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Umpqua Reports Second Quarter 2017 Results

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 % 9 %
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.com Bradley Howes SVP/Director of Investor Relations Umpqua Holdings Corporation 503-727-4226 bradhowes@umpquabank.com

Source:Umpqua Holdings Corporation