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Umpqua Reports Third Quarter 2017 Results

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

Source:Umpqua Holdings Corporation