 million, $16.3 million, $5.3 million, $10.9 million, and $7.3 million at September 30, 2017, June 30, 2017, March 31, 2016, December 31, 2016, and September 30, 2016, respectively.

     
    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
     (Unaudited)
      Quarter Ended % Change
    (Dollars in thousands) Sep 30,
    2017
     Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Allowance for loan and lease losses:              
    Balance beginning of period $136,867  $136,292  $133,984  $133,692  $131,042     
    Provision for loan and lease losses 11,997  10,657  11,672  13,171  13,091  13% (8)%
    Charge-offs (13,222) (13,944) (13,002) (16,303) (13,088) (5)% 1%
    Recoveries 3,861  3,862  3,638  3,424  2,647  0% 46%
    Net charge-offs (9,361) (10,082) (9,364) (12,879) (10,441) (7)% (10)%
    Total allowance for loan and lease losses 139,503  136,867  136,292  133,984  133,692  2% 4%
    Reserve for unfunded commitments 3,932  3,816  3,495  3,611  3,536  3% 11%
    Total allowance for credit losses $143,435  $140,683  $139,787  $137,595  $137,228  2% 5%
                   
    Net charge-offs to average loans and leases (annualized) 0.20% 0.22% 0.22% 0.29% 0.24%    
    Recoveries to gross charge-offs 29.20% 27.70% 27.98% 21.00% 20.22%    
    Allowance for loan and lease losses to loans and leases 0.75% 0.75% 0.76% 0.77% 0.77%    
    Allowance for credit losses to loans and leases 0.77% 0.77% 0.78% 0.79% 0.79%    


    Umpqua Holdings Corporation
    Credit Quality – Allowance for Loan and Lease Losses
    (Unaudited)
      Nine Months Ended % Change
    (Dollars in thousands) Sep 30, 2017 Sep 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 34,326  28,503  20%
    Charge-offs (40,168) (33,620) 19%
    Recoveries 11,361  8,487  34%
    Net charge-offs (28,807) (25,133) 15%
    Total allowance for loan and lease losses 139,503  133,692  4%
    Reserve for unfunded commitments 3,932  3,536  11%
    Total allowance for credit losses $143,435  $137,228  5%
           
    Net charge-offs to average loans and leases (annualized) 0.21% 0.20%  
    Recoveries to gross charge-offs 28.28% 25.24%  


    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
               
      Quarter Ended % Change
      Sep 30,
    2017
     Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Average Rates:              
    Yield on loans and leases 4.70% 4.67% 4.65% 4.70% 4.75% 0.03  (0.05)
    Yield on loans held for sale 3.89% 3.26% 3.86% 3.79% 3.79% 0.63  0.10 
    Yield on taxable investments 2.00% 2.07% 2.10% 1.85% 1.96% (0.07) 0.04 
    Yield on tax-exempt investments (1) 4.59% 4.64% 4.76% 4.72% 4.68% (0.05) (0.09)
    Yield on interest bearing cash and temporary investments 1.47% 1.03% 0.79% 0.56% 0.50% 0.44  0.97 
    Total yield on earning assets (1) 4.30% 4.26% 4.18% 4.14% 4.26% 0.04  0.04 
                        
    Cost of interest bearing deposits 0.36% 0.33% 0.30% 0.28% 0.28% 0.03  0.08 
    Cost of securities sold under agreements                   
    to repurchase and fed funds purchased 0.10% 0.32% 0.04% 0.04% 0.04% (0.22) 0.06 
    Cost of term debt 1.63% 1.72% 1.67% 1.53% 1.57% (0.09) 0.06 
    Cost of junior subordinated debentures 5.02% 4.88% 4.70% 4.59% 4.36% 0.14  0.66 
    Total cost of interest bearing liabilities 0.55% 0.52% 0.48% 0.46% 0.46% 0.03  0.09 
                        
    Net interest spread (1) 3.75% 3.74% 3.70% 3.68% 3.80% 0.01  (0.05)
    Net interest margin (1) 3.94% 3.91% 3.85% 3.83% 3.95% 0.03  (0.01)
                        
    Performance Ratios:                   
    Return on average assets 0.96% 0.92% 0.75% 1.11% 1.01% 0.04  (0.05)
    Return on average tangible assets 1.04% 0.99% 0.81% 1.20% 1.09% 0.05  (0.05)
    Return on average common equity 6.10% 5.76% 4.74% 7.04% 6.28% 0.34  (0.18)
    Return on average tangible common equity 11.23% 10.67% 8.83% 13.19% 11.79% 0.56  (0.56)
    Efficiency ratio – Consolidated 63.43% 64.71% 68.15% 59.65% 62.11% (1.28) 1.32 
    Efficiency ratio – Bank 61.42% 62.45% 65.75% 57.96% 60.45% (1.03) 0.97 

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

     
    Umpqua Holdings Corporation
    Selected Ratios
    (Unaudited)
         
      Nine Months Ended % Change
      Sep 30, 2017 Sep 30, 2016 Year over
    Year
    Average Rates:      
    Yield on loans and leases 4.67% 4.88% (0.21)
    Yield on loans held for sale 3.67% 3.86% (0.19)
    Yield on taxable investments 2.06% 2.14% (0.08)
    Yield on tax-exempt investments (1) 4.66% 4.71% (0.05)
    Yield on interest bearing cash and temporary investments 0.96% 0.51% 0.45 
    Total yield on earning assets (1) 4.25% 4.43% (0.18)
             
    Cost of interest bearing deposits 0.33% 0.27% 0.06 
    Cost of securities sold under agreements        
    to repurchase and fed funds purchased 0.16% 0.04% 0.12 
    Cost of term debt 1.67% 1.72% (0.05)
    Cost of junior subordinated debentures 4.87% 4.29% 0.58 
    Total cost of interest bearing liabilities 0.52% 0.46% 0.06 
             
    Net interest spread (1) 3.73% 3.97% (0.24)
    Net interest margin (1) 3.91% 4.12% (0.21)
             
    Performance Ratios:        
    Return on average assets 0.88% 0.91% (0.03)
    Return on average tangible assets 0.95% 0.99% (0.04)
    Return on average common equity 5.54% 5.61% (0.07)
    Return on average tangible common equity 10.26% 10.59% (0.33)
    Efficiency ratio – Consolidated 65.35% 65.79% (0.44)
    Efficiency ratio – Bank 63.13% 63.96% (0.83)

    (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) Sep 30,
    2017
     Jun 30,
    2017
     Mar 31,
    2017
     Dec 31,
    2016
     Sep 30,
    2016
     Seq.
    Quarter
     Year
    over
    Year
    Temporary investments and interest bearing cash $253,015  $125,886  $804,354  $1,194,904  $874,410  101% (71)%
    Investment securities, taxable 2,867,292  3,008,079  2,723,576  2,373,652  2,265,883  (5)% 27%
    Investment securities, tax-exempt 281,139  292,553  286,444  287,359  283,818  (4)% (1)%
    Loans held for sale 420,282  392,183  351,570  482,028  481,740  7% (13)%
    Loans and leases 18,537,827  18,024,651  17,598,314  17,386,385  17,400,657  3% 7%
    Total interest earning assets 22,359,555  21,843,352  21,764,258  21,724,328  21,306,508  2% 5%
    Goodwill and other intangible assets, net 1,820,394  1,822,032  1,823,799  1,825,491  1,827,405  0% 0%
    Total assets 25,311,994  24,792,869  24,730,285  24,740,986  24,422,986  2% 4%
                     
    Non-interest bearing demand deposits 6,354,591  5,951,670  5,883,924  5,939,223  5,766,022  7% 10%
    Interest bearing deposits 13,155,462  13,037,064  13,119,736  13,026,614  12,836,987  1% 2%
    Total deposits 19,510,053  18,988,734  19,003,660  18,965,837  18,603,009  3% 5%
    Interest bearing liabilities 14,705,842  14,659,650  14,661,558  14,606,120  14,446,687  0% 2%
                     
    Shareholders’ equity - common 3,986,868  3,956,777  3,936,340  3,914,624  3,911,323  1% 2%
    Tangible common equity (1) 2,166,474  2,134,745  2,112,541  2,089,133  2,083,918  1% 4%


           
    Umpqua Holdings Corporation
    Average Balances
    (Unaudited)
      Nine Months Ended% Change
    (Dollars in thousands) Sep 30, 2017 Sep 30, 2016 Year over Year
    Temporary investments and interest bearing cash $392,399  $583,056  (33)%
    Investment securities, taxable 2,866,842  2,294,054  25%
    Investment securities, tax-exempt 286,693  283,914  1%
    Loans held for sale 388,263  394,797  (2)%
    Loans and leases 18,057,039  17,215,000  5%
    Total interest earning assets 21,991,236  20,770,821  6%
    Goodwill and other intangible assets, net 1,822,063  1,829,611  0%
    Total assets 24,947,180  23,913,446  4%
            
    Non-interest bearing demand deposits 6,065,119  5,508,255  10%
    Interest bearing deposits 13,104,218  12,631,564  4%
    Total deposits 19,169,337  18,139,819  6%
    Interest bearing liabilities 14,675,845  14,225,049  3%
            
    Shareholders’ equity - common 3,960,180  3,893,218  2%
    Tangible common equity (1) 2,138,117  2,063,607  4%

    (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) Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Seq.
    Quarter
     Year over
    Year
    Residential mortgage servicing rights:              
    Residential mortgage loans serviced for others $15,007,942  $14,797,242  $14,541,171  $14,327,368  $13,880,660  1% 8%
    MSR asset, at fair value 141,225  141,832  142,344  142,973  114,446  0% 23%
    MSR as % of serviced portfolio 0.94% 0.96% 0.98% 1.00% 0.82% (2)% 15%
    Residential mortgage banking revenue:                
    Origination and sale $32,784  $32,385  $24,647  $32,386  $45,631  1% (28)%
    Servicing 9,879  9,839  9,858  9,597  9,401  0% 5%
    Change in fair value of MSR asset (9,233) (8,330) (7,671) 16,465  (7,826) 11% 18%
    Total $33,430  $33,894  $26,834  $58,448  $47,206  (1)% (29)%
                     
    Closed loan volume:                
    Closed loan volume - portfolio $336,362  $312,022  $245,334  $250,000  $305,648  8% 10%
    Closed loan volume - for-sale 891,063  918,200  754,715  1,061,327  1,118,526  (3)% (20)%
    Closed loan volume - total $1,227,425  $1,230,222  $1,000,049  $1,311,327  $1,424,174  0% (14)%
                   
    Gain on sale margin:              
    Based on for-sale volume 3.68% 3.53% 3.27% 3.05% 4.08% 0.15  (0.40)
                   
      Nine Months Ended % Change        
    (Dollars in thousands) Sep 30, 2017 Sep 30, 2016 Year over
    Year
            
    Residential mortgage banking revenue:              
    Origination and sale $89,816  $116,123  (23)%        
    Servicing 29,576  25,683  15%        
    Change in fair value of MSR asset (25,234) (42,391) (40)%        
    Total $94,158  $99,415  (5)%        
                   
    Closed loan volume:              
    Closed loan volume - portfolio $893,718  $1,004,492  (11)%        
    Closed loan volume - for-sale 2,563,978  2,928,951  (12)%        
    Closed loan volume - total $3,457,696  $3,933,443  (12)%        
                   
    Gain on sale margin:              
    Based on for-sale volume 3.50% 3.96% (0.46)        
                   


    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