10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[ x ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended: December 31, 2011

[    ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to            .

Commission File Number: 001-34624

UMPQUA HOLDINGS CORPORATION

(Exact name of Registrant as specified in its charter)

OREGON	93-1261319
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

ONE SW COLUMBIA STREET, SUITE 1200, PORTLAND, OREGON 97258

(Address of principal executive offices) (zip code)

(503) 727-4100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
NONE

Securities registered pursuant to Section 12(g) of the Act:                        Common Stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  [ x ]  No  [    ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act.  Yes  [    ]  No  [ x ]

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [ x ]  No  [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  [ x ]  Yes  [    ]  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Act. Check one:

Large Accelerated filer  [ x ]    Accelerated filer  [    ]    Non-accelerated filer  [    ]    Smaller reporting company  [    ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  [    ]  No  [ x ]

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2011, based on the closing price on that date of $11.57 per share, and 113,403,414 shares held was $1,312,077,500.

Indicate the number of shares outstanding for each of the issuer’s classes of common stock, as of the latest practical date:

The number of shares of the Registrant’s common stock (no par value) outstanding as of January 31, 2012 was 112,193,401.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2012 Annual Meeting of Shareholders of Umpqua Holdings Corporation are incorporated by reference in this Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14.

Umpqua Holdings Corporation

FORM 10-K CROSS REFERENCE INDEX

PART I		2
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	18
ITEM 1B.	UNRESOLVED STAFF COMMENTS	25
ITEM 2.	PROPERTIES	25
ITEM 3.	LEGAL PROCEEDINGS	25
ITEM 4.	(REMOVED AND RESERVED)	26
PART II		27
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	27
ITEM 6.	SELECTED FINANCIAL DATA	31
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	87
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	92
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	181
ITEM 9A.	CONTROLS AND PROCEDURES	181
ITEM 9B.	OTHER INFORMATION	181
PART III		182
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	182
ITEM 11.	EXECUTIVE COMPENSATION	182
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	182
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	182
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	182
PART IV		183
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	183
SIGNATURES		184
EXHIBIT INDEX		186

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PART I

ITEM 1.    BUSINESS.

This Annual Report on Form 10-K contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These statements may include statements that expressly or implicitly predict future results, performance or events. Statements other than statements of historical fact are forward-looking statements. You can find many of these statements by looking for words such as “anticipates,” “expects,” “believes,” “estimates” and “intends” and words or phrases of similar meaning. We make forward-looking statements regarding projected sources of funds, use of proceeds, availability of acquisition and growth opportunities, dividends, adequacy of our allowance for loan and lease losses and provision for loan and lease losses, our commercial real estate portfolio and subsequent chargeoffs. Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. There are many factors that could cause actual results to differ materially from those contemplated by these forward-looking statements. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking statements include those set forth in our filings with the SEC, Item 1A of this Annual Report on Form 10-K, and the following factors that might cause actual results to differ materially from those presented:

• our ability to attract new deposits and loans and leases;

• demand for financial services in our market areas;

• competitive market pricing factors;

• deterioration in economic conditions that could result in increased loan and lease losses;

• risks associated with concentrations in real estate related loans;

• market interest rate volatility;

• stability of funding sources and continued availability of borrowings;

• changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth;

• our ability to recruit and retain key management and staff;

• availability of, and competition for, FDIC-assisted and other acquisition opportunities;

• risks associated with merger and acquisition integration;

• significant decline in the market value of the Company that could result in an impairment of goodwill;

• our ability to raise capital or incur debt on reasonable terms;

• regulatory limits on the Bank’s ability to pay dividends to the Company;

• the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and related rules and regulations on the Company’s business operations and competitiveness, including the impact of executive compensation restrictions, which may affect the Company’s ability to retain and recruit executives in competition with firms in other industries who do not operate under those restrictions;

• the impact of the Dodd-Frank Act on the Company’s interchange fee revenue, interest expense, FDIC deposit insurance assessments and regulatory compliance expenses, which includes a maximum permissible interchange fee that an issuer may receive for an electronic debit transaction, resulting in an approximate 50% decrease in interchange revenue on an average transaction.

For a more detailed discussion of some of the risk factors, see the section entitled “Risk Factors” below. We do not intend to update any factors, except as required by SEC rules, or to publicly announce revisions to any of our forward-looking statements. Any forward-looking statement speaks only as of the date that such statement was made. You should consider any forward looking statements in light of this explanation, and we caution you about relying on forward-looking statements.

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Umpqua Holdings Corporation

Introduction

Umpqua Holdings Corporation (referred to in this report as “we,” “our,” “Umpqua,” and “the Company”), an Oregon corporation, was formed as a bank holding company in March 1999. At that time, we acquired 100% of the outstanding shares of South Umpqua Bank, an Oregon state-chartered bank formed in 1953. We became a financial holding company in March 2000 under the provisions of the Gramm-Leach-Bliley Act. Umpqua has two principal operating subsidiaries, Umpqua Bank (the “Bank”) and Umpqua Investments, Inc. (“Umpqua Investments”). Prior to July 2009, Umpqua Investments was known as Strand, Atkinson, Williams and York, Inc. (“Strand”).

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”). You may obtain these reports, and any amendments, from the SEC’s website at www.sec.gov. You may obtain copies of these reports, and any amendments, through our website at www.umpquaholdingscorp.com. These reports are available through our website as soon as reasonably practicable after they are filed electronically with the SEC. All of our SEC filings since November 14, 2002 have been made available on our website within two days of filing with the SEC.

General Background

Headquartered in Portland, Oregon, Umpqua Bank is considered one of the most innovative community banks in the United States, combining a high touch customer experience with the sophisticated products and expertise of a commercial bank. The Bank has implemented a variety of retail marketing strategies to increase revenue and differentiate the company from its competition. The Bank provides a wide range of banking, wealth management, mortgage banking and other financial services to corporate, institutional and individual customers. Along with its subsidiaries, the Bank is subject to the regulations of state and federal agencies and undergoes periodic examinations by these regulatory agencies. See “Supervision and Regulation” below for additional information.

Umpqua Investments is a registered broker-dealer and investment advisor with offices in Portland, Lake Oswego, and Medford, Oregon, and offered through Umpqua Bank stores. The firm is one of the oldest investment companies in the Northwest and is actively engaged in the communities it serves. Umpqua Investments offers a full range of investment products and services including: stocks, fixed income securities (municipal, corporate, and government bonds, CDs, and money market instruments), mutual funds, annuities, options, retirement planning, money management services and life insurance.

Business Strategy

Umpqua Bank’s principal objective is to become the leading community-oriented financial services retailer throughout the Pacific Northwest and Northern California. We plan to continue the expansion of our market from Seattle to San Francisco, primarily along the I-5 corridor. We intend to continue to grow our assets and increase profitability and shareholder value by differentiating ourselves from competitors through the following strategies:

Capitalize On Innovative Product Delivery System.    Our philosophy has been to develop an environment for the customer that makes the banking experience relevant and enjoyable. With this approach in mind, we have developed a unique store concept that offers “one-stop” shopping and includes distinct physical areas or boutiques, such as a “serious about service center,” an “investment opportunity center” and a “computer café,” which make the Bank’s products and services more tangible and accessible. In 2006, we introduced our “Neighborhood Stores” and in 2007, we introduced the Umpqua “Innovation Lab.” In 2010, we introduced the next generation version of our Neighborhood Store in the Capitol Hill area of Seattle, Washington. We are continuing to remodel existing and acquired stores in metropolitan locations to further our retail vision and have a consistent brand experience.

Deliver Superior Quality Service.    We insist on quality service as an integral part of our culture, from the Board of Directors to our new sales associates, and believe we are among the first banks to introduce a measurable quality service program. Under our “return on quality” program, the performance of each sales associate and store is evaluated monthly based on specific measurable factors such as the “sales effectiveness ratio” that totals the average number of banking products purchased by each new customer. The evaluations also encompass factors such as the number of new loan and deposit accounts generated in each store, reports by incognito “mystery shoppers” and customer surveys. Based on scores achieved, Umpqua’s “return on

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quality” program rewards both individual sales associates and store teams with financial incentives. Through such programs, we are able to measure the quality of service provided to our customers and maintain employee focus on quality customer service.

Establish Strong Brand Awareness.    As a financial services retailer, we devote considerable resources to developing the “Umpqua Bank” brand. This is done through design strategy, marketing, merchandising, community based events, and delivery through our customer facing channels. From Bank branded bags of custom roasted coffee beans and chocolate coins with each transaction, to educational seminars and three Umpqua-branded ice cream trucks, Umpqua’s goal is to engage our customer with the brand in a whole new way. The unique look and feel of our stores and interactive displays help position us as an innovative, customer-friendly retailer of financial products and services. We build consumer preference for our products and services through strong brand awareness.

Use Technology to Expand Customer Base.    Although our strategy continues to emphasize superior personal service, as consumer preferences evolve we continue to expand user-friendly, technology-based systems to attract customers who want to interact with their financial institution electronically. We offer technology-based services including remote deposit capture, online banking, bill pay and treasury services, mobile banking, voice response banking, automatic payroll deposit programs, advanced function ATMs, interactive product kiosks, and a robust internet web site. We believe the availability of both traditional bank services and electronic banking services enhances our ability to attract a broader range of customers and wrap our value proposition across all channels.

Increase Market Share in Existing Markets and Expand Into New Markets.    As a result of our innovative retail product orientation, measurable quality service program and strong brand awareness, we believe that there is significant potential to increase business with current customers, to attract new customers in our existing markets and to enter new markets.

Pursue Strategic Acquisitions.    A part of our strategy in this economic environment is to pursue the acquisition of banks within or in proximity to our geographic footprint that may be operating under capital constraints, regulatory pressure or other competitive disadvantages. We also consider the acquisition of certain failing banks that the FDIC makes available for bid, and that meet our strategic objectives. Failed bank transactions are attractive opportunities because we can acquire loans subject to a loss share agreement with the FDIC, or at a significant discount, that limits our downside risk on the purchased loan portfolio and, apart from our assumption of deposit liabilities, we have significant discretion as to the non-deposit liabilities that we assume. Assets purchased from the FDIC are marked to their fair value. We have completed four FDIC-assisted transactions since January 1, 2009.

Marketing and Sales

Our goal of increasing our share of financial services in our market areas is driven by a marketing and sales strategy with the following key components:

Media Advertising.    Our comprehensive marketing campaigns aim to strengthen the Umpqua Bank brand and heighten public awareness about our innovative delivery of financial products and services. The Bank has been recognized nationally for its use of new media and unique approach. From programs like Umpqua’s Discover Local Music Project and ice cream trucks, to campaigns like “Save Hard Spend Smart” and the “Lemonaire,” Umpqua is utilizing nontraditional media channels and leveraging mass market media in new ways. In 2005 Umpqua dubbed the term “hand-shake marketing” to describe the Company’s fresh approach to localized marketing.

Retail Store Concept.    As a financial services provider, we believe that the store environment is critical to successfully market and sell products and services. Retailers traditionally have displayed merchandise within their stores in a manner designed to encourage customers to purchase their products. Purchases are made on the spur of the moment due to the products’ availability and attractiveness. Umpqua Bank believes this same concept can be applied to financial institutions and accordingly displays financial services and products through tactile merchandising within our stores. Unlike many financial institutions whose strategy is to discourage customers from visiting their facilities in favor of ATMs or other forms of electronic banking, we encourage customers to visit our stores, where they are greeted by well-trained sales associates and encouraged to browse and to make “impulse purchases.” Our “Next Generation” store model includes features like free wireless, free use of laptop computers, opening rooms with refrigerated beverages and innovative products packaging like MainStreet for businesses – a

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Umpqua Holdings Corporation

package that includes relationship pricing for deposit and loan products, and invitation to “Business Therapy” seminars. The stores host a variety of after-hours events, from poetry readings to seminars on how to build an art collection. To bring financial services to our customers in a cost-effective way, we introduced “Neighborhood Stores.” We build these stores in established neighborhoods and design them to be neighborhood hubs. These stand-alone full-service stores are smaller and emphasize advanced technology. To strengthen brand recognition, all Neighborhood Stores are similar in appearance. Umpqua’s “Innovation Lab” is a one-of-a-kind location, showcasing emerging and existing technologies that foster community and redefine what consumers can expect from a banking experience. As a testing ground for new initiatives, the Lab will change regularly to feature new technology, products, services and community events.

Service Culture.    Umpqua believes strongly that if we lead with a service culture, we will have more opportunity to sell our products and services and to create deeper customer relationships across all divisions, from retail to mortgage and commercial. Although a successful marketing program will attract customers to visit, a service environment and a well-trained sales team are critical to selling our products and services. We believe that our service culture has become well established throughout the organization due to our unique facility designs and ongoing training of our associates on all aspects of sales and service. We provide training at our in-house training facility, known as “The World’s Greatest Bank University,” to recognize and celebrate exceptional service, and pay commissions for the sale of the Bank’s products and services. This service culture has helped transform us from a traditional community bank to a nationally recognized marketing company focused on selling financial products and services.

Products and Services

We offer a full array of financial products to meet the banking needs of our market area and target customers. To ensure the ongoing viability of our product offerings, we regularly examine the desirability and profitability of existing and potential new products. To make it easy for new prospective customers to bank with us and access our products, we offer a “Switch Kit,” which allows a customer to open a primary checking account with Umpqua Bank in less than ten minutes. Other avenues through which customers can access our products include our web site equipped with an e-switchkit which includes internet banking through “umpqua.online,” mobile banking, and our 24-hour telephone voice response system.

Deposit Products.    We offer a traditional array of deposit products, including non-interest bearing checking accounts, interest bearing checking and savings accounts, money market accounts and certificates of deposit. These accounts earn interest at rates established by management based on competitive market factors and management’s desire to increase certain types or maturities of deposit liabilities. Our approach is to tailor fit products and bundle those that meet the customer’s needs. This approach adds value for the customer, increases products per household and produces higher service fee income. We also offer a senior checking product which is augmented by Club Carefree, a group that enjoys travel, purchase discounts, and topical seminars.

During the economic downturn, Umpqua opted to increase FDIC insurance coverage for our customers, providing greater peace of mind during these difficult times. In addition, the Company has an agreement with Promontory Interfinancial Network that makes it possible to offer FDIC insurance to depositors in excess of the current deposit limits. This Certificate of Deposit Account Registry Service (“CDARS”) uses a deposit-matching program to distribute excess deposit balances across other participating banks. This product is designed to enhance our ability to attract and retain customers and increase deposits, by providing additional FDIC coverage to customers. Due to the nature of the placement of the funds, CDARS deposits are classified as “brokered deposits” by regulatory agencies.

Private Bank.    Umpqua Private Bank serves high net worth individuals with liquid investable assets by providing customized financial solutions and offerings. The private bank is designed to augment Umpqua’s existing high-touch customer experience, and works collaboratively with the Bank’s affiliate retail brokerage Umpqua Investments and with the independent capital management firm Ferguson Wellman Capital Management, to offer a comprehensive, integrated approach that meets clients’ financial goals, including financial planning, trust services and investments.

Retail Brokerage Services.    Umpqua Investments provides a full range of brokerage services including equity and fixed income products, mutual funds, annuities, options, retirement planning and money management services. Additionally, Umpqua

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Investments offers life insurance. At December 31, 2011, Umpqua Investments had 41 Series 7-licensed financial advisors serving clients at three stand-alone retail brokerage offices, one location located within a retirement facility, and “Investment Opportunity Centers” located in many Bank stores.

Asset Management Services.    Umpqua entered into a strategic alliance with Ferguson Wellman in the fall of 2009 to further enhance our offerings to individuals, unions and corporate retirement plans, endowments and foundations.

Commercial Loans and Commercial Real Estate Loans.    We offer specialized loans for business and commercial customers, including accounts receivable and inventory financing, equipment loans, international trade, real estate construction loans and permanent financing and SBA program financing as well as capital markets and treasury management services. Additionally, we offer specially designed loan products for small businesses through our Small Business Lending Center, and have recently introduced a new business banking division to increase lending to small and mid-sized businesses. Ongoing credit management activities continue to focus on commercial real estate loans given this is a significant portion of our loan portfolio. We are also engaged in initiatives that continue to diversify the loan portfolio including a strong focus on commercial and industrial loans in addition to financing owner-occupied properties.

Residential Real Estate Loans.    Real estate loans are available for construction, purchase and refinancing of residential owner-occupied and rental properties. Borrowers can choose from a variety of fixed and adjustable rate options and terms. We sell most residential real estate loans that we originate into the secondary market. Servicing is retained on the majority of these loans. We also support the Home Affordable Refinance Program and Home Affordable Modification Program.

Consumer Loans.    We provide loans to individual borrowers for a variety of purposes, including secured and unsecured personal loans, home equity and personal lines of credit and motor vehicle loans.

Market Area and Competition

The geographic markets we serve are highly competitive for deposits, loans, leases and retail brokerage services. We compete with traditional banking institutions, as well as non-bank financial service providers, such as credit unions, brokerage firms and mortgage companies. In our primary market areas of Oregon, Western Washington, Northern California, and Nevada, major banks and large regional banks generally hold dominant market share positions. By virtue of their larger capital bases, these institutions have significantly larger lending limits than we do and generally have more expansive branch networks. Competition also includes other commercial banks that are community-focused.

As the industry becomes increasingly dependent on and oriented toward technology-driven delivery systems, permitting transactions to be conducted by telephone, computer and the internet, non-bank institutions are able to attract funds and provide lending and other financial services even without offices located in our primary service area. Some insurance companies and brokerage firms compete for deposits by offering rates that are higher than may be appropriate for the Bank in relation to its asset and liability management objectives. However, we offer a wide array of deposit products and believe we can compete effectively through rate-driven product promotions. We also compete with full service investment firms for non-bank financial products and services offered by Umpqua Investments.

Credit unions present a significant competitive challenge for our banking services and products. As credit unions currently enjoy an exemption from income tax, they are able to offer higher deposit rates and lower loan rates than we can on a comparable basis. Credit unions are also not currently subject to certain regulatory constraints, such as the Community Reinvestment Act, which, among other things, requires us to implement procedures to make and monitor loans throughout the communities we serve. Adhering to such regulatory requirements raises the costs associated with our lending activities, and reduces potential operating profits. Accordingly, we seek to compete by focusing on building customer relationships, providing superior service and offering a wide variety of commercial banking products that do not compete directly with products and services typically offered by the credit unions, such as commercial real estate loans, inventory and accounts receivable financing, and SBA program loans for qualified businesses.

Many of our stores are located in markets that have historically experienced growth below statewide averages. During the past several years, the States of Oregon, California, Washington, and Nevada have experienced economic difficulties. To the extent

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Umpqua Holdings Corporation

the fiscal condition of state and local governments does not improve, there could be an adverse effect on business conditions in the affected state that would negatively impact the prospects for the Bank’s operations located there.

The current adverse economic conditions, driven by the U.S. recession, the housing market downturn, and declining real estate values in our markets, have negatively impacted aspects of our loan portfolio and the markets we serve. Continued deterioration in the real estate market or other segments of our loan portfolio could further negatively impact our operations in these markets, financial condition and results of operations.

The following table presents the Bank’s market share percentage for total deposits as of June 30, 2011, in each county where we have operations. The table also indicates the ranking by deposit size in each market. All information in the table was obtained from SNL Financial of Charlottesville, Virginia, which compiles deposit data published by the FDIC as of June 30, 2011 and updates the information for any bank mergers and acquisitions completed subsequent to the reporting date.

Oregon
County	Market Share		Market Rank		Number of Stores
Benton		7.3%		7		1
Clackamas		4.6%		7		5
Coos		39.6%		1		5
Curry		27.6%		2		1
Deschutes		4.7%		8		5
Douglas		60.2%		1		9
Jackson		16.7%		1		9
Josephine		18.3%		1		5
Lane		17.8%		1		9
Lincoln		12.1%		4		2
Linn		12.7%		4		3
Marion		8.4%		5		3
Multnomah		3.3%		6		16
Washington		4.1%		9		4

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California
County	Market Share			Market Rank		Number of Stores
Amador		5.6	%		7		1
Butte		3.3	%		8		2
Calaveras		23.7	%		2		4
Colusa		35.7	%		1		2
Contra Costa		0.2	%		24		2
El Dorado		7.9	%		4		5
Glenn		27.7	%		3		2
Humboldt		25.1	%		1		7
Lake		16.4	%		3		2
Mendocino		3.3	%		7		1
Napa		12.4	%		3		7
Placer		6.7	%		3		9
Sacramento		1.1	%		15		6
San Joaquin		0.6	%		20		1
Shasta		2.8	%		8		1
Solano		4.0	%		9		4
Sonoma		0.1	%		20		1
Stanislaus		0.9	%		15		2
Sutter		15.7	%		2		2
Tehama		16.9	%		1		2
Trinity		26.1	%		2		1
Tuolumne		18.7	%		3		5
Yolo		2.8	%		10		1
Yuba		24.4	%		2		2
Washington
County	Market Share			Market Rank		Number of Stores
Clark		8.4	%		7		5
King		0.5	%		21		10
Pierce		4.2	%		7		11
Snohomish		0.8	%		21		1
Nevada
County	Market Share			Market Rank		Number of Stores
Washoe		0.6	%		7		4

Lending and Credit Functions

The Bank makes both secured and unsecured loans to individuals and businesses. At December 31, 2011, commercial real estate, commercial, residential, and consumer and other represented approximately 64%, 25%, 10%, and 1%, respectively, of the total non-covered loan and lease portfolio.

Inter-agency guidelines adopted by federal bank regulators mandate that financial institutions establish real estate lending policies with maximum allowable real estate loan-to-value limits, subject to an allowable amount of non-conforming loans as a percentage of capital. We have adopted as loan policy loan-to-value limits that range from 5% to 10% less than the federal guidelines for each category; however, policy exceptions are permitted for real estate loan customers with strong financial credentials.

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Umpqua Holdings Corporation

Allowance for Loan and Lease Losses (“ALLL”) Methodology

The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality and adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan and lease losses. The Bank has a management ALLL Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank’s Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Each risk rating is assessed an inherent credit loss factor that determines the amount of the allowance for loan and lease losses provided for that group of loans and leases with similar risk rating. Credit loss factors may vary by region based on management’s belief that there may ultimately be different credit loss rates experienced in each region.

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize an impairment reserve as a specific component to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. The combination of the risk rating-based allowance component and the impairment reserve allowance component lead to an allocated allowance for loan and lease losses.

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of deteriorating economic conditions characterized by falling real estate values. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends. As of December 31, 2011, the unallocated allowance amount represented 5% of the allowance.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our total loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our residential development, commercial real estate, commercial construction and commercial loan portfolios, and have led to an increase in non-performing loans and the allowance for loan and lease losses. A continued deterioration or a prolonged delay in economic recovery in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

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Employees

As of December 31, 2011, we had a total of 2,255 full-time equivalent employees. None of the employees are subject to a collective bargaining agreement and management believes its relations with employees to be good. Umpqua Bank was named #69 on Fortune magazine’s 2012 list of “100 Best Companies to Work For”, #25 on the 2011 list, #23 on the 2010 list, and #34 on the 2009 list. Information regarding employment agreements with our executive officers is contained in Item 11 below, which item is incorporated by reference to our proxy statement for the 2012 annual meeting of shareholders.

Government Policies

The operations of our subsidiaries are affected by state and federal legislative changes and by policies of various regulatory authorities. These policies include, for example, statutory maximum legal lending rates, domestic monetary policies of the Board of Governors of the Federal Reserve System, United States fiscal policy, and capital adequacy and liquidity constraints imposed by federal and state regulatory agencies. Congress enacted the Emergency Economic Stabilization Act of 2008 (“EESA”), which granted significant authority to the U.S. Department of the Treasury (the “Treasury”) to invest in financial institutions, guarantee debt, buy troubled assets and take other action designed to stabilize financial markets. In November 2008, the Company closed a transaction under the Capital Purchase Program (“CPP”) in which the Company issued 214,181 shares of cumulative preferred stock to the Treasury and issued a warrant to purchase 2,221,795 (reduced in 2009 to 1,110,898) shares of common stock at $14.46 per share in exchange for $214,181,000. Agreements executed in connection with the CPP transaction placed restrictions on compensation payable to senior executive officers and provided that the Company may not declare dividends that exceed $0.19 per common share per quarter without Treasury’s prior written consent. Federal and state governments have been actively responding to the financial market crisis that unfolded in 2008 and legislative and regulatory initiatives are expected to continue for the foreseeable future. In connection with the Company’s public offering in February 2010, Umpqua repurchased the preferred stock from the Treasury and the warrant in March 2010. See Note 22 of the Notes to the Consolidated Financial Statement in Item 8 below.

Supervision and Regulation

General.    We are extensively regulated under federal and state law. These laws and regulations are generally intended to protect depositors and customers, not shareholders. To the extent that the following information describes statutory or regulatory provisions, it is qualified in its entirety by reference to the particular statute or regulation. Any change in applicable laws or regulations may have a material effect on our business and prospects. Our operations may be affected by legislative changes and by the policies of various regulatory authorities. We cannot accurately predict the nature or the extent of the effects on our business and earnings that fiscal or monetary policies, or new federal or state legislation may have in the future. Umpqua is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both as administered by the Securities and Exchange Commission. As a listed company on NASDAQ, Umpqua is subject to NASDAQ rules for listed companies.

Holding Company Regulation.    We are a registered financial holding company under the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”), and are subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the “Federal Reserve”). As a financial holding company, we are examined by and file reports with the Federal Reserve. The Federal Reserve expects a bank holding company to serve as a source of financial and managerial strength to its subsidiary bank and, under appropriate circumstances, to commit resources to support the subsidiary bank.

Financial holding companies are bank holding companies that satisfy certain criteria and are permitted to engage in activities that traditional bank holding companies are not. The qualifications and permitted activities of financial holdings companies are described below under “Regulatory Structure of the Financial Services Industry.”

Federal and State Bank Regulation.    Umpqua Bank, as a state chartered bank with deposits insured by the FDIC, is primarily subject to the supervision and regulation of the Oregon Department of Consumer and Business Services Division of Finance and Corporate Securities, the Washington Department of Financial Institutions, the California Department of Financial Institutions, the Nevada Division of Financial Institutions , the FDIC and the Consumer Financial Protection Bureau (CFPB). These agencies may prohibit the Bank from engaging in what they believe constitute unsafe or unsound banking practices. Our primary state regulator (the State of Oregon) regularly examines the Bank or participates in joint examinations with the FDIC.

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Umpqua Holdings Corporation

The Community Reinvestment Act (“CRA”) requires that, in connection with examinations of financial institutions within its jurisdiction, the FDIC evaluate the record of the financial institutions in meeting the credit needs of their local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of those institutions. These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or new facility. A less than “Satisfactory” rating would result in the suspension of any growth of the Bank through acquisitions or opening de novo branches until the rating is improved. As of the most recent CRA examination in April 2010, the Bank’s CRA rating was “Satisfactory.”

Banks are also subject to certain restrictions imposed by the Federal Reserve Act on extensions of credit to executive officers, directors, principal shareholders or any related interest of such persons. Extensions of credit must be made on substantially the same terms, including interest rates and collateral as, and follow credit underwriting procedures that are not less stringent than, those prevailing at the time for comparable transactions with persons not affiliated with the bank, and must not involve more than the normal risk of repayment or present other unfavorable features. Banks are also subject to certain lending limits and restrictions on overdrafts to such persons. A violation of these restrictions may result in the assessment of substantial civil monetary penalties on the affected bank or any officer, director, employee, agent or other person participating in the conduct of the affairs of that bank, the imposition of a cease and desist order, and other regulatory sanctions.

The Federal Reserve Act and related Regulation W limit the amount of certain loan and investment transactions between the Bank and its affiliates, require certain levels of collateral for such loans, and limit the amount of advances to third parties that may be collateralized by the securities of Umpqua or its subsidiaries. Regulation W requires that certain transactions between the Bank and its affiliates be on terms substantially the same, or at least as favorable to the Bank, as those prevailing at the time for comparable transactions with or involving nonaffiliated companies or, in the absence of comparable transactions, on terms and under circumstances, including credit standards, that in good faith would be offered to or would apply to nonaffiliated companies. Umpqua and its subsidiaries have adopted an Affiliate Transactions Policy and have entered into various affiliate agreements in compliance with Regulation W.

The Federal Reserve and the FDIC have adopted non-capital safety and soundness standards for institutions. These standards cover internal controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, and standards for asset quality, earnings and stock valuation. An institution that fails to meet these standards must develop a plan acceptable to the agency, specifying the steps that it will take to meet the standards. Failure to submit or implement such a plan may subject the institution to regulatory sanctions. We believe that the Bank is in compliance with these standards.

Federal Deposit Insurance.    Substantially all deposits with Umpqua Bank are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of the FDIC and are subject to deposit insurance assessments to maintain the DIF. The FDIC uses a risk-based assessment system that imposes insurance premiums based upon a bank’s capital level and supervisory ratings. The base assessment rates under the Federal Deposit Insurance Reform Act of 2005 (“Reform Act”), enacted in February 2006, ranged from $0.02 to $0.40 per $100 of deposits annually. The FDIC could increase or decrease the assessment rate schedule five basis points (annualized) higher or lower than the base rates in order to manage the DIF to prescribed statutory target levels. For 2007 the effective assessment amounts were $0.03 above the base rate amounts. Assessment rates for well managed, well capitalized institutions ranged from $0.05 to $0.07 per $100 of deposits annually. The Bank’s assessment rate for 2008 fell within this range. In 2007, the FDIC issued one-time assessment credits that could be used to offset this expense. The Bank’s credit was fully utilized in 2007 and covered the majority of that year’s assessment. The Bank did not have any remaining credit to offset assessments in 2008.

In December 2008, the FDIC adopted a rule that amended the system for risk-based assessments and changed assessment rates in attempt to restore targeted reserve ratios in the DIF. Effective January 1, 2009, the risk-based assessment rates were uniformly raised by seven basis points (annualized). On February 27, 2009, the FDIC further modified the risk-based assessment system, effective April 1, 2009, to effectively require larger risk institutions to pay a larger share of the assessment. Characteristics of larger risk institutions include a significant reliance on secured liabilities or brokered deposits, particularly when combined with rapid asset growth. The rule also provided incentives for institutions to hold long-term unsecured debt

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and, for smaller institutions, high levels of Tier 1 capital. The initial base assessment rates range from $0.12 to $0.45 per $100 of deposits annually. After potential adjustments related to unsecured debt, secured liabilities and brokered deposit balances, the final total assessment rates range from $0.07 to $0.775 per $100 of deposits annually. Initial base assessment rates for well managed, well capitalized institutions ranged from $0.12 to $0.16 per $100 of deposits annually. The Bank’s assessment rate for 2010 fell within this range.

In October 2010, the FDIC adopted a new DIF restoration plan to ensure that the fund reserve ratio reaches 1.35% by September 30, 2020, as required by the Dodd-Frank Act. Under the new restoration plan, the FDIC will forego the uniform three-basis point increase in initial assessment rates schedules for January 1, 2011 and maintain the current schedule of assessment rates. At least semi-annually, the FDIC will update its loss and income projections for the DIF and, if needed, increase or decrease assessment rates. On February 7, 2011, the FDIC adopted a final rule modifying the risk-based assessment system from a domestic deposit base to a scorecard based assessment system, effective April 1, 2011. Effective as of April 1, 2011, the Bank was categorized as a large institution as the Bank has more than $10 billion in assets. The initial base assessment rates range from five to 35 basis points. After potential adjustments related to unsecured debt and brokered deposit balances, the final total assessment rates range from 2.5 to 45 basis points. Initial base assessment rates for large institutions ranged from five to 35 basis points. The Bank’s assessment rate for 2011 fell at the low end of this range. Further increases in the assessment rate could have a material adverse effect on our earnings, depending upon the amount of the increase.

In 2006, the Reform Act increased the deposit insurance limit for certain retirement plan deposit accounts from $100,000 to $250,000. The basic insurance limit for other deposits, including individuals, joint account holders, businesses, government entities, and trusts, remained at $100,000. The Reform Act also provided for the merger of the two deposit insurance funds administered by the FDIC, the Bank Insurance Fund (“BIF”) and the Savings Association Insurance Fund (“SAIF”), into the DIF. On October 3, 2008, the EESA temporarily raised the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. The basic deposit insurance limit would have returned to $100,000 after December 31, 2009. On May 20, 2009, the Helping Families Save Their Homes Act extended the temporary increase in the standard maximum deposit insurance amount to $250,000 per depositor through December 31, 2013. The standard maximum deposit insurance amount would return to $100,000 on January 1, 2014. The Dodd-Frank Act permanently raises the current standard maximum federal deposit insurance amount from $100,000 to $250,000 per qualified account.

In November 2008, the FDIC approved the final ruling establishing the Transaction Account Guarantee Program (“TAGP”) as part of the Temporary Liquidity Guarantee Program (“TLGP”). Under this program, effective immediately and through December 31, 2009, all non-interest bearing transaction accounts became fully guaranteed by the FDIC for the entire amount in the account. This unlimited coverage also extended to NOW (interest bearing deposit accounts) earning an interest rate no greater than 0.50% and all IOLTAs (lawyers’ trust accounts). Coverage under the TAGP, funded through insurance premiums paid by participating financial institutions, was in addition to and separate from the additional coverage announced under EESA. In August 2009, the FDIC extended the TAGP portion of the TLGP through June 30, 2010. In June 2010, the FDIC extended the TAGP portion of the TLGP for an additional six months, from July 1, 2010 to December 31, 2010. The rule required that interest rates on qualifying NOW accounts offered by banks participating in the program be reduced to 0.25% from 0.50%. The rule provided for an additional extension of the program, without further rulemaking, for a period of time not to exceed December 31, 2011. Umpqua elected to participate in the TAGP program through the extended period. In July 2010, the Dodd-Frank Act, was enacted which provides for unlimited deposit insurance for noninterest bearing transactions accounts (excluding NOW, but including IOLTAs) beginning December 31, 2010 for a period of two years.

The FDIC may terminate the deposit insurance of any insured depository institution if it determines that the institution has engaged in or is engaging in unsafe and unsound banking practices, is in an unsafe or unsound condition or has violated any applicable law, regulation or order or any condition imposed in writing by, or pursuant to, any written agreement with the FDIC. The termination of deposit insurance for the Bank could have a material adverse effect on our financial condition and results of operations due to the fact that the Bank’s liquidity position would likely be affected by deposit withdrawal activity.

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Umpqua Holdings Corporation

Dividends.    Under the Oregon Bank Act and the Federal Deposit Insurance Corporation Improvement Act of 1991, the Bank is subject to restrictions on the payment of cash dividends to its parent company. A bank may not pay cash dividends if that payment would reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. In addition, under the Oregon Bank Act, the amount of the dividend paid by the Bank may not be greater than net unreserved retained earnings, after first deducting to the extent not already charged against earnings or reflected in a reserve, all bad debts, which are debts on which interest is unpaid and past due at least six months unless the debt is fully secured and in the process of collection; all other assets charged-off as required by Oregon bank regulators or a state or federal examiner; and all accrued expenses, interest and taxes of the Bank. In addition, state and federal regulatory authorities are authorized to prohibit banks and holding companies from paying dividends that would constitute an unsafe or unsound banking practice. The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the extent that its net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition.

Capital Adequacy.    The federal and state bank regulatory agencies use capital adequacy guidelines in their examination and regulation of holding companies and banks. If capital falls below the minimum levels established by these guidelines, a holding company or a bank may be denied approval to acquire or establish additional banks or non-bank businesses or to open new facilities.

The FDIC and Federal Reserve have adopted risk-based capital guidelines for holding companies and banks. The risk-based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profile among holding companies and banks, to account for off-balance sheet exposure and to minimize disincentives for holding liquid assets. Assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. The capital adequacy guidelines limit the degree to which a holding company or bank may leverage its equity capital.

Federal regulations establish minimum requirements for the capital adequacy of depository institutions, such as the Bank. Banks with capital ratios below the required minimums are subject to certain administrative actions, including prompt corrective action, the termination of deposit insurance upon notice and hearing, or a temporary suspension of insurance without a hearing.

The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) requires federal banking regulators to take “prompt corrective action” with respect to a capital-deficient institution, including requiring a capital restoration plan and restricting certain growth activities of the institution. Umpqua could be required to guarantee any such capital restoration plan required of the Bank if the Bank became undercapitalized. Pursuant to FDICIA, regulations were adopted defining five capital levels: well capitalized, adequately capitalized, undercapitalized, severely undercapitalized and critically undercapitalized. Under the regulations, the Bank is considered “well capitalized” as of December 31, 2011.

Federal and State Regulation of Broker-Dealers.    Umpqua Investments, Inc. is a fully disclosed introducing broker-dealer clearing through First Clearing LLC. Umpqua Investments is regulated by the Financial Industry Regulatory Authority (“FINRA”) and has deposits insured through the Securities Investors Protection Corp (“SIPC”) as well as third party insurers. FINRA performs regular examinations of the firm that include reviews of policies, procedures, recordkeeping, trade practices, and customer protection as well as other inquiries.

SIPC protects client securities and cash up to $500,000, including $100,000 for cash with additional coverage provided through First Clearing for the remaining net equity balance in a brokerage account, if any. This coverage does not include losses in investment accounts.

Broker-Dealer and Related Regulatory Supervision.    Umpqua Investments is a member of, and is subject to the regulatory supervision of, FINRA. Areas subject to this regulatory review include compliance with trading rules, financial reporting, investment suitability for clients, and compliance with stock exchange rules and regulations.

Effects of Government Monetary Policy.    Our earnings and growth are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government, particularly the Federal Reserve. The Federal Reserve

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implements national monetary policy for such purposes as curbing inflation and combating recession, through its open market operations in U.S. Government securities, control of the discount rate applicable to borrowings from the Federal Reserve, and establishment of reserve requirements against certain deposits. These activities influence growth of bank loans, investments and deposits, and also affect interest rates charged on loans or paid on deposits. The nature and impact of future changes in monetary policies and their impact on us cannot be predicted with certainty.

Regulatory Structure of the Financial Services Industry.    Federal laws and regulations governing banking and financial services underwent significant changes in recent years and are subject to significant changes in the future. From time to time, legislation is introduced in the United States Congress that contains proposals for altering the structure, regulation, and competitive relationships of the nation’s financial institutions. If enacted into law, these proposals could increase or decrease the cost of doing business, limit or expand permissible activities, or affect the competitive balance among banks, savings associations, and other financial institutions. Whether or in what form any such legislation may be adopted or the extent to which our business might be affected thereby cannot be predicted.

The GLB Act, enacted in November 1999, repealed sections of the Banking Act of 1933, commonly referred to as the Glass-Steagall Act, that prohibited banks from engaging in securities activities, and prohibited securities firms from engaging in banking. The GLB Act created a new form of holding company, known as a financial holding company, that is permitted to acquire subsidiaries that are variously engaged in banking, securities underwriting and dealing, and insurance underwriting.

A bank holding company, if it meets specified requirements, may elect to become a financial holding company by filing a declaration with the Federal Reserve, and may thereafter provide its customers with a broader spectrum of products and services than a traditional bank holding company is permitted to do. A financial holding company may, through a subsidiary, engage in any activity that is deemed to be financial in nature and activities that are incidental or complementary to activities that are financial in nature. These activities include traditional banking services and activities previously permitted to bank holding companies under Federal Reserve regulations, but also include underwriting and dealing in securities, providing investment advisory services, underwriting and selling insurance, merchant banking (holding a portfolio of commercial businesses, regardless of the nature of the business, for investment), and arranging or facilitating financial transactions for third parties.

To qualify as a financial holding company, the bank holding company must be deemed to be well-capitalized and well-managed, as those terms are used by the Federal Reserve. In addition, each subsidiary bank of a bank holding company must also be well-capitalized and well-managed and be rated at least “satisfactory” under the Community Reinvestment Act. A bank holding company that does not qualify, or has not chosen, to become a financial holding company must limit its activities to traditional banking activities and those non-banking activities the Federal Reserve has deemed to be permissible because they are closely related to the business of banking.

The GLB Act also includes provisions to protect consumer privacy by prohibiting financial services providers, whether or not affiliated with a bank, from disclosing non-public personal, financial information to unaffiliated parties without the consent of the customer, and by requiring annual disclosure of the provider’s privacy policy.

Legislation enacted by Congress in 1995 permits interstate banking and branching, which allows banks to expand nationwide through acquisition, consolidation or merger. Under this law, an adequately capitalized bank holding company may acquire banks in any state or merge banks across state lines if permitted by state law. Further, banks may establish and operate branches in any state subject to the restrictions of applicable state law. Under Oregon law, an out-of-state bank or bank holding company may merge with or acquire an Oregon state chartered bank or bank holding company if the Oregon bank, or in the case of a bank holding company, the subsidiary bank, has been in existence for a minimum of three years, and the law of the state in which the acquiring bank is located permits such merger. The Bank now has the ability to open additional de novo branches in the states of Oregon, California, Washington, and Nevada.

Section 613 of the Dodd-Frank Act eliminates interstate branching restrictions that were implemented as part of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, and removes many restrictions on de novo interstate branching by national and state-chartered banks. The FDIC and the OCC now have authority to approve applications by insured state

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Umpqua Holdings Corporation

nonmember banks and national banks, respectively, to establish de novo branches in states other than the bank’s home state if “the law of the State in which the branch is located, or is to be located, would permit establishment of the branch, if the bank were a State bank chartered by such State.” The enactment of this section may significantly increase interstate banking by community banks in western states, where barriers to entry were previously high.

Anti-Terrorism Legislation.    The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (“USA Patriot Act”), enacted in 2001:

• prohibits banks from providing correspondent accounts directly to foreign shell banks;

• imposes due diligence requirements on banks opening or holding accounts for foreign financial institutions or wealthy foreign individuals;

• requires financial institutions to establish an anti-money-laundering (“AML”) compliance program; and

• generally eliminates civil liability for persons who file suspicious activity reports.

The USA Patriot Act also increases governmental powers to investigate terrorism, including expanded government access to account records. The Department of the Treasury is empowered to administer and make rules to implement the Act, which to some degree, affects our record-keeping and reporting expenses. Should the Bank’s AML compliance program be deemed insufficient by federal regulators, we would not be able to grow through acquiring other institutions or opening de novo branches.

Sarbanes-Oxley Act of 2002.    The Sarbanes-Oxley Act of 2002 addresses public company corporate governance, auditing, accounting, executive compensation and enhanced and timely disclosure of corporate information.

The Sarbanes-Oxley Act represents significant federal involvement in matters traditionally left to state regulatory systems, such as the regulation of the accounting profession, and regulation of the relationship between a Board of Directors and management and between a Board of Directors and its committees.

The Sarbanes-Oxley Act provides for, among other things:

• prohibition on personal loans by Umpqua to its directors and executive officers except loans made by the Bank in accordance with federal banking regulations;

• independence requirements for Board audit committee members and our auditors;

• certification of Exchange Act reports by the chief executive officer, chief financial officer and principal accounting officer;

• disclosure of off-balance sheet transactions;

• expedited reporting of stock transactions by insiders; and

• increased criminal penalties for violations of securities laws.

The Sarbanes-Oxley Act also requires:

• management to establish, maintain and evaluate disclosure controls and procedures;

• management to report on its annual assessment of the effectiveness of internal controls over financial reporting;

• our external auditor to attest to the effectiveness of internal controls over financial reporting.

The SEC has adopted regulations to implement various provisions of the Sarbanes-Oxley Act, including disclosures in periodic filings pursuant to the Exchange Act. Also, in response to the Sarbanes-Oxley Act, NASDAQ adopted new standards for listed companies. In 2004, the Sarbanes-Oxley Act substantially increased our reporting and compliance expenses.

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Emergency Economic Stabilization Act of 2008 (EESA).    This act granted broad powers to the U.S. Treasury, the FDIC, and the Federal Reserve to stabilize the financial markets under the following programs:

• the Capital Purchase Program allocated $250 billion to Treasury to purchase senior preferred shares and warrants to purchase commons stock from approved financial institutions;

• the Troubled Asset Purchase Program allocated $250 billion to Treasury to purchase troubled assets from financial institutions, with Treasury to also receive securities issued by participating institutions;

• the Temporary Liquidity Guaranty Program (“TLGP”) authorized the FDIC to insure newly issued senior unsecured debt and insure the total balance in non-interest bearing transactional deposit accounts of those institutions who elect to participate;

• the Commercial Paper and Money Market Investor Funding Facilities authorized the Federal Reserve Bank of New York to purchase rated commercial paper from U.S. companies and to purchase money market instruments from U.S. money market mutual funds.

The Dodd-Frank Wall Street Reform and Consumer Protection Act.    On July 21, 2010, President Obama signed the Dodd-Frank Act, which is a sweeping overhaul of financial industry regulation. In general, the Act:

• Creates a systemic-risk council of top regulators, the Financial Stability Oversight Council (FSOC), whose purpose is to identify risks and respond to emerging threats to the financial stability of the U.S. arising from large, interconnected bank holding companies or nonbank financial companies;

• Gives the FDIC authority to unwind large failing financial firms. Treasury would supply funds to cover the up-front costs of winding down the failed firm, but the government would have to put a “repayment plan” in place. Regulators would recoup any losses incurred from the wind-down afterwards by assessing fees on financial firms with more than $50 billion in assets;

• Directs the FDIC to base deposit-insurance assessments on assets minus tangible capital instead of on domestic deposits and requires the FDIC to increase premium rates to raise the Deposit Insurance Fund’s (DIF) minimum reserve ratio from 1.15% to 1.35% by September 30, 2020. Banks, like Umpqua, with consolidated assets greater than $10 billion would pay the increased premiums;

• Extends the FDIC’s Transaction Account Guarantee (TAG) program to December 31, 2012. There is no “opt-out” from the extension;

• Permanently increases FDIC deposit-insurance coverage to $250,000, retroactive to January 1, 2008. The Act eliminates the 1.5% cap on the DIF reserve ratio and automatic dividends when the ratio exceeds 1.35%. Under the agreement, the FDIC would have discretion on whether to provide dividends to DIF members;

• Authorizes banks to pay interest on business checking accounts, which is likely to significantly increase our interest expense;

• Creates a new Consumer Financial Protection Bureau (CFPB), housed under the Federal Reserve and led by a director appointed by the President and confirmed by the Senate. All existing consumer laws and regulations will be transferred to this agency and each existing regulatory agency will contribute their respective consumer regulatory and exam staffs to the CFPB;

• Grants to CFPB the authority to write consumer protection rules for banks and nonbank financial firms offering consumer financial services or products and to ensure that consumers are protected from “unfair, deceptive, or abusive” acts or practices. The CFPB also has authority to examine and enforce regulations for banks, like Umpqua, with greater than $10 billion in assets;

• Authorizes the CFPB to require banks to compile and provide reports relating to its consumer lending, marketing and other consumer business activities and to make that information available to the public if it is “in the public interest”;

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Umpqua Holdings Corporation

• Directs the Federal Reserve to set interchange fees for debit card transactions charged by banks with more than $10 billion in assets. It must establish what it determines are reasonable fees by factoring in their transaction costs compared to those for checks;

• Requires loan originators to retain 5% of any loan sold and securitized, unless it is a “qualified residential mortgage”, which includes standard 30 and 15 year fixed rate loans. It also specifically exempts from risk retention FHA, VA, Farmer Mac and Rural Housing Service loans;

• Excludes the proceeds of trust preferred securities from Tier 1 capital except for trust preferred securities issued before May 19, 2010 by bank holding companies, like the Company, with less than $15 billion in assets at December 31, 2009;

• Adopts various mortgage lending and predatory lending provisions;

• Requires federal regulators jointly to prescribe regulations mandating that financial institutions with more than $1 billion in assets to disclose to their regulators their incentive compensation plans to permit the regulators to determine whether the plans provide executive officers, employees, directors or principal shareholders with excessive compensation, fees or benefits; or could lead to material financial loss to the institution;

• Imposes a number of requirements related to executive compensation that apply to all public companies, such as prohibition of broker discretionary voting in connection with a shareholder vote on executive compensation; mandatory shareholder “say on pay” (every one to three years) and “say on golden parachutes”; and clawback of incentive compensation from current or former executive officers following any accounting restatement;

• Establishes a modified version of the “Volcker Rule” and generally prohibits banks from engaging in proprietary trading or holding or obtaining an interest in a hedge fund or private equity fund, to the extent that it would exceed 3% of its Tier 1 capital. A bank’s interest in any single hedge fund or private equity fund may not exceed 3% of the assets of that fund.

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ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed below. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report.

Difficult market conditions have adversely affected and may continue to have an adverse effect on our industry.

Since 2007, dramatic declines in the housing market, with falling home prices and increasing foreclosures and unemployment and under-employment have negatively impacted the credit performance of mortgage loans and resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities as well as major commercial and investment banks. These write-downs have caused many financial institutions to seek additional capital, to merge with larger and stronger institutions and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors have reduced or ceased providing funding to borrowers, including to other financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally. The resulting economic pressure on consumers and lack of confidence in the financial markets has adversely affected our business, financial condition and results of operations. We expect only moderate improvement in these conditions in the near future. A worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions on us and others in the financial institutions industry. In particular, we may face the following risks in connection with these events:

• We face increased regulation of our industry, including as a result of the EESA, the American Recovery and Reinvestment Act of 2009 (the “ARRA”) and the Dodd-Frank Act. Compliance with such regulation will increase our costs, reduce existing sources of revenue and may limit our ability to pursue business opportunities.

• Our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage, and underwrite our customers become less predictive of future performance.

• The process we use to estimate losses inherent in our loan portfolio requires difficult, subjective, and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers to repay their loans, which process may no longer be capable of accurate estimation and may, in turn, impact its reliability.

• We may be required to pay significantly higher Federal Deposit Insurance Corporation premiums in the future if losses further deplete the FDIC deposit insurance fund.

• There may be downward pressure on our stock price.

• Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions and government sponsored entities.

• We may face increased competition due to intensified consolidation of the financial services industry.

If current levels of market disruption and volatility continue or worsen, there can be no assurance that we will not experience an adverse effect, which may be material, on our ability to access capital and on our business, financial condition and results of operations.

The majority of our assets are loans, which if not repaid would result in losses to the Bank.

The Bank, like other lenders, is subject to credit risk, which is the risk of losing principal or interest due to borrowers’ failure to repay loans in accordance with their terms. Underwriting and documentation controls cannot mitigate all credit risk. A downturn in the economy or the real estate market in our market areas or a rapid increase in interest rates could have a negative effect on collateral values and borrowers’ ability to repay. To the extent loans are not paid timely by borrowers, the loans are placed on

18

Umpqua Holdings Corporation

non-accrual status, thereby reducing interest income. Further, under these circumstances, an additional provision for loan and lease losses or unfunded commitments may be required. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—”Allowance for Loan and Lease Losses and Reserve for Unfunded Commitments”, “Provision for Loan and Lease Losses” and “Asset Quality and Non-Performing Assets”.

A large percentage of our loan portfolio is secured by real estate, in particular commercial real estate. Continued deterioration in the real estate market or other segments of our loan portfolio would lead to additional losses, which could have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2011, approximately 80% of our total loan portfolio is secured by real estate, the majority of which is commercial real estate. As a result of increased levels of commercial and consumer delinquencies and declining real estate values, since 2007 we have experienced elevated levels of net charge-offs and allowances for loan and lease reserves. Increases in commercial and consumer delinquency levels or continued declines in real estate market values would require increased net charge-offs and increases in the allowance for loan and lease losses, which could have a material adverse effect on our business, financial condition and results of operations and prospects.

Continued deterioration in the real estate market could result in loans that we have restructured to become delinquent and classified as non-accrual loans.

At December 31, 2011, impaired loans of $80.6 million were classified as performing restructured loans. We restructured the loans in response to borrower financial difficulty, and generally provided for a temporary modification of loan repayment terms. Loans are reported as restructured when we grant concessions to a borrower experiencing financial difficulties that we would not otherwise consider. Examples of such concessions include forgiveness of principal or accrued interest, extending the maturity dates or providing a lower interest rate than would be normally available for a transaction of similar risk. In exchange for these concessions, at the time of restructure, we require additional collateral to bring the loan to value to at most 100%. A further decline in the economic conditions in our general market areas or other factors could adversely impact borrowers with restructured loans and cause borrowers to become delinquent or otherwise default or call into question their ability to repay full interest and principal in accordance with the restructured terms, which would result in the restructured loan being reclassified as non-accrual.

The effects of the current economic recession have been particularly severe in our primary market areas in the Pacific Northwest, Northern California, and Nevada.

Substantially all of our loans are to businesses and individuals in Northern California, Oregon, Washington, and Nevada. The Pacific Northwest has one of the nation’s highest unemployment rates and major employers in Oregon and Washington have implemented substantial employee layoffs or scaled back growth plans. Severe declines in housing prices and property values have been particularly acute in our primary market areas. The States of California, Oregon, Washington, and Nevada continue to face fiscal challenges, the long-term effects of which on each State’s economy cannot be predicted. A further deterioration in the economic conditions or a prolonged delay in economic recovery in our primary market areas could result in the following consequences, any of which could materially and adversely affect our business: loan delinquencies may increase; problem assets and foreclosures may increase putting further price pressures on valuations generally; demand for our products and services may decrease; low cost or noninterest bearing deposits may decrease; and collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers’ borrowing power, and reducing the value of assets and collateral associated with our existing loans.

The benefits of our FDIC loss-sharing agreements may be reduced or eliminated.

In connection with Umpqua Bank’s assumption of the banking operations of Evergreen Bank, Rainier Pacific Bank, and Nevada Security Bank, the Bank entered into Whole Bank Purchase and Assumption Agreements with Loss-Share. Our decisions regarding the fair value of assets acquired, including the FDIC loss-sharing assets, could be inaccurate which could materially and adversely affect our business, financial condition, results of operations, and future prospects. Management makes various assumptions and judgments about the collectability of the acquired loans, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of secured loans. In FDIC-assisted acquisitions

19

that include loss-sharing agreements, we record a loss-sharing asset that reflects our estimate of the timing and amount of future losses that are anticipated to occur in and used to value the acquired loan portfolio. In determining the size of the loss-sharing asset, we analyze the loan portfolio based on historical loss experience, volume and classification of loans, volume and trends in delinquencies and nonaccruals, local economic conditions, and other pertinent information.

If our assumptions relating to the timing or amount of expected losses are incorrect, there could be a negative impact on our operating results. Increases in the amount of future losses in response to different economic conditions or adverse developments in the acquired loan portfolio may result in increased credit loss provisions. Changes in our estimate of the timing of those losses, specifically if those losses are to occur beyond the applicable loss-sharing periods, may result in impairments of the FDIC indemnification asset.

Our ability to obtain reimbursement under the loss-sharing agreements on covered assets depends on our compliance with the terms of the loss-sharing agreements.

Management must certify to the FDIC on a quarterly basis our compliance with the terms of the FDIC loss-sharing agreements as a prerequisite to obtaining reimbursement from the FDIC for realized losses on covered assets. The required terms of the agreements are extensive and failure to comply with any of the guidelines could result in a specific asset or group of assets permanently losing their loss-sharing coverage. Additionally, management may decide to forgo loss-share coverage on certain assets to allow greater flexibility over the management of certain assets. As of December 31, 2011, $641.9 million, or 5.6%, of the Company’s assets were covered by the aforementioned FDIC loss-sharing agreements.

Under the terms of the FDIC loss-sharing agreements, the assignment or transfer of a loss-sharing agreement to another entity generally requires the written consent of the FDIC. In addition, the Bank may not assign or otherwise transfer a loss-sharing agreement during its term without the prior written consent of the FDIC. No assurances can be given that we will manage the covered assets in such a way as to maintain loss-share coverage on all such assets.

Acquisition opportunities may not become available and increased competition may make it more difficult for us to acquire banks in traditional M&A transactions or to successfully bid on failed bank transactions.

Our near-term business strategy includes pursue the acquisition of banks within or in proximity to our geographic footprint that may be operating under capital constraints, regulatory pressure or other competitive disadvantages as well as analyzing and bidding on failing banks that the FDIC plans to place in receivership. Traditional merger and acquisition transactions have been infrequent in the past few years, but we expect that the volume may be increasing as banks work through their problem loan portfolios. However, many target banks may be valued at a discount to their book value, making transactions difficult to conclude. In addition, the FDIC may not place banks that meet our strategic objectives into receivership and the bidding process for failing banks has become very competitive. We may not be able to match or beat the bids of other acquirers unless we bid aggressively by increasing the premium paid on assumed deposits or reducing the discount bid on assets purchased, which could make the acquisition less beneficial to the financial performance of the Bank.

A rapid change in interest rates, or maintenance of rates at historically high or low levels for an extended period, could make it difficult to maintain our current interest income spread and could result in reduced earnings.

Our earnings are largely derived from net interest income, which is interest income and fees earned on loans and investments, less interest paid on deposits and other borrowings. Interest rates are highly sensitive to many factors that are beyond the control of our management, including general economic conditions and the policies of various governmental and regulatory authorities. As interest rates change, net interest income is affected. With fixed rate assets (such as fixed rate loans and most investment securities) and liabilities (such as certificates of deposit), the effect on net interest income depends on the cash flows associated with the maturity of the asset or liability. Asset/liability management policies may not be successfully implemented and from time to time our risk position is not balanced. An unanticipated rapid decrease or increase in interest rates could have an adverse effect on the spreads between the interest rates earned on assets and the rates of interest paid on liabilities, and therefore on the level of net interest income. For instance, any rapid increase in interest rates in the future could result in interest expense increasing faster than interest income because of fixed rate loans and longer-term investments. Historically low rates for an extended period of time result in reduced returns from the investment and loan portfolios. Further, substantially

20

Umpqua Holdings Corporation

higher interest rates generally reduce loan demand and may result in slower loan growth than previously experienced. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—”Quantitative and Qualitative Disclosures about Market Risk”.

Interest rate volatility and credit risk adjusted rate spreads may impact our financial assets and liabilities measured at fair value, particularly the fair value of our junior subordinated debentures.

The widening of the credit risk adjusted rate spreads on potential new issuances of junior subordinated debentures above our contractual spreads and reductions in three month LIBOR rates have contributed to cumulative positive fair value adjustments in our junior subordinated debentures carried at fair value over the last three years. Tightening of these credit risk adjusted rate spreads and interest rate volatility may result in recognizing negative fair value adjustments charged to earnings in the future.

The Dodd-Frank Act and other recent legislative and regulatory initiatives contain numerous provisions and requirements that could detrimentally affect the Company’s business.

The Dodd-Frank Act and related regulations subject us and other financial institutions to additional restrictions, oversight, reporting obligations and costs, which could have an adverse impact on our business, financial condition, results of operations or the price of our common stock. In addition, this increased regulation of the financial services industry restricts the ability of firms within the industry to conduct business consistent with historical practices, including aspects such as compensation, interest rates, new and inconsistent consumer protection regulations and mortgage regulation, among others. Congress or state legislatures could also adopt laws reducing the amount that borrowers are otherwise contractually required to pay under existing loan contracts, require lenders to extend or restructure certain loans or limit foreclosure and collection remedies. Federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied.

We cannot predict the substance or impact of pending or future legislation or regulation, or the application thereof. Compliance with such current and potential regulation and scrutiny will significantly increase our costs, impede the efficiency of our internal business processes, may require us to increase our regulatory capital and may limit our ability to pursue business opportunities in an efficient manner. In response, we may be required to or choose to raise additional capital, which could have a dilutive effect on the existing holders of our common stock and adversely affect the market price of our common stock.

We may be required to raise additional capital in the future, but that capital may not be available when it is needed, or it may only be available on unacceptable terms, which could adversely affect our financial condition and results of operations.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations or to support future FDIC-assisted acquisitions. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, we may not be able to raise additional capital, if needed, on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations and pursue our growth strategy could be materially impaired.

Conditions in the financial markets may limit our access to additional funding to meet our liquidity needs.

Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale or pledging as collateral of loans and other assets could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general. An adverse regulatory action against us could detrimentally impact our access to liquidity sources. Our ability to borrow could also be impaired by factors that are nonspecific to us, such as severe disruption of the financial markets or negative news and expectations about the prospects for the financial services industry as a whole as evidenced by turmoil in the domestic and worldwide credit markets.

Our wholesale funding sources may prove insufficient to support our future growth or an unexpected reduction in deposits.

We must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. If we grow more rapidly than any increase in our deposit balances, we are likely to become more dependent on

21

these sources, which include Federal Home Loan Bank advances, proceeds from the sale of loans and liquidity resources at the holding company. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. If we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs, and our profitability would be adversely affected.

As a bank holding company that conducts substantially all of our operations through Umpqua Bank, our banking subsidiary, our ability to pay dividends, repurchase our shares or to repay our indebtedness depends upon liquid assets held by the holding company and the results of operations of our subsidiaries.

Umpqua Holdings Corporation is a separate and distinct legal entity from our subsidiaries and it receives substantially all of its revenue from dividends paid from Umpqua Bank. There are legal limitations on the extent to which the Bank may extend credit, pay dividends or otherwise supply funds to, or engage in transactions with, us. Our inability to receive dividends from the Bank could adversely affect our business, financial condition, results of operations and prospects.

Our net income depends primarily upon Umpqua Bank’s net interest income, which is the income that remains after deducting from total income generated by earning assets the expense attributable to the acquisition of the funds required to support earning assets (primarily interest paid on deposits). The amount of interest income is dependent on many factors including the volume of earning assets, the general level of interest rates, the dynamics of changes in interest rates and the levels of nonperforming loans. All of those factors affect the Bank’s ability to pay dividends to the holding company.

Various statutory provisions restrict the amount of dividends the Bank can pay to us without regulatory approval. The Bank may not pay cash dividends if that payment could reduce the amount of its capital below that necessary to meet the “adequately capitalized” level in accordance with regulatory capital requirements. It is also possible that, depending upon the financial condition of the Bank and other factors, regulatory authorities could conclude that payment of dividends or other payments, including payments to us, is an unsafe or unsound practice and impose restrictions or prohibit such payments. Under Oregon law, the Bank may not pay dividends in excess of unreserved retained earnings, deducting there from, to the extent not already charged against earnings or reflected in a reserve, the following: (1) all bad debts, which are debts on which interest is past due and unpaid for at least six months, unless the debt is fully secured and in the process of collection; (2) all other assets charged-off as required by Oregon bank regulators or a state or federal examiner; and (3) all accrued expenses, interest and taxes of the institution. The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the extent that its net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition.

A significant decline in the company’s market value could result in an impairment of goodwill.

Recently, the Company’s common stock has been trading at a price below its book value, including goodwill and other intangible assets. The valuation of goodwill is estimated using discounted cash flows of forecasted earnings, estimated sales price based on recent observable market transactions and market capitalization based on current stock price. If impairment was deemed to exist, a write down of goodwill would occur with a charge to earnings. In the second quarter 2009, we recognized a goodwill impairment charge of $112.0 million related to our Community Banking operating segment. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Goodwill and Other Intangible Assets”.

We have a gross deferred tax asset position of $124.3 million at December 31, 2011, and we are required to assess the recoverability of this asset on an ongoing basis.

Deferred tax assets are evaluated on a quarterly basis to determine if they are expected to be recoverable in the future. Our evaluation considers positive and negative evidence to assess whether it is more likely than not that a portion of the asset will not be realized. The risk of a valuation allowance increases if continuing operating losses are incurred. Future negative operating performance or other negative evidence may result in a valuation allowance being recorded against some or all of this amount. A valuation allowance on our deferred tax asset could have a material adverse impact on our capital and results of operations.

22

Umpqua Holdings Corporation

We are pursuing an aggressive growth strategy that is expected to include mergers and acquisitions, which could create integration risks.

Umpqua is among the fastest-growing community financial services organizations in the United States. Since 2000, we have completed the acquisition and integration of 10 other financial institutions. There is no assurance that future acquisitions will be successfully integrated. We have announced our intent to pursue FDIC-assisted acquisition opportunities, traditional M&A transactions, and to open new stores in Oregon, Washington and California to continue our growth strategy. If we pursue our growth strategy too aggressively, or if factors beyond management’s control divert attention away from our integration plans, we might not be able to realize some or all of the anticipated benefits. Moreover, we are dependent on the efforts of key personnel to achieve the synergies associated with our acquisitions. The loss of one or more of our key persons could have a material adverse effect upon our ability to achieve the anticipated benefits.

The financial services industry is highly competitive.

We face pricing competition for loans and deposits. We also face competition with respect to customer convenience, product lines, accessibility of service and service capabilities. Our most direct competition comes from other banks, brokerages, mortgage companies and savings institutions. We also face competition from credit unions, government-sponsored enterprises, mutual fund companies, insurance companies and other non-bank businesses. This significant competition in attracting and retaining deposits and making loans as well as in providing other financial services throughout our market area may impact future earnings and growth.

Involvement in non-bank business creates risks associated with the securities industry.

Umpqua Investments’ retail brokerage operations present special risks not borne by community banks that focus exclusively on community banking. For example, the brokerage industry is subject to fluctuations in the stock market that may have a significant adverse impact on transaction fees, customer activity and investment portfolio gains and losses. Likewise, additional or modified regulations may adversely affect Umpqua Investments’ operations. Umpqua Investments is also dependent on a small number of established brokers, whose departure could result in the loss of a significant number of customer accounts. A significant decline in fees and commissions or trading losses suffered in the investment portfolio could adversely affect Umpqua Investments’ income and potentially require the contribution of additional capital to support its operations. Umpqua Investments is subject to claim arbitration risk arising from customers who claim their investments were not suitable or that their portfolios were too actively traded. These risks increase when the market, as a whole, declines. The risks associated with retail brokerage may not be supported by the income generated by those operations. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—”Non-interest Income”.

Our banking and brokerage operations are subject to extensive government regulation that is expected to become more burdensome, increase our costs and make us less competitive compared to financial services firms that are not subject to the same regulation.

We and our subsidiaries are subject to extensive regulation under federal and state laws. These laws and regulations are primarily intended to protect customers, depositors and the deposit insurance fund, rather than shareholders. The Bank is an Oregon state-chartered commercial bank whose primary regulator is the Oregon Division of Finance and Corporate Securities. The Bank is also subject to the supervision by and the regulations of the Washington Department of Financial Institutions, the California Department of Financial Institutions, the Nevada Division of Financial Institutions, the Federal Deposit Insurance Corporation (“FDIC”), which insures bank deposits and the Consumer Financial Protection Bureau. Umpqua Investments is subject to extensive regulation by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority. Umpqua is subject to regulation and supervision by the Board of Governors of the Federal Reserve System, the SEC and NASDAQ. Federal and state regulations may place banks and brokerage firms at a competitive disadvantage compared to less regulated competitors such as finance companies, credit unions, mortgage banking companies and leasing companies. There is also the possibility that laws could be enacted that would prohibit a company from controlling both an FDIC-insured bank and a broker dealer, or restrict their activities if under common ownership. If we receive less than satisfactory results on regulatory examinations, we could be restricted from making acquisitions, adding new stores, developing new lines of business

23

or otherwise continuing our growth strategy for a period of time. Future changes in federal and state banking and brokerage regulations could adversely affect our operating results and ability to continue to compete effectively.

The value of the securities in our investment securities portfolio may be negatively affected by continued disruptions in securities markets.

The market for some of the investment securities held in our portfolio has become extremely volatile over the past three years. Volatile market conditions or deteriorating financial performance of the issuer or obligor may detrimentally affect the value of these securities. There can be no assurance that the declines in market value associated with these disruptions will not result in other-than-temporary or permanent impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels.

The volatility of our mortgage banking business can adversely affect earnings if our mitigating strategies are not successful.

Changes in interest rates greatly affect the mortgage banking business. One of the principal risks in this area is prepayment of mortgages and the consequent detrimental effect on the value of mortgage servicing rights (“MSR”). We may employ hedging strategies to mitigate this risk but if the hedging decisions and strategies are not successful, our net income could be adversely affected. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—”Mortgage Servicing Rights”.

Our business is highly reliant on technology and our ability to manage the operational risks associated with technology.

Our business involves storing and processing sensitive consumer and business customer data. A cyber security breach may result in theft of such data or disruption of our transaction processing systems. We depend on internal systems and outsourced technology to support these data storage and processing operations. Our inability to use or access these information systems at critical points in time could unfavorably impact the timeliness and efficiency of our business operations. A material breach of customer data security may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions and may result in class action litigation. Cyber security risk management programs are expensive to maintain and will not protect the Company from all risks associated with maintaining the security of customer data and the Company’s proprietary data from external and internal intrusions, disaster recovery and failures in the controls used by our vendors. In addition, Congress and the legislatures of states in which we operate regularly consider legislation that would impose more stringent data privacy requirements.

Our business is highly reliant on third party vendors and our ability to manage the operational risks associated with outsourcing those services.

We rely on third parties to provide services that are integral to our operations. These vendors provide services that support our operations, including the storage and processing of sensitive consumer and business customer data, as well as our sales efforts. A cyber security breach of a vendor’s system may result in theft of our data or disruption of business processes. A material breach of customer data security at a service provider’s site may negatively impact our business reputation and cause a loss of customers; result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions and may result in litigation. In most cases, we will remain primarily liable to our customers for losses arising from a breach of a vendor’s data security system. We rely on our outsourced service providers to implement and maintain prudent cyber security controls. We have procedures in place to assess a vendor’s cyber security controls prior to establishing a contractual relationship and to periodically review assessments of those control systems; however, these procedures are not infallible and a vendor’s system can be breached despite the procedures we employ. We have alliances with other companies that assist in our sales efforts. In our wealth management business, we have an alliance with Ferguson Wellman, a registered investment advisor to whom we refer customers for investment advice and asset management services. We cannot be sure that we will be able to maintain these relationships on favorable terms. In addition, some of our data processing services are provided by companies associated with our competitors. The loss of these vendor relationships could disrupt the services we provide to our customers and cause us to incur significant expense in connection with replacing these services.

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Umpqua Holdings Corporation

Store construction can disrupt banking activities and may not be completed on time or within budget, which could result in reduced earnings.

The Bank has, over the past several years, been transformed from a traditional community bank into a community-oriented financial services retailer. We have announced plans to build new stores in Oregon, Washington and California as part of our de novo branching strategy. This includes our strategy of building “Neighborhood Stores.” We also continue to remodel acquired bank branches to resemble retail stores that include distinct physical areas or boutiques such as a “serious about service center,” an “investment opportunity center” and a “computer cafe.” Store construction involves significant expense and risks associated with locating store sites and delays in obtaining permits and completing construction. Remodeling involves significant expense, disrupts banking activities during the remodeling period, and presents a new look and feel to the banking services and products being offered. Financial constraints may delay remodeling projects. Customers may not react favorably to the construction-related activities or the remodeled look and feel. There are risks that construction or remodeling costs will exceed forecasted budgets and that there may be delays in completing the projects, which could cause disruption in those markets.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

The executive offices of Umpqua and Umpqua Investments are located at One SW Columbia Street in Portland, Oregon in office space that is leased. The Bank owns its main office located in Roseburg, Oregon. At December 31, 2011, the Bank conducted Community Banking activities or operated Commercial Banking Centers at 194 locations, in Northern California, Oregon and Washington along the I-5 corridor; in the San Francisco Bay area, Inland Foothills, Napa and Coastal regions in California; in Bend and along the Coast of Oregon; in greater Seattle and Bellevue, Washington, and in Reno, Nevada, of which 64 are owned and 130 are leased under various agreements. As of December 31, 2011, the Bank also operated 15 facilities for the purpose of administrative and other functions, such as back-office support, of which five are owned and 10 are leased. All facilities are in a good state of repair and appropriately designed for use as banking or administrative office facilities. As of December 31, 2011, Umpqua Investments leased three stand-alone offices from unrelated third parties, one stand-alone office from the Bank, and also leased space in eight Bank stores under lease agreements that are based on market rates.

Additional information with respect to owned premises and lease commitments is included in Notes 8 and 20, respectively, of the Notes to Consolidated Financial Statements in Item  8 below.

ITEM 3. LEGAL PROCEEDINGS.

In our Form 10-Q for the period ending June 30, 2011, we initially reported on a putative stockholders derivative action filed in the U.S. District Court for the District of Oregon by Plumbers Local No. 137 Pension Fund and Laborers’ Local #231 Pension Fund naming Umpqua’s present directors, certain executive officers and PricewaterhouseCoopers LLP (PwC) as defendants and Umpqua as nominal party. On January 11, 2012, District Court Magistrate Judge, John V. Acosta, ruled on a motion to dismiss filed by Umpqua’s present directors and certain executive officers and issued findings and a recommendation that the case be dismissed without prejudice. Plaintiffs filed an Objection to those findings and recommendations and the case is pending resolution of those Objections.

On December 29, 2011, in the United States District Court for the Northern District of California-San Francisco Division (case no. 11-6700), Amber Hawthorne filed a class action lawsuit against Umpqua Bank on behalf of herself and a national class, including a sub-class of California residents seeking in excess of $5 million, plus punitive damages, alleging that Umpqua Bank engaged in unfair and deceptive practices by posting debit items in a high to low order to maximize overdraft fees, automatically enrolling customers in debit Overdraft Protection (“ODP”) programs before the Regulation E revisions, failing to adequately disclose posting order, manipulating posting to maximize ODP fees and failing to advise customers how to minimize fees. Plaintiff alleges claims for breach of contract, breach of the covenant of good faith and fair dealing, unconscionability, conversion, unjust enrichment, and a violation of California Business & Professions Code 17200 (for the California subclass). The

25

claims are in the initial stage of investigation but Umpqua believes that the claims are not supportable and are overstated and the Company intends to vigorously defend the case.

Due to the nature of our business, we are involved in legal proceedings that arise in the ordinary course of our business. While the outcome of these matters is currently not determinable, we do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

See Note 20 (Legal Proceedings) for a discussion of the Company’s involvement in litigation pertaining to Visa, Inc.

ITEM 4. (REMOVED AND RESERVED)

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Umpqua Holdings Corporation

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Our Common Stock is traded on The NASDAQ Global Select Market under the symbol “UMPQ.” As of December 31, 2011, there were 200,000,000 common shares authorized for issuance. The following table presents the high and low sales prices of our common stock for each period, based on inter-dealer prices that do not include retail mark-ups, mark-downs or commissions, and cash dividends declared for each period:

Quarter Ended	High		Low		Cash Dividend Per Share
December 31, 2011	$	12.83	$	8.35	$	0.07
September 30, 2011	$	12.07	$	8.10	$	0.07
June 30, 2011	$	12.10	$	10.83	$	0.05
March 31, 2011	$	12.81	$	10.40	$	0.05
December 31, 2010	$	12.59	$	10.42	$	0.05
September 30, 2010	$	13.15	$	10.20	$	0.05
June 30, 2010	$	15.90	$	11.34	$	0.05
March 31, 2010	$	14.24	$	10.87	$	0.05

As of December 31, 2011, our common stock was held by approximately 4,754 shareholders of record, a number that does not include beneficial owners who hold shares in “street name”, or shareholders from previously acquired companies that have not exchanged their stock. At December 31, 2011, a total of 2.2 million stock options, 585,000 shares of restricted stock and 219,000 restricted stock units were outstanding. Additional information about stock options, restricted stock and restricted stock units is included in Note 22 of the Notes to Consolidated Financial Statements in Item 8 below and in Item 12 below.

The payment of future cash dividends is at the discretion of our Board and subject to a number of factors, including results of operations, general business conditions, growth, financial condition and other factors deemed relevant by the Board of Directors. Further, our ability to pay future cash dividends is subject to certain regulatory requirements and restrictions discussed in the Supervision and Regulation section in Item 1 above.

During 2011, Umpqua’s Board of Directors declared a quarterly cash dividend of $0.05 per common share for the first and second quarters and $0.07 per common share for the third and fourth quarters. These dividends were made pursuant to our existing dividend policy and in consideration of, among other things, earnings, regulatory capital levels, the overall payout ratio and expected asset growth. We expect that the dividend rate will be reassessed on a quarterly basis by the Board of Directors in accordance with the dividend policy.

We have a dividend reinvestment plan that permits shareholder participants to purchase shares at the then-current market price in lieu of the receipt of cash dividends. Shares issued in connection with the dividend reinvestment plan are purchased in open market transactions.

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Equity Compensation Plan Information

The following table sets forth information about equity compensation plans that provide for the award of securities or the grant of options to purchase securities to employees and directors of Umpqua, its subsidiaries and its predecessors by merger that were in effect at December 31, 2011.

(shares in thousands)

	Equity Compensation Plan Information
	(A)		(B)		(C)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights(4)		Number of securities remaining available for future issuance under  equity compensation plans excluding securities reflected in column (A)
Equity compensation plans approved by security holders
2003 Stock Incentive Plan(1)		1,773	$	15.09		1,378
2007 Long Term Incentive Plan(2)		219		—		679
Other(3)		416	$	11.95		—
Total		2,408	$	14.48		2,057
Equity compensation plans not approved by security holders		—		—		—
Total		2,408	$	14.48		2,057

(1) At Umpqua’s 2010 Annual Meeting, shareholders approved an amendment to the 2003 Stock Incentive Plan to make an additional two million shares of stock available for issuance through awards of incentive stock options, nonqualified stock options or restricted stock grants, provided awards of stock options and restricted stock grants under the 2003 Stock Incentive Plan, when added to options outstanding under all other plans, are limited to a maximum 10% of the outstanding shares on a fully diluted basis. The Plan’s termination date was extended to June 30, 2015.

(2) At Umpqua’s 2007 Annual Meeting, shareholders approved a 2007 Long Term Incentive Plan. The plan authorized the issuance of one million shares of stock through awards of performance-based restricted stock unit grants to executive officers. Target grants of 65,000 and maximum grants of 114,000 were approved to be issued in 2009, and target grants of 60,000 and maximum grants of 105,000 were approved to be issued in 2011 under this plan. During 2009, 23,000 units vested and were released and 57,000 units forfeited upon the retirement of an executive. During 2010, 16,000 units vested and were released and 94,000 units forfeited upon the retirement of an executive. During 2011, 63,300 units vested and were released and 47,475 units forfeited. As of December 31, 2011, 212,000 restricted stock units are expected to vest if the current estimate of performance-based targets is satisfied, and would result in 685,000 securities available for future issuance.

(3) Includes other Umpqua stock plans and stock plans assumed through previous mergers.

(4) Weighted average exercise price is based solely on securities with an exercise price.

(b) Not applicable.

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Umpqua Holdings Corporation

(c) The following table provides information about repurchases of common stock by the Company during the quarter ended December 31, 2011:

Period	Total number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced  Plan(2)		Maximum Number of Remaining Shares that May be Purchased at Period End under the Plan
10/1/11 - 10/31/11		231	$	8.73		251,194		14,748,806
11/1/11 - 11/30/11		70	$	12.14		2,120,769		12,628,037
12/1/11 - 12/31/11		—	$	—		4,301		12,623,736
Total for quarter		301	$	9.52		2,376,264

(1) Shares repurchased by the Company during the quarter consist of cancellation of 301 restricted shares to pay withholding taxes. There were no shares tendered in connection with option exercises and 2.4 million shares were repurchased pursuant to the Company’s publicly announced corporate stock repurchase plan described in (2) below.

(2) The Company’s share repurchase plan, which was first approved by the Board and announced in August 2003, was amended on September 29, 2011 to increase the number of common shares available for repurchase under the plan to 15 million shares. The repurchase program will run through June 2013. As of December 31, 2011, a total of 12.6 million shares remained available for repurchase. The Company repurchased 2.5 million shares in 2011 and no shares under the repurchase plan in 2010 or 2009. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, and our capital plan.

During the year ended December 31, 2011, there were 8,135 shares tendered in connection with option exercises. During the year ended December 31, 2010, there were 4,515 shares tendered in connection with option exercises. Restricted shares cancelled to pay withholding taxes totaled 23,158 and 12,443 shares during the years ended December 31, 2011 and 2010, respectively. Restricted stock units cancelled to pay withholding taxes totaled 22,349 during the year ended December 31, 2011. Restricted stock units cancelled to pay withholding taxes totaled 5,583 during the year ended December 31, 2010.

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STOCK PERFORMANCE GRAPH

The following chart, which is furnished not filed, compares the yearly percentage changes in the cumulative shareholder return on our common stock during the five fiscal years ended December 31, 2011, with (i) the Total Return Index for NASDAQ Bank Stocks (ii) the Total Return Index for The Nasdaq Stock Market (U.S. Companies) and (iii) the Standard and Poor’s 500. This comparison assumes $100.00 was invested on December 31, 2006, in our common stock and the comparison indices, and assumes the reinvestment of all cash dividends prior to any tax effect and retention of all stock dividends. Price information from December 31, 2006 to December 31, 2011, was obtained by using the NASDAQ closing prices as of the last trading day of each year.

	Period Ending
	12/31/2006		12/31/2007		12/31/2008		12/31/2009		12/31/2010		12/31/2011
Umpqua Holdings Corporation	$	100.00	$	54.01	$	53.19	$	50.28	$	46.42	$	48.33
Nasdaq Bank Stocks	$	100.00	$	80.09	$	62.84	$	52.60	$	60.04	$	53.74
Nasdaq U.S.	$	100.00	$	110.66	$	66.42	$	96.54	$	114.06	$	113.16
S&P 500	$	100.00	$	105.49	$	66.46	$	84.05	$	96.71	$	98.76

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Umpqua Holdings Corporation

ITEM 6.     SELECTED FINANCIAL DATA.

Umpqua Holdings Corporation

Annual Financial Trends

(in thousands, except per share data)

	2011		2010		2009			2008		2007
Interest income	$	501,753	$	488,596	$	423,732		$	442,546	$	488,392
Interest expense		73,301		93,812		103,024			152,239		202,438
Net interest income		428,452		394,784		320,708			290,307		285,954
Provision for non-covered loan and lease losses		46,220		113,668		209,124			107,678		41,730
Provision for covered loan and lease losses		16,141		5,151		—			—		—
Non-interest income		84,118		75,904		73,516			107,118		64,829
Non-interest expense		338,611		311,063		267,178			215,588		210,804
Goodwill impairment		—		—		111,952			982		—
Merger related expenses		360		6,675		273			—		3,318
Income (loss) before provision for (benefit from) income taxes		111,238		34,131		(194,303	)		73,177		94,931
Provision for (benefit from) income taxes		36,742		5,805		(40,937	)		22,133		31,663
Net income (loss)		74,496		28,326		(153,366	)		51,044		63,268
Preferred stock dividends		—		12,192		12,866			1,620		—
Dividends and undistributed earnings allocated to participating securities		356		67		30			154		187
Net earnings (loss) available to common shareholders	$	74,140	$	16,067	$	(166,262	)	$	49,270	$	63,081
YEAR END
Assets	$	11,563,355	$	11,668,710	$	9,381,372		$	8,597,550	$	8,340,053
Earning assets		10,263,923		10,374,131		8,344,203			7,491,498		7,146,841
Non-covered loans and leases(1)		5,888,098		5,658,987		5,999,267			6,131,374		6,055,635
Covered loans and leases		622,451		785,898		—			—		—
Deposits		9,236,690		9,433,805		7,440,434			6,588,935		6,589,326
Term debt		255,676		262,760		76,274			206,531		73,927
Junior subordinated debentures, at fair value		82,905		80,688		85,666			92,520		131,686
Junior subordinated debentures, at amortized cost		102,544		102,866		103,188			103,655		104,680
Common shareholders’ equity		1,672,413		1,642,574		1,362,182			1,284,830		1,239,938
Total shareholders’ equity		1,672,413		1,642,574		1,566,517			1,487,008		1,239,938
Common shares outstanding		112,165		114,537		86,786			60,146		59,980
AVERAGE
Assets	$	11,600,435	$	10,830,486	$	8,975,178		$	8,342,005	$	7,897,568
Earning assets		10,332,242		9,567,341		7,925,014			7,215,001		6,797,834
Non-covered loans and leases(1)		5,723,771		5,783,452		6,103,666			6,118,540		5,822,907
Covered loans and leases		707,026		681,569		—			—		—
Deposits		9,301,978		8,607,980		7,010,739			6,459,576		6,250,521
Term debt		257,496		261,170		129,814			194,312		57,479
Junior subordinated debentures		184,115		184,134		190,491			226,349		221,833
Common shareholders’ equity		1,671,893		1,589,393		1,315,953			1,254,730		1,222,628
Total shareholders’ equity		1,671,893		1,657,544		1,519,119			1,281,220		1,222,628
Basic common shares outstanding		114,220		107,922		70,399			60,084		59,828
Diluted common shares outstanding		114,409		108,153		70,399			60,424		60,404
PER COMMON SHARE DATA
Basic earnings (loss)	$	0.65	$	0.15	$	(2.36	)	$	0.82	$	1.05
Diluted earnings (loss)		0.65		0.15		(2.36	)		0.82		1.04
Book value		14.91		14.34		15.70			21.36		20.67
Tangible book value(2)		8.87		8.39		8.33			8.76		7.92
Cash dividends declared		0.24		0.20		0.20			0.62		0.74

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(dollars in thousands)

	2011		2010		2009		2008		2007
PERFORMANCE RATIOS
Return on average assets(3)		0.64%		0.15%		-1.85%		0.59%		0.80%
Return on average common shareholders’ equity(4)		4.43%		1.01%		-12.63%		3.93%		5.16%
Return on average tangible common shareholders’ equity(5)		7.47%		1.76%		-26.91%		9.99%		13.05%
Efficiency ratio(6), (7)		65.58%		66.90%		95.34%		54.08%		60.62%
Average common shareholders’ equity to average assets		14.41%		14.68%		14.66%		15.04%		15.48%
Leverage ratio(8)		10.91%		10.56%		12.79%		12.38%		9.24%
Net interest margin (fully tax equivalent)(9)		4.19%		4.17%		4.09%		4.07%		4.24%
Non-interest revenue to total net revenue(10)		16.41%		16.13%		18.65%		26.95%		18.48%
Dividend payout ratio(11)		36.92%		133.33%		-8.47%		75.61%		70.48%
ASSET QUALITY
Non-covered, non-performing loans	$	91,383	$	145,248	$	199,027	$	133,366	$	91,099
Non-covered, non-performing assets		125,558		178,039		223,593		161,264		98,042
Allowance for non-covered loan and lease losses		92,968		101,921		107,657		95,865		84,904
Net non-covered charge-offs		55,173		119,404		197,332		96,717		21,994
Non-covered, non-performing loans to non-covered loans and leases		1.55%		2.57%		3.32%		2.18%		1.50%
Non-covered, non-performing assets to total assets		1.09%		1.53%		2.38%		1.88%		1.18%
Allowance for non-covered loan and lease losses to total non-covered loans and leases		1.58%		1.80%		1.79%		1.56%		1.40%
Allowance for non-covered credit losses to non-covered loans and leases		1.59%		1.82%		1.81%		1.58%		1.42%
Net charge-offs to average non-covered loans and leases		0.96%		2.06%		3.23%		1.58%		0.38%

(1) Excludes loans held for sale

(2) Average common shareholders’ equity less average intangible assets (excluding MSR) divided by shares outstanding at the end of the year. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Results of Operations – Overview” for the reconciliation of non-GAAP financial measures, in Item 7 of this report.

(3) Net earnings (loss) available to common shareholders divided by average assets.

(4) Net earnings (loss) available to common shareholders divided by average common shareholders’ equity.

(5) Net earnings (loss) available to common shareholders divided by average common shareholders’ equity less average intangible assets. See Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Results of Operations – Overview” for the reconciliation of non-GAAP financial measures, in Item 7 of this report.

(6) Non-interest expense divided by the sum of net interest income (fully tax equivalent) and non-interest income.

(7) The efficiency ratio calculation includes goodwill impairment charges of $112.0 million and $1.0 million in 2009 and 2008, respectively. Goodwill impairment losses are a non-cash expense that have no direct effect on the Company’s or the Bank’s liquidity or capital ratios.

(8) Tier 1 capital divided by leverage assets. Leverage assets are defined as quarterly average total assets, net of goodwill, intangibles and certain other items as required by the Federal Reserve.

(9) Net interest margin (fully tax equivalent) is calculated by dividing net interest income (fully tax equivalent) by average interest earnings assets.

(10) Non-interest revenue divided by the sum of non-interest revenue and net interest income

(11) Dividends declared per common share divided by basic earnings per common share.

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Umpqua Holdings Corporation

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS AND RISK FACTORS

See the discussion of forward-looking statements and risk factors in Part I Item 1 and Item 1A of this report.

EXECUTIVE OVERVIEW

Significant items for the year ended December 31, 2011 were as follows:

Financial Performance

• Net earnings per diluted common share was $0.65 in 2011, as compared to net earnings of $0.15 per diluted common share earned in 2010. The increase in net earnings per diluted common share is principally attributed to reduced provision for loan and lease losses. Operating earnings per diluted common share, defined as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment divided by the same diluted share total used in determining diluted earnings per common share, was $0.66 in 2011, as compared to operating earnings per diluted common share of $0.12 in 2010. Operating earnings per diluted common share is considered a “non-GAAP” financial measure. More information regarding this measurement and reconciliation to the comparable GAAP measurement is provided under the heading Results of Operations—Overview below.

• Net interest margin, on a tax equivalent basis, increased to 4.19% in 2011 from 4.17% in 2010. The increase in net interest margin resulted from the increase in average covered loans and investment balances, increased covered loan yields, and declining costs of interest bearing deposits, partially offset by lower average non-covered loan balances, lower non-covered loan yields, and decreased investment yields. Excluding the impact of loan disposal gains and interest and fee reversals on non-accrual loans, our core net interest margin was 3.95% for 2011, as compared to core net interest margin of 3.92% for 2010. Core net interest margin is considered a “non-GAAP” financial measure. More information regarding this measurement and reconciliation to the comparable GAAP measurement is provided under the heading Results of Operations—Overview below.

• Mortgage banking revenue was $26.6 million in 2011, compared to $21.2 million in 2010. Closed mortgage volume increased 27% in the current year to a record $994.5 million due to an increase in purchase and refinancing activity, resulting from historically low mortgage interest rates.

• We recorded loss of $2.2 million in the income statement representing the change in fair value on our junior subordinated debentures measured at fair value in 2011, compared to gains of $5.0 million in 2010.

• Total gross non-covered loans and leases increased to $5.9 billion as of December 31, 2011, an increase of $229.1 million, or 4.0%, as compared to December 31, 2010. This increase is principally attributable to net loan originations of $336.9 million during the year offset by charge-offs of $65.1 million, transfers to non-covered other real estate owned of $47.4 million, and sales of non-covered loans of $11.2 million.

• Total deposits were $9.2 billion as of December 31, 2011, a decrease of $197.1 million, or 2.1%, as compared to December 31, 2010, resulting from the run-off of higher priced deposits.

• Total consolidated assets were $11.6 billion as of December 31, 2011, compared to $11.7 billion as of December 31, 2010, representing a decrease of $105.4 million or 0.9%.

Credit Quality

• Non-covered, non-performing assets decreased to $125.6 million, or 1.09% of total assets, as of December 31, 2011, compared to $178.0 million, or 1.53% of total assets as of December 31, 2010. Non-covered, non-performing loans decreased to $91.4 million, or 1.55% of non-covered total loans, as of

33

December 31, 2011, compared to $145.2 million, or 2.57% of total non-covered loans as of December 31, 2010. Non-covered, non-accrual loans have been written-down to their estimated net realizable values.

• Net charge-offs were $55.2 million in 2011, or 0.96% of average non-covered loans and leases, as compared to net charge-offs of $119.4 million, or 2.06% of average non-covered loans and leases in 2010. The decrease in net charge-offs in the current year is consistent with the overall improving trends in credit quality indicators.

• Provision for non-covered loan and lease losses in 2011 was $46.2 million as compared to $113.7 million in 2010. The decrease reflects continued improvement and stabilization of credit quality and the decline of non-performing loans outstanding.

Capital and Growth Initiatives

• Total risk based capital ratio was 17.2% as of December 31, 2011, compared to 17.6% as of December 31, 2010, due to an increase in risk weighted assets primarily related to non-covered loans and $29.8 million of common stock repurchased.

• Declared cash dividends of $0.05 per common share for the first and second quarters of the year and $0.07 per common share for the third and fourth quarters of 2011. In determining the amount of dividends to be paid, we consider capital preservation, expected asset growth, projected earnings and our overall dividend pay-out ratio.

• Opened a new Commercial Banking Center in San Jose, California, and ten Community Banking stores in Portland, Oregon, Seattle, Washington, and northern California.

• Launched our new Business Banking Division and expanded offerings from our Debt Capital Markets Group to provide additional products and services to our business and commercial customers.

SUMMARY OF CRITICAL ACCOUNTING POLICIES

The SEC defines “critical accounting policies” as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. Our significant accounting policies are described in Note 1 in the Notes to Consolidated Financial Statements in Item 8 of this report. Not all of these critical accounting policies require management to make difficult, subjective or complex judgments or estimates. Management believes that the following policies would be considered critical under the SEC’s definition.

Allowance for Non-Covered Loan and Lease Losses and Reserve for Unfunded Commitments

The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality and adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. Consumer and residential loan portfolios are reviewed monthly for their performance as a pool of loans, since no single loan is individually significant or judged by its risk rating, size or potential risk of loss. In contrast, the monitoring process for the commercial and commercial real estate portfolios includes periodic reviews of individual loans with risk ratings assigned to each loan and performance judged on a loan by loan basis. The Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan and lease losses. The Bank has a management Allowance for Loan and Lease Losses (“ALLL”) Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank’s Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

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Umpqua Holdings Corporation

Each risk rating is assessed an inherent credit loss factor that determines the amount of the allowance for loan and lease losses provided for that group of loans and leases with similar risk rating. Credit loss factors may vary by region based on management’s belief that there may ultimately be different credit loss rates experienced in each region. Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral for collateral dependent loans. A loan is considered collateral dependent if repayment of the loan is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize an impairment reserve as a specific component to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. The combination of the risk rating-based allowance component and the impairment reserve allowance component lead to an allocated allowance for loan and lease losses.

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of economic conditions characterized by falling real estate values. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends. As of December 31, 2011, the unallocated allowance amount represented 5% of the allowance.

The reserve for unfunded commitments (“RUC”) is established to absorb inherent losses associated with our commitment to lend funds, such as with a letter or line of credit. The adequacy of the ALLL and RUC are monitored on a regular basis and are based on management’s evaluation of numerous factors. These factors include the quality of the current loan portfolio; the trend in the loan portfolio’s risk ratings; current economic conditions; loan concentrations; loan growth rates; past-due and non-performing trends; evaluation of specific loss estimates for all significant problem loans; historical charge-off and recovery experience; and other pertinent information.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses.

Covered Loans and Indemnification Asset

Loans acquired in an FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as “covered loans” and reported separately in our statements of financial condition. Acquired loans were aggregated into pools based on individually evaluated common risk characteristics and aggregate expected cash flows were estimated for each pool. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. The cash flows expected to be received over the life of the pool were estimated by management with the assistance of a third party valuation specialist. These cash flows were input into a FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”), compliant accounting loan system which calculates the carrying values of the pools and underlying loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speeds assumptions are periodically reassessed and updated within the accounting model to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a pool’s carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan or pool using the

35

effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations (“ASC 805”). The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the carrying value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted or amortized into non-interest income over the life of the FDIC indemnification asset, which is maintained at the loan pool level.

Mortgage Servicing Rights

In accordance with FASB ASC 860, Transfers and Servicing (“ASC 860”). the Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company elected to measure its residential mortgage servicing assets at fair value and to report changes in fair value through earnings. Fair value adjustments encompass market-driven valuation changes and the runoff in value that occurs from the passage of time, which are separately reported. Under the fair value method, the MSR is carried in the balance sheet at fair value and the changes in fair value are reported in earnings under the caption mortgage banking revenue in the period in which the change occurs.

Retained mortgage servicing rights are measured at fair value as of the date of sale. We use quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available.

The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights. Additional information is included in Note 10 of the Notes to Consolidated Financial Statements.

Valuation of Goodwill and Intangible Assets

At December 31, 2011, we had $677.2 million in goodwill and other intangible assets as a result of business combinations. Goodwill and other intangible assets with indefinite lives are not amortized but instead are periodically tested for impairment. Management performs an impairment analysis for the intangible assets with indefinite lives on an annual basis as of December 31. Additionally, goodwill and other intangible assets with indefinite lives are evaluated on an interim basis when events or circumstance indicate impairment potentially exists.

The Company performed a goodwill impairment analysis of the Community Banking reporting segment as of June 30, 2009, due to a decline in the Company’s market capitalization below the book value of equity and continued weakness in the banking industry. The Company engaged an independent valuation consultant to assist us in determining whether our goodwill asset was impaired. The valuation of the reporting unit was determined using discounted cash flows of forecasted earnings, estimated sales price multiples based on recent observable market transactions and market capitalization based on current stock price. The results of the Company’s and valuation specialist’s step one test indicated that the reporting unit’s fair value was less than its carrying value, and therefore the Company performed a step two analysis. In the step two analysis, we calculated the fair value for the reporting unit’s assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name, in order to determine the implied fair value of goodwill. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures. Based on the

36

Umpqua Holdings Corporation

results of the step two analysis, the Company determined that the implied fair value of the goodwill was greater than its carrying amount on the Company’s balance sheet, and as a result, recognized a goodwill impairment loss of $112.0 million. This write-down of goodwill is a non-cash charge that did not affect the Company’s or the Bank’s liquidity or operations. In addition, because goodwill is excluded in the calculation of regulatory capital, the Company’s “well-capitalized” capital ratios were not affected by this charge.

The Company performed its annual goodwill impairment analysis of the Community Banking reporting segment as of December 31, 2011. In the first step of the goodwill impairment test the Company determined that the fair value of the Community Banking reporting unit exceeded its carrying amount. This determination is consistent with the events occurring after the Company recognized the $112.0 million impairment of goodwill in the second quarter of 2009. First, the market capitalization and estimated fair value of the Company increased significantly subsequent to the recognition of the impairment charge as the fair value of the Company’s stock increased 60% from June 30, 2009 to December 31, 2011. Secondly, the Company’s successful public common stock offerings in the third quarter of 2009 and first quarter of 2010 diluted the carrying value of the reporting unit’s book equity on a per share basis. The impairment analysis requires management to make subjective judgments. Events and factors that may significantly affect the estimates include, among others, competitive forces, customer behaviors and attrition, changes in revenue growth trends, cost structures, technology, changes in discount rates and specific industry and market conditions. There can be no assurance that changes in circumstances, estimates or assumption will not result in additional impairment of all, or some portion of, goodwill. Additional information is included in Note 9 of the Notes to Consolidated Financial Statements.

Stock-based Compensation

Consistent with the provisions of FASB ASC 718, Stock Compensation (“ASC 718”), we recognize expense for the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees’ requisite service period (generally the vesting period). The requisite service period may be subject to performance conditions. The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model. Management assumptions utilized at the time of grant impact the fair value of the option calculated under the Black-Scholes methodology, and ultimately, the expense that will be recognized over the life of the option. Additional information is included in Note 1 of the Notes to Consolidated Financial Statements.

Fair Value

FASB ASC 820, Fair Value Measurements and Disclosures, establishes a hierarchical disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have little or no pricing observability and a higher degree of judgment utilized in measuring fair value. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. See Note 24 of the Notes to Consolidated Financial Statements for additional information about the level of pricing transparency associated with financial instruments carried at fair value.

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2011, the FASB issued ASU No. 2011-02, A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. The Update provides additional guidance relating to when creditors should classify loan modifications as troubled debt restructurings. The ASU also ends the deferral issued in January 2010 of the disclosures about troubled debt restructurings required by ASU No. 2010-20. The provisions of ASU No. 2011-02 and the disclosure requirements of ASU No. 2010-20 are effective for the Company’s interim reporting period ending September 30, 2011. The guidance applies retrospectively to restructurings occurring on or after January 1, 2011. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

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In April 2011, the FASB issued ASU No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements. The Update amends existing guidance to remove from the assessment of effective control, the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and, as well, the collateral maintenance implementation guidance related to that criterion. ASU No. 2011-03 is effective for the Company’s reporting period beginning on or after December 15, 2011. The guidance applies prospectively to transactions or modification of existing transactions that occur on or after the effective date and early adoption is not permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The Update amends existing guidance regarding the highest and best use and valuation premise by clarifying these concepts are only applicable to measuring the fair value of nonfinancial assets. The Update also clarifies that the fair value measurement of financial assets and financial liabilities which have offsetting market risks or counterparty credit risks that are managed on a portfolio basis, when several criteria are met, can be measured at the net risk position. Additional disclosures about Level 3 fair value measurements are required including a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, a description of the valuation process in place, and discussion of the sensitivity of fair value changes in unobservable inputs and interrelationships about those inputs as well disclosure of the level of the fair value of items that are not measured at fair value in the financial statements but disclosure of fair value is required. The provisions of ASU No. 2011-04 are effective for the Company’s reporting period beginning after December 15, 2011 and should be applied prospectively. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. The Update amends current guidance to allow a company the option of presenting the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions do not change the items that must be reported in other comprehensive income or when an item of other comprehensive must to reclassified to net income. The amendments do not change the option for a company to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense (benefit) related to the total of other comprehensive income items. The amendments do not affect how earnings per share is calculated or presented. The provisions of ASU No. 2011-05 are effective for the Company’s reporting period beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted and there are no required transition disclosures. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The ASU defers indefinitely the requirement to present reclassification adjustments and the effect of those reclassification adjustments on the face of the financial statements where net income is presented, by component of net income, and on the face of the financial statements where other comprehensive income is presented, by component of other comprehensive income. The Company is currently in the process of evaluating the Updates but does not expect either will have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. With the Update, a company testing goodwill for impairment now has the option of performing a qualitative assessment before calculating the fair value of the reporting unit (the first step of goodwill impairment test). If, on the basis of qualitative factors, the fair value of the reporting unit is more likely than not greater than the carrying amount, a quantitative calculation would not be needed. Additionally, new examples of events and circumstances that an entity should consider in performing its qualitative assessment about whether to proceed to the first step of the goodwill impairment have been made to the guidance and replace the previous guidance for triggering events for interim impairment assessment. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

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Umpqua Holdings Corporation

In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update requires an entity to offset, and present as a single net amount, a recognized eligible asset and a recognized eligible liability when it has an unconditional and legally enforceable right of setoff and intends either to settle the asset and liability on a net basis or to realize the asset and settle the liability simultaneously. The ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amendments are effective for annual and interim reporting periods beginning on or after January 1, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company’s consolidated financial statements.

RESULTS OF OPERATIONS—OVERVIEW

For the year ended December 31, 2011, net earnings available to common shareholders was $74.1 million, or $0.65 per diluted common share, as compared to net earnings available to common shareholders of $16.1 million, or $0.15 per diluted common share for the year ended December 31, 2010. The increase in net earnings available to common shareholders in 2011 is principally attributable to increased net interest income, increased non-interest income, and decreased provision for loan losses, partially offset by increased non-interest expense.

For the year ended December 31, 2010, net earnings available to common shareholders was $16.1 million, or $0.15 per diluted common share, as compared to net loss available to common shareholders of $166.3 million, or $2.36 per diluted common share for the year ended December 31, 2009. The increase in net earnings available to common shareholders in 2010, as compared to 2009, is principally attributable to increased net interest income, increased non-interest income, decreased provision for loan losses, and decreased non-interest expense. Non-interest income for 2010 includes a bargain purchase gain on acquisition of $6.4 million relating to the acquisition of Evergreen. We assumed certain assets and liabilities of Evergreen, Rainier, and Nevada Security on January 22, 2010, February 26, 2010, and June 18, 2010, respectively, and the results of the acquired operations are included in our financial results starting on January 23, 2010, February 27, 2010, and June 19, 2010, respectively.

We recognize gains or losses on our junior subordinated debentures carried at fair value resulting from the estimated market credit risk adjusted spread and changes in interest rates that do not directly correlate with the Company’s operating performance. Also, we incur significant expenses related to the completion and integration of mergers and acquisitions. Additionally, we may recognize goodwill impairment losses that have no direct effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios. Lastly, we may recognize one-time bargain purchase gains on certain FDIC-assisted acquisitions that are not reflective of Umpqua’s on-going earnings power. Accordingly, management believes that our operating results are best measured on a comparative basis excluding the impact of gains or losses on junior subordinated debentures measured at fair value, net of tax, merger-related expenses, net of tax, and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains, net of tax. We define operating earnings as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment, and we calculate operating earnings per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share (see Note 25 of the Notes to Consolidated Financial Statements in Item 8 below). Operating earnings and operating earnings per diluted share are considered “non-GAAP” financial measures. Although we believe the presentation of non-GAAP financial measures provides a better indication of our operating performance, readers of this report are urged to review the GAAP results as presented in the Financial Statements and Supplementary Data in Item 8 below.

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The following table presents a reconciliation of operating earnings (loss) and operating earnings (loss) per diluted share to net earnings (loss) and net earnings (loss) per diluted common share for years ended December 31, 2011, 2010 and 2009:

Reconciliation of Operating Earnings (Loss) to Net (Loss) Earnings Available to Common Shareholders

Years Ended December 31,

(in thousands, except per share data)

	2011		2010			2009
Net earnings (loss) available to common shareholders	$	74,140	$	16,067		$	(166,262	)
Net loss (gain) on junior subordinated debentures carried at fair value, net of tax (1)		1,318		(2,988	)		(3,889	)
Bargain purchase gain on acquisitions, net of tax(1)		—		(3,862	)		—
Goodwill impairment		—		—			111,952
Merger-related expenses, net of tax(1)		216		4,005			164
Operating earnings (loss)	$	75,674	$	13,222		$	(58,035	)
Per diluted common share:
Net earnings (loss) available to common shareholders	$	0.65	$	0.15		$	(2.36	)
Net loss (gain) on junior subordinated debentures carried at fair value, net of tax		0.01		(0.03	)		(0.06	)
Bargain purchase gain on acquisitions, net of tax		—		(0.04	)		—
Goodwill impairment		—		—			1.59
Merger-related expenses, net of tax		—		0.04			0.01
Operating earnings (loss)	$	0.66	$	0.12		$	(0.82	)

(1) Adjusted for income tax effect of pro forma operating earnings at 40%.

Management believes core net interest income and core net interest margin are useful financial measures because they enable investors to evaluate the underlying growth or compression in these values excluding interest income adjustments related to credit quality. Management uses these measures to evaluate core net interest income operating results exclusive of credit costs, in order to monitor our effectiveness in growing higher interest yielding assets and managing our cost of interest bearing liabilities over time. Core net interest income is calculated as net interest income, adjusting tax exempt interest income to its taxable equivalent, adding back interest and fee reversals related to new non-accrual loans during the period, and deducting the interest income gains recognized from loan disposition activities within covered loan pools. Core net interest margin is calculated by dividing annualized core net interest income by a period’s average interest earning assets. Core net interest income and core net interest margin are considered “non-GAAP” financial measures. Although we believe the presentation of non-GAAP financial measures provides a better indication of our operating performance, readers of this report are urged to review the GAAP results as presented in the Financial Statements and Supplementary Data in Item 8 below.

40

Umpqua Holdings Corporation

The following table presents a reconciliation of net interest income to core net interest income and net interest margin to core net interest margin for years ended December 31, 2011, 2010 and 2009:

Reconciliation of Net Interest Income to Core Net Interest Income and Net Interest Margin to Net Core Interest Margin

Years Ended December 31,

(dollars in thousands)

	2011			2010			2009
Net interest income—tax equivalent basis(1)	$	432,748		$	399,054		$	324,436
Adjustments:
Interest and fee reversals on non-accrual loans		1,751			3,259			4,432
Covered loan disposal gains		(26,327	)		(26,945	)		—
Core net interest income—tax equivalent basis(1)	$	408,172		$	375,368		$	328,868
Average interest earning assets	$	10,332,242		$	9,567,341		$	7,925,014
Net interest margin—consolidated(1)		4.19%			4.17%			4.09%
Core net interest margin—consolidated(1)		3.95%			3.92%			4.15%

(1) Tax-exempt income has been adjusted to a tax equivalent basis at a 35% tax rate. The amount of such adjustment was an addition to recorded income of approximately $4.3 million, $4.3 million, and $3.7 million for the years ended 2011, 2010 and 2009, respectively.

The following table presents the returns on average assets, average common shareholders’ equity and average tangible common shareholders’ equity for the years ended December 31, 2011, 2010 and 2009. For each of the years presented, the table includes the calculated ratios based on reported net earnings (loss) available to common shareholders and operating earnings (loss) as shown in the table above. Our return on average common shareholders’ equity is negatively impacted as a result of capital required to support goodwill. To the extent this performance metric is used to compare our performance with other financial institutions that do not have merger-related intangible assets, we believe it beneficial to also consider the return on average common tangible shareholders’ equity. The return on average common tangible shareholders’ equity is calculated by dividing net earnings (loss) available to common shareholders by average common shareholders’ common equity less average goodwill and intangible assets, net (excluding MSRs). The return on average tangible common shareholders’ equity is considered a non-GAAP financial measure and should be viewed in conjunction with the return on average common shareholders’ equity.

Returns on Average Assets, Common Shareholders’ Equity and Tangible Common Shareholders’ Equity

For the Years Ended December 31,

(dollars in thousands)

	2011			2010			2009
RETURNS ON AVERAGE ASSETS:
Net earnings (loss) available to common shareholders		0.64%			0.15%			-1.85%
Operating earnings (loss)		0.65%			0.12%			-0.65%
RETURNS ON AVERAGE COMMON SHAREHOLDERS’ EQUITY:
Net earnings (loss) available to common shareholders		4.43%			1.01%			-12.63%
Operating earnings (loss)		4.53%			0.83%			-4.41%
RETURNS ON AVERAGE TANGIBLE COMMON SHAREHOLDERS’ EQUITY:
Net earnings (loss) available to common shareholders		7.47%			1.76%			-26.91%
Operating earnings (loss)		7.63%			1.45%			-9.39%
CALCULATION OF AVERAGE TANGIBLE COMMON SHAREHOLDERS’ EQUITY:
Average common shareholders’ equity	$	1,671,893		$	1,589,393		$	1,315,953
Less: average goodwill and other intangible assets, net		(679,588	)		(674,597	)		(698,223	)
Average tangible common shareholders’ equity	$	992,305		$	914,796		$	617,730

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Additionally, management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy. Umpqua believes the exclusion of certain intangible assets in the computation of tangible common equity and tangible common equity ratio provides a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the operating results and capital of the Company. Tangible common equity is calculated as total shareholders’ equity less goodwill and other intangible assets, net (excluding MSRs). In addition, 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 tangible common equity and tangible common equity ratio is considered a non-GAAP financial measure and should be viewed in conjunction with the total shareholders’ equity and the total shareholders’ equity ratio.

The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP) as of December 31, 2011 and December 31, 2010:

Reconciliations of Total Shareholders’ Equity to Tangible Common Shareholders’ Equity and Total Assets to Tangible Assets

(dollars in thousands)

	2011		2010
Total shareholders’ equity	$	1,672,413	$	1,642,574
Subtract:
Goodwill and other intangible assets, net		677,224		681,969
Tangible common shareholders’ equity	$	995,189	$	960,605
Total assets	$	11,563,355	$	11,668,710
Subtract:
Goodwill and other intangible assets, net		677,224		681,969
Tangible assets	$	10,886,131	$	10,986,741
Tangible common equity ratio		9.14%		8.74%

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although we believe these non-GAAP financial measure are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

NET INTEREST INCOME

Net interest income is the largest source of our operating income. Net interest income for 2011 was $428.5 million, an increase of $33.7 million, or 9% over 2010. Net interest income for 2010 was $394.8 million, an increase of $74.1 million, or 23% over 2009. The negative impact to net interest income of the reversal of interest income and fees on loans during the year was $1.7 million in 2011 and $3.3 million and $4.4 million in 2010 and 2009, respectively. The increase in net interest income in 2011 as compared to 2010 is attributable to growth in outstanding average interest-earning assets, primarily average covered loans and average investment securities, increased covered loan yields, decreased cost of deposits and investing excess interest earning cash into the investment portfolio, partially offset by a decline in average non-covered loans outstanding, lower non-covered loan yields, lower investment yields, and increased average interest bearing deposit balances.

The increase in net interest income in 2010 as compared to 2009 is attributable to growth in outstanding average interest-earning assets, primarily covered loans and investment securities, partially offset by a decline in non-covered loans outstanding. In addition to organic growth, the FDIC-assisted purchase and assumption of certain assets and liabilities of Evergreen, Rainier, and Nevada Security, which were completed on January 22, 2010, February 26, 2010, and June 18, 2010, respectively, contributed to an increase in interest earning assets and interest bearing liabilities in 2010 over 2009.

42

Umpqua Holdings Corporation

The net interest margin (net interest income as a percentage of average interest earnings assets) on a fully tax-equivalent basis was 4.19% for 2011, an increase of 2 basis points as compared to the same period in 2010. The increase in net interest margin primarily resulted from an increase in average covered loans and investment balances, a decrease in interest bearing cash, and a decrease in our interest expense to earning assets of 27 basis points due to declining costs of interest bearing deposits, partially offset by a decrease in average non-covered loan balances, and decline in investment yields.

Loan disposal related activities within the covered loan portfolio, either through loans being paid off in full or transferred to other real estate owned (“OREO”), result in gains within covered loan interest income to the extent assets received in satisfaction of debt (such as cash or the net realizable value of OREO received) exceeds the allocated carrying value of the loan disposed of from the pool. Loan disposal activities contributed $26.3 million of interest income for 2011, compared to $26.9 million of loan disposal gains recognized during 2010. While dispositions of covered loans positively impact net interest margin, we recognize a corresponding decrease to the change in FDIC indemnification asset at the incremental loss-sharing rate within other non-interest income.

The net interest margin on a fully tax-equivalent basis was 4.17% for 2010, an increase of 8 basis points as compared to the same period in 2009. The increase in net interest margin primarily resulted from an increase in average covered loans outstanding, increased yield on the covered loan portfolio as a result of payoffs ahead of expectations, and a decrease in our interest expense to earning assets of 32 basis points due to declining costs of interest bearing deposits, partially offset by the interest reversals of new non-accrual loans (contributing to a 4 basis point decline), a decline in non-covered loans outstanding, and the impact of holding much higher levels of interest bearing cash with the Federal Reserve Bank (at 25 basis points). The increase in net interest margin related to covered loan yields was offset by a corresponding decrease to the change in FDIC indemnification asset in other non-interest income.

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Our net interest income is affected by changes in the amount and mix of interest earnings assets and interest bearing liabilities, as well as changes in the yields earned on interest earnings assets and rates paid on deposits and borrowed funds. The following table presents condensed average balance sheet information, together with interest income and yields on average interest earnings assets, and interest expense and rates paid on average interest bearing liabilities for the years ended December 31, 2011, 2010 and 2009:

Average Rates and Balances

(dollars in thousands)

	2011							2010							2009
	Average Balance			Interest Income or Expense		Average Yields or Rates		Average Balance			Interest Income or Expense		Average Yields or Rates		Average Balance			Interest Income or Expense		Average Yields or Rates
INTEREST EARNING ASSETS:
Non-covered loans and leases(1)	$	5,794,106		$	319,702		5.52%	$	5,828,637		$	336,320		5.77%	$	6,145,927		$	355,195		5.78%
Covered loans and leases		707,026			86,011		12.17%		681,569			73,812		10.83%		—			—		NA
Taxable securities		2,968,501			85,797		2.89%		1,946,222			67,402		3.46%		1,386,960			60,217		4.34%
Non-taxable securities(2)		224,085			12,949		5.78%		227,589			13,109		5.76%		198,641			11,522		5.80%
Temporary investments and interest bearing deposits		638,524			1,590		0.25%		883,324			2,223		0.25%		193,486			526		0.27%
Total interest earning assets		10,332,242			506,049		4.90%		9,567,341			492,866		5.15%		7,925,014			427,460		5.39%
Allowance for non-covered loan and lease losses		(96,748	)						(102,016	)						(96,916	)
Other assets		1,364,941							1,365,161							1,147,080
Total assets	$	11,600,435						$	10,830,486						$	8,975,178
INTEREST BEARING LIABILITIES:
Interest bearing checking and savings accounts	$	4,765,091		$	20,647		0.43%	$	4,203,109		$	31,632		0.75%	$	3,333,088		$	32,341		0.97%
Time deposits		2,754,533			35,096		1.27%		2,875,706			44,609		1.55%		2,358,697			56,401		2.39%
Securities sold under agreements to repurchase and federal funds purchased		113,129			539		0.48%		54,696			517		0.95%		60,722			680		1.12%
Term debt		257,496			9,255		3.59%		261,170			9,229		3.53%		129,814			4,576		3.53%
Junior subordinated debentures		184,115			7,764		4.22%		184,134			7,825		4.25%		190,491			9,026		4.74%
Total interest bearing liabilities		8,074,364			73,301		0.91%		7,578,815			93,812		1.24%		6,072,812			103,024		1.70%
Noninterest bearing deposits		1,782,354							1,529,165							1,318,954
Other liabilities		71,824							64,962							64,293
Total liabilities		9,928,542							9,172,942							7,456,059
Preferred equity		—							68,151							203,166
Common equity		1,671,893							1,589,393							1,315,953
Total shareholders’ equity		1,671,893							1,657,544							1,519,119
Total liabilities and shareholders’ equity	$	11,600,435						$	10,830,486						$	8,975,178
NET INTEREST INCOME(2)				$	432,748						$	399,054						$	324,436
NET INTEREST SPREAD							3.99%							3.91%							3.69%
AVERAGE YIELD ON EARNING ASSETS(1), (2)							4.90%							5.15%							5.39%
INTEREST EXPENSE TO EARNING ASSETS							0.71%							0.98%							1.30%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN(1), (2)							4.19%							4.17%							4.09%

44

Umpqua Holdings Corporation

(1) Non-covered, non-accrual loans and loans held for sale are included in the average balance.

(2) Tax-exempt income has been adjusted to a tax equivalent basis at a 35% tax rate. The amount of such adjustment was an addition to recorded income of approximately $4.3 million, $4.3 million, and $3.7 million for the years ended 2011, 2010 and 2009, respectively.

The following table sets forth a summary of the changes in tax equivalent net interest income due to changes in average asset and liability balances (volume) and changes in average rates (rate) for 2011 compared to 2010 and 2010 compared to 2009. Changes in tax equivalent interest income and expense, which are not attributable specifically to either volume or rate, are allocated proportionately between both variances.

Rate/Volume Analysis

(in thousands)

	2011 COMPARED TO 2010									2010 COMPARED TO 2009
	INCREASE (DECREASE) IN INTEREST INCOME AND EXPENSE DUE TO CHANGES IN									INCREASE (DECREASE) IN INTEREST INCOME AND EXPENSE DUE TO CHANGES IN
	VOLUME			RATE			TOTAL			VOLUME			RATE			TOTAL
INTEREST EARNING ASSETS:
Non-covered loans and leases	$	(1,983	)	$	(14,635	)	$	(16,618	)	$	(18,309	)	$	(566	)	$	(18,875	)
Covered loans and leases		2,836			9,363			12,199			73,812			—			73,812
Taxable securities		30,950			(12,555	)		18,395			21,009			(13,824	)		7,185
Non-taxable securities(1)		(203	)		43			(160	)		1,668			(81	)		1,587
Temporary investments and interest bearing deposits		(610	)		(23	)		(633	)		1,739			(42	)		1,697
Total(1)		30,990			(17,807	)		13,183			79,919			(14,513	)		65,406
INTEREST BEARING LIABILITIES:
Interest bearing checking and savings accounts		3,799			(14,784	)		(10,985	)		7,424			(8,133	)		(709	)
Time deposits		(1,816	)		(7,697	)		(9,513	)		10,694			(22,486	)		(11,792	)
Securities sold under agreements to repurchase and federal funds purchased		365			(343	)		22			(64	)		(99	)		(163	)
Term debt		(131	)		157			26			4,642			11			4,653
Junior subordinated debentures		(1	)		(60	)		(61	)		(293	)		(908	)		(1,201	)
Total		2,216			(22,727	)		(20,511	)		22,403			(31,615	)		(9,212	)
Net increase in net interest income(1)	$	28,774		$	4,920		$	33,694		$	57,516		$	17,102		$	74,618

(1) Tax exempt income has been adjusted to a tax equivalent basis at a 35% tax rate.

PROVISION FOR LOAN AND LEASE LOSSES

The provision for non-covered loan and lease losses was $46.2 million for 2011, compared to $113.7 million for 2010 and $209.1 million for 2009. As a percentage of average outstanding loans, the provision for loan losses recorded for 2011 was 0.81%, a decrease of 116 basis points from 2010 and a decrease of 262 basis points from 2009, respectively.

The decrease in the provision for loan and lease losses in 2011 as compared to 2010 and 2010 compared to 2009 is principally attributable to the declining levels of non-performing loans and the decreases in net charge-offs during the periods. The decrease in the provision for loan and lease losses is also attributable to a reduction in downgrades within the portfolio, an easing in the velocity of declining real estate values in our markets and the resulting impact on our commercial real estate and commercial construction portfolio and reflects continued improvement and stabilization of credit quality.

45

The Company recognizes the charge-off of impairment reserves on impaired loans in the period they arise for collateral dependent loans. Therefore, the non-covered, non-accrual loans of $80.6 million as of December 31, 2011 have already been written-down to their estimated fair value, less estimated costs to sell, and are expected to be resolved with no additional material loss, absent further decline in market prices. Depending on the characteristics of a loan, the fair value of collateral is estimated by obtaining external appraisals.

The provision for non-covered loan and lease losses is based on management’s evaluation of inherent risks in the loan portfolio and a corresponding analysis of the allowance for loan and lease losses. Additional discussion on loan quality and the allowance for loan and lease losses is provided under the heading Asset Quality and Non-Performing Assets below.

The provision for covered loan and lease losses for the year ended December 31, 2011 was $16.1 million, compared to $5.2 million for 2010. Provisions for covered loan and leases are recognized subsequent to acquisition to the extent it is probable we will be unable to collect all cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimates after acquisition, considering both the timing and amount of those expected cash flows. Provisions may be required when determined losses of unpaid principal incurred exceed previous loss expectations to-date, or future cash flows previously expected to be collectible are no longer probable of collection. Provisions for covered loan and lease losses, including amounts advanced subsequent to acquisition, are not reflected in the allowance for non-covered loan and lease losses, rather as a valuation allowance netted against the carrying value of the covered loan and lease balance accounted for under ASC 310-30, in accordance with the guidance.

NON-INTEREST INCOME

Non-interest income in 2011 was $84.1 million, an increase of $8.2 million, or 11%, compared to 2010. Non-interest income in 2010 was $75.9 million, an increase of $2.4 million, or 3%, compared to 2009. The following table presents the key components of non-interest income for years ended December 31, 2011, 2010 and 2009:

Non-Interest Income

Years Ended December 31,

(dollars in thousands)

	2011 compared to 2010											2010 compared to 2009
	2011			2010			Change Amount			Change Percent		2010			2009			Change Amount			Change Percent
Service charges on deposit accounts	$	33,096		$	34,874		$	(1,778	)		-5%	$	34,874		$	32,957		$	1,917			6%
Brokerage commissions and fees		12,787			11,661			1,126			10%		11,661			7,597			4,064			53%
Mortgage banking revenue, net		26,550			21,214			5,336			25%		21,214			18,688			2,526			14%
Gain (loss) on investment securities, net		7,376			1,912			5,464			286%		1,912			(1,677	)		3,589			-214%
(Loss) gain on junior subordinated debentures carried at fair value		(2,197	)		4,980			(7,177	)		-144%		4,980			6,482			(1,502	)		-23%
Bargain purchase gain on acquisition		—			6,437			(6,437	)		-100%		6,437			—			6,437			100%
Change in FDIC indemnification asset		(6,168	)		(16,445	)		10,277			-62%		(16,445	)		—			(16,445	)		100%
Other income		12,674			11,271			1,403			12%		11,271			9,469			1,802			19%
Total	$	84,118		$	75,904		$	8,214			11%	$	75,904		$	73,516		$	2,388			3%

The decrease in deposit service charges in 2011 compared to 2010 is principally attributable to reductions in non-sufficient funds and overdraft fee income from regulatory reform changes, which took place in the third quarter of 2010, offset by increases in ATM income and increased other deposit account service charges. The increase in deposit service charges in 2010 compared to 2009 is principally attributable to increased non-sufficient funds and overdraft fee income due to higher average overdraft balances and due to increased deposit service charges related to the deposits acquired in the Rainier, Evergreen and Nevada Security acquisitions, offset by reductions in non-sufficient funds and overdraft fee income from regulatory reform changes, which took place in the third quarter of 2010.

46

Umpqua Holdings Corporation

Brokerage commissions and fees in 2011 increased 10%, primarily due to the increase in managed account fees at Umpqua Investments. In 2011, assets under management at Umpqua Investments, a part of the Wealth Management segment, increased to $2.09 billion as compared to $2.06 billion at December 31, 2010. Brokerage commissions and fees in 2010 increased 53% as compared to 2009 as a result of the increase in assets under management due to the new leadership’s ability to recruit new brokers in 2009.

Mortgage banking revenue in 2011 increased due to an increase in purchase and refinancing activity, compared to 2010. Closed mortgage volume for 2011 was $994.5 million, representing a 27% increase over 2010 production. Closed mortgage volume for 2010 was $785.4 million, representing a 4% increase over 2009 production. The continuing low mortgage interest rate environment has led to elevated levels of refinance activity, contributing to a $3.0 million decline in fair value on the mortgage servicing right (“MSR”) asset in 2011, compared to a $3.9 million decline in fair value recognized in 2010. As of December 31, 2011, the Company serviced $2.0 billion of mortgage loans for others, and the related mortgage servicing right asset is valued at $18.2 million, or 0.90% of the total serviced portfolio principal balance.

The net gain on investment securities recognized in 2011 represents the realized gain on sale of investment securities of $7.7 million offset by an other-than-temporary impairment (“OTTI”) charge of $359,000. During the year, the Company sold longer duration investment securities in order to reduce the price risk of the securities portfolio and hedge the potential future adverse effects of rising interest rates on accumulated other comprehensive income if interest rates were to significantly increase in future periods. The net gain on investment securities recognized in 2010 represents the realized gain on sale of investment securities of $2.3 million offset by an OTTI charge of $414,000. The net gain on investment securities recognized in 2009 represents an OTTI charge of $10.6 million, partially offset by the realized gain on sale of investment securities of $8.9 million. The OTTI charge recognized in earnings for all periods primarily related to held to maturity non-agency collateralized mortgage obligations, and the amount recognized in earnings represents our estimate of the credit loss component of the total impairments. Additional discussion on the OTTI charges and gain on sale of investment securities are provided in Note 4 of the Notes to Consolidated Financial Statements and under the heading Investment Securities.

A loss of $2.2 million recognized in 2011 as compared to a gain of $5.0 million in 2010 represents the change of fair value on the junior subordinated debentures recorded at fair value. Absent future changes to the significant inputs utilized in the discounted cash flow model used to measure the fair value of these instruments, the cumulative discount for each junior subordinated debenture will reverse over time, ultimately returning the carrying values of these instruments to their notional value at their expected redemption dates. This will result in recognizing losses on junior subordinated debentures carried at fair value on a quarterly basis within non-interest income. The decrease in the gain recognized from 2010 to the loss recognized in 2011 and the decrease in the gain recognized from 2009 to 2010 primarily resulted from the widening of the credit risk adjusted spread over the contractual rate of each junior subordinated debenture measured at fair value. Additional information on the junior subordinated debentures carried at fair value is included in Note 18 of the Notes to Consolidated Financial Statements and under the heading Junior Subordinated Debentures.

A bargain purchase gain of $6.4 million recognized in 2010 represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed in the Evergreen acquisition. Additional information on the bargain purchase gain is included in Note 2 of the Notes to Consolidated Financial Statements and under the heading Business Combinations.

The change in FDIC indemnification asset represents a change in cash flows expected to be recoverable under the loss-share agreements entered into with the FDIC in connection with the Evergreen, Rainier, and Nevada Security FDIC-assisted acquisitions. Additional information on the FDIC indemnification asset is included in Note 7 of the Notes to Consolidated Financial Statements and under the heading Covered Assets below.

Other income increased in 2011 over 2010 by $1.4 million, primarily attributable to the initiation of an interest rate swap program with commercial banking customers to facilitate their risk management strategies, offset by various non-recurring sundry recoveries recognized in 2010. Other income increased in 2010 over 2009 by $1.8 million, primarily attributable to various non-recurring sundry recoveries.

47

NON-INTEREST EXPENSE

Non-interest expense for 2011 was $339.0 million, an increase of $21.2 million or 7% compared to 2010. Non-interest expense for 2010 was $317.7 million, a decrease of $61.7 million or 16% compared to 2009. The following table presents the key elements of non-interest expense for the years ended December 31, 2011, 2010 and 2009.

Non-Interest Expense

Years Ended December 31,

(dollars in thousands)

	2011 compared to 2010										2010 compared to 2009
	2011		2010			Change Amount			Change Percent		2010			2009		Change Amount			Change Percent
Salaries and employee benefits	$	179,480	$	162,875		$	16,605			10%	$	162,875		$	126,850	$	36,025			28%
Net occupancy and equipment		51,284		45,940			5,344			12%		45,940			39,673		6,267			16%
Communications		11,214		10,464			750			7%		10,464			7,671		2,793			36%
Marketing		6,138		6,225			(87	)		-1%		6,225			4,529		1,696			37%
Services		24,170		22,576			1,594			7%		22,576			21,918		658			3%
Supplies		2,824		3,998			(1,174	)		-29%		3,998			3,257		741			23%
FDIC assessments		10,768		15,095			(4,327	)		-29%		15,095			15,825		(730	)		-5%
Net loss on non-covered other real estate owned		10,690		8,097			2,593			32%		8,097			23,204		(15,107	)		-65%
Net loss (gain) on covered other real estate owned		7,481		(2,172	)		9,653			-444%		(2,172	)		—		(2,172	)		NM
Intangible amortization and impairment		4,948		5,389			(441	)		-8%		5,389			6,165		(776	)		-13%
Goodwill impairment		—		—			—			—		—			111,952		(111,952	)		NM
Merger related expenses		360		6,675			(6,315	)		NM		6,675			273		6,402			NM
Other expenses		29,614		32,576			(2,962	)		-9%		32,576			18,086		14,490			80%
Total	$	338,971	$	317,738		$	21,233			7%	$	317,738		$	379,403	$	(61,665	)		-16%

NM – Not meaningful

Management believes there are several categories of non-interest expense which are outside of the control of the Company or depend on changes in market values, including FDIC deposit insurance assessments, gain or loss on other real estate owned, as well as infrequently occurring expenses such as merger related costs and goodwill impairments. Excluding the impact of these non-controllable, valuation related or infrequently occurring items, non-interest expense increased $19.6 million, or 7%, in 2011 over 2010. The increase primarily relates to increased salary and benefits expense related to mortgage and commercial banking loan production and the phase in costs related to ten new stores opened in the second half of 2011. Excluding the impact of these non-controllable or infrequently occurring items, non-interest expense increased $61.9 million, or 27%, in 2010 over 2009, in line with the 24% growth in assets in 2010 and reflecting the additional costs of acquired institutions during that year.

Of the $16.6 million increase in total salaries and employee benefits expense in 2011 compared to 2010, approximately $8.4 million of the increase is due to mortgage and commercial banking production in the current year. The remainder primarily results from the increase in by 70 full-time equivalent employees throughout the Company to support growth initiatives. Of the $36.0 million increase in total salaries and employee benefits expense in 2010 compared to 2009, approximately $13.8 million of the increase is the result of the FDIC-assisted acquisition of Rainier, Evergreen, and Nevada Security, respectively, $1.2 million is the result of variable mortgage compensation based on increased volume and revenue, $724,000 is a result of reduced loan origination activity related to lower customer demand, resulting in a reduced offset to compensation expense for deferred loan costs. The remainder primarily results from the increase in employees (not through acquisition) by 108 in full-time equivalents in 2010.

48

Umpqua Holdings Corporation

Net occupancy and equipment expense continues to increase primarily as a result of the growth in the number of our Company’s locations. The growth in 2011 is the result of the cost of the addition of ten de novo Community Banking locations, one Mortgage Office and an administrative facility in Hillsboro, Oregon. The growth in 2010 is the result of the cost of operating new locations through the FDIC-assisted acquisition of Rainier, Evergreen and Nevada Security, respectively, the addition of five de novo Community Banking locations, in Portland, Oregon, Seattle, Washington, and Santa Rosa, California, the opening of one new Commercial Banking Center in Walnut Creek, California and two Mortgage Offices in Tigard, Oregon, and Longview, Washington. Additionally, in 2010, we remodeled 48 stores, including locations acquired.

Communications costs increased in 2011 compared to 2010 primarily due to increased data processing cost as a result of the Company’s continued growth and expansion. Marketing and supplies expenses decreased as compared to 2010 due to cost containment efforts and a reduced spend associated with FDIC assumptions and expansion into new markets in 2010. Services expense increased as compared to 2010 primarily due to increased legal and professional fees. Communications, marketing and supplies fluctuated in 2010 as compared to 2009 as a result of normal operations and the FDIC assumptions.

The decrease in FDIC assessments in 2011 as compared to 2010 resulted from the adoption by the FDIC of a final rule which changed the assessment rate and the assessment base (from a domestic deposit base to a scorecard based assessment system for banks with more than $10 billion in assets), effective in the second quarter of 2011. The decrease in FDIC assessments in 2010 as compared to 2009 resulted from the one-time $4.0 million special assessment incurred in the second quarter of 2009, partially offset by the industry wide increase in the assessment rate, organic deposit growth, and deposit growth resulting from the FDIC-assisted acquisitions. Additional discussion on FDIC insurance assessments is provided in Item 1 Business above, under the heading Federal Deposit Insurance.

The economic downturn and depressed real estate values continued to detrimentally affect our loan portfolio and has led to a continued elevated level of foreclosures on related properties and movement of the properties into other real estate owned (“OREO”). In 2011, declines in the market values of these properties after foreclosure have resulted in additional losses on the sale of the properties or by valuation adjustments. As a result, during 2011, the Company recognized losses on sale of non-covered OREO of $1.7 million and non-covered valuation adjustments of $8.9 million and net gains on sale of covered OREO properties of $1.2 million and valuation adjustments of covered OREO properties of $8.7 million. During 2010, the Company recognized losses on sale of non-covered OREO of $4.0 million and non-covered valuation adjustments of $4.1 million and net gains on sale of covered OREO properties of $4.1 million and valuation adjustments of covered OREO properties of $1.9 million. During 2009, the Company recognized losses on sale of non-covered OREO of $11.0 million and non-covered valuation adjustments of $12.2 million. Gains on sale of covered OREO represents proceeds received in excess of their estimated acquisition date fair values. As the estimated credit losses realized on these properties were less than originally anticipated at acquisition date, there is a corresponding decrease in non-interest income within the Change in FDIC indemnification asset line item representing the reduction of anticipated covered credit losses. Additional discussion regarding our procedures to determine and recognize valuation adjustments on other real estate owned is provided under the heading Asset Quality and Non-Performing Assets below.

The decrease in intangible amortization in 2011 as compared to 2010 results primarily from the run-off of intangible assets from prior years completing their scheduled amortization. The decrease in intangible amortization in 2010 as compared to 2009 results primarily from an $804,000 impairment recognized in the fourth quarter of 2009 related to the merchant servicing portfolio obtained through a prior acquisition, partially offset by the run-off of intangible assets in 2009 that were amortized on an accelerated basis.

The goodwill impairment charge incurred in 2009 relates to the Community Banking operating segment. This charge primarily resulted from a decline in the fair value of the Community Banking reporting unit, which corresponded to the decline in the Company’s market capitalization and the banking industry in general, and its effect on the implied fair value of the goodwill. Discussion related to the goodwill impairment charge is provided in Note 9 of the Notes to Consolidated Financial Statements and under the heading Goodwill and Other Intangible Assets below.

We incur significant expenses in connection with the completion and integration of bank acquisitions that are not capitalizable. Classification of expenses as merger-related is done in accordance with the provisions of a Board-approved policy. The

49

following table presents the merger-related expenses by major category for the year ended December 31, 2011, 2010 and 2009. The merger-related expenses incurred in 2010 and 2011 relate to the FDIC-assisted acquisitions of Evergreen, Rainier, and Nevada Security. The merger-related expenses incurred in 2009 relate to the FDIC-assisted purchase and assumption of certain assets and liabilities of the Bank of Clark County. We do not expect to incur any additional significant merger-related expenses in connection with the Evergreen, Rainier, Nevada Security, Bank of Clark County or any other previous acquisition.

Merger-Related Expense

Years Ended December 31,

(in thousands)

	2011		2010		2009
Professional fees	$	173	$	2,984	$	143
Compensation and relocation		—		962		39
Communications		—		330		61
Premises and equipment		82		630		2
Travel		11		710		—
Other		94		1,059		28
Total	$	360	$	6,675	$	273

Other non-interest expense decreased in 2011 over 2010 primarily as a result of non-recurring settlement costs recognized in 2010 partially offset by increased expenses related to problem covered and non-covered loans and covered and non-covered other real estate owned as well as various other growth initiatives underway. Other non-interest expense increased in 2010 over 2009 primarily as a result of expenses related to problem covered and non-covered loans and covered and non-covered other real estate owned as well as various other growth initiatives underway.

INCOME TAXES

Our consolidated effective tax rate as a percentage of pre-tax income for 2011 was 33.0%, compared to 17.0% for 2010 and 21.0% for 2009. The effective tax rates were below the federal statutory rate of 35% and the apportioned state rate of 4.1% (net of the federal tax benefit) principally because of the non-deductible impairment loss on goodwill (for 2009), non-taxable income arising from bank-owned life insurance, income on tax-exempt investment securities, tax credits arising from low income housing investments, Business Energy tax credits and exemptions related to loans and hiring in designated enterprise zones. The income tax expense from income taxes in 2011 is a result of the operating income recognized in the period.

Additional information on income taxes is provided in Note 13 of the Notes to Consolidated Financial Statements in Item 8 below.

FINANCIAL CONDITION

INVESTMENT SECURITIES

The composition of our investment securities portfolio reflects management’s investment strategy of maintaining an appropriate level of liquidity while providing a relatively stable source of interest income. The investment securities portfolio also mitigates interest rate and credit risk inherent in the loan portfolio, while providing a vehicle for the investment of available funds, a source of liquidity (by pledging as collateral or through repurchase agreements) and collateral for certain public funds deposits.

Trading securities consist of securities held in inventory by Umpqua Investments for sale to its clients and securities invested in trust for the benefit of former employees of acquired institutions as required by agreements. Trading securities were $2.3 million at December 31, 2011, as compared to $3.0 million at December 31, 2010. The decrease is principally attributable to a decrease of $985,000 in Umpqua Investments’ inventory of trading securities, offset by increases in the fair market value of investments securities invested for the benefit of former employees and contributions made to supplemental retirement plans for the benefit of certain executives of $271,000.

50

Umpqua Holdings Corporation

Investment securities available for sale increased $249.4 million to $3.2 billion as of December 31, 2011, as compared to December 31, 2010. This increase is principally attributable to purchases of $1.2 billion of investment securities available for sale, which were partially offset by paydowns of $927.3 million and amortization of net purchase price premiums of $36.1 million.

Investment securities held to maturity were $4.7 million as of December 31, 2011, as compared to $4.8 million at December 31, 2010. This decrease is principally attributable to paydowns and maturities of investment securities held to maturity of $1.7 million, offset by purchases of $1.6 million.

The following table presents the available for sale and held to maturity investment securities portfolio by major type as of December 31 for each of the last three years:

Summary of Investment Securities

As of December 31,

(in thousands)

	December 31,
	2011		2010		2009
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	118,465	$	118,789	$	11,794
Obligations of states and political subdivisions		253,553		216,726		211,825
Residential mortgage-backed securities and collateralized mortgage obligations		2,794,355		2,581,504		1,569,849
Other debt securities		134		152		159
Investments in mutual funds and other equity securities		2,071		2,009		1,989
	$	3,168,578	$	2,919,180	$	1,795,616
HELD TO MATURITY:
Obligations of states and political subdivisions	$	1,335	$	2,370	$	3,216
Residential mortgage-backed securities and collateralized mortgage obligations		3,379		2,392		2,845
	$	4,714	$	4,762	$	6,061

51

The following table presents information regarding the amortized cost, fair value, average yield and maturity structure of the investment portfolio at December 31, 2011.

Investment Securities Composition*

December 31, 2011

(dollars in thousands)

	Amortized Cost		Fair Value		Average Yield
U.S. TREASURY AND AGENCIES
One year or less	$	71,668	$	72,083		1.14%
One to five years		45,347		46,134		1.56%
Five to ten years		217		248		3.68%
		117,232		118,465		1.31%
OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS
One year or less		21,276		21,514		5.45%
One to five years		75,980		80,535		5.62%
Five to ten years		138,081		149,221		5.71%
Over ten years		3,300		3,620		7.96%
		238,637		254,890		5.69%
OTHER DEBT SECURITIES
Over ten years		151		134		6.29%
Serial maturities		2,758,532		2,797,777		2.67%
Other investment securities		1,959		2,071		3.67%
Total securities	$	3,116,511	$	3,173,337		2.86%

*Weighted average yields are stated on a federal tax-equivalent basis of 35%. Weighted average yields for available for sale investments have been calculated on an amortized cost basis.

The mortgage-related securities in “Serial maturities” in the table above include both pooled mortgage-backed issues and high-quality collaterized mortgage obligation structures, with an average duration of 2.7 years. These mortgage-related securities provide yield spread to U.S. Treasury or agency securities; however, the cash flows arising from them can be volatile due to refinancing of the underlying mortgage loans.

The equity security in “Other investment securities” in the table above at December 31, 2011 principally represents an investment in a Community Reinvestment Act investment fund comprised largely of mortgage-backed securities, although funds may also invest in municipal bonds, certificates of deposit, repurchase agreements, or securities issued by other investment companies.

We review investment securities on an ongoing basis for the presence of other-than-temporary impairment (“OTTI”) or permanent impairment, taking into consideration current market conditions, fair value in relationship to cost, extent and nature of the change in fair value, issuer rating changes and trends, whether we intend to sell a security or if it is likely that we will be required to sell the security before recovery of our amortized cost basis of the investment, which may be maturity, and other factors.

Prior to the second quarter of 2009, the Company would assess an OTTI or permanent impairment based on the nature of the decline and whether the Company had the ability and intent to hold the investments until a market price recovery. If the Company determined a security to be other-than-temporarily or permanently impaired, the full amount of impairment would be recognized through earnings in its entirety. New guidance related to the recognition and presentation of OTTI of debt securities became effective in the second quarter of 2009. Rather than asserting whether a company has the ability and intent to

52

Umpqua Holdings Corporation

hold an investment until a market price recovery, a company must consider whether they intend to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity.

For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the amount recorded in OCI increases the carrying value of the investment and does not affect earnings. If there is an indication of additional credit losses the security is reevaluated accordingly to the procedures described above.

Prior to the Company’s adoption of the new guidance related to the recognition and presentation of OTTI of debt securities which became effective in the second quarter of 2009, the Company recorded a $2.1 million OTTI charge in the three months ended March 31, 2009. This charge related to three non-agency collateralized mortgage obligations carried as held to maturity for which the default rates and loss severities of the underlying collateral and credit coverage ratios of the security indicated that it was probable that credit losses were expected to occur. Upon adoption of the new OTTI guidance in the second quarter of 2009, the Company analyzed these securities as well as other securities where OTTI had been previously recognized, and determined that as of the adoption date such losses were credit related. As such, there was no cumulative effect adjustment to the opening balance of retained earnings or a corresponding adjustment to accumulated OCI.

The following table presents the OTTI losses for the years ended December 31, 2011, 2010, and 2009.

	2011				2010				2009
	Held To Maturity		Available For Sale		Held To Maturity		Available For Sale		Held To Maturity			Available For Sale
Total other-than-temporary impairment losses	$	190	$	—	$	93	$	—	$	12,317		$	239
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income(1)		169		—		321		—		(1,983	)		—
Net impairment losses recognized in earnings(2)	$	359	$	—	$	414	$	—	$	10,334		$	239

(1) Represents other-than-temporary impairment losses related to all other factors.

(2) Represents other-than-temporary impairment losses related to credit losses.

The OTTI recognized on investment securities held to maturity primarily relates to 29 non-agency collateralized mortgage obligations for all periods presented. Each of these securities holds various levels of credit subordination. The underlying mortgage loans of these securities were originated from 2003 through 2007. At origination, the weighted average loan-to-value of the underlying mortgages was 69%; the underlying borrowers had weighted average FICO scores of 731, and 59% were limited documentation loans. These securities were valued by third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. We estimated the cash flows of the underlying collateral for each security considering credit, interest and prepayment risk models that incorporate management’s estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as loan interest rates, geographic location, borrower characteristics and vintage, and historical experience. We then used a third party to obtain information about the structure of each security, including

53

subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows were then discounted at the interest rate used to recognize interest income on each security. We review the actual collateral performance of these securities on a quarterly basis and update the inputs as appropriate to determine the projected cash flows.

The following table presents a summary of the significant inputs utilized to measure management’s estimate of the credit loss component on these non-agency residential collateralized mortgage obligations as of December 31, 2011 and 2010:

	2011						2010
	Range				Weighted Average		Range				Weighted Average
	Minimum		Maximum				Minimum		Maximum
Constant prepayment rate		10.0%		20.0%		14.0%		5.0%		20.0%		14.9%
Collateral default rate		5.0%		60.0%		22.6%		5.0%		15.0%		10.6%
Loss severity		27.5%		50.0%		32.5%		25.0%		55.0%		37.9%

Gross unrealized losses in the available for sale investment portfolio was $4.0 million at December 31, 2011. This consisted primarily of unrealized losses on residential mortgage-backed securities and collateralized mortgage obligations of $4.0 million. The unrealized losses were primarily caused by interest rate increases subsequent to the purchase of the securities, and not credit quality. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral. Additional information about the investment securities portfolio is provided in Note 4 of the Notes to Consolidated Financial Statements in Item 8 below.

RESTRICTED EQUITY SECURITIES

Restricted equity securities were $32.6 million at December 31, 2011 and $34.5 million at December 31, 2010. The decrease of $1.9 million is attributable to stock redemption by the Federal Home Loan Bank (“FHLB”) of San Francisco. Of the $32.6 million at December 31, 2011, $28.6 million and $2.7 million represent the Bank’s investment in the Federal Home Loan Banks (“FHLB”) of Seattle and San Francisco, respectively.

FHLB stock is carried at par and does not have a readily determinable fair value. Ownership of FHLB stock is restricted to the FHLB and member institutions, and can only be purchased and redeemed at par. The remaining restricted equity securities primarily represent investments in Pacific Coast Bankers’ Bancshares stock.

Although as of December 31, 2011, the FHLB of Seattle complies with all of its regulatory requirements (including the risk-based capital requirement), it remains classified as “undercapitalized” by the Federal Housing Finance Agency (“Finance Agency”). Under Finance Agency regulations, a FHLB that fails to meet any regulatory capital requirement may not declare a dividend or redeem or repurchase capital stock in excess of what is required for members’ current loans.

Management periodically evaluates FHLB stock for other-than-temporary or permanent impairment. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of the cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount of the FHLB and the length of time this situation has persisted, (2) the compliance with the minimum financial metrics required as part of the Consent Arrangement the bank has with the Finance Agency, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB, and (4) the liquidity position of the FHLB.

Moody’s Investors Services rating of the FHLB of Seattle as Aaa was confirmed in August 2011, but a negative outlook was assigned as Moody’s revised the rating outlook to negative for U.S. government debt and all issuers Moody’s considers directly-linked to the U.S. government. Standard and Poors’ rating is AA+, but it also issued a negative outlook with the action reflecting the downgrade of the long-term sovereign credit rating of the U.S. in 2011. Based on the above, the Company has determined there is not an other-than-temporary impairment on the FHLB stock investment as of December 31, 2011.

54

Umpqua Holdings Corporation

LOANS AND LEASES

Non-covered loans and leases

Total non-covered loans and leases outstanding at December 31, 2011 were $5.9 billion, an increase of $229.1 million, or 4.0%, from year-end 2010. This increase is principally attributable to non-covered net loan originations of $336.9 million during the period and covered loans transferred to non-covered loans of $12.3 million, offset by charge-offs of $65.1 million, transfers to other real estate owned of $47.4 million, and sales of non-covered loans sold of $11.2 million.

The Bank provides a wide variety of credit services to its customers, including construction loans, commercial lines of credit, secured and unsecured commercial loans, commercial real estate loans, residential mortgage loans, home equity credit lines, consumer loans and commercial leases. Loans are principally made on a secured basis to customers who reside, own property or operate businesses within the Bank’s principal market area.

The following table presents the composition of the non-covered loan portfolio as of December 31 for each of the last five years.

Non-covered Loan Portfolio Composition

As of December 31,

(dollars in thousands)

	2011					2010					2009					2008					2007
	Amount			Percentage		Amount			Percentage		Amount			Percentage		Amount			Percentage		Amount			Percentage
Commercial real estate	$	3,813,434			64.8%	$	3,879,102			68.5%	$	4,115,593			68.6%	$	4,139,289			67.5%	$	4,187,819			69.2%
Commercial		1,458,765			24.8%		1,256,872			22.2%		1,390,491			23.2%		1,503,400			24.5%		1,438,505			23.8%
Residential		588,119			10.0%		501,001			8.9%		468,486			7.8%		465,361			7.6%		404,900			6.6%
Consumer & other		38,860			0.6%		33,043			0.6%		36,098			0.6%		34,774			0.6%		35,700			0.6%
Deferred loan fees, net		(11,080	)		-0.2%		(11,031	)		-0.2%		(11,401	)		-0.2%		(11,450	)		-0.2%		(11,289	)		-0.2%
Total loans and leases	$	5,888,098			100.0%	$	5,658,987			100.0%	$	5,999,267			100.0%	$	6,131,374			100.0%	$	6,055,635			100.0%

The following table presents the concentration distribution of our non-covered loan portfolio by major type:

Non-Covered Loan Concentrations

As of December 31, 2011 and 2010

(dollars in thousands)

	2011					2010
	Amount			Percentage		Amount			Percentage
Commercial real estate
Term & multifamily	$	3,558,295			60.5%	$	3,483,475			61.6%
Construction & development		165,066			2.8%		247,814			4.4%
Residential development		90,073			1.5%		147,813			2.6%
Commercial
Term		625,766			10.6%		509,453			9.0%
LOC & other		832,999			14.1%		747,419			13.2%
Residential
Mortgage		315,927			5.4%		222,416			3.9%
Home equity loans & lines		272,192			4.6%		278,585			4.9%
Consumer & other		38,860			0.7%		33,043			0.6%
Deferred loan fees, net		(11,080	)		-0.2%		(11,031	)		-0.2%
Total	$	5,888,098			100.0%	$	5,658,987			100.0%

55

The following table presents the maturity distribution of our non-covered loan portfolios and the sensitivity of these loans to changes in interest rates as of December 31, 2011:

Maturities and Sensitivities of Non-covered Loans to Changes in Interest Rates

(in thousands)

	By Maturity								Loans Over One Year by Rate Sensitivity
	One Year or Less		One Through Five Years		Over Five Years		Total		Fixed Rate		Floating Rate
Commercial real estate	$	406,360	$	1,388,399	$	2,018,675	$	3,813,434	$	707,080	$	2,699,994
Commercial(1)	$	702,814	$	468,393	$	257,945	$	1,429,152	$	439,414	$	286,924

(1) Excludes the lease portfolio.

In order to assist with understanding the concentrations and risks associated with our portfolio, we are providing several additional tables to provide details of the most significant classes of the Company’s non-covered loan portfolio. The classification of non-covered loan balances are presented in accordance with how management monitors and manages the risks of the non-covered loan portfolio, including how the Company applies its allowance for non-covered loan and lease losses methodology.

56

Umpqua Holdings Corporation

The following table presents a distribution of the non-covered commercial real estate term & multifamily portfolio by type and region as of December 31, 2011 and December 31, 2010.

Non-Covered Commercial Real Estate Term & Multifamily Portfolio by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total		December 31, 2010
Non-owner occupied:
Commercial building	$	137,362	$	4,938	$	29,425	$	51,557	$	56,891	$	127,825	$	407,998	$	390,783
Medical office		87,420		217		8,991		—		8,683		15,614		120,925		112,856
Professional office		152,048		4,980		51,580		19,961		105,690		59,489		393,748		417,969
Storage		40,786		144		15,899		4,044		11,261		45,352		117,486		127,285
Multi-family		69,555		485		13,477		9,721		17,978		40,599		151,815		116,591
Resort		124		—		666		—		—		392		1,182		6,111
Retail		180,805		6,040		30,990		12,309		167,227		64,638		462,009		468,482
Residential		28,773		96		7,711		4,225		4,534		20,377		65,716		74,400
Farmland & agricultural		2,228		11		—		—		—		16,324		18,563		23,966
Apartments		67,575		—		9,134		15,557		17,857		15,833		125,956		114,797
Assisted living		111,688		—		56,978		190		10,310		22,359		201,525		211,191
Hotel & motel		60,842		—		817		690		17,294		41,804		121,447		129,593
Industrial		42,674		2,301		4,717		5,339		29,804		22,006		106,841		92,237
RV park		33,425		—		18,934		—		3,023		6,073		61,455		56,654
Warehouse		10,107		—		—		—		617		2,196		12,920		13,115
Other		18,591		245		1,057		302		1,517		4,621		26,333		43,635
Total	$	1,044,003	$	19,457	$	250,376	$	123,895	$	452,686	$	505,502	$	2,395,919	$	2,399,665
Owner occupied:
Commercial building	$	198,831	$	2,925	$	36,580	$	21,835	$	63,927	$	130,793	$	454,891	$	389,809
Medical office		95,204		3,593		24,664		930		8,872		26,623		159,886		149,151
Professional office		73,623		2,190		10,351		2,197		19,953		21,008		129,322		115,673
Storage		—		—		—		—		—		—		—		—
Multi-family		758		—		42		3,740		—		134		4,674		4,143
Resort		8,730		—		4,201		—		2,771		780		16,482		13,930
Retail		42,710		620		12,280		3,568		42,739		49,647		151,564		159,941
Residential		3,709		142		2,146		—		771		2,917		9,685		12,481
Farmland & agricultural		7,002		—		1,252		1,825		—		51,936		62,015		58,347
Apartments		418		—		694		—		—		29		1,141		2,405
Assisted living		—		—		—		—		—		—		—		—
Hotel & motel		—		—		—		—		—		—		—		—
Industrial		53,584		637		11,744		7,280		11,097		35,361		119,703		122,584
RV park		663		—		951		—		—		1,812		3,426		4,606
Warehouse		9,857		—		607		—		—		6,489		16,953		17,956
Other		29,617		—		130		943		—		1,944		32,634		32,784
Total	$	524,706	$	10,107	$	105,642	$	42,318	$	150,130	$	329,473	$	1,162,376	$	1,083,810
Total	$	1,568,709	$	29,564	$	356,018	$	166,213	$	602,816	$	834,975	$	3,558,295	$	3,483,475

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Total non-owner occupied	$	1,047,254	$	22,688	$	276,514	$	110,451	$	490,052	$	452,706	$	2,399,665
Total owner occupied		477,752		13,117		96,299		33,451		161,894		301,297		1,083,810
Total	$	1,525,006	$	35,805	$	372,813	$	143,902	$	651,946	$	754,003	$	3,483,475

57

The following table presents a distribution of the non-covered term commercial real estate portfolio by type and year of origination as of December 31, 2011:

Non-Covered Commercial Real Estate Term & Multifamily Portfolio by Type and Year of Origination

(in thousands)

	Prior to 2001		2001 - 2005		2006 - 2007		2008 - 2009		2010 - 2011		Total
Non-owner occupied:
Commercial building	$	8,000	$	89,342	$	80,574	$	136,106	$	93,976	$	407,998
Medical office		2,516		53,002		12,393		32,832		20,182		120,925
Professional office		11,909		179,541		57,218		72,878		72,202		393,748
Storage		2,401		44,234		28,801		18,754		23,296		117,486
Multi-family		2,701		30,432		24,269		31,551		62,862		151,815
Resort		392		124		—		666		—		1,182
Retail		12,269		212,146		110,638		74,826		52,130		462,009
Residential		1,099		10,953		16,753		16,574		20,337		65,716
Farmland & agricultural		1,310		3,240		1,304		10,099		2,610		18,563
Apartments		911		21,443		20,694		35,808		47,100		125,956
Assisted living		12,539		70,761		45,015		41,645		31,565		201,525
Hotel & motel		16,235		51,303		12,200		37,788		3,921		121,447
Industrial		2,510		58,166		11,396		6,251		28,518		106,841
RV park		3,043		19,540		13,000		11,087		14,785		61,455
Warehouse		987		8,406		3,527		—		—		12,920
Other		67		8,550		10,046		5,504		2,166		26,333
Total	$	78,889	$	861,183	$	447,828	$	532,369	$	475,650	$	2,395,919
Owner occupied:
Commercial building	$	14,206	$	84,620	$	112,144	$	141,000	$	102,921	$	454,891
Medical office		3,474		21,532		25,308		88,381		21,191		159,886
Professional office		3,914		46,627		30,724		21,054		27,003		129,322
Storage		—		—		—		—		—		—
Multi-family		158		1,457		—		—		3,059		4,674
Resort		690		9,603		—		2,841		3,348		16,482
Retail		7,391		44,487		69,090		22,099		8,497		151,564
Residential		448		4,500		2,971		1,033		733		9,685
Farmland & agricultural		2,555		3,502		11,441		20,473		24,044		62,015
Apartments		29		—		694		—		418		1,141
Assisted living		—		—		—		—		—		—
Hotel & motel		—		—		—		—		—		—
Industrial		3,597		47,526		14,767		24,907		28,906		119,703
RV park		788		1,190		299		144		1,005		3,426
Warehouse		103		8,248		3,193		4,888		521		16,953
Other		—		4,975		25,690		1,019		950		32,634
Total	$	37,353	$	278,267	$	296,321	$	327,839	$	222,596	$	1,162,376
Total	$	116,242	$	1,139,450	$	744,149	$	860,208	$	698,246	$	3,558,295

58

Umpqua Holdings Corporation

The following table presents a distribution of the non-covered term commercial real estate portfolio by type and year of maturity as of December 31, 2011:

Non-Covered Commercial Real Estate Term & Multifamily Portfolio by Type and Year of Maturity

(in thousands)

	December 31, 2011
	2012		2013		2014 - 2015		2016 - 2017		2018 - 2022		2023 & Later		Total
Non-owner
Commercial building	$	31,552	$	33,706	$	65,672	$	87,428	$	174,157	$	15,483	$	407,998
Medical office		10,510		5,940		10,610		20,702		62,425		10,738		120,925
Professional office		26,415		54,669		84,886		92,952		122,141		12,685		393,748
Storage		481		17,367		21,487		22,705		53,867		1,579		117,486
Multi-family		4,175		6,733		28,182		22,799		82,717		7,209		151,815
Resort		—		666		516		—		—		—		1,182
Retail		23,093		38,843		134,311		132,076		127,023		6,663		462,009
Residential		15,402		7,411		7,987		10,649		18,076		6,191		65,716
Farmland & agricultural		459		1,172		6,726		2,123		4,459		3,624		18,563
Apartments		4,456		5,902		22,338		15,113		76,330		1,817		125,956
Assisted living		27,420		4,464		31,014		60,355		76,167		2,105		201,525
Hotel & motel		7,399		8,084		37,476		15,548		40,438		12,502		121,447
Industrial		5,633		6,529		25,597		31,537		28,366		9,179		106,841
RV park		638		4,202		13,463		10,057		30,327		2,768		61,455
Warehouse		1,008		4,352		2,082		1,188		3,273		1,017		12,920
Other		3,964		1,691		4,349		9,549		3,143		3,637		26,333
Total	$	162,605	$	201,731	$	496,696	$	534,781	$	902,909	$	97,197	$	2,395,919
Owner occupied:
Commercial building	$	16,781	$	26,134	$	46,190	$	78,576	$	230,720	$	56,490	$	454,891
Medical office		1,837		363		8,651		14,648		115,961		18,426		159,886
Professional office		3,122		10,220		18,919		35,003		55,337		6,721		129,322
Storage		—		—		—		—		—		—		—
Multi-family		—		566		891		42		3,175		—		4,674
Resort		—		102		3,461		3,963		4,856		4,100		16,482
Retail		9,829		12,432		29,313		45,353		47,035		7,602		151,564
Residential		1,025		782		4,314		493		1,236		1,835		9,685
Farmland & agricultural		3,568		3,115		11,435		9,440		27,824		6,633		62,015
Apartments		—		—		29		694		418		—		1,141
Assisted living		—		—		—		—		—		—		—
Hotel & motel		—		—		—		—		—		—		—
Industrial		5,847		4,348		21,116		25,660		56,738		5,994		119,703
RV park		82		774		1,123		299		299		849		3,426
Warehouse		874		—		6,876		4,362		4,673		168		16,953
Other		3,194		754		661		3,514		24,243		268		32,634
Total	$	46,159	$	59,590	$	152,979	$	222,047	$	572,515	$	109,086	$	1,162,376
Total	$	208,764	$	261,321	$	649,675	$	756,828	$	1,475,424	$	206,283	$	3,558,295

59

The following table presents a distribution of the non-covered commercial real estate construction portfolio by type and region as of December 31, 2011 and December 31, 2010.

Non-Covered Commercial Real Estate Construction and Development Portfolio by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total		December 31, 2010
Non-owner occupied:
Commercial building	$	7,408	$	—	$	2,705	$	562	$	11,166	$	836	$	22,677	$	25,877
Medical office		—		—		—		—		—		—		—		13,888
Professional office		—		—		—		—		—		1,897		1,897		23,077
Storage		5,387		—		—		—		—		—		5,387		8,447
Multi-family		4,990		—		—		6,072		—		—		11,062		10,705
Retail		13,743		—		—		—		2,030		—		15,773		13,498
Residential		18,958		—		5,154		3,950		19,853		5,007		52,922		62,058
Apartments		24,637		—		—		—		—		—		24,637		13,324
Assisted living		—		—		—		—		5,854		—		5,854		20,389
Hotel & motel		—		—		—		—		—		—		—		5,447
Industrial		—		—		—		—		—		—		—		—
Other		87		—		—		—		—		5,783		5,870		3,104
Total	$	75,210	$	—	$	7,859	$	10,584	$	38,903	$	13,523	$	146,079	$	199,814
Owner occupied:
Commercial building	$	5,443	$	—	$	1,087	$	—	$	575	$	4,645	$	11,750	$	25,379
Medical office		430		—		—		—		—		—		430		14,479
Professional office		—		—		—		—		—		—		—		—
Storage		—		—		—		—		—		—		—		—
Multi-family		—		—		—		—		—		—		—		—
Retail		—		—		—		—		—		—		—		—
Residential		1,455		—		—		—		—		578		2,033		5,944
Apartments		—		—		—		—		—		—		—		—
Assisted living		—		—		—		—		—		—		—		—
Hotel & motel		—		—		—		—		—		—		—		—
Industrial		2,521		—		71		—		—		—		2,592		2,198
Other		—		—		—		—		—		2,182		2,182		—
Total	$	9,849	$	—	$	1,158	$	—	$	575	$	7,405	$	18,987	$	48,000
Total	$	85,059	$	—	$	9,017	$	10,584	$	39,478	$	20,928	$	165,066	$	247,814

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Total non-owner occupied	$	99,309	$	310	$	8,357	$	4,921	$	61,897	$	25,020	$	199,814
Total owner occupied		34,592		—		243		—		584		12,581		48,000
Total	$	133,901	$	310	$	8,600	$	4,921	$	62,481	$	37,601	$	247,814

60

Umpqua Holdings Corporation

The following table presents a distribution of the non-covered commercial loan portfolio (excluding leases) by type and region as of December 31, 2011 and December 31, 2010.

Commercial Loan Portfolio by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total		December 31, 2010
Commercial line of credit	$	184,047	$	530	$	15,990	$	12,377	$	146,643	$	112,920	$	472,507	$	372,319
Asset-based line of credit		143,684		1,857		15,941		23,262		11,123		52,220		248,087		206,185
Term loans		154,282		2,310		20,640		28,561		79,406		87,773		372,972		343,967
Agricultural		21,027		148		1,087		1,917		336		67,363		91,878		83,332
Municipal		16,923		—		16,274		—		36,765		3,585		73,547		71,994
SBA		—		—		—		—		—		84,221		84,221		57,529
Small business lending		25,569		1,246		14,903		5,452		11,979		25,504		84,653		89,090
Total	$	545,532	$	6,091	$	84,835	$	71,569	$	286,252	$	433,586	$	1,427,865	$	1,224,416

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Total	$	448,158	$	5,004	$	77,343	$	50,369	$	293,369	$	350,173	$	1,224,416

Covered Loans and Leases, Net

Total covered loans and leases outstanding at December 31, 2011 were $622.5 million, a decrease of $163.4 million as compared to year-end 2010. This decrease is principally attributable to net covered loan paydowns and maturities of $119.8 million, transfers to covered other real estate owned of $15.3 million, and covered loans transferred to non-covered loans of $12.3 million.

The following table presents the composition of the covered loan portfolio as of December 31 for 2011 and 2010.

Covered Loan Portfolio Composition

As of December 31,

(dollars in thousands)

	2011					2010
	Amount			Percentage		Amount			Percentage
Commercial real estate	$	506,637			79.4%	$	619,248			78.5%
Commercial		57,576			9.1%		78,003			9.9%
Residential		64,588			10.2%		80,504			10.2%
Consumer & other		7,970			1.3%		10,864			1.4%
Total		636,771			100.0%		788,619			100.0%
Allowance for covered loans		(14,320	)				(2,721	)
Total	$	622,451				$	785,898

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The following table presents the concentration distribution of our covered loan portfolio at December 31, 2011 and December 31, 2010.

Covered Loan and Leases Concentrations

(dollars in thousands)

	2011					2010
	Amount			Percentage		Amount			Percentage
Commercial real estate
Term & multifamily	$	474,054			74.3%	$	569,642			72.2%
Construction & development		14,820			2.3%		24,713			3.1%
Residential development		17,763			2.8%		24,893			3.2%
Commercial
Term		34,150			5.4%		42,776			5.4%
LOC & other		23,426			3.7%		35,227			4.5%
Residential
Mortgage		35,503			5.6%		44,824			5.7%
Home equity loans & lines		29,085			4.6%		35,680			4.5%
Consumer & other		7,970			1.3%		10,864			1.4%
Total		636,771			100.0%		788,619			100.0%
Allowance for covered loans		(14,320	)				(2,721	)
Total	$	622,451				$	785,898

The covered loans are subject to loss-sharing agreements with the FDIC. Under the terms of the Evergreen acquisition loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, other real estate owned (“OREO”) and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $90.0 million on covered assets for Evergreen and absorb 95% of losses and share in 95% of loss recoveries exceeding $90.0 million, except for the Bank will incur losses up to $30.2 million before the loss-sharing will commence. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates.

Under the terms of the Rainier loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $95.0 million of losses on covered assets and absorb 95% of losses and share in 95% of loss recoveries exceeding $95.0 million. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates.

Under the terms of the Nevada Security loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on all covered assets. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates.

Discussion of and tables related to the covered loan segment is provided under the heading Asset Quality and Non-Performing Assets.

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Umpqua Holdings Corporation

ASSET QUALITY AND NON-PERFORMING ASSETS

Non-Covered Loans and Leases

We manage asset quality and control credit risk through diversification of the non-covered loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Quality Group is charged with monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. The provision for non-covered loan and lease losses charged to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level adequate to absorb probable incurred losses. The amount of provision charge is dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the non-covered loan portfolio, delinquencies, management’s assessment of loan portfolio quality, general economic conditions that can impact the value of collateral, and other trends. The evaluation of these factors is performed through an analysis of the adequacy of the allowance for loan and lease losses. Reviews of non-performing, past due non-covered loans and larger credits, designed to identify potential charges to the allowance for loan and lease losses, and to determine the adequacy of the allowance, are conducted on a quarterly basis. These reviews consider such factors as the financial strength of borrowers, the value of the applicable collateral, loan loss experience, estimated loan losses, growth in the loan portfolio, prevailing economic conditions and other factors. Additional information regarding the methodology used in determining the adequacy of the allowance for loan and lease losses is contained in Part I Item 1 of this report in the section titled Lending and Credit Functions.

Non-covered, non-performing loans, which include non-covered, non-accrual loans and non-covered accruing loans past due over 90 days, totaled $91.4 million or 1.55% of total non-covered loans as of December 31, 2011, as compared to $145.2 million, or 2.57% of total non-covered loans, at December 31, 2010. Non-covered, non-performing assets, which include non-covered, non-performing loans and non-covered, foreclosed real estate (“other real estate owned”), totaled $125.6 million, or 1.09% of total assets as of December 31, 2011 compared with $178.0 million, or 1.53% of total assets as of December 31, 2010. The decrease in non-performing assets in 2011 is attributable to the improving economic environment, an easing in the velocity of declining real estate values in our markets and the resulting impact on our commercial real estate and commercial construction portfolio.

A loan is considered impaired when based on current information and events, we determine it is probable that we will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Generally, when loans are identified as impaired they are moved to our Special Assets Division. When we identify a loan as impaired, we measure the loan for potential impairment using discount cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of collateral, less selling costs. The starting point for determining the fair value of collateral is through obtaining external appraisals. Generally, external appraisals are updated every six to nine months. We obtain appraisals from a pre-approved list of independent, third party, local appraisal firms. Approval and addition to the list is based on experience, reputation, character, consistency and knowledge of the respective real estate market. At a minimum, it is ascertained that the appraiser is: (a) currently licensed in the state in which the property is located, (b) is experienced in the appraisal of properties similar to the property being appraised, (c) is actively engaged in the appraisal work, (d) has knowledge of current real estate market conditions and financing trends, (e) is reputable, and (f) is not on Freddie Mac’s nor the Bank’s Exclusionary List of appraisers and brokers. In certain cases appraisals will be reviewed by our Real Estate Valuation Services group to ensure the quality of the appraisal and the expertise and independence of the appraiser. Upon receipt and review, an external appraisal is utilized to measure a loan for potential impairment. Our impairment analysis documents the date of the appraisal used in the analysis, whether the officer preparing the report deems it current, and, if not, allows for internal valuation adjustments with justification. Typical justified adjustments might include discounts for continued market deterioration subsequent to appraisal date, adjustments for the release of collateral contemplated in the appraisal, or the value of other collateral or consideration not contemplated in the appraisal. An appraisal over one year old in most cases will be considered stale dated and an updated or new appraisal will be required. Any adjustments from appraised value to net realizable value are detailed and justified in the impairment analysis, which is reviewed and approved by senior credit quality officers and the Company’s Allowance for Loan and Lease Losses (“ALLL”) Committee. Although an external appraisal is the

63

primary source to value collateral dependent loans, we may also utilize values obtained through purchase and sale agreements, negotiated short sales, broker price opinions, or the sales price of the note. These alternative sources of value are used only if deemed to be more representative of value based on updated information regarding collateral resolution. Impairment analyses are updated, reviewed and approved on a quarterly basis at or near the end of each reporting period. Appraisals or other alternative sources of value received subsequent to the reporting period, but prior to our filing of periodic reports, are considered and evaluated to ensure our periodic filings are materially correct and not misleading. Based on these processes, we do not believe there are significant time lapses for the recognition of additional loan loss provisions or charge-offs from the date they become known.

Non-covered loans are classified as non-accrual when collection of principal or interest is doubtful—generally if they are past due as to maturity or payment of principal or interest by 90 days or more—unless such non-covered loans are well-secured and in the process of collection. Additionally, all loans that are impaired are considered for non-accrual status. Non-covered loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospects for future payments in accordance with the loan agreement appear relatively certain.

Upon acquisition of real estate collateral, typically through the foreclosure process, we promptly begin to market the property for sale. If we do not begin to receive offers or indications of interest we will analyze the price and review market conditions to assess whether a lower price reflects the market value of the property and would enable us to sell the property. In addition, we update appraisals on other real estate owned property six to nine months after the most recent appraisal. Increases in valuation adjustments recorded in a period are primarily based on a) updated appraisals received during the period, or b) management’s authorization to reduce the selling price of the property during the period. Unless a current appraisal is available, an appraisal will be ordered prior to a loan moving to other real estate owned. Foreclosed properties held as other real estate owned are recorded at the lower of the recorded investment in the loan or market value of the property less expected selling costs. Non-covered other real estate owned at December 31, 2011 totaled $34.2 million and consisted of 63 properties.

Non-covered loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date(s) or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

The Company has written down impaired, non-covered non-accrual loans as of December 31, 2011 to their estimated net realizable value, based on disposition value, and expects resolution with no additional material loss, absent further decline in market prices.

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Umpqua Holdings Corporation

The following table summarizes our non-covered non-performing assets as of December 31 for each of the last five years.

Non-Covered, Non-Performing Assets

As of December 31,

(dollars in thousands)

	2011		2010		2009		2008		2007
Non-covered loans on non-accrual status	$	80,562	$	138,177	$	193,118	$	127,914	$	81,317
Non-covered loans past due 90 days or more and accruing		10,821		7,071		5,909		5,452		9,782
Total non-covered non-performing loans		91,383		145,248		199,027		133,366		91,099
Non-covered other real estate owned		34,175		32,791		24,566		27,898		6,943
Total non-covered non-performing assets	$	125,558	$	178,039	$	223,593	$	161,264	$	98,042
Restructured loans(1)	$	80,563	$	84,441	$	134,439	$	23,540	$	—
Allowance for non-covered loan and lease losses	$	92,968	$	101,921	$	107,657	$	95,865	$	84,904
Reserve for unfunded commitments		940		818		731		983		1,182
Allowance for credit losses	$	93,908	$	102,739	$	108,388	$	96,848	$	86,086
Asset quality ratios:
Non-covered non-performing assets to total assets		1.09%		1.53%		2.38%		1.88%		1.18%
Non-covered non-performing loans to total non-covered loans		1.55%		2.57%		3.32%		2.18%		1.50%
Allowance for non-covered loan losses to total non-covered loans		1.58%		1.80%		1.79%		1.56%		1.40%
Allowance for non-covered credit losses to total non-covered loans		1.59%		1.82%		1.81%		1.58%		1.42%
Allowance for non-covered credit losses to total non-covered non-performing loans		103%		71%		54%		73%		94%

(1) Represents accruing restructured loans performing according to their restructured terms.

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The following tables summarize our non-covered non-performing assets by loan type and region as of December 31, 2011 and December 31, 2010:

Non-Covered, Non-Performing Assets by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Loans on non-accrual status:
Commercial real estate
Term & multifamily	$	27,183	$	617	$	2,286	$	1,159	$	7,494	$	5,747	$	44,486
Construction & development		921		—		568		—		1,859		—		3,348
Residential development		9,226		—		—		4,172		63		2,375		15,836
Commercial
Term		724		1,814		239		157		1,462		3,724		8,120
LOC & other		5,457		147		95		1,114		—		1,959		8,772
Residential
Mortgage		—		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—		—
Total		43,511		2,578		3,188		6,602		10,878		13,805		80,562
Loans past due 90 days or more and accruing:
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction & development		—		—		—		—		575		—		575
Residential development		—		—		—		—		—		—		—
Commercial
Term		—		—		—		—		—		1,179		1,179
LOC & other		—		—		—		—		47		1,350		1,397
Residential
Mortgage		4,342		—		—		—		—		—		4,342
Home equity loans & lines		773		200		294		—		572		810		2,649
Consumer & other		475		—		155		2		6		41		679
Total		5,590		200		449		2		1,200		3,380		10,821
Total non-performing loans		49,101		2,778		3,637		6,604		12,078		17,185		91,383
Other real estate owned:
Commercial real estate
Term & multifamily	$	4,673	$	140	$	786	$	—	$	7,618	$	2,700	$	15,917
Construction & development		2,383		400		—		—		3,166		—		5,949
Residential development		1,487		944		1,457		589		3,494		784		8,755
Commercial
Term		—		—		—		—		—		—		—
LOC & other		50		306		—		521		—		—		877
Residential
Mortgage		2,099		—		—		—		—		—		2,099
Home equity loans & lines		—		—		212		—		366		—		578
Consumer & other		—		—		—		—		—		—		—
Total other real estate owned		10,692		1,790		2,455		1,110		14,644		3,484		34,175
Total non-performing assets	$	59,793	$	4,568	$	6,092	$	7,714	$	26,722	$	20,669	$	125,558

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Umpqua Holdings Corporation

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Loans on non-accrual status:
Commercial real estate
Term & multifamily	$	24,180	$	4,816	$	537	$	1,898	$	9,010	$	8,721	$	49,162
Construction & development		12,726		—		472		—		6,817		109		20,124
Residential development		10,191		110		2,122		3,033		10,761		8,369		34,586
Commercial
Term		710		1,679		320		373		98		3,092		6,272
LOC & other		7,586		878		768		6,830		8,628		3,343		28,033
Residential
Mortgage		—		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—		—
Total		55,393		7,483		4,219		12,134		35,314		23,634		138,177
Loans past due 90 days or more and accruing:
Commercial real estate
Term & multifamily	$	79	$	—	$	—	$	176	$	2,753	$	—	$	3,008
Construction & development		—		—		—		—		—		—		—
Residential development		—		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Term		—		—		—		—		—		—		—
LOC & other		—		—		—		—		—		—		—
Residential		—		—		—		—		—		—
Mortgage		2,925		—		—		—		—		—		2,925
Home equity loans & lines		73		—		—		—		159		—		232
Consumer & other		880		—		—		—		26		—		906
Total		3,957		—		—		176		2,938		—		7,071
Total non-performing loans		59,350		7,483		4,219		12,310		38,252		23,634		145,248
Other real estate owned:
Commercial real estate
Term & multifamily	$	5,396	$	—	$	1,656	$	—	$	3,091	$	5,686	$	15,829
Construction & development		3,443		539		—		313		4,392		—		8,687
Residential development		674		1,844		1,368		112		—		1,118		5,116
Commercial
Term		—		—		—		—		—		—		—
LOC & other		—		—		—		—		—		—		—
Residential
Mortgage		954		—		—		—		—		—		954
Home equity loans & lines		—		—		—		—		—		—		—
Consumer & other		—		—		—		—		481		1,724		2,205
Total other real estate owned		10,467		2,383		3,024		425		7,964		8,528		32,791
Total non-performing assets	$	69,817	$	9,866	$	7,243	$	12,735	$	46,216	$	32,162	$	178,039

As of December 31, 2011, non-covered, non-performing assets of $125.6 million have been written down by 38%, or $76.3 million, from their current par balance of $201.9 million.

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The Company is continually performing extensive reviews of our permanent commercial real estate portfolio, including stress testing. These reviews are being performed on both our non-owner and owner occupied credits. These reviews are being completed to verify leasing status, to ensure the accuracy of risk ratings, and to develop proactive action plans with borrowers on projects. The stress testing has been performed to determine the effect of rising cap rates, interest rates and vacancy rates, on this portfolio. Based on our analysis, the Company believes our lending teams are effectively managing the risks in this portfolio. There can be no assurance that any further declines in economic conditions, such as potential increases in retail or office vacancy rates, will exceed the projected assumptions utilized in the stress testing and may result in additional non-covered, non-performing loans in the future.

The following table summarizes our non-covered loans past due 30-89 days by loan type and by region as of December 31, 2011 and December 31, 2010. Loans past due 30-89 days have decreased 27% between the two periods.

Non-Covered Loans Past Due 30-89 Days by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Commercial real estate
Term & multifamily	$	1,721	$	—	$	1,029	$	—	$	6,867	$	8,886	$	18,503
Construction & development		—		—		—		662		—		—		662
Residential development		—		—		—		—		4,171		—		4,171
Commercial
Term		760		—		166		—		461		1,426		2,813
LOC & other		141		—		98		—		5,616		699		6,554
Residential
Mortgage		1,180		—		—		—		—		—		1,180
Home equity loans & lines		22		—		94		—		—		567		683
Consumer & other		578		—		36		10		4		33		661
Total	$	4,402	$	—	$	1,423	$	672	$	17,119	$	11,611	$	35,227

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Commercial real estate
Term & multifamily	$	6,636	$	1,719	$	—	$	—	$	5,524	$	9,045	$	22,924
Construction & development		373		—		—		—		8,525		—		8,898
Residential development		—		—		—		—		480		160		640
Commercial
Term		354		—		—		64		868		1,655		2,941
LOC & other		1,542		—		17		1,670		1,291		1,961		6,481
Residential
Mortgage		2,414		—		—		—		—		—		2,414
Home equity loans & lines		469		—		—		200		1,778		—		2,447
Consumer & other		1,339		—		—		100		32		1		1,472
Total	$	13,127	$	1,719	$	17	$	2,034	$	18,498	$	12,822	$	48,217

68

Umpqua Holdings Corporation

Non-covered Restructured Loans

At December 31, 2011 and December 31, 2010, impaired loans of $80.6 million and $84.4 million were classified as non-covered performing restructured loans, respectively. The restructurings were granted in response to borrower financial difficulty, and generally provide for a temporary modification of loan repayment terms. The non-covered performing restructured loans on accrual status and two loans included in loans past due 30+ days and accruing represent the only impaired loans accruing interest at each respective date. In order for a restructured loan to be considered performing and on accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow. The Company had obligations of $205,000 to lend additional funds on the restructured loans as of December 31, 2011.

Residential Modification Program

The Bank’s modification program is designed to enable the Bank to work with its customers experiencing financial difficulty to maximize repayment. While the Bank has designed guidelines similar to the government sponsored Home Affordable Refinance Program (“HARP”) and Home Affordable Modification Program (“HAMP”), the bank participates in the programs only in the capacity as servicer on behalf of investor loans that have been sold.

A and B Note Workout Structures

The Bank performs A note/B note workout structures as a subset of the Bank’s troubled debt restructuring strategy. The amount of loans restructured using this structure was $21.4 million and $20.5 million as of December 31, 2011 and December 31, 2010, respectively.

Under an A note/B note workout structure, the new A note is underwritten in accordance with customary troubled debt restructuring underwriting standards and is reasonably assured of full repayment while the B note is not. The B note is immediately charged off upon restructuring.

If the loan was on accrual prior to the troubled debt restructuring being documented with the loan legally bifurcated into an A note fully supporting accrual status and a B note or amount fully contractually forgiven and charged off, the A note may remain on accrual status. If the loan was on nonaccrual at the time the troubled debt restructuring was documented with the loan legally bifurcated into an A note fully supporting accrual status and a B note or amount contractually forgiven and fully charged off, the A note may be returned to accrual status, and risk rated accordingly, after a reasonable period of performance under the troubled debt restructuring terms. Six months of payment performance is generally required to return these loans to accrual status.

The A note will continue to be classified as a troubled debt restructuring and only may be removed from impaired status in years after the restructuring if (a) the restructuring agreement specifies an interest rate equal to or greater than the rate that the Bank was willing to accept at the time of the restructuring for a new loan with comparable risk and (b) the loan is not impaired based on the terms specified by the restructuring agreement.

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The following tables summarize our non-covered performing restructured loans by loan type and region as of December 31, 2011 and December 31, 2010:

Non-Covered Restructured Loans by Type and Region

(in thousands)

	December 31, 2011
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Commercial real estate
Term & multifamily	$	10,148	$	—	$	5,243	$	—	$	4,618	$	2,602	$	22,611
Construction & development		8,967		—		—		—		8,171		2,858		19,996
Residential development		14,195		943		—		—		18,826		—		33,964
Commercial
Term		—		—		—		—		3,191		672		3,863
LOC & other		—		—		—		—		—		—		—
Residential
Mortgage		—		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		129		129
Consumer & other		—		—		—		—		—		—		—
Total	$	33,310	$	943	$	5,243	$	—	$	34,806	$	6,261	$	80,563

	December 31, 2010
	Northwest Oregon		Central Oregon		Southern Oregon		Washington		Greater Sacramento		Northern California		Total
Commercial real estate
Term & multifamily	$	9,446	$	—	$	3,888	$	—	$	11,820	$	3,543	$	28,697
Construction & development		—		—		—		—		5,434		—		5,434
Residential development		22,277		—		—		5,330		21,322		—		48,929
Commercial
Term		—		—		—		—		—		904		904
LOC & other		—		—		—		—		—		298		298
Residential
Mortgage		179		—		—		—		—		—		179
Home equity loans & lines		—		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—		—
Total	$	31,902	$	—	$	3,888	$	5,330	$	38,576	$	4,745	$	84,441

The following table presents a distribution of our non-covered performing restructured loans by year of maturity, according to the restructured terms, as of December 31, 2011:

(in thousands)

Year	Amount
2012	$	57,555
2013		4,134
2014		2,949
2015		4,517
2016		10,736
Thereafter		672
Total	$	80,563

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Umpqua Holdings Corporation

The Bank has had a varying degree of success with different types of concessions. The following table presents the percentage of troubled debt restructurings, by type of concession, at December 31, 2011 that have performed and are expected to perform according to the troubled debt restructuring agreement:

	December 31, 2011
Rate		100%
Term		100%
Interest Only		—
Payment		86%
Combination		80%

A further decline in the economic conditions in our general market areas or other factors could adversely impact individual borrowers or the loan portfolio in general. Accordingly, there can be no assurance that loans will not become 90 days or more past due, become impaired or placed on non-accrual status, restructured or transferred to other real estate owned in the future. Additional information about the loan portfolio is provided in Note 5 of the Notes to Consolidated Financial Statements in Item 8 below.

Covered Non-Performing Assets

Covered non-performing assets totaled $19.5 million, or 0.17% of total assets at December 31, 2011 as compared to $29.9 million, or 0.26% of total assets at December 31, 2010. These covered non-performing assets are subject to shared-loss agreements with the FDIC. The following tables summarize our covered non-performing assets by loan type as of December 31, 2011 and December 31, 2010:

	December 31, 2011
	Evergreen		Rainier		Nevada Security		Total
Covered other real estate owned:
Commercial real estate
Term & multifamily	$	914	$	1,827	$	8,525	$	11,266
Construction & development		36		1,053		2,621		3,710
Residential development		351		2,359		1,301		4,011
Commercial
Term		—		—		188		188
LOC & other		—		—		—		—
Residential
Mortgage		69		247		—		316
Home equity loans & lines		—		—		—		—
Consumer & other		—		—		—		—
Total	$	1,370	$	5,486	$	12,635	$	19,491

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	December 31, 2010
	Evergreen		Rainier		Nevada Security		Total
Covered other real estate owned:
Commercial real estate
Term & multifamily	$	3,557	$	210	$	8,153	$	11,920
Construction & development		596		—		2,161		2,757
Residential development		2,421		7,252		5,198		14,871
Commercial
Term		315		—		—		315
LOC & other		—		—		—		—
Residential
Mortgage		—		—		—		—
Home equity loans & lines		—		—		—		—
Consumer & other		—		—		—		—
Total	$	6,889	$	7,462	$	15,512	$	29,863

Total Non-Performing Assets

The following tables summarize our total (including covered and non-covered) nonperforming assets at December 31:

	2011		2010		2009		2008		2007
Loans on non-accrual status	$	80,562	$	138,177	$	193,118	$	127,914	$	81,317
Loans past due 90 days or more and accruing		10,821		7,071		5,909		5,452		9,782
Total non-performing loans		91,383		145,248		199,027		133,366		91,099
Other real estate owned		53,666		62,654		24,566		27,898		6,943
Total non-performing assets	$	145,049	$	207,902	$	223,593	$	161,264	$	98,042
Asset quality ratios:
Total non-performing assets to total assets		1.25%		1.78%		2.38%		1.88%		1.18%
Total non-performing loans to total loans		1.40%		2.25%		3.32%		2.18%		1.50%

ALLOWANCE FOR NON-COVERED LOAN AND LEASE LOSSES AND RESERVE FOR UNFUNDED COMMITMENTS

The allowance for non-covered loan and lease losses (“ALLL”) totaled $93.0 million and $101.9 million at December 31, 2011 and 2010, respectively. The decrease in the ALLL from the prior year-end results is principally attributable to a decrease in provision for non-covered loan and lease losses of a level below net charge-offs for the year and declining non-performing loans, as a result of the improving conditions in the non-covered loan portfolios. Additional discussion on the change in provision for loan and lease losses is provided under the heading Provision for Loan and Lease Losses above.

The unallocated portion of ALLL provides for coverage of credit losses inherent in the loan portfolio but not captured in the credit loss factors that are utilized in the risk rating-based component, or in the specific impairment reserve component of the allowance for loan and lease losses, and acknowledges the inherent imprecision of all loss prediction models. As of December 31, 2011, the unallocated allowance amount represented 5% of the allowance for loan and lease losses, compared to 8% at December 31, 2010. The level in unallocated ALLL in the current year reflects management’s evaluation of the existing general business and economic conditions, and improving credit quality and collateral values of real estate in our markets as compared to 2010. The ALLL composition should not be interpreted as an indication of specific amounts or loan categories in which future charge-offs may occur.

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Umpqua Holdings Corporation

The following table provides a summary of activity in the ALLL by major loan type for each of the five years ended December 31:

Allowance for Non-covered Loan and Lease Losses

Years Ended December 31,

(dollars in thousands)

	2011			2010			2009			2008			2007
Balance at beginning of year	$	101,921		$	107,657		$	95,865		$	84,904		$	60,090
Loans charged off:
Commercial real estate		(36,011	)		(71,030	)		(136,382	)		(82,919	)		(20,632	)
Commercial		(21,071	)		(50,242	)		(57,932	)		(14,614	)		(2,208	)
Residential		(6,333	)		(5,168	)		(4,331	)		(1,597	)		(547	)
Consumer & other		(1,636	)		(2,061	)		(2,222	)		(1,922	)		(1,343	)
Total loans charged off		(65,051	)		(128,501	)		(200,867	)		(101,052	)		(24,730	)
Recoveries:
Commercial real estate		5,906			6,980			1,334			2,571			1,022
Commercial		3,348			1,318			1,549			1,021			819
Residential		239			334			126			148			241
Consumer & other		385			465			526			595			654
Total recoveries		9,878			9,097			3,535			4,335			2,736
Net charge-offs		(55,173	)		(119,404	)		(197,332	)		(96,717	)		(21,994	)
Addition incident to mergers		—			—			—			—			5,078
Provision charged to operations		46,220			113,668			209,124			107,678			41,730
Balance at end of year	$	92,968		$	101,921		$	107,657		$	95,865		$	84,904
Ratio of net charge-offs to average non-covered loans		0.96%			2.06%			3.23%			1.58%			0.38%
Ratio of provision to average non-covered loans		0.81%			1.97%			3.43%			1.76%			0.72%
Recoveries as a percentage of charge-offs		15.19%			7.08%			1.76%			4.29%			11.06%

The following table sets forth the allocation of the allowance for non-covered loan and lease losses and percent of loans in each category to total non-covered loans (excluding deferred loan fees):

Allowance for Non-covered Loan and Lease Losses Composition

As of December 31,

(in thousands)

	2011				2010				2009				2008				2007
	Amount		%		Amount		%		Amount		%		Amount		%		Amount		%
Commercial real estate	$	59,574		64.8%	$	64,405		68.5%	$	67,281		68.6%	$	57,907		67.5%	$	57,433		69.2%
Commercial		20,485		24.8%		22,146		22.2%		24,583		23.2%		23,104		24.5%		19,514		23.8%
Residential		7,625		10.0%		5,926		8.9%		5,811		7.8%		5,778		7.6%		3,406		6.6%
Consumer & other		867		0.6%		803		0.6%		455		0.6%		484		0.6%		504		0.6%
Unallocated		4,417				8,641				9,527				8,592				4,047
Allowance for non-covered loan and lease losses	$	92,968			$	101,921			$	107,657			$	95,865			$	84,904

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All impaired loans are individually evaluated for impairment. If the measurement of each impaired loans’ value is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. This can be accomplished by charging-off the impaired portion of the loan or establishing a specific component within the allowance for loan and lease losses. If in management’s assessment the sources of repayment will not result in a reasonable probability that the carrying value of a loan can be recovered, the amount of a loan’s specific impairment is charged-off against the allowance for loan and lease losses. Prior to the second quarter of 2008, the Company established specific reserves within the allowance for loan and leases losses for loan impairments and recognized the charge-off of the impairment reserve when the loan was resolved, sold, or foreclosed and transferred to other real estate owned. Due to declining real estate values in our markets and the deterioration of the U.S. economy in general, it became increasingly likely that impairment reserves on collateral dependent loans, particularly those relating to real estate, would not be recoverable and represented a confirmed loss. As a result, beginning in the second quarter of 2008, the Company began recognizing the charge-off of impairment reserves on impaired loans in the period they arise for collateral dependent loans. This process has effectively accelerated the recognition of charge-offs recognized since the second quarter of 2008. The change in our assessment of the possible recoverability of our collateral dependent impaired loans’ carrying values has ultimately had no impact on our impairment valuation procedures or the amount of provision for loan and leases losses included within the Consolidated Statements of Operations. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

At December 31, 2011, the recorded investment in non-covered loans classified as impaired totaled $166.3 million, with a corresponding valuation allowance (included in the allowance for loan and lease losses) of $3.8 million. The valuation allowance on impaired loans represents the impairment reserves on performing restructured loans, nonaccrual loans and two loans included in loans past due 30+ days and accruing at December 31, 2011. At December 31, 2010, the total recorded investment in impaired loans was $222.6 million, with a corresponding valuation allowance (included in the allowance for loan and lease losses) of $5.2 million. The valuation allowance on impaired loans represents the impairment reserves on performing restructured loans and nonaccrual loans represent the only impaired loans accruing interest at December 31, 2010.

The majority of loan charge-offs in the current year relate to real estate related credits. In the current year we experienced decreased charge-offs in all categories except for residential. These charge-offs were largely driven by economic conditions coupled with falling real estate values in our markets. The majority of all charge-offs taken in the current year relate to borrowers that were directly affected by the housing market downturn or indirectly impacted from the contraction of real estate dependent businesses.

The following table presents a summary of activity in the reserve for unfunded commitments (“RUC”):

Summary of Reserve for Unfunded Commitments Activity

Years Ended December 31,

(in thousands)

	2011		2010			2009
Balance at beginning of period	$	818	$	731		$	983
Net change to other expense:
Commercial real estate		26		(24	)		(94	)
Commercial		58		91			(141	)
Residential		27		14			(17	)
Consumer & other		11		6			—
Total change to other expense		122		87			(252	)
Balance at end of period	$	940	$	818		$	731

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Umpqua Holdings Corporation

We believe that the ALLL and RUC at December 31, 2011 are sufficient to absorb losses inherent in the loan portfolio and credit commitments outstanding as of that date, respectively, based on the best information available. This assessment, based in part on historical levels of net charge-offs, loan growth, and a detailed review of the quality of the loan portfolio, involves uncertainty and judgment. Therefore, the adequacy of the ALLL and RUC cannot be determined with precision and may be subject to change in future periods. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review.

ALLOWANCE FOR COVERED LOAN AND LEASE LOSSES

The allowance for covered loan and lease losses (“ALLL”) totaled $14.3 million at December 31, 2011, an increase of $11.6 million from the $2.7 million at December 31, 2010. The increase in the covered ALLL from the prior year end results from decreases in the amount and changes in the timing of expected cash flows attributable to credit deterioration on the acquired loans compared to those previously estimated, as measured on a pool basis. The following table summarizes activity related to the allowance for covered loan and lease losses by covered loan portfolio segment for the year ended December 31, 2011 and 2010, respectively:

Allowance for Covered Loan and Lease Losses

(dollars in thousands)

	December 31, 2011			December 31, 2010
Balance at beginning of period	$	2,721		$	—
Loans charged off:
Commercial real estate		(3,177	)		(2,439	)
Commercial		(660	)		(266	)
Residential		(1,657	)		—
Consumer & other		(1,192	)		—
Total loans charged off		(6,686	)		(2,705	)
Recoveries:
Commercial real estate		1,348			11
Commercial		512			263
Residential		142			—
Consumer & other		142			1
Total recoveries		2,144			275
Net charge-offs		(4,542	)		(2,430	)
Covered provision charged to operations		16,141			5,151
Balance at end of period	$	14,320		$	2,721
As a percentage of average covered loans and leases:
Net charge-offs		0.64%			0.36%
Provision for covered loan and lease losses		2.28%			0.76%

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The following table sets forth the allocation of the allowance for covered loan and lease losses and percent of covered loans in each category to total loans as of December 31, 2011 and December 31, 2010:

Allowance for Covered Loan and Lease Losses Composition

(in thousands)

	2011				2010
	Amount		%		Amount		%
Commercial real estate	$	8,939		79.4%	$	2,465		78.5%
Commercial		3,964		9.1%		176		9.9%
Residential		991		10.2%		56		10.2%
Consumer & other		426		1.3%		24		1.4%
Allowance for covered loan and lease losses	$	14,320		100%	$	2,721		100%

MORTGAGE SERVICING RIGHTS

The following table presents the key elements of our mortgage servicing rights asset as of December 31, 2011, 2010 and 2009:

Summary of Mortgage Servicing Rights

Years Ended December 31,

(dollars in thousands)

	2011			2010			2009
Balance, beginning of year	$	14,454		$	12,625		$	8,205
Additions for new mortgage servicing rights capitalized		6,720			5,645			7,570
Acquired mortgage servicing rights		—			62			—
Changes in fair value:
Due to changes in model inputs or assumptions(1)		(858	)		(1,598	)		(3,469	)
Other(2)		(2,132	)		(2,280	)		319
Balance, end of year	$	18,184		$	14,454		$	12,625
Balance of loans serviced for others	$	2,009,849		$	1,603,414		$	1,277,832
MSR as a percentage of serviced loans		0.90%			0.90%			0.99%

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2) Represents changes due to collection/realization of expected cash flows over time.

Mortgage servicing rights are adjusted to fair value quarterly with the change recorded in mortgage banking revenue. The value of mortgage servicing rights is impacted by market rates for mortgage loans. Historically low market rates can cause prepayments to increase as a result of refinancing activity. To the extent loans are prepaid sooner than estimated at the time servicing assets are originally recorded, it is possible that certain mortgage servicing rights assets may decrease in value. Generally, the fair value of our mortgage servicing rights will increase as market rates for mortgage loans rise and decrease if market rates fall.

Additional information about the Company’s mortgage servicing rights is provided in Note 10 of the Notes to Consolidated Financial Statements in Item 8 below.

GOODWILL AND OTHER INTANGIBLE ASSETS

At December 31, 2011, we had recognized goodwill of $656.1 million, as compared to $655.9 million at December 31, 2010. The goodwill recorded in connection with acquisitions represents the excess of the purchase price over the estimated fair value of the net assets acquired. Goodwill and other intangible assets with indefinite lives are not amortized but instead are

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periodically tested for impairment. Management evaluates goodwill and intangible assets with indefinite lives on an annual basis as of December 31. Additionally, we perform impairment evaluations on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

The goodwill impairment test involves a two-step process. The first step compares the fair value of a reporting unit (e.g. Wealth Management and Community Banking) to its carrying value. If the reporting unit’s fair value is less than its carrying value, the Company would be required to proceed to the second step. In the second step the Company calculates the implied fair value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The estimated fair value of the Company is allocated to all of the Company’s assets and liabilities, including any unrecognized identifiable intangible assets, as if the Company had been acquired in a business combination and the estimated fair value of the reporting unit is the price paid to acquire it. The allocation process is performed only for purposes of determining the amount of goodwill impairment. No assets or liabilities are written up or down, nor are any additional unrecognized identifiable intangible assets recorded as a part of this process. Any excess of the estimated purchase price over the fair value of the reporting unit’s net assets represents the implied fair value of goodwill. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss would be recognized as a charge to earnings in an amount equal to that excess.

Substantially all of the Company’s goodwill is associated with our community banking operations. Due to a decline in the Company’s market capitalization below book value of equity and continued weakness in the banking industry, the Company performed a goodwill impairment evaluation of the Community Banking operating segment as of June 30, 2009. The Company engaged an independent valuation consultant to assist us in determining whether and to what extent our goodwill asset was impaired. We utilized a variety of valuation techniques to analyze and measure the estimated fair value of reporting units under both the income and market valuation approach. Under the income approach, the fair value of the reporting unit is determined by projecting future earnings for five years, utilizing a terminal value based on expected future growth rates, and applying a discount rate reflective of current market conditions. The estimation of forecasted earnings uses management’s best estimate of economic and market conditions over the projected periods and considers estimated growth rates in loans and deposits and future expected changes in net interest margins. Various market-based valuation approaches are utilized and include applying market price to earnings, core deposit premium, and tangible book value multiples as observed from relevant, comparable peer companies of the reporting unit. We also valued the reporting unit by applying an estimated control premium to the market capitalization. Weightings are assigned to each of the aforementioned model results, judgmentally allocated based on the observability and reliability of the inputs, to arrive at a final fair value estimate of the reporting unit. The results of the Company’s and valuation specialist’s step one impairment test indicated that the reporting unit’s fair value was less than its carrying value. As a result, the Company performed a step two analysis. The external valuation specialist assisted management’s analysis under step two of the goodwill impairment test. Under this approach, we calculated the fair value for the reporting unit’s assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures carried at amortized cost. The external valuation specialist assisted management to estimate the fair value of our unrecognized identifiable assets, such as the core deposit intangible and trade name.

The most significant fair value adjustment made in this analysis was to adjust the carrying value of the Company’s loans receivable portfolio to fair value. The fair value of the Company’s loan receivable portfolio at June 30, 2009 was estimated in a manner similar to methodology utilized as part of the December 31, 2008 goodwill impairment evaluation. As part of the December 31, 2008 loan valuation, the loan portfolio was stratified into sixty-eight loan pools that shared common characteristics, namely loan type, payment terms, and whether the loans were performing or non-performing. Each loan pool was discounted at a rate that considers current market interest rates, credit risk, and assumed liquidity premiums required based upon the nature of the underlying pool. Due to the disruption in the financial markets experienced during 2008 and

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continuing through 2009, the liquidity premium reflects the reduction in demand in the secondary markets for all grades of non-conforming credit, including those that are performing. Liquidity premiums for individual loan categories generally ranged from 4.6% for performing loans to 30% for construction and non-performing loans. At December 31, 2008, the fair value of the overall loan portfolio was calculated to be at a 9% discount relative to its book value. The composition of the loan portfolio at June 30, 2009, including loan type and performance indicators, was substantially similar to the loan portfolio at December 31, 2008. At June 30, 2009, the fair value of the loan portfolio was estimated to be at a 12% discount relative to its carrying value. The additional discount is primarily attributed to the additional liquidity premium required as of the measurement date associated with the Company’s concentration of commercial real estate loans.

Other significant fair value adjustments utilized in this goodwill impairment analysis included the value of the core deposit intangible asset which was calculated as 0.53% of core deposits, and includes all deposits except certificates of deposit. The carrying value of other real estate owned was discounted by 25%, representing a liquidity adjustment given the current market conditions. The fair value of our trade name, which represents the competitive advantage associated with our brand recognition and ability to attract and retain relationships, was estimated to be $19.3 million. The fair value of our junior subordinated debentures carried at amortized cost was determined in a manner and utilized inputs, primarily the credit risk adjusted spread, consistent with our methodology for determining the fair value of junior subordinated debentures recorded at fair value. Information relating to our methodologies for estimating the fair value of financial instruments that were adjusted to fair value as part of this analysis, including the Visa Class B common stock, deposits, term debt, and junior subordinated debentures, is included in Note 24 of the Notes to Consolidated Financial Statements.

Based on the results of the step two analysis, the Company determined that the implied fair value of the goodwill was less than its carrying amount on the Company’s balance sheet, and as a result, we recognized a goodwill impairment loss of $112.0 million in the second quarter of 2009. This write-down of goodwill is a non-cash charge that does not affect the Company’s or the Bank’s liquidity or operations. In addition, because goodwill is excluded in the calculation of regulatory capital, the Company’s “well-capitalized” regulatory capital ratios are not affected by this charge.

The Company also conducted its annual evaluation of goodwill for impairment as of December 31, 2011. In the first step of the goodwill impairment test the Company determined that the fair value of the Community Banking reporting unit exceeded its carrying amount. This determination is consistent with the events occurring after the Company recognized the $112.0 million impairment of goodwill second quarter of 2009. First, the market capitalization and estimated fair value of the Company increased significantly subsequent to the recognition of the impairment charge as the fair value of the Company’s stock increased 60% from June 30, 2009 to December 31, 2011. Secondly, the Company’s successful public common stock offerings in the third quarter of 2009 and first quarter of 2010 diluted the carrying value of the reporting book equity on a per share basis, against which the fair value of the reporting unit is measured. The significant assumptions and methodology utilized to test for goodwill impairment as of December 31, 2011 were consistent with these used at December 31, 2010.

If the Company’s common stock price should significantly decline or continues to trade below book value per common share, or should general economic conditions deteriorate further or remain depressed for a prolonged period of time, particularly in the financial industry, the Company may be required to recognize additional impairment of all, or some portion of, its goodwill. It is possible that changes in circumstances, existing at the measurement date or at other times in the future, or changes in the numerous estimates associated with management’s judgments, assumptions and estimates made in assessing the fair value of our goodwill, such as valuation multiples, discount rates, or projected earnings, could result in an impairment charge in future periods. Additional impairment charges, if any, may be material to the Company’s results of operations and financial position. However, any potential future impairment charge will have no effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios.

The inputs management utilizes to estimate the fair value of a reporting unit in step one of the goodwill impairment test, and estimating the fair values of the underlying assets and liabilities of a reporting unit in the second step of the goodwill impairment test, require management to make significant judgments, assumptions and estimates where observable market may not readily exist. Such inputs include, but are not limited to, trading multiples from comparable transactions, control premiums, the value that may arise from synergies and other benefits that would accrue from control over an entity, and the appropriate

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rates to discount projected cash flows. Additionally, there may be limited current market inputs to value certain assets or liabilities, particularly loans and junior subordinated debentures. These valuation inputs are considered to be Level 3 inputs.

Management will continue to monitor the relationship of the Company’s market capitalization to both its book value and tangible book value, which management attributes to both financial services industry-wide and Company specific factors, and to evaluate the carrying value of goodwill and other intangible assets.

The Company evaluated the Wealth Management reporting segment’s goodwill for impairment as of December 31, 2011. The first step of the goodwill impairment test indicated that the reporting unit’s fair value exceeded its carrying value. As of December 31, 2011, the ending carrying value of the Wealth Management segment’s goodwill was $2.7 million.

At December 31, 2011, we had other intangible assets of $21.1 million, as compared to $26.1 million at December 31, 2010. As part of a business acquisition, a portion of the purchase price is allocated to the other value of intangible assets such as the merchant servicing portfolio or core deposits, which includes all deposits except certificates of deposit. The value of these other intangible assets were determined by a third party based on the net present value of future cash flows for the merchant servicing portfolio and an analysis of the cost differential between the core deposits and alternative funding sources for the core deposit intangible. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and are also reviewed for impairment. We amortize other intangible assets on an accelerated or straight-line basis over an estimated ten to fifteen year life. In the fourth quarter of 2009, the Company recognized an $804,000 impairment related to the merchant servicing portfolio obtained through a prior acquisition. The remaining decrease in other intangible assets resulted from scheduled amortization. No other impairment losses were recognized in connection with other intangible assets since their initial recognition.

Additional information regarding our accounting for goodwill and other intangible assets is included in Notes 1, 2 and 9 of the Notes to Consolidated Financial Statements in Item 8 below.

DEPOSITS

Total deposits were $9.2 billion at December 31, 2011, a decrease of $197.1 million, or 2.1%, as compared to year-end 2010. Of the total change in deposit balances during the current year, deposits from consumers and businesses decreased $231.6 million, and deposits from public entities increased $34.5 million. Although deposits have declined due to the run-off of higher priced time deposits, management attributes the ability to reduce our cost of deposits while maintaining our overall deposit base and grow certain lines of business to ongoing business development and marketing efforts in our service markets. Additional information regarding interest bearing deposits is included in Note 14 of the Notes to Consolidated Financial Statements in Item 8 below.

The following table presents the deposit balances by major category as of December 31:

Deposits

As of December 31,

(dollars in thousands)

	2011				2010
	Amount		Percentage		Amount		Percentage
Noninterest bearing	$	1,913,121		21%	$	1,616,687		17%
Interest bearing demand		993,579		11%		927,224		10%
Money market		3,661,785		39%		3,467,549		37%
Savings		386,528		4%		349,696		4%
Time, $100,000 and over		1,629,505		18%		2,191,055		23%
Time less than $100,000		652,172		7%		881,594		9%
Total	$	9,236,690		100%	$	9,433,805		100%

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The following table presents the average amount of and average rate paid by major category as of December 31:

	2011				2010				2009
	Average		Average		Average		Average		Average		Average
	Deposits		Rate		Deposits		Rate		Deposits		Rate
Non-interest bearing	$	1,782,354		0.00%	$	1,529,165		0.00%	$	1,318,954		0.00%
Interest bearing demand		903,721		0.34%		941,637		0.50%		798,760		0.61%
Money market		3,487,624		0.49%		2,932,136		0.90%		2,232,911		1.20%
Savings		373,746		0.10%		329,336		0.16%		301,417		0.19%
Time		2,754,533		1.27%		2,875,706		1.55%		2,358,697		2.39%
Total	$	9,301,978			$	8,607,980			$	7,010,739

The following table presents the scheduled maturities of time deposits of $100,000 and greater as of December 31, 2011:

Maturities of Time Deposits of $100,000 and Greater

(in thousands)

Three months or less	$	493,587
Over three months through six months		192,775
Over six months through twelve months		463,446
Over twelve months		479,697
Time, $100,000 and over	$	1,629,505

The Company has an agreement with Promontory Interfinancial Network LLC (“Promontory”) that makes it possible to provide FDIC deposit insurance to balances in excess of current deposit insurance limits. Promontory’s Certificate of Deposit Account Registry Service (“CDARS”) uses a deposit-matching program to exchange Bank deposits in excess of the current deposit insurance limits for excess balances at other participating banks, on a dollar-for-dollar basis, that would be fully insured at the Bank. This product is designed to enhance our ability to attract and retain customers and increase deposits, by providing additional FDIC coverage to customers. CDARS deposits can be reciprocal or one-way. All of the Bank’s CDARS deposits are reciprocal. At December 31, 2011 and December 31, 2010, the Company’s CDARS balances totaled $274.6 million and $323.2 million, respectively. Of these totals, at December 31, 2011 and December 31, 2010, $258.3 million and $300.6 million, respectively, represented time deposits equal to or greater than $100,000 but were fully insured under current deposit insurance limits.

The Dodd-Frank Act provides for unlimited deposit insurance for noninterest bearing transactions accounts, excluding NOW (interest bearing deposit accounts) and including all IOLTA (lawyers’ trust accounts), beginning December 31, 2010 for a period of two years. Also, the Dodd-Frank Act permanently raises the current standard maximum federal deposit insurance amount from $100,000 to $250,000 per qualified account.

BORROWINGS

At December 31, 2011, the Bank had outstanding $124.6 million of securities sold under agreements to repurchase and no outstanding federal funds purchased balances. Additional information regarding securities sold under agreements to repurchase and federal funds purchased is provided in Notes 15 and 16 of Notes to Consolidated Financial Statements in Item 8 below.

At December 31, 2011, the Bank had outstanding term debt with a carrying value of $255.7 million primarily with the Federal Home Loan Bank (“FHLB”). Term debt outstanding as of December 31, 2011 decreased $7.1 million since December 31, 2010 primarily as a result of repayment of FHLB borrowings. Management expects continued use of FHLB advances as a source of short and long-term funding. Advances from the FHLB amounted to $245.0 million of the total term debt and are secured by investment securities and residential mortgage loans. The FHLB advances have fixed contractual interest rates ranging from 4.46% to 4.72% and mature in 2016 and 2017.

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Additional information regarding term debt is provided in Note 17 of Notes to Consolidated Financial Statements in Item 8 below.

JUNIOR SUBORDINATED DEBENTURES

We had junior subordinated debentures with carrying values of $185.4 million and $183.6 million, respectively, at December 31, 2011 and 2010.

At December 31, 2011, approximately $219.6 million, or 95% of the total issued amount, had interest rates that are adjustable on a quarterly basis based on a spread over three month LIBOR. Interest expense for junior subordinated debentures decreased in 2011 as compared to 2010 and in 2010 as compared to 2009, primarily resulting from decreases in short-term market interest rates and LIBOR. Although increases in short-term market interest rates will increase the interest expense for junior subordinated debentures, we believe that other attributes of our balance sheet will serve to mitigate the impact to net interest income on a consolidated basis.

On January 1, 2007, the Company elected the fair value measurement option for certain pre-existing junior subordinated debentures of $97.9 million (the Umpqua Statutory Trusts). The remaining junior subordinated debentures as of the adoption date were acquired through business combinations and were measured at fair value at the time of acquisition. In 2007, the Company issued two series of trust preferred securities and elected to measure each instrument at fair value. Accounting for junior subordinated debentures originally issued by the Company at fair value enables us to more closely align our financial performance with the economic value of those liabilities. Additionally, we believe it improves our ability to manage the market and interest rate risks associated with the junior subordinated debentures. The junior subordinated debentures measured at fair value and amortized cost have been presented as separate line items on the balance sheet. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants under current market conditions as of the measurement date.

The significant inputs utilized in the estimation of fair value of these instruments are the credit risk adjusted spread and three month LIBOR. The credit risk adjusted spread represents the nonperformance risk of the liability, contemplating the inherent risk of the obligation. Generally, an increase in the credit risk adjusted spread and/or a decrease in the three month LIBOR will result in positive fair value adjustments. Conversely, a decrease in the credit risk adjusted spread and/or an increase in the three month LIBOR will result in negative fair value adjustments.

Through the first quarter of 2010 we obtained valuations from a third-party pricing service to assist with the estimation and determination of fair value of these liabilities. In these valuations, the credit risk adjusted interest spread for potential new issuances through the primary market and implied spreads of these instruments when traded as assets on the secondary market, were estimated to be significantly higher than the contractual spread of our junior subordinated debentures measured at fair value. The difference between these spreads has resulted in the cumulative gain in fair value, reducing the carrying value of these instruments as reported on our Condensed Consolidated Balance Sheets. In July 2010, the Dodd-Frank Act was signed into law which, among other things, limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. This law may require many banks to raise new Tier 1 capital and is expected to effectively close the trust-preferred securities markets from offering new issuances in the future. As a result of this legislation, our third-party pricing service noted that they were no longer to able to provide reliable fair value estimates related to these liabilities given the absence of observable or comparable transactions in the market place in recent history or as anticipated into the future.

Due to inactivity in the junior subordinated debenture market and the inability to obtain observable quotes of our, or similar, junior subordinated debenture liabilities or the related trust preferred securities when traded as assets, we utilize an income approach valuation technique to determine the fair value of these liabilities using our estimation of market discount rate assumptions. The Company monitors activity in the trust preferred and related markets, to the extent available, changes related to the current and anticipated future interest rate environment, and considers our entity-specific creditworthiness, to validate the reasonableness of the credit risk adjusted spread and effective yield utilized in our discounted cash flow model. Regarding the activity in and condition of the junior subordinated debt market, we noted no observable changes in the current period as it

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relates to companies comparable to our size and condition, in either the primary or secondary markets. Relating to the interest rate environment, we considered the change in slope and shape of the forward LIBOR swap curve in the current period, the affects of which did not result in a significant change in the fair value of these liabilities.

The Company’s specific credit risk is implicit in the credit risk adjusted spread used to determine the fair value of our junior subordinated debentures. As our Company is not specifically rated by any credit agency, it is difficult to specifically attribute changes in our estimate of the applicable credit risk adjusted spread to specific changes in our own creditworthiness versus changes in the market’s required return from similar companies. As a result, these considerations must be largely based off of qualitative considerations as we do not have a credit rating and we do not regularly issue senior or subordinated debt that would provide us an independent measure of the changes in how the market quantifies our perceived default risk.

On a quarterly basis we assess entity-specific qualitative considerations that if not mitigated or represents a material change from the prior reporting period may result in a change to the perceived creditworthiness and ultimately the estimated credit risk adjusted spread utilized to value these liabilities. Entity-specific considerations that positively impact our creditworthiness include: our strong capital position resulting from our successful public stock offerings in 2009 and 2010, that offers us flexibility to pursue business opportunities such as mergers and acquisitions, or expand our footprint and product offerings; having significant levels of on and off-balance sheet liquidity; being profitable (after excluding the one-time goodwill impairment charge recognized in 2009); and, having an experienced management team. However, these positive considerations are mitigated by significant risks and uncertainties that impact our creditworthiness and ability to maintain capital adequacy in the future. Specific risks and concerns include: given our concentration of loans secured by real estate in our loan portfolio, a continued and sustained deterioration of the real estate market may result in declines in the value of the underlying collateral and increased delinquencies that could result in an increased of charge-offs; despite recent improvement, our credit quality metrics remain negatively elevated since 2007 relative to historical standards; the continuation of current economic downturn that has been particularly severe in our primary markets could adversely affect our business; recent increased regulation facing our industry, such as the ESAA, ARRA and the Dodd-Frank Act, will increase the cost of compliance and restrict our ability to conduct business consistent with historical practices, and could negatively impact profitability; we have a significant amount of goodwill and other intangible assets that dilute our available tangible common equity; and the carrying value of certain material, recently recorded assets on our balance sheet, such as the FDIC loss-sharing indemnification asset, are highly reliant on management estimates, such as the timing or amount of losses that are estimated to be covered, and the assumed continued compliance with the provisions of the loss-share agreement. To the extent assumptions ultimately prove incorrect or should we consciously forego or unknowingly violate the guidelines of the agreement, an impairment of the asset may result which would reduce capital.

Additionally, the Company periodically utilizes an external valuation firm to determine or validate the reasonableness of the assessments of inputs and factors that ultimately determines the estimate fair value of these liabilities. The extent we involve or engage these external third parties correlates to management’s assessment of the current subordinate debt market, how the current environment and market compares to the preceding quarter, and perceived changes in the Company’s own creditworthiness during the quarter. In periods of potential significant valuation changes and at year-end reporting periods we typically engage third parties to perform a full independent valuation of these liabilities. For periods where management has assessed the market and other factors impacting the underlying valuation assumptions of these liabilities, and has determined significant changes to the valuation of these liabilities in the current period are remote, the scope of the valuation specialist’s review is limited to a review the reasonableness of Management’s assessment of inputs. In the fourth quarter of 2011, the Company engaged an external valuation firm to prepare an independent valuation of our junior subordinated debentures measured at fair value and the results were consistent with the Company’s valuation.

Absent changes to the significant inputs utilized in the discounted cash flow model used to measure the fair value of these instruments at each reporting period, the cumulative discount for each junior subordinated debenture will reverse over time, ultimately returning the carrying values of these instruments to their notional values at their expected redemption dates, in a manner similar to the effective yield method as if these instruments were accounted for under the amortized cost method. For the year ended December 31, 2011, 2010, 2009, we recorded a loss of $2.2 million, a gain of $5.0 million, and a gain of $6.5

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million, respectively, resulting from the change in fair value of the junior subordinated debentures recorded at fair value. Observable activity in the junior subordinated debenture and related markets in future periods may change the effective rate used to discount these liabilities, and could result in additional fair value adjustments (gains or losses on junior subordinated debentures measured at fair value) outside the expected periodic change in fair value had the fair value assumptions remained unchanged.

As noted above, the Dodd-Frank Act limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. As the Company had less than $15 billion in assets at December 31, 2009, under the Dodd-Frank Act, the Company will be able to continue to include its existing trust preferred securities, less the common stock of the Trusts, in Tier 1 capital. At December 31, 2011, the Company’s restricted core capital elements were 18.4% of total core capital, net of goodwill and any associated deferred tax liability.

The contractual interest expense on junior subordinated debentures continues to be recorded on an accrual basis and is reported in interest expense. The junior subordinated debentures recorded at fair value of $82.9 million had contractual unpaid principal amounts of $134.0 million outstanding as of December 31, 2011. The junior subordinated debentures recorded at fair value of $80.7 million had contractual unpaid principal amounts of $134.0 million outstanding as of December 31, 2010.

Additional information regarding junior subordinated debentures measured at fair value is included in Note 24 of the Notes to Consolidated Financial Statements in Item 8 below.

All of the debentures issued to the Trusts, less the common stock of the Trusts, qualified as Tier 1 capital as of December 31, 2011, under guidance issued by the Board of Governors of the Federal Reserve System. Additional information regarding the terms of the junior subordinated debentures, including maturity/redemption dates, interest rates and the fair value election, is included in Note 18 of the Notes to Consolidated Financial Statements in Item 8 below.

LIQUIDITY AND CASH FLOW

The principal objective of our liquidity management program is to maintain the Bank’s ability to meet the day-to-day cash flow requirements of our customers who either wish to withdraw funds or to draw upon credit facilities to meet their cash needs.

We monitor the sources and uses of funds on a daily basis to maintain an acceptable liquidity position. One source of funds includes public deposits. Individual state laws require banks to collateralize public deposits, typically as a percentage of their public deposit balance in excess of FDIC insurance. Public deposits represent 10.9% of total deposits at December 31, 2011 and 10.3% at December 31, 2010. The amount of collateral required varies by state and may also vary by institution within each state, depending on the individual state’s risk assessment of depository institutions. Changes in the pledging requirements for uninsured public deposits may require pledging additional collateral to secure these deposits, drawing on other sources of funds to finance the purchase of assets that would be available to be pledged to satisfy a pledging requirement, or could lead to the withdrawal of certain public deposits from the Bank. In addition to liquidity from core deposits and the repayments and maturities of loans and investment securities, the Bank can utilize established uncommitted federal funds lines of credit, sell securities under agreements to repurchase, borrow on a secured basis from the FHLB or issue brokered certificates of deposit.

The Bank had available lines of credit with the FHLB totaling $1.8 billion at December 31, 2011 subject to certain collateral requirements, namely the amount of pledged loans and investment securities. The Bank had available lines of credit with the Federal Reserve totaling $448.5 million subject to certain collateral requirements, namely the amount of certain pledged loans at December 31, 2011. The Bank had uncommitted federal funds line of credit agreements with additional financial institutions totaling $135.0 million at December 31, 2011. Availability of the lines is subject to federal funds balances available for loan and continued borrower eligibility. These lines are intended to support short-term liquidity needs, and the agreements may restrict the consecutive day usage.

The Company is a separate entity from the Bank and must provide for its own liquidity. Substantially all of the Company’s revenues are obtained from dividends declared and paid by the Bank. In 2011, there were $17.5 million of dividends paid by the Bank to the Company. There are statutory and regulatory provisions that could limit the ability of the Bank to pay dividends

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to the Company. We believe that such restrictions will not have an adverse impact on the ability of the Company to fund its quarterly cash dividend distributions to shareholders, when approved, and meet its ongoing cash obligations, which consist principally of debt service on the $230.1 million (issued amount) of outstanding junior subordinated debentures. As of December 31, 2011, the Company did not have any borrowing arrangements of its own.

Additional discussion related to liquidity related risks given the current economic climate is provided in Item 1A Risk Factors above.

As disclosed in the Consolidated Statements of Cash Flows in Item 8 of this report, net cash provided by operating activities was $182.4 million during 2011. The difference between cash provided by operating activities and net income largely consisted of non-cash items including a $46.2 million provision for non-covered loan and lease losses and a $16.1 million provision for covered loan and lease losses. Net cash of $382.7 million used by investing activities consisted principally of $1.2 billion of purchases of investment securities available for sale, net non-covered loan originations of $327.0 million, $34.0 million of purchases of premises and equipment, partially offset by net proceeds from the FDIC indemnification asset of $54.9 million, and proceeds from investment securities available for sale of $927.3 million, net covered loan paydowns of $119.8 million, proceeds from the sale of non-covered other real estate owned of $35.3 million, proceeds from the sale of covered other real estate owned of $17.6 million, and proceeds from the sale of loans of $11.2 million. The $205.0 million of cash used by financing activities primarily consisted of $196.1 million decrease in net deposits, $29.8 million of retirement of common stock, $25.3 million of dividends paid on common stock and $5.0 million repayment of term debt, partially offset by $50.8 million increase in net securities sold under agreements to repurchase.

Although we expect the Bank’s and the Company’s liquidity positions to remain satisfactory during 2012, it is possible that our deposit growth for 2012 may not be maintained at previous levels due to pricing pressure or, in order to generate deposit growth, our pricing may need to be adjusted in a manner that results in increased interest expense on deposits.

OFF-BALANCE-SHEET ARRANGEMENTS

Information regarding Off-Balance-Sheet Arrangements is included in Note 20 and Note 21 of the Notes to Consolidated Financial Statements in Item 8 below.

The following table presents a summary of significant contractual obligations extending beyond one year as of December 31, 2011 and maturing as indicated:

Future Contractual Obligations

As of December 31, 2011:

(in thousands)

	Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
Deposits (1)	$	8,544,824	$	514,983	$	174,178	$	2,705	$	9,236,690
Term debt		—		—		190,016		55,519		245,535
Junior subordinated debentures(2)		—		—		—		230,061		230,061
Operating leases		15,695		25,300		17,726		21,386		80,107
Other long-term liabilities(3)		1,933		3,359		3,196		34,112		42,600
Total contractual obligations	$	8,562,452	$	543,642	$	385,116	$	343,783	$	9,834,993

(1) Deposits with indeterminate maturities, such as demand, savings and money market accounts, are reflected as obligations due in less than one year.

(2) Represents the issued amount of all junior subordinated debentures.

(3) Includes maximum payments related to employee benefit plans, assuming all future vesting conditions are met. Additional information about employee benefit plans is provided in Note 19 of the Notes to Consolidated Financial Statements in Item 8 below.

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Umpqua Holdings Corporation

The table above does not include interest payments or purchase accounting adjustments related to deposits, term debt or junior subordinated debentures.

As of December 31, 2011, the Company has a liability for unrecognized tax benefits relating to California tax incentives and temporary differences in the amount of $717,000, which includes accrued interest of $167,000. As the Company is not able to estimate the period in which this liability will be paid in the future, this amount is not included in the future contractual obligations table above.

CONCENTRATIONS OF CREDIT RISK

Information regarding Concentrations of Credit Risk is included in Notes 3, 5, and 20 of the Notes to Consolidated Financial Statements.

CAPITAL RESOURCES

Shareholders’ equity at December 31, 2011 was $1.7 billion, an increase of $29.8 million, or 2%, from December 31, 2010. The increase in shareholders’ equity during 2011 was principally due to net income of $74.5 million, offset by stock repurchases of $29.8 million and common stock dividends of $27.5 million.

The Federal Reserve Board has in place guidelines for risk-based capital requirements applicable to U.S. banks and bank/financial holding companies. These risk-based capital guidelines take into consideration risk factors, as defined by regulation, associated with various categories of assets, both on and off-balance sheet. Under the guidelines, capital strength is measured in two tiers, which are used in conjunction with risk-adjusted assets to determine the risk-based capital ratios. The guidelines require an 8% total risk-based capital ratio, of which 4% must be Tier I capital. Our consolidated Tier I capital, which consists of shareholders’ equity and qualifying trust-preferred securities, less other comprehensive income, goodwill, other intangible assets, disallowed servicing assets and disallowed deferred tax assets, totaled $1.2 billion at December 31, 2011. Tier II capital components include all, or a portion of, the allowance for loan and lease losses and the portion of trust preferred securities in excess of Tier I statutory limits. The total of Tier I capital plus Tier II capital components is referred to as Total Risk-Based Capital, and was $1.3 billion at December 31, 2011. The percentage ratios, as calculated under the guidelines, were 15.91% and 17.16% for Tier I and Total Risk-Based Capital, respectively, at December 31, 2011. The Tier 1 and Total Risk-Based Capital ratios at December 31, 2010 were 16.36% and 17.62%, respectively.

A minimum leverage ratio is required in addition to the risk-based capital standards and is defined as period-end shareholders’ equity and qualifying trust preferred securities, less other comprehensive income, goodwill and deposit-based intangibles, divided by average assets as adjusted for goodwill and other intangible assets. Although a minimum leverage ratio of 4% is required for the highest-rated financial holding companies that are not undertaking significant expansion programs, the Federal Reserve Board may require a financial holding company to maintain a leverage ratio greater than 4% if it is experiencing or anticipating significant growth or is operating with less than well-diversified risks in the opinion of the Federal Reserve Board. The Federal Reserve Board uses the leverage and risk-based capital ratios to assess capital adequacy of banks and financial holding companies. Our consolidated leverage ratios at December 31, 2011 and 2010 were 10.91% and 10.56%, respectively. As of December 31, 2011, the most recent notification from the FDIC categorized the Bank as “well-capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s regulatory capital category.

During the year ended December 31, 2011, the Company made no contributions to the Bank. At December 31, 2011, all three of the capital ratios of the Bank exceeded the minimum ratios required by federal regulation. Management monitors these ratios on a regular basis to ensure that the Bank remains within regulatory guidelines. Further information regarding the actual and required capital ratios is provided in Note 23 of the Notes to Consolidated Financial Statements in Item 8 below.

On February 3, 2010, the Company raised $303.6 million through a public offering by issuing 8,625,000 shares of the Company’s common stock, including 1,125,000 shares pursuant to the underwriters’ over-allotment option, at a share price of $11.00 per share and 18,975,000 depository shares, including 2,475,000 depository shares pursuant to the underwriter’s over-allotment option, also at a price of $11.00 per share. Fractional interests (1/100th) in each share of the Series B Common Stock

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Equivalent were represented by the 18,975,000 depositary shares; as a result, each depositary share would convert into one share of common stock. The net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $288.1 million. The net proceeds from the offering were used to redeem the preferred stock issued to the United States Department of the Treasury (“U.S. Treasury”) under the Troubled Asset Relief Program (“TARP”) Capital Purchase Program (“CPP”), to fund FDIC-assisted acquisition opportunities and for general corporate purposes.

On February 17, 2010, the Company redeemed all of the outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury under the TARP CPP for an aggregate purchase price of $214.2 million. As a result of the repurchase of the Series A preferred stock, the Company incurred a one-time deemed dividend of $9.7 million due to the accelerated amortization of the remaining issuance discount on the preferred stock.

On March 31, 2010, the Company repurchased the common stock warrant issued to the U.S. Treasury pursuant to the TARP CPP, for $4.5 million. The warrant repurchase, together with the Company’s redemption in February 2010 of the entire amount of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury, represents full repayment of all TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

On April 20, 2010, shareholders of the Company approved an amendment to the Company’s Restated Articles of Incorporation. The amendment, which became effective on April 21, 2010, increased the number of authorized shares of common stock to 200,000,000 (from 100,000,000). As a result of the effectiveness of the amendment, as of the close of business on April 21, 2010, the Company’s Series B Common Stock Equivalent preferred stock automatically converted into newly issued shares of common stock at a conversion rate of 100 shares of common stock for each share of Series B Common Stock Equivalent preferred stock. All shares of Series B Common Stock Equivalent preferred stock and representative depositary shares ceased to exist upon the conversion. Trading in the depositary shares on NASDAQ (ticker symbol “UMPQP”) ceased and the UMPQP symbol voluntarily delisted effective as of the close of business on April 21, 2010.

During 2011, Umpqua’s Board of Directors declared a quarterly cash dividend of $0.05 per common share for the first and second quarters and $0.07 per common share for the third and fourth quarters. These dividends were made pursuant to our existing dividend policy and in consideration of, among other things, earnings, regulatory capital levels, the overall payout ratio and expected asset growth. We expect that the dividend rate will be reassessed on a quarterly basis by the Board of Directors in accordance with the dividend policy. The payment of cash dividends is subject to regulatory limitations as described under the Supervision and Regulation section of Part I of this report.

There is no assurance that future cash dividends on common shares will be declared or increased. The following table presents cash dividends declared and dividend payout ratios (dividends declared per common share divided by basic earnings per common share) for the years ended December 31, 2011, 2010 and 2009:

Cash Dividends and Payout Ratios per Common Share

	2011		2010		2009
Dividend declared per common share	$	0.24	$	0.20	$	0.20
Dividend payout ratio		37%		133%		-8%

The Company’s share repurchase plan, which was first approved by the Board and announced in August 2003, was amended on September 29, 2011 to increase the number of common shares available for repurchase under the plan to 15 million shares. The repurchase program will run through June 2013. As of December 31, 2011, a total of 12.6 million shares remained available for repurchase. The Company repurchased 2.5 million shares under the repurchase plan in 2011. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, and our capital plan. In addition, our stock plans provide that option and award holders may pay for the exercise price and tax withholdings in part or whole by tendering previously held shares.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk arises primarily from credit risk and interest rate risk inherent in our investment, lending and financing activities. To manage our credit risk, we rely on various controls, including our underwriting standards and loan policies, internal loan monitoring and periodic credit reviews as well as our allowance of loan and lease losses (“ALLL”) methodology, all of which are administered by the Bank’s Credit Quality Group or ALLL Committee. Additionally, the Bank’s Loan and Investment Committee provides board oversight over the Company’s loan and investment portfolio risk management functions, and the Bank’s Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology.

Interest rate risk is the potential for loss resulting from adverse changes in the level of interest rates on the Company’s net interest income. The absolute level and volatility of interest rates can have a significant impact on our profitability. The objective of interest rate risk management is to identify and manage the sensitivity of net interest income to changing interest rates to achieve our overall financial objectives. Based on economic conditions, asset quality and various other considerations, management establishes tolerance ranges for interest rate sensitivity and manages within these ranges. Net interest income and the fair value of financial instruments are greatly influenced by changes in the level of interest rates. We manage exposure to fluctuations in interest rates through policies that are established by the Asset/Liability Management Committee (“ALCO”). The ALCO meets monthly and has responsibility for developing asset/liability management policy, formulating and implementing strategies to improve balance sheet positioning and earnings and reviewing interest rate sensitivity. The Board of Directors’ Loan and Investment Committee provides oversight of the asset/liability management process, reviews the results of the interest rate risk analyses prepared for the ALCO and approves the asset/liability policy on an annual basis.

We measure our interest rate risk position on at least a quarterly basis using three methods: (i) gap analysis, (ii) net interest income simulation; and (ii) economic value of equity (fair value of financial instruments) modeling. The results of these analyses are reviewed by ALCO and the Loan and Investment Committee quarterly. If hypothetical changes to interest rates cause changes to our simulated net interest income simulation or economic value of equity modeling outside of our pre-established internal limits, we may adjust our asset and liability size or mix in our effort to bring our interest rate risk exposure within our established limits.

Gap Analysis

A gap analysis provides information about the volume and repricing characteristics and relationship between the amounts of interest-sensitive assets and interest-bearing liabilities at a particular point in time. An effective interest rate strategy attempts to match the volume of interest sensitive assets and interest bearing liabilities respond to changes in interest rates within an acceptable timeframe, thereby minimizing the impact of interest rate changes on net interest income. Interest rate sensitivity is measured as the difference between the volumes of assets and liabilities at a point in time that are subject to repricing at various time horizons: immediate to three months, four to twelve months, one to five years, over five years, and on a cumulative basis. The differences are known as interest sensitivity gaps. The main focus of this interest rate management tool is the gap sensitivity identified as the cumulative one year gap. The table below sets forth interest sensitivity gaps for these different intervals as of December 31, 2011.

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Interest Sensitivity Gap

December 31, 2011

(in thousands)

	By Repricing Interval
	0-3 Months			4-12 Months			1-5 Years		Over 5 Years		Non-Rate- Sensitive			Total
ASSETS
Interest bearing deposits	$	445,954		$	—		$	—	$	—	$	—		$	445,954
Temporary Investments		547			—			—		—		—			547
Trading account assets		2,309			—			—		—		—			2,309
Securities held to maturity		332,435			843,002			1,578,389		254,941		159,811			3,168,578
Securities available for sale		1,304			177			908		2,906		(581	)		4,714
Loans held for sale		1,642			5,927			26,979		64,143		—			98,691
Non-covered loans and leases		2,019,503			1,104,417			2,537,232		142,991		83,955			5,888,098
Covered loans and leases		140,916			170,263			313,985		20,737		(23,450	)		622,451
Non-interest earning assets		—			—			—		—		1,332,013			1,332,013
Total assets		2,944,610			2,123,786			4,457,493		485,718		1,551,748		$	11,563,355
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing demand deposits		993,579			—			—		—		—		$	993,579
Savings and money market deposits		4,048,313			—			—		—		—			4,048,313
Time deposits		626,157			962,967			689,848		2,705		—			2,281,677
Securities sold under agreements to repurchase		124,605			—			—		—		—			124,605
Term debt		9			26			190,154		55,346		10,141			255,676
Junior subordinated debentures, at fair value		134,024										(51,119	)		82,905
Junior subordinated debentures, at amortized cost		85,572			—			—		10,465		6,507			102,544
Non-interest bearing liabilities and shareholders’ equity		—			—			—		—		3,674,056			3,674,056
Total liabilities and shareholders’ equity		6,012,259			962,993			880,002		68,516		3,639,585		$	11,563,355
Interest rate sensitivity gap		(3,067,649	)		1,160,793			3,577,491		417,202		(2,087,837	)
Cumulative interest rate sensitivity gap	$	(3,067,649	)	$	(1,906,856	)	$	1,670,635	$	2,087,837	$	—
Cumulative gap as a % of earning assets		-30.0%			-18.6%			16.3%		20.4%

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Umpqua Holdings Corporation

The gap table has inherent limitations and actual results may vary significantly from the results suggested by the gap table. The gap table is unable to incorporate certain balance sheet characteristics or factors. The gap table assumes a static balance sheet and looks at the repricing of existing assets and liabilities without consideration of new loans and deposits that reflect a more current interest rate environment. Changes in the mix of earning assets or supporting liabilities can either increase or decrease the net interest margin without affecting interest rate sensitivity. In addition, the interest rate spread between an asset and its supporting liability can vary significantly, while the timing of repricing for both the asset and the liability remains the same, thus impacting net interest income. This characteristic is referred to as basis risk and generally relates to the possibility that the repricing characteristics of short-term assets tied to the prime rate are different from those of short-term funding sources such as certificates of deposit. Varying interest rate environments can create unexpected changes in prepayment levels of assets and liabilities that are not reflected in the interest rate sensitivity analysis. These prepayments may have a significant impact on our net interest margin.

For example, unlike the net interest income simulation, the interest rate risk profile of certain deposit products and floating rate loans that have reached their floors cannot be captured effectively in a gap table. Although the table shows the amount of certain assets and liabilities scheduled to reprice in a given time frame, it does not reflect when or to what extent such repricings may actually occur. For example, interest-bearing checking, money market and savings deposits are shown to reprice in the first 3 months, but we may choose to reprice these deposits more slowly and incorporate only a portion of the movement in market rates based on market conditions at that time. Alternatively, a loan which has reached its floor may not reprice even though market interest rates change causing such loan to act like a fixed rate loan regardless of its scheduled repricing date. The gap table as presented cannot factor in the flexibility we believe we have in repricing deposits or the floors on our loans.

Because of these factors, an interest sensitivity gap analysis may not provide an accurate assessment of our exposure to changes in interest rates. We believe the estimated effect of a change in interest rates is better reflected in our net interest income and market value of equity simulations.

Net Interest Income Simulation

Interest rate sensitivity is a function of the repricing characteristics of our interest earnings assets and interest bearing liabilities. These repricing characteristics are the time frames within which the interest bearing assets and liabilities are subject to change in interest rates either at replacement, repricing or maturity during the life of the instruments. Interest rate sensitivity management focuses on the maturity structure of assets and liabilities and their repricing characteristics during periods of changes in market interest rates.

Management utilizes an interest rate simulation model to estimate the sensitivity of net interest income to changes in market interest rates. This model is an interest rate risk management tool and the results are not necessarily an indication of our future net interest income. This model has inherent limitations and these results are based on a given set of rate changes and assumptions at one point in time. These estimates are based upon a number of assumptions for each scenario, including changes in the size or mix of the balance sheet, new volume rates for new balances, the rate of prepayments, and the correlation of pricing to changes in the interest rate environment. For example, for interest bearing deposit balances we may choose to reprice these balances more slowly and incorporate only a portion of the movement in market rates based on market conditions at that time. Additionally, our primary analysis assumes a static balance sheet, both in terms of the total size and mix of our balance sheet, meaning cash flows from the maturity or repricing of assets and liabilities are redeployed in the same instrument at modeled rates.

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Changes that could vary significantly from our assumptions include loan and deposit growth or contraction, changes in the mix of our earning assets or funding sources, the performance of covered loans accounted for under the expected cash flow method, and future asset/liability management decisions, all of which may have significant effects on our net interest income. Also, some of the assumptions made in the simulation model may not materialize and unanticipated events and circumstances will occur. In addition, the simulation model does not take into account any future actions management could undertake to mitigate the impact of interest rate changes or the impact a change in interest rates may have on our credit risk profile, loan prepayment estimates and spread relationships, which can change regularly. Actions we could undertake include, but are not limited to, growing or contracting the balance sheet, changing the composition of the balance sheet, or changing our pricing strategies for loans or deposits.

The estimated impact on our net interest income over a time horizon of one year as of December 31, 2011 is indicated in the table below. For the scenarios shown, the interest rate simulation assumes a parallel and sustained shift in market interest rates ratably over a twelve-month period and no change in the composition or size of the balance sheet. For example, the “up 200 basis points” scenario is based on a theoretical increase in market rates of 16.7 basis points per month for twelve months applied to the balance sheet of December 31 for each respective year.

Interest Rate Simulation Impact on Net Interest Income

As of December 31,

(dollars in thousands)

	2011					2010					2009
	Increase (Decrease) in Net Interest Income from Base Scenario			Percentage Change		Increase (Decrease) in Net Interest Income from Base Scenario			Percentage Change		Decrease in Net Interest Income from Base Scenario			Percentage Change
Up 300 basis points	$	6,383			1.6%	$	7,495			2.0%	$	(1,203	)		-0.4%
Up 200 basis points	$	5,031			1.3%	$	9,115			2.4%	$	(2,118	)		-0.6%
Up 100 basis points	$	2,021			0.5%	$	6,464			1.7%	$	(3,033	)		-0.9%
Down 100 basis points	$	(6,153	)		-1.5%	$	(12,478	)		-3.3%	$	(290	)		-0.1%
Down 200 basis points	$	(15,460	)		-3.9%	$	(21,512	)		-5.7%	$	(7,609	)		-2.2%
Down 300 basis points	$	(24,236	)		-6.1%	$	(30,172	)		-8.0%	$	(14,928	)		-4.4%

Asset sensitivity indicates that in a rising interest rate environment a Company’s net interest margin would increase and in decreasing interest rate environment a Company’s net interest margin would decrease. Liability sensitivity indicates that in a rising interest rate environment a Company’s net interest margin would decrease and in decreasing interest rate environment a Company’s net interest margin would increase. For both December 31, 2011 and December 31, 2010, we were “asset-sensitive” in both increased and decreased market interest rate scenarios, although the relative level of asset sensitivity in 2011 declined from the prior year. At December 31, 2009, we were “liability-sensitive” in an increased market interest rate scenario, and “asset-sensitive” in a decreased market interest rate scenario.

In general, we view the net interest income model results as more relevant to the Company’s current operating profile (a going concern), and we primarily manage our balance sheet based on this information.

Economic Value of Equity

Another interest rate sensitivity measure we utilize is the quantification of market value changes for all financial assets and liabilities, given an increase or decrease in market interest rates. This approach provides a longer-term view of interest rate risk, capturing all future expected cash flows. Assets and liabilities with option characteristics are measured based on different interest rate path valuations using statistical rate simulation techniques. The projections are by their nature forward-looking and therefore inherently uncertain, and include various assumptions regarding cash flows and discount rates.

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Umpqua Holdings Corporation

The table below illustrates the effects of various instantaneous market interest rate changes on the fair values of financial assets and liabilities (excluding mortgage servicing rights) as compared to the corresponding carrying values and fair values:

Interest Rate Simulation Impact on Fair Value of Financial Assets and Liabilities

As of December 31,

(dollars in thousands)

	2011					2010
	Decrease in Estimated Fair Value of Equity			Percentage Change		Increase (Decrease) in Estimated Fair Value of Equity			Percentage Change
Up 300 basis points	$	(115,995	)		-6.0%	$	(214,740	)		-9.3%
Up 200 basis points	$	(48,051	)		-2.5%	$	(114,667	)		-5.0%
Up 100 basis points	$	(14,229	)		-0.7%	$	(59,857	)		-2.6%
Down 100 basis points	$	(17,857	)		0.0%	$	(55,141	)		-2.4%
Down 200 basis points	$	24,283			1.3%	$	(126,830	)		-5.5%
Down 300 basis points	$	160,635			8.3%	$	(179,198	)		-7.8%

As of December 31, 2011, our economic value of equity model indicates a liability sensitive profile, suggesting a sudden or sustained increase in rates would result in a decrease in our estimated market value of equity. Consistent with the results in the interest rate simulation impact on net interest income, our overall sensitivity to market interest rate changes as of December 31, 2011 has decreased compared to December 31, 2010. As of December 31, 2011, our estimated economic value of equity (fair value of financial assets and liabilities) exceeded our book value of equity. This result is primarily based on the significant value placed on the Company’s significant amount of noninterest bearing and low interest bearing deposits and fixed rates or floors characteristics included in the Company’s loan portfolio. While noninterest bearing deposits do not impact the net interest income simulation, the value of these deposits have a significant impact on the economic value of equity model, particularly when market rates are assumed to rise.

IMPACT OF INFLATION AND CHANGING PRICES

A financial institution’s asset and liability structure is substantially different from that of an industrial firm in that primarily all assets and liabilities of a bank are monetary in nature, with relatively little investment in fixed assets or inventories. Inflation has an important impact on the growth of total assets and the resulting need to increase equity capital at higher than normal rates in order to maintain appropriate capital ratios. We believe that the impact of inflation on financial results depends on management’s ability to react to changes in interest rates and, by such reaction, reduce the inflationary impact on performance. We have an asset/liability management program which attempts to manage interest rate sensitivity. In addition, periodic reviews of banking services and products are conducted to adjust pricing in view of current and expected costs.

Our financial statements included in Item 8 below have been prepared in accordance with accounting principles generally accepted in the United States, which requires us to measure financial position and operating results principally in terms of historic dollars. Changes in the relative value of money due to inflation or recession are generally not considered. The primary effect of inflation on our results of operations is through increased operating costs, such as compensation, occupancy and business development expenses. In management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the rate of inflation. Although interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond our control, including U.S. fiscal and monetary policy and general national and global economic conditions.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Umpqua Holdings Corporation and Subsidiaries

We have audited the accompanying consolidated balance sheets of Umpqua Holdings Corporation and Subsidiaries (the Company) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in shareholders’ equity, comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011. We also have audited the Company’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risks. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Umpqua Holdings Corporation and Subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Umpqua Holdings Corporation and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

/s/ Moss Adams LLP

Portland, Oregon

February 17, 2012

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Umpqua Holdings Corporation

UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2011 and 2010

(in thousands, except shares)

	December 31, 2011			December 31, 2010
ASSETS
Cash and due from banks	$	152,265		$	111,946
Interest bearing deposits		445,954			891,634
Temporary investments		547			545
Total cash and cash equivalents		598,766			1,004,125
Investment securities
Trading, at fair value		2,309			3,024
Available for sale, at fair value		3,168,578			2,919,180
Held to maturity, at amortized cost		4,714			4,762
Loans held for sale		98,691			75,626
Non-covered loans and leases		5,888,098			5,658,987
Allowance for non-covered loan and lease losses		(92,968	)		(101,921	)
Non-covered loans and leases, net		5,795,130			5,557,066
Covered loans and leases, net of allowance of $14,320 and $2,721		622,451			785,898
Restricted equity securities		32,581			34,475
Premises and equipment, net		152,366			136,599
Goodwill and other intangible assets, net		677,224			681,969
Mortgage servicing rights, at fair value		18,184			14,454
Non-covered other real estate owned		34,175			32,791
Covered other real estate owned		19,491			29,863
FDIC indemnification asset		91,089			146,413
Other assets		247,606			242,465
Total assets	$	11,563,355		$	11,668,710
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Noninterest bearing	$	1,913,121		$	1,616,687
Interest bearing		7,323,569			7,817,118
Total deposits		9,236,690			9,433,805
Securities sold under agreements to repurchase		124,605			73,759
Term debt		255,676			262,760
Junior subordinated debentures, at fair value		82,905			80,688
Junior subordinated debentures, at amortized cost		102,544			102,866
Other liabilities		88,522			72,258
Total liabilities		9,890,942			10,026,136
COMMITMENTS AND CONTINGENCIES (NOTE 20)
SHAREHOLDERS’ EQUITY
Common stock, no par value, 200,000,000 shares authorized; issued and outstanding: 112,164,891 in 2011 and 114,536,814 in 2010		1,514,913			1,540,928
Retained earnings		123,726			76,701
Accumulated other comprehensive income		33,774			24,945
Total shareholders’ equity		1,672,413			1,642,574
Total liabilities and shareholders’ equity	$	11,563,355		$	11,668,710

See notes to consolidated financial statements

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UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands, except per share amounts)

	2011			2010			2009
INTEREST INCOME
Interest and fees on non-covered loans	$	319,702		$	336,320		$	355,195
Interest and fees on covered loans		86,011			73,812			—
Interest and dividends on investment securities
Taxable		85,785			67,388			60,195
Exempt from federal income tax		8,653			8,839			7,794
Dividends		12			14			22
Interest on temporary investments and interest bearing deposits		1,590			2,223			526
Total interest income		501,753			488,596			423,732
INTEREST EXPENSE
Interest on deposits		55,743			76,241			88,742
Interest on securities sold under agreements to repurchase and federal funds purchased		539			517			680
Interest on term debt		9,255			9,229			4,576
Interest on junior subordinated debentures		7,764			7,825			9,026
Total interest expense		73,301			93,812			103,024
Net interest income		428,452			394,784			320,708
PROVISION FOR NON-COVERED LOAN AND LEASE LOSSES		46,220			113,668			209,124
PROVISION FOR COVERED LOAN AND LEASE LOSSES		16,141			5,151			—
Net interest income after provision for loan and lease losses		366,091			275,965			111,584
NON-INTEREST INCOME
Service charges on deposit accounts		33,096			34,874			32,957
Brokerage commissions and fees		12,787			11,661			7,597
Mortgage banking revenue, net		26,550			21,214			18,688
Gain (loss) on investment securities, net
Gain on sale of investment securities, net		7,735			2,326			8,896
Total other-than-temporary impairment losses		(190	)		(93	)		(12,556	)
Portion of other-than-temporary impairment losses (transferred from) recognized in other comprehensive income		(169	)		(321	)		1,983
Total gain (loss) on investment securities, net		7,376			1,912			(1,677	)
(Loss) gain on junior subordinated debentures carried at fair value		(2,197	)		4,980			6,482
Bargain purchase gain on acquisition		—			6,437			—
Change in FDIC indemnification asset		(6,168	)		(16,445	)		—
Other income		12,674			11,271			9,469
Total non-interest income		84,118			75,904			73,516
NON-INTEREST EXPENSE
Salaries and employee benefits		179,480			162,875			126,850
Net occupancy and equipment		51,284			45,940			39,673
Communications		11,214			10,464			7,671
Marketing		6,138			6,225			4,529
Services		24,170			22,576			21,918
Supplies		2,824			3,998			3,257
FDIC assessments		10,768			15,095			15,825
Net loss on non-covered other real estate owned		10,690			8,097			23,204
Net loss (gain) on covered other real estate owned		7,481			(2,172	)		—
Intangible amortization and impairment		4,948			5,389			6,165
Goodwill impairment		—			—			111,952
Merger related expenses		360			6,675			273
Other expenses		29,614			32,576			18,086
Total non-interest expense		338,971			317,738			379,403
Income (loss) before provision for (benefit from) income taxes		111,238			34,131			(194,303	)
Provison for (benefit from) income taxes		36,742			5,805			(40,937	)
Net income (loss)	$	74,496		$	28,326		$	(153,366	)

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Umpqua Holdings Corporation

UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands, except per share amounts)

	2011		2010		2009
Net income (loss)	$	74,496	$	28,326	$	(153,366	)
Preferred stock dividends		—		12,192		12,866
Dividends and undistributed earnings allocated to participating securities		356		67		30
Net earnings (loss) available to common shareholders	$	74,140	$	16,067	$	(166,262	)
Earnings (loss) per common share:
Basic	$	0.65	$	0.15	$	(2.36	)
Diluted	$	0.65	$	0.15	$	(2.36	)
Weighted average number of common shares outstanding:
Basic		114,220		107,922		70,399
Diluted		114,409		108,153		70,399

See notes to consolidated financial statements

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UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands, except shares)

				Common Stock
	Preferred Stock			Shares			Amount			Retained Earnings			Accumulated Other Comprehensive Income			Total
BALANCE AT JANUARY 1, 2009	$	202,178			60,146,400		$	1,005,820		$	264,938		$	14,072		$	1,487,008
Net loss											(153,366	)					(153,366	)
Other comprehensive income, net of tax														10,883			10,883
Comprehensive loss																$	(142,483	)
Issuance of common stock					26,538,461			245,697									245,697
Stock-based compensation								2,188									2,188
Stock repurchased and retired					(19,516	)		(174	)								(174	)
Issuances of common stock under stock plans and related net tax deficiencies					120,243			(243	)								(243	)
Amortization of discount on preferred stock		2,157									(2,157	)					—
Dividends declared on preferred stock											(10,739	)					(10,739	)
Cash dividends on common stock ($0.20 per share)											(14,737	)					(14,737	)
Balance at December 31, 2009	$	204,335			86,785,588		$	1,253,288		$	83,939		$	24,955		$	1,566,517
BALANCE AT JANUARY 1, 2010	$	204,335			86,785,588		$	1,253,288		$	83,939		$	24,955		$	1,566,517
Net income											28,326						28,326
Other comprehensive (loss) income, net of tax														(10	)		(10	)
Comprehensive income																$	28,316
Issuance of common stock					8,625,000			89,786									89,786
Stock-based compensation								3,505									3,505
Stock repurchased and retired					(22,541	)		(284	)								(284	)
Issuances of common stock under stock plans and related net tax benefit					173,767			844									844
Redemption of preferred stock issued to U.S. Treasury		(214,181	)														(214,181	)
Issuance of preferred stock		198,289															198,289
Conversion of preferred stock to common stock		(198,289	)		18,975,000			198,289									—
Amortization of discount on preferred stock		9,846									(9,846	)					—
Dividends declared on preferred stock											(3,686	)					(3,686	)
Repurchase of warrants issued to U.S. Treasury								(4,500	)								(4,500	)
Cash dividends on common stock ($0.20 per share)											(22,032	)					(22,032	)
Balance at December 31, 2010	$	—			114,536,814		$	1,540,928		$	76,701		$	24,945		$	1,642,574
BALANCE AT JANUARY 1, 2011	$	—			114,536,814		$	1,540,928		$	76,701		$	24,945		$	1,642,574
Net income											74,496						74,496
Other comprehensive income, net of tax														8,829			8,829
Comprehensive income																$	83,325
Stock-based compensation								3,785									3,785
Stock repurchased and retired					(2,557,056	)		(29,754	)								(29,754	)
Issuances of common stock under stock plans and related net tax deficiencies					185,133			(46	)								(46	)
Cash dividends on common stock ($0.24 per share)											(27,471	)					(27,471	)
Balance at December 31, 2011	$	—			112,164,891		$	1,514,913		$	123,726		$	33,774		$	1,672,413

See notes to consolidated financial statements

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Umpqua Holdings Corporation

UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands)

	2011			2010			2009
Net income (loss)	$	74,496		$	28,326		$	(153,366	)
Available for sale securities:
Unrealized gains arising during the year		22,101			1,305			23,888
Reclassification adjustment for gains realized in net income (net of tax expense of $3,094, $930, and $3,431 in 2011, 2010, and 2009, respectively)		(4,641	)		(1,396	)		(5,147	)
Income tax expense related to unrealized gains		(8,840	)		(522	)		(9,555	)
Net change in unrealized gains		8,620			(613	)		9,186
Held to maturity securities:
Reclassification adjustment for impairments realized in net income (net of tax benefit of $1,716 in 2009)		—			—			2,574
Amortization of unrealized losses on investment securities transferred to held to maturity (net of tax benefit of $70 in 2009)		—			—			103
Net change in unrealized losses on investment securities transferred to held to maturity		—			—			2,677
Unrealized (losses) gain related to factors other than credit (net of tax expense of $34 and $1,080 in 2011 and 2009, respectively and tax benefit of $150 in 2010)		(52	)		225			(1,620	)
Reclassification adjustment for impairments realized in net income (net of tax benefit of $108, $137 and $307 in 2011, 2010 and 2009, respectively)		161			205			460
Accretion of unrealized losses related to factors other than credit to investment securities held to maturity (net of tax benefit of $66, $115 and $120 in 2011, 2010 and 2009, respectively)		100			173			180
Net change in unrealized losses related to factors other than credit		209			603			(980	)
Other comprehensive income (loss), net of tax		8,829			(10	)		10,883
Comprehensive income (loss)	$	83,325		$	28,316		$	(142,483	)

See notes to consolidated financial statements

97

UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands)

	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	74,496		$	28,326		$	(153,366	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income tax expense (benefit)		2,000			4,393			(18,360	)
Amortization of investment premiums, net		36,086			20,464			9,301
Gain on sale of investment securities, net		(7,735	)		(2,326	)		(8,896	)
Other-than-temporary impairment on investment securities available for sale		—			—			239
Other-than-temporary impairment on investment securities held to maturity		359			414			10,334
Loss on sale of non-covered other real estate owned		1,743			4,023			10,957
Gain on sale of covered other real estate owned		(1,228	)		(4,113	)		—
Valuation adjustment on non-covered other real estate owned		8,947			4,074			12,247
Valuation adjustment on covered other real estate owned		8,709			1,941			—
Provision for non-covered loan and lease losses		46,220			113,668			209,124
Provision for covered loan and lease losses		16,141			5,151			—
Bargain purchase gain on acquisition		—			(6,437	)		—
Change in FDIC indemnification asset		6,168			16,445			—
Depreciation, amortization and accretion		13,151			9,199			11,649
Goodwill impairment		—			—			111,952
Increase in mortgage servicing rights		(6,720	)		(5,645	)		(7,570	)
Change in mortgage servicing rights carried at fair value		2,990			3,878			3,150
Change in junior subordinated debentures carried at fair value		2,217			(4,978	)		(6,854	)
Stock-based compensation		3,785			3,505			2,188
Net decrease (increase) in trading account assets		715			(751	)		(286	)
Gain on sale of loans		(10,676	)		(10,923	)		(6,649	)
Origination of loans held for sale		(821,744	)		(702,449	)		(682,535	)
Proceeds from sales of loans held for sale		809,355			670,872			677,598
Excess tax benefits from the exercise of stock options		(6	)		(7	)		(1	)
Change in other assets and liabilities
Net (increase) decrease in other assets		(17,798	)		47,011			(72,570	)
Net increase (decrease) in other liabilities		15,177			2,914			(8,426	)
Net cash provided by operating activities		182,352			198,649			93,226
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities available for sale		(1,190,686	)		(1,498,224	)		(1,002,490	)
Purchases of investment securities held to maturity		(1,573	)		—			—
Proceeds from investment securities available for sale		927,276			408,670			464,376
Proceeds from investment securities held to maturity		1,637			1,675			2,282
Redemption of restricted equity securities		1,894			472			1,280
Net non-covered loan and lease (originations) paydowns		(327,032	)		146,252			(121,257	)
Net covered loan and lease paydowns		119,772			119,941			—
Proceeds from sales of loans		11,185			38,744			12,519
Proceeds from disposals of furniture and equipment		921			1,237			270
Purchases of premises and equipment		(33,974	)		(47,559	)		(11,239	)
Net proceeds from FDIC indemnification asset		54,881			48,443			—
Proceeds from sales of non-covered other real estate owned		35,340			25,124			26,167
Proceeds from sales of covered other real estate owned		17,615			14,598			—
Proceeds from sale of acquired insurance portfolio		—			5,150			—
Cash acquired in merger, net of cash consideration paid		—			179,046			178,905
Net cash used by investing activities		(382,744	)		(556,431	)		(449,187	)

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UMPQUA HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

For the Years Ended December 31, 2011, 2010 and 2009

(in thousands)

	2011			2010			2009
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposit liabilities	$	(196,063	)	$	847,895		$	667,610
Net increase (decrease) in securities sold under agreements to repurchase		50,846			28,579			(2,408	)
Repayment of term debt		(4,993	)		(165,789	)		(130,191	)
Proceeds from issuance of preferred stock		—			198,289			—
Redemption of preferred stock		—			(214,181	)		—
Repurchase of warrants issued to U.S. Treasury		—			(4,500	)		—
Net proceeds from issuance of common stock		—			89,786			245,697
Dividends paid on preferred stock		—			(3,686	)		(10,739	)
Dividends paid on common stock		(25,317	)		(20,626	)		(13,399	)
Excess tax benefits from the exercise of stock options		6			7			1
Proceeds from stock options exercised		308			1,004			301
Retirement of common stock		(29,754	)		(284	)		(174	)
Net cash (used) provided by financing activities		(204,967	)		756,494			756,698
Net (decrease) increase in cash and cash equivalents		(405,359	)		398,712			400,737
Cash and cash equivalents, beginning of year		1,004,125			605,413			204,676
Cash and cash equivalents, end of year	$	598,766		$	1,004,125		$	605,413
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	78,690		$	99,556		$	106,541
Income taxes	$	47,608		$	285		$	48
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Change in unrealized gains on investment securities available for sale, net of taxes	$	8,620		$	(613	)	$	9,186
Change in unrealized loss on investment securities transferred to held to maturity, net of taxes	$	—		$	—		$	2,677
Change in unrealized losses on investment securities held to maturity related to factors other than credit, net of taxes	$	209		$	603		$	(980	)
Cash dividend declared on common and preferred stock and payable after period-end	$	7,890		$	5,745		$	4,346
Transfer of non-covered loans to non-covered other real estate owned	$	47,414		$	41,491		$	50,914
Transfer of covered loans to covered other real estate owned	$	15,271		$	15,350		$	—
Transfer from FDIC indemnification asset to due from FDIC and other	$	49,156		$	84,660		$	—
Transfer of covered loans to non-covered loans	$	12,263		$	—		$	—
Receivable from sales of noncovered other real estate owned and loans	$	1,100		$	45		$	4,875
Receivable from sales of covered other real estate owned	$	547		$	—		$	—
Conversion of preferred stock to common stock	$	—		$	198,289		$	—
Acquisitions:
Assets acquired	$	—		$	1,512,048		$	4,978
Liabilities assumed	$	—		$	1,505,611		$	183,883

See notes to consolidated financial statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2011, 2010 and 2009

NOTE 1.    SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations—Umpqua Holdings Corporation (the “Company”) is a financial holding company headquartered in Portland, Oregon, that is engaged primarily in the business of commercial and retail banking and the delivery of retail brokerage services. The Company provides a wide range of banking, asset management, mortgage banking and other financial services to corporate, institutional and individual customers through its wholly-owned banking subsidiary Umpqua Bank (the “Bank”). The Company engages in the retail brokerage business through its wholly-owned subsidiary Umpqua Investments, Inc. (“Umpqua Investments”). The Company and its subsidiaries are subject to regulation by certain federal and state agencies and undergo periodic examination by these regulatory agencies.

Basis of Financial Statement Presentation—The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with prevailing practices within the banking and securities industries. In preparing such financial statements, management is required to make certain estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan and lease losses, the valuation of mortgage servicing rights, the fair value of junior subordinated debentures, the valuation of covered loans and the FDIC indemnification asset, and the valuation of goodwill and other intangible assets.

Consolidation—The accompanying consolidated financial statements include the accounts of the Company, the Bank and Umpqua Investments. All significant intercompany balances and transactions have been eliminated in consolidation. As of December 31, 2011, the Company had 14 wholly-owned trusts (“Trusts”) that were formed to issue trust preferred securities and related common securities of the Trusts. The Company has not consolidated the accounts of the Trusts in its consolidated financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB”) ASC 810, Consolidation (“ASC 810”). As a result, the junior subordinated debentures issued by the Company to the Trusts are reflected on the Company’s consolidated balance sheet as junior subordinated debentures.

Subsequent events—The Company has evaluated events and transactions subsequent to December 31, 2011 for potential recognition or disclosure.

Cash and Cash Equivalents—Cash and cash equivalents include cash and due from banks, and temporary investments which are federal funds sold and interest bearing balances due from other banks. Cash and cash equivalents generally have a maturity of 90 days or less at the time of purchase.

Trading Account Securities—Debt and equity securities held for resale are classified as trading account securities and reported at fair value. Realized and unrealized gains or losses are recorded in non-interest income.

Investment Securities—Debt securities are classified as held to maturity if the Company has both the intent and ability to hold those securities to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for amortization of premium and accretion of discount, computed by the effective interest method over their contractual lives.

Securities are classified as available for sale if the Company intends and has the ability to hold those securities for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized holding gains or losses are included in other comprehensive income as a separate component of shareholders’ equity, net of tax. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Premiums and discounts are amortized or accreted over the life of the related investment security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

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Prior to the second quarter of 2009, the Company would assess an other-than-temporary impairment (“OTTI”) or permanent impairment based on the nature of the decline and whether the Company has the ability and intent to hold the investments until a market price recovery. If the Company determined a security to be other-than-temporarily or permanently impaired, the full amount of impairment would be recognized through earnings in its entirety. New guidance related to the recognition and presentation of OTTI of debt securities became effective in the second quarter of 2009. Rather than asserting whether a Company has the ability and intent to hold an investment until a market price recovery, a Company must consider whether it intends to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the amount recorded in OCI increases the carrying value of the investment and does not affect earnings. If there is an indication of additional credit losses the security is re-evaluated according to the procedures described above. OTTI losses totaling $359,000, $414,000, and $10.6 million were recognized through earnings in the years ended December 31, 2011, 2010 and 2009, respectively, within total gain (loss) on investment securities, net.

Transfers of securities from available for sale to held to maturity are accounted for at fair value as of the date of the transfer. The difference between the fair value and the par value at the date of transfer is considered a premium or discount and is accounted for accordingly. Any unrealized gain or loss at the date of the transfer is reported in OCI, and is amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount, and will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held to maturity security.

Loans Held for Sale—Loans held for sale includes mortgage loans and are reported at the lower of cost or market value. Cost generally approximates market value, given the short duration of these assets. Gains or losses on the sale of loans that are held for sale are recognized at the time of the sale and determined by the difference between net sale proceeds and the net book value of the loans less the estimated fair value of any retained mortgage servicing rights.

Non-Covered Loans—Loans are stated at the amount of unpaid principal, net of unearned income and any deferred fees or costs. All discounts and premiums are recognized over the estimated life of the loan as yield adjustments. This estimated life is adjusted for prepayments.

Loans are classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement. The carrying value of impaired loans is based on the present value of expected future cash flows (discounted at each loan’s effective interest rate) or, for collateral dependent loans, at fair value of the collateral, less selling costs. If the measurement of each impaired loans’ value is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. This can be accomplished by charging-off the impaired portion of the loan or establishing a specific component to be provided for in the allowance for loan and lease losses.

Covered Loans—Loans acquired in a FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as “covered loans” and reported separately in our consolidated balance sheets. Covered loans are reported exclusive of the expected cash flow reimbursements expected from the FDIC. Acquired loans are aggregated into pools based on individually evaluated common risk characteristics and aggregate expected cash flows were estimated for each pool. A pool is accounted

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for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. The Company aggregated all of the loans acquired in the FDIC-assisted acquisitions into different pools based on common risk characteristics such as risk rating, underlying collateral, type of interest rate (fixed or adjustable), types of amortization, and other similar factors. A loan will be removed from a pool of loans only if the loan is sold, foreclosed, or assets are received in full satisfaction of the loan, and will be removed from the pool at its carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and its cash, fair value of the collateral, or other assets received will be recognized in income immediately as interest income on loans and would not affect the effective yield used to recognize the accretable yield on the remaining pool. Loans originally placed into a performing pool are not reported individually as 30-89 days past due, non-performing (90+ days past due or nonaccrual), or accounted for as a troubled debt restructuring as the pool is the unit of accounting. Rather, these metrics related to the underlying loans within a performing pool will be considered in our ongoing assessment and estimates of future cash flows. If, at acquisition, the loans are collateral dependent and acquired primarily for the rewards of ownership of the underlying collateral, or if cash flows expected to be collected cannot be reasonably estimated, accrual of income is inappropriate.

The cash flows expected to be received over the life of the pool were estimated by management with the assistance of a third party valuation specialist. These cash flows were input into a FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”) compliant loan accounting system which calculates the carrying values of the pools and underlying loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speeds assumptions will be periodically reassessed and updated within the accounting system to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a pool’s carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan or pool using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through an increase to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for covered loan losses.

The covered loans acquired are and will continue to be subject to the Company’s internal and external credit review and monitoring. If credit deterioration is experienced subsequent to the initial acquisition fair value amount, such deterioration will be measured, and a provision for credit losses will be charged to earnings. These provisions will be mostly offset by an increase to the FDIC indemnification asset, and will be recognized in non-interest income.

The covered loan portfolio also includes revolving lines of credit with funded and unfunded commitments. Balances outstanding at the time of acquisition are accounted for under ASC 310-30. Any additional advances on these loans subsequent to the acquisition date are not accounted for under ASC 310-30.

FDIC Indemnification Asset—The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations. The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into non-interest income over the life of the FDIC indemnification asset.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans, at a pool level, and covered other real estate owned. Generally, any increases in cash flow of the covered assets over those previously expected will result in prospective increases in the loan pool yield and amortization of the FDIC indemnification asset. Any decreases in cash flow of the covered assets under those previously expected will trigger impairments on the underlying loan pools and will result in a corresponding gain of the

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FDIC indemnification asset. Increases and decreases to the FDIC indemnification asset are recorded as adjustments to non-interest income. The resulting carrying value of the indemnification asset represents the present value of amounts recoverable from the FDIC for future expected losses and the amounts due from the FDIC for claims related to covered losses.

Income Recognition on Non-Covered, Non-Accrual and Impaired Loans—Non-covered loans, including impaired non-covered loans, are classified as non-accrual if the collection of principal and interest is doubtful. Generally, this occurs when a non-covered loan is past due as to maturity or payment of principal or interest by 90 days or more, unless such non-covered loans are well-secured and in the process of collection. Generally, if a non-covered loan or portion thereof is partially charged-off, the non-covered loan is considered impaired and classified as non-accrual. Non-covered loans that are less than 90 days past due may also be classified as non-accrual if repayment in full of principal and/or interest is in doubt.

When a non-covered loan is classified as non-accrual, all uncollected accrued interest is reversed to interest income and the accrual of interest income is terminated. Generally, any cash payments are applied as a reduction of principal outstanding. In cases where the future collectability of the principal balance in full is expected, interest income may be recognized on a cash basis. A non-covered loan may be restored to accrual status when the borrower’s financial condition improves so that full collection of future contractual payments is considered likely. For those non-covered loans placed on non-accrual status due to payment delinquency, this will generally not occur until the borrower demonstrates repayment ability over a period of not less than six months.

Non-covered loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include forgiveness of principal or accrued interest, extending the maturity date or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

The decision to classify a non-covered loan as impaired is made by the Bank’s Allowance for Loan and Lease Losses (“ALLL”) Committee. The ALLL Committee meets regularly to review the status of all problem and potential problem loans. If the ALLL Committee concludes a loan is impaired but recovery of the full principal and interest is expected, an impaired loan may remain on accrual status.

Allowance for Loan and Lease Losses—The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality of the portfolio and the adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan and lease losses. The Bank has a management ALLL Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank’s Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Each risk rating is assessed an inherent credit loss factor that determines the amount of the allowance for loan and lease losses provided for that group of loans and leases with similar risk rating. Credit loss factors may vary by region based on management’s belief that there may ultimately be different credit loss rates experienced in each region.

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment

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using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize this impairment reserve as a specific component to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. The combination of the risk rating-based allowance component and the impairment reserve allowance component lead to an allocated allowance for loan and lease losses.

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of economic conditions characterized by falling real estate values. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.

As adjustments become necessary, they are reported in earnings in the periods in which they become known as a change in the provision for loan and lease losses and a corresponding charge to the allowance. Loans, or portions thereof, deemed uncollectible are charged to the allowance. Provisions for losses, and recoveries on loans previously charged-off, are added to the allowance.

The adequacy of the ALLL is monitored on a regular basis and is based on management’s evaluation of numerous factors. These factors include the quality of the current loan portfolio; the trend in the loan portfolio’s risk ratings; current economic conditions; loan concentrations; loan growth rates; past-due and non-performing trends; evaluation of specific loss estimates for all significant problem loans; historical charge-off and recovery experience; and other pertinent information.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our loan portfolio, and have led to an increase in non-performing loans, charge-offs, and the allowance for loan and lease losses. A continued deterioration or prolonged delay in economic recovery in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

Reserve for Unfunded Commitments—A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Bank’s commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. The reserve is based on estimates, and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses, and recoveries on loans commitments previously charged-off, are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets.

Loan Fees and Direct Loan Origination Costs—Loan origination and commitment fees and direct loan origination costs are deferred and recognized as an adjustment to the yield over the life of the related loans.

Restricted Equity Securities—Restricted equity securities were $32.6 million and $34.5 million at December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock amounted to $31.3 million and $33.2 million of the total restricted securities as of December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock represents the Bank’s investment in the

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Federal Home Loan Banks of Seattle and San Francisco (“FHLB”) stock and is carried at par value, which reasonably approximates its fair value. Management periodically evaluates FHLB stock for other-than-temporary or permanent impairment. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB, and (4) the liquidity position of the FHLB.

Moody’s Investors Services rating of the FHLB of Seattle as Aaa was confirmed in August 2011, but a negative outlook was assigned as Moody’s revised the rating outlook to negative for U.S. government debt and all issuers Moody’s considers directly-linked to the U.S. government. Standard and Poors’ rating is AA+, but it also issued a negative outlook with the action reflecting the downgrade of the long-term sovereign credit rating of the U.S. in 2011. Based on the above, the Company has determined there is not an other-than-temporary impairment on the FHLB stock investment as of December 31, 2011.

As a member of the FHLB system, the Bank is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets, or FHLB advances. At December 31, 2011, the Bank’s minimum required investment in FHLB stock was $10.5 million. The Bank may request redemption at par value of any stock in excess of the minimum required investment. Stock redemptions are at the discretion of the FHLB. The remaining restricted equity securities balance primarily represents an investment in Pacific Coast Bankers’ Bancshares stock.

Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided over the estimated useful life of equipment, generally three to ten years, on a straight-line or accelerated basis. Depreciation is provided over the estimated useful life of premises, up to 39 years, on a straight-line or accelerated basis. Generally, leasehold improvements are amortized over the life of the related lease, or the life of the related asset, whichever is shorter. Expenditures for major renovations and betterments of the Company’s premises and equipment are capitalized.

Management reviews long-lived and intangible assets any time that a change in circumstance indicates that the carrying amount of these assets may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of the asset to the forecasted undiscounted cash flows of the operation associated with the asset. If the evaluation of the forecasted cash flows indicates that the carrying value of the asset is not recoverable, the asset is written down to fair value.

Goodwill and Other Intangibles—Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. Amortization of intangible assets is included in other non-interest expense in the Consolidated Statements of Operations.

The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

The goodwill impairment test involves a two-step process. The first step compares the fair value of a reporting unit to its carrying value. If the reporting unit’s fair value is less than its carrying value, the Company would be required to proceed to the second step. In the second step the Company calculates the implied fair value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The estimated fair value of the Company is allocated to all of the Company’s assets and liabilities, including any unrecognized identifiable intangible

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assets, as if the Company had been acquired in a business combination and the estimated fair value of the reporting unit is the price paid to acquire it. The allocation process is performed only for purposes of determining the amount of goodwill impairment. No assets or liabilities are written up or down, nor are any additional unrecognized identifiable intangible assets recorded as a part of this process. Any excess of the estimated purchase price over the fair value of the reporting unit’s net assets represents the implied fair value of goodwill. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss would be recognized as a charge to earnings in an amount equal to that excess.

Mortgage Servicing Rights (“MSR”)—The Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its residential mortgage servicing assets at fair value and reports changes in fair value through earnings. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time, are each separately reported. Under the fair value method, the MSR is carried in the balance sheet at fair value and the changes in fair value are reported in earnings under the caption mortgage banking revenue in the period in which the change occurs.

Retained mortgage servicing rights are measured at fair value as of the date of sale. We use quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Key assumptions used in measuring the fair value of MSR as of December 31 were as follows:

	2011		2010		2009
Constant prepayment rate		20.39%		18.54%		18.35%
Discount rate		8.60%		8.62%		8.70%
Weighted average life (years)		4.5		4.5		4.5

The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights.

SBA/USDA Loans Sales and Servicing—The Bank, on a limited basis, sells or transfers loans, including the guaranteed portion of Small Business Administration (“SBA”) and Department of Agriculture (“USDA”) loans (with servicing retained) for cash proceeds equal to the principal amount of loans, as adjusted to yield interest to the investor based upon the current market rates. The Bank records an asset representing the right to service loans for others when it sells a loan and retains the servicing rights. The carrying value of loans is allocated between the loan and the servicing rights, based on their relative fair values. The fair value of servicing rights is estimated by discounting estimated future cash flows from servicing using discount rates that approximate current market rates and using estimated prepayment rates. The servicing rights are carried at the lower of cost or market and are amortized in proportion to, and over the period of, the estimated net servicing income, assuming prepayments.

For purposes of evaluating and measuring impairment, servicing rights are based on a discounted cash flow methodology, current prepayment speeds and market discount rates. Any impairment is measured as the amount by which the carrying value of servicing rights for a stratum exceeds its fair value. The carrying value of SBA/USDA servicing rights at December 31, 2011 and 2010 were $666,000 and $721,000, respectively. No impairment charges were recorded for the years ended December 31, 2011, 2010 or 2009 related to SBA/USDA servicing assets.

A premium over the adjusted carrying value is received upon the sale of the guaranteed portion of an SBA or USDA loan. The Bank’s investment in an SBA or USDA loan is allocated among the sold and retained portions of the loan based on the relative fair value of each portion at the time of loan origination, adjusted for payments and other activities. Because the portion

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retained does not carry an SBA or USDA guarantee, part of the gain recognized on the sold portion of the loan may be deferred and amortized as a yield enhancement on the retained portion in order to obtain a market equivalent yield.

Non-Covered Other Real Estate Owned—Non-covered other real estate owned (“non-covered OREO”) represents real estate which the Bank has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property’s new basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Subsequent valuation adjustments are recognized within net loss on non-covered OREO. Revenue and expenses from operations and subsequent adjustments to the carrying amount of the property are included in other non-interest expense in the Consolidated Statements of Operations.

In some instances, the Bank may make loans to facilitate the sales of other real estate owned. Management reviews all sales for which it is the lending institution for compliance with sales treatment under provisions established within FASB ASC 360-20, Real Estate Sales. Any gains related to sales of other real estate owned may be deferred until the buyer has a sufficient initial and continuing investment in the property.

Covered Other Real Estate Owned—All OREO acquired in FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement are referred to as “covered OREO” and reported separately in our statements of financial position. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral’s net realizable value, less selling costs.

Covered OREO was initially recorded at its estimated fair value on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to non-interest expense, and will be mostly offset by non-interest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to non-interest expense with a corresponding charge to non-interest income for the portion of the recovery that is due to the FDIC.

Income Taxes—Income taxes are accounted for using the asset and liability method. Under this method a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company’s income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not, that all or some portion of the potential deferred tax asset will not be realized.

Derivative Loan Commitments—The Bank enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage loan commitments. The commitments to originate mortgage loans held for sale and the related forward delivery contracts are considered derivatives. Effective in the second quarter of 2011, the Bank began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting the interest rate swaps that the Bank executes with a third party, such that the Bank minimizes its net risk exposure. The Company recognizes all derivatives as either assets or liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to accumulated other comprehensive income and/or current earnings, as appropriate. None of the Company’s derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, and the Company reports changes in fair values of its derivatives in current period net income.

The fair value of the derivative loan commitments is estimated using the present value of expected future cash flows. Assumptions used include pull-through rate assumption based on historical information, current mortgage interest rates, the stage of completion of the underlying application and underwriting process, the time remaining until the expiration of the derivative loan commitment, and the expected net future cash flows related to the associated servicing of the loan.

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Operating Segments—Public enterprises are required to report certain information about their operating segments in a complete set of financial statements to shareholders. They are also required to report certain enterprise-wide information about the Company’s products and services, its activities in different geographic areas, and its reliance on major customers. The basis for determining the Company’s operating segments is the manner in which management operates the business. Management has identified three primary business segments, Community Banking, Mortgage Banking, and Wealth Management. Prior to January 1, 2011, the Company reported Retail Brokerage, consisting of Umpqua Investments, as its own segment. Effective in 2011, the Company began reporting Umpqua Investments, Umpqua Private Bank, and Umpqua Financial Advisors under the Wealth Management segment. Umpqua Private Bank and Umpqua Financial Advisors do not meet the quantitative thresholds for reporting as separate segments and service the same customer base on Umpqua Investments.

Share-Based Payment—The Company has two active stock-based compensation plans that provide for the granting of stock options and restricted stock to eligible employees and directors. In accordance with FASB ASC 718, Stock Compensation, we recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees’ requisite service period (generally the vesting period). The requisite service period may be subject to performance conditions.

The Company’s 2003 Stock Incentive Plan provides for granting of stock options and restricted stock awards. Stock options and restricted stock awards generally vest ratably over 5 years and are recognized as expense over that same period of time.

The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model using assumptions noted in the following table. Expected volatility is based on the historical volatility of the price of the Company’s common stock. The Company uses historical data to estimate option exercise and stock option forfeiture rates within the valuation model. The expected term of options granted is determined based on historical experience with similar options, giving consideration to the contractual terms and vesting schedules, and represents the period of time that options granted are expected to be outstanding. The expected dividend yield is based on dividend trends and the market value of the Company’s common stock at the time of grant. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant corresponding to the estimated expected term of the options granted. The following weighted average assumptions were used to determine the fair value of stock option grants as of the grant date to determine compensation cost for the years ended December 31, 2011, 2010 and 2009:

	2011		2010		2009
Dividend yield		2.79%		2.72%		2.23%
Expected life (years)		7.1		7.1		7.3
Expected volatility		52%		52%		46%
Risk-free rate		2.71%		2.69%		2.18%
Weighted average grant date fair value of options granted	$	4.65	$	5.24	$	3.65

The Company’s 2007 Long Term Incentive Plan provides for granting of restricted stock units for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. The current restricted stock units outstanding cliff vest after three years based on performance and service conditions. Compensation expense is recognized over the service period to the extent restricted stock units are expected to vest.

Earnings per Share—According to the provisions of FASB ASC 260, Earnings Per Share, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s nonvested restricted stock awards qualify as participating securities.

Net income, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings or absorb losses. Basic earnings per common share is computed by dividing net earnings available to

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common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares.

Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, warrants, stock options, certain restricted stock awards and restricted stock units are the only potentially dilutive non-participating instruments issued by the Company. Next, we determine and include in diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company.

Advertising expenses—Advertising costs are generally expensed as incurred.

Fair Value Measurements—FASB ASC 820, Fair Value Measurements and Disclosure, (“ASC 820”, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recently Issued Accounting Pronouncements—In April 2011, the FASB issued ASU No. 2011-02, A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. The Update provides additional guidance relating to when creditors should classify loan modifications as troubled debt restructurings. The ASU also ends the deferral issued in January 2010 of the disclosures about troubled debt restructurings required by ASU No. 2010-20. The provisions of ASU No. 2011-02 and the disclosure requirements of ASU No. 2010-20 are effective for the Company’s interim reporting period ending September 30, 2011. The guidance applies retrospectively to restructurings occurring on or after January 1, 2011. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements. The Update amends existing guidance to remove from the assessment of effective control, the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and, as well, the collateral maintenance implementation guidance related to that criterion. ASU No. 2011-03 is effective for the Company’s reporting period beginning on or after December 15, 2011. The guidance applies prospectively to transactions or modification of existing transactions that occur on or after the effective date and early adoption is not permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The Update amends existing guidance regarding the highest and best use and valuation premise by clarifying these concepts are only applicable to measuring the fair value of nonfinancial assets. The Update also

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clarifies that the fair value measurement of financial assets and financial liabilities which have offsetting market risks or counterparty credit risks that are managed on a portfolio basis, when several criteria are met, can be measured at the net risk position. Additional disclosures about Level 3 fair value measurements are required including a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, a description of the valuation process in place, and discussion of the sensitivity of fair value changes in unobservable inputs and interrelationships about those inputs as well disclosure of the level of the fair value of items that are not measured at fair value in the financial statements but disclosure of fair value is required. The provisions of ASU No. 2011-04 are effective for the Company’s reporting period beginning after December 15, 2011 and should be applied prospectively. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. The Update amends current guidance to allow a company the option of presenting the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions do not change the items that must be reported in other comprehensive income or when an item of other comprehensive must to reclassified to net income. The amendments do not change the option for a company to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense (benefit) related to the total of other comprehensive income items. The amendments do not affect how earnings per share is calculated or presented. The provisions of ASU No. 2011-05 are effective for the Company’s reporting period beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted and there are no required transition disclosures. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The ASU defers indefinitely the requirement to present reclassification adjustments and the effect of those reclassification adjustments on the face of the financial statements where net income is presented, by component of net income, and on the face of the financial statements where other comprehensive income is presented, by component of other comprehensive income. The Company is currently in the process of evaluating the Updates but does not expect either will have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. With the Update, a company testing goodwill for impairment now has the option of performing a qualitative assessment before calculating the fair value of the reporting unit (the first step of goodwill impairment test). If, on the basis of qualitative factors, the fair value of the reporting unit is more likely than not greater than the carrying amount, a quantitative calculation would not be needed. Additionally, new examples of events and circumstances that an entity should consider in performing its qualitative assessment about whether to proceed to the first step of the goodwill impairment have been made to the guidance and replace the previous guidance for triggering events for interim impairment assessment. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update requires an entity to offset, and present as a single net amount, a recognized eligible asset and a recognized eligible liability when it has an unconditional and legally enforceable right of setoff and intends either to settle the asset and liability on a net basis or to realize the asset and settle the liability simultaneously. The ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amendments are effective for annual and interim reporting periods beginning on or after January 1, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company’s consolidated financial statements.

Reclassifications—Certain amounts reported in prior years’ financial statements have been reclassified to conform to the current presentation. The results of the reclassifications are not considered material and have no effect on previously reported net earnings (losses) available to common shareholders and earnings (losses) per common share.

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NOTE 2.    BUSINESS COMBINATIONS

On January 22, 2010, the Washington Department of Financial Institutions closed EvergreenBank (“Evergreen”), Seattle, Washington and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. That same date, Umpqua Bank assumed the banking operations of Evergreen from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, other real estate owned (“OREO”) and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $90.0 million on covered assets for Evergreen and absorb 95% of losses and share in 95% of loss recoveries exceeding $90.0 million, except the Bank will incur losses up to $30.2 million before the loss-sharing will commence. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date. With this agreement, Umpqua Bank assumed six additional store locations in the greater Seattle, Washington market. This acquisition is consistent with our community banking expansion strategy and provides further opportunity to fill in our market presence in the greater Seattle, Washington market.

On February 26, 2010, the Washington Department of Financial Institutions closed Rainier Pacific Bank (“Rainier”), Tacoma, Washington and appointed the FDIC as receiver. That same date, Umpqua Bank assumed the banking operations of Rainier from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $95.0 million of losses on covered assets and absorb 95% of losses and share in 95% of loss recoveries exceeding $95.0 million. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates. With this agreement, Umpqua Bank assumed 14 additional store locations in Pierce County and surrounding areas. This acquisition expands our presence in the south Puget Sound region of Washington State.

The operations of Evergreen and Rainier are included in our operating results from January 23, 2010 and February 27, 2010, respectively, and added combined revenue of $46.2 million and $54.0 million, non-interest expense of $25.3 million and $23.6 million, and earnings of $13.8 million and $11.0 million, net of tax, for the years ended December 31, 2011 and 2010, respectively. These operating results include a bargain purchase gain of $6.4 million for the year ended December 31, 2010, which is not indicative of future operating results. Evergreen’s and Rainiers’s results of operations prior to the acquisition are not included in our operating results. Merger-related expenses of $92,000 and $4.4 million for the years ended December 31, 2011 and 2010 have been incurred in connection with these acquisitions and recognized in a separate line item on the Condensed Consolidated Statements of Operations.

On June 18, 2010, the Nevada State Financial Institutions Division closed Nevada Security Bank (“Nevada Security”), Reno, Nevada and appointed the FDIC as receiver. That same date, Umpqua Bank assumed the banking operations of Nevada Security from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO, and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on all covered assets. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates. With this agreement, Umpqua Bank now assumed five additional store locations, including three in Reno, Nevada, one in Incline Village, Nevada, and one in Roseville, California. This acquisition expands our presence into the State of Nevada.

The operations of Nevada Security are included in our operating results from June 19, 2010, and added revenue of $18.6 million and $15.1 million, non-interest expense of $11.3 million and $7.3 million, and earnings of $2.1 million and $1.3 million, net of tax, for the years ended December 31, 2011 and 2010, respectively. Nevada Security’s results of operations prior to the acquisition are not included in our operating results. Merger-related expenses of $101,000 and $1.7 million for the years ended December 31, 2011 and 2010 have been incurred in connection with the acquisition of Nevada Security and recognized as a separate line item on the Condensed Consolidated Statements of Operations.

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We refer to the acquired loan portfolios and other real estate owned as “covered loans” and “covered other real estate owned”, respectively, and these are presented as separate line items in our consolidated balance sheet. Collectively these balances are referred to as “covered assets”.

The assets acquired and liabilities assumed from the Evergreen, Rainier, and Nevada Security acquisitions have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition dates. The fair values of the assets acquired and liabilities assumed were determined based on the requirements of the Fair Value Measurements and Disclosures topic of the Financial Accounting Standards Board Accounting Standards Codification (the “FASB ASC”). The terms of the agreements provide for the FDIC to indemnify the Bank against claims with respect to liabilities of Evergreen, Rainier, and Nevada Security not assumed by the Bank and certain other types of claims identified in the agreement. The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain of $6.4 million in the Evergreen acquisition, $35.8 million of goodwill in the Rainier acquisition and $10.4 million of goodwill in the Nevada Security acquisition.

A summary of the net assets (liabilities) received from the FDIC and the estimated fair value adjustments are presented below:

(in thousands)

	Evergreen			Rainier			Nevada Security
	January 22, 2010			February 26, 2010			June 18, 2010
Cost basis net assets (liabilities)	$	58,811		$	(50,295	)	$	53,629
Cash payment received from (paid to) the FDIC		—			59,351			(29,950	)
Fair value adjustments:
Loans		(117,449	)		(103,137	)		(112,975	)
Other real estate owned		(2,422	)		(6,581	)		(17,939	)
Other intangible assets		440			6,253			322
FDIC indemnification asset		71,755			76,603			99,160
Deposits		(1,023	)		(1,828	)		(1,950	)
Term debt		(2,496	)		(13,035	)		—
Other		(1,179	)		(3,139	)		(690	)
Bargain purchase gain (goodwill)	$	6,437		$	(35,808	)	$	(10,393	)

In FDIC-assisted transactions, only certain assets and liabilities are transferred to the acquirer and, depending on the nature and amount of the acquirer’s bid, the FDIC may be required to make a cash payment to the acquirer or the acquirer may be required to make payment to the FDIC.

In the Evergreen acquisition, cost basis net assets of $58.8 million were transferred to the Company. The bargain purchase gain represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed.

In the Rainier acquisition, cost basis net liabilities of $50.3 million and a cash payment received from the FDIC of $59.4 million were transferred to the Company. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired. Goodwill of $27.6 million and core deposit intangible assets of $1.1 million recognized are deductible for income tax purposes.

In the Nevada Security acquisition, cost basis net assets of $53.6 million were transferred to the Company and a cash payment of $30.0 million was made to the FDIC. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired. Goodwill of $36.8 million and core deposit intangible assets of $322,000 recognized are deductible for income tax purposes.

The Bank did not immediately acquire all the real estate, banking facilities, furniture or equipment of Evergreen, Rainier, or Nevada Security as part of the purchase and assumption agreements. Rather, the Bank was granted the option to purchase or lease the real estate and furniture and equipment from the FDIC. The term of this option expired 90 days from the acquisition

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dates, unless extended by the FDIC. Acquisition costs of the real estate and furniture and equipment are based on current mutually agreed upon appraisals. Prior to the expiration of option term, Umpqua exercised the right to purchase approximately $344,000 of furniture and equipment for Evergreen, $26.3 million of real estate and furniture and equipment for Rainier, and $2.0 million of real estate, furniture and equipment for Nevada Security.

The statement of assets acquired and liabilities assumed at their estimated fair values of Evergreen, Rainier, and Nevada Security are presented below:

(in thousands)

	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Assets Acquired:
Cash and equivalents	$	18,919	$	94,067	$	66,060
Investment securities		3,850		26,478		22,626
Covered loans		252,493		458,340		215,507
Premises and equipment		—		17		50
Restricted equity securities		3,073		13,712		2,951
Goodwill		—		35,808		10,393
Other intangible assets		440		6,253		322
Mortgage servicing rights		—		62		—
Covered other real estate owned		2,421		6,580		17,938
FDIC indemnification asset		71,755		76,603		99,160
Other assets		328		3,254		2,588
Total assets acquired	$	353,279	$	721,174	$	437,595
Liabilities Assumed:
Deposits	$	285,775	$	425,771	$	437,299
Term debt		60,813		293,191		—
Other liabilities		254		2,212		296
Total liabilities assumed		346,842		721,174		437,595
Net assets acquired/bargain purchase gain	$	6,437	$	—	$	—

Rainier’s assets and liabilities were significant at a level to require disclosure of one year of historical financial statements and related pro forma financial disclosure. However, given the pervasive nature of the loss-sharing agreement entered into with the FDIC, the historical information of Rainier is much less relevant for purposes of assessing the future operations of the combined entity. In addition, prior to closure Rainier had not completed an audit of their financial statements, and we determined that audited financial statements were not and would not be reasonably available for the year ended December 31, 2009. Given these considerations, the Company requested, and received, relief from the Securities and Exchange Commission from submitting certain financial information of Rainier. The assets and liabilities of Evergreen and Nevada Security were not at a level that requires disclosure of historical or pro forma financial information.

The Company incurs significant expenses related to mergers that cannot be capitalized. Generally, these expenses begin to be recognized while due diligence is being conducted and continue until such time as all systems have been converted and operational functions become fully integrated. Merger-related expenses are presented as a line item on the Consolidated Statements of Operations.

The following table presents the key components of merger-related expense for years ended December 31, 2011, 2010 and 2009. Substantially all of the merger-related expenses incurred during 2010 were in connection with the FDIC-assisted purchase and assumption of Evergreen, Rainier, and Nevada Security. Substantially all of the merger-related expenses incurred during 2009 were in connection with the FDIC-assisted purchase and assumption of certain assets and liabilities of the Bank of Clark County.

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Merger-Related Expense

(in thousands)

	2011		2010		2009
Professional fees	$	173	$	2,984	$	143
Compensation and relocation		—		962		39
Communications		—		330		61
Premises and equipment		82		630		2
Travel		11		710		—
Other		94		1,059		28
Total	$	360	$	6,675	$	273

No additional merger-related expenses are expected in connection with the FDIC-assisted purchase and assumption of Evergreen, Rainier, and Nevada Security assumptions or any other prior acquisitions.

NOTE 3.    CASH AND DUE FROM BANKS

The Bank is required to maintain an average reserve balance with the Federal Reserve Bank or maintain such reserve balance in the form of cash. The amount of required reserve balance at December 31, 2011 and 2010 was approximately $33.6 million and $31.8 million, respectively, and was met by holding cash and maintaining an average balance with the Federal Reserve Bank.

NOTE 4.    INVESTMENT SECURITIES

The following table presents the amortized costs, unrealized gains, unrealized losses and approximate fair values of investment securities at December 31, 2011 and 2010:

December 31, 2011

(in thousands)

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,232	$	1,234	$	(1	)	$	118,465
Obligations of states and political subdivisions		237,302		16,264		(13	)		253,553
Residential mortgage-backed securities and collateralized mortgage obligations		2,755,153		43,152		(3,950	)		2,794,355
Other debt securities		151		—		(17	)		134
Investments in mutual funds and other equity securities		1,959		112		—			2,071
	$	3,111,797	$	60,762	$	(3,981	)	$	3,168,578
HELD TO MATURITY:
Obligations of states and political subdivisions	$	1,335	$	2	$	—		$	1,337
Residential mortgage-backed securities and collateralized mortgage obligations		3,379		120		(77	)		3,422
	$	4,714	$	122	$	(77	)	$	4,759

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December 31, 2010

(in thousands)

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,551	$	1,239	$	(1	)	$	118,789
Obligations of states and political subdivisions		213,129		4,985		(1,388	)		216,726
Residential mortgage-backed securities and collateralized mortgage obligations		2,543,974		57,506		(19,976	)		2,581,504
Other debt securities		152		—		—			152
Investments in mutual funds and other equity securities		1,959		50		—			2,009
	$	2,876,765	$	63,780	$	(21,365	)	$	2,919,180
HELD TO MATURITY:
Obligations of states and political subdivisions	$	2,370	$	5	$	—		$	2,375
Residential mortgage-backed securities and collateralized mortgage obligations		2,392		216		(209	)		2,399
	$	4,762	$	221	$	(209	)	$	4,774

Investment securities that were in an unrealized loss position as of December 31, 2011 and 2010 are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral:

December 31, 2011

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	85	$	1	$	85	$	1
Obligations of states and political subdivisions		516		13		—		—		516		13
Residential mortgage-backed securities and collateralized mortgage obligations		489,475		3,160		52,222		790		541,697		3,950
Other debt securities		—		—		134		17		134		17
Total temporarily impaired securities	$	489,991	$	3,173	$	52,441	$	808	$	542,432	$	3,981
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	602	$	77	$	602	$	77
Total temporarily impaired securities	$	—	$	—	$	602	$	77	$	602	$	77

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December 31, 2010

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	110	$	1	$	110	$	1
Obligations of states and political subdivisions		60,110		1,366		1,003		22		61,113		1,388
Residential mortgage-backed securities and collateralized mortgage obligations		1,238,483		19,968		1,539		8		1,240,022		19,976
Total temporarily impaired securities	$	1,298,593	$	21,334	$	2,652	$	31	$	1,301,245	$	21,365
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	658	$	209	$	658	$	209
Total temporarily impaired securities	$	—	$	—	$	658	$	209	$	658	$	209

The unrealized losses on investments in U.S. Treasury and agencies securities were caused by interest rate increases subsequent to the purchase of these securities. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than par. Because the Bank does not intend to sell the securities in this class and it is not likely that the Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until contractual maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

The unrealized losses on obligations of political subdivisions were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities. Management monitors published credit ratings of these securities and no adverse ratings changes have occurred since the date of purchase of obligations of political subdivisions which are in an unrealized loss position as of December 31, 2011. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because the Bank does not intend to sell the securities in this class and it is not likely that Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

All of the available for sale residential mortgage-backed securities and collateralized mortgage obligations portfolio in an unrealized loss position at December 31, 2011 are issued or guaranteed by governmental agencies. The unrealized losses on residential mortgage-backed securities and collateralized mortgage obligations were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, and not concerns regarding the underlying credit of the issuers or the underlying collateral. It is expected that these securities will not be settled at a price less than the amortized cost of each investment. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because the Bank does not intend to sell the securities in this class and it is not likely that the Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until contractual maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

We review investment securities on an ongoing basis for the presence of other-than-temporary impairment (“OTTI”) or permanent impairment, taking into consideration current market conditions, fair value in relationship to cost, extent and nature of the decline in fair value, issuer rating changes and trends, whether we intend to sell a security or if it is likely that we will be required to sell the security before recovery of our amortized cost basis of the investment, which may be maturity, and other factors. For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows

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expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income (“OCI”). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the OTTI amount recorded in OCI will increase the carrying value of the investment, and would not affect earnings. If there is an indication of additional credit losses, the security is re-evaluated accordingly to the procedures described above.

The following tables present the OTTI losses for the years ended December 31, 2011, 2010 and 2009.

(in thousands)

	2011				2010				2009
	Held To Maturity		Available For Sale		Held To Maturity		Available For Sale		Held To Maturity			Available For Sale
Total other-than-temporary impairment losses	$	190	$	—	$	93	$	—	$	12,317		$	239
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income(1)		169		—		321		—		(1,983	)		—
Net impairment losses recognized in earnings(2)	$	359	$	—	$	414	$	—	$	10,334		$	239

(1) Represents other-than-temporary impairment losses related to all other factors.

(2) Represents other-than-temporary impairment losses related to credit losses.

New guidance related to the recognition and presentation of OTTI of debt securities became effective beginning in the second quarter of 2009. Rather than asserting whether a Company has the ability and intent to hold an investment until a market price recovery, a Company must consider whether they intend to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. The $8.2 million in OTTI recognized on investment securities held to maturity subsequent to March 31, 2009 primarily relates to 29 non-agency residential collateralized mortgage obligations. Each of these securities holds various levels of credit subordination. The underlying mortgage loans of these securities were originated from 2003 through 2007. At origination, the weighted average loan-to-value of the underlying mortgages was 69%; the underlying borrowers had weighted average FICO scores of 731, and 59% were limited documentation loans. These securities are valued by third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. We estimate cash flows of the underlying collateral for each security considering credit, interest and prepayment risk models that incorporate management’s estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as loan interest rates, geographic location, borrower characteristics and vintage, and historical experience. We then used a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows are then discounted at the interest rate used to recognize interest income on each security. We review the actual collateral performance of these securities on a quarterly basis and update the inputs as appropriate to determine the projected cash flows. The following table presents a summary of the significant inputs utilized to measure management’s estimate of the credit loss component on these non-agency residential collateralized mortgage obligations as of December 31, 2011 and 2010:

	2011						2010
	Range				Weighted Average		Range				Weighted Average
	Minimum		Maximum				Minimum		Maximum
Constant prepayment rate		10.0%		20.0%		14.0%		5.0%		20.0%		14.9%
Collateral default rate		5.0%		60.0%		22.6%		5.0%		15.0%		10.6%
Loss severity		27.5%		50.0%		32.5%		25.0%		55.0%		37.9%

117

In the second quarter of 2009 the Company recorded an OTTI charge of $239,000 related to an available for sale collateralized debt obligation that holds trust preferred securities. Management noted certain deferrals and defaults in the pool and believes the impairment represents credit loss in its entirety. Through December 31, 2011, no further OTTI charges have been recorded on available for sale securities.

The following table presents a roll forward of the credit loss component of held to maturity debt securities that have been written down for OTTI with the credit loss component recognized in earnings and the remaining impairment loss related to all other factors recognized in OCI for the years ended December 31, 2011 and 2010, respectively, since the adoption of the revised guidance related to the recognition and presentation of OTTI of debt securities:

	2011			2010
Balance, beginning of period	$	12,778		$	12,364
Additions:
Subsequent OTTI credit losses		359			414
Reductions:
Securities sold, matured or paid-off		(3,563	)		—
Balance, end of period	$	9,574		$	12,778

Prior to the Company’s adoption of the new guidance related to the recognition and presentation of OTTI of debt securities which became effective in the second quarter of 2009, the Company would assess an OTTI or permanent impairment based on the nature of the decline and whether the Company had the ability and intent to hold the investments until a market price recovery. In the three months ended March 31, 2009, the Company recorded a $2.1 million OTTI charge. This charge related to three non-agency residential collateralized mortgage obligations carried as held to maturity for which the default rates and loss severities of the underlying collateral and credit coverage ratios of the security indicated that it was probable that credit losses were expected to occur. These securities were valued by third party pricing services using matrix or model pricing methodologies, and were corroborated by broker indicative bids. The remaining non-agency securities within residential mortgage-backed securities and collateralized mortgage obligations carried as held to maturity were specifically evaluated for OTTI, and the default rates and loss severities of the underlying collateral indicated that credit losses are not expected to occur. Upon adoption of the new OTTI guidance in the second quarter of 2009, the Company analyzed these securities as well as other securities where OTTI had been previously recognized, and determined that as of the adoption date such losses were credit related. As such, there was no cumulative effect adjustment to the opening balance of retained earnings or a corresponding adjustment to accumulated OCI.

The following table presents the maturities of investment securities at December 31, 2011:

(in thousands)

	Available For Sale				Held To Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
AMOUNTS MATURING IN:
Three months or less	$	22,142	$	22,217	$	—	$	—
Over three months through twelve months		424,824		429,396		330		331
After one year through five years		2,272,876		2,310,113		1,096		1,155
After five years through ten years		310,639		323,164		1,023		1,010
After ten years		79,357		81,617		2,265		2,263
Other investment securities		1,959		2,071		—		—
	$	3,111,797	$	3,168,578	$	4,714	$	4,759

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The amortized cost and fair value of collateralized mortgage obligations and mortgage-backed securities are presented by expected average life, rather than contractual maturity, in the preceding table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay underlying loans without prepayment penalties.

The following table presents the gross realized gains and gross realized losses on the sale of securities available for sale for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011				2010				2009
	Gains		Losses		Gains		Losses		Gains		Losses
U.S. Treasury and agencies	$	—	$	—	$	—	$	1	$	—	$	—
Obligations of states and political subdivisions		8		—		3		7		—		1
Residential mortgage-backed securities and collateralized mortgage obligations		8,544		817		2,331		—		9,409		591
	$	8,552	$	817	$	2,334	$	8	$	9,409	$	592

The following table presents, as of December 31, 2011, investment securities which were pledged to secure borrowings and public deposits as permitted or required by law:

(in thousands)

	Amortized Cost		Fair Value
To Federal Home Loan Bank to secure borrowings	$	183,909	$	190,176
To state and local governments to secure public deposits		738,780		759,019
Other securities pledged		191,740		194,200
Total pledged securities	$	1,114,429	$	1,143,395

The carrying value of investment securities pledged as of December 31, 2011 and December 31, 2010 was $1.1 billion and $1.5 billion.

119

NOTE 5.    NON-COVERED LOANS AND LEASES

The following table presents the major types of non-covered loans recorded in the balance sheets as of December 31, 2011 and 2010:

(in thousands)

	2011			2010
Commercial real estate
Term & multifamily	$	3,558,295		$	3,483,475
Construction & development		165,066			247,814
Residential development		90,073			147,813
Commercial
Term		625,766			509,453
LOC & other		832,999			747,419
Residential
Mortgage		315,927			222,416
Home equity loans & lines		272,192			278,585
Consumer & other		38,860			33,043
Total		5,899,178			5,670,018
Deferred loan fees, net		(11,080	)		(11,031	)
Total	$	5,888,098		$	5,658,987

As of December 31, 2011, loans totaling $5.1 billion were pledged to secure borrowings and available lines of credit.

NOTE 6.    ALLOWANCE FOR NON-COVERED LOAN LOSS AND CREDIT QUALITY

The Bank has a management Allowance for Loan and Lease Losses (“ALLL”) Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank’s Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Our methodology for assessing the appropriateness of the ALLL consists of three key elements, which include 1) the formula allowance; 2) the specific allowance; and 3) the unallocated allowance. By incorporating these factors into a single allowance requirement analysis, all risk-based activities within the loan portfolio are simultaneously considered.

Formula Allowance

The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality and adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the formula allowance.

The formula allowance is calculated by applying risk factors to various segments of pools of outstanding loans. Risk factors are assigned to each portfolio segment based on management’s evaluation of the losses inherent within each segment. Segments or regions with greater risk of loss will therefore be assigned a higher risk factor.

Base risk—The portfolio is segmented into loan categories, and these categories are assigned a Base Risk factor based on an evaluation of the loss inherent within each segment.

Extra risk—Additional risk factors provide for an additional allocation of ALLL based on the loan risk rating system and loan delinquency, and reflect the increased level of inherent losses associated with more adversely classified loans.

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Changes to risk factors—Risk factors are assigned at origination and may be changed periodically based on management’s evaluation of the following factors: loss experience; changes in the level of non-performing loans; regulatory exam results; changes in the level of adversely classified loans (positive or negative); improvement or deterioration in local economic conditions; and any other factors deemed relevant.

Specific Allowance

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize an impairment reserve as a Specific Allowance to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. Loans determined to be impaired with a specific allowance are excluded from the formula allowance so as not to double-count the loss exposure. The non-accrual impaired loans as of period end have already been partially charged off to their estimated net realizable value, and are expected to be resolved over the coming quarters with no additional material loss, absent further decline in market prices.

The combination of the formula allowance component and the specific allowance component represent the allocated allowance for loan and lease losses.

Unallocated Allowance

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of deteriorating economic conditions characterized by falling real estate values. The unallocated amount is reviewed quarterly with consideration of factors including, but not limited to:

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

• Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

• Changes in the nature and volume of the portfolio and in the terms of loans;

• Changes in the experience and ability of lending management and other relevant staff;

• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

• Changes in the quality of the institution’s loan review system;

• Changes in the value of underlying collateral for collateral-depending loans;

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations;

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institutions’ existing portfolio.

These factors are evaluated through a management survey of the Chief Credit Officer, Chief Lending Officers, Special Asset Manager, and Credit Review Manager. The survey requests responses to evaluate current changes in the nine qualitative

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factors. This information is then incorporated into our understanding of the reasonableness of the formula factors and our evaluation of the unallocated portion of the ALLL.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our loan portfolio. A continued deterioration in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

The reserve for unfunded commitments (“RUC”) is established to absorb inherent losses associated with our commitment to lend funds, such as with a letter or line of credit. The adequacy of the ALLL and RUC are monitored on a regular basis and are based on management’s evaluation of numerous factors. For each portfolio segment, these factors include:

• The quality of the current loan portfolio;

• The trend in the loan portfolio’s risk ratings;

• Current economic conditions;

• Loan concentrations;

• Loan growth rates;

• Past-due and non-performing trends;

• Evaluation of specific loss estimates for all significant problem loans;

• Historical short (one year), medium (three year), and long-term charge-off rates;

• Recovery experience;

• Peer comparison loss rates.

There have been no significant changes to the Bank’s methodology or policies in the periods presented.

Activity in the Non-Covered Allowance for Loan and Lease Losses

The following table summarizes activity related to the allowance for non-covered loan and lease losses by non-covered loan portfolio segment for the years ended December 31, 2011 and 2010:

(in thousands)

	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921
Charge-offs		(36,011	)		(21,071	)		(6,333	)		(1,636	)		—			(65,051	)
Recoveries		5,906			3,348			239			385			—			9,878
Provision		25,274			16,062			7,793			1,315			(4,224	)		46,220
Balance, end of period	$	59,574		$	20,485		$	7,625		$	867		$	4,417		$	92,968

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Umpqua Holdings Corporation and Subsidiaries

	December 31, 2010
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	67,281		$	24,583		$	5,811		$	455		$	9,527		$	107,657
Charge-offs		(71,030	)		(50,242	)		(5,168	)		(2,061	)		—			(128,501	)
Recoveries		6,980			1,318			334			465			—			9,097
Provision		61,174			46,487			4,949			1,944			(886	)		113,668
Balance, end of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921

The following table presents the allowance and recorded investment in non-covered loans by portfolio segment and balances individually or collectively evaluated for impairment as of December 31, 2011 and 2010, respectively:

(in thousands)

	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	58,402	$	17,877	$	7,621	$	867	$	4,417	$	89,184
Individually evaluated for impairment		1,172		2,608		4		—		—		3,784
Total	$	59,574	$	20,485	$	7,625	$	867	$	4,417	$	92,968
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,673,455	$	1,432,594	$	587,990	$	38,860			$	5,732,899
Individually evaluated for impairment		139,979		26,171		129		—				166,279
Total	$	3,813,434	$	1,458,765	$	588,119	$	38,860			$	5,899,178

	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	61,885	$	19,435	$	5,918	$	803	$	8,641	$	96,682
Individually evaluated for impairment		2,520		2,711		8		—		—		5,239
Total	$	64,405	$	22,146	$	5,926	$	803	$	8,641	$	101,921
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,692,169	$	1,221,365	$	500,822	$	33,043			$	5,447,399
Individually evaluated for impairment		186,933		35,507		179		—				222,619
Total	$	3,879,102	$	1,256,872	$	501,001	$	33,043			$	5,670,018

(1) The gross non-covered loan and lease balance excludes deferred loans fees of $11.1 million and $11.0 million for the years ended December 31, 2011 and 2010, respectively.

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Summary of Reserve for Unfunded Commitments Activity

The following table presents a summary of activity in the reserve for unfunded commitments (“RUC”) and unfunded commitments at December 31, 2011 and 2010:

(in thousands)

	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	33	$	575	$	158	$	52	$	818
Net change to other expense		26		58		27		11		122
Balance, end of period	$	59	$	633	$	185	$	63	$	940

	December 31, 2010
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	57		$	484	$	144	$	46	$	731
Net change to other expense		(24	)		91		14		6		87
Balance, end of period	$	33		$	575	$	158	$	52	$	818

	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Unfunded commitments:
December 31, 2011	$	58,013	$	605,001	$	233,990	$	47,577	$	944,581
December 31, 2010	$	33,326	$	548,920	$	210,574	$	45,556	$	838,376

Non-Covered Loans Sold

In the course of managing the loan portfolio, at certain times, management may decide to sell loans prior to resolution. The following table summarizes non-covered loans sold by loan portfolio during the years ended December 31:

(In thousands)

	2011		2010
Commercial Real Estate
Term & multifamily	$	7,143	$	8,848
Construction & development		28		4,686
Residential development		1,123		15,255
Commercial
Term		151		9,915
LOC & other		2,740		40
Total	$	11,185	$	38,744

Asset Quality and Non-Performing Loans

We manage asset quality and control credit risk through diversification of the non-covered loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Quality Group is charged with monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of non-performing, past due non-covered loans and larger credits, designed to identify potential charges to the allowance for loan and lease losses, and to determine the adequacy of the allowance, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers, the value of the applicable collateral, loan loss experience, estimated loan losses, growth in the loan portfolio, prevailing economic conditions and other factors.

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A loan is considered impaired when based on current information and events, we determine it is probable that we will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Generally, when loans are identified as impaired they are moved to our Special Assets Division. When we identify a loan as impaired, we measure the loan for potential impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of collateral, less selling costs. The starting point for determining the fair value of collateral is through obtaining external appraisals. Generally, external appraisals are updated every six to nine months. We obtain appraisals from a pre-approved list of independent, third party, local appraisal firms. Approval and addition to the list is based on experience, reputation, character, consistency and knowledge of the respective real estate market. At a minimum, it is ascertained that the appraiser is: (a) currently licensed in the state in which the property is located, (b) is experienced in the appraisal of properties similar to the property being appraised, (c) is actively engaged in the appraisal work, (d) has knowledge of current real estate market conditions and financing trends, (e) is reputable, and (f) is not on Freddie Mac’s nor the Bank’s Exclusionary List of appraisers and brokers. In certain cases appraisals will be reviewed by our Real Estate Valuation Services group to ensure the quality of the appraisal and the expertise and independence of the appraiser. Upon receipt and review, an external appraisal is utilized to measure a loan for potential impairment. Our impairment analysis documents the date of the appraisal used in the analysis, whether the officer preparing the report deems it current, and, if not, allows for internal valuation adjustments with justification. Typical justified adjustments might include discounts for continued market deterioration subsequent to appraisal date, adjustments for the release of collateral contemplated in the appraisal, or the value of other collateral or consideration not contemplated in the appraisal. An appraisal over one year old in most cases will be considered stale dated and an updated or new appraisal will be required. Any adjustments from appraised value to net realizable value are detailed and justified in the impairment analysis, which is reviewed and approved by senior credit quality officers and the Company’s Allowance for Loan and Lease Losses (“ALLL”) Committee. Although an external appraisal is the primary source to value collateral dependent loans, we may also utilize values obtained through purchase and sale agreements, negotiated short sales, broker price opinions, or the sales price of the note. These alternative sources of value are used only if deemed to be more representative of value based on updated information regarding collateral resolution. Impairment analyses are updated, reviewed and approved on a quarterly basis at or near the end of each reporting period. Appraisals or other alternative sources of value received subsequent to the reporting period, but prior to our filing of periodic reports, are considered and evaluated to ensure our periodic filings are materially correct and not misleading. Based on these processes, we do not believe there are significant time lapses for the recognition of additional loan loss provisions or charge-offs from the date they become known.

Loans are classified as non-accrual when collection of principal or interest is doubtful—generally if they are past due as to maturity or payment of principal or interest by 90 days or more—unless such loans are well-secured and in the process of collection. Additionally, all loans that are impaired are considered for non-accrual status. Loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospects for future payments in accordance with the loan agreement appear relatively certain.

Loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

Loans are reported as past due when installment payments, interest payments, or maturity payments are past due based on contractual terms. All loans determined to be impaired are individually assessed for impairment except for impaired consumer loans which are collectively evaluated for impairment in accordance with FASB ASC 450, Contingencies (“ASC 450”). The specific factors considered in determining that a loan is impaired include borrower financial capacity, current economic, business and market conditions, collection efforts, collateral position and other factors deemed relevant. Generally, impaired

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loans are placed on non-accrual status and all cash receipts are applied to the principal balance. Continuation of accrual status and recognition of interest income is generally limited to performing restructured loans.

The Company has written down impaired, non-accrual loans as of December 31, 2011 to their estimated net realizable value, generally based on disposition value, and expects resolution with no additional material loss, absent further decline in market prices.

Non-Covered Non-Accrual Loans and Loans Past Due

The following table summarizes our non-covered, non-accrual loans and loans past due by loan class as of December 31, 2011 and December 31, 2010:

(in thousands)

	December 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non- covered Loans and Leases
Commercial real estate
Term & multifamily	$	7,319	$	11,184	$	—	$	18,503	$	44,486	$	3,495,306	$	3,558,295
Construction & development		—		662		575		1,237		3,348		160,481		165,066
Residential development		4,171		—		—		4,171		15,836		70,066		90,073
Commercial
Term		2,075		738		1,179		3,992		8,120		613,654		625,766
LOC & other		5,435		1,697		1,397		8,529		8,772		815,698		832,999
Residential
Mortgage		215		965		4,343		5,523		—		310,404		315,927
Home equity loans & lines		492		191		2,648		3,331		—		268,861		272,192
Consumer & other		67		16		679		762		—		38,098		38,860
Total	$	19,774	$	15,453	$	10,821	$	46,048	$	80,562	$	5,772,568	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098

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Umpqua Holdings Corporation and Subsidiaries

	December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non- covered Loans and Leases
Commercial real estate
Term & multifamily	$	14,596	$	8,328	$	3,008	$	25,932	$	49,162	$	3,408,381	$	3,483,475
Construction & development		2,172		6,726		—		8,898		20,124		218,792		247,814
Residential development		640		—		—		640		34,586		112,587		147,813
Commercial
Term		2,010		932		—		2,942		6,271		500,240		509,453
LOC & other		5,939		1,418		18		7,375		28,034		712,010		747,419
Residential
Mortgage		1,314		1,101		3,372		5,787		—		216,629		222,416
Home equity loans & lines		1,096		1,351		232		2,679		—		275,906		278,585
Consumer & other		361		233		441		1,035		—		32,008		33,043
Total	$	28,128	$	20,089	$	7,071	$	55,288	$	138,177	$	5,476,553	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

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Non-covered Impaired Loans

The following table summarizes our non-covered impaired loans by loan class as of December 31, 2011 and December 31, 2010:

(in thousands)

	2011
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	54,673	$	47,344	$	—	$	50,459	$	—
Construction & development		22,553		17,744		—		21,498		—
Residential development		30,575		23,212		—		33,864		—
Commercial
Term		14,205		11,311		—		9,339		—
LOC & other		23,132		9,034		—		16,121		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		22,611		13,105		557		18,792		894
Construction & development		3,762		12,248		151		6,560		798
Residential development		26,326		26,326		464		32,810		1,120
Commercial
Term		1,851		1,851		608		627		140
LOC & other		3,975		3,975		2,000		3,642		—
Residential
Mortgage		—		—		—		143		—
Home equity loans & lines		129		129		4		52		3
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	160,500	$	139,979	$	1,172	$	163,983	$	2,812
Commercial		43,163		26,171		2,608		29,729		140
Residential		129		129		4		195		3
Consumer & Other		—		—		—		—		—
Total	$	203,792	$	166,279	$	3,784	$	193,907	$	2,955

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Umpqua Holdings Corporation and Subsidiaries

	2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	62,605	$	49,790	$	—	$	56,003	$	—
Construction & development		33,091		25,558		—		27,588		—
Residential development		63,859		39,011		—		37,603		—
Commercial
Term		8,024		6,969		—		9,420		—
LOC & other		56,046		19,814		—		38,215		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		29,926		28,070		1,614		28,518		823
Construction & development		—		—		—		1,706		38
Residential development		46,059		44,504		906		54,607		1,474
Commercial
Term		205		205		9		402		48
LOC & other		9,878		8,519		2,702		1,884		14
Residential
Mortgage		179		179		8		3,750		6
Home equity loans & lines		—		—		—		21		—
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	235,540	$	186,933	$	2,520	$	206,025	$	2,335
Commercial		74,153		35,507		2,711		49,921		62
Residential		179		179		8		3,771		6
Consumer & Other		—		—		—		—		—
Total	$	309,872	$	222,619	$	5,239	$	259,717	$	2,403

Loans with no related allowance reported generally represent non-accrual loans. The Company recognizes the charge-off of impairment reserves on impaired loans in the period it arises for collateral dependent loans. Therefore, the non-accrual loans as of December 31, 2011 have already been written-down to their estimated net realizable value, based on disposition value, and are expected to be resolved with no additional material loss, absent further decline in market prices. The valuation allowance on impaired loans primarily represents the impairment reserves on performing restructured loans, and is measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value.

At December 31, 2011 and 2010, non-covered impaired loans of $80.6 million and $84.4 million were classified as accruing restructured loans, respectively. The restructurings were granted in response to borrower financial difficulty, and generally provide for a temporary modification of loan repayment terms. The restructured loans on accrual status and two loans included in loans past due 30+ days and accruing represent the only impaired loans accruing interest at December 31, 2011. The restructured loans on accrual status represent the only impaired loans accruing interest at December 31, 2010. In order for a restructured loan to be considered for accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow. The Company had obligations of $205,000 to lend additional funds on the restructured loans as of December 31, 2011.

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For the years ended December 31, 2011, 2010 and 2009, interest income of approximately $3.0 million, $2.4 million and $2.4 million, respectively, was recognized in connection with impaired loans. The impaired loans for which these interest income amounts were recognized primarily relate to accruing restructured loans.

Non-covered Credit Quality Indicators

As previously noted, the Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The Bank differentiates its lending portfolios into homogeneous loans (generally consumer loans) and non-homogeneous loans (generally all non-consumer loans). The 10 risk rating categories can be generally described by the following groupings for non-homogeneous loans:

Minimal Risk—A minimal risk loan, risk rated 1, is to a borrower of the highest quality. The borrower has an unquestioned ability to produce consistent profits and service all obligations and can absorb severe market disturbances with little or no difficulty.

Low Risk—A low risk loan, risk rated 2, is similar in characteristics to a minimal risk loan. Margins may be smaller or protective elements may be subject to greater fluctuation. The borrower will have a strong demonstrated ability to produce profits, provide ample debt service coverage and to absorb market disturbances.

Modest Risk—A modest risk loan, risk rated 3, is a desirable loan with excellent sources of repayment and no currently identifiable risk of collection. The borrower exhibits a very strong capacity to repay the credit in accordance with the repayment agreement. The borrower may be susceptible to economic cycles, but will have reserves to weather these cycles.

Average Risk—An average risk loan, risk rated 4, is an attractive loan with sound sources of repayment and no material collection or repayment weakness evident. The borrower has an acceptable capacity to pay in accordance with the agreement. The borrower is susceptible to economic cycles and more efficient competition, but should have modest reserves sufficient to survive all but the most severe downturns or major setbacks.

Acceptable Risk—An acceptable risk loan, risk rated 5, is a loan with lower than average, but still acceptable credit risk. These borrowers may have higher leverage, less certain but viable repayment sources, have limited financial reserves and may possess weaknesses that can be adequately mitigated through collateral, structural or credit enhancement. The borrower is susceptible to economic cycles and is less resilient to negative market forces or financial events. Reserves may be insufficient to survive a modest downturn.

Watch—A watch loan, risk rated 6, is still pass-rated, but represents the lowest level of acceptable risk due to an emerging risk element or declining performance trend. Watch ratings are expected to be temporary, with issues resolved or manifested to the extent that a higher or lower rating would be appropriate. The borrower should have a plausible plan, with reasonable certainty of success, to correct the problems in a short period of time. Borrowers rated Watch are characterized by elements of uncertainty, such as:

• Borrower may be experiencing declining operating trends, strained cash flows or less-than anticipated performance. Cash flow should still be adequate to cover debt service, and the negative trends should be identified as being of a short-term or temporary nature.

• The borrower may have experienced a minor, unexpected covenant violation.

• Companies who may be experiencing tight working capital or have a cash cushion deficiency.

• Loans may also be a Watch if financial information is late, there is a documentation deficiency, the borrower has experienced unexpected management turnover, or if they face industry issues that, when combined with performance factors create uncertainty in their future ability to perform.

• Delinquent payments, increasing and material overdraft activity, request for bulge and/or out-of-formula advances may be an indicator of inadequate working capital and may suggest a lower rating.

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• Failure of the intended repayment source to materialize as expected, or renewal of a loan (other than cash/marketable security secured or lines of credit) without reduction are possible indicators of a Watch or worse risk rating.

Special Mention—A Special Mention loan, risk rated 7, has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or the institutions credit position at some future date. They contain unfavorable characteristics and are generally undesirable. Loans in this category are currently protected but are potentially weak and constitute an undue and unwarranted credit risk, but not to the point of a Substandard classification. A Special Mention loan has potential weaknesses, which if not checked or corrected, weaken the asset or inadequately protect the Bank’s position at some future date. Such weaknesses include:

• Performance is poor or significantly less than expected. There may be a temporary debt-servicing deficiency or inadequate working capital as evidenced by a cash cushion deficiency, but not to the extent that repayment is compromised. Material violation of financial covenants is common.

• Loans with unresolved material issues that significantly cloud the debt service outlook, even though a debt servicing deficiency does not currently exist.

• Modest underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt as structured. Depth of support for interest carry provided by owner/guarantors may mitigate and provide for improved rating.

• This rating may be assigned when a loan officer is unable to supervise the credit properly, an inadequate loan agreement, an inability to control collateral, failure to obtain proper documentation, or any other deviation from prudent lending practices.

• Unlike a Substandard credit, there should be a reasonable expectation that these temporary issues will be corrected within the normal course of business, rather than liquidation of assets, and in a reasonable period of time.

Substandard—A substandard asset, risk rated 8, is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. Loans are classified as Substandard when they have unsatisfactory characteristics causing unacceptable levels of risk. A substandard loan normally has one or more well-defined weaknesses that could jeopardize repayment of the debt. The likely need to liquidate assets to correct the problem, rather than repayment from successful operations is the key distinction between Special Mention and Substandard. The following are examples of well-defined weaknesses:

• Cash flow deficiencies or trends are of a magnitude to jeopardize current and future payments with no immediate relief. A loss is not presently expected, however the outlook is sufficiently uncertain to preclude ruling out the possibility.

• Borrower has been unable to adjust to prolonged and unfavorable industry or economic trends.

• Material underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt and risk is not mitigated by willingness and capacity of owner/guarantor to support interest payments.

• Management character or honesty has become suspect. This includes instances where the borrower has become uncooperative.

• Due to unprofitable or unsuccessful business operations, some form of restructuring of the business, including liquidation of assets, has become the primary source of loan repayment. Cash flow has deteriorated, or been

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diverted, to the point that sale of collateral is now the Bank’s primary source of repayment (unless this was the original source of repayment). If the collateral is under the Bank’s control and is cash or other liquid, highly marketable securities and properly margined, then a more appropriate rating might be Special Mention or Watch.

• The borrower is bankrupt, or for any other reason, future repayment is dependent on court action.

• There is material, uncorrectable faulty documentation or materially suspect financial information.

Doubtful—Loans classified as doubtful, risk rated 9, have all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work towards strengthening of the asset, classification as a loss (and immediate charge-off) is deferred until more exact status may be determined. Pending factors include proposed merger, acquisition, liquidation procedures, capital injection, and perfection of liens on additional collateral and refinancing plans. In certain circumstances, a Doubtful rating will be temporary, while the Bank is awaiting an updated collateral valuation. In these cases, once the collateral is valued and appropriate margin applied, the remaining un-collateralized portion will be charged off. The remaining balance, properly margined, may then be upgraded to Substandard, however must remain on non-accrual.

Loss—Loans classified as loss, risk rated 10, are considered un-collectible and of such little value that the continuance as an active Bank asset is not warranted. This rating does not mean that the loan has no recovery or salvage value, but rather that the loan should be charged off now, even though partial or full recovery may be possible in the future.

Impaired—Loans are classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement, without unreasonable delay. This generally includes all loans classified as non-accrual and troubled debt restructurings. Impaired loans are risk rated for internal and regulatory rating purposes, but presented separately for clarification.

Homogeneous loans are not risk rated until they are greater than 30 days past due, and risk rating is based primarily on the past due status of the loan. The risk rating categories can be generally described by the following groupings for commercial and commercial real estate homogeneous loans:

Special Mention—A homogeneous special mention loan, risk rated 7, is 30-59 days past due from the required payment date at month-end.

Substandard—A homogeneous substandard loan, risk rated 8, is 60-119 days past due from the required payment date at month-end.

Doubtful—A homogeneous doubtful loan, risk rated 9, is 120-149 days past due from the required payment date at month-end.

Loss—A homogeneous loss loan, risk rated 10, is 150 days and more past due from the required payment date. These loans are generally charged-off in the month in which the 150- day time period elapses.

The risk rating categories can be generally described by the following groupings for residential and consumer and other homogeneous loans:

Special Mention—A homogeneous retail special mention loan, risk rated 7, is 30-89 days past due from the required payment date at month-end.

Substandard—A homogeneous retail substandard loan, risk rated 8, is an open-end loan 90-180 days past due from the required payment date at month-end or a closed-end loan 90-120 days past due from the required payment date at month-end.

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Loss—A homogeneous retail loss loan, risk rated 10, is a closed-end loan that becomes past due 120 cumulative days or an open-end retail loan that becomes past due 180 cumulative days from the contractual due date. These loans are generally charged-off in the month in which the 120- or 180-day period elapses.

The following table summarizes our internal risk rating by loan class for the non-covered loan portfolio as of December 30, 2011 and December 31, 2010:

(in thousands)

	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	3,075,452	$	275,475	$	146,919	$	—	$	—	$	60,449	$	3,558,295
Construction & development		102,786		19,946		12,342		—		—		29,992		165,066
Residential development		25,062		6,740		8,733		—		—		49,538		90,073
Commercial
Term		586,365		16,631		9,608		—		—		13,162		625,766
LOC & other		775,233		22,051		22,706		—		—		13,009		832,999
Residential
Mortgage		309,478		2,106		296		—		4,047		—		315,927
Home equity loans & lines		268,731		683		773		—		1,876		129		272,192
Consumer & other		38,098		82		254		—		426		—		38,860
Total	$	5,181,205	$	343,714	$	201,631	$	—	$	6,349	$	166,279	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098
	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	2,978,116	$	314,094	$	113,405	$	—	$	—	$	77,860	$	3,483,475
Construction & development		145,108		25,295		51,853		—		—		25,558		247,814
Residential development		27,428		13,764		23,106		—		—		83,515		147,813
Commercial
Term		472,512		17,658		12,109		—		—		7,174		509,453
LOC & other		646,163		30,761		42,162		—		—		28,333		747,419
Residential
Mortgage		216,899		2,414		786		—		2,138		179		222,416
Home equity loans & lines		275,906		2,447		125		—		107		—		278,585
Consumer & other		32,008		595		29		—		411		—		33,043
Total	$	4,794,140	$	407,028	$	243,575	$	—	$	2,656	$	222,619	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

The percentage of non-covered impaired loans classified as special mention, substandard, and loss was 3.8%, 96.0%, and 0.2%, respectively, as of December 31, 2011.

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Troubled Debt Restructurings

At December 31, 2011 and December 31, 2010, non-covered impaired loans of $80.6 million and $84.4 million were classified as accruing restructured loans, respectively. The restructurings were granted in response to borrower financial difficulty, and generally provide for a temporary modification of loan repayment terms. The restructured loans on accrual status and two loans included in loans past due 30+ days and accruing represent the only impaired loans accruing interest. In order for a restructured loan to be considered for accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow.

Impaired restructured loans carry a specific allowance calculated and the allowance on impaired restructured loans is calculated consistently across the portfolios.

As a result of adopting the amendments in Accounting Standards Update No. 2011-02, the Company reassessed all restructurings that occurred on or after the beginning of the current fiscal year (January 1, 2011) for identification as troubled debt restructurings. The Company identified as troubled debt restructurings certain receivables for which the allowance for credit losses had previously been measured under a general allowance for credit losses methodology. Upon identifying those receivables as troubled debt restructurings, the Company identified them as impaired under the guidance in Section 310-10-35. The amendments in Accounting Standards Update No. 2011-02 require prospective application of the impairment measurement guidance in Section 310-10-35 for those receivables newly identified as impaired. At the end of the first year of adoption (December 31, 2011), the recorded investment in receivables for which the allowance for credit losses was previously measured under a general allowance for credit losses methodology and are now impaired under Section 310-10-35 was $5.4 million, and there was no allowance for credit losses associated with those receivables, on the basis of a current evaluation of loss. In evaluating concessions made during the year, the Company frequently obtained adequate compensation for concessions made. As a result, few loans qualified as troubled debt restructuring under the new definitions outlined in Section 310-10-35.

Available commitments for non-covered troubled debt restructurings outstanding as of December 31, 2011 totaled $205,000. As of December, 2010, no available commitments were outstanding on non-covered troubled debt restructurings.

The following tables present non-covered troubled debt restructurings by accrual versus non-accrual status and by loan class as of December 31, 2011 and 2010:

(in thousands)

	December 31, 2011
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	22,611	$	21,951	$	44,562
Construction & development		19,996		921		20,917
Residential development		33,964		11,969		45,933
Commercial
Term		3,863		1,762		5,625
LOC & other		—		6,973		6,973
Residential
Mortgage		—		—		—
Home equity loans & lines		129		—		129
Consumer & other		—		—		—
Total	$	80,563	$	43,576	$	124,139

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	December 31, 2010
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	28,697	$	3,185	$	31,882
Construction & development		5,434		—		5,434
Residential development		48,929		8,036		56,965
Commercial
Term		904		725		1,629
LOC & other		298		11,040		11,338
Residential
Mortgage		179		—		179
Home equity loans & lines		—		—		—
Consumer & other		—		—		—
Total	$	84,441	$	22,986	$	107,427

The Bank’s policy is that loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appear relatively certain. The Bank’s policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status.

The types of modifications offered can generally be described in the following categories:

Rate Modification—A modification in which the interest rate is modified.

Term Modification—A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification—A modification in which the loan is converted to interest only payments for a period of time.

Payment Modification—A modification in which the payment amount is changed, other than an interest only modification described above.

Combination Modification—Any other type of modification, including the use of multiple types of modifications.

The following tables present newly non-covered restructured loans that occurred during the years ended December 31, 2011 and 2010, respectively:

	2011
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	34,943	$	34,943
Construction & development		—		—		—		—		13,760		13,760
Residential development		279		354		—		—		9,090		9,723
Commercial
Term		—		—		—		70		5,311		5,381
LOC & other		—		—		—		—		4,050		4,050
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		130		—		—		—		130
Consumer & other		—		—		—		—		—		—
Total	$	279	$	484	$	—	$	70	$	67,154	$	67,987

135

(in thousands)
	2010
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	13,018	$	13,018
Construction & development		—		—		—		—		5,534		5,534
Residential development		—		1,459		—		—		3,691		5,150
Commercial
Term		—		—		—		—		—		—
LOC & other		—		1,371		—		—		—		1,371
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—
Total	$	—	$	2,830	$	—	$	—	$	22,243	$	25,073

For the periods presented in the tables above, the outstanding recorded investment was the same pre and post modification.

The following tables represent financing receivables modified as troubled debt restructurings within the previous 12 months for which there was a payment default during the years ended December 31, 2011 and 2010, respectively:

(in thousands)

	2011		2010
Commercial real estate
Term & multifamily	$	9,642	$	5,553
Construction & development		—		—
Residential development		1,767		—
Commercial
Term		140		661
LOC & other		—		—
Residential
Mortgage		—		944
Home equity loans & lines		—		—
Consumer & other		—		—
Total	$	11,549	$	7,158

NOTE 7.    COVERED ASSETS AND INDEMNIFICATION ASSET

Covered Loans

Loans acquired in a FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as “covered loans” and reported separately in our statements of financial condition. Covered loans are reported exclusive of the expected cash flow reimbursements expected from the FDIC.

Acquired loans are valued as of acquisition date in accordance with ASC 805. Loans purchased with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Because of the significant fair value discounts associated with the acquired portfolios, the concentration of real estate related loans (to finance

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or secured by real estate collateral) and the decline in real estate values in the regions serviced, and after considering the underwriting standards of the acquired originating bank, the Company elected to account for all acquired loans under ASC 310-30. Under ASC 805 and ASC 310-30, loans are to be recorded at fair value at acquisition date, factoring in credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for loan losses is not carried over or recorded as of the acquisition date. We have aggregated the acquired loans into various loan pools based on multiple layers of common risk characteristics for the purpose of determining their respective fair values as of their acquisition dates, and for applying the subsequent recognition and measurement provisions for income accretion and impairment testing.

Acquired loans were first segregated between those designated as performing versus those designated as non-performing. In this application, ‘performing’ and ‘non-performing’ loans were defined in accordance with the scoping requirements of ASC 310-30, that is the ‘non-performing’ loans individually exhibited evidence of deteriorated credit quality since origination for which it is probable that we will not be able to collect all contractually required payments receivable. Our Credit Quality and Credit Review teams identified these non-performing credits on a loan-by-loan basis during the due diligence process. Generally, identified non-performing loans tended to be risk rated substandard or worse on the acquired institution’s books. Collectively, the non-performing loans would be considered the ‘classic’ application of ASC 310-30. The remaining performing notes were accounted for under ASC 310-30 by analogy due to the significant fair value discounts associated with the pools resulting from the underwriting standards of the acquired bank (that often contributed to the bank’s failure), the concentration of loans for the purpose of, and collateralized by, real estate, and the general economic condition of the regions each acquired bank serviced. We deem analogizing all loans to ASC 310-30 acceptable as a significant component of the fair value discount applied to each loan pool is attributed to estimated credit losses that are anticipated to occur over the life of each respective loan pool.

Once notes were separated based on their expected future performance, they were further segregated based on specific loan types (purpose/collateral) and then their principal cash flow and interest rate characteristics. The most significant loan type categories utilized (in no particular order) were commercial residential development, commercial construction, farmland, 1^st lien single family mortgages, 2^nd lien single family loans, single family revolving lines of credit, multifamily mortgages, owner occupied commercial real estate, non-owner occupied commercial real estate, commercial loans, commercial lines of credit, consumer installment loans, and consumer lines of credit. Next, groups of loans were segregated based on repayment characteristics, specifically whether the notes’ principal balances were amortizing or interest-only. Lastly, loans were separated by various interest rate characteristics, such as whether the interest rate was fixed or variable. For those loans whose interest rates were variable, they were also segregated by their underlying indices (e.g. PRIME, Federal Home Loan Bank, or constant maturity treasury) and whether or not there were interest rate floors.

The following table presents the number of pools, number of loans and acquired unpaid principal balance, by performing (“analogized 310-30”), non-performing (“classic 310-30”) and in total, separately for each institution acquired in 2010.

(dollars in millions)

	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Performing loans (“Analogized ASC 310-30”):
Number of Pools		15		19		19
Number of Loans		1,263		3,647		402
Acquired Unpaid Principal Balance	$	247.9	$	516.9	$	224.2
Non-performing loans (“Classic ASC 310-30”):
Number of Pools		8		10		9
Number of Loans		127		39		106
Acquired Unpaid Principal Balance	$	120.6	$	44.5	$	103.4
Total Portfolio
Number of Pools		23		29		28
Number of Loans		1,390		3,686		508
Acquired Unpaid Principal Balance	$	368.5	$	561.4	$	327.6

137

The fair value of each loan pool was computed by discounting the expected cash flows at their estimated market discount rate. Cash flows expected to be collected at acquisition date were estimated by applying certain key assumptions to each loan pool, such as credit loss rates, prepayment speeds, and resolution terms related to nonperforming loans, against the contractual cash flows of the underlying loans. Credit loss estimates for each pool were determined by considering factors such as, underlying collateral types, collateral locations, estimated collateral values, and credit quality indicators such as risk ratings. Market discount rates were determined using a buildup approach which included assumptions with respect to funding cost and funding mix, a market participant’s required rate of return on equity capital, servicing costs and a liquidity premium.

The following table reflects the estimated fair value of the acquired loans at the acquisition dates:

(in thousands)

	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010		Total
Commercial real estate
Term & multifamily	$	141,076	$	331,869	$	154,119	$	627,064
Construction & development		18,832		562		9,481		28,875
Residential development		16,219		10,340		15,641		42,200
Commercial
Term		27,272		14,850		18,257		60,379
LOC & other		23,965		18,169		11,408		53,542
Residential
Mortgage		11,886		39,897		1,539		53,322
Home equity loans & lines		8,308		31,029		4,421		43,758
Consumer & other		4,935		11,624		641		17,200
Total	$	252,493	$	458,340	$	215,507	$	926,340

In estimating the fair value of the covered loans at the acquisition date, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments and (b) estimated the amount and timing of undiscounted expected principal and interest payments. The difference between these two amounts represents the nonaccretable difference. On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the “accretable yield”. The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans.

The following table presents a reconciliation of the undiscounted contractual cash flows, nonaccretable difference, accretable yield, and fair value of covered loans for each respective acquired loan portfolio at the acquisition dates:

(in thousands)

	Evergreen			Rainier			Nevada Security
	January 22, 2010			February 26, 2010			June 18, 2010			Total
Undiscounted contractual cash flows	$	498,216		$	821,972		$	396,134		$	1,716,322
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(124,131	)		(125,774	)		(115,021	)		(364,926	)
Undiscounted cash flows expected to be collected		374,085			696,198			281,113			1,351,396
Accretable yield at acquisition		(121,592	)		(237,858	)		(65,606	)		(425,056	)
Estimated fair value of loans acquired at acquisition	$	252,493		$	458,340		$	215,507		$	926,340

The covered loan portfolio also includes revolving lines of credit with funded and unfunded commitments. Balances outstanding at the time of acquisition are included in the loan pools and are accounted for under ASC 310-30. Any additional

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Umpqua Holdings Corporation and Subsidiaries

advances on these loans subsequent to the acquisition date may or may not be covered depending on the nature of the disbursement and the terms of each respective loss-sharing agreement, and are not accounted for under ASC 310-30.

The covered loans acquired are and will continue to be subject to the Company’s internal and external credit review and monitoring. To the extent there is experienced or projected credit deterioration on the acquired loan pools subsequent to amounts estimated at the previous remeasurement date, this deterioration will be measured, and a provision for credit losses will be charged to earnings. Additionally, provision for credit losses will be recorded on advances on covered loans subsequent to acquisition date in a manner consistent with the allowance for non-covered loan and lease losses. These provisions will be mostly offset by an increase to the FDIC indemnification asset, which is recognized in non-interest income.

Covered Loans

The following table presents the major types of covered loans as of December 31, 2011 and 2010:

(in thousands)

	2011
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	99,346	$	248,206	$	126,502	$	474,054
Construction & development		7,241		711		6,868		14,820
Residential development		7,809		227		9,727		17,763
Commercial
Term		14,911		5,807		13,432		34,150
LOC & other		8,776		8,854		5,796		23,426
Residential
Mortgage		6,320		27,320		1,863		35,503
Home equity loans & lines		4,660		21,055		3,370		29,085
Consumer & other		2,394		5,541		35		7,970
Total	$	151,457	$	317,721	$	167,593		636,771
Allowance for covered loans								(14,320	)
Total							$	622,451
	2010
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	124,743	$	303,585	$	141,314	$	569,642
Construction & development		14,470		854		9,389		24,713
Residential development		11,024		2,497		11,372		24,893
Commercial
Term		18,895		10,881		13,000		42,776
LOC & other		11,876		14,320		9,031		35,227
Residential
Mortgage		8,129		35,026		1,669		44,824
Home equity loans & lines		6,740		25,214		3,726		35,680
Consumer & other		2,793		8,071		—		10,864
Total	$	198,670	$	400,448	$	189,501		788,619
Allowance for covered loans								(2,721	)
Total							$	785,898

139

The outstanding contractual unpaid principal balance, excluding purchase accounting adjustments, at December 31, 2011 was $209.5 million, $379.0 million and $260.2 million, for Evergreen, Rainier, and Nevada Security, respectively, as compared to $286.6 million, $481.7 million and $295.4 million, for Evergreen, Rainier, and Nevada Security, respectively, at December 31, 2010.

In estimating the fair value of the covered loans at the acquisition date, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments and (b) estimated the amount and timing of undiscounted expected principal and interest payments. The difference between these two amounts represents the nonaccretable difference.

On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the “accretable yield”. The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans.

The following table presents the changes in the accretable yield for the years ended December 31, 2011 and 2010 for each respective acquired loan portfolio:

	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	90,770		$	172,614		$	73,515		$	336,899
Accretion to interest income		(26,240	)		(35,382	)		(22,580	)		(84,202	)
Disposals		(10,575	)		(19,893	)		(4,595	)		(35,063	)
Reclassifications from nonaccretable difference		2,524			2,994			14,681			20,199
Balance, end of period	$	56,479		$	120,333		$	61,021		$	237,833
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Additions resulting from acquisitions		121,592			237,858			65,606			425,056
Accretion to interest income		(29,060	)		(32,979	)		(10,978	)		(73,017	)
Disposals		(6,572	)		(12,830	)		(2,376	)		(21,778	)
Reclassifications (to)/from nonaccretable difference		4,810			(19,435	)		21,263			6,638
Balance, end of period	$	90,770		$	172,614		$	73,515		$	336,899

The estimated fair value of the loan portfolios and expected credit losses continued to be based on a weighted average pool-level basis. However, the undiscounted contractual cash flows estimate was refined to be based off of the underlying individual loans and resulted in a reduction in the undiscounted contractual cash flows and a corresponding decrease in accretable yield. As these acquisitions occurred in the first quarter of 2010, the Company elected to reflect these changes, beginning in the second quarter of 2010, in the reclassification to nonaccretable difference line item of the accretable yield reconciliation, rather than adjust the acquisition date balance disclosure as the estimated fair values did not change. The updated initial cash flows did not have a material impact on or result in retrospective adjustments to the Company’s consolidated financial statements.

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Umpqua Holdings Corporation and Subsidiaries

Allowance for Covered Loan and Lease Losses

The following table summarizes activity related to the allowance for covered loan and lease losses by covered loan portfolio segment for the years ended December 31, 2011 and 2010, respectively:

(in thousands)

	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Total
Balance, beginning of period	$	2,465		$	176		$	56		$	24		$	2,721
Charge-offs		(3,177	)		(660	)		(1,657	)		(1,192	)		(6,686	)
Recoveries		1,348			512			142			142			2,144
Provision		8,303			3,936			2,450			1,452			16,141
Balance, end of period	$	8,939		$	3,964		$	991		$	426		$	14,320

	December 31, 2010
	Commercial Real Estate			Commercial			Residential		Consumer & Other		Total
Balance, beginning of period	$	—		$	—		$	—	$	—	$	—
Charge-offs		(2,439	)		(266	)		—		—		(2,705	)
Recoveries		11			263			—		1		275
Provision		4,893			179			56		23		5,151
Balance, end of period	$	2,465		$	176		$	56	$	24	$	2,721

The following table presents the allowance and recorded investment in covered loans by portfolio segment as of December 31, 2011 and 2010:

(in thousands)

	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	8,491	$	3,366	$	955	$	395	$	13,207
Collectively evaluated for impairment(2)		448		598		36		31		1,113
Total	$	8,939	$	3,964	$	991	$	426	$	14,320
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	503,575	$	39,427	$	59,980	$	5,410	$	608,392
Collectively evaluated for impairment(2)		3,062		18,149		4,608		2,560		28,379
Total	$	506,637	$	57,576	$	64,588	$	7,970	$	636,771

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	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	2,345	$	—	$	—	$	—	$	2,345
Collectively evaluated for impairment		120		176		56		24		376
Total	$	2,465	$	176	$	56	$	24	$	2,721
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	614,361	$	63,252	$	72,650	$	8,610	$	758,873
Collectively evaluated for impairment		4,887		14,751		7,854		2,254		29,746
Total	$	619,248	$	78,003	$	80,504	$	10,864	$	788,619

(1) In accordance with ASC 310-30, the valuation allowance is netted against the carrying value of the covered loan and lease balance.

(2) The allowance on covered loan and lease losses includes an allowance on covered loan advances on acquired loans subsequent to acquisition.

The valuation allowance on covered loans was reduced by recaptured provision of $3.5 million and none for the years ended December 31, 2011 and 2010, respectively.

Covered Credit Quality Indicators

Covered loans are risk rated in a manner consistent with non-covered loans. As previously noted, the Company’s risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating groupings are described fully in Note 6. The below table includes both loans acquired with deteriorated credit quality accounted for under ASC 310-30 and covered loan advances on acquired loans subsequent to acquisition.

The following table summarizes our internal risk rating grouping by class of covered loans, net as of December 31, 2011 and 2010:

(in thousands)

	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	329,273	$	58,610	$	68,521	$	12,343	$	—	$	468,747
Construction & development		1,552		1,410		6,733		3,410		—		13,105
Residential development		1,187		405		8,394		5,808		—		15,794
Commercial
Term		18,006		1,661		8,244		3,228		—		31,139
LOC & other		13,605		2,756		5,607		556		—		22,524
Residential
Mortgage		35,233		—		—		—		—		35,233
Home equity loans & lines		28,223		—		143		—		—		28,366
Consumer & other		7,543		—		—		—		—		7,543
Total	$	434,622	$	64,842	$	97,642	$	25,345	$	—	$	622,451

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	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	485,238	$	32,150	$	44,833	$	7,421	$	—	$	569,642
Construction & development		6,155		3,799		7,640		4,841		—		22,435
Residential development		6,625		1,322		12,907		3,852		—		24,706
Commercial
Term		31,760		2,119		7,087		1,634		—		42,600
LOC & other		22,960		4,246		7,183		838		—		35,227
Residential
Mortgage		44,524		—		300		—		—		44,824
Home equity loans & lines		34,998		—		627		—		—		35,625
Consumer & other		10,827		—		12		—		—		10,839
Total	$	643,087	$	43,636	$	80,589	$	18,586	$	—	$	785,898

Covered Other Real Estate Owned

All other real estate owned (“OREO”) acquired in FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement are referred to as “covered OREO” and reported separately in our statements of financial position. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral’s net realizable value, less selling costs.

Covered OREO was initially recorded at its estimated fair value on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to non-interest expense, and will be mostly offset by non-interest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to non-interest expense with a corresponding charge to non-interest income for the portion of the recovery that is due to the FDIC.

The following table summarizes the activity related to the covered OREO for the years ended December 31, 2011 and 2010:

(in thousands)

	2011			2010
Balance, beginning of period	$	29,863		$	—
Acquisition		—			26,939
Additions to covered OREO		15,271			15,350
Dispositions of covered OREO		(16,934	)		(10,485	)
Valuation adjustments in the period		(8,709	)		(1,941	)
Balance, end of period	$	19,491		$	29,863

FDIC Indemnification Asset

The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations. The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into non-interest income over the life of the FDIC indemnification asset.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered assets. These adjustments are measured on the same basis as the related covered loans and covered other real estate owned. Any increases

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in cash flow of the covered assets over those expected will reduce the FDIC indemnification asset and any decreases in cash flow of the covered assets under those expected will increase the FDIC indemnification asset. Increases and decreases to the FDIC indemnification asset are recorded as adjustments to non-interest income. The resulting carrying value of the indemnification asset represents the amounts recoverable from the FDIC for future expected losses, and the amounts due from the FDIC for claims related to covered losses the Company have incurred less amounts due back to the FDIC relating to shared recoveries.

The following table summarizes the activity related to the FDIC indemnification asset for each respective acquired portfolio for the years ended December 31, 2011 and 2010:

(in thousands)

	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	40,606		$	43,726		$	62,081		$	146,413
Change in FDIC indemnification asset		1,357			(7,343	)		(182	)		(6,168	)
Transfers to due from FDIC		(13,416	)		(8,111	)		(27,629	)		(49,156	)
Balance, end of period	$	28,547		$	28,272		$	34,270		$	91,089
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Acquisitions		71,755			76,603			99,160			247,518
Change in FDIC indemnification asset		(12,864	)		(7,045	)		3,464			(16,445	)
Transfers to due from FDIC		(18,285	)		(25,832	)		(40,543	)		(84,660	)
Balance, end of period	$	40,606		$	43,726		$	62,081		$	146,413

NOTE 8.    PREMISES AND EQUIPMENT

The following table presents the major components of premises and equipment at December 31, 2011 and 2010:

(in thousands)

	2011			2010
Land	$	24,855		$	23,174
Buildings and improvements		127,028			115,807
Furniture, fixtures and equipment		108,599			95,909
Construction in progress		10,360			4,471
Total premises and equipment		270,842			239,361
Less: Accumulated depreciation and amortization		(118,476	)		(102,762	)
Premises and equipment, net	$	152,366		$	136,599

Depreciation expense totaled $16.5 million, $14.4 million and $12.8 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Umpqua’s subsidiaries have entered into a number of non-cancelable lease agreements with respect to premises and equipment. See Note 20 for more information regarding rental expense, net of rent income, and minimum annual rental commitments under non-cancelable lease agreements.

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NOTE 9.    GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the Company’s goodwill and other intangible assets for the years ended December 31, 2008, 2009, 2010, and 2011. Goodwill is reflected by operating segment; all other intangible assets are related to the Community Banking segment.

(in thousands)

	Goodwill
	Community Banking									Wealth Management
	Gross			Accumulated Impairment			Total			Gross		Accumulated Impairment			Total
Balance, December 31, 2008	$	719,336		$	—		$	719,336		$	3,697	$	(982	)	$	2,715
Reductions		(81	)		—			(81	)		—		—			—
Impairment		—			(111,952	)		(111,952	)		—		—			—
Balance, December 31, 2009		719,255			(111,952	)		607,303			3,697		(982	)		2,715
Net additions		45,954			—			45,954			—		—			—
Reductions		(96	)		—			(96	)		—		—			—
Balance, December 31, 2010		765,113			(111,952	)		653,161			3,697		(982	)		2,715
Net additions		247			—			247			—		—			—
Reductions		(44	)		—			(44	)		—		—			—
Balance, December 31, 2011	$	765,316		$	(111,952	)	$	653,364		$	3,697	$	(982	)	$	2,715
	Other Intangible Assets
	Gross			Accumulated Amortization			Net
Balance, December 31, 2008	$	56,213		$	(20,432	)	$	35,781
Impairment		—			(804	)		(804	)
Amortization		—			(5,361	)		(5,361	)
Balance, December 31, 2009		56,213			(26,597	)		29,616
Net additions		7,016			—			7,016
Reductions		(5,150	)		—			(5,150	)
Amortization		—			(5,389	)		(5,389	)
Balance, December 31, 2010		58,079			(31,986	)		26,093
Net additions		—			—			—
Amortization		—			(4,948	)		(4,948	)
Balance, December 31, 2011	$	58,079		$	(36,934	)	$	21,145

Goodwill additions in 2011 relate to purchase accounting adjustments finalized relating to the Rainier acquisition. The 2010 goodwill additions relate to the Rainier and Nevada Security acquisitions and represent the excess of the total purchase price paid over the fair values of the assets acquired, net of the fair values of liabilities assumed. Additional information on the acquisition and purchase price allocation is provided in Note 2. The reductions to goodwill include decreases of $44,000, $96,000, and $81,000 in 2011, 2010, and 2009, respectively, due to the recognition of tax benefits upon exercise of fully vested acquired stock options.

Intangible additions in 2010 relate to the Evergreen, Rainier, and Nevada Security acquisitions and represent core deposits, which includes all deposits except certificates of deposit, and an insurance related customer relationship, which was sold in the second quarter of 2010 for the same value recorded in the purchase price allocation. The values of the core deposit intangible assets were determined by an analysis of the cost differential between the core deposits and alternative funding sources. The value of the insurance related customer relationship was determined based on market indicators. Intangible assets with definite

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useful lives are amortized to their estimated residual values over their respective estimated useful lives, and are also reviewed for impairment. We amortize other intangible assets on an accelerated or straight-line basis over an estimated ten to fifteen year life. No impairment losses separate from the scheduled amortization have been recognized in the periods presented.

The Company performed a goodwill impairment analysis of the Community Banking operating segment as of June 30, 2009, due to a decline in the Company’s market capitalization below book value of equity and continued weakness in the banking industry. The Company engaged an independent valuation consultant to assist us in determining whether and to what extent our goodwill asset was impaired. The results of the Company’s and valuation specialist’s step one impairment test indicated that the reporting unit’s fair value was less than its carrying value, and therefore the Company performed a step two analysis. As part of the second step of the goodwill impairment analysis, we calculated the fair value of the reporting unit’s assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures carried at amortized cost. The external valuation specialist assisted management to estimate the fair value of our unrecognized identifiable assets, such as the core deposit intangible and trade name.

The most significant fair value adjustment made in this analysis was to adjust the carrying value of the Company’s loans receivable portfolio to fair value. The fair value of the Company’s loan receivable portfolio at June 30, 2009 was estimated in a manner similar to methodology utilized as part of the December 31, 2008 goodwill impairment evaluation. As part of the December 31, 2008 loan valuation, the loan portfolio was stratified into sixty-eight loan pools that shared common characteristics, namely loan type, payment terms, and whether the loans were performing or non-performing. Each loan pool was discounted at a rate that considers current market interest rates, credit risk, and assumed liquidity premiums required based upon the nature of the underlying pool. Due to the disruption in the financial markets experienced during 2008 and continuing through 2009, the liquidity premium reflects the reduction in demand in the secondary markets for all grades of non-conforming credit, including those that are performing. Liquidity premiums for individual loan categories generally ranged from 4.6% for performing loans to 30% for construction and non-performing loans. At December 31, 2008, the fair value of the overall loan portfolio was calculated to be at a 9% discount relative to its book value. The composition of the loan portfolio at June 30, 2009, including loan type and performance indicators, was substantially similar to the loan portfolio at December 31, 2008. At June 30, 2009, the fair value of the loan portfolio was estimated to be at a 12% discount relative to its carrying value. The additional discount is primarily attributed to the additional liquidity premium required as of the measurement date associated with the Company’s concentration of commercial real estate loans.

Other significant fair value adjustments utilized in this goodwill impairment analysis included the value of the core deposit intangible asset which was calculated as 0.53% of core deposits, and includes all deposits except certificates of deposit. The carrying value of other real estate owned was discounted by 25%, representing a liquidity adjustment given the current market conditions. The fair value of our trade name, which represents the competitive advantage associated with our brand recognition and ability to attract and retain relationships, was estimated to be $19.3 million. The fair value of our junior subordinated debentures carried at amortized cost was determined in a manner and utilized inputs, primarily the credit risk adjusted spread, consistent with our methodology for determining the fair value of junior subordinated debentures recorded at fair value.

Based on the results of the step two analysis, the Company determined that the implied fair value of the goodwill was less than its carrying amount on the Company’s balance sheet, and as a result, recognized a goodwill impairment loss of $112.0 million in the second quarter of 2009. This write-down of goodwill was a non-cash charge that did not affect the Company’s or the Bank’s liquidity or operations. In addition, because goodwill is excluded in the calculation of regulatory capital, the Company’s “well-capitalized” capital ratios were not affected by this charge.

The Company conducted its annual evaluation of goodwill for impairment at both December 31, 2011 and 2010, respectively. At both dates, in the first step of the goodwill impairment test, the Company determined that the fair value of the Community Banking reporting unit exceeded its carrying amount. This determination is consistent with the events occurring after the Company recognized the $112.0 million impairment of goodwill in the second quarter of 2009. First, the market capitalization and estimated fair value of the Company increased significantly subsequent to the recognition of the impairment charge, as the

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fair value of the Company’s stock increased 60% from June 30, 2009 to December 31, 2011. Secondly, the Company’s successful public common stock offerings in the third quarter of 2009 and first quarter of 2010 diluted the carrying value of the reporting unit’s book equity on a per share basis, against which the fair value of the reporting unit is measured. The significant assumptions and methodology utilized to test for goodwill impairment as of December 31, 2011 were consistent with those used at December 31, 2010.

If the Company’s common stock price should significantly decline or continues to trade below book value per common share, or should general economic conditions deteriorate further or remain depressed for a prolonged period of time, particularly in the financial industry, the Company may be required to recognize additional impairment of all, or some portion of, its goodwill. It is possible that changes in circumstances, existing at the measurement date or at other times in the future, or changes in the numerous estimates associated with management’s judgments, assumptions and estimates made in assessing the fair value of our goodwill, such as valuation multiples, discount rates, or projected earnings, could result in an impairment charge in future periods. Additional impairment charges, if any, may be material to the Company’s results of operations and financial position. However, any potential future impairment charge will have no effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios.

The inputs management utilizes to estimate the fair value of a reporting unit in step one of the goodwill impairment test, and estimating the fair values of the underlying assets and liabilities of a reporting unit in the second step of the goodwill impairment test, require management to make significant judgments, assumptions and estimates where observable market may not readily exist. Such inputs include, but are not limited to, trading multiples from comparable transactions, control premiums, the value that may arise from synergies and other benefits that would accrue from control over an entity, and the appropriate rates to discount projected cash flows. Additionally, there may be limited current market inputs to value certain assets or liabilities, particularly loans and junior subordinated debentures. These valuation inputs are considered to be Level 3 inputs.

Management will continue to monitor the relationship of the Company’s market capitalization to both its book value and tangible book value, which management attributes to both financial services industry-wide and Company specific factors, and to evaluate the carrying value of goodwill and other intangible assets.

The Company evaluated the Wealth Management reporting segment’s goodwill for impairment as of December 31, 2011. The first step of the goodwill impairment test indicated that the reporting unit’s fair value exceeded its carrying value, therefore, no additional impairment was recognized.

In 2009, the Company recognized an $804,000 impairment related to the merchant servicing portfolio as a result of a decrease in the actual and expected future cash flows related to the income stream. Additional information on intangible assets related to acquisitions is provided in Note 2.

The table below presents the forecasted amortization expense for intangible assets acquired in all mergers:

(in thousands)

Year	Expected Amortization
2012	$	4,795
2013		4,623
2014		4,403
2015		4,182
2016		2,433
Thereafter		709
	$	21,145

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NOTE 10.    MORTGAGE SERVICING RIGHTS

The following table presents the changes in the Company’s mortgage servicing rights (“MSR”) for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011			2010			2009
Balance, beginning of year	$	14,454		$	12,625		$	8,205
Additions for new mortgage servicing rights capitalized		6,720			5,645			7,570
Acquired mortgage servicing rights		—			62			—
Changes in fair value:
Due to changes in model inputs or assumptions(1)		(858	)		(1,598	)		(3,469	)
Other(2)		(2,132	)		(2,280	)		319
Balance, end of year	$	18,184		$	14,454		$	12,625
Balance of loans serviced for others	$	2,009,849		$	1,603,414		$	1,277,832
MSR as a percentage of serviced loans		0.90%			0.90%			0.99%

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2) Represents changes due to collection/realization of expected cash flows over time.

The amount of contractually specified servicing fees, late fees and ancillary fees earned, recorded in mortgage banking revenue on the Consolidated Statements of Operations, were $4.7 million, $3.9 million, and $3.0 million, respectively, for the years ended December 31, 2011, 2010, and 2009.

NOTE 11.    NON-COVERED OTHER REAL ESTATE OWNED, NET

The following table presents the changes in other real estate owned (“OREO”), net of valuation allowance, for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011			2010			2009
Balance, beginning of period	$	32,791		$	24,566		$	27,898
Additions to OREO		47,414			41,491			50,914
Dispositions of OREO		(37,083	)		(29,192	)		(41,999	)
Valuation adjustments in the period		(8,947	)		(4,074	)		(12,247	)
Balance, end of period	$	34,175		$	32,791		$	24,566

OREO properties are recorded at the lower of the recorded investment in the loan (prior to foreclosure) or the fair market value of the property less expected selling costs. The Company recognized valuation allowances of $5.1 million, $2.4 million, and $11.4 million on its non-covered OREO balances as of December 31, 2011, 2010 and 2009, respectively. Valuation allowances on non-covered OREO balances are based on updated appraisals of the underlying properties as received during a period or management’s authorization to reduce the selling price of a property during the period.

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NOTE 12.    OTHER ASSETS

Other assets consisted of the following at December 31, 2011 and 2010:

(in thousands)

	2011		2010
Cash surrender value of life insurance policies	$	92,555	$	90,161
Accrued interest receivable		30,617		30,307
Due from FDIC		26,510		36,461
Prepaid FDIC deposit assessment		18,739		29,369
Income taxes receivable		14,715		516
Equity method investments		12,400		8,377
Derivative assets		7,955		1,060
Investment in unconsolidated Trusts		6,934		6,933
Deferred tax assets, net		—		9,649
Other		37,181		29,632
Total	$	247,606	$	242,465

The amount due from the FDIC relates to the FDIC-assisted acquisitions of Evergreen, Rainier, and Nevada Security. See further discussion at Note 7.

The Company invests in limited partnerships that operate qualified affordable housing projects to receive tax benefits in the form of tax deductions from operating losses and tax credits. The Company accounts for the investments under the equity method. The Company’s remaining capital commitments to these partnerships at December 31, 2011 and 2010 were approximately $6.9 million and $1.9 million, respectively. Such amounts are included in other liabilities on the consolidated balance sheets.

Also see Note 18 for information on the Company’s investment in Trusts and Note 21 for information on the Company’s derivatives.

NOTE 13.    INCOME TAXES

The following table presents the components of income tax expense (benefit) attributable to continuing operations included in the Consolidated Statements of Operations for the years ended December 31:

(in thousands)

	Current			Deferred			Total
YEAR ENDED DECEMBER 31, 2011:
Federal	$	29,932		$	(40	)	$	29,892
State		4,810			2,040			6,850
	$	34,742		$	2,000		$	36,742
YEAR ENDED DECEMBER 31, 2010:
Federal	$	(1,714	)	$	6,364		$	4,650
State		3,126			(1,971	)		1,155
	$	1,412		$	4,393		$	5,805
YEAR ENDED DECEMBER 31, 2009:
Federal	$	(24,339	)	$	(7,471	)	$	(31,810	)
State		1,762			(10,889	)		(9,127	)
	$	(22,577	)	$	(18,360	)	$	(40,937	)

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The following table presents a reconciliation of income taxes computed at the Federal statutory rate to the actual effective rate for the years ended December 31:

	2011		2010		2009
Statutory Federal income tax rate		35.0%		35.0%		35.0%
Goodwill impairment		—		—		-20.0%
State tax, net of Federal income tax		3.8%		2.5%		2.9%
Tax-exempt income		-3.7%		-13.6%		2.2%
Tax credits		-1.5%		-5.5%		1.0%
Other		-0.6%		-1.4%		-0.1%
Effective income tax rate		33.0%		17.0%		21.0%

The following table reflects the effects of temporary differences that give rise to the components of the net deferred tax (liabilities) assets (recorded in other liabilities or/and other assets on the consolidated balance sheets) as of December 31:

(in thousands)

	2011			2010
DEFERRED TAX ASSETS:
Covered loans	$	38,812		$	49,334
Allowance for loan and lease losses		36,221			41,084
Accrued severance and deferred compensation		10,976			10,690
Tax credits		6,815			13,289
Non-covered other real estate owned		6,566			3,741
Covered other real estate owned		6,284			8,132
Non-covered loans		2,607			3,401
Discount on trust preferred securities		2,535			2,753
Basis differences of stock and securities		2,335			2,998
Net operating loss carryforwards		1,291			8,897
Other		9,826			7,719
Total gross deferred tax assets		124,268			152,038
DEFERRED TAX LIABILITIES:
FDIC indemnification asset		45,817			73,719
Unrealized gain on investment securities		22,713			16,966
Fair market value adjustment on junior subordinated debentures		20,099			20,801
Premises and equipment depreciation		8,789			5,581
Mortgage servicing rights		7,058			5,782
Deferred loan fees		4,983			4,297
Intangibles		4,928			5,228
Leased assets		4,251			4,879
Other		6,063			5,136
Total gross deferred tax liabilities		124,701			142,389
Net deferred tax (liabilities) assets	$	(433	)	$	9,649

The Company has determined that it is not required to establish a valuation allowance for the deferred tax assets as management believes it is more likely than not that the deferred tax assets of $124.3 million and $152.0 million at December 31, 2011 and 2010, respectively, will be realized principally through carry-back to taxable income in prior years and future reversals of existing taxable temporary differences. Management further believes that future taxable income will be sufficient to realize the benefits of temporary deductible differences that cannot be realized through carry-back to prior years or through the reversal of future temporary taxable differences.

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The tax credits consist of state tax credits of $6.8 and $8.9 million at December 31, 2011 and 2010, respectively, and none and $4.3 million of federal low income housing credits at December 31, 2011 and 2010, respectively. The state tax credits, comprised primarily of State of Oregon Business Energy Tax Credits (“BETC”), will be utilized to offset future state income taxes. Most of the state tax credits benefit a five-year period, with an eight-year carry-forward allowed. Federal low income housing credits have a twenty-year carry forward. Management believes, based upon the Company’s historical performance, that the deferred tax assets relating to these tax credits will be realized in the normal course of operations, and, accordingly, management has not reduced these deferred tax assets by a valuation allowance.

The Company has California state net operating loss carry forwards of $1.3 million at both December 31, 2011 and 2010. The California state net operating losses may be carried forward twenty years. Management believes, based upon the Company’s historical performance, that the deferred tax assets relating to federal and state net operating losses will be realized in the normal course of operations, and, accordingly, management has not reduced these deferred tax assets by a valuation allowance.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, as well as the Oregon and California state jurisdictions. Except for the California amended returns of an acquired institution for the tax years 2001, 2002, and 2003, and only as it relates to the net interest deduction taken on these amended returns, the Company is no longer subject to U.S. federal or Oregon state tax authority examinations for years before 2008 and California state tax authority examinations for years before 2004. The Internal Revenue Service concluded an examination of the Company’s U.S. income tax returns for 2006 through 2008 in 2010. The results of these examinations had no significant impact on the Company’s financial statements.

In accordance with the provisions of FASB ASC 740, Income Taxes, (“ASC 740”), relating to the accounting for uncertainty in income taxes, the Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

The Company recorded a reduction in its liability for unrecognized tax benefits relating to California tax incentives and temporary differences in the amount of $39,000 and $1.7 million during 2011 and 2010, respectively. The Company had gross unrecognized tax benefits recorded as of December 31, 2011 and 2010 in the amounts of $550,000 and $589,000, respectively. If recognized the unrecognized tax benefit would impact the 2011 annual effective tax rate by 0.3%. During 2011, the Company recognized a benefit of $4,000 in interest related to its liability for unrecognized tax benefits during the same period. During 2010, the Company accrued $194,000 of interest related to unrecognized tax benefits, which is reported by the Company as a component of tax expense. As of December 31, 2011 and 2010, the accrued interest related to unrecognized tax benefits is $167,000 and $171,000, respectively.

Detailed below is a reconciliation of the Company’s unrecognized tax benefits, gross of any related tax benefits, for the years ended December 31, 2011 and 2010, respectively:

(in thousands)

	2011			2010
Balance, beginning of period	$	589		$	2,263
Changes based on tax positions related to prior years		—			(1,674	)
Reductions for tax positions of prior years		(39	)		—
Balance, end of period	$	550		$	589

151

NOTE 14.    INTEREST BEARING DEPOSITS

The following table presents the major types of interest bearing deposits at December 31, 2011 and 2010:

(in thousands)

	2011		2010
Interest bearing demand	$	993,579	$	927,224
Money market		3,661,785		3,467,549
Savings		386,528		349,696
Time, $100,000 and over		1,629,505		2,191,055
Time less than $100,000		652,172		881,594
Total interest bearing deposits	$	7,323,569	$	7,817,118

The following table presents interest expense for each deposit type for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011		2010		2009
Interest bearing demand	$	3,056	$	4,677	$	4,884
Money market		17,236		26,412		26,885
Savings		356		543		572
Time, $100,000 and over		25,771		31,735		36,070
Other time less than $100,000		9,324		12,874		20,331
Total interest on deposits	$	55,743	$	76,241	$	88,742

The following table presents the scheduled maturities of time deposits as of December 31, 2011:

(in thousands)

Year	Amount
2012	$	1,589,811
2013		469,152
2014		45,831
2015		37,493
2016		136,685
Thereafter		2,705
Total time deposits	$	2,281,677

The following table presents the remaining maturities of time deposits of $100,000 or more as of December 31, 2011:

(in thousands)

Year	Amount
Three months or less	$	493,587
Over three months through six months		192,775
Over six months through twelve months		463,446
Over twelve months		479,697
Time, $100,000 and over	$	1,629,505

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NOTE 15.    SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The following table presents information regarding securities sold under agreements to repurchase at December 31, 2011 and 2010:

(dollars in thousands)

	Repurchase Amount		Weighted Average Interest Rate		Carrying Value of Underlying Assets		Market Value of Underlying Assets
December 31, 2011	$	124,605		0.35%	$	129,810	$	129,810
December 31, 2010	$	73,759		0.66%	$	75,305	$	75,305

The securities underlying agreements to repurchase entered into by the Bank are for the same securities originally sold, with a one-day maturity. In all cases, the Bank maintains control over the securities. Securities sold under agreements to repurchase averaged approximately $113.1 million, $54.7 million, and $60.7 million for the years ended December 31, 2011, 2010 and 2009, respectively. The maximum amount outstanding at any month end for the years ended December 31, 2011, 2010 and 2009 was $148.2 million, $73.8 million, and $64.3 million, respectively. Investment securities are pledged as collateral in an amount equal to or greater than the repurchase agreements.

NOTE 16.    FEDERAL FUNDS PURCHASED

At December 31, 2011 and 2010, the Company had no outstanding federal funds purchased balances. The Bank had available lines of credit with the FHLB totaling $1.8 billion at December 31, 2011. The Bank had available lines of credit with the Federal Reserve totaling $448.5 million subject to certain collateral requirements, namely the amount of certain pledged loans at December 31, 2011. The Bank had uncommitted federal funds line of credit agreements with additional financial institutions totaling $135.0 million at December 31, 2011. At December 31, 2011, the lines of credit had interest rates ranging from 0.3% to 3.0%. Availability of the lines is subject to federal funds balances available for loan, continued borrower eligibility and are reviewed and renewed periodically throughout the year. These lines are intended to support short-term liquidity needs, and the agreements may restrict consecutive day usage.

NOTE 17.    TERM DEBT

The Bank had outstanding secured advances from the FHLB and other creditors at December 31, 2011 and 2010 with carrying values of $255.7 million and $262.8 million, respectively.

The following table summarizes the future contractual maturities of borrowed funds (excluding the remaining unamortized purchase accounting adjustments relating to the Rainier acquisition of $10.1 million) as of December 31, 2011:

(dollars in thousands)

Year	Amount
2012	$	—
2013		—
2014		—
2015		—
2016		190,016
Thereafter		55,519
Total borrowed funds	$	245,535

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The maximum amount outstanding from the FHLB under term advances at month end during 2011 and 2010 was $250.0 million and $355.2 million, respectively. The average balance outstanding on FHLB term advances during 2011 and 2010 was $245.8 and $247.5 million, respectively. The average interest rate on the borrowings (excluding the accretion of purchase accounting adjustments) was 4.6% in 2011 and 4.4% in 2010. The FHLB requires the Bank to maintain a required level of investment in FHLB and sufficient collateral to qualify for notes. The Bank has pledged as collateral for these notes all FHLB stock, all funds on deposit with the FHLB, and its investments and commercial real estate portfolios, accounts, general intangibles, equipment and other property in which a security interest can be granted by the Bank to the FHLB.

NOTE 18.    JUNIOR SUBORDINATED DEBENTURES

The following is information about the Company’s wholly-owned trusts (“Trusts”) as of December 31, 2011:

(dollars in thousands)

			Issued Amount		Carrying Value (1)		Rate (2)			Effective Rate (3)		Maturity Date		Redemption Date
Trust Name	Issue Date
AT FAIR VALUE:
Umpqua Statutory Trust II		October 2002	$	20,619	$	14,166		Floating	(4)		5.50%		October 2032		October 2007
Umpqua Statutory Trust III		October 2002		30,928		21,476		Floating	(5)		5.62%		November 2032		November 2007
Umpqua Statutory Trust IV		December 2003		10,310		6,641		Floating	(6)		5.05%		January 2034		January 2009
Umpqua Statutory Trust V		December 2003		10,310		6,625		Floating	(6)		5.31%		March 2034		March 2009
Umpqua Master Trust I		August 2007		41,238		21,134		Floating	(7)		3.70%		September 2037		September 2012
Umpqua Master Trust IB		September 2007		20,619		12,863		Floating	(8)		5.28%		December 2037		December 2012
				134,024		82,905
AT AMORTIZED COST:
HB Capital Trust I		March 2000		5,310		6,329		10.875%			8.24%		March 2030		March 2010
Humboldt Bancorp Statutory Trust I		February 2001		5,155		5,897		10.200%			8.26%		February 2031		February 2011
Humboldt Bancorp Statutory Trust II		December 2001		10,310		11,378		Floating	(9)		3.29%		December 2031		December 2006
Humboldt Bancorp Staututory Trust III		September 2003		27,836		30,605		Floating	(10)		2.76%		September 2033		September 2008
CIB Capital Trust		November 2002		10,310		11,219		Floating	(5)		3.20%		November 2032		November 2007
Western Sierra Statutory Trust I		July 2001		6,186		6,186		Floating	(11)		4.01%		July 2031		July 2006
Western Sierra Statutory Trust II		December 2001		10,310		10,310		Floating	(9)		4.15%		December 2031		December 2006
Western Sierra Statutory Trust III		September 2003		10,310		10,310		Floating	(12)		3.30%		September 2033		September 2008
Western Sierra Statutory Trust IV		September 2003		10,310		10,310		Floating	(12)		3.30%		September 2033		September 2008
				96,037		102,544
		Total	$	230,061	$	185,449

  (1) Includes purchase accounting adjustments, net of accumulated amortization, for junior subordinated debentures assumed in connection with previous mergers as well as fair value adjustments related to trusts recorded at fair value.

  (2) Contractual interest rate of junior subordinated debentures.

  (3) Effective interest rate based upon the carrying value as of December 2011.

  (4) Rate based on LIBOR plus 3.35%, adjusted quarterly.

  (5) Rate based on LIBOR plus 3.45%, adjusted quarterly.

  (6) Rate based on LIBOR plus 2.85%, adjusted quarterly.

  (7) Rate based on LIBOR plus 1.35%, adjusted quarterly.

  (8) Rate based on LIBOR plus 2.75%, adjusted quarterly.

  (9) Rate based on LIBOR plus 3.60%, adjusted quarterly.

(10) Rate based on LIBOR plus 2.95%, adjusted quarterly.

(11) Rate based on LIBOR plus 3.58%, adjusted quarterly.

(12) Rate based on LIBOR plus 2.90%, adjusted quarterly.

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The Trusts are reflected as junior subordinated debentures in the Consolidated Balance Sheets. The common stock issued by the Trusts is recorded in other assets in the Consolidated Balance Sheets, and totaled $6.9 million and $6.9 million at December 31, 2011 and 2010, respectively.

On January 1, 2007, the Company selected the fair value measurement option for certain pre-existing junior subordinated debentures (the Umpqua Statutory Trusts). The remaining junior subordinated debentures as of the adoption date were acquired through business combinations and were measured at fair value at the time of acquisition. In 2007, the Company issued two series of trust preferred securities and elected to measure each instrument at fair value. Accounting for the junior subordinated debentures originally issued by the Company at fair value enables us to more closely align our financial performance with the economic value of those liabilities. Additionally, we believe it improves our ability to manage the market and interest rate risks associated with the junior subordinated debentures. The junior subordinated debentures measured at fair value and amortized cost are presented as separate line items on the balance sheet. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants under current market conditions as of the measurement date.

The significant inputs utilized in the estimation of fair value of these instruments are the credit risk adjusted spread and three month LIBOR. The credit risk adjusted spread represents the nonperformance risk of the liability, contemplating the inherent risk of the obligation. Generally, an increase in the credit risk adjusted spread and/or a decrease in the three month LIBOR will result in positive fair value adjustments. Conversely, a decrease in the credit risk adjusted spread and/or an increase in the three month LIBOR will result in negative fair value adjustments.

Through the first quarter of 2010 we obtained valuations from a third-party pricing service to assist with the estimation and determination of fair value of these liabilities. In these valuations, the credit risk adjusted interest spread for potential new issuances through the primary market and implied spreads of these instruments when traded as assets on the secondary market, were estimated to be significantly higher than the contractual spread of our junior subordinated debentures measured at fair value. The difference between these spreads has resulted in the cumulative gain in fair value, reducing the carrying value of these instruments as reported on our Consolidated Balance Sheets. In July 2010, the Dodd-Frank Act was signed into law which, among other things, limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. This law may require many banks to raise new Tier 1 capital and is expected to effectively close the trust-preferred securities markets from offering new issuances in the future. As a result of this legislation, our third-party pricing service noted that they were no longer to able to provide reliable fair value estimates related to these liabilities given the absence of observable or comparable transactions in the market place in recent history or as anticipated into the future.

Due to inactivity in the junior subordinated debenture market and the inability to obtain observable quotes of our, or similar, junior subordinated debenture liabilities or the related trust preferred securities when traded as assets, we utilize an income approach valuation technique to determine the fair value of these liabilities using our estimation of market discount rate assumptions. The Company monitors activity in the trust preferred and related markets, to the extent available, changes related to the current and anticipated future interest rate environment, and considers our entity-specific creditworthiness, to validate the reasonableness of the credit risk adjusted spread and effective yield utilized in our discounted cash flow model. Regarding the activity in and condition of the junior subordinated debt market, we noted no observable changes in the current period as it relates to companies comparable to our size and condition, in either the primary or secondary markets. Relating to the interest rate environment, we considered the change in slope and shape of the forward LIBOR swap curve in the current period, the affects of which did not result in a significant change in the fair value of these liabilities.

The Company’s specific credit risk is implicit in the credit risk adjusted spread used to determine the fair value of our junior subordinated debentures. As our Company is not specifically rated by any credit agency, it is difficult to specifically attribute changes in our estimate of the applicable credit risk adjusted spread to specific changes in our own creditworthiness versus changes in the market’s required return from similar companies. As a result, these considerations must be largely based off of qualitative considerations as we do not have a credit rating and we do not regularly issue senior or subordinated debt that would provide us an independent measure of the changes in how the market quantifies our perceived default risk.

155

On a quarterly basis we assess entity-specific qualitative considerations that if not mitigated or represents a material change from the prior reporting period may result in a change to the perceived creditworthiness and ultimately the estimated credit risk adjusted spread utilized to value these liabilities. Entity-specific considerations that positively impact our creditworthiness include: our strong capital position resulting from our successful public stock offerings in 2009 and 2010, that offers us flexibility to pursue business opportunities such as mergers and acquisitions, or expand our footprint and product offerings; having significant levels of on and off-balance sheet liquidity; being profitable (after excluding the one-time goodwill impairment charge recognized in 2009); and, having an experienced management team. However, these positive considerations are mitigated by significant risks and uncertainties that impact our creditworthiness and ability to maintain capital adequacy in the future. Specific risks and concerns include: given our concentration of loans secured by real estate in our loan portfolio, a continued and sustained deterioration of the real estate market may result in declines in the value of the underlying collateral and increased delinquencies that could result in an increased of charge-offs; despite recent improvement, our credit quality metrics remain negatively elevated since 2007 relative to historical standards; the continuation of current economic downturn that has been particularly severe in our primary markets could adversely affect our business; recent increased regulation facing our industry, such as the Emergency Economic Stabilization Act of 2008, the American Recovery and Reinvestment Act of 2009 and the Dodd-Frank Act, will increase the cost of compliance and restrict our ability to conduct business consistent with historical practices, and could negatively impact profitability; we have a significant amount of goodwill and other intangible assets that dilute our available tangible common equity; and the carrying value of certain material, recently recorded assets on our balance sheet, such as the FDIC loss-sharing indemnification asset, are highly reliant on management estimates, such as the timing or amount of losses that are estimated to be covered, and the assumed continued compliance with the provisions of the loss-share agreement. To the extent assumptions ultimately prove incorrect or should we consciously forego or unknowingly violate the guidelines of the agreement, an impairment of the asset may result which would reduce capital.

Additionally, the Company periodically utilizes an external valuation firm to determine or validate the reasonableness of the assessments of inputs and factors that ultimately determines the estimate fair value of these liabilities. The extent we involve or engage these external third parties correlates to management’s assessment of the current subordinate debt market, how the current environment and market compares to the preceding quarter, and perceived changes in the Company’s own creditworthiness during the quarter. In periods of potential significant valuation changes and at year-end reporting periods we typically engage third parties to perform a full independent valuation of these liabilities. For periods where management has assessed the market and other factors impacting the underlying valuation assumptions of these liabilities, and has determined significant changes to the valuation of these liabilities in the current period are remote, the scope of the valuation specialist’s review is limited to a review the reasonableness of Management’s assessment of inputs. In the fourth quarter of 2011, the Company engaged an external valuation firm to prepare an independent valuation of our junior subordinated debentures measured at fair value and the results were consistent with the Company’s valuation.

Absent changes to the significant inputs utilized in the discounted cash flow model used to measure the fair value of these instruments at each reporting period, the cumulative discount for each junior subordinated debenture will reverse over time, ultimately returning the carrying values of these instruments to their notional values at their expected redemption dates, in a manner similar to the effective yield method as if these instruments were accounted for under the amortized cost method. This will result in recognizing losses on junior subordinated debentures carried at fair value on a quarterly basis within non-interest income. For the years ended December 31, 2011 and 2010, we recorded a loss of $2.2 million and a gain $5.0 million, respectively, resulting from the change in fair value of the junior subordinated debentures recorded at fair value. Observable activity in the junior subordinated debenture and related markets in future periods may change the effective rate used to discount these liabilities, and could result in additional fair value adjustments (gains or losses on junior subordinated debentures measured at fair value) outside the expected periodic change in fair value had the fair value assumptions remained unchanged.

As noted above, the Dodd-Frank Act limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. As the Company had less than $15 billion in assets at December 31, 2009, under the Dodd-Frank Act, the Company will be able to continue to include its existing trust preferred securities, less the common stock of the Trusts, in Tier 1 capital. At December 31, 2011, the Company’s restricted core capital elements were 18.41% of total core capital, net of goodwill and any associated deferred tax liability.

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NOTE 19.    EMPLOYEE BENEFIT PLANS

Employee Savings Plan—Substantially all of the Bank’s and Umpqua Investments’ employees are eligible to participate in the Umpqua Bank 401(k) and Profit Sharing Plan (the “Umpqua 401(k) Plan”), a defined contribution and profit sharing plan sponsored by the Company. Employees may elect to have a portion of their salary contributed to the plan in conformity with Section 401(k) of the Internal Revenue Code. At the discretion of the Company’s Board of Directors, the Company may elect to make matching and/or profit sharing contributions to the Umpqua 401(k) Plan based on profits of the Bank. The Company’s contributions under the plan charged to expense amounted to $2.7 million, $2.2 million, and $2.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Supplemental Retirement Plan—The Company has established the Umpqua Holdings Corporation Deferred Compensation & Supplemental Retirement Plan (the “DC/SRP”), a nonqualified deferred compensation plan to help supplement the retirement income of certain highly compensated executives selected by resolution of the Company’s Board of Directors. The DC/SRP has two components, a supplemental retirement plan (“SRP”) and a deferred compensation plan (“DCP”). The Company may make discretionary contributions to the SRP. For the years ended December 31, 2011, 2010 and 2009, the Company’s matching contribution charged to expense for these supplemental plans totaled $96,000, $56,000, and $6,000, respectively. The plan balances at December 31, 2011 and 2010 were $530,000 and $387,000, respectively, and are recorded in other liabilities. Under the DCP, eligible officers may elect to defer up to 50% of their salary into a plan account. The plan balance was $532,000 and $300,000 at December 31, 2011 and 2010, respectively.

Salary Continuation Plans—The Bank sponsors various salary continuation plans for the CEO and certain retired employees. These plans are unfunded, and provide for the payment of a specified amount on a monthly basis for a specified period (generally 10 to 20 years) after retirement. In the event of a participant employee’s death prior to or during retirement, the Bank is obligated to pay to the designated beneficiary the benefits set forth under the plan. At December 31, 2011 and 2010, liabilities recorded for the estimated present value of future salary continuation plan benefits totaled $16.9 million and $16.3 million, respectively, and are recorded in other liabilities. For the years ended December 31, 2011, 2010 and 2009, expense recorded for the salary continuation plan benefits totaled $1.8 million, $1.8 million, and $1.8 million, respectively.

Deferred Compensation Plans and Rabbi Trusts—The Bank from time to time adopts deferred compensation plans that provide certain key executives with the option to defer a portion of their compensation. In connection with prior acquisitions, the Bank assumed liability for certain deferred compensation plans for key employees, retired employees and directors. Subsequent to the effective date of the acquisitions, no additional contributions were made to these plans. At December 31, 2011 and 2010, liabilities recorded in connection with deferred compensation plan benefits totaled $2.5 million and $3.0 million, respectively, and are recorded in other liabilities.

The Bank has established and sponsors, for some deferred compensation plans assumed in connection with prior mergers, irrevocable trusts commonly referred to as “Rabbi Trusts.” The trust assets (generally cash and trading assets) are consolidated in the Company’s balance sheets and the associated liability (which equals the related asset balances) is included in other liabilities. The asset and liability balances related to these trusts as of December 31, 2011 and 2010 were $1.3 million and $1.5 million, respectively.

The Bank has purchased, or acquired through mergers, life insurance policies in connection with the implementation of certain executive supplemental income, salary continuation and deferred compensation retirement plans. These policies provide protection against the adverse financial effects that could result from the death of a key employee and provide tax-exempt income to offset expenses associated with the plans. It is the Bank’s intent to hold these policies as a long-term investment. However, there will be an income tax impact if the Bank chooses to surrender certain policies. Although the lives of individual current or former management-level employees are insured, the Bank is the owner and sole or partial beneficiary. At December 31, 2011 and 2010, the cash surrender value of these policies was $92.6 million and $90.2 million, respectively. At December 31, 2011 and 2010, the Bank also had liabilities for post-retirement benefits payable to other partial beneficiaries under some of these life insurance policies of $1.5 million and $1.4 million, respectively. The Bank is exposed to credit risk to the extent an insurance company is unable to fulfill its financial obligations under a policy. In order to mitigate this risk, the Bank uses a variety of insurance companies and regularly monitors their financial condition.

157

NOTE 20. COMMITMENTS AND CONTINGENCIES

Lease Commitments—The Company leases 142 sites under non-cancelable operating leases. The leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term.

Rent expense for the years ended December 31, 2011, 2010 and 2009 was $16.6 million, $15.3 million, and $13.0 million, respectively. Rent expense was offset by rent income of $1.0 million, $1.0 million, and $555,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The following table sets forth, as of December 31, 2011, the future minimum lease payments under non-cancelable operating leases and future minimum income receivable under non-cancelable operating subleases:

(in thousands)

	Lease Payments		Sublease Income
2012	$	15,695	$	1,019
2013		13,444		696
2014		11,856		514
2015		10,002		421
2016		7,724		260
Thereafter		21,386		802
Total	$	80,107	$	3,712

Financial Instruments with Off-Balance-Sheet Risk—The Company’s financial statements do not reflect various commitments and contingent liabilities that arise in the normal course of the Bank’s business and involve elements of credit, liquidity and interest rate risk. The following table presents a summary of the Bank’s commitments and contingent liabilities:

(in thousands)

	As of December 31, 2011
Commitments to extend credit	$	1,222,920
Commitments to extend overdrafts	$	226,749
Forward sales commitments	$	182,671
Commitments to originate loans held for sale	$	143,512
Standby letters of credit	$	61,316

The Bank is a party to financial instruments with off-balance-sheet credit risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve elements of credit and interest-rate risk similar to the amounts recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the Bank’s involvement in particular classes of financial instruments.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any covenant or condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. While most standby letters of credit are not

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utilized, a significant portion of such utilization is on an immediate payment basis. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral varies but may include cash, accounts receivable, inventory, premises and equipment and income-producing commercial properties.

Standby letters of credit and financial guarantees written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including international trade finance, commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds cash, marketable securities, or real estate as collateral supporting those commitments for which collateral is deemed necessary. The Bank has not been required to perform on any financial guarantees but did incur losses of $110,000 in connection with standby letters of credit during the year ended December 31, 2011 and no losses in connection with standby letters of credit during the year ended December 31, 2010. The Bank has not been required to perform on any financial guarantees but did incur losses of $23,000 in connection with standby letters of credit during the year ended December 31, 2009. At December 31, 2011, approximately $31.5 million of standby letters of credit expire within one year, and $29.8 million expire thereafter. Upon issuance, the Company recognizes a liability equivalent to the amount of fees received from the customer for these standby letter of credit commitments. Fees are recognized ratably over the term of the standby letter of credit. The fair value of guarantees associated with standby letters of credit was $254,000 as of December 31, 2011.

At December 31, 2011 and 2010, the reserve for unfunded commitments, which is included in other liabilities on the consolidated balance sheet, was $940,000 and $818,000, respectively. The adequacy of the reserve for unfunded commitments is reviewed on a quarterly basis, based upon changes in the amounts of commitments, loss experience, and economic conditions.

Mortgage loans sold to investors may be sold with servicing rights retained, for which the Bank makes only standard legal representations and warranties as to meeting certain underwriting and collateral documentation standards. In the past two years, the Bank has had to repurchase fewer than 10 loans due to deficiencies in underwriting or loan documentation and has not realized significant losses related to these repurchases. Management believes that any liabilities that may result from such recourse provisions are not significant.

Legal Proceedings—The Bank owns 468,659 shares of Class B common stock of Visa Inc. which are convertible into Class A common stock at a conversion ratio of 0.4254 per Class A share. As of December 31, 2011, the value of the Class A shares was $101.53 per share. Utilizing the conversion ratio, the value of unredeemed Class A equivalent shares owned by the Company was $20.2 million as of December 31, 2011, and has not been reflected in the accompanying financial statements. The shares of Visa Class B common stock are restricted and may not be transferred until the later of (1) three years from the date of the initial public offering or (2) the period of time necessary to resolve the covered litigation. Visa Member Banks are required to fund an escrow account to cover settlements, resolution of pending litigation and related claims. If the funds in the escrow account are insufficient to settle all the covered litigation, Visa may sell additional Class A shares, use the proceeds to settle litigation, and further reduce the conversion ratio. If funds remain in the escrow account after all litigation is settled, the Class B conversion ratio will be increased to reflect that surplus.

In the ordinary course of business, various claims and lawsuits are brought by and against the Company, the Bank and Umpqua Investments. In the opinion of management, there is no pending or threatened proceeding in which an adverse decision could result in a material adverse change in the Company’s consolidated financial condition or results of operations.

Concentrations of Credit Risk—The Company grants real estate mortgage, real estate construction, commercial, agricultural and installment loans and leases to customers throughout Oregon, Washington, California and Nevada. In management’s judgment, a concentration exists in real estate-related loans, which represented approximately 80% and 82%, respectively, of the Company’s loan and lease portfolio at December 31, 2011 and 2010. Commercial real estate concentrations are managed to assure wide geographic and business diversity. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax

159

policies, tightening credit or refinancing markets, or a decline in real estate values in the Company’s primary market areas in particular and aspects of our commercial real estate, commercial construction and commercial loan portfolios, could have an adverse impact on the repayment of these loans. Personal and business incomes, proceeds from the sale of real property, or proceeds from refinancing, represent the primary sources of repayment for a majority of these loans.

The Bank recognizes the credit risks inherent in dealing with other depository institutions. Accordingly, to prevent excessive exposure to any single correspondent, the Bank has established general standards for selecting correspondent banks as well as internal limits for allowable exposure to any single correspondent. In addition, the Bank has an investment policy that sets forth limitations that apply to all investments with respect to credit rating and concentrations per issuer.

NOTE 21.    DERIVATIVES

The Company may use derivatives to hedge the risk of changes in the fair values of interest rate lock commitments, residential mortgage loans held for sale, and mortgage servicing rights. None of the Company’s derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in income. The Company primarily utilizes forward interest rate contracts in its derivative risk management strategy.

The Bank enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates (“MBS TBAs”) in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage loan commitments. Credit risk associated with forward contracts is limited to the replacement cost of those forward contracts in a gain position. There were no counterparty default losses on forward contracts in 2011, 2010 or 2009. Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates. The Bank limits its exposure to market risk by monitoring differences between commitments to customers and forward contracts with broker/dealers. In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the Company completes the transaction by either paying or receiving a fee to or from the broker/dealer equal to the increase or decrease in the market value of the forward contract. At December 31, 2011, the Bank had commitments to originate mortgage loans held for sale totaling $143.5 million and forward sales commitments of $182.7 million.

The Company’s mortgage banking derivative instruments do not have specific credit risk-related contingent features. The forward sales commitments do have contingent features that may require transferring collateral to the broker/dealers upon their request. However, this amount would be limited to the net unsecured loss exposure at such point in time and would not materially affect the Company’s liquidity or results of operations.

Effective in the second quarter of 2011, the Bank began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting the interest rate swaps that the Bank executes with a third party, such that the Bank minimizes its net risk exposure. As of December 31, 2011, the Bank had 38 interest rate swaps with an aggregate notional amount of $194.3 million related to this program.

In connection with the interest rate swap program with commercial customers, the Bank has agreements with its derivative counterparties that contain a provision where if the Bank defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Bank could also be declared in default on its derivative obligations.

The Bank also has agreements with its derivative counterparties that contain a provision where if the Bank fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations under the agreements. Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as if the Bank were issued a prompt corrective action directive or a cease and desist order, or if certain regulatory ratios fall below specified levels.

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As of December 31, 2011, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $6.6 million. The Bank has minimum collateral posting thresholds with certain of its derivative counterparties, and has been required to post collateral against its obligations under these agreements of $5.8 million as of December 31, 2011. If the Bank had breached any of these provisions at December 31, 2011, it could have been required to settle its obligations under the agreements at the termination value.

The following tables summarize the types of derivatives, separately by assets and liabilities, their locations on the Consolidated Balance Sheets, and the fair values of such derivatives as of December 31, 2011 and 2010:

(in thousands)

Derivatives not designated as hedging instrument	Balance Sheet Location	Asset Derivatives				Liability Derivatives
		December 31, 2011		December 31, 2010		December 31, 2011		December 31, 2010
Interest rate lock commitments	Other assets/Other liabilities	$	1,752	$	306	$	3	$	170
Interest rate forward sales commitments	Other assets/Other liabilities		—		754		90		191
Interest rate swaps	Other assets/Other liabilities		6,203		—		6,416		—
Total		$	7,955	$	1,060	$	6,509	$	361

The following table summarizes the types of derivatives, their location on the Consolidated Statements of Operations, and the losses recorded in 2011, 2010 and 2009:

(in thousands)

Derivatives not designated as hedging instrument	Income Statement Location	2011			2010			2009
Interest rate lock commitments	Mortgage banking revenue	$	1,613		$	146		$	(1,176	)
Interest rate forward sales commitments	Mortgage banking revenue		(10,579	)		(3,034	)		(255	)
Interest rate swaps	Other income		(187	)		—			—
Total		$	(9,153	)	$	(2,888	)	$	(1,431	)

NOTE 22.    SHAREHOLDERS’ EQUITY

On February 3, 2010, the Company raised $303.6 million through a public offering by issuing 8,625,000 shares of the Company’s common stock, including 1,125,000 shares pursuant to the underwriters’ over-allotment option, at a share price of $11.00 per share and 18,975,000 depository shares, including 2,475,000 depository shares pursuant to the underwriter’s over-allotment option, also at a price of $11.00 per share. Fractional interests (1/100th) in each share of the Series B Common Stock Equivalent were represented by the 18,975,000 depositary shares; as a result, each depository share would convert into one share of common stock. The net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $288.1 million. The net proceeds from the offering were used to redeem the preferred stock issued to the United States Department of the Treasury (U.S. Treasury) under the Troubled Asset Relief Program (“TARP”) Capital Purchase Program (“CPP”), to fund FDIC-assisted acquisition opportunities and for general corporate purposes.

On February 17, 2010, the Company redeemed all of the outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury under the TARP CPP for an aggregate purchase price of $214.2 million. As a result of the repurchase of the Series A preferred stock, the Company incurred a one-time deemed dividend of $9.8 million due to the accelerated amortization of the remaining issuance discount on the preferred stock.

On March 31, 2010, the Company repurchased the common stock warrant issued to the U.S. Treasury pursuant to the TARP CPP, for $4.5 million. The warrant repurchase, together with the Company’s redemption in February 2010 of the entire amount of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury, represents full repayment of all TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

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On April 20, 2010, shareholders of the Company approved an amendment to the Company’s Restated Articles of Incorporation. The amendment, which became effective on April 21, 2010, increased the number of authorized shares of common stock to 200,000,000 (from 100,000,000). As a result of the effectiveness of the amendment, as of the close of business on April 21, 2010, the Company’s Series B Common Stock Equivalent preferred stock automatically converted into newly issued shares of common stock at a conversion rate of 100 shares of common stock for each share of Series B Common Stock Equivalent preferred stock. All shares of Series B Common Stock Equivalent preferred stock and representative depositary shares ceased to exist upon the conversion. Trading in the depositary shares on NASDAQ (ticker symbol “UMPQP”) ceased and the UMPQP symbol voluntarily delisted effective as of the close of business on April 21, 2010.

The Company has 4,000,000 shares of no par value preferred stock authorized and available to be issued. As of December 31, 2011 and 2010, there was no preferred stock outstanding.

Stock Plans—The Company’s 2007 Long Term Incentive Plan (“2007 LTI Plan”) authorizes the award of up to 1 million restricted stock unit grants, which are subject to performance-based vesting as well as other approved vesting conditions. The Company’s 2003 Stock Incentive Plan (“2003 Plan”) provides for grants of up to 4 million shares. The 2003 Plan terminates June 30, 2015, but it may be extended with the approval of the board and shareholders. The 2003 Plan further provides that no grants may be issued if existing options and subsequent grants under the 2003 Plan exceed 10% of the Company’s outstanding shares on a diluted basis. Under the terms of the 2003 Plan, options and awards generally vest ratably over a period of five years, the exercise price of each option equals the market price of the Company’s common stock on the date of the grant, and the maximum term is ten years.

The Company has options outstanding under two prior plans adopted in 1995 and 2000, respectively. With the adoption of the 2003 Plan, no additional grants can be issued under the previous plans. The Company also assumed various plans in connection with mergers and acquisitions but does not make grants under those plans.

On June 17, 2011, the Company’s Compensation Committee modified restricted stock awards and option grants that were originally issued to fourteen executive officers on January 31, 2011, as follows:

• Added performance vesting conditions linking total shareholder return, compared to the return of a regional bank stock total return index;

• Awards will cliff vest after three years instead of time vest over a four year period, but only to the extent that the performance conditions are met; and

• The modified grants will vest in whole or in part only if total shareholder return achieves specified targets, subject to prorated vesting upon death, disability, qualifying retirement, termination for good reason or a change of control.

As a result of the modification, there was no incremental compensation cost.

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The following table summarizes information about stock option activity for the years ended December 31, 2011, 2010 and 2009:

(shares in thousands)

	2011					2010					2009
	Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price
Balance, beginning of year		2,067		$	14.82		1,763		$	15.05		1,819		$	15.66
Granted		237		$	11.01		450		$	12.39		229		$	9.34
Exercised		(40	)	$	7.67		(112	)	$	8.97		(51	)	$	5.93
Forfeited/expired		(113	)	$	15.72		(34	)	$	13.83		(234	)	$	16.20
Balance, end of year		2,151		$	14.48		2,067		$	14.82		1,763		$	15.05
Options exercisable,end of year		1,334		$	16.13		1,217		$	16.65		1,071		$	15.90

The following table summarizes information about outstanding stock options issued under all plans as of December 31, 2011:

(shares in thousands)

Range of Exercise Prices	Options Outstanding						Options Exercisable
	Options Outstanding		Weighted Avg. Remaining Contractual Life (Years)		Weighted Avg. Exercise Price		Options Exercisable		Weighted Avg. Exercise Price
$4.58 to $10.97		599		7.0	$	8.76		255	$	6.51
$11.26 to $12.87		560		7.9	$	12.11		188	$	11.95
$13.34 to $19.31		602		3.4	$	16.13		502	$	16.34
$20.03 to $28.43		390		3.4	$	24.14		389	$	24.14
		2,151		5.6	$	14.48		1,334	$	16.13

The compensation cost related to stock options, including costs related to unvested options assumed in connection with acquisitions, that has been charged against income (included in salaries and employee benefits) was $1.2 million, $861,000, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to stock options was $463,000, $344,000, and $541,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding and options exercisable as of December 31, 2011, was $2.4 million and $1.6 million, respectively. The weighted average remaining contractual term of options exercisable was 4.3 years as of December 31, 2011. The total intrinsic value of options exercised was $147,000, $420,000, and $220,000, in the years ended December 31, 2011, 2010 and 2009, respectively. During the years ended December 31, 2011, 2010 and 2009, the amount of cash received from the exercise of stock options was $309,000, $1.0 million, and $301,000, respectively. As of December 31, 2011, there was $2.7 million of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a weighted-average period of 2.4 years.

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The Company grants restricted stock awards periodically as a part of the 2003 Plan for the benefit of employees. Restricted shares issued generally vest on an annual basis over five years. A deferred restricted stock award was granted to an executive in 2007 and is now fully vested. The Company will issue certificates for the vested award within the seventh month following termination of the executive’s employment. The following table summarizes information about nonvested restricted shares outstanding at December 31:

(shares in thousands)

	2011					2010					2009
	Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value
Balance, beginning of year		401		$	15.29		187		$	21.46		216		$	23.42
Granted		282		$	11.02		274		$	12.16		26		$	9.83
Released		(82	)	$	17.58		(46	)	$	22.23		(46	)	$	23.81
Forfeited/expired		(16	)	$	12.91		(14	)	$	13.32		(9	)	$	22.85
Balance, end of year		585		$	12.98		401		$	15.29		187		$	21.46

The compensation cost related to restricted stock awards that has been charged against income (included in salaries and employee benefits) was $2.3 million, $1.9 million, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to restricted stock awards was $899,000, $746,000, and $548,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The total fair value of restricted shares vested was $919,000, $571,000, and $445,000, for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $3.7 million of total unrecognized compensation cost related to nonvested restricted stock awards which is expected to be recognized over a weighted-average period of 2.4 years.

The Company grants restricted stock units as a part of the 2007 Long Term Incentive Plan for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. In the first quarter of 2008, 2009 and 2011, restricted stock units were granted to executives that cliff vest after three years based on performance and service conditions. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the performance and service conditions set forth in the grant agreements. The following table summarizes information about restricted stock units outstanding at December 31:

(shares in thousands)

	2011					2010					2009
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		225		$	11.13		335		$	15.54		301		$	19.48
Granted		105		$	10.42		—		$	—		114		$	8.01
Released		(63	)	$	14.33		(16	)	$	24.52		(23	)	$	21.33
Forfeited/expired		(48	)	$	14.33		(94	)	$	24.52		(57	)	$	18.98
Balance, end of year		219		$	9.17		225		$	11.13		335		$	15.54

The compensation cost related to restricted stock units that has been charged against income (included in salaries and employee benefits) was $391,000 and $778,000 for the years ended December 31, 2011 and 2010, respectively. For the year ended December 31, 2009, the Company recorded a reversal of compensation cost of $539,000 related to restricted stock units

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that has been credited to salaries and employee benefits expense. The total income tax benefit recognized in the income statement related to restricted stock units was $156,000 and $311,000 for the years ended December 31, 2011 and 2010, respectively. The total income tax expense recognized in the income statement related to restricted stock units was $215,000 for the year ended December 31, 2009. The total fair value of restricted stock units vested and released was $677,000, $213,000, and $186,000 for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $772,000 of total unrecognized compensation cost related to nonvested restricted stock units which is expected to be recognized over a weighted-average period of 1.1 years, assuming the current expectation of performance conditions are met.

For the years ended December 31, 2011, 2010 and 2009, the Company received income tax benefits of $694,000, $406,000, and $326,000, respectively, related to the exercise of non-qualified employee stock options, disqualifying dispositions in the exercise of incentive stock options, the vesting of restricted shares and the vesting of restricted stock units. For the year ended December 31, 2011, the Company had net tax deficiencies (tax deficiency resulting from tax deductions less than the compensation cost recognized) of $261,000, compared to net tax deficiencies of $216,000 and $369,000 for the years ended December 31, 2010 and 2009, respectively. Only cash flows from gross excess tax benefits are classified as financing cash flows.

Share Repurchase Plan—The Company’s share repurchase plan, which was first approved by the Board and announced in August 2003, was amended on September 29, 2011 to increase the number of common shares available for repurchase under the plan to 15 million shares. The repurchase program will run through June 2013. As of December 31, 2011, a total of 12.6 million shares remained available for repurchase. The Company repurchased 2.5 million shares under the repurchase plan in 2011 and no shares in 2010. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, and our capital plan.

We also have certain stock option and restricted stock plans which provide for the payment of the option exercise price or withholding taxes by tendering previously owned or recently vested shares. During the years ended December 31, 2011 and 2010, there were 8,135 and 4,515 shares tendered in connection with option exercises, respectively. Restricted shares cancelled to pay withholding taxes totaled 23,158 and 12,443 shares during the years ended December 31, 2011 and 2010, respectively. Restricted stock units cancelled to pay withholding taxes totaled 22,439 and 5,583 during the years ended December 31, 2011 and 2010, respectively.

NOTE 23. REGULATORY CAPITAL

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under capital adequacy guidelines, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about risk components, asset risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations). Management believes, as of December 31, 2011, that the Company meets all capital adequacy requirements to which it is subject.

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The Company’s capital amounts and ratios as of December 31, 2011 and 2010 are presented in the following table:

(dollars in thousands)

	Actual				For Capital Adequacy purposes				To be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
AS OF DECEMBER 31, 2011:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,287,560		17.16%	$	600,261		8.00%	$	750,326		10.00%
Umpqua Bank	$	1,163,611		15.53%	$	599,413		8.00%	$	749,267		10.00%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,193,740		15.91%	$	300,123		4.00%	$	450,185		6.00%
Umpqua Bank	$	1,069,914		14.28%	$	299,696		4.00%	$	449,544		6.00%
Tier I Capital
(to Average Assets)
Consolidated	$	1,193,740		10.91%	$	437,668		4.00%	$	547,085		5.00%
Umpqua Bank	$	1,069,914		9.78%	$	437,593		4.00%	$	546,991		5.00%
	Actual				For Capital Adequacy purposes				To be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
AS OF DECEMBER 31, 2010:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,253,333		17.62%	$	569,050		8.00%	$	711,313		10.00%
Umpqua Bank	$	1,085,839		15.27%	$	568,874		8.00%	$	711,093		10.00%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,164,226		16.36%	$	284,652		4.00%	$	426,978		6.00%
Umpqua Bank	$	996,798		14.02%	$	284,393		4.00%	$	426,590		6.00%
Tier I Capital
(to Average Assets)
Consolidated	$	1,164,226		10.56%	$	440,995		4.00%	$	551,243		5.00%
Umpqua Bank	$	996,798		9.04%	$	441,061		4.00%	$	551,326		5.00%

The Company is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”), and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Bank is an Oregon state chartered bank with deposits insured by the Federal Deposit Insurance Corporation (“FDIC”), and is subject to the supervision and regulation of the Director of the Oregon Department of Consumer and Business Services, administered through the Division of Finance and Corporate Securities, and to the supervision and regulation of the California Department of Financial Institutions, the Washington Department of Financial Institutions and the FDIC. As of December 31, 2011, the most recent notification from the FDIC categorized the Bank as “well-capitalized” under the regulatory framework for prompt corrective action. The Company is not subject to the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s regulatory capital category.

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NOTE 24.    FAIR VALUES

The following table presents estimated fair values of the Company’s financial instruments as of December 31, 2011 and December 31, 2010, whether or not recognized or recorded at fair value in the Consolidated Balance Sheets:

(in thousands)

	2011				2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
FINANCIAL ASSETS:
Cash and cash equivalents	$	598,766	$	598,766	$	1,004,125	$	1,004,125
Trading securities		2,309		2,309		3,024		3,024
Securities available for sale		3,168,578		3,168,578		2,919,180		2,919,180
Securities held to maturity		4,714		4,759		4,762		4,774
Loans held for sale		98,691		98,691		75,626		75,626
Non-covered loans and leases, net		5,795,130		5,816,714		5,557,066		5,767,506
Covered loans and leases		622,451		722,295		785,898		893,682
Restricted equity securities		32,581		32,581		34,475		34,475
Mortgage servicing rights		18,184		18,184		14,454		14,454
Bank owned life insurance assets		92,555		92,555		90,161		90,161
FDIC indemnification asset		91,089		47,008		146,413		90,011
Derivatives		7,955		7,955		1,060		1,060
Visa Class B common stock		—		19,230		—		15,987
FINANCIAL LIABILITIES:
Deposits	$	9,236,690	$	9,260,327	$	9,433,805	$	9,464,406
Securities sold under agreement to repurchase		124,605		124,605		73,759		73,759
Term debt		255,676		284,911		262,760		282,127
Junior subordinated debentures, at fair value		82,905		82,905		80,688		80,688
Junior subordinated debentures, at amortized cost		102,544		68,698		102,866		65,771
Derivatives		6,509		6,509		361		361

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The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2011 and 2010:

(in thousands)

	Fair Value at December 31, 2011
Description	Total		Level 1		Level 2		Level 3
Trading securities
Obligations of states and political subdivisions	$	296	$	296	$	—	$	—
Equity securities		1,918		1,918		—		—
Other investments securities(1)		95		95		—		—
Available for sale securities
U.S. Treasury and agencies		118,465		—		118,465		—
Obligations of states and political subdivisions		253,553		—		253,553		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,794,355		—		2,794,355		—
Other debt securities		134		—		134		—
Investments in mutual funds and other equity securities		2,071		—		2,071		—
Mortgage servicing rights, at fair value		18,184		—		—		18,184
Derivatives		7,955		—		7,955		—
Total assets measured at fair value	$	3,197,026	$	2,309	$	3,176,533	$	18,184
Junior subordinated debentures, at fair value	$	82,905	$	—	$	—	$	82,905
Derivatives		6,509		—		6,509		—
Total liabilities measured at fair value	$	89,414	$	—	$	6,509	$	82,905

	Fair Value at December 31, 2010
Description	Total		Level 1		Level 2		Level 3
Trading securities
Obligations of states and political subdivisions	$	1,282	$	1,282	$	—	$	—
Equity securities		1,645		1,645		—		—
Other investments securities(1)		97		97		—		—
Available for sale securities
U.S. Treasury and agencies		118,789		—		118,789		—
Obligations of states and political subdivisions		216,726		—		216,726		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,581,504		—		2,581,504		—
Other debt securities		152		—		152		—
Investments in mutual funds and other equity securities		2,009		—		2,009		—
Mortgage servicing rights, at fair value		14,454		—		—		14,454
Derivatives		1,060		—		1,060		—
Total assets measured at fair value	$	2,937,718	$	3,024	$	2,920,240	$	14,454
Junior subordinated debentures, at fair value	$	80,688	$	—	$	—	$	80,688
Derivatives		361		—		361		—
Total liabilities measured at fair value	$	81,049	$	—	$	361	$	80,688

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(1) Principally represents U.S. Treasury and agencies or residential mortgage-backed securities issued or guaranteed by governmental agencies.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents—For short-term instruments, including cash and due from banks, and interest bearing deposits with banks, the carrying amount is a reasonable estimate of fair value.

Securities—Fair values for investment securities are primarily measured using information from a third-party pricing service. The pricing service uses evaluated pricing models based on market data. In the event that limited or less transparent information is provided by the third-party pricing service, fair value is estimated using secondary pricing services or non-binding third-party broker quotes. Management periodically reviews the pricing information received from the third-party pricing service and compares it to secondary pricing service, evaluating significant price variances between services to determine an appropriate estimate of fair value to report.

Loans Held For Sale—For loans held for sale, carrying value approximates fair value.

Non-covered Loans and Leases, net—Fair values are estimated for portfolios of loans and leases with similar financial characteristics. Loans are segregated by type, including commercial, real estate and consumer loans. Each loan category is further segregated by fixed and variable rate. For variable rate loans, carrying value approximates fair value. Effective in the second quarter of 2010, the fair value of fixed rate loans is calculated by discounting contractual cash flows at rates which similar loans are currently being made. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio.

Covered Loans and leases, net—Covered loans and leases are initially measured at their estimated fair value on their date of acquisition as described in Note 7. Subsequent to acquisition, the fair value of covered loans is measured using the same methodology as that of non-covered loans.

Restricted Equity Securities—The carrying value of restricted equity securities approximates fair value as the shares can only be redeemed by the issuing institution at par.

Mortgage Servicing Rights—The fair value of mortgage servicing rights is estimated using a discounted cash flow model. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Due to the limited observability of all significant inputs utilized in the valuation model, particularly the discount rate and projected constant prepayment rate, and how changes in these assumptions could potentially impact the ending valuation of this asset, as well as the lack of readily available quotes or observable trades of similar assets in the current period, we classify this as a Level 3 fair value measure. Management believes the significant inputs utilized are indicative of those that would be used by market participants.

Bank Owned Life Insurance Assets—Fair values of insurance policies owned are based on the insurance contract’s cash surrender value.

FDIC Indemnification Asset—The FDIC indemnification asset is calculated as the expected future cash flows under the loss-share agreement discounted by a rate reflective of the creditworthiness of the FDIC as would be required from the market.

Deposits—The fair value of deposits with no stated maturity, such as non-interest bearing deposits, savings and interest checking accounts, and money market accounts, is equal to the amount payable on demand as of December 31, 2011 and 2010. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Securities Sold under Agreements to Repurchase—For short-term instruments, including securities sold under agreements to repurchase, the carrying amount is a reasonable estimate of fair value.

169

Term Debt—The fair value of medium term notes is calculated based on the discounted value of the contractual cash flows using current rates at which such borrowings can currently be obtained.

Junior Subordinated Debentures—The fair value of junior subordinated debentures is estimated using an income approach valuation technique. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants. Due to credit concerns in the capital markets and inactivity in the trust preferred markets that have limited the observability of market spreads, we have classified this as a Level 3 fair value measure.

Derivative Instruments—The fair value of the derivative instruments is estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate.

Visa Class B Common Stock—The fair value of Visa Class B common stock is estimated by applying a 5% discount to the value of the unredeemed Class A equivalent shares. The discount primarily represents the risk related to the further potential reduction of the conversion ratio between Class B and Class A shares and a liquidity risk premium.

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the years ended December 31, 2011 and 2010.

(in thousands)

	Beginning Balance		Change included in earnings			Issuances		Settlements			Ending Balance		Net change in unrealized gains or losses relating to items held at end of period
2011
Mortgage servicing rights	$	14,454	$	(2,990	)	$	6,720	$	—		$	18,184	$	(961	)
Junior subordinated debentures		80,688		6,134			—		(3,917	)		82,905		6,134
2010
Mortgage servicing rights	$	12,625	$	(3,878	)	$	5,707	$	—		$	14,454	$	(1,965	)
Junior subordinated debentures		85,666		(1,004	)		—		(3,974	)		80,688		(1,004	)

Losses on mortgage servicing rights carried at fair value are recorded in mortgage banking revenue within other non-interest income. Gains (losses) on junior subordinated debentures carried at fair value are recorded within other non-interest income. The contractual interest expense on the junior subordinated debentures is recorded on an accrual basis as interest on junior subordinated debentures within interest expense. Settlements related to the junior subordinated debentures represent the payment of accrued interest that is embedded in the fair value of these liabilities.

Management believes that the credit risk adjusted spread being utilized is indicative of the nonperformance risk premium a willing market participant would require under current market conditions, that is, the inactive market. Management attributes the change in fair value of the junior subordinated debentures during the period to market changes in the nonperformance expectations and pricing of this type of debt, and not as a result of changes to our entity-specific credit risk. Future contractions in the credit risk adjusted the Company’s contractual spreads has primarily contributed to the positive fair value adjustments in 2010. Generally, an increase in the credit risk adjusted spread and/or a decrease in the three month LIBOR swap curve will result in positive fair value adjustments. Conversely, a decrease in the credit risk adjusted spread and/or an increase in the three month LIBOR swap curve will result in negative fair value adjustments.

Additionally, from time to time, certain assets are measured at fair value on a nonrecurring basis. These adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment. The following table presents information about the Company’s assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the years ended December 31, 2011 and 2010. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon.

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(in thousands)

	December 31, 2011
Description	Total		Level 1		Level 2		Level 3
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	487	$	—	$	—	$	487
Non-covered loans and leases		53,847		—		—		53,847
Non-covered other real estate owned		11,321		—		—		11,321
Covered other real estate owned		12,561		—		—		12,561
	$	78,216	$	—	$	—	$	78,216
	December 31, 2010
Description	Total		Level 1		Level 2		Level 3
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	1,226	$	—	$	—	$	1,226
Non-covered loans and leases		74,639		—		—		74,639
Non-covered other real estate owned		7,958		—		—		7,958
Covered other real estate owned		8,708		—		—		8,708
	$	92,531	$	—	$	—	$	92,531

The following table presents the losses resulting from nonrecurring fair value adjustments for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011		2010		2009
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	359	$	414	$	10,334
Non-covered loans and leases		51,883		119,240		185,810
Goodwill		—		—		111,952
Other intangible assets, net		—		—		804
Non-covered other real estate owned		8,947		4,074		12,247
Covered other real estate owned		8,709		1,941		—
Total loss from nonrecurring measurements	$	69,898	$	125,669	$	321,147

The investment securities held to maturity above relate to non-agency collateralized mortgage obligations where other-than-temporary impairment (“OTTI”) has been identified and the investments have been adjusted to fair value. The fair value of these investments securities were obtained from third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. While we do not expect to recover the entire amortized cost basis of these securities, as we as we do not intend to sell these securities and it is not likely that we will be required to sell these securities before maturity, only the credit loss component of the impairment is recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. The remaining impairment loss related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to a separate component other comprehensive income (“OCI”). We estimate the cash flows of the underlying collateral within each security considering credit, interest and prepayment risk models that incorporate management’s estimate of projected key assumptions including prepayment rates, collateral default rates and

171

loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as loan interest rates, geographic location, borrower characteristics and vintage, and historical experience. We then use a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows are then discounted at the interest rate used to recognize interest income on each security.

The non-covered loans and leases amount above represents impaired, collateral dependent loans that have been adjusted to fair value. When we identify a collateral dependent loan as impaired, we measure the impairment using the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. The loss represents charge-offs or impairments on collateral dependent loans for fair value adjustments based on the fair value of collateral. The carrying value of loans fully charged-off is zero.

The goodwill amount above represents goodwill that has been adjusted to fair value. The impairment charge recognized in 2009 relates to the Community Banking reporting segment. The Company engaged an independent valuation consultant to assist the Company in estimating the fair value of the Community Banking reporting unit for step one of the goodwill impairment test. We utilized a variety of valuation techniques to analyze and measure the estimated fair value of the reporting unit under both the income and market valuation approach. Under the income approach, the fair value of the reporting unit is determined by projecting future earnings for five years, utilizing a terminal value based on expected future growth rates, and applying a discount rate reflective of current market conditions. The estimation of forecasted earnings uses management’s best estimates of economic and market conditions over the projected periods and considers estimated growth rates in loans and deposits and future expected changes in net interest margins. Various market-based valuation approaches are utilized and include applying market price to earnings, core deposit premium, and tangible book value multiples as observed from relevant, comparable peer companies of the reporting unit. We also valued the reporting unit by applying an estimated control premium to the market capitalization. Weightings are assigned to each of the aforementioned model results, judgmentally allocated based on the observability and reliability of the inputs, to arrive at a final fair value estimate of the reporting unit. Because the step one analysis indicated that the implied fair value of goodwill was likely lower than the carrying amount, we completed step two of the goodwill impairment test. In step two of the goodwill impairment test, we calculated the fair value for the reporting unit’s assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name, in order to determine the implied fair value of goodwill. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures carried at amortized cost. The external valuation specialist assisted management to estimate the fair value of our unrecognized identifiable assets, such as the core deposit intangible and trade name. Information relating to our methodologies for estimating the fair value of financial instruments is described above. Through this process, the Company determined that the implied fair value of the reporting unit’s goodwill was less than its carrying amount, and as a result, we recognized a goodwill impairment charge equal to that deficit.

The other intangible asset, net, amount above represents a merchant servicing portfolio income stream that has been adjusted to fair value. The impairment charge is a result of a decrease in the actual and expected future cash flows related to the income stream. The fair value of the merchant servicing portfolio was determined using an income approach (discounted cash flow model). Future cash flows were estimated based on actual historical experience and consideration of future expectations, including the discount revenue rates, offsetting operating expenses, growth and attrition rates, as well as other factors, discounted at a 14% discount rate.

The non-covered and covered other real estate owned amount above represents impaired real estate that has been adjusted to fair value. Non-covered other real estate owned represents real estate which the Bank has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property’s new basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically

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performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned. The loss represents impairments on non-covered other real estate owned for fair value adjustments based on the fair value of the real estate.

NOTE 25.    EARNINGS PER COMMON SHARE

The following is a computation of basic and diluted earnings per common share for the years ended December 31, 2011, 2010 and 2009:

(in thousands, except per share data)

	2011		2010		2009
NUMERATORS:
Net income (loss)	$	74,496	$	28,326	$	(153,366	)
Preferred stock dividends		—		12,192		12,866
Dividends and undistributed earnings allocated to participating securities(1)		356		67		30
Net earnings (loss) available to common shareholders	$	74,140	$	16,067	$	(166,262	)
DENOMINATORS:
Weighted average number of common shares outstanding—basic		114,220		107,922		70,399
Effect of potentially dilutive common shares(2)		189		231		—
Weighted average number of common shares outstanding—diluted		114,409		108,153		70,399
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	0.65	$	0.15	$	(2.36	)
Diluted	$	0.65	$	0.15	$	(2.36	)

(1) Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

(2) Represents the effect of the assumed exercise of warrants, assumed exercise of stock options, vesting of non-participating restricted shares, and vesting of restricted stock units, based on the treasury stock method.

The following table presents the weighted average outstanding non-participating securities that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011		2010		2009
Stock options		1,815		1,450		1,826
CPP warrant		—		274		1,811
Non-participating, nonvested restricted shares		—		9		17
Restricted stock units		—		—		100
		1,815		1,733		3,754

In the fourth quarter of 2008, the Company issued the CPP warrant to the U.S. Treasury to purchase up to 2,221,795 shares of common stock. This security was not included in the computation of diluted EPS for the year ended December 31, 2009 because the warrant’s exercise price was greater than the average market price of common shares. The weighted average number of outstanding common stock underlying the CPP warrant in 2009 reflects the 50% reduction of the number of shares of common stock underlying the warrant in connection with the Company’s qualifying public offering in the third quarter of 2009. The weighted average number of outstanding common stock underlying the CPP warrant in 2010 reflects the repurchase of the warrants in connection with the Company’s full repayment of TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

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NOTE 26.    OPERATING SEGMENTS

The Company operates three primary segments: Community Banking, Mortgage Banking and Wealth Management. The Community Banking segment’s principal business focus is the offering of loan and deposit products to its business and retail customers in its primary market areas. As of December 31, 2011, the Community Banking segment operates 194 locations throughout Oregon, Northern California, Washington and Nevada.

The Mortgage Banking segment, which operates as a division of the Bank, originates, sells and services residential mortgage loans.

The Wealth Management segment consists of the operations of Umpqua Investments, which offers a full range of retail brokerage services and products to its clients who consist primarily of individual investors, and Umpqua Private Bank, which serves high net worth individuals with liquid investable assets and provides customized financial solutions and offerings, and Umpqua Financial Advisors. The Company accounts for intercompany fees and services between Umpqua Investments and the Bank at estimated fair value according to regulatory requirements for services provided. Intercompany items relate primarily to management services, referral fees and deposit rebates.

Prior to January 1, 2011, the Company reported Retail Brokerage, consisting of Umpqua Investments, as its own segment. Effective in 2011, the Company began reporting Umpqua Investments, Umpqua Private Bank, and Umpqua Financial Advisors under the Wealth Management segment. Umpqua Private Bank and Umpqua Financial Advisors do not meet the quantitative thresholds for reporting as separate segments and service the same customer base as Umpqua Investments. As a result of the change in reportable segment, prior periods have been adjusted in the financial information below.

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the consolidated financial results is shown in the following tables:

Year Ended December 31, 2011

(in thousands)

	Community Banking		Wealth Management		Mortgage Banking		Consolidated
Interest income	$	474,167	$	13,362	$	14,224	$	501,753
Interest expense		68,751		2,067		2,483		73,301
Net interest income		405,416		11,295		11,741		428,452
Provision for non-covered loan and lease losses		46,220		—		—		46,220
Provision for covered loan and lease losses		16,141		—		—		16,141
Non-interest income		43,282		13,963		26,873		84,118
Non-interest expense		302,883		15,630		20,458		338,971
Income before provision for income taxes		83,454		9,628		18,156		111,238
Provision for income taxes		26,023		3,457		7,262		36,742
Net income		57,431		6,171		10,894		74,496
Dividends and undistributed earnings allocated to participating securities		356		—		—		356
Net earnings available to common shareholders	$	57,075	$	6,171	$	10,894	$	74,140
Total assets	$	11,086,493	$	53,044	$	423,818	$	11,563,355
Total loans (covered and non-covered)	$	6,171,368	$	38,810	$	300,371	$	6,510,549
Total deposits	$	8,830,353	$	390,992	$	15,345	$	9,236,690

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Year Ended December 31, 2010

(in thousands)

	Community			Wealth		Mortgage
	Banking			Management		Banking		Consolidated
Interest income	$	466,054		$	9,978	$	12,564	$	488,596
Interest expense		89,622			1,435		2,755		93,812
Net interest income		376,432			8,543		9,809		394,784
Provision for non-covered loan and lease losses		113,668			—		—		113,668
Provision for covered loan and lease losses		5,151			—		—		5,151
Non-interest income		41,534			12,967		21,403		75,904
Non-interest expense		286,629			15,503		15,606		317,738
Income before (benefit from) provision for income taxes		12,518			6,007		15,606		34,131
(Benefit from) provision for income taxes		(2,342	)		1,905		6,242		5,805
Net income		14,860			4,102		9,364		28,326
Preferred stock dividends		12,192			—		—		12,192
Dividends and undistributed earnings allocated to participating securities		67			—		—		67
Net earnings available to common shareholders	$	2,601		$	4,102	$	9,364	$	16,067
Total assets	$	11,314,681		$	37,757	$	316,272	$	11,668,710
Total loans (covered and non-covered)	$	6,198,532		$	23,631	$	222,722	$	6,444,885
Total deposits	$	9,160,058		$	262,148	$	11,599	$	9,433,805

Year Ended December 31, 2009

(in thousands)

	Community			Wealth			Mortgage
	Banking			Management			Banking		Consolidated
Interest income	$	406,460		$	4,467		$	12,805	$	423,732
Interest expense		99,382			1			3,641		103,024
Net interest income		307,078			4,466			9,164		320,708
Provision for loan and lease losses		209,124			—			—		209,124
Non-interest income		45,280			9,344			18,892		73,516
Non-interest expense		352,290			12,910			14,203		379,403
(Loss) income before (benefit from) provision for income taxes		(209,056	)		900			13,853		(194,303	)
(Benefit from) provision for income taxes		(46,383	)		(95	)		5,541		(40,937	)
Net (loss) income		(162,673	)		995			8,312		(153,366	)
Preferred stock dividends		12,866			—			—		12,866
Dividends and undistributed earnings allocated to participating securities		30			—			—		30
Net (loss) earnings available to common shareholders	$	(175,569	)	$	995		$	8,312	$	(166,262	)
Total assets	$	9,109,542		$	31,196		$	240,634	$	9,381,372
Total loans (covered and non-covered)	$	5,789,730		$	17,484		$	192,053	$	5,999,267
Total deposits	$	7,432,549		$	98		$	7,787	$	7,440,434

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NOTE 27.    RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Bank has made loans to its directors and executive officers (and their associated and affiliated companies). All such loans have been made on the same terms as those prevailing at the time of origination to other borrowers.

The following table presents a summary of aggregate activity involving related party borrowers for the years ended December 31, 2011, 2010 and 2009:

(in thousands)

	2011			2010			2009
Loans outstanding at beginning of year	$	9,264		$	12,301		$	13,968
New loans and advances		10,041			1,409			1,819
Less loan repayments		(7,060	)		(3,467	)		(3,471	)
Reclassification(1)		—			(979	)		(15	)
Loans outstanding at end of year	$	12,245		$	9,264		$	12,301

(1) Represents loans that were once considered related party but are no longer considered related party, or loans that were not related party that subsequently became related party loans.

At December 31, 2011 and 2010 deposits of related parties amounted to $18.9 million and $14.7 million, respectively.

NOTE 28.    PARENT COMPANY FINANCIAL STATEMENTS

Condensed Balance Sheets

December 31,

(in thousands)

	2011		2010
ASSETS
Non-interest bearing deposits with subsidiary banks	$	82,133	$	128,450
Investments in:
Bank subsidiary		1,772,003		1,695,914
Nonbank subsidiaries		24,486		20,560
Receivable from nonbank subsidiary		—		8
Other assets		5,713		1,782
Total assets	$	1,884,335	$	1,846,714
LIABILITIES AND SHAREHOLDERS’ EQUITY
Payable to bank subsidiary	$	32	$	26
Other liabilities		26,441		20,560
Junior subordinated debentures, at fair value		82,905		80,688
Junior subordinated debentures, at amortized cost		102,544		102,866
Total liabilities		211,922		204,140
Shareholders’ equity		1,672,413		1,642,574
Total liabilities and shareholders’ equity	$	1,884,335	$	1,846,714

176

Umpqua Holdings Corporation and Subsidiaries

Condensed Statements of Operations

Year Ended December 31,

(in thousands)

	2011			2010			2009
INCOME
Dividends from subsidiaries	$	17,743		$	245		$	18,306
Other income		(2,127	)		5,081			6,656
Total income		15,616			5,326			24,962
EXPENSES
Management fees paid to subsidiaries		469			291			305
Other expenses		9,072			9,116			10,079
Total expenses		9,541			9,407			10,384
Income (loss) before income tax benefit and equity in undistributed earnings of subsidiaries		6,075			(4,081	)		14,578
Income tax benefit		(4,325	)		(1,594	)		(1,677	)
Net income (loss) before equity in undistributed earnings of subsidiaries		10,400			(2,487	)		16,255
Equity in (distributions in excess) undistributed earnings of subsidiaries		64,096			30,813			(169,621	)
Net income (loss)		74,496			28,326			(153,366	)
Preferred stock dividends		—			12,192			12,866
Dividends and undistributed earnings allocated to participating securities		356			67			30
Net earnings (loss) available to common shareholders	$	74,140		$	16,067		$	(166,262	)

177

Condensed Statements of Cash Flows

Year Ended December 31,

(in thousands)

	2011			2010			2009
OPERATING ACTIVITIES:
Net income (loss)	$	74,496		$	28,326		$	(153,366	)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
(Distributions in excess) equity in undistributed earnings of subsidiaries		(64,096	)		(30,813	)		169,621
Gain on sale of investment securities		—			—			(79	)
Depreciation, amortization and accretion		(322	)		(322	)		(467	)
Change in fair value of junior subordinated debentures		2,217			(4,978	)		(6,854	)
Net (increase) decrease in other assets		(3,933	)		3,717			(637	)
Net increase (decrease) in other liabilities		3,736			(1,930	)		1,523
Net cash provided (used) by operating activities		12,098			(6,000	)		9,741
INVESTING ACTIVITIES:
Investment in subsidiaries		(3,668	)		(126,500	)		(87,000	)
Proceeds from investment securities held to maturity		—			—			229
Net decrease (increase) in receivables from nonbank subsidiaries		8			(8	)		—
Net cash used by investing activities		(3,660	)		(126,508	)		(86,771	)
FINANCING ACTIVITIES:
Net increase (decrease) in payables to subsidiaries		7			(34	)		53
Proceeds from issuance of preferred stock		—			198,289			—
Redemption of preferred stock		—			(214,181	)		—
Redemption of warrants		—			(4,500	)		—
Net proceeds from issuance of common stock		—			89,786			245,697
Dividends paid on preferred stock		—			(3,686	)		(10,739	)
Dividends paid on common stock		(25,317	)		(20,626	)		(13,399	)
Stock repurchased		(29,754	)		(284	)		(174	)
Proceeds from exercise of stock options		309			1,004			301
Net cash (used) provided by financing activities		(54,755	)		45,768			221,739
Change in cash and cash equivalents		(46,317	)		(86,740	)		144,709
Cash and cash equivalents, beginning of year		128,450			215,190			70,481
Cash and cash equivalents, end of year	$	82,133		$	128,450		$	215,190

178

Umpqua Holdings Corporation and Subsidiaries

NOTE 29.    QUARTERLY FINANCIAL INFORMATION (Unaudited)

The following tables present the summary results for the eight quarters ending December 31, 2011:

2011

(in thousands, except per share information)

	2011
	December 31		September 30		June 30		March 31		Four Quarters
Interest income	$	121,917	$	126,527	$	128,417	$	124,892	$	501,753
Interest expense		15,262		18,993		19,056		19,990		73,301
Net interest income		106,655		107,534		109,361		104,902		428,452
Provision for non-covered loan and lease losses		6,642		9,089		15,459		15,030		46,220
Provision for covered loan and lease losses		698		4,420		3,755		7,268		16,141
Non-interest income		18,128		24,778		19,627		21,585		84,118
Non-interest expense		85,339		86,224		83,207		84,201		338,971
Income before provision for income taxes		32,104		32,579		26,567		19,988		111,238
Provision for income taxes		10,722		10,717		8,782		6,521		36,742
Net income		21,382		21,862		17,785		13,467		74,496
Dividends and undistributed earnings allocated to participating securities		103		105		86		62		356
Net earnings available to common shareholders	$	21,279	$	21,757	$	17,699	$	13,405	$	74,140
Basic earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Diluted earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Cash dividends declared per common share	$	0.07	$	0.07	$	0.05	$	0.05

179

2010

(in thousands, except per share information)

	2010
	December 31		September 30		June 30		March 31			Four Quarters
Interest income	$	130,677	$	132,946	$	115,604	$	109,369		$	488,596
Interest expense		23,562		24,629		23,304		22,317			93,812
Net interest income		107,115		108,317		92,300		87,052			394,784
Provision for non-covered loan and lease losses		17,567		24,228		29,767		42,106			113,668
Provision for covered loan and lease losses		4,484		667		—		—			5,151
Non-interest income		15,161		12,133		18,563		30,047			75,904
Non-interest expense		87,864		85,170		74,833		69,871			317,738
Income before provision for (benefit from) income taxes		12,361		10,385		6,263		5,122			34,131
Provision for (benefit from) income taxes		4,203		2,194		2,800		(3,392	)		5,805
Net income		8,158		8,191		3,463		8,514			28,326
Preferred stock dividends		—		—		—		12,192			12,192
Dividends and undistributed earnings allocated to participating securities		18		18		16		15			67
Net earnings (loss) available to common shareholders	$	8,140	$	8,173	$	3,447	$	(3,693	)	$	16,067
Basic earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Diluted earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Cash dividends declared per common share	$	0.05	$	0.05	$	0.05	$	0.05

180

Umpqua Holdings Corporation

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A.    CONTROLS AND PROCEDURES.

On a quarterly basis, we carry out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934. As of December 31, 2011, our management, including our Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer, concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us, that is required to be included in our periodic SEC filings.

Although we change and improve our internal controls over financial reporting on an ongoing basis, we do not believe that any such changes occurred in the fourth quarter 2011 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Umpqua Holdings Corporation is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control system is designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with the authorizations of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on our assessment and those criteria, we believe that, as of December 31, 2011, the Company maintained effective internal control over financial reporting.

The Company’s registered public accounting firm has audited the Company’s consolidated financial statements and the effectiveness of our internal control over financial reporting as of and for the year ended December 31, 2011 that are included in this annual report and issued their Report of Independent Registered Public Accounting Firm, appearing under Item 8. The attestation report expresses an unqualified opinion on the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2011.

February 17, 2012

ITEM 9B.    OTHER INFORMATION.

None.

181

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The response to this item is incorporated by reference to Umpqua’s Proxy Statement for the 2012 annual meeting of shareholders under the captions “Annual Meeting Business”- “Item 1, Election of Directors”, “Information About Executive Officers”, “Corporate Governance Overview” and “Section 16(a) Beneficial Ownership Reporting Compliance.”

ITEM 11.    EXECUTIVE COMPENSATION.

The response to this item is incorporated by reference to the Proxy Statement, under the caption “Compensation Discussion and Analysis.”

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The response to this item is set forth in Part II, Item 5, “Equity Compensation Plan Information” and is incorporated by reference to the Proxy Statement, under the caption “Security Ownership of Management and Others.”

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The response to this item is incorporated by reference to the Proxy Statement, under the captions “Annual Meeting Business- Item 1, Election of Directors” and “Related Party Transactions.”

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES.

The response to this item is incorporated by reference to the Proxy Statement, under the caption “Independent Registered Public Accounting Firm.”

182

Umpqua Holdings Corporation

PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) (1)    Financial Statements:

The consolidated financial statements are included as Item 8 of this Form 10-K.

(2) Financial Statement Schedules:

All schedules have been omitted because the information is not required, not applicable, not present in amounts sufficient to require submission of the schedule, or is included in the financial statements or notes thereto.

(3) The exhibits filed as part of this report and exhibits incorporated herein by reference to other documents are listed on the Index of Exhibits to this annual report on Form 10-K on sequential page 186.

183

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Umpqua Holdings Corporation has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on February 17, 2012.

UMPQUA HOLDINGS CORPORATION (Registrant)

/s/ Raymond P. Davis	Date: February 17, 2012
Raymond P. Davis, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Raymond P. Davis Raymond P. Davis	President, Chief Executive Officer and Director (Principal Executive Officer)	February 17, 2012
/s/ Ronald L. Farnsworth Ronald L. Farnsworth	Executive Vice President, Chief Financial Officer (Principal Financial Officer)	February 17, 2012
/s/ Neal T. McLaughlin Neal T. McLaughlin	Executive Vice President, Treasurer (Principal Accounting Officer)	February 17, 2012
/s/ Allyn C. Ford Allyn C. Ford	Director	February 17, 2012
/s/ Peggy Y. Fowler Peggy Y. Fowler	Director	February 17, 2012
/s/ Stephen M. Gambee Stephen M. Gambee	Director	February 17, 2012
/s/ Jose R. Hermocillo Jose R. Hermocillo	Director	February 17, 2012
/s/ William A. Lansing William A. Lansing	Director	February 17, 2012
/s/ Luis F. Machuca Luis F. Machuca	Director	February 17, 2012
/s/ Diane D. Miller Diane D. Miller	Director	February 17, 2012

184

Umpqua Holdings Corporation

Signature	Title	Date
/s/ Dudley R. Slater Dudley R. Slater	Director	February 17, 2012
/s/ Bryan L. Timm Bryan L. Timm	Director	February 17, 2012
/s/ Hilliard C. Terry, III Hilliard C. Terry, III	Director	February 17, 2012
/s/ Frank R. J. Whittaker Frank R. J. Whittaker	Director	February 17, 2012

185

EXHIBIT INDEX

Exhibit
3.1	(a)	Restated Articles of Incorporation with designation of Fixed Rate Cumulative Perpetual Preferred Stock, Series A and designation of Series B Common Stock Equivalent preferred stock
3.2	(b)	Bylaws, as amended
4.1	(c)	Specimen Common Stock Certificate
4.2	(d)	Amended and Restated Declaration of Trust for Umpqua Master Trust I, dated August 9, 2007
4.3	(e)	Indenture, dated August 9, 2007, by and between Umpqua Holdings Corporation and LaSalle Bank National Association
4.4	(f)	Series A Guarantee Agreement, dated August 9, 2007, by and between Umpqua Holdings Corporation and LaSalle Bank National Association
4.5	(g)	Series B Guarantee Agreement, dated September 6, 2007, by and between Umpqua Holdings Corporation and LaSalle Bank National Association
4.6	(h)	Series B Supplement pursuant to Amended and Restated Declaration of Trust dated August 9, 2007
10.1**	(i)	Third Restated Supplemental Executive Retirement Plan effective April 16, 2008 between the Company and Raymond P. Davis
10.2**	(j)	Employment Agreement dated July 1, 2003, between the Company and Raymond P. Davis
10.3**	(k)	Umpqua Holdings Corporation 2005 Performance-Based Executive Incentive Plan
10.4**	(l)	2003 Stock Incentive Plan, as amended, effective March 5, 2007
10.5**	(m)	2007 Long Term Incentive Plan effective March 5, 2007
10.6**	(n)	Employment Agreement with Brad Copeland dated March 10, 2006
10.7**	(o)	Employment Agreement with Kelly J. Johnson dated January 15, 2009
10.8**	(p)	Employment Agreement with Colin Eccles dated January 21, 2009
10.9**	(q)	Form of Employment Agreement with Ronald L. Farnsworth, Steven L. Philpott and Neal T. McLaughlin, each dated March 5, 2008
10.10**	(r)	Form of Long Term Incentive Restricted Stock Unit Agreement
10.11**	(s)	Split-Dollar Insurance Agreement dated April 16, 2008 between the Company and Raymond P. Davis
10.12**	(t)	Form of First Amendment to Employment Agreement effective September 16, 2008 between the Company and Brad Copeland and between the Company and Barbara Baker
10.14**	(u)	Employment Agreement dated effective March 21, 2010 between the Company and Cort O’Haver
10.15**	(v)	Employment Agreement dated effective June 1, 2010 between the Company and Mark Wardlow
10.16**	(w)	Employment Agreement dated effective November 15, 2010 between the Company and Ulderico (Rick) Calero, Jr.
10.17**	(x)	Form of Amendment No. 1 to Nonqualified Stock Option Agreements between Company and Executive Officers that were originally issued January 31, 2011
10.18**	(y)	Form of Amendment No. 1 to Restricted Stock Agreements between the Company and Executive Officers that were originally issued January 31, 2011
12	Ratio of Earnings to Fixed Charges
21.1	Subsidiaries of the Registrant
23.1	Consent of Independent Registered Public Accounting Firm – Moss Adams LLP
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Certification of Principal Accounting Officer under Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

186

Umpqua Holdings Corporation

101.INS XBRL Instance Document *

101.SCH XBRL Taxonomy Extension Schema Document *

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB XBRL Taxonomy Extension Label Linkbase Document *

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document *

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.

** Indicates compensatory plan or arrangement

(a) Incorporated by reference to Exhibit 3.1 to Form 10-Q filed May 7, 2010

(b) Incorporated by reference to Exhibit 3.2 to Form 8-K filed April 22, 2008

(c) Incorporated by reference to Exhibit 4 to the Registration Statement on Form S-8 (No. 333-77259) filed with the SEC on April 28, 1999

(d) Incorporated by reference to Exhibit 4.1 to Form 8-K filed August 10, 2007

(e) Incorporated by reference to Exhibit 4.2 to Form 8-K filed August 10, 2007

(f) Incorporated by reference to Exhibit 4.3 to Form 8-K filed August 10, 2007

(g) Incorporated by reference to Exhibit 4.3 to Form 8-K filed September 7, 2007

(h) Incorporated by reference to Exhibit 4.4 to Form 8-K filed September 7, 2007

(i) Incorporated by reference to Exhibit 99.1 to Form 8-K/A filed April 22, 2008

(j) Incorporated by reference to Exhibit 10.4 to Form 10-Q filed August 14, 2003

(k) Incorporated by reference to Appendix B to Form DEF 14A filed March 31, 2005

(l) Incorporated by reference to Appendix A to Form DEF 14A filed March 14, 2007

(m) Incorporated by reference to Appendix B to Form DEF 14A filed March 14, 2007

(n) Incorporated by reference to Exhibit 10.2 to Form 8-K filed March 21, 2006

(o) Incorporate by reference to Exhibit 10.7 to Form 10-K filed February 19, 2010

(p) Incorporated by reference to Exhibit 10.8 to Form 10-K filed February 19, 2010

(q) Incorporated by reference to Exhibit 99.1 to Form 8-K filed March 7, 2008

(r) Incorporated by reference to Exhibit 10.4 to Form 10-Q filed August 3, 2007

(s) Incorporated by reference to Exhibit 99.2 to Form 8-K filed April 22, 2008

(t) Incorporated by reference to Exhibit 99.1 to Form 8-K filed October 8, 2008

(u) Incorporated by reference to Exhibit 10.1 to Form 10-Q filed November 4, 2010

(v) Incorporated by reference to Exhibit 10.2 to Form 10-Q filed November 4, 2010

(w) Incorporated by reference to Exhibit 99.1 to Form 8-K filed February 4, 2011

(x) Incorporated by reference to Exhibit 10.1 to Form 8-K filed June 20, 2011

(y) Incorporated by reference to Exhibit 10.2 to Form 8-K filed June 20, 2011

187

EX-12

Exhibit 12

Ratio of Earnings to Fixed Charges

The following table shows the ratio of earnings to fixed charges for the Company, on a consolidated basis.

	2011		2010		2009			2008		2007
Consolidated ratios of earnings to fixed charges
Excluding interest on deposits		7.34		2.94		(12.60	)		4.20		5.40
Including interest on deposits		2.52		1.36		(0.89	)		1.48		1.47

The ratio of earnings to fixed charges is calculated as net income before income taxes plus fixed charges minus interest capitalized.

Fixed charges, excluding interest on deposits, consist of:

• Contractual interest on short-term borrowing and long-term debt,

• Amortization of debt issuance costs,

• Capitalized interest, and

• Amortization of fair value of adjustments for instruments assumed in purchase business combinations.

Fixed charges, including interest on deposits, consist of all of the items listed immediately above and interest on deposits.

EX-21.1

Exhibit 21.1

Subsidiaries of Umpqua Holdings Corporation

Name of Subsidiary	State of Incorporation	Other Names Under Which Business is Conducted
Umpqua Bank	Oregon	Umpqua Bank  Mortgage, Umpqua Bank                         Leasing, Umpqua Private Bank
UB Properties, LLC	Oregon
Umpqua Investments, Inc.	Oregon	Strand, Atkinson,  Williams & York, Inc.
Umpqua Master Trust I	Delaware
Umpqua Statutory Trust II	Delaware
Umpqua Statutory Trust III	Delaware
Umpqua Statutory Trust IV	Delaware
Umpqua Statutory Trust V	Delaware
HB Capital Trust I	Delaware
Humboldt Bancorp Statutory Trust I	Connecticut
Humboldt Bancorp Statutory Trust II	Connecticut
Humboldt Bancorp Statutory Trust III	Connecticut
CIB Capital Trust	Delaware
Western Sierra Statutory Trust I	Connecticut
Western Sierra Statutory Trust II	Connecticut
Western Sierra Statutory Trust III	Delaware
Western Sierra Statutory Trust IV	Delaware

Umpqua Holdings Corporation directly owns 100% of the voting stock of each subsidiary listed above.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Umpqua Holdings Corporation of our report dated February 17, 2012, with respect to the consolidated balance sheets of Umpqua Holdings Corporation and Subsidiaries (Umpqua) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in shareholders’ equity, comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2011, and of our same report, with respect to Umpqua’s internal controls over financial reporting as of December 31, 2011, which report is included in this annual report on Form 10-K of Umpqua for the year ended December 31, 2011.

• Registration Statement on Form S-3ASR (No. 333-155997)

• Registration Statement on Form S-8 (No. 333-144766)

• Registration Statement on Form S-8 (No. 333-143347)

• Registration Statement on Form S-8 (No. 333-135071)

• Registration Statement on Form S-8 (No. 333-117680)

• Registration Statement on Form S-8 (No. 333-117679)

• Registration Statement on Form S-8 (No. 333-105637)

• Registration Statement on Form S-8 (No. 333-101357)

• Registration Statement on Form S-8 (No. 333-58978)

• Registration Statement on Form S-8 (No. 333-77259)

/s/ Moss Adams LLP

Portland, Oregon

February 17, 2012

EX-31.1

Exhibit 31.1

I, Raymond P. Davis, certify that:

1. I have reviewed this annual report on Form 10-K of Umpqua Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is likely to materially affect the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 17, 2012	/s/ Raymond P. Davis
	Raymond P. Davis
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Ronald L. Farnsworth, certify that:

1. I have reviewed this annual report on Form 10-K of Umpqua Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is likely to materially affect the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 17, 2012	/s/ Ronald L. Farnsworth
	Ronald L. Farnsworth
	Executive Vice President/CFO
	(Principal Financial Officer)

EX-31.3

Exhibit 31.3

I, Neal T. McLaughlin, certify that:

1. I have reviewed this annual report on Form 10-K of Umpqua Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure control and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is likely to materially affect the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 17, 2012	/s/ Neal T. McLaughlin
	Neal T. McLaughlin
	Executive Vice President/Treasurer
	(Principal Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION

OF

CHIEF EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER AND

PRINCIPAL ACCOUNTING OFFICER

UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is given by the undersigned Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer of Umpqua Holdings Corporation (the “registrant”) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Each of the undersigned hereby certifies, with respect to the registrant’s annual report on Form 10-K for the period ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant

/s/ Raymond P. Davis

Raymond P. Davis

President and Chief Executive Officer

Umpqua Holdings Corporation

(Principal Executive Officer)

/s/ Ronald L. Farnsworth

Ronald L. Farnsworth

Executive Vice President/CFO

(Principal Financial Officer)

/s/ Neal T. McLaughlin

Neal T. McLaughlin

Executive Vice President/Treasurer

(Principal Accounting Officer)

February 17, 2012

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Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2011

Significant Accounting Policies [Abstract]

Nature Of Operations

Nature of Operations—Umpqua Holdings Corporation (the "Company") is a financial holding company headquartered in Portland, Oregon, that is engaged primarily in the business of commercial and retail banking and the delivery of retail brokerage services. The Company provides a wide range of banking, asset management, mortgage banking and other financial services to corporate, institutional and individual customers through its wholly-owned banking subsidiary Umpqua Bank (the "Bank"). The Company engages in the retail brokerage business through its wholly-owned subsidiary Umpqua Investments, Inc. ("Umpqua Investments"). The Company and its subsidiaries are subject to regulation by certain federal and state agencies and undergo periodic examination by these regulatory agencies.

Basis Of Financial Statement Presentation

Basis of Financial Statement Presentation—The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with prevailing practices within the banking and securities industries. In preparing such financial statements, management is required to make certain estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan and lease losses, the valuation of mortgage servicing rights, the fair value of junior subordinated debentures, the valuation of covered loans and the FDIC indemnification asset, and the valuation of goodwill and other intangible assets.

Consolidation

Consolidation—The accompanying consolidated financial statements include the accounts of the Company, the Bank and Umpqua Investments. All significant intercompany balances and transactions have been eliminated in consolidation. As of December 31, 2011, the Company had 14 wholly-owned trusts ("Trusts") that were formed to issue trust preferred securities and related common securities of the Trusts. The Company has not consolidated the accounts of the Trusts in its consolidated financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB") ASC 810, Consolidation ("ASC 810"). As a result, the junior subordinated debentures issued by the Company to the Trusts are reflected on the Company's consolidated balance sheet as junior subordinated debentures.

Subsequent Events

Subsequent events—The Company has evaluated events and transactions subsequent to December 31, 2011 for potential recognition or disclosure.

Cash And Cash Equivalents

Cash and Cash Equivalents—Cash and cash equivalents include cash and due from banks, and temporary investments which are federal funds sold and interest bearing balances due from other banks. Cash and cash equivalents generally have a maturity of 90 days or less at the time of purchase.

Trading Account Securities

Trading Account Securities—Debt and equity securities held for resale are classified as trading account securities and reported at fair value. Realized and unrealized gains or losses are recorded in non-interest income.

Investment Securities

Investment Securities—Debt securities are classified as held to maturity if the Company has both the intent and ability to hold those securities to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for amortization of premium and accretion of discount, computed by the effective interest method over their contractual lives.

Securities are classified as available for sale if the Company intends and has the ability to hold those securities for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized holding gains or losses are included in other comprehensive income as a separate component of shareholders' equity, net of tax. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Premiums and discounts are amortized or accreted over the life of the related investment security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

Prior to the second quarter of 2009, the Company would assess an other-than-temporary impairment ("OTTI") or permanent impairment based on the nature of the decline and whether the Company has the ability and intent to hold the investments until a market price recovery. If the Company determined a security to be other-than-temporarily or permanently impaired, the full amount of impairment would be recognized through earnings in its entirety. New guidance related to the recognition and presentation of OTTI of debt securities became effective in the second quarter of 2009. Rather than asserting whether a Company has the ability and intent to hold an investment until a market price recovery, a Company must consider whether it intends to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income ("OCI"). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the amount recorded in OCI increases the carrying value of the investment and does not affect earnings. If there is an indication of additional credit losses the security is re-evaluated according to the procedures described above. OTTI losses totaling $359,000, $414,000, and $10.6 million were recognized through earnings in the years ended December 31, 2011, 2010 and 2009, respectively, within total gain (loss) on investment securities, net.

Transfers of securities from available for sale to held to maturity are accounted for at fair value as of the date of the transfer. The difference between the fair value and the par value at the date of transfer is considered a premium or discount and is accounted for accordingly. Any unrealized gain or loss at the date of the transfer is reported in OCI, and is amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount, and will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held to maturity security.

Loans Held For Sale

Loans Held for Sale—Loans held for sale includes mortgage loans and are reported at the lower of cost or market value. Cost generally approximates market value, given the short duration of these assets. Gains or losses on the sale of loans that are held for sale are recognized at the time of the sale and determined by the difference between net sale proceeds and the net book value of the loans less the estimated fair value of any retained mortgage servicing rights.

Non-Covered Loans

Non-Covered Loans—Loans are stated at the amount of unpaid principal, net of unearned income and any deferred fees or costs. All discounts and premiums are recognized over the estimated life of the loan as yield adjustments. This estimated life is adjusted for prepayments.

Loans are classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement. The carrying value of impaired loans is based on the present value of expected future cash flows (discounted at each loan's effective interest rate) or, for collateral dependent loans, at fair value of the collateral, less selling costs. If the measurement of each impaired loans' value is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. This can be accomplished by charging-off the impaired portion of the loan or establishing a specific component to be provided for in the allowance for loan and lease losses.

Covered Loans

Covered Loans—Loans acquired in a FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as "covered loans" and reported separately in our consolidated balance sheets. Covered loans are reported exclusive of the expected cash flow reimbursements expected from the FDIC. Acquired loans are aggregated into pools based on individually evaluated common risk characteristics and aggregate expected cash flows were estimated for each pool. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. The Company aggregated all of the loans acquired in the FDIC-assisted acquisitions into different pools based on common risk characteristics such as risk rating, underlying collateral, type of interest rate (fixed or adjustable), types of amortization, and other similar factors. A loan will be removed from a pool of loans only if the loan is sold, foreclosed, or assets are received in full satisfaction of the loan, and will be removed from the pool at its carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and its cash, fair value of the collateral, or other assets received will be recognized in income immediately as interest income on loans and would not affect the effective yield used to recognize the accretable yield on the remaining pool. Loans originally placed into a performing pool are not reported individually as 30-89 days past due, non-performing (90+ days past due or nonaccrual), or accounted for as a troubled debt restructuring as the pool is the unit of accounting. Rather, these metrics related to the underlying loans within a performing pool will be considered in our ongoing assessment and estimates of future cash flows. If, at acquisition, the loans are collateral dependent and acquired primarily for the rewards of ownership of the underlying collateral, or if cash flows expected to be collected cannot be reasonably estimated, accrual of income is inappropriate.

The cash flows expected to be received over the life of the pool were estimated by management with the assistance of a third party valuation specialist. These cash flows were input into a FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30") compliant loan accounting system which calculates the carrying values of the pools and underlying loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speeds assumptions will be periodically reassessed and updated within the accounting system to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a pool's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan or pool using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through an increase to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for covered loan losses.

The covered loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring. If credit deterioration is experienced subsequent to the initial acquisition fair value amount, such deterioration will be measured, and a provision for credit losses will be charged to earnings. These provisions will be mostly offset by an increase to the FDIC indemnification asset, and will be recognized in non-interest income.

The covered loan portfolio also includes revolving lines of credit with funded and unfunded commitments. Balances outstanding at the time of acquisition are accounted for under ASC 310-30. Any additional advances on these loans subsequent to the acquisition date are not accounted for under ASC 310-30.

FDIC Indemnification Asset

FDIC Indemnification Asset—The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations. The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into non-interest income over the life of the FDIC indemnification asset.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans, at a pool level, and covered other real estate owned. Generally, any increases in cash flow of the covered assets over those previously expected will result in prospective increases in the loan pool yield and amortization of the FDIC indemnification asset. Any decreases in cash flow of the covered assets under those previously expected will trigger impairments on the underlying loan pools and will result in a corresponding gain of the FDIC indemnification asset. Increases and decreases to the FDIC indemnification asset are recorded as adjustments to non-interest income. The resulting carrying value of the indemnification asset represents the present value of amounts recoverable from the FDIC for future expected losses and the amounts due from the FDIC for claims related to covered losses.

Income Recognition On Non-Covered, Non-Accrual And Impaired Loans

Income Recognition on Non-Covered, Non-Accrual and Impaired Loans—Non-covered loans, including impaired non-covered loans, are classified as non-accrual if the collection of principal and interest is doubtful. Generally, this occurs when a non-covered loan is past due as to maturity or payment of principal or interest by 90 days or more, unless such non-covered loans are well-secured and in the process of collection. Generally, if a non-covered loan or portion thereof is partially charged-off, the non-covered loan is considered impaired and classified as non-accrual. Non-covered loans that are less than 90 days past due may also be classified as non-accrual if repayment in full of principal and/or interest is in doubt.

When a non-covered loan is classified as non-accrual, all uncollected accrued interest is reversed to interest income and the accrual of interest income is terminated. Generally, any cash payments are applied as a reduction of principal outstanding. In cases where the future collectability of the principal balance in full is expected, interest income may be recognized on a cash basis. A non-covered loan may be restored to accrual status when the borrower's financial condition improves so that full collection of future contractual payments is considered likely. For those non-covered loans placed on non-accrual status due to payment delinquency, this will generally not occur until the borrower demonstrates repayment ability over a period of not less than six months.

Non-covered loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include forgiveness of principal or accrued interest, extending the maturity date or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan's carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

The decision to classify a non-covered loan as impaired is made by the Bank's Allowance for Loan and Lease Losses ("ALLL") Committee. The ALLL Committee meets regularly to review the status of all problem and potential problem loans. If the ALLL Committee concludes a loan is impaired but recovery of the full principal and interest is expected, an impaired loan may remain on accrual status.

Allowance For Loan And Lease Losses

Allowance for Loan and Lease Losses—The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality of the portfolio and the adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan and lease losses. The Bank has a management ALLL Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank's Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Each risk rating is assessed an inherent credit loss factor that determines the amount of the allowance for loan and lease losses provided for that group of loans and leases with similar risk rating. Credit loss factors may vary by region based on management's belief that there may ultimately be different credit loss rates experienced in each region.

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize this impairment reserve as a specific component to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. The combination of the risk rating-based allowance component and the impairment reserve allowance component lead to an allocated allowance for loan and lease losses.

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of economic conditions characterized by falling real estate values. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.

As adjustments become necessary, they are reported in earnings in the periods in which they become known as a change in the provision for loan and lease losses and a corresponding charge to the allowance. Loans, or portions thereof, deemed uncollectible are charged to the allowance. Provisions for losses, and recoveries on loans previously charged-off, are added to the allowance.

The adequacy of the ALLL is monitored on a regular basis and is based on management's evaluation of numerous factors. These factors include the quality of the current loan portfolio; the trend in the loan portfolio's risk ratings; current economic conditions; loan concentrations; loan growth rates; past-due and non-performing trends; evaluation of specific loss estimates for all significant problem loans; historical charge-off and recovery experience; and other pertinent information.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our loan portfolio, and have led to an increase in non-performing loans, charge-offs, and the allowance for loan and lease losses. A continued deterioration or prolonged delay in economic recovery in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

Reserve For Unfunded Commitments

Reserve for Unfunded Commitments—A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Bank's commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. The reserve is based on estimates, and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses, and recoveries on loans commitments previously charged-off, are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets.

Loan Fees And Direct Loan Origination Costs

Loan Fees and Direct Loan Origination Costs—Loan origination and commitment fees and direct loan origination costs are deferred and recognized as an adjustment to the yield over the life of the related loans.

Restricted Equity Securities

Restricted Equity Securities—Restricted equity securities were $32.6 million and $34.5 million at December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock amounted to $31.3 million and $33.2 million of the total restricted securities as of December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock represents the Bank's investment in the Federal Home Loan Banks of Seattle and San Francisco ("FHLB") stock and is carried at par value, which reasonably approximates its fair value. Management periodically evaluates FHLB stock for other-than-temporary or permanent impairment. Management's determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB, and (4) the liquidity position of the FHLB.

Moody's Investors Services rating of the FHLB of Seattle as Aaa was confirmed in August 2011, but a negative outlook was assigned as Moody's revised the rating outlook to negative for U.S. government debt and all issuers Moody's considers directly-linked to the U.S. government. Standard and Poors' rating is AA+, but it also issued a negative outlook with the action reflecting the downgrade of the long-term sovereign credit rating of the U.S. in 2011. Based on the above, the Company has determined there is not an other-than-temporary impairment on the FHLB stock investment as of December 31, 2011.

As a member of the FHLB system, the Bank is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets, or FHLB advances. At December 31, 2011, the Bank's minimum required investment in FHLB stock was $10.5 million. The Bank may request redemption at par value of any stock in excess of the minimum required investment. Stock redemptions are at the discretion of the FHLB. The remaining restricted equity securities balance primarily represents an investment in Pacific Coast Bankers' Bancshares stock.

Premises And Equipment

Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided over the estimated useful life of equipment, generally three to ten years, on a straight-line or accelerated basis. Depreciation is provided over the estimated useful life of premises, up to 39 years, on a straight-line or accelerated basis. Generally, leasehold improvements are amortized over the life of the related lease, or the life of the related asset, whichever is shorter. Expenditures for major renovations and betterments of the Company's premises and equipment are capitalized.

Management reviews long-lived and intangible assets any time that a change in circumstance indicates that the carrying amount of these assets may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of the asset to the forecasted undiscounted cash flows of the operation associated with the asset. If the evaluation of the forecasted cash flows indicates that the carrying value of the asset is not recoverable, the asset is written down to fair value.

Goodwill And Other Intangibles

Goodwill and Other Intangibles—Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. Amortization of intangible assets is included in other non-interest expense in the Consolidated Statements of Operations.

The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

The goodwill impairment test involves a two-step process. The first step compares the fair value of a reporting unit to its carrying value. If the reporting unit's fair value is less than its carrying value, the Company would be required to proceed to the second step. In the second step the Company calculates the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The estimated fair value of the Company is allocated to all of the Company's assets and liabilities, including any unrecognized identifiable intangible assets, as if the Company had been acquired in a business combination and the estimated fair value of the reporting unit is the price paid to acquire it. The allocation process is performed only for purposes of determining the amount of goodwill impairment. No assets or liabilities are written up or down, nor are any additional unrecognized identifiable intangible assets recorded as a part of this process. Any excess of the estimated purchase price over the fair value of the reporting unit's net assets represents the implied fair value of goodwill. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss would be recognized as a charge to earnings in an amount equal to that excess.

Mortgage Servicing Rights ("MSR")

Mortgage Servicing Rights ("MSR")— The Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its residential mortgage servicing assets at fair value and reports changes in fair value through earnings. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time, are each separately reported. Under the fair value method, the MSR is carried in the balance sheet at fair value and the changes in fair value are reported in earnings under the caption mortgage banking revenue in the period in which the change occurs.

Retained mortgage servicing rights are measured at fair value as of the date of sale. We use quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Key assumptions used in measuring the fair value of MSR as of December 31 were as follows:

	2011			2010			2009
Constant prepayment rate		20.39	%		18.54	%		18.35	%
Discount rate		8.60	%		8.62	%		8.70	%
Weighted average life (years)		4.5			4.5			4.5

The expected life of the loan can vary from management's estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management's estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights.

SBA/USDA Loans Sales And Servicing

SBA/USDA Loans Sales and Servicing—The Bank, on a limited basis, sells or transfers loans, including the guaranteed portion of Small Business Administration ("SBA") and Department of Agriculture ("USDA") loans (with servicing retained) for cash proceeds equal to the principal amount of loans, as adjusted to yield interest to the investor based upon the current market rates. The Bank records an asset representing the right to service loans for others when it sells a loan and retains the servicing rights. The carrying value of loans is allocated between the loan and the servicing rights, based on their relative fair values. The fair value of servicing rights is estimated by discounting estimated future cash flows from servicing using discount rates that approximate current market rates and using estimated prepayment rates. The servicing rights are carried at the lower of cost or market and are amortized in proportion to, and over the period of, the estimated net servicing income, assuming prepayments.

For purposes of evaluating and measuring impairment, servicing rights are based on a discounted cash flow methodology, current prepayment speeds and market discount rates. Any impairment is measured as the amount by which the carrying value of servicing rights for a stratum exceeds its fair value. The carrying value of SBA/USDA servicing rights at December 31, 2011 and 2010 were $666,000 and $721,000, respectively. No impairment charges were recorded for the years ended December 31, 2011, 2010 or 2009 related to SBA/USDA servicing assets.

A premium over the adjusted carrying value is received upon the sale of the guaranteed portion of an SBA or USDA loan. The Bank's investment in an SBA or USDA loan is allocated among the sold and retained portions of the loan based on the relative fair value of each portion at the time of loan origination, adjusted for payments and other activities. Because the portion retained does not carry an SBA or USDA guarantee, part of the gain recognized on the sold portion of the loan may be deferred and amortized as a yield enhancement on the retained portion in order to obtain a market equivalent yield.

Non-Covered Other Real Estate Owned

Non-Covered Other Real Estate Owned—Non-covered other real estate owned ("non-covered OREO") represents real estate which the Bank has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property's new basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Subsequent valuation adjustments are recognized within net loss on non-covered OREO. Revenue and expenses from operations and subsequent adjustments to the carrying amount of the property are included in other non-interest expense in the Consolidated Statements of Operations.

In some instances, the Bank may make loans to facilitate the sales of other real estate owned. Management reviews all sales for which it is the lending institution for compliance with sales treatment under provisions established within FASB ASC 360-20, Real Estate Sales. Any gains related to sales of other real estate owned may be deferred until the buyer has a sufficient initial and continuing investment in the property.

Covered Other Real Estate Owned

Covered Other Real Estate Owned—All OREO acquired in FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement are referred to as "covered OREO" and reported separately in our statements of financial position. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral's net realizable value, less selling costs.

Covered OREO was initially recorded at its estimated fair value on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to non-interest expense, and will be mostly offset by non-interest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to non-interest expense with a corresponding charge to non-interest income for the portion of the recovery that is due to the FDIC.

Income Taxes

 Income Taxes—Income taxes are accounted for using the asset and liability method. Under this method a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company's income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not, that all or some portion of the potential deferred tax asset will not be realized.

Derivative Loan Commitments

Derivative Loan Commitments—The Bank enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage loan commitments. The commitments to originate mortgage loans held for sale and the related forward delivery contracts are considered derivatives. Effective in the second quarter of 2011, the Bank began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting the interest rate swaps that the Bank executes with a third party, such that the Bank minimizes its net risk exposure. The Company recognizes all derivatives as either assets or liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to accumulated other comprehensive income and/or current earnings, as appropriate. None of the Company's derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, and the Company reports changes in fair values of its derivatives in current period net income.

The fair value of the derivative loan commitments is estimated using the present value of expected future cash flows. Assumptions used include pull-through rate assumption based on historical information, current mortgage interest rates, the stage of completion of the underlying application and underwriting process, the time remaining until the expiration of the derivative loan commitment, and the expected net future cash flows related to the associated servicing of the loan.

Operating Segments

Operating Segments—Public enterprises are required to report certain information about their operating segments in a complete set of financial statements to shareholders. They are also required to report certain enterprise-wide information about the Company's products and services, its activities in different geographic areas, and its reliance on major customers. The basis for determining the Company's operating segments is the manner in which management operates the business. Management has identified three primary business segments, Community Banking, Mortgage Banking, and Wealth Management. Prior to January 1, 2011, the Company reported Retail Brokerage, consisting of Umpqua Investments, as its own segment. Effective in 2011, the Company began reporting Umpqua Investments, Umpqua Private Bank, and Umpqua Financial Advisors under the Wealth Management segment. Umpqua Private Bank and Umpqua Financial Advisors do not meet the quantitative thresholds for reporting as separate segments and service the same customer base on Umpqua Investments.

Share Based Payment

Share-Based Payment—The Company has two active stock-based compensation plans that provide for the granting of stock options and restricted stock to eligible employees and directors. In accordance with FASB ASC 718, Stock Compensation, we recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees' requisite service period (generally the vesting period). The requisite service period may be subject to performance conditions.

The Company's 2003 Stock Incentive Plan provides for granting of stock options and restricted stock awards. Stock options and restricted stock awards generally vest ratably over 5 years and are recognized as expense over that same period of time.

The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model using assumptions noted in the following table. Expected volatility is based on the historical volatility of the price of the Company's common stock. The Company uses historical data to estimate option exercise and stock option forfeiture rates within the valuation model. The expected term of options granted is determined based on historical experience with similar options, giving consideration to the contractual terms and vesting schedules, and represents the period of time that options granted are expected to be outstanding. The expected dividend yield is based on dividend trends and the market value of the Company's common stock at the time of grant. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant corresponding to the estimated expected term of the options granted. The following weighted average assumptions were used to determine the fair value of stock option grants as of the grant date to determine compensation cost for the years ended December 31, 2011, 2010 and 2009:

	2011			2010			2009
Dividend yield		2.79	%		2.72	%		2.23	%
Expected life (years)		7.1			7.1			7.3
Expected volatility		52	%		52	%		46	%
Risk-free rate		2.71	%		2.69	%		2.18	%
Weighted average grant date fair value of options granted	$	4.65		$	5.24		$	3.65

The Company's 2007 Long Term Incentive Plan provides for granting of restricted stock units for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. The current restricted stock units outstanding cliff vest after three years based on performance and service conditions. Compensation expense is recognized over the service period to the extent restricted stock units are expected to vest.

Earnings Per Share

Earnings per Share—According to the provisions of FASB ASC 260, Earnings Per Share, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company's nonvested restricted stock awards qualify as participating securities.

Net income, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings or absorb losses. Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares.

Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, warrants, stock options, certain restricted stock awards and restricted stock units are the only potentially dilutive non-participating instruments issued by the Company. Next, we determine and include in diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company.

Advertising Expenses

Advertising expenses—Advertising costs are generally expensed as incurred.

Fair Value Measurements

Fair Value Measurements—FASB ASC 820, Fair Value Measurements and Disclosure, ("ASC 820", defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Reclassifications

Reclassifications—Certain amounts reported in prior years' financial statements have been reclassified to conform to the current presentation. The results of the reclassifications are not considered material and have no effect on previously reported net earnings (losses) available to common shareholders and earnings (losses) per common share.

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Shareholders' Equity (Summary Of Nonvested Restricted Share Activity) (Details) (Restricted Stock Units [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restricted Stock Units [Member]
Restricted Shares Outstanding - Balance, beginning of year	401	187	216
Restricted Shares Outstanding - Granted	282	274	26
Restricted Shares Outstanding - Released	(82)	(46)	(46)
Restricted Shares Outstanding - Forfeited/expired	(16)	(14)	(9)
Restricted Shares Outstanding - Balance, end of year	585	401	187
Weighted Average Grant Date Fair Value - Balance, beginning of year	$ 15.29	$ 21.46	$ 23.42
Weighted Average Grant Date Fair Value - Granted	$ 11.02	$ 12.16	$ 9.83
Weighted Average Grant Date Fair Value - Released	$ 17.58	$ 22.23	$ 23.81
Weighted Average Grant Date Fair Value - Forfeited/expired	$ 12.91	$ 13.32	$ 22.85
Weighted Average Grant Date Fair Value - Balance, end of year	$ 12.98	$ 15.29	$ 21.46

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Mortgage Servicing Rights (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Mortgage Servicing Rights [Abstract]
Contractually specified servicing fees, late fees and ancillary fees earned	$ 4.7	$ 3.9	$ 3.0

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Schedule Of Components Of Income Tax Expense (Benefit)

(in thousands)
	Current			Deferred			Total
YEAR ENDED DECEMBER 31, 2011:
Federal	$	29,932		$	(40	)	$	29,892
State		4,810			2,040			6,850
	$	34,742		$	2,000		$	36,742
YEAR ENDED DECEMBER 31, 2010:
Federal	$	(1,714	)	$	6,364		$	4,650
State		3,126			(1,971	)		1,155
	$	1,412		$	4,393		$	5,805
YEAR ENDED DECEMBER 31, 2009:
Federal	$	(24,339	)	$	(7,471	)	$	(31,810	)
State		1,762			(10,889	)		(9,127	)
	$	(22,577	)	$	(18,360	)	$	(40,937	)

Schedule Of Reconciliation Of Income Taxes

	2011			2010			2009
Statutory Federal income tax rate		35.0	%		35.0	%		35.0	%
Goodwill impairment		—			—			-20.0	%
State tax, net of Federal income tax		3.8	%		2.5	%		2.9	%
Tax-exempt income		-3.7	%		-13.6	%		2.2	%
Tax credits		-1.5	%		-5.5	%		1.0	%
Other		-0.6	%		-1.4	%		-0.1	%
Effective income tax rate		33.0	%		17.0	%		21.0	%

Components Of The Net Deferred Tax (Liabilities) Assets

(in thousands)
	2011			2010
DEFERRED TAX ASSETS:
Covered loans	$	38,812		$	49,334
Allowance for loan and lease losses		36,221			41,084
Accrued severance and deferred compensation		10,976			10,690
Tax credits		6,815			13,289
Non-covered other real estate owned		6,566			3,741
Covered other real estate owned		6,284			8,132
Non-covered loans		2,607			3,401
Discount on trust preferred securities		2,535			2,753
Basis differences of stock and securities		2,335			2,998
Net operating loss carryforwards		1,291			8,897
Other		9,826			7,719
Total gross deferred tax assets		124,268			152,038
DEFERRED TAX LIABILITIES:
FDIC indemnification asset		45,817			73,719
Unrealized gain on investment securities		22,713			16,966
Fair market value adjustment on junior subordinated debentures		20,099			20,801
Premises and equipment depreciation		8,789			5,581
Mortgage servicing rights		7,058			5,782
Deferred loan fees		4,983			4,297
Intangibles		4,928			5,228
Leased assets		4,251			4,879
Other		6,063			5,136
Total gross deferred tax liabilities		124,701			142,389
Net deferred tax (liabilities) assets	$	(433	)	$	9,649

Schedule Of Company's Unrecognized Tax Benefits

(in thousands)
	2011			2010
Balance, beginning of period	$	589		$	2,263
Changes based on tax positions related to prior years		—			(1,674	)
Reductions for tax positions of prior years		(39	)		—
Balance, end of period	$	550		$	589

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Earnings Per Common Share (Schedule Of Weighted Average Outstanding Securities Not Included In The Computation Of Diluted Earnings Per Common Share) (Details)	3 Months Ended	12 Months Ended
	Dec. 31, 2008	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Anti-dilutive weighted average outstanding securities		1,815,000	1,733,000	3,754,000
Warrants issued during period to purchase common stock	2,221,795
Percentage of common stock reduction underlying warrant		50.00%
Stock Options [Member]
Anti-dilutive weighted average outstanding securities		1,815,000	1,450,000	1,826,000
CPP Warrants [Member]
Anti-dilutive weighted average outstanding securities			274,000	1,811,000
Restricted Stock [Member]
Anti-dilutive weighted average outstanding securities			9,000	17,000
Restricted Stock Units [Member]
Anti-dilutive weighted average outstanding securities				100,000

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Covered Assets And Indemnification Asset (Tables)

12 Months Ended

Dec. 31, 2011

Covered Assets And Indemnification Asset [Abstract]

Number Of Loans And Acquired Unpaid Principal Balance

(dollars in millions)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Performing loans ("Analogized ASC 310-30"):
Number of Pools		15		19		19
Number of Loans		1,263		3,647		402
Acquired Unpaid Principal Balance	$	247.9	$	516.9	$	224.2
Non-performing loans ("Classic ASC 310-30"):
Number of Pools		8		10		9
Number of Loans		127		39		106
Acquired Unpaid Principal Balance	$	120.6	$	44.5	$	103.4
Total Portfolio
Number of Pools		23		29		28
Number of Loans		1,390		3,686		508
Acquired Unpaid Principal Balance	$	368.5	$	561.4	$	327.6

Estimated Fair Value Of Acquired Loans

(in thousands)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010		Total
Commercial real estate
Term & multifamily	$	141,076	$	331,869	$	154,119	$	627,064
Construction & development		18,832		562		9,481		28,875
Residential development		16,219		10,340		15,641		42,200
Commercial
Term		27,272		14,850		18,257		60,379
LOC & other		23,965		18,169		11,408		53,542
Residential
Mortgage		11,886		39,897		1,539		53,322
Home equity loans & lines		8,308		31,029		4,421		43,758
Consumer & other		4,935		11,624		641		17,200
Total	$	252,493	$	458,340	$	215,507	$	926,340

Reconciliation Of Acquired Loan Portfolios

(in thousands)
	Evergreen January  22, 2010			Rainier February  26, 2010			Nevada  Security June 18, 2010			Total
Undiscounted contractual cash flows	$	498,216		$	821,972		$	396,134		$	1,716,322
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(124,131	)		(125,774	)		(115,021	)		(364,926	)
Undiscounted cash flows expected to be collected		374,085			696,198			281,113			1,351,396
Accretable yield at acquisition		(121,592	)		(237,858	)		(65,606	)		(425,056	)
Estimated fair value of loans acquired at acquisition	$	252,493		$	458,340		$	215,507		$	926,340

Covered Loans

(in thousands)
	2011
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	99,346	$	248,206	$	126,502	$	474,054
Construction & development		7,241		711		6,868		14,820
Residential development		7,809		227		9,727		17,763
Commercial
Term		14,911		5,807		13,432		34,150
LOC & other		8,776		8,854		5,796		23,426
Residential
Mortgage		6,320		27,320		1,863		35,503
Home equity loans & lines		4,660		21,055		3,370		29,085
Consumer & other		2,394		5,541		35		7,970
Total	$	151,457	$	317,721	$	167,593		636,771
Allowance for covered loans								(14,320	)
Total							$	622,451
	2010
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	124,743	$	303,585	$	141,314	$	569,642
Construction & development		14,470		854		9,389		24,713
Residential development		11,024		2,497		11,372		24,893
Commercial
Term		18,895		10,881		13,000		42,776
LOC & other		11,876		14,320		9,031		35,227
Residential
Mortgage		8,129		35,026		1,669		44,824
Home equity loans & lines		6,740		25,214		3,726		35,680
Consumer & other		2,793		8,071		—		10,864
Total	$	198,670	$	400,448	$	189,501		788,619
Allowance for covered loans								(2,721	)
Total							$	785,898

Changes In Accretable Yield In Acquired Loans

	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	90,770		$	172,614		$	73,515		$	336,899
Accretion to interest income		(26,240	)		(35,382	)		(22,580	)		(84,202	)
Disposals		(10,575	)		(19,893	)		(4,595	)		(35,063	)
Reclassifications from nonaccretable difference		2,524			2,994			14,681			20,199
Balance, end of period	$	56,479		$	120,333		$	61,021		$	237,833
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Additions resulting from acquisitions		121,592			237,858			65,606			425,056
Accretion to interest income		(29,060	)		(32,979	)		(10,978	)		(73,017	)
Disposals		(6,572	)		(12,830	)		(2,376	)		(21,778	)
Reclassifications (to)/from nonaccretable difference		4,810			(19,435	)		21,263			6,638
Balance, end of period	$	90,770		$	172,614		$	73,515		$	336,899

Activity Related To Allowance For Covered Loan And Lease Losses By Covered Loan Portfolio

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Total
Balance, beginning of period	$	2,465		$	176		$	56		$	24		$	2,721
Charge-offs		(3,177	)		(660	)		(1,657	)		(1,192	)		(6,686	)
Recoveries		1,348			512			142			142			2,144
Provision		8,303			3,936			2,450			1,452			16,141
Balance, end of period	$	8,939		$	3,964		$	991		$	426		$	14,320
	December 31, 2010
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Total
Balance, beginning of period	$	—		$	—		$	—		$	—		$	—
Charge-offs		(2,439	)		(266	)		—			—			(2,705	)
Recoveries		11			263			—			1			275
Provision		4,893			179			56			23			5,151
Balance, end of period	$	2,465		$	176		$	56		$	24		$	2,721

Allowance And Recorded Investment By Covered Loan Portfolio

(in thousands)
	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	8,491	$	3,366	$	955	$	395	$	13,207
Collectively evaluated for impairment(2)		448		598		36		31		1,113
Total	$	8,939	$	3,964	$	991	$	426	$	14,320
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	503,575	$	39,427	$	59,980	$	5,410	$	608,392
Collectively evaluated for impairment(2)		3,062		18,149		4,608		2,560		28,379
Total	$	506,637	$	57,576	$	64,588	$	7,970	$	636,771
	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	2,345	$	—	$	—	$	—	$	2,345
Collectively evaluated for impairment		120		176		56		24		376
Total	$	2,465	$	176	$	56	$	24	$	2,721
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	614,361	$	63,252	$	72,650	$	8,610	$	758,873
Collectively evaluated for impairment		4,887		14,751		7,854		2,254		29,746
Total	$	619,248	$	78,003	$	80,504	$	10,864	$	788,619

(1) In accordance with ASC 310-30, the valuation allowance is netted against the carrying value of the covered loan and lease balance.

(2) The allowance on covered loan and lease losses includes an allowance on covered loan advances on acquired loans subsequent to acquisition.

Internal Risk Rating By Covered Loans Class

(in thousands)
	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	329,273	$	58,610	$	68,521	$	12,343	$	—	$	468,747
Construction & development		1,552		1,410		6,733		3,410		—		13,105
Residential development		1,187		405		8,394		5,808		—		15,794
Commercial
Term		18,006		1,661		8,244		3,228		—		31,139
LOC & other		13,605		2,756		5,607		556		—		22,524
Residential
Mortgage		35,233		—		—		—		—		35,233
Home equity loans & lines		28,223		—		143		—		—		28,366
Consumer & other		7,543		—		—		—		—		7,543
Total	$	434,622	$	64,842	$	97,642	$	25,345	$	—	$	622,451
	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	485,238	$	32,150	$	44,833	$	7,421	$	—	$	569,642
Construction & development		6,155		3,799		7,640		4,841		—		22,435
Residential development		6,625		1,322		12,907		3,852		—		24,706
Commercial
Term		31,760		2,119		7,087		1,634		—		42,600
LOC & other		22,960		4,246		7,183		838		—		35,227
Residential
Mortgage		44,524		—		300		—		—		44,824
Home equity loans & lines		34,998		—		627		—		—		35,625
Consumer & other		10,827		—		12		—		—		10,839
Total	$	643,087	$	43,636	$	80,589	$	18,586	$	—	$	785,898

Summary Of Activity In Covered Other Real Estate Owned

(in thousands)
	2011			2010
Balance, beginning of period	$	29,863		$	—
Acquisition		—			26,939
Additions to covered OREO		15,271			15,350
Dispositions of covered OREO		(16,934	)		(10,485	)
Valuation adjustments in the period		(8,709	)		(1,941	)
Balance, end of period	$	19,491		$	29,863

Summary Of Activity Related To The FDIC Indemnification Asset

(in thousands)
	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	40,606		$	43,726		$	62,081		$	146,413
Change in FDIC indemnification asset		1,357			(7,343	)		(182	)		(6,168	)
Transfers to due from FDIC		(13,416	)		(8,111	)		(27,629	)		(49,156	)
Balance, end of period	$	28,547		$	28,272		$	34,270		$	91,089
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Acquisitions		71,755			76,603			99,160			247,518
Change in FDIC indemnification asset		(12,864	)		(7,045	)		3,464			(16,445	)
Transfers to due from FDIC		(18,285	)		(25,832	)		(40,543	)		(84,660	)
Balance, end of period	$	40,606		$	43,726		$	62,081		$	146,413

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Interest Bearing Deposits (Major Types Of Interest Bearing Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Interest Bearing Deposits [Abstract]
Interest bearing demand	$ 993,579	$ 927,224
Money market	3,661,785	3,467,549
Savings	386,528	349,696
Time, $100,000 and over	1,629,505	2,191,055
Time less than $100,000	652,172	881,594
Total interest bearing deposits	$ 7,323,569	$ 7,817,118

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Significant Accounting Policies (Assumptions Used In Measuring The Fair Value Of Mortgage Servicing Rights) (Details)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Significant Accounting Policies [Abstract]
Constant prepayment rate	20.39%	18.54%	18.35%
Discount rate	8.60%	8.62%	8.70%
Weighted average life (years)	4.5	4.5	4.5

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Interest Bearing Deposits (Remaining Maturities Of Time Deposits Of $100,000 Or More) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Interest Bearing Deposits [Abstract]
Three months or less	$ 493,587
Over three months through six months	192,775
Over six months through twelve months	463,446
Over twelve months	479,697
Time, $100,000 and over	$ 1,629,505	$ 2,191,055

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Interest Bearing Deposits (Tables)

12 Months Ended

Dec. 31, 2011

Interest Bearing Deposits [Abstract]

Schedule Of Interest Bearing Deposits

(in thousands)
	2011		2010
Interest bearing demand	$	993,579	$	927,224
Money market		3,661,785		3,467,549
Savings		386,528		349,696
Time, $100,000 and over		1,629,505		2,191,055
Time less than $100,000		652,172		881,594
Total interest bearing deposits	$	7,323,569	$	7,817,118

Schedule Of Interest Expense By Type

(in thousands)
	2011		2010		2009
Interest bearing demand	$	3,056	$	4,677	$	4,884
Money market		17,236		26,412		26,885
Savings		356		543		572
Time, $100,000 and over		25,771		31,735		36,070
Other time less than $100,000		9,324		12,874		20,331
Total interest on deposits	$	55,743	$	76,241	$	88,742

Schedule Of Maturities Time Deposits

(in thousands)
Year	Amount
2012	$	1,589,811
2013		469,152
2014		45,831
2015		37,493
2016		136,685
Thereafter		2,705
Total time deposits	$	2,281,677

Remaining Maturities Of Time Deposits Of $100,000 Or More

(in thousands)
Year	Amount
Three months or less	$	493,587
Over three months through six months		192,775
Over six months through twelve months		463,446
Over twelve months		479,697
Time, $100,000 and over	$	1,629,505

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Investment Securities (Amortized Cost, Unrealized Gains And Losses, And Fair Value Of Investment Securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities, Amortized Cost	$ 3,111,797	$ 2,876,765
Available-for-sale Securities, Unrealized Gains	60,762	63,780
Available-for-sale Securities, Unrealized Losses	(3,981)	(21,365)
Available-for-sale Securities, Fair Value	3,168,578	2,919,180
Held-to-maturity Securities, Amortized Cost	4,714	4,762
Held-to-maturity Securities, Unrealized Gains	122	221
Held-to-maturity Securities, Unrealized Losses	(77)	(209)
Held-to-maturity Securities, Fair Value	4,759	4,774
U.S. Treasury And Agencies [Member]
Available-for-sale Securities, Amortized Cost	117,232	117,551
Available-for-sale Securities, Unrealized Gains	1,234	1,239
Available-for-sale Securities, Unrealized Losses	(1)	(1)
Available-for-sale Securities, Fair Value	118,465	118,789
Obligations Of States And Political Subdivisions [Member]
Available-for-sale Securities, Amortized Cost	237,302	213,129
Available-for-sale Securities, Unrealized Gains	16,264	4,985
Available-for-sale Securities, Unrealized Losses	(13)	(1,388)
Available-for-sale Securities, Fair Value	253,553	216,726
Held-to-maturity Securities, Amortized Cost	1,335	2,370
Held-to-maturity Securities, Unrealized Gains	2	5
Held-to-maturity Securities, Unrealized Losses
Held-to-maturity Securities, Fair Value	1,337	2,375
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member]
Available-for-sale Securities, Amortized Cost	2,755,153	2,543,974
Available-for-sale Securities, Unrealized Gains	43,152	57,506
Available-for-sale Securities, Unrealized Losses	(3,950)	(19,976)
Available-for-sale Securities, Fair Value	2,794,355	2,581,504
Held-to-maturity Securities, Amortized Cost	3,379	2,392
Held-to-maturity Securities, Unrealized Gains	120	216
Held-to-maturity Securities, Unrealized Losses	(77)	(209)
Held-to-maturity Securities, Fair Value	3,422	2,399
Other Debt Securities [Member]
Available-for-sale Securities, Amortized Cost	151	152
Available-for-sale Securities, Unrealized Gains
Available-for-sale Securities, Unrealized Losses	(17)
Available-for-sale Securities, Fair Value	134	152
Investments In Mutual Funds And Other Equity Securities [Member]
Available-for-sale Securities, Amortized Cost	1,959	1,959
Available-for-sale Securities, Unrealized Gains	112	50
Available-for-sale Securities, Fair Value	$ 2,071	$ 2,009

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Related Party Transactions (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010		Dec. 31, 2009
Related Party Transactions [Abstract]
Loans outstanding at beginning of year	$ 9,264,000	$ 12,301,000		$ 13,968,000
New loans and advances	10,041,000	1,409,000		1,819,000
Less loan repayments	(7,060,000)	(3,467,000)		(3,471,000)
Reclassification		(979,000)	[1]	(15,000)	[1]
Loans outstanding at end of year	12,245,000	9,264,000		12,301,000
Deposits of related parties	$ 18,900,000	$ 14,700,000

[1] Represents loans that were once considered related party but are no longer considered related party, or loans that were not related party that subsequently became related party loans.

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Covered Assets And Indemnification Asset (Allowance And Recorded Investment By Covered Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Loans acquired with deteriorated credit quality	$ 13,207	[1]	$ 2,345	[1]
Collectively evaluated for impairment	1,113	[2]	376
Total	14,320		2,721
Loans acquired with deteriorated credit quality	608,392	[1]	758,873	[1]
Collectively evaluated for impairment	28,379	[2]	29,746
Total	636,771		788,619
Commercial Real Estate [Member]
Loans acquired with deteriorated credit quality	8,491	[1]	2,345	[1]
Collectively evaluated for impairment	448	[2]	120
Total	8,939		2,465
Loans acquired with deteriorated credit quality	503,575	[1]	614,361	[1]
Collectively evaluated for impairment	3,062	[2]	4,887
Total	506,637		619,248
Commercial [Member]
Loans acquired with deteriorated credit quality	3,366	[1]
Collectively evaluated for impairment	598	[2]	176
Total	3,964		176
Loans acquired with deteriorated credit quality	39,427	[1]	63,252	[1]
Collectively evaluated for impairment	18,149	[2]	14,751
Total	57,576		78,003
Residential [Member]
Loans acquired with deteriorated credit quality	955	[1]
Collectively evaluated for impairment	36	[2]	56
Total	991		56
Loans acquired with deteriorated credit quality	59,980	[1]	72,650	[1]
Collectively evaluated for impairment	4,608	[2]	7,854
Total	64,588		80,504
Consumer & Other [Member]
Loans acquired with deteriorated credit quality	395	[1]
Collectively evaluated for impairment	31	[2]	24
Total	426		24
Loans acquired with deteriorated credit quality	5,410	[1]	8,610	[1]
Collectively evaluated for impairment	2,560	[2]	2,254
Total	$ 7,970		$ 10,864

[1] In accordance with ASC 310-30, the valuation allowance is netted against the carrying value of the covered loan and lease balance.

[2] The allowance on covered loan and lease losses includes an allowance on covered loan advances on acquired loans subsequent to acquisition.

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Non-Covered Loans And Leases (Tables)

12 Months Ended

Dec. 31, 2011

Non-Covered Loans And Leases [Abstract]

Schedule Of Major Types Of Non-Covered Loans

(in thousands)
	2011			2010
Commercial real estate
Term & multifamily	$	3,558,295		$	3,483,475
Construction & development		165,066			247,814
Residential development		90,073			147,813
Commercial
Term		625,766			509,453
LOC & other		832,999			747,419
Residential
Mortgage		315,927			222,416
Home equity loans & lines		272,192			278,585
Consumer & other		38,860			33,043
Total		5,899,178			5,670,018
Deferred loan fees, net		(11,080	)		(11,031	)
Total	$	5,888,098		$	5,658,987

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Fair Values

12 Months Ended

Dec. 31, 2011

Fair Values [Abstract]

Fair Values

NOTE 24.    FAIR VALUES

The following table presents estimated fair values of the Company's financial instruments as of December 31, 2011 and December 31, 2010, whether or not recognized or recorded at fair value in the Consolidated Balance Sheets:

(in thousands)

	2011				2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
FINANCIAL ASSETS:
Cash and cash equivalents	$	598,766	$	598,766	$	1,004,125	$	1,004,125
Trading securities		2,309		2,309		3,024		3,024
Securities available for sale		3,168,578		3,168,578		2,919,180		2,919,180
Securities held to maturity		4,714		4,759		4,762		4,774
Loans held for sale		98,691		98,691		75,626		75,626
Non-covered loans and leases, net		5,795,130		5,816,714		5,557,066		5,767,506
Covered loans and leases		622,451		722,295		785,898		893,682
Restricted equity securities		32,581		32,581		34,475		34,475
Mortgage servicing rights		18,184		18,184		14,454		14,454
Bank owned life insurance assets		92,555		92,555		90,161		90,161
FDIC indemnification asset		91,089		47,008		146,413		90,011
Derivatives		7,955		7,955		1,060		1,060
Visa Class B common stock		—		19,230		—		15,987
FINANCIAL LIABILITIES:
Deposits	$	9,236,690	$	9,260,327	$	9,433,805	$	9,464,406
Securities sold under agreement to repurchase		124,605		124,605		73,759		73,759
Term debt		255,676		284,911		262,760		282,127
Junior subordinated debentures, at fair value		82,905		82,905		80,688		80,688
Junior subordinated debentures, at amortized cost		102,544		68,698		102,866		65,771
Derivatives		6,509		6,509		361		361

The following table presents information about the Company's assets and liabilities measured at fair value on a recurring basis at December 31, 2011 and 2010:

(in thousands)
	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Description
Trading securities
Obligations of states and political subdivisions	$	296	$	296	$	—	$	—
Equity securities		1,918		1,918		—		—
Other investments securities(1)		95		95		—		—
Available for sale securities
U.S. Treasury and agencies		118,465		—		118,465		—
Obligations of states and political subdivisions		253,553		—		253,553		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,794,355		—		2,794,355		—
Other debt securities		134		—		134		—
Investments in mutual funds and other equity securities		2,071		—		2,071		—
Mortgage servicing rights, at fair value		18,184		—		—		18,184
Derivatives		7,955		—		7,955		—
Total assets measured at fair value	$	3,197,026	$	2,309	$	3,176,533	$	18,184
Junior subordinated debentures, at fair value	$	82,905	$	—	$	—	$	82,905
Derivatives		6,509		—		6,509		—
Total liabilities measured at fair value	$	89,414	$	—	$	6,509	$	82,905
	Fair Value at December 31, 2010
	Total		Level 1		Level 2		Level 3
Description
Trading securities
Obligations of states and political subdivisions	$	1,282	$	1,282	$	—	$	—
Equity securities		1,645		1,645		—		—
Other investments securities(1)		97		97		—		—
Available for sale securities
U.S. Treasury and agencies		118,789		—		118,789		—
Obligations of states and political subdivisions		216,726		—		216,726		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,581,504		—		2,581,504		—
Other debt securities		152		—		152		—
Investments in mutual funds and other equity securities		2,009		—		2,009		—
Mortgage servicing rights, at fair value		14,454		—		—		14,454
Derivatives		1,060		—		1,060		—
Total assets measured at fair value	$	2,937,718	$	3,024	$	2,920,240	$	14,454
Junior subordinated debentures, at fair value	$	80,688	$	—	$	—	$	80,688
Derivatives		361		—		361		—
Total liabilities measured at fair value	$	81,049	$	—	$	361	$	80,688

(1) Principally represents U.S. Treasury and agencies or residential mortgage-backed securities issued or guaranteed by governmental agencies.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents—For short-term instruments, including cash and due from banks, and interest bearing deposits with banks, the carrying amount is a reasonable estimate of fair value.

Securities—Fair values for investment securities are primarily measured using information from a third-party pricing service. The pricing service uses evaluated pricing models based on market data. In the event that limited or less transparent information is provided by the third-party pricing service, fair value is estimated using secondary pricing services or non-binding third-party broker quotes. Management periodically reviews the pricing information received from the third-party pricing service and compares it to secondary pricing service, evaluating significant price variances between services to determine an appropriate estimate of fair value to report.

Loans Held For Sale— For loans held for sale, carrying value approximates fair value.

Non-covered Loans and Leases, net—Fair values are estimated for portfolios of loans and leases with similar financial characteristics. Loans are segregated by type, including commercial, real estate and consumer loans. Each loan category is further segregated by fixed and variable rate. For variable rate loans, carrying value approximates fair value. Effective in the second quarter of 2010, the fair value of fixed rate loans is calculated by discounting contractual cash flows at rates which similar loans are currently being made. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio.

Covered Loans and leases, net—Covered loans and leases are initially measured at their estimated fair value on their date of acquisition as described in Note 7. Subsequent to acquisition, the fair value of covered loans is measured using the same methodology as that of non-covered loans.

Restricted Equity Securities—The carrying value of restricted equity securities approximates fair value as the shares can only be redeemed by the issuing institution at par.

Mortgage Servicing Rights—The fair value of mortgage servicing rights is estimated using a discounted cash flow model. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Due to the limited observability of all significant inputs utilized in the valuation model, particularly the discount rate and projected constant prepayment rate, and how changes in these assumptions could potentially impact the ending valuation of this asset, as well as the lack of readily available quotes or observable trades of similar assets in the current period, we classify this as a Level 3 fair value measure. Management believes the significant inputs utilized are indicative of those that would be used by market participants.

Bank Owned Life Insurance Assets—Fair values of insurance policies owned are based on the insurance contract's cash surrender value.

FDIC Indemnification Asset—The FDIC indemnification asset is calculated as the expected future cash flows under the loss-share agreement discounted by a rate reflective of the creditworthiness of the FDIC as would be required from the market.

Deposits—The fair value of deposits with no stated maturity, such as non-interest bearing deposits, savings and interest checking accounts, and money market accounts, is equal to the amount payable on demand as of December 31, 2011 and 2010. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Securities Sold under Agreements to Repurchase—For short-term instruments, including securities sold under agreements to repurchase, the carrying amount is a reasonable estimate of fair value.

Term Debt—The fair value of medium term notes is calculated based on the discounted value of the contractual cash flows using current rates at which such borrowings can currently be obtained.

Junior Subordinated Debentures— The fair value of junior subordinated debentures is estimated using an income approach valuation technique. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants. Due to credit concerns in the capital markets and inactivity in the trust preferred markets that have limited the observability of market spreads, we have classified this as a Level 3 fair value measure.

Derivative Instruments—The fair value of the derivative instruments is estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate.

Visa Class B Common Stock—The fair value of Visa Class B common stock is estimated by applying a 5% discount to the value of the unredeemed Class A equivalent shares. The discount primarily represents the risk related to the further potential reduction of the conversion ratio between Class B and Class A shares and a liquidity risk premium.

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the years ended December 31, 2011 and 2010.

(in thousands)
	Beginning Balance		Change included in earnings			Issuances		Settlements			Ending Balance		Net change in unrealized gains or losses relating to items held at end of period
2011
Mortgage servicing rights	$	14,454	$	(2,990	)	$	6,720	$	—		$	18,184	$	(961	)
Junior subordinated debentures		80,688		6,134			—		(3,917	)		82,905		6,134
2010
Mortgage servicing rights	$	12,625	$	(3,878	)	$	5,707	$	—		$	14,454	$	(1,965	)
Junior subordinated debentures		85,666		(1,004	)		—		(3,974	)		80,688		(1,004	)

Losses on mortgage servicing rights carried at fair value are recorded in mortgage banking revenue within other non-interest income. Gains (losses) on junior subordinated debentures carried at fair value are recorded within other non-interest income. The contractual interest expense on the junior subordinated debentures is recorded on an accrual basis as interest on junior subordinated debentures within interest expense. Settlements related to the junior subordinated debentures represent the payment of accrued interest that is embedded in the fair value of these liabilities.

Management believes that the credit risk adjusted spread being utilized is indicative of the nonperformance risk premium a willing market participant would require under current market conditions, that is, the inactive market. Management attributes the change in fair value of the junior subordinated debentures during the period to market changes in the nonperformance expectations and pricing of this type of debt, and not as a result of changes to our entity-specific credit risk. Future contractions in the credit risk adjusted the Company's contractual spreads has primarily contributed to the positive fair value adjustments in 2010. Generally, an increase in the credit risk adjusted spread and/or a decrease in the three month LIBOR swap curve will result in positive fair value adjustments. Conversely, a decrease in the credit risk adjusted spread and/or an increase in the three month LIBOR swap curve will result in negative fair value adjustments.

Additionally, from time to time, certain assets are measured at fair value on a nonrecurring basis. These adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment. The following table presents information about the Company's assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the years ended December 31, 2011 and 2010. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon.

(in thousands)
	December 31, 2011
	Total		Level 1		Level 2		Level 3
Description
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	487	$	—	$	—	$	487
Non-covered loans and leases		53,847		—		—		53,847
Non-covered other real estate owned		11,321		—		—		11,321
Covered other real estate owned		12,561		—		—		12,561
	$	78,216	$	—	$	—	$	78,216
	December 31, 2010
	Total		Level 1		Level 2		Level 3
Description
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	1,226	$	—	$	—	$	1,226
Non-covered loans and leases		74,639		—		—		74,639
Non-covered other real estate owned		7,958		—		—		7,958
Covered other real estate owned		8,708		—		—		8,708
	$	92,531	$	—	$	—	$	92,531

The following table presents the losses resulting from nonrecurring fair value adjustments for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011		2010		2009
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	359	$	414	$	10,334
Non-covered loans and leases		51,883		119,240		185,810
Goodwill		—		—		111,952
Other intangible assets, net		—		—		804
Non-covered other real estate owned		8,947		4,074		12,247
Covered other real estate owned		8,709		1,941		—
Total loss from nonrecurring measurements	$	69,898	$	125,669	$	321,147

The investment securities held to maturity above relate to non-agency collateralized mortgage obligations where other-than-temporary impairment ("OTTI") has been identified and the investments have been adjusted to fair value. The fair value of these investments securities were obtained from third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. While we do not expect to recover the entire amortized cost basis of these securities, as we as we do not intend to sell these securities and it is not likely that we will be required to sell these securities before maturity, only the credit loss component of the impairment is recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. The remaining impairment loss related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to a separate component other comprehensive income ("OCI"). We estimate the cash flows of the underlying collateral within each security considering credit, interest and prepayment risk models that incorporate management's estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as loan interest rates, geographic location, borrower characteristics and vintage, and historical experience. We then use a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows are then discounted at the interest rate used to recognize interest income on each security.

The non-covered loans and leases amount above represents impaired, collateral dependent loans that have been adjusted to fair value. When we identify a collateral dependent loan as impaired, we measure the impairment using the current fair value of the collateral, less selling costs. Depending on the characteristics of a loan, the fair value of collateral is generally estimated by obtaining external appraisals. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. The loss represents charge-offs or impairments on collateral dependent loans for fair value adjustments based on the fair value of collateral. The carrying value of loans fully charged-off is zero.

The goodwill amount above represents goodwill that has been adjusted to fair value. The impairment charge recognized in 2009 relates to the Community Banking reporting segment. The Company engaged an independent valuation consultant to assist the Company in estimating the fair value of the Community Banking reporting unit for step one of the goodwill impairment test. We utilized a variety of valuation techniques to analyze and measure the estimated fair value of the reporting unit under both the income and market valuation approach. Under the income approach, the fair value of the reporting unit is determined by projecting future earnings for five years, utilizing a terminal value based on expected future growth rates, and applying a discount rate reflective of current market conditions. The estimation of forecasted earnings uses management's best estimates of economic and market conditions over the projected periods and considers estimated growth rates in loans and deposits and future expected changes in net interest margins. Various market-based valuation approaches are utilized and include applying market price to earnings, core deposit premium, and tangible book value multiples as observed from relevant, comparable peer companies of the reporting unit. We also valued the reporting unit by applying an estimated control premium to the market capitalization. Weightings are assigned to each of the aforementioned model results, judgmentally allocated based on the observability and reliability of the inputs, to arrive at a final fair value estimate of the reporting unit. Because the step one analysis indicated that the implied fair value of goodwill was likely lower than the carrying amount, we completed step two of the goodwill impairment test. In step two of the goodwill impairment test, we calculated the fair value for the reporting unit's assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name, in order to determine the implied fair value of goodwill. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures carried at amortized cost. The external valuation specialist assisted management to estimate the fair value of our unrecognized identifiable assets, such as the core deposit intangible and trade name. Information relating to our methodologies for estimating the fair value of financial instruments is described above. Through this process, the Company determined that the implied fair value of the reporting unit's goodwill was less than its carrying amount, and as a result, we recognized a goodwill impairment charge equal to that deficit.

The other intangible asset, net, amount above represents a merchant servicing portfolio income stream that has been adjusted to fair value. The impairment charge is a result of a decrease in the actual and expected future cash flows related to the income stream. The fair value of the merchant servicing portfolio was determined using an income approach (discounted cash flow model). Future cash flows were estimated based on actual historical experience and consideration of future expectations, including the discount revenue rates, offsetting operating expenses, growth and attrition rates, as well as other factors, discounted at a 14% discount rate.

The non-covered and covered other real estate owned amount above represents impaired real estate that has been adjusted to fair value. Non-covered other real estate owned represents real estate which the Bank has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property's new basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Fair value adjustments on other real estate owned are recognized within net loss on real estate owned. The loss represents impairments on non-covered other real estate owned for fair value adjustments based on the fair value of the real estate.

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Investment Securities (Schedule Of Fair Value And Unrealized Losses Of Securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities, Less than 12 Months, Fair Value	$ 489,991	$ 1,298,593
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	3,173	21,334
Available-for-sale Securities, 12 Months or Longer, Fair Value	52,441	2,652
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	808	31
Available-for-sale Securities, Fair Value	542,432	1,301,245
Available-for-sale Securities, Unrealized Losses	3,981	21,365
Held-to-maturity Securities, 12 Months or Longer, Fair Value	602	658
Held-to-maturity Securities, 12 Months or Longer, Unrealized Losses	77	209
Held-to-maturity Securities, Fair Value	602	658
Held-to-maturity Securities, Unrealized Losses	77	209
U.S. Treasury And Agencies [Member]
Available-for-sale Securities, 12 Months or Longer, Fair Value	85	110
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	1	1
Available-for-sale Securities, Fair Value	85	110
Available-for-sale Securities, Unrealized Losses	1	1
Obligations Of States And Political Subdivisions [Member]
Available-for-sale Securities, Less than 12 Months, Fair Value	516	60,110
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	13	1,366
Available-for-sale Securities, 12 Months or Longer, Fair Value		1,003
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses		22
Available-for-sale Securities, Fair Value	516	61,113
Available-for-sale Securities, Unrealized Losses	13	1,388
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member]
Available-for-sale Securities, Less than 12 Months, Fair Value	489,475	1,238,483
Available-for-sale Securities, Less than 12 Months, Unrealized Losses	3,160	19,968
Available-for-sale Securities, 12 Months or Longer, Fair Value	52,222	1,539
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	790	8
Available-for-sale Securities, Fair Value	541,697	1,240,022
Available-for-sale Securities, Unrealized Losses	3,950	19,976
Held-to-maturity Securities, 12 Months or Longer, Fair Value	602	658
Held-to-maturity Securities, 12 Months or Longer, Unrealized Losses	77	209
Held-to-maturity Securities, Fair Value	602	658
Held-to-maturity Securities, Unrealized Losses	77	209
Other Debt Securities [Member]
Available-for-sale Securities, 12 Months or Longer, Fair Value	134
Available-for-sale Securities, 12 Months or Longer, Unrealized Losses	17
Available-for-sale Securities, Fair Value	134
Available-for-sale Securities, Unrealized Losses	$ 17

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Income Taxes (Schedule Of Reconciliation Of Income Taxes) (Details)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Abstract]
Statutory Federal income tax rate	35.00%	35.00%	35.00%
Goodwill impairment			(20.00%)
State tax net of Federal income tax	3.80%	2.50%	2.90%
Tax-exempt income	(3.70%)	(13.60%)	2.20%
Tax credits	(1.50%)	(5.50%)	1.00%
Other	(0.60%)	(1.40%)	(0.10%)
Effective income tax rate	33.00%	17.00%	21.00%

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Federal Funds Purchased (Details) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Federal funds	$ 0	$ 0
Federal home loan bank, advances, general debt obligations, disclosures, amount of available, unused funds	1,800,000,000
Maximum [Member]
Interest rate available lines of credit	3.00%
Minimum [Member]
Interest rate available lines of credit	0.30%
Federal Reserve [Member]
Lines of credit	448,500,000
Federal Funds Purchased [Member]
Lines of credit	$ 135,000,000

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Commitments And Contingencies (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Commitments And Contingencies [Abstract]
Other company stock owned shares	468,659
Number of non-cancelable operating leases	142
Rent expense	$ 16,600,000	$ 15,300,000	$ 13,000,000
Rent income	1,000,000	1,000,000	555,000
Losses in connection with standby letters of credit		0	23,000
Standby letters of credit losses	110,000
Standby letters of credit that expire within one year	31,500,000
Standby letters of credit that expire thereafter	29,800,000
Fair value of guarantee with standby letters of credit	254,000
Reserve for unfunded commitments	940,000	818,000	731,000
Unredeemed class A equivalent shares owned	$ 20,200,000
Concentration risk, other risk, percentage	80	82
Value of the class A shares	$ 101.53
Conversion ratio from Class B shares into Class A shares	0.4254

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Business Combinations (Schedule Of Net Assets (Liabilities) Received From The FDIC And The Estimated Fair Value Adjustments) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			12 Months Ended						0 Months Ended
	Dec. 31, 2010	Dec. 31, 2011	Dec. 31, 2009	Dec. 31, 2011 Evergreen Bank [Member]	Dec. 31, 2010 Evergreen Bank [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member]	Dec. 31, 2010 Rainier Pacific Bank [Member]	Dec. 31, 2011 Nevada Security Bank [Member]	Dec. 31, 2010 Nevada Security Bank [Member]	Jan. 22, 2010 Evergreen Bank [Member]	Jan. 22, 2010 Evergreen Bank [Member] Fair Value Adjustments [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member] Fair Value Adjustments [Member]	Jun. 18, 2010 Nevada Security Bank [Member]	Jun. 18, 2010 Nevada Security Bank [Member] Fair Value Adjustments [Member]
Cost basis net assets (liabilities)				$ 58,800		$ 50,300		$ 53,600			$ 58,811		$ (50,295)		$ 53,629
Cash payment received from (paid to) the FDIC						59,400		30,000					59,351		(29,950)
Loans	5,557,066	5,795,130									(117,449)		(103,137)		(112,975)
Other real estate owned											(2,422)		(6,581)		(17,939)
Other intangible assets											440		6,253		322
FDIC indemnification asset	146,413	91,089		28,547	40,606	28,272	43,726	34,270	62,081		71,755		76,603		99,160
Deposits	(9,433,805)	(9,236,690)	(7,440,434)								(1,023)		(1,828)		(1,950)
Term debt		(245,535)									(2,496)		(13,035)
Other	(242,465)	(247,606)									(1,179)		(3,139)		(690)
Bargain purchase gain (goodwill)	$ (6,437)			$ (6,400)						$ (6,437)	$ 6,437		$ (35,808)		$ (10,393)

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Allowance For Non-Covered Loan Loss And Credit Quality (Summary Of Reserve For Unfunded Commitments Activity) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Balance, beginning of period	$ 818	$ 731
Net change to other expense	122	87
Balance, end of period	940	818
Unfunded commitments	944,581	838,376
Commercial [Member]
Balance, beginning of period	575	484
Net change to other expense	58	91
Balance, end of period	633	575
Unfunded commitments	605,001	548,920
Consumer & Other [Member]
Balance, beginning of period	52	46
Net change to other expense	11	6
Balance, end of period	63	52
Unfunded commitments	47,577	45,556
Commercial Real Estate [Member]
Balance, beginning of period	33	57
Net change to other expense	26	(24)
Balance, end of period	59	33
Unfunded commitments	58,013	33,326
Residential [Member]
Balance, beginning of period	158	144
Net change to other expense	27	14
Balance, end of period	185	158
Unfunded commitments	$ 233,990	$ 210,574

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Term Debt (Tables)

12 Months Ended

Dec. 31, 2011

Term Debt [Abstract]

Schedule Of Future Contractual Maturities Of Borrowed Funds

(dollars in thousands)
Year	Amount
2012	$	—
2013		—
2014		—
2015		—
2016		190,016
Thereafter		55,519
Total borrowed funds	$	245,535

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Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2009	Dec. 31, 2008
Reductions to goodwill	$ 44,000	$ 96,000	$ 81,000
Number of loan pools with common characteristics					68
Liquidity premiums for individual performing loans as a percentage					4.60%
Liquidity premiums for construction and non-performing loans as a percentage					30.00%
Fair value of the overall loan portfolio at a discount relative to its book value					9.00%
Fair value of the overall loan portfolio at a discount relative to its carrying value				12.00%
Fair value adjustments in goodwill impairment analysis as a percentage of core deposits	0.53%
Discounted rate of carrying value of other real estate owned	25.00%
Estimated fair value of trade name	19,300,000
Percentage change in fair value of stock	60.00%
Goodwill, Impairment Loss			111,952,000
Merchant Servicing Portfolio [Member]
Impairment of intangible assets (excluding goodwill)			804,000
Community Banking [Member]
Goodwill, Impairment Loss			$ 111,952,000

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Commitments And Contingencies (Future Minimum Lease Payments And Future Minimum Income Receivable Under Non-Cancelable Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Commitments And Contingencies [Abstract]
2012, Lease Payments	$ 15,695
2013, Lease Payments	13,444
2014, Lease Payments	11,856
2015, Lease Payments	10,002
2016, Lease Payments	7,724
Thereafter, Lease Payments	21,386
Total, Lease Payments	80,107
2012, Sublease Income	1,019
2013, Sublease Income	696
2014, Sublease Income	514
2015, Sublease Income	421
2016, Sublease Income	260
Thereafter, Sublease Income	802
Total, Sublease Income	$ 3,712

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Cash And Due From Banks (Details) (Federal Reserve [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Federal Reserve [Member]
Federal reserve cash required reserve	$ 33.6	$ 31.8

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Fair Values (Schedule Of Reconciliation Of Assets And Liabilities Measured At Fair Value Using Significant Unobservable Inputs (Level 3) On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Fair Values [Abstract]
Mortgage servicing rights, Beginning Balance	$ 14,454	$ 12,625
Mortgage servicing rights, Change included in earnings	(2,990)	(3,878)
Mortgage servicing rights, Purchases and issuances	6,720	5,707
Mortgage servicing rights, Ending Balance	18,184	14,454
Mortgage servicing rights, Net change in unrealized gains or (losses) relating to items held at end of period	(961)	(1,965)
Junior subordinated debentures, Beginning Balance	80,688	85,666
Junior subordinated debentures, Change included in earnings	6,134	(1,004)
Junior subordinated debentures, Sales and settlements	(3,917)	(3,974)
Junior subordinated debentures, Ending Balance	82,905	80,688
Junior subordinated debentures, Net change in unrealized gains or losses relating to items held at end of period	$ 6,134	$ (1,004)

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Non-Covered Loans And Leases (Schedule Of Major Types Of Non-Covered Loans) (Details) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Non-Covered Loans And Leases [Abstract]
Commercial real estate, Term & multifamily	$ 3,558,295,000	$ 3,483,475,000
Commercial real estate, Construction & development	165,066,000	247,814,000
Commercial real estate, Residential development	90,073,000	147,813,000
Commercial, Term	625,766,000	509,453,000
Commercial, LOC & other	832,999,000	747,419,000
Residential, Mortgage	315,927,000	222,416,000
Residential, Home equity loans & lines	272,192,000	278,585,000
Consumer & other	38,860,000	33,043,000
Total	5,899,178,000	5,670,018,000
Deferred loan fees, net	(11,080,000)	(11,031,000)
Total loans and leases	5,888,098,000	5,658,987,000
Total loans pledged to secure borrowings	$ 5,100,000,000

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Fair Values (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Carrying value of loans fully charged-off	$ 0
Percentage of future cash flows estimated discounted rate	14.00%
Visa Class B Common Stock [Member]
Discount on fair value of common stock	5.00%

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Fair Values (Fair Value Assets And Liabilities Measured On Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Total investment securities, held to maturity	$ 4,759	$ 4,774
Fair Value, Measurements, Nonrecurring [Member]
Total	78,216	92,531
Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Total	78,216	92,531
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Nonrecurring [Member]
Total investment securities, held to maturity	487	1,226
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Total investment securities, held to maturity	487	1,226
Non-Covered Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Total investment securities, held to maturity	53,847	74,639
Non-Covered Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Total investment securities, held to maturity	53,847	74,639
Non-Covered Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member]
Total investment securities, held to maturity	11,321	7,958
Non-Covered Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Total investment securities, held to maturity	11,321	7,958
Covered Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member]
Total investment securities, held to maturity	12,561	8,708
Covered Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member]
Total investment securities, held to maturity	$ 12,561	$ 8,708

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Investment Securities (Summary Of Significant Inputs Used To Estimate Credit Loss On Non-Agency Collateralized Mortgage Obligations) (Details)	Dec. 31, 2011	Dec. 31, 2010
Maximum [Member]
Constant prepayment rate	20.00%	20.00%
Collateral default rate	60.00%	15.00%
Loss severity	50.00%	55.00%
Minimum [Member]
Constant prepayment rate	10.00%	5.00%
Collateral default rate	5.00%	5.00%
Loss severity	27.50%	25.00%
Weighted Average [Member]
Constant prepayment rate	14.00%	14.90%
Collateral default rate	22.60%	10.60%
Loss severity	32.50%	37.90%

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Allowance For Non-Covered Loan Loss And Credit Quality (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Unallocated allowance, maximum percentage	10.00%
Secured loan portfolio, percentage	80.00%
Loans past due as to maturity, days	90
Percentage of loan collateral balance	100.00%
Impaired Financing Receivable, Related Allowance	$ 3,784,000	$ 5,239,000
Impaired recorded investment in receivables	5,400,000
Financing Receivable, Allowance for Credit Losses	0
Interest Income Recognized	2,955,000	2,403,000	2,400,000
Commitments for troubled debt restructurings outstanding	205,000	0
Restructured Loans [Member]
Financing receivable modifications recorded investment	$ 80,600,000	$ 84,400,000
Special Mention [Member]
Percentage of non-covered impaired loans classified	3.80%
Substandard [Member]
Percentage of non-covered impaired loans classified	96.00%
Loss [Member]
Percentage of non-covered impaired loans classified	0.20%
Maximum [Member]
External appraisal, months	9
Minimum [Member]
External appraisal, months	6

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Investment Securities (Narrative) (Details) (USD $)	12 Months Ended					3 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009		Dec. 31, 2011 29 Non-Agency Residential Collateralized Mortgage Obligations [Member]	Mar. 31, 2009 Three Non-Agency Residential Collateralized Mortgage Obligations [Member]
OTTI recognized on investment securities held to maturity	$ 190,000	$ 93,000	$ 12,317,000		$ 8,200,000	$ 2,100,000
Adverse ratings change	0
OTTI charge related to an available for sale			239,000
OTTI charges recorded on available for sale securities			239,000	[1]
Underlying mortgages of held-to-maturity securities with other-than-temporary impairment, loan-to-value	69.00%
Underlying borrowers, FICO score, weighted average	731
Portion of underlying mortgages with limited documentation	59.00%
Carrying value of investment securities pledged	$ 1,100,000,000	$ 1,500,000,000

[1] Represents other-than-temporary impairment losses related to credit losses.

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Significant Accounting Policies (Weighted Average Assumptions To Determine The Fair Value Of Stock Option Grants) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Significant Accounting Policies [Abstract]
Dividend yield	2.79%	2.72%	2.23%
Expected life (years)	7.1	7.1	7.3
Expected volatility	52.00%	52.00%	46.00%
Risk-free rate	2.71%	2.69%	2.18%
Weighted average grant date fair value of options granted	$ 4.65	$ 5.24	$ 3.65

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Federal Funds Purchased

12 Months Ended

Dec. 31, 2011

Federal Funds Purchased [Abstract]

Federal Funds Purchased

NOTE 16. FEDERAL FUNDS PURCHASED

At December 31, 2011 and 2010, the Company had no outstanding federal funds purchased balances. The Bank had available lines of credit with the FHLB totaling $1.8 billion at December 31, 2011. The Bank had available lines of credit with the Federal Reserve totaling $448.5 million subject to certain collateral requirements, namely the amount of certain pledged loans at December 31, 2011. The Bank had uncommitted federal funds line of credit agreements with additional financial institutions totaling $135.0 million at December 31, 2011. At December 31, 2011, the lines of credit had interest rates ranging from 0.3% to 3.0 %. Availability of the lines is subject to federal funds balances available for loan, continued borrower eligibility and are reviewed and renewed periodically throughout the year. These lines are intended to support short-term liquidity needs, and the agreements may restrict consecutive day usage.

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Shareholders' Equity (Summary Of Outstanding Stock Options Issued Under All Plans) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified					12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2011 $4.58 To $10.97 [Member]	Dec. 31, 2011 $11.26 To $12.87 [Member]	Dec. 31, 2011 $13.34 To $19.31 [Member]	Dec. 31, 2011 $20.03 To $28.43 [Member]
Options Outstanding, Range of Exercise Prices, minimum					$ 4.58	$ 11.26	$ 13.34	$ 20.03
Options Outstanding, Range of Exercise Prices, maximum					$ 10.97	$ 12.87	$ 19.31	$ 28.43
Options Outstanding	2,151	2,067	1,763	1,819	599	560	602	390
Options Outstanding, Weighted Avg. Remaining Contractual Life (Years)	5.6				7.0	7.9	3.4	3.4
Options Outstanding, Weighted Avg. Exercise Price	$ 14.48	$ 14.82	$ 15.05	$ 15.66	$ 8.76	$ 12.11	$ 16.13	$ 24.14
Options Exercisable	1,334	1,217	1,071		255	188	502	389
Options Exercisable, Weighted Avg. Exercise Price	$ 16.13	$ 16.65	$ 15.90		$ 6.51	$ 11.95	$ 16.34	$ 24.14

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Goodwill And Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

	Goodwill
	Community Banking									Wealth Management
	Gross			Accumulated Impairment			Total			Gross		Accumulated Impairment			Total
Balance, December 31, 2008	$	719,336		$	—		$	719,336		$	3,697	$	(982	)	$	2,715
Reductions		(81	)		—			(81	)		—		—			—
Impairment		—			(111,952	)		(111,952	)		—		—			—
Balance, December 31, 2009		719,255			(111,952	)		607,303			3,697		(982	)		2,715
Net additions		45,954			—			45,954			—		—			—
Reductions		(96	)		—			(96	)		—		—			—
Balance, December 31, 2010		765,113			(111,952	)		653,161			3,697		(982	)		2,715
Net additions		247			—			247			—		—			—
Reductions		(44	)		—			(44	)		—		—			—
Balance, December 31, 2011	$	765,316		$	(111,952	)	$	653,364		$	3,697	$	(982	)	$	2,715
	Other Intangible Assets
	Gross			Accumulated Amortization			Net
Balance, December 31, 2008	$	56,213		$	(20,432	)	$	35,781
Impairment		—			(804	)		(804	)
Amortization		—			(5,361	)		(5,361	)
Balance, December 31, 2009		56,213			(26,597	)		29,616
Net additions		7,016			—			7,016
Reductions		(5,150	)		—			(5,150	)
Amortization		—			(5,389	)		(5,389	)
Balance, December 31, 2010		58,079			(31,986	)		26,093
Net additions		—			—			—
Amortization		—			(4,948	)		(4,948	)
Balance, December 31, 2011	$	58,079		$	(36,934	)	$	21,145

Schedule Of Intangible Assets And Goodwill

Year	Expected Amortization
2012	$	4,795
2013		4,623
2014		4,403
2015		4,182
2016		2,433
Thereafter		709
	$	21,145

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Parent Company Financial Statements (Schedule Of Condensed Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Financial Statements, Captions [Line Items]
Other assets	$ 247,606	$ 242,465
Total assets	11,563,355	11,668,710	9,381,372
Other liabilities	88,522	72,258
Junior subordinated debentures, at fair value	82,905	80,688
Junior subordinated debentures, at amortized cost	102,544	102,866
Total liabilities	9,890,942	10,026,136
Shareholders' equity	1,672,413	1,642,574
Total liabilities and shareholders' equity	11,563,355	11,668,710
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Non-interest bearing deposits with subsidiary banks	82,133	128,450
Investments in Bank Subsidiary	1,772,003	1,695,914
Investments In Nonbank subsidiaries	24,486	20,560
Receivable from nonbank subsidiary		8
Other assets	5,713	1,782
Total assets	1,884,335	1,846,714
Payable to bank subsidiary	32	26
Other liabilities	26,441	20,560
Junior subordinated debentures, at fair value	82,905	80,688
Junior subordinated debentures, at amortized cost	102,544	102,866
Total liabilities	211,922	204,140
Shareholders' equity	1,672,413	1,642,574
Total liabilities and shareholders' equity	$ 1,884,335	$ 1,846,714

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Derivatives (Policy)

12 Months Ended

Dec. 31, 2011

Derivatives [Abstract]

Derivatives

The Company may use derivatives to hedge the risk of changes in the fair values of interest rate lock commitments, residential mortgage loans held for sale, and mortgage servicing rights. None of the Company's derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in income. The Company primarily utilizes forward interest rate contracts in its derivative risk management strategy.

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Business Combinations (Schedule Of Merger-Related Expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Merger-related expenses	$ 360	$ 6,675	$ 273
Professional Fees [Member]
Merger-related expenses	173	2,984	143
Compensation And Relocation [Member]
Merger-related expenses		962	39
Communications [Member]
Merger-related expenses		330	61
Premises And Equipment [Member]
Merger-related expenses	82	630	2
Travel [Member]
Merger-related expenses	11	710
Other Merger Related Expense [Member]
Merger-related expenses	$ 94	$ 1,059	$ 28

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Covered Assets And Indemnification Asset (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2011 Evergreen Bank [Member]	Dec. 31, 2010 Evergreen Bank [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member]	Dec. 31, 2010 Rainier Pacific Bank [Member]	Dec. 31, 2011 Nevada Security Bank [Member]	Dec. 31, 2010 Nevada Security Bank [Member]
Outstanding unpaid principal of covered loans		$ 209.5	$ 286.6	$ 379.0	$ 481.7	$ 260.2	$ 295.4
Recaptured provision on covered loans	$ 3.5
Range of risk rating for loans and leases, minimum	1
Range of risk rating for loans and leases, maximum	10

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Parent Company Financial Statements

12 Months Ended

Dec. 31, 2011

Parent Company Financial Statements [Abstract]

Parent Company Financial Statements

NOTE 28. PARENT COMPANY FINANCIAL STATEMENTS

Condensed Balance Sheets

December 31,
(in thousands)
	2011		2010
ASSETS
Non-interest bearing deposits with subsidiary banks	$	82,133	$	128,450
Investments in:
Bank subsidiary		1,772,003		1,695,914
Nonbank subsidiaries		24,486		20,560
Receivable from nonbank subsidiary		—		8
Other assets		5,713		1,782
Total assets	$	1,884,335	$	1,846,714
LIABILITIES AND SHAREHOLDERS' EQUITY
Payable to bank subsidiary	$	32	$	26
Other liabilities		26,441		20,560
Junior subordinated debentures, at fair value		82,905		80,688
Junior subordinated debentures, at amortized cost		102,544		102,866
Total liabilities		211,922		204,140
Shareholders' equity		1,672,413		1,642,574
Total liabilities and shareholders' equity	$	1,884,335	$	1,846,714

Condensed Statements of Operations

Year Ended December 31,
(in thousands)
	2011			2010			2009
INCOME
Dividends from subsidiaries	$	17,743		$	245		$	18,306
Other income		(2,127	)		5,081			6,656
Total income		15,616			5,326			24,962
EXPENSES
Management fees paid to subsidiaries		469			291			305
Other expenses		9,072			9,116			10,079
Total expenses		9,541			9,407			10,384
Income (loss) before income tax benefit and equity in undistributed earnings of subsidiaries		6,075			(4,081	)		14,578
Income tax benefit		(4,325	)		(1,594	)		(1,677	)
Net income (loss) before equity in undistributed earnings of subsidiaries		10,400			(2,487	)		16,255
Equity in (distributions in excess) undistributed earnings of subsidiaries		64,096			30,813			(169,621	)
Net income (loss)		74,496			28,326			(153,366	)
Preferred stock dividends		—			12,192			12,866
Dividends and undistributed earnings allocated to participating securities		356			67			30
Net earnings (loss) available to common shareholders	$	74,140		$	16,067		$	(166,262	)

Condensed Statements of Cash Flows

Year Ended December 31,
(in thousands)
	2011			2010			2009
OPERATING ACTIVITIES:
Net income (loss)	$	74,496		$	28,326		$	(153,366	)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
(Distributions in excess) equity in undistributed earnings of subsidiaries		(64,096	)		(30,813	)		169,621
Gain on sale of investment securities		—			—			(79	)
Depreciation, amortization and accretion		(322	)		(322	)		(467	)
Change in fair value of junior subordinated debentures		2,217			(4,978	)		(6,854	)
Net (increase) decrease in other assets		(3,933	)		3,717			(637	)
Net increase (decrease) in other liabilities		3,736			(1,930	)		1,523
Net cash provided (used) by operating activities		12,098			(6,000	)		9,741
INVESTING ACTIVITIES:
Investment in subsidiaries		(3,668	)		(126,500	)		(87,000	)
Proceeds from investment securities held to maturity		—			—			229
Net decrease (increase) in receivables from nonbank subsidiaries		8			(8	)		—
Net cash used by investing activities		(3,660	)		(126,508	)		(86,771	)
FINANCING ACTIVITIES:
Net increase (decrease) in payables to subsidiaries		7			(34	)		53
Proceeds from issuance of preferred stock		—			198,289			—
Redemption of preferred stock		—			(214,181	)		—
Redemption of warrants		—			(4,500	)		—
Net proceeds from issuance of common stock		—			89,786			245,697
Dividends paid on preferred stock		—			(3,686	)		(10,739	)
Dividends paid on common stock		(25,317	)		(20,626	)		(13,399	)
Stock repurchased		(29,754	)		(284	)		(174	)
Proceeds from exercise of stock options		309			1,004			301
Net cash (used ) provided by financing activities		(54,755	)		45,768			221,739
Change in cash and cash equivalents		(46,317	)		(86,740	)		144,709
Cash and cash equivalents, beginning of year		128,450			215,190			70,481
Cash and cash equivalents, end of year	$	82,133		$	128,450		$	215,190

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Non-Covered Other Real Estate Owned, Net (Tables)

12 Months Ended

Dec. 31, 2011

Non-Covered Other Real Estate Owned, Net [Abstract]

Schedule Of Changes In Other Real Estate Owned

(in thousands)
	2011			2010			2009
Balance, beginning of period	$	32,791		$	24,566		$	27,898
Additions to OREO		47,414			41,491			50,914
Dispositions of OREO		(37,083	)		(29,192	)		(41,999	)
Valuation adjustments in the period		(8,947	)		(4,074	)		(12,247	)
Balance, end of period	$	34,175		$	32,791		$	24,566

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Parent Company Financial Statements (Tables)

12 Months Ended

Dec. 31, 2011

Parent Company Financial Statements [Abstract]

Schedule Of Condensed Balance Sheet

December 31,
(in thousands)
	2011		2010
ASSETS
Non-interest bearing deposits with subsidiary banks	$	82,133	$	128,450
Investments in:
Bank subsidiary		1,772,003		1,695,914
Nonbank subsidiaries		24,486		20,560
Receivable from nonbank subsidiary		—		8
Other assets		5,713		1,782
Total assets	$	1,884,335	$	1,846,714
LIABILITIES AND SHAREHOLDERS' EQUITY
Payable to bank subsidiary	$	32	$	26
Other liabilities		26,441		20,560
Junior subordinated debentures, at fair value		82,905		80,688
Junior subordinated debentures, at amortized cost		102,544		102,866
Total liabilities		211,922		204,140
Shareholders' equity		1,672,413		1,642,574
Total liabilities and shareholders' equity	$	1,884,335	$	1,846,714

Schedule Of Condensed Statements Of Operations

Year Ended December 31,
(in thousands)
	2011			2010			2009
INCOME
Dividends from subsidiaries	$	17,743		$	245		$	18,306
Other income		(2,127	)		5,081			6,656
Total income		15,616			5,326			24,962
EXPENSES
Management fees paid to subsidiaries		469			291			305
Other expenses		9,072			9,116			10,079
Total expenses		9,541			9,407			10,384
Income (loss) before income tax benefit and equity in undistributed earnings of subsidiaries		6,075			(4,081	)		14,578
Income tax benefit		(4,325	)		(1,594	)		(1,677	)
Net income (loss) before equity in undistributed earnings of subsidiaries		10,400			(2,487	)		16,255
Equity in (distributions in excess) undistributed earnings of subsidiaries		64,096			30,813			(169,621	)
Net income (loss)		74,496			28,326			(153,366	)
Preferred stock dividends		—			12,192			12,866
Dividends and undistributed earnings allocated to participating securities		356			67			30
Net earnings (loss) available to common shareholders	$	74,140		$	16,067		$	(166,262	)

Schedule Of Condensed Statements Of Cash Flows

Year Ended December 31,
(in thousands)
	2011			2010			2009
OPERATING ACTIVITIES:
Net income (loss)	$	74,496		$	28,326		$	(153,366	)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
(Distributions in excess) equity in undistributed earnings of subsidiaries		(64,096	)		(30,813	)		169,621
Gain on sale of investment securities		—			—			(79	)
Depreciation, amortization and accretion		(322	)		(322	)		(467	)
Change in fair value of junior subordinated debentures		2,217			(4,978	)		(6,854	)
Net (increase) decrease in other assets		(3,933	)		3,717			(637	)
Net increase (decrease) in other liabilities		3,736			(1,930	)		1,523
Net cash provided (used) by operating activities		12,098			(6,000	)		9,741
INVESTING ACTIVITIES:
Investment in subsidiaries		(3,668	)		(126,500	)		(87,000	)
Proceeds from investment securities held to maturity		—			—			229
Net decrease (increase) in receivables from nonbank subsidiaries		8			(8	)		—
Net cash used by investing activities		(3,660	)		(126,508	)		(86,771	)
FINANCING ACTIVITIES:
Net increase (decrease) in payables to subsidiaries		7			(34	)		53
Proceeds from issuance of preferred stock		—			198,289			—
Redemption of preferred stock		—			(214,181	)		—
Redemption of warrants		—			(4,500	)		—
Net proceeds from issuance of common stock		—			89,786			245,697
Dividends paid on preferred stock		—			(3,686	)		(10,739	)
Dividends paid on common stock		(25,317	)		(20,626	)		(13,399	)
Stock repurchased		(29,754	)		(284	)		(174	)
Proceeds from exercise of stock options		309			1,004			301
Net cash (used ) provided by financing activities		(54,755	)		45,768			221,739
Change in cash and cash equivalents		(46,317	)		(86,740	)		144,709
Cash and cash equivalents, beginning of year		128,450			215,190			70,481
Cash and cash equivalents, end of year	$	82,133		$	128,450		$	215,190

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Parent Company Financial Statements (Schedule Of Condensed Statements Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	$ 74,496	$ 28,326	$ (153,366)
Gain on sale of investment securities, net	(7,735)	(2,326)	(8,896)
Depreciation, amortization and accretion	(13,151)	(9,199)	(11,649)
Change in fair value of junior subordinated debentures	2,217	(4,978)	(6,854)
Net (increase) decrease in other assets	(17,798)	47,011	(72,570)
Net increase (decrease) in other liabilities	15,177	2,914	(8,426)
Net cash provided by operating activities	182,352	198,649	93,226
Net cash used by investing activities	(382,744)	(556,431)	(449,187)
Proceeds from issuance of preferred stock		198,289
Redemption of preferred stock		(214,181)
Repurchase of warrants issued to U.S. Treasury		(4,500)
Net proceeds from issuance of common stock		89,786	245,697
Dividends paid on preferred stock		(3,686)	(10,739)
Dividends paid on common stock	(25,317)	(20,626)	(13,399)
Proceeds from exercise of stock options	308	1,004	301
Net cash (used) provided by financing activities	(204,967)	756,494	756,698
Change in cash and cash equivalents	(405,359)	398,712	400,737
Cash and cash equivalents, beginning of year	1,004,125	605,413	204,676
Cash and cash equivalents, end of year	598,766	1,004,125	605,413
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	74,496	28,326	(153,366)
(Distributions in excess) equity in undistributed earnings of subsidiaries	(64,096)	(30,813)	169,621
Gain on sale of investment securities, net			(79)
Depreciation, amortization and accretion	(322)	(322)	(467)
Change in fair value of junior subordinated debentures	2,217	(4,978)	(6,854)
Net (increase) decrease in other assets	(3,933)	3,717	(637)
Net increase (decrease) in other liabilities	3,736	(1,930)	1,523
Net cash provided by operating activities	12,098	(6,000)	9,741
Investment in subsidiaries	(3,668)	(126,500)	(87,000)
Proceeds from investment securities held to maturity			229
Net decrease (increase) in receivables from nonbank subsidiaries	8	(8)
Net cash used by investing activities	(3,660)	(126,508)	(86,771)
Net increase (decrease) in payables to subsidiaries	7	(34)	53
Proceeds from issuance of preferred stock		198,289
Redemption of preferred stock		(214,181)
Repurchase of warrants issued to U.S. Treasury		(4,500)
Net proceeds from issuance of common stock		89,786	245,697
Dividends paid on preferred stock		(3,686)	(10,739)
Dividends paid on common stock	(25,317)	(20,626)	(13,399)
Stock repurchased	(29,754)	(284)	(174)
Proceeds from exercise of stock options	309	1,004	301
Net cash (used) provided by financing activities	(54,755)	45,768	221,739
Change in cash and cash equivalents	(46,317)	(86,740)	144,709
Cash and cash equivalents, beginning of year	128,450	215,190	70,481
Cash and cash equivalents, end of year	$ 82,133	$ 128,450	$ 215,190

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Goodwill And Other Intangible Assets (Schedule Of Intangible Assets And Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Goodwill And Other Intangible Assets [Abstract]
2012	$ 4,795
2013	4,623
2014	4,403
2015	4,182
2016	2,433
Thereafter	709
Total Expected Amortization	$ 21,145

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Earnings Per Common Share (Computation Of Basic And Diluted Earnings (Loss) Per Common Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Earnings Per Common Share [Abstract]
Net income (loss)	$ 21,382	$ 21,862	$ 17,785	$ 13,467	$ 8,158	$ 8,191	$ 3,463	$ 8,514	$ 74,496		$ 28,326		$ (153,366)
Preferred stock dividends											12,192		12,866
Dividends and undistributed earnings allocated to participating securities	103	105	86	62	18	18	16	15	356	[1]	67	[1]	30	[1]
Net earnings (loss) available to common shareholders	$ 21,279	$ 21,757	$ 17,699	$ 13,405	$ 8,140	$ 8,173	$ 3,447	$ (3,693)	$ 74,140		$ 16,067		$ (166,262)
Weighted average number of common shares outstanding - basic									114,220		107,922		70,399
Effect of potentially dilutive common shares									189	[2]	231	[2]
Weighted average number of common shares outstanding - diluted									114,409		108,153		70,399
Basic	$ 0.19	$ 0.19	$ 0.15	$ 0.12	$ 0.07	$ 0.07	$ 0.03	$ (0.04)	$ 0.65		$ 0.15		$ (2.36)
Diluted	$ 0.19	$ 0.19	$ 0.15	$ 0.12	$ 0.07	$ 0.07	$ 0.03	$ (0.04)	$ 0.65		$ 0.15		$ (2.36)

[1] Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

[2] Represents the effect of the assumed exercise of warrants, assumed exercise of stock options, vesting of non-participating restricted shares, and vesting of restricted stock units, based on the treasury stock method.

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2011

Shareholders' Equity [Abstract]

Summary Of Stock Option Activity

(shares in thousands)
	2011					2010					2009
	Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price
Balance, beginning of year		2,067		$	14.82		1,763		$	15.05		1,819		$	15.66
Granted		237		$	11.01		450		$	12.39		229		$	9.34
Exercised		(40	)	$	7.67		(112	)	$	8.97		(51	)	$	5.93
Forfeited/expired		(113	)	$	15.72		(34	)	$	13.83		(234	)	$	16.20
Balance, end of year		2,151		$	14.48		2,067		$	14.82		1,763		$	15.05
Options exercisable,end of year		1,334		$	16.13		1,217		$	16.65		1,071		$	15.90

Summary Of Outstanding Stock Options Issued

Range of Exercise Prices	Options Outstanding						Options Exercisable
	Options Outstanding		Weighted Avg. Remaining Contractual Life (Years)		Weighted Avg. Exercise Price		Options Exercisable		Weighted Avg. Exercise Price
$4.58 to $10.97		599		7.0	$	8.76		255	$	6.51
$11.26 to $12.87		560		7.9	$	12.11		188	$	11.95
$13.34 to $19.31		602		3.4	$	16.13		502	$	16.34
$20.03 to $28.43		390		3.4	$	24.14		389	$	24.14
		2,151		5.6	$	14.48		1,334	$	16.13

Summary Of Nonvested Restricted Share Activity

(shares in thousands)
	2011					2010					2009
	Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value
Balance, beginning of year		401		$	15.29		187		$	21.46		216		$	23.42
Granted		282		$	11.02		274		$	12.16		26		$	9.83
Released		(82	)	$	17.58		(46	)	$	22.23		(46	)	$	23.81
Forfeited/expired		(16	)	$	12.91		(14	)	$	13.32		(9	)	$	22.85
Balance, end of year		585		$	12.98		401		$	15.29		187		$	21.46

Summary Of Restricted Stock Unit Activity

(shares in thousands)
	2011					2010					2009
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		225		$	11.13		335		$	15.54		301		$	19.48
Granted		105		$	10.42		—		$	—		114		$	8.01
Released		(63	)	$	14.33		(16	)	$	24.52		(23	)	$	21.33
Forfeited/expired		(48	)	$	14.33		(94	)	$	24.52		(57	)	$	18.98
Balance, end of year		219		$	9.17		225		$	11.13		335		$	15.54

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Allowance For Non-Covered Loan Loss And Credit Quality (Tables)

12 Months Ended

Dec. 31, 2011

Allowance For Non-Covered Loan Loss And Credit Quality [Abstract]

Activity In The Non-Covered Allowance For Loan And Lease Losses

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921
Charge-offs		(36,011	)		(21,071	)		(6,333	)		(1,636	)		—			(65,051	)
Recoveries		5,906			3,348			239			385			—			9,878
Provision		25,274			16,062			7,793			1,315			(4,224	)		46,220
Balance, end of period	$	59,574		$	20,485		$	7,625		$	867		$	4,417		$	92,968
	December 31, 2010
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	67,281		$	24,583		$	5,811		$	455		$	9,527		$	107,657
Charge-offs		(71,030	)		(50,242	)		(5,168	)		(2,061	)		—			(128,501	)
Recoveries		6,980			1,318			334			465			—			9,097
Provision		61,174			46,487			4,949			1,944			(886	)		113,668
Balance, end of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921

The following table presents the allowance and recorded investment in non-covered loans by portfolio segment and balances individually or collectively evaluated for impairment as of December 31, 2011 and 2010, respectively:

(in thousands)
	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	58,402	$	17,877	$	7,621	$	867	$	4,417	$	89,184
Individually evaluated for impairment		1,172		2,608		4		—		—		3,784
Total	$	59,574	$	20,485	$	7,625	$	867	$	4,417	$	92,968
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,673,455	$	1,432,594	$	587,990	$	38,860			$	5,732,899
Individually evaluated for impairment		139,979		26,171		129		—				166,279
Total	$	3,813,434	$	1,458,765	$	588,119	$	38,860			$	5,899,178
	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	61,885	$	19,435	$	5,918	$	803	$	8,641	$	96,682
Individually evaluated for impairment		2,520		2,711		8		—		—		5,239
Total	$	64,405	$	22,146	$	5,926	$	803	$	8,641	$	101,921
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,692,169	$	1,221,365	$	500,822	$	33,043			$	5,447,399
Individually evaluated for impairment		186,933		35,507		179		—				222,619
Total	$	3,879,102	$	1,256,872	$	501,001	$	33,043			$	5,670,018

(1) The gross non-covered loan and lease balance excludes deferred loans fees of $11.1 million and $11.0 million for the years ended December 31, 2011 and 2010, respectively.

Summary Of Reserve For Unfunded Commitments Activity

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	33		$	575	$	158	$	52	$	818
Net change to other expense		26			58		27		11		122
Balance, end of period	$	59		$	633	$	185	$	63	$	940
	December 31, 2010
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	57		$	484	$	144	$	46	$	731
Net change to other expense		(24	)		91		14		6		87
Balance, end of period	$	33		$	575	$	158	$	52	$	818
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Unfunded commitments:
December 31, 2011	$	58,013		$	605,001	$	233,990	$	47,577	$	944,581
December 31, 2010	$	33,326		$	548,920	$	210,574	$	45,556	$	838,376

Non-Covered Loans Sold

(In thousands)
	2011		2010
Commercial Real Estate
Term & multifamily	$	7,143	$	8,848
Construction & development		28		4,686
Residential development		1,123		15,255
Commercial
Term		151		9,915
LOC & other		2,740		40
Total	$	11,185	$	38,744

Non-Covered Non-Accrual Loans And Loans Past Due

(in thousands)
	December 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non-covered Loans and Leases
Commercial real estate
Term & multifamily	$	7,319	$	11,184	$	—	$	18,503	$	44,486	$	3,495,306	$	3,558,295
Construction & development		—		662		575		1,237		3,348		160,481		165,066
Residential development		4,171		—		—		4,171		15,836		70,066		90,073
Commercial
Term		2,075		738		1,179		3,992		8,120		613,654		625,766
LOC & other		5,435		1,697		1,397		8,529		8,772		815,698		832,999
Residential
Mortgage		215		965		4,343		5,523		—		310,404		315,927
Home equity loans & lines		492		191		2,648		3,331		—		268,861		272,192
Consumer & other		67		16		679		762		—		38,098		38,860
Total	$	19,774	$	15,453	$	10,821	$	46,048	$	80,562	$	5,772,568	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098
	December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non-covered Loans and Leases
Commercial real estate
Term & multifamily	$	14,596	$	8,328	$	3,008	$	25,932	$	49,162	$	3,408,381	$	3,483,475
Construction & development		2,172		6,726		—		8,898		20,124		218,792		247,814
Residential development		640		—		—		640		34,586		112,587		147,813
Commercial
Term		2,010		932		—		2,942		6,271		500,240		509,453
LOC & other		5,939		1,418		18		7,375		28,034		712,010		747,419
Residential
Mortgage		1,314		1,101		3,372		5,787		—		216,629		222,416
Home equity loans & lines		1,096		1,351		232		2,679		—		275,906		278,585
Consumer & other		361		233		441		1,035		—		32,008		33,043
Total	$	28,128	$	20,089	$	7,071	$	55,288	$	138,177	$	5,476,553	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

Non-Covered Impaired Loans

(in thousands)
	2011
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	54,673	$	47,344	$	—	$	50,459	$	—
Construction & development		22,553		17,744		—		21,498		—
Residential development		30,575		23,212		—		33,864		—
Commercial
Term		14,205		11,311		—		9,339		—
LOC & other		23,132		9,034		—		16,121		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		22,611		13,105		557		18,792		894
Construction & development		3,762		12,248		151		6,560		798
Residential development		26,326		26,326		464		32,810		1,120
Commercial
Term		1,851		1,851		608		627		140
LOC & other		3,975		3,975		2,000		3,642		—
Residential
Mortgage		—		—		—		143		—
Home equity loans & lines		129		129		4		52		3
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	160,500	$	139,979	$	1,172	$	163,983	$	2,812
Commercial		43,163		26,171		2,608		29,729		140
Residential		129		129		4		195		3
Consumer & Other		—		—		—		—		—
Total	$	203,792	$	166,279	$	3,784	$	193,907	$	2,955

	2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	62,605	$	49,790	$	—	$	56,003	$	—
Construction & development		33,091		25,558		—		27,588		—
Residential development		63,859		39,011		—		37,603		—
Commercial
Term		8,024		6,969		—		9,420		—
LOC & other		56,046		19,814		—		38,215		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		29,926		28,070		1,614		28,518		823
Construction & development		—		—		—		1,706		38
Residential development		46,059		44,504		906		54,607		1,474
Commercial
Term		205		205		9		402		48
LOC & other		9,878		8,519		2,702		1,884		14
Residential
Mortgage		179		179		8		3,750		6
Home equity loans & lines		—		—		—		21		—
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	235,540	$	186,933	$	2,520	$	206,025	$	2,335
Commercial		74,153		35,507		2,711		49,921		62
Residential		179		179		8		3,771		6
Consumer & Other		—		—		—		—		—
Total	$	309,872	$	222,619	$	5,239	$	259,717	$	2,403

Internal Risk Rating By Loan Class

(in thousands)
	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	3,075,452	$	275,475	$	146,919	$	—	$	—	$	60,449	$	3,558,295
Construction & development		102,786		19,946		12,342		—		—		29,992		165,066
Residential development		25,062		6,740		8,733		—		—		49,538		90,073
Commercial
Term		586,365		16,631		9,608		—		—		13,162		625,766
LOC & other		775,233		22,051		22,706		—		—		13,009		832,999
Residential
Mortgage		309,478		2,106		296		—		4,047		—		315,927
Home equity loans & lines		268,731		683		773		—		1,876		129		272,192
Consumer & other		38,098		82		254		—		426		—		38,860
Total	$	5,181,205	$	343,714	$	201,631	$	—	$	6,349	$	166,279	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098
	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	2,978,116	$	314,094	$	113,405	$	—	$	—	$	77,860	$	3,483,475
Construction & development		145,108		25,295		51,853		—		—		25,558		247,814
Residential development		27,428		13,764		23,106		—		—		83,515		147,813
Commercial
Term		472,512		17,658		12,109		—		—		7,174		509,453
LOC & other		646,163		30,761		42,162		—		—		28,333		747,419
Residential
Mortgage		216,899		2,414		786		—		2,138		179		222,416
Home equity loans & lines		275,906		2,447		125		—		107		—		278,585
Consumer & other		32,008		595		29		—		411		—		33,043
Total	$	4,794,140	$	407,028	$	243,575	$	—	$	2,656	$	222,619	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

Schedule Of Troubled Debt Restructuring By Concession (Terms Modified)

(in thousands)
	December 31, 2011
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	22,611	$	21,951	$	44,562
Construction & development		19,996		921		20,917
Residential development		33,964		11,969		45,933
Commercial
Term		3,863		1,762		5,625
LOC & other		—		6,973		6,973
Residential
Mortgage		—		—		—
Home equity loans & lines		129		—		129
Consumer & other		—		—		—
Total	$	80,563	$	43,576	$	124,139
	December 31, 2010
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	28,697	$	3,185	$	31,882
Construction & development		5,434		—		5,434
Residential development		48,929		8,036		56,965
Commercial
Term		904		725		1,629
LOC & other		298		11,040		11,338
Residential
Mortgage		179		—		179
Home equity loans & lines		—		—		—
Consumer & other		—		—		—
Total	$	84,441	$	22,986	$	107,427

Schedule Of Newly Restructured Loans

(in thousands)
	2011
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	34,943	$	34,943
Construction & development		—		—		—		—		13,760		13,760
Residential development		279		354		—		—		9,090		9,723
Commercial
Term		—		—		—		70		5,311		5,381
LOC & other		—		—		—		—		4,050		4,050
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		130		—		—		—		130
Consumer & other		—		—		—		—		—		—
Total	$	279	$	484	$	—	$	70	$	67,154	$	67,987
(in thousands)
	2010
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	13,018	$	13,018
Construction & development		—		—		—		—		5,534		5,534
Residential development		—		1,459		—		—		3,691		5,150
Commercial
Term		—		—		—		—		—		—
LOC & other		—		1,371		—		—		—		1,371
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—
Total	$	—	$	2,830	$	—	$	—	$	22,243	$	25,073

Schedule Of Troubled Debt Restructurings

(in thousands)
	2011		2010
Commercial real estate
Term & multifamily	$	9,642	$	5,553
Construction & development		—		—
Residential development		1,767		—
Commercial
Term		140		661
LOC & other		—		—
Residential
Mortgage		—		944
Home equity loans & lines		—		—
Consumer & other		—		—
Total	$	11,549	$	7,158

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 74,496	$ 28,326	$ (153,366)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income tax expense (benefit)	2,000	4,393	(18,360)
Amortization of investment premiums, net	36,086	20,464	9,301
Gain on sale of investment securities, net	(7,735)	(2,326)	(8,896)
Other-than-temporary impairment on investment securities available for sale			239
Other-than-temporary impairment on investment securities held to maturity	359	414	10,334
Loss on sale of non-covered other real estate owned	1,743	4,023	10,957
Gain on sale of covered other real estate owned	(1,228)	(4,113)
Valuation adjustment on non-covered other real estate owned	8,947	4,074	12,247
Valuation adjustment on covered other real estate owned	8,709	1,941
Provision for non-covered loan and lease losses	46,220	113,668	209,124
Provision for covered loan and lease losses	16,141	5,151
Bargain purchase gain on acquisition		(6,437)
Change in FDIC indemnification asset	6,168	16,445
Depreciation, amortization and accretion	13,151	9,199	11,649
Goodwill impairment			111,952
Increase in mortgage servicing rights	(6,720)	(5,645)	(7,570)
Change in mortgage servicing rights carried at fair value	2,990	3,878	3,150
Change in fair value of junior subordinated debentures	2,217	(4,978)	(6,854)
Stock-based compensation	3,785	3,505	2,188
Net decrease (increase) in trading account assets	715	(751)	(286)
Gain on sale of loans	(10,676)	(10,923)	(6,649)
Origination of loans held for sale	(821,744)	(702,449)	(682,535)
Proceeds from sales of loans held for sale	809,355	670,872	677,598
Excess tax benefits from the exercise of stock options	(6)	(7)	(1)
Net (increase) decrease in other assets	(17,798)	47,011	(72,570)
Net increase (decrease) in other liabilities	15,177	2,914	(8,426)
Net cash provided by operating activities	182,352	198,649	93,226
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities available for sale	(1,190,686)	(1,498,224)	(1,002,490)
Purchases of investment securities held to maturity	(1,573)
Proceeds from investment securities available for sale	927,276	408,670	464,376
Proceeds from investment securities held to maturity	1,637	1,675	2,282
Redemption of restricted equity securities	1,894	472	1,280
Net non-covered loan and lease (originations) paydowns	(327,032)	146,252	(121,257)
Net covered loan and lease paydowns	119,772	119,941
Proceeds from sales of loans	11,185	38,744	12,519
Proceeds from disposals of furniture and equipment	921	1,237	270
Purchases of premises and equipment	(33,974)	(47,559)	(11,239)
Net proceeds from FDIC indemnification asset	54,881	48,443
Proceeds from sales of non-covered other real estate owned	35,340	25,124	26,167
Proceeds from sales of covered other real estate owned	17,615	14,598
Proceeds from sale of acquired insurance portfolio		5,150
Cash acquired in merger, net of cash consideration paid		179,046	178,905
Net cash used by investing activities	(382,744)	(556,431)	(449,187)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposit liabilities	(196,063)	847,895	667,610
Net increase (decrease) in securities sold under agreements to repurchase	50,846	28,579	(2,408)
Repayment of term debt	(4,993)	(165,789)	(130,191)
Proceeds from issuance of preferred stock		198,289
Redemption of preferred stock		(214,181)
Repurchase of warrants issued to U.S. Treasury		(4,500)
Net proceeds from issuance of common stock		89,786	245,697
Dividends paid on preferred stock		(3,686)	(10,739)
Dividends paid on common stock	(25,317)	(20,626)	(13,399)
Excess tax benefits from the exercise of stock options	6	7	1
Proceeds from stock options exercised	308	1,004	301
Retirement of common stock	(29,754)	(284)	(174)
Net cash (used) provided by financing activities	(204,967)	756,494	756,698
Net (decrease) increase in cash and cash equivalents	(405,359)	398,712	400,737
Cash and cash equivalents, beginning of year	1,004,125	605,413	204,676
Cash and cash equivalents, end of year	598,766	1,004,125	605,413
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest	78,690	99,556	106,541
Income taxes	47,608	285	48
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Change in unrealized gains on investment securities available for sale, net of taxes	8,620	(613)	9,186
Change in unrealized loss on investment securities transferred to held to maturity, net of taxes			2,677
Change in unrealized losses on investment securities held to maturity related to factors other than credit, net of taxes	209	603	(980)
Cash dividend declared on common and preferred stock and payable after period-end	7,890	5,745	4,346
Transfer of non-covered loans to non-covered other real estate owned	47,414	41,491	50,914
Transfer of covered loans to covered other real estate owned	15,271	15,350
Transfer from FDIC indemnification asset to due from FDIC and other	49,156	84,660
Transfer of covered loans to non-covered loans	12,263
Receivable from sales of noncovered other real estate owned and loans	1,100	45	4,875
Receivable from sales of covered other real estate owned	547
Conversion of preferred stock to common stock		198,289
Acquisitions:
Assets acquired		1,512,048	4,978
Liabilities assumed		$ 1,505,611	$ 183,883

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Shareholders' Equity (Narrative) (Details) (USD $)	0 Months Ended					12 Months Ended				12 Months Ended	0 Months Ended	3 Months Ended		12 Months Ended						12 Months Ended
	Jun. 17, 2011	Apr. 21, 2010	Mar. 31, 2010	Feb. 17, 2010	Feb. 03, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Apr. 20, 2010	Dec. 31, 2011 Nonvested Stock [Member]	Feb. 03, 2010 Preferred Stock [Member]	Mar. 31, 2009 Restricted Stock [Member]	Mar. 31, 2008 Restricted Stock [Member]	Dec. 31, 2011 Restricted Stock [Member]	Dec. 31, 2010 Restricted Stock [Member]	Dec. 31, 2009 Restricted Stock [Member]	Dec. 31, 2011 Restricted Stock Units [Member]	Dec. 31, 2010 Restricted Stock Units [Member]	Dec. 31, 2011 2007 Long Term Incentive Plan [Member]	Dec. 31, 2011 2003 Stock Incentive Plan [Member]	Dec. 31, 2011 Stock Options [Member]	Dec. 31, 2010 Stock Options [Member]	Dec. 31, 2009 Stock Options [Member]
Common stock raised through a public offer					$ 303,600,000		$ 89,786,000	$ 245,697,000
Common stock shares raised through a public offer					8,625,000
Common stock, shares pursuant to the underwriters' over-allotment option					1,125,000
Underwriter's over-allotment option price per share					$ 11.00
Common stock, depository shares					18,975,000
Common stock, depository shares pursuant to underwriters over-allotment option					2,475,000
Common stock, depository share price per share					$ 11.00
Depository shares, fractional interests					0.01
Common stock, depository shares outstanding											18,975,000
Proceeds from issuance of common and preferred stock, net					288,100,000
Redeemed fixed rate cumulative perpetual preferred stock				214,200,000			214,181,000
Deemed dividend due from accelerated amortization of remaining issuance discount on preferred stock				9,800,000
Repurchase of warrants issued to U.S. Treasury			4,500,000				4,500,000
Common stock, shares authorized		200,000,000				200,000,000	200,000,000		100,000,000
Conversion of preferred stock to common stock, shares		100
Preferred stock, shares authorized						4,000,000
Plan termination																				June 30, 2015
Stock unit grants, authorized																			1,000,000	4,000,000
Grants issued on diluted common stock shares maximum percentage																				10.00%
Options and awards vest over period, maximum																				ten
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	four					5														five
Compensation cost						3,785,000	3,505,000	2,188,000						2,300,000	1,900,000	1,400,000	391,000	778,000			1,200,000	861,000	1,400,000
Reversal of compensation cost																539,000
Total income tax benefit recognized related to stock-based compensation						899,000	746,000	548,000								215,000	156,000	311,000			463,000	344,000	541,000
Restricted stock share based compensation arrangement by share based payment award, award vesting period						5
Total intrinsic value of options outstanding						2,400,000
Total intrinsic value of options exercisable						1,600,000
Weighted average remaining contractual term of options exercisable						4.3
Total intrinsic value of options exercised						147,000	420,000	220,000
Cash received from exercise of stock options						309,000	1,000,000	301,000
Total fair value of restricted stock units vested and released														677,000	213,000	186,000
Restricted stock units at fair value														919,000	571,000	445,000
Total unrecognized compensation cost related to nonvested stock options										2,700,000				3,700,000			772,000
Expected recognized over a weighted-average period, years										2.4				2.4			1.1
Stock units granted to executives that cliff vest, years												three	three
Income tax benefits received						694,000	406,000	326,000
Tax deficiency from stock options exercised						$ 261,000	$ 216,000	$ 369,000
Stock repurchase plan, amended authorized shares						15,000,000
Share repurchase plan, shares remained available for repurchase						12,600,000
Shares under the repurchase plan						2,500,000	0.00
Stock repurchase program number of shares tendered						8,135	4,515
Cancellation of restricted stock shares to pay withholding						23,158	12,443
Cancellation of restricted stock units to pay withholding						22,439	5,583

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Deferred tax assets	$ 124,268,000	$ 152,038,000
Income tax credits and adjustments	6,800,000	8,900,000
Deferred tax assets, tax credit carry forwards, alternative minimum tax	0	4,300,000
State tax credits benefit period	five
State tax credits, carry forward period	eight
Unrecognized tax benefits	550,000	589,000	2,263,000
Unrecognized tax benefits, decreases resulting from settlements with taxing authorities	(39,000)
Unrecognized tax benefits, Interest on income taxes expense	4,000	194,000
Effective income tax rate on unrecognized tax benefits that would impact effective tax rate	0.30%
Accrued interest related to unrecognized tax benefits	167,000	171,000
Carry forward period of federal low income housing credits	20
Net operating loss carryforwards	1,291,000	8,897,000
California [Member]
Unrecognized tax benefits, decreases resulting from settlements with taxing authorities	$ 39,000	$ 1,700,000
Net operating loss carryforward maximum period	20

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Regulatory Capital (Tables)

12 Months Ended

Dec. 31, 2011

Regulatory Capital [Abstract]

Summary Of Company's Capital Amounts And Ratios

(dollars in thousands)
	Actual					For Capital Adequacy purposes					To be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
AS OF DECEMBER 31, 2011:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,287,560		17.16	%	$	600,261		8.00	%	$	750,326		10.00	%
Umpqua Bank	$	1,163,611		15.53	%	$	599,413		8.00	%	$	749,267		10.00	%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,193,740		15.91	%	$	300,123		4.00	%	$	450,185		6.00	%
Umpqua Bank	$	1,069,914		14.28	%	$	299,696		4.00	%	$	449,544		6.00	%
Tier I Capital
(to Average Assets)
Consolidated	$	1,193,740		10.91	%	$	437,668		4.00	%	$	547,085		5.00	%
Umpqua Bank	$	1,069,914		9.78	%	$	437,593		4.00	%	$	546,991		5.00	%
	Actual					For Capital Adequacy purposes					To be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
AS OF DECEMBER 31, 2010:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,253,333		17.62	%	$	569,050		8.00	%	$	711,313		10.00	%
Umpqua Bank	$	1,085,839		15.27	%	$	568,874		8.00	%	$	711,093		10.00	%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,164,226		16.36	%	$	284,652		4.00	%	$	426,978		6.00	%
Umpqua Bank	$	996,798		14.02	%	$	284,393		4.00	%	$	426,590		6.00	%
Tier I Capital
(to Average Assets)
Consolidated	$	1,164,226		10.56	%	$	440,995		4.00	%	$	551,243		5.00	%
Umpqua Bank	$	996,798		9.04	%	$	441,061		4.00	%	$	551,326		5.00	%

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Term Debt (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Term Debt [Abstract]
Term debt	$ 255,676,000	$ 262,760,000
FHLB advances unamortized purchase accounting adjustment	10,100,000
Federal home loan bank advances general debt obligations disclosures maximum outstanding	250,000,000	355,200,000
Federal home loan bank advances general debt obligations disclosures average outstanding	$ 245,800,000	$ 247,500,000
Average interest rate on borrowings	4.60%	4.40%

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Derivatives (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Counterparty default losses on forward contracts	$ 0	$ 0	$ 0
Commitments to originate loans held for sale	143.5
Notional amount of credit risk derivatives	194.3
Number of interest rate derivatives held	38
Termination value of derivatives in net liability position	6.6
Minimum collateral posting agreement amount	5.8
Forward Sales Commitments [Member]
Forward sales commitments	$ 182.7

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

Significant Accounting Policies [Abstract]

Assumptions Used In Measuring The Fair Value Of Mortgage Servicing Rights

	2011			2010			2009
Constant prepayment rate		20.39	%		18.54	%		18.35	%
Discount rate		8.60	%		8.62	%		8.70	%
Weighted average life (years)		4.5			4.5			4.5

Share-Based Payment

	2011			2010			2009
Dividend yield		2.79	%		2.72	%		2.23	%
Expected life (years)		7.1			7.1			7.3
Expected volatility		52	%		52	%		46	%
Risk-free rate		2.71	%		2.69	%		2.18	%
Weighted average grant date fair value of options granted	$	4.65		$	5.24		$	3.65

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Commitments And Contingencies

12 Months Ended

Dec. 31, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 20. COMMITMENTS AND CONTINGENCIES

Lease Commitments—The Company leases 142 sites under non-cancelable operating leases. The leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term.

Rent expense for the years ended December 31, 2011, 2010 and 2009 was $16.6 million, $15.3 million, and $13.0 million, respectively. Rent expense was offset by rent income of $1.0 million, $1.0 million, and $555,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The following table sets forth, as of December 31, 2011, the future minimum lease payments under non-cancelable operating leases and future minimum income receivable under non-cancelable operating subleases:

(in thousands)
	Lease Payments		Sublease Income
2012	$	15,695	$	1,019
2013		13,444		696
2014		11,856		514
2015		10,002		421
2016		7,724		260
Thereafter		21,386		802
Total	$	80,107	$	3,712

Financial Instruments with Off-Balance-Sheet Risk—The Company's financial statements do not reflect various commitments and contingent liabilities that arise in the normal course of the Bank's business and involve elements of credit, liquidity and interest rate risk. The following table presents a summary of the Bank's commitments and contingent liabilities:

(in thousands)
	As of December 31, 2011
Commitments to extend credit	$	1,222,920
Commitments to extend overdrafts	$	226,749
Forward sales commitments	$	182,671
Commitments to originate loans held for sale	$	143,512
Standby letters of credit	$	61,316

The Bank is a party to financial instruments with off-balance-sheet credit risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve elements of credit and interest-rate risk similar to the amounts recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the Bank's involvement in particular classes of financial instruments.

The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and financial guarantees written, is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any covenant or condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. While most standby letters of credit are not utilized, a significant portion of such utilization is on an immediate payment basis. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral varies but may include cash, accounts receivable, inventory, premises and equipment and income-producing commercial properties.

Standby letters of credit and financial guarantees written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including international trade finance, commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds cash, marketable securities, or real estate as collateral supporting those commitments for which collateral is deemed necessary. The Bank has not been required to perform on any financial guarantees but did incur losses of $110,000 in connection with standby letters of credit during the year ended December 31, 2011 and no losses in connection with standby letters of credit during the year ended December 31, 2010. The Bank has not been required to perform on any financial guarantees but did incur losses of $23,000 in connection with standby letters of credit during the year ended December 31, 2009. At December 31, 2011, approximately $31.5 million of standby letters of credit expire within one year, and $29.8 million expire thereafter. Upon issuance, the Company recognizes a liability equivalent to the amount of fees received from the customer for these standby letter of credit commitments. Fees are recognized ratably over the term of the standby letter of credit. The fair value of guarantees associated with standby letters of credit was $254,000 as of December 31, 2011.

At December 31, 2011 and 2010, the reserve for unfunded commitments, which is included in other liabilities on the consolidated balance sheet, was $940,000 and $818,000, respectively. The adequacy of the reserve for unfunded commitments is reviewed on a quarterly basis, based upon changes in the amounts of commitments, loss experience, and economic conditions.

Mortgage loans sold to investors may be sold with servicing rights retained, for which the Bank makes only standard legal representations and warranties as to meeting certain underwriting and collateral documentation standards. In the past two years, the Bank has had to repurchase fewer than 10 loans due to deficiencies in underwriting or loan documentation and has not realized significant losses related to these repurchases. Management believes that any liabilities that may result from such recourse provisions are not significant.

Legal Proceedings—The Bank owns 468,659 shares of Class B common stock of Visa Inc. which are convertible into Class A common stock at a conversion ratio of 0.4254 per Class A share. As of December 31, 2011, the value of the Class A shares was $101.53 per share. Utilizing the conversion ratio, the value of unredeemed Class A equivalent shares owned by the Company was $20.2 million as of December 31, 2011, and has not been reflected in the accompanying financial statements. The shares of Visa Class B common stock are restricted and may not be transferred until the later of (1) three years from the date of the initial public offering or (2) the period of time necessary to resolve the covered litigation. Visa Member Banks are required to fund an escrow account to cover settlements, resolution of pending litigation and related claims. If the funds in the escrow account are insufficient to settle all the covered litigation, Visa may sell additional Class A shares, use the proceeds to settle litigation, and further reduce the conversion ratio. If funds remain in the escrow account after all litigation is settled, the Class B conversion ratio will be increased to reflect that surplus.

In the ordinary course of business, various claims and lawsuits are brought by and against the Company, the Bank and Umpqua Investments. In the opinion of management, there is no pending or threatened proceeding in which an adverse decision could result in a material adverse change in the Company's consolidated financial condition or results of operations.

Concentrations of Credit Risk—The Company grants real estate mortgage, real estate construction, commercial, agricultural and installment loans and leases to customers throughout Oregon, Washington, California and Nevada. In management's judgment, a concentration exists in real estate-related loans, which represented approximately 80% and 82%, respectively, of the Company's loan and lease portfolio at December 31, 2011 and 2010. Commercial real estate concentrations are managed to assure wide geographic and business diversity. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax policies, tightening credit or refinancing markets, or a decline in real estate values in the Company's primary market areas in particular and aspects of our commercial real estate, commercial construction and commercial loan portfolios, could have an adverse impact on the repayment of these loans. Personal and business incomes, proceeds from the sale of real property, or proceeds from refinancing, represent the primary sources of repayment for a majority of these loans.

The Bank recognizes the credit risks inherent in dealing with other depository institutions. Accordingly, to prevent excessive exposure to any single correspondent, the Bank has established general standards for selecting correspondent banks as well as internal limits for allowable exposure to any single correspondent. In addition, the Bank has an investment policy that sets forth limitations that apply to all investments with respect to credit rating and concentrations per issuer.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

NOTE 19. EMPLOYEE BENEFIT PLANS

Employee Savings Plan—Substantially all of the Bank's and Umpqua Investments' employees are eligible to participate in the Umpqua Bank 401(k) and Profit Sharing Plan (the "Umpqua 401(k) Plan"), a defined contribution and profit sharing plan sponsored by the Company. Employees may elect to have a portion of their salary contributed to the plan in conformity with Section 401(k) of the Internal Revenue Code. At the discretion of the Company's Board of Directors, the Company may elect to make matching and/or profit sharing contributions to the Umpqua 401(k) Plan based on profits of the Bank. The Company's contributions under the plan charged to expense amounted to $2.7 million, $2.2 million, and $2.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Supplemental Retirement Plan—The Company has established the Umpqua Holdings Corporation Deferred Compensation & Supplemental Retirement Plan (the "DC/SRP"), a nonqualified deferred compensation plan to help supplement the retirement income of certain highly compensated executives selected by resolution of the Company's Board of Directors. The DC/SRP has two components, a supplemental retirement plan ("SRP") and a deferred compensation plan ("DCP"). The Company may make discretionary contributions to the SRP. For the years ended December 31, 2011, 2010 and 2009, the Company's matching contribution charged to expense for these supplemental plans totaled $96,000, $56,000, and $6,000, respectively. The plan balances at December 31, 2011 and 2010 were $530,000 and $387,000, respectively, and are recorded in other liabilities. Under the DCP, eligible officers may elect to defer up to 50% of their salary into a plan account. The plan balance was $532,000 and $300,000 at December 31, 2011 and 2010, respectively.

Salary Continuation Plans—The Bank sponsors various salary continuation plans for the CEO and certain retired employees. These plans are unfunded, and provide for the payment of a specified amount on a monthly basis for a specified period (generally 10 to 20 years) after retirement. In the event of a participant employee's death prior to or during retirement, the Bank is obligated to pay to the designated beneficiary the benefits set forth under the plan. At December 31, 2011 and 2010, liabilities recorded for the estimated present value of future salary continuation plan benefits totaled $16.9 million and $16.3 million, respectively, and are recorded in other liabilities. For the years ended December 31, 2011, 2010 and 2009, expense recorded for the salary continuation plan benefits totaled $1.8 million, $1.8 million, and $1.8 million, respectively.

Deferred Compensation Plans and Rabbi Trusts—The Bank from time to time adopts deferred compensation plans that provide certain key executives with the option to defer a portion of their compensation. In connection with prior acquisitions, the Bank assumed liability for certain deferred compensation plans for key employees, retired employees and directors. Subsequent to the effective date of the acquisitions, no additional contributions were made to these plans. At December 31, 2011 and 2010, liabilities recorded in connection with deferred compensation plan benefits totaled $2.5 million and $3.0 million, respectively, and are recorded in other liabilities.

The Bank has established and sponsors, for some deferred compensation plans assumed in connection with prior mergers, irrevocable trusts commonly referred to as "Rabbi Trusts." The trust assets (generally cash and trading assets) are consolidated in the Company's balance sheets and the associated liability (which equals the related asset balances) is included in other liabilities. The asset and liability balances related to these trusts as of December 31, 2011 and 2010 were $1.3 million and $1.5 million, respectively.

The Bank has purchased, or acquired through mergers, life insurance policies in connection with the implementation of certain executive supplemental income, salary continuation and deferred compensation retirement plans. These policies provide protection against the adverse financial effects that could result from the death of a key employee and provide tax-exempt income to offset expenses associated with the plans. It is the Bank's intent to hold these policies as a long-term investment. However, there will be an income tax impact if the Bank chooses to surrender certain policies. Although the lives of individual current or former management-level employees are insured, the Bank is the owner and sole or partial beneficiary. At December 31, 2011 and 2010, the cash surrender value of these policies was $92.6 million and$90.2 million, respectively. At December 31, 2011 and 2010, the Bank also had liabilities for post-retirement benefits payable to other partial beneficiaries under some of these life insurance policies of $1.5 million and $1.4 million, respectively. The Bank is exposed to credit risk to the extent an insurance company is unable to fulfill its financial obligations under a policy. In order to mitigate this risk, the Bank uses a variety of insurance companies and regularly monitors their financial condition.

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Covered Assets And Indemnification Asset (Reconciliation Of Acquired Loan Portfolios) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Jan. 22, 2010 Evergreen Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Jun. 18, 2010 Nevada Security Bank [Member]
Undiscounted contractual cash flows	$ 1,716,322	$ 498,216	$ 821,972	$ 396,134
Undiscounted cash flows not expected to be collected (nonaccretable difference)	(364,926)	(124,131)	(125,774)	(115,021)
Undiscounted cash flows expected to be collected	1,351,396	374,085	696,198	281,113
Accretable yield at acquisition	(425,056)	(121,592)	(237,858)	(65,606)
Estimated fair value of loans acquired at acquisition	$ 926,340	$ 252,493	$ 458,340	$ 215,507

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Securities Sold Under Agreements To Repurchase (Tables)

12 Months Ended

Dec. 31, 2011

Securities Sold Under Agreements To Repurchase [Abstract]

Securities Sold Under Agreements To Repurchase

(dollars in thousands)
	Repurchase Amount		Weighted Average Interest Rate			Carrying Value of Underlying Assets		Market Value of Underlying Assets
December 31, 2011	$	124,605		0.35	%	$	129,810	$	129,810
December 31, 2010	$	73,759		0.66	%	$	75,305	$	75,305

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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2011

Business Combinations [Abstract]

Schedule Of Net Assets (Liabilities) Received From The FDIC And The Estimated Fair Value Adjustments

(in thousands)
	Evergreen			Rainier			Nevada Security
	January 22, 2010			February 26, 2010			June 18, 2010
Cost basis net assets (liabilities)	$	58,811		$	(50,295	)	$	53,629
Cash payment received from (paid to) the FDIC		—			59,351			(29,950	)
Fair value adjustments:
Loans		(117,449	)		(103,137	)		(112,975	)
Other real estate owned		(2,422	)		(6,581	)		(17,939	)
Other intangible assets		440			6,253			322
FDIC indemnification asset		71,755			76,603			99,160
Deposits		(1,023	)		(1,828	)		(1,950	)
Term debt		(2,496	)		(13,035	)		—
Other		(1,179	)		(3,139	)		(690	)
Bargain purchase gain (goodwill)	$	6,437		$	(35,808	)	$	(10,393	)

Statement Of Assets Acquired And Liabilities Assumed At Estimated Fair Values

(in thousands)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Assets Acquired:
Cash and equivalents	$	18,919	$	94,067	$	66,060
Investment securities		3,850		26,478		22,626
Covered loans		252,493		458,340		215,507
Premises and equipment		—		17		50
Restricted equity securities		3,073		13,712		2,951
Goodwill		—		35,808		10,393
Other intangible assets		440		6,253		322
Mortgage servicing rights		—		62		—
Covered other real estate owned		2,421		6,580		17,938
FDIC indemnification asset		71,755		76,603		99,160
Other assets		328		3,254		2,588
Total assets acquired	$	353,279	$	721,174	$	437,595
Liabilities Assumed:
Deposits	$	285,775	$	425,771	$	437,299
Term debt		60,813		293,191		—
Other liabilities		254		2,212		296
Total liabilities assumed		346,842		721,174		437,595
Net assets acquired/bargain purchase gain	$	6,437	$	—	$	—

Schedule Of Merger Related Expense

Merger-Related Expense
(in thousands)
	2011		2010		2009
Professional fees	$	173	$	2,984	$	143
Compensation and relocation		—		962		39
Communications		—		330		61
Premises and equipment		82		630		2
Travel		11		710		—
Other		94		1,059		28
Total	$	360	$	6,675	$	273

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Derivatives

12 Months Ended

Dec. 31, 2011

Derivatives [Abstract]

Derivatives

NOTE 21. DERIVATIVES

The Company may use derivatives to hedge the risk of changes in the fair values of interest rate lock commitments, residential mortgage loans held for sale, and mortgage servicing rights. None of the Company's derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in income. The Company primarily utilizes forward interest rate contracts in its derivative risk management strategy.

The Bank enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates ("MBS TBAs") in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage loan commitments. Credit risk associated with forward contracts is limited to the replacement cost of those forward contracts in a gain position. There were no counterparty default losses on forward contracts in 2011, 2010 or 2009. Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates. The Bank limits its exposure to market risk by monitoring differences between commitments to customers and forward contracts with broker/dealers. In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the Company completes the transaction by either paying or receiving a fee to or from the broker/dealer equal to the increase or decrease in the market value of the forward contract. At December 31, 2011, the Bank had commitments to originate mortgage loans held for sale totaling $143.5 million and forward sales commitments of $182.7 million.

The Company's mortgage banking derivative instruments do not have specific credit risk-related contingent features. The forward sales commitments do have contingent features that may require transferring collateral to the broker/dealers upon their request. However, this amount would be limited to the net unsecured loss exposure at such point in time and would not materially affect the Company's liquidity or results of operations.

Effective in the second quarter of 2011, the Bank began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting the interest rate swaps that the Bank executes with a third party, such that the Bank minimizes its net risk exposure. As of December 31, 2011, the Bank had 38 interest rate swaps with an aggregate notional amount of $194.3 million related to this program.

In connection with the interest rate swap program with commercial customers, the Bank has agreements with its derivative counterparties that contain a provision where if the Bank defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Bank could also be declared in default on its derivative obligations.

The Bank also has agreements with its derivative counterparties that contain a provision where if the Bank fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations under the agreements. Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as if the Bank were issued a prompt corrective action directive or a cease and desist order, or if certain regulatory ratios fall below specified levels.

As of December 31, 2011, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $6.6 million. The Bank has minimum collateral posting thresholds with certain of its derivative counterparties, and has been required to post collateral against its obligations under these agreements of $5.8 million as of December 31, 2011. If the Bank had breached any of these provisions at December 31, 2011, it could have been required to settle its obligations under the agreements at the termination value.

The following tables summarize the types of derivatives, separately by assets and liabilities, their locations on the Consolidated Balance Sheets, and the fair values of such derivatives as of December 31, 2011 and 2010:

(in thousands)

Derivatives not designated as hedging instrument	Balance Sheet Location	Asset Derivatives				Liability Derivatives
		December 31, 2011		December 31, 2010		December 31, 2011		December 31, 2010
Interest rate lock commitments	Other assets/Other liabilities	$	1,752	$	306	$	3	$	170
Interest rate forward sales commitments	Other assets/Other liabilities		—		754		90		191
Interest rate swaps	Other assets/Other liabilities		6,203		—		6,416		—
Total		$	7,955	$	1,060	$	6,509	$	361

The following table summarizes the types of derivatives, their location on the Consolidated Statements of Operations, and the losses recorded in 2011, 2010 and 2009:

(in thousands)
Derivatives not designated as hedging instrument	Income Statement Location	2011			2010			2009
Interest rate lock commitments	Mortgage banking revenue	$	1,613		$	146		$	(1,176	)
Interest rate forward sales commitments	Mortgage banking revenue		(10,579	)		(3,034	)		(255	)
Interest rate swaps	Other income		(187	)		—			—
Total		$	(9,153	)	$	(2,888	)	$	(1,431	)

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Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

NOTE 22. SHAREHOLDERS' EQUITY

On February 3, 2010, the Company raised $303.6 million through a public offering by issuing 8,625,000 shares of the Company's common stock, including 1,125,000 shares pursuant to the underwriters' over-allotment option, at a share price of $11.00 per share and 18,975,000 depository shares, including 2,475,000 depository shares pursuant to the underwriter's over-allotment option, also at a price of $11.00 per share. Fractional interests (1/100th) in each share of the Series B Common Stock Equivalent were represented by the 18,975,000 depositary shares; as a result, each depository share would convert into one share of common stock. The net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $288.1 million. The net proceeds from the offering were used to redeem the preferred stock issued to the United States Department of the Treasury (U.S. Treasury) under the Troubled Asset Relief Program ("TARP") Capital Purchase Program ("CPP"), to fund FDIC-assisted acquisition opportunities and for general corporate purposes.

On February 17, 2010, the Company redeemed all of the outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury under the TARP CPP for an aggregate purchase price of $214.2 million. As a result of the repurchase of the Series A preferred stock, the Company incurred a one-time deemed dividend of $9.8 million due to the accelerated amortization of the remaining issuance discount on the preferred stock.

On March 31, 2010, the Company repurchased the common stock warrant issued to the U.S. Treasury pursuant to the TARP CPP, for $4.5 million. The warrant repurchase, together with the Company's redemption in February 2010 of the entire amount of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury, represents full repayment of all TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

On April 20, 2010, shareholders of the Company approved an amendment to the Company's Restated Articles of Incorporation. The amendment, which became effective on April 21, 2010, increased the number of authorized shares of common stock to 200,000,000 (from 100,000,000). As a result of the effectiveness of the amendment, as of the close of business on April 21, 2010, the Company's Series B Common Stock Equivalent preferred stock automatically converted into newly issued shares of common stock at a conversion rate of 100 shares of common stock for each share of Series B Common Stock Equivalent preferred stock. All shares of Series B Common Stock Equivalent preferred stock and representative depositary shares ceased to exist upon the conversion. Trading in the depositary shares on NASDAQ (ticker symbol "UMPQP") ceased and the UMPQP symbol voluntarily delisted effective as of the close of business on April 21, 2010.

The Company has 4,000,000 shares of no par value preferred stock authorized and available to be issued. As of December 31, 2011 and 2010, there was no preferred stock outstanding.

Stock Plans—The Company's 2007 Long Term Incentive Plan ("2007 LTI Plan") authorizes the award of up to 1 million restricted stock unit grants, which are subject to performance-based vesting as well as other approved vesting conditions. The Company's 2003 Stock Incentive Plan ("2003 Plan") provides for grants of up to 4 million shares. The 2003 Plan terminates June 30, 2015, but it may be extended with the approval of the board and shareholders. The 2003 Plan further provides that no grants may be issued if existing options and subsequent grants under the 2003 Plan exceed 10% of the Company's outstanding shares on a diluted basis. Under the terms of the 2003 Plan, options and awards generally vest ratably over a period of five years, the exercise price of each option equals the market price of the Company's common stock on the date of the grant, and the maximum term is ten years.

The Company has options outstanding under two prior plans adopted in 1995 and 2000, respectively. With the adoption of the 2003 Plan, no additional grants can be issued under the previous plans. The Company also assumed various plans in connection with mergers and acquisitions but does not make grants under those plans.

On June 17, 2011, the Company's Compensation Committee modified restricted stock awards and option grants that were originally issued to fourteen executive officers on January 31, 2011, as follows:

• Added performance vesting conditions linking total shareholder return, compared to the return of a regional bank stock total return index;

• Awards will cliff vest after three years instead of time vest over a four year period, but only to the extent that the performance conditions are met; and

• The modified grants will vest in whole or in part only if total shareholder return achieves specified targets, subject to prorated vesting upon death, disability, qualifying retirement, termination for good reason or a change of control.

As a result of the modification, there was no incremental compensation cost.

The following table summarizes information about stock option activity for the years ended December 31, 2011, 2010 and 2009:

(shares in thousands)
	2011					2010					2009
	Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price
Balance, beginning of year		2,067		$	14.82		1,763		$	15.05		1,819		$	15.66
Granted		237		$	11.01		450		$	12.39		229		$	9.34
Exercised		(40	)	$	7.67		(112	)	$	8.97		(51	)	$	5.93
Forfeited/expired		(113	)	$	15.72		(34	)	$	13.83		(234	)	$	16.20
Balance, end of year		2,151		$	14.48		2,067		$	14.82		1,763		$	15.05
Options exercisable,end of year		1,334		$	16.13		1,217		$	16.65		1,071		$	15.90

The following table summarizes information about outstanding stock options issued under all plans as of December 31, 2011:

(shares in thousands)

Range of Exercise Prices	Options Outstanding						Options Exercisable
	Options Outstanding		Weighted Avg. Remaining Contractual Life (Years)		Weighted Avg. Exercise Price		Options Exercisable		Weighted Avg. Exercise Price
$4.58 to $10.97		599		7.0	$	8.76		255	$	6.51
$11.26 to $12.87		560		7.9	$	12.11		188	$	11.95
$13.34 to $19.31		602		3.4	$	16.13		502	$	16.34
$20.03 to $28.43		390		3.4	$	24.14		389	$	24.14
		2,151		5.6	$	14.48		1,334	$	16.13

The compensation cost related to stock options, including costs related to unvested options assumed in connection with acquisitions, that has been charged against income (included in salaries and employee benefits) was $1.2 million, $861,000, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to stock options was $463,000, $344,000, and $541,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding and options exercisable as of December 31, 2011, was $2.4 million and $1.6 million, respectively. The weighted average remaining contractual term of options exercisable was 4.3 years as of December 31, 2011. The total intrinsic value of options exercised was $147,000, $420,000, and $220,000, in the years ended December 31, 2011, 2010 and 2009, respectively. During the years ended December 31, 2011, 2010 and 2009, the amount of cash received from the exercise of stock options was $309,000, $1.0 million, and $301,000, respectively. As of December 31, 2011, there was $2.7 million of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a weighted-average period of 2.4 years.

The Company grants restricted stock awards periodically as a part of the 2003 Plan for the benefit of employees. Restricted shares issued generally vest on an annual basis over five years. A deferred restricted stock award was granted to an executive in 2007 and is now fully vested. The Company will issue certificates for the vested award within the seventh month following termination of the executive's employment. The following table summarizes information about nonvested restricted shares outstanding at December 31:

(shares in thousands)
	2011					2010					2009
	Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value
Balance, beginning of year		401		$	15.29		187		$	21.46		216		$	23.42
Granted		282		$	11.02		274		$	12.16		26		$	9.83
Released		(82	)	$	17.58		(46	)	$	22.23		(46	)	$	23.81
Forfeited/expired		(16	)	$	12.91		(14	)	$	13.32		(9	)	$	22.85
Balance, end of year		585		$	12.98		401		$	15.29		187		$	21.46

The compensation cost related to restricted stock awards that has been charged against income (included in salaries and employee benefits) was $2.3 million, $1.9 million, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to restricted stock awards was $899,000, $746,000, and $548,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The total fair value of restricted shares vested was $919,000, $571,000, and $445,000, for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $3.7 million of total unrecognized compensation cost related to nonvested restricted stock awards which is expected to be recognized over a weighted-average period of 2.4 years.

The Company grants restricted stock units as a part of the 2007 Long Term Incentive Plan for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. In the first quarter of 2008, 2009 and 2011, restricted stock units were granted to executives that cliff vest after three years based on performance and service conditions. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the performance and service conditions set forth in the grant agreements. The following table summarizes information about restricted stock units outstanding at December 31:

(shares in thousands)
	2011					2010					2009
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		225		$	11.13		335		$	15.54		301		$	19.48
Granted		105		$	10.42		—		$	—		114		$	8.01
Released		(63	)	$	14.33		(16	)	$	24.52		(23	)	$	21.33
Forfeited/expired		(48	)	$	14.33		(94	)	$	24.52		(57	)	$	18.98
Balance, end of year		219		$	9.17		225		$	11.13		335		$	15.54

The compensation cost related to restricted stock units that has been charged against income (included in salaries and employee benefits) was $391,000 and $778,000 for the years ended December 31, 2011 and 2010, respectively. For the year ended December 31, 2009, the Company recorded a reversal of compensation cost of $539,000 related to restricted stock units that has been credited to salaries and employee benefits expense. The total income tax benefit recognized in the income statement related to restricted stock units was $156,000 and $311,000 for the years ended December 31, 2011 and 2010, respectively. The total income tax expense recognized in the income statement related to restricted stock units was $215,000 for the year ended December 31, 2009. The total fair value of restricted stock units vested and released was $677,000, $213,000, and $186,000 for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $772,000 of total unrecognized compensation cost related to nonvested restricted stock units which is expected to be recognized over a weighted-average period of 1.1 years, assuming the current expectation of performance conditions are met.

For the years ended December 31, 2011, 2010 and 2009, the Company received income tax benefits of $694,000, $406,000, and $326,000, respectively, related to the exercise of non-qualified employee stock options, disqualifying dispositions in the exercise of incentive stock options, the vesting of restricted shares and the vesting of restricted stock units. For the year ended December 31, 2011, the Company had net tax deficiencies (tax deficiency resulting from tax deductions less than the compensation cost recognized) of $261,000, compared to net tax deficiencies of $216,000 and $369,000 for the years ended December 31, 2010 and 2009, respectively. Only cash flows from gross excess tax benefits are classified as financing cash flows.

Share Repurchase Plan— The Company's share repurchase plan, which was first approved by the Board and announced in August 2003, was amended on September 29, 2011 to increase the number of common shares available for repurchase under the plan to 15 million shares. The repurchase program will run through June 2013. As of December 31, 2011, a total of 12.6 million shares remained available for repurchase. The Company repurchased 2.5 million shares under the repurchase plan in 2011 and no shares in 2010. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, and our capital plan.

We also have certain stock option and restricted stock plans which provide for the payment of the option exercise price or withholding taxes by tendering previously owned or recently vested shares. During the years ended December 31, 2011 and 2010, there were 8,135 and 4,515 shares tendered in connection with option exercises, respectively. Restricted shares cancelled to pay withholding taxes totaled 23,158 and 12,443 shares during the years ended December 31, 2011 and 2010, respectively. Restricted stock units cancelled to pay withholding taxes totaled 22,439 and 5,583 during the years ended December 31, 2011 and 2010, respectively.

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Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Reclassification adjustment for impairments realized in net income investment securities transferred to held to maturity, tax benefit			$ 1,716
Amortization of unrealized losses on investment securities transferred to held to maturity, tax benefit			70
Reclassification adjustment for net gains realized in earnings, tax expense	3,094	930	3,431
Unrealized (losses) gains related to factors other than credit, tax expense (benefit)	34	(150)	1,080
Reclassification adjustment for impairments realized in net income, tax benefit	108	137	307
Accretion of unrealized losses related to factors other than credit to investment securities held to maturity, tax benefit	$ 66	$ 115	$ 120

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Regulatory Capital

12 Months Ended

Dec. 31, 2011

Regulatory Capital [Abstract]

Regulatory Capital

NOTE 23. REGULATORY CAPITAL

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company's financial statements. Under capital adequacy guidelines, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classifications are also subject to qualitative judgments by the regulators about risk components, asset risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations). Management believes, as of December 31, 2011, that the Company meets all capital adequacy requirements to which it is subject.

The Company's capital amounts and ratios as of December 31, 2011 and 2010 are presented in the following table:

(dollars in thousands)
	Actual					For Capital Adequacy purposes					To be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
AS OF DECEMBER 31, 2011:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,287,560		17.16	%	$	600,261		8.00	%	$	750,326		10.00	%
Umpqua Bank	$	1,163,611		15.53	%	$	599,413		8.00	%	$	749,267		10.00	%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,193,740		15.91	%	$	300,123		4.00	%	$	450,185		6.00	%
Umpqua Bank	$	1,069,914		14.28	%	$	299,696		4.00	%	$	449,544		6.00	%
Tier I Capital
(to Average Assets)
Consolidated	$	1,193,740		10.91	%	$	437,668		4.00	%	$	547,085		5.00	%
Umpqua Bank	$	1,069,914		9.78	%	$	437,593		4.00	%	$	546,991		5.00	%
	Actual					For Capital Adequacy purposes					To be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
AS OF DECEMBER 31, 2010:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,253,333		17.62	%	$	569,050		8.00	%	$	711,313		10.00	%
Umpqua Bank	$	1,085,839		15.27	%	$	568,874		8.00	%	$	711,093		10.00	%
Tier I Capital
(to Risk Weighted Assets)
Consolidated	$	1,164,226		16.36	%	$	284,652		4.00	%	$	426,978		6.00	%
Umpqua Bank	$	996,798		14.02	%	$	284,393		4.00	%	$	426,590		6.00	%
Tier I Capital
(to Average Assets)
Consolidated	$	1,164,226		10.56	%	$	440,995		4.00	%	$	551,243		5.00	%
Umpqua Bank	$	996,798		9.04	%	$	441,061		4.00	%	$	551,326		5.00	%

The Company is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999 (the "GLB Act"), and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Bank is an Oregon state chartered bank with deposits insured by the Federal Deposit Insurance Corporation ("FDIC"), and is subject to the supervision and regulation of the Director of the Oregon Department of Consumer and Business Services, administered through the Division of Finance and Corporate Securities, and to the supervision and regulation of the California Department of Financial Institutions, the Washington Department of Financial Institutions and the FDIC. As of December 31, 2011, the most recent notification from the FDIC categorized the Bank as "well-capitalized" under the regulatory framework for prompt corrective action. The Company is not subject to the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's regulatory capital category.

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Quarterly Financial Information (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Quarterly Financial Information [Abstract]
Interest income	$ 121,917,000	$ 126,527,000	$ 128,417,000	$ 124,892,000	$ 130,677,000	$ 132,946,000	$ 115,604,000	$ 109,369,000	$ 501,753,000		$ 488,596,000		$ 423,732,000
Interest expense	15,262,000	18,993,000	19,056,000	19,990,000	23,562,000	24,629,000	23,304,000	22,317,000	73,301,000		93,812,000		103,024,000
Net interest income	106,655,000	107,534,000	109,361,000	104,902,000	107,115,000	108,317,000	92,300,000	87,052,000	428,452,000		394,784,000		320,708,000
Provision for non-covered loan and lease losses	6,642,000	9,089,000	15,459,000	15,030,000	17,567,000	24,228,000	29,767,000	42,106,000	46,220,000		113,668,000		209,124,000
Provision for covered loan and lease losses	698,000	4,420,000	3,755,000	7,268,000	4,484,000	667,000			16,141,000		5,151,000
Non-interest income	18,128,000	24,778,000	19,627,000	21,585,000	15,161,000	12,133,000	18,563,000	30,047,000	84,118,000		75,904,000		73,516,000
Non-interest expense	85,339,000	86,224,000	83,207,000	84,201,000	87,864,000	85,170,000	74,833,000	69,871,000	338,971,000		317,738,000		379,403,000
Income (loss) before provision for (benefit from) income taxes	32,104,000	32,579,000	26,567,000	19,988,000	12,361,000	10,385,000	6,263,000	5,122,000	111,238,000		34,131,000		(194,303,000)
Provision for (benefit from) income taxes	10,722,000	10,717,000	8,782,000	6,521,000	4,203,000	2,194,000	2,800,000	(3,392,000)	36,742,000		5,805,000		(40,937,000)
Net income	21,382,000	21,862,000	17,785,000	13,467,000	8,158,000	8,191,000	3,463,000	8,514,000	74,496,000		28,326,000		(153,366,000)
Preferred stock dividends											3,686,000		10,739,000
Dividends and undistributed earnings allocated to participating securities	103,000	105,000	86,000	62,000	18,000	18,000	16,000	15,000	356,000	[1]	67,000	[1]	30,000	[1]
Net earnings (loss) available to common shareholders	21,279,000	21,757,000	17,699,000	13,405,000	8,140,000	8,173,000	3,447,000	(3,693,000)	74,140,000		16,067,000		(166,262,000)
Basic earnings (loss) per common share	$ 0.19	$ 0.19	$ 0.15	$ 0.12	$ 0.07	$ 0.07	$ 0.03	$ (0.04)	$ 0.65		$ 0.15		$ (2.36)
Diluted earnings (loss) per common share	$ 0.19	$ 0.19	$ 0.15	$ 0.12	$ 0.07	$ 0.07	$ 0.03	$ (0.04)	$ 0.65		$ 0.15		$ (2.36)
Cash dividends declared per common share	$ 0.07	$ 0.07	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 27,471,000		$ 22,032,000		$ 14,737,000

[1] Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

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Investment Securities (Schedule Of Maturities Of Investment Securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Available-for-sale Securities, Three months or less, Amortized Cost	$ 22,142
Available-for-sale Securities, Over three months through twelve months, Amortized Cost	424,824
Available-for-sale Securities, After one through five Years, Amortized Cost	2,272,876
Available-for-sale Securities, After five through ten years, Amortized Cost	310,639
Available-for-sale Securities, After ten years, Amortized Cost	79,357
Available-for-sale Securities, Amortized Cost	3,111,797
Available-for-sale Securities, Three months or less, Fair Value	22,217
Available-for-sale Securities, Over three months through twelve months, Fair Value	429,396
Available-for-sale Securities, After one through five years, Fair Value	2,310,113
Available-for-sale Securities, After five through ten years, Fair Value	323,164
Available-for-sale Securities, After ten years, Fair Value	81,617
Available-for-sale Securities, Fair Value	3,168,578
Held-to-maturity Securities, Over three months through twelve months, Amortized Cost	330
Held-to-maturity Securities, After one through five years, Amortized Cost	1,096
Held-to-maturity Securities, After five through ten years, Amortized Cost	1,023
Held-to-maturity Securities, After ten years, Amortized Cost	2,265
Held-to-maturity Securities, Amortized Cost	4,714
Held-to-maturity Securities, Over three months through twelve months, Fair Value	331
Held-to-maturity Securities, After one through five years, Fair Value	1,155
Held-to-maturity Securities, After five through ten years, Fair Value	1,010
Held-to-maturity Securities, After ten years, Fair Value	2,263
Held-to-maturity Securities, Fair Value	4,759
Other Investments Securities [Member]
Available-for-sale Securities, Amortized Cost	1,959
Available-for-sale Securities, Fair Value	$ 2,071

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Non-Covered Other Real Estate Owned, Net (Schedule Of Changes In Other Real Estate Owned) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Non-Covered Other Real Estate Owned, Net [Abstract]
Balance, beginning of period	$ 32,791,000	$ 24,566,000	$ 27,898,000
Additions to OREO	47,414,000	41,491,000	50,914,000
Dispositions of OREO	(37,083,000)	(29,192,000)	(41,999,000)
Valuation adjustments in the period	(8,947,000)	(4,074,000)	(12,247,000)
Balance, end of period	34,175,000	32,791,000	24,566,000
Recognized valuation allowances	$ 5,100,000	$ 2,400,000	$ 11,400,000

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Business Combinations (Policy)

12 Months Ended

Dec. 31, 2011

Business Combinations [Abstract]

Business Combinations

The assets acquired and liabilities assumed from the Evergreen, Rainier, and Nevada Security acquisitions have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition dates. The fair values of the assets acquired and liabilities assumed were determined based on the requirements of the Fair Value Measurements and Disclosures topic of the Financial Accounting Standards Board Accounting Standards Codification (the "FASB ASC"). The terms of the agreements provide for the FDIC to indemnify the Bank against claims with respect to liabilities of Evergreen, Rainier, and Nevada Security not assumed by the Bank and certain other types of claims identified in the agreement. The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain of $6.4 million in the Evergreen acquisition, $35.8 million of goodwill in the Rainier acquisition and $10.4 million of goodwill in the Nevada Security acquisition.

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Other Assets (Tables)

12 Months Ended

Dec. 31, 2011

Other Assets [Abstract]

Schedule Of Other Assets

(in thousands)
	2011		2010
Cash surrender value of life insurance policies	$	92,555	$	90,161
Accrued interest receivable		30,617		30,307
Due from FDIC		26,510		36,461
Prepaid FDIC deposit assessment		18,739		29,369
Income taxes receivable		14,715		516
Equity method investments		12,400		8,377
Derivative assets		7,955		1,060
Investment in unconsolidated Trusts		6,934		6,933
Deferred tax assets, net		—		9,649
Other		37,181		29,632
Total	$	247,606	$	242,465

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Business Combinations (Narrative) (Details) (USD $)	12 Months Ended		12 Months Ended											12 Months Ended							0 Months Ended	12 Months Ended	0 Months Ended	12 Months Ended	0 Months Ended	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2011	Dec. 31, 2011 Evergreen Bank [Member]	Dec. 31, 2011 Evergreen Bank [Member] Non-Single Family Residential [Member]	Dec. 31, 2011 Evergreen Bank [Member] Single Family Residential [Member]	Dec. 31, 2011 Evergreen Bank [Member] FDIC Loss and Loss Recovery Sharing And Absorption Threshold Minimum [Member]	Dec. 31, 2011 Evergreen Bank [Member] FDIC Loss and Loss Recovery Sharing And Absorption Threshold Maximum [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member] Non-Single Family Residential [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member] Single Family Residential [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member] FDIC Loss and Loss Recovery Sharing And Absorption Threshold Minimum [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member] FDIC Loss and Loss Recovery Sharing And Absorption Threshold Maximum [Member]	Dec. 31, 2011 Evergreen And Rainier [Member]	Dec. 31, 2010 Evergreen And Rainier [Member]	Dec. 31, 2011 Nevada Security Bank [Member]	Dec. 31, 2010 Nevada Security Bank [Member]	Dec. 31, 2011 Nevada Security Bank [Member] Non-Single Family Residential [Member]	Dec. 31, 2011 Nevada Security Bank [Member] Single Family Residential [Member]	Dec. 31, 2011 Nevada Security Bank [Member] FDIC Loss and Loss Recovery Sharing And Absorption [Member]	Jan. 22, 2010 Evergreen Bank [Member]	Dec. 31, 2011 Evergreen Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Dec. 31, 2011 Rainier Pacific Bank [Member]	Jun. 18, 2010 Nevada Security Bank [Member]	Dec. 31, 2011 Nevada Security Bank [Member]	Dec. 31, 2010 Evergreen And Rainier [Member]
Date that Umpqua Bank assumed operations																						January 22, 2010		February 26, 2010		June 18, 2010
FDIC loss absorption percentage						80.00%	95.00%					80.00%	95.00%							80.00%
FDIC loss recoveries absorption percentage						80.00%	95.00%					80.00%	95.00%							80.00%
Covered asset value for FDIC absorption						$ 90,000,000	$ 90,000,000					$ 95,000,000	$ 95,000,000
Umpqua to incur losses before loss-sharing, amount		30,200,000
Length of loss-sharing arrangement, by loan type, years				5	10					5	10							5	10
Length of loss recovery provisions, by loan type, years				8	10					8	10							8	10
Number of store locations assumed			6					14								5
Business acquisition revenue														46,200,000	54,000,000	18,600,000	15,100,000
Non-interest expense from acquisition, included in Umpqua operations														25,300,000	23,600,000	11,300,000	7,300,000
Earnings (loss) added by acquisition, included in Umpqua operations														13,800,000	11,000,000	2,100,000	1,300,000
Bargain purchase gain on acquisition	6,437,000		6,400,000																		6,437,000						6,400,000
Merger-related expenses, incurred in connection with acquisitions														92,000	4,400,000	101,000	1,700,000
Cost basis net assets (liabilities)			58,800,000					50,300,000								53,600,000
Cash payment received from (paid to) the FDIC								59,400,000								30,000,000
(Goodwill) recognized in connection with acquisition								27,600,000	35,800,000							10,400,000								36,800,000
Core deposit intangible assets recognized and deductible for income tax purposes																								1,100,000		322,000
Purchase of furniture equipment and real estate			344,000					26,300,000																		2,000,000
Total assets acquired																					$ 353,279,000		$ 721,174,000		$ 437,595,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and due from banks	$ 152,265	$ 111,946
Interest bearing deposits	445,954	891,634
Temporary investments	547	545
Total cash and cash equivalents	598,766	1,004,125
Investment securities
Trading, at fair value	2,309	3,024
Available for sale, at fair value	3,168,578	2,919,180
Held to maturity, at amortized cost	4,714	4,762
Loans held for sale	98,691	75,626
Non-covered loans and leases	5,888,098	5,658,987
Allowance for non-covered loan and lease losses	(92,968)	(101,921)
Non-covered loans and leases, net	5,795,130	5,557,066
Covered loans and leases, net of allowance of $14,320 and $2,721	622,451	785,898
Restricted equity securities	32,581	34,475
Premises and equipment, net	152,366	136,599
Goodwill and other intangible assets, net	677,224	681,969
Mortgage servicing rights, at fair value	18,184	14,454
Non-covered other real estate owned	34,175	32,791
Covered other real estate owned	19,491	29,863
FDIC indemnification asset	91,089	146,413
Other assets	247,606	242,465
Total assets	11,563,355	11,668,710
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing	1,913,121	1,616,687
Interest bearing	7,323,569	7,817,118
Total deposits	9,236,690	9,433,805
Securities sold under agreements to repurchase	124,605	73,759
Term debt	255,676	262,760
Junior subordinated debentures, at fair value	82,905	80,688
Junior subordinated debentures, at amortized cost	102,544	102,866
Other liabilities	88,522	72,258
Total liabilities	9,890,942	10,026,136
COMMITMENTS AND CONTINGENCIES (NOTE 20)
SHAREHOLDERS' EQUITY
Common stock, no par value, 200,000,000 shares authorized; issued and outstanding: 112,164,891 in 2011 and 114,536,814 in 2010	1,514,913	1,540,928
Retained earnings	123,726	76,701
Accumulated other comprehensive income	33,774	24,945
Total shareholders' equity	1,672,413	1,642,574
Total liabilities and shareholders' equity	$ 11,563,355	$ 11,668,710

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2011

Investment Securities [Abstract]

Amortized Cost, Unrealized Gains And Losses, And Fair Value Of Investment Securities

December 31, 2011
(in thousands)
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,232	$	1,234	$	(1	)	$	118,465
Obligations of states and political subdivisions		237,302		16,264		(13	)		253,553
Residential mortgage-backed securities and collateralized mortgage obligations		2,755,153		43,152		(3,950	)		2,794,355
Other debt securities		151		—		(17	)		134
Investments in mutual funds and other equity securities		1,959		112		—			2,071
	$	3,111,797	$	60,762	$	(3,981	)	$	3,168,578
HELD TO MATURITY:
Obligations of states and political subdivisions	$	1,335	$	2	$	—		$	1,337
Residential mortgage-backed securities and collateralized mortgage obligations		3,379		120		(77	)		3,422
	$	4,714	$	122	$	(77	)	$	4,759

December 31, 2010

(in thousands)

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,551	$	1,239	$	(1	)	$	118,789
Obligations of states and political subdivisions		213,129		4,985		(1,388	)		216,726
Residential mortgage-backed securities and collateralized mortgage obligations		2,543,974		57,506		(19,976	)		2,581,504
Other debt securities		152		—		—			152
Investments in mutual funds and other equity securities		1,959		50		—			2,009
	$	2,876,765	$	63,780	$	(21,365	)	$	2,919,180
HELD TO MATURITY:
Obligations of states and political subdivisions	$	2,370	$	5	$	—		$	2,375
Residential mortgage-backed securities and collateralized mortgage obligations		2,392		216		(209	)		2,399
	$	4,762	$	221	$	(209	)	$	4,774

Schedule Of Fair Value And Unrealized Losses Of Securities

December 31, 2011

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	85	$	1	$	85	$	1
Obligations of states and political subdivisions		516		13		—		—		516		13
Residential mortgage-backed securities and collateralized mortgage obligations		489,475		3,160		52,222		790		541,697		3,950
Other debt securities		—		—		134		17		134		17
Total temporarily impaired securities	$	489,991	$	3,173	$	52,441	$	808	$	542,432	$	3,981
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	602	$	77	$	602	$	77
Total temporarily impaired securities	$	—	$	—	$	602	$	77	$	602	$	77

December 31, 2010

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	110	$	1	$	110	$	1
Obligations of states and political subdivisions		60,110		1,366		1,003		22		61,113		1,388
Residential mortgage-backed securities and collateralized mortgage obligations		1,238,483		19,968		1,539		8		1,240,022		19,976
Total temporarily impaired securities	$	1,298,593	$	21,334	$	2,652	$	31	$	1,301,245	$	21,365
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	658	$	209	$	658	$	209
Total temporarily impaired securities	$	—	$	—	$	658	$	209	$	658	$	209

Other-Than-Temporary Impairment Losses, Investment Securities

	2011				2010				2009
	Held To Maturity		Available For Sale		Held To Maturity		Available For Sale		Held To Maturity			Available For Sale
Total other-than-temporary impairment losses	$	190	$	—	$	93	$	—	$	12,317		$	239
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income(1)		169		—		321		—		(1,983	)		—
Net impairment losses recognized in earnings(2)	$	359	$	—	$	414	$	—	$	10,334		$	239

(1) Represents other-than-temporary impairment losses related to all other factors.

(2) Represents other-than-temporary impairment losses related to credit losses.

Summary Of Significant Inputs Used To Estimate Credit Loss On Non-Agency Collateralized Mortgage Obligations

	2011									2010
	Range						Weighted			Range						Weighted Average
	Minimum			Maximum			Average			Minimum			Maximum
Constant prepayment rate		10.0	%		20.0	%		14.0	%		5.0	%		20.0	%		14.9	%
Collateral default rate		5.0	%		60.0	%		22.6	%		5.0	%		15.0	%		10.6	%
Loss severity		27.5	%		50.0	%		32.5	%		25.0	%		55.0	%		37.9	%

Roll Forward Of Credit Losses Of Held-To-Maturity Securities Written Down As Other-Than-Temporary Impairment Recognized In Earnings And Other Comprehensive Income

	2011			2010
Balance, beginning of period	$	12,778		$	12,364
Additions:
Subsequent OTTI credit losses		359			414
Reductions:
Securities sold, matured or paid-off		(3,563	)		—
Balance, end of period	$	9,574		$	12,778

Schedule Of Maturities Of Investment Securities

(in thousands)
	Available For Sale				Held To Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
AMOUNTS MATURING IN:
Three months or less	$	22,142	$	22,217	$	—	$	—
Over three months through twelve months		424,824		429,396		330		331
After one year through five years		2,272,876		2,310,113		1,096		1,155
After five years through ten years		310,639		323,164		1,023		1,010
After ten years		79,357		81,617		2,265		2,263
Other investment securities		1,959		2,071		—		—
	$	3,111,797	$	3,168,578	$	4,714	$	4,759

Gross Realized Gains And Losses On Sales Of Available For Sale Securities

(in thousands)
	2011				2010				2009
	Gains		Losses		Gains		Losses		Gains		Losses
U.S. Treasury and agencies	$	—	$	—	$	—	$	1	$	—	$	—
Obligations of states and political subdivisions		8		—		3		7		—		1
Residential mortgage-backed securities and collateralized mortgage obligations		8,544		817		2,331		—		9,409		591
	$	8,552	$	817	$	2,334	$	8	$	9,409	$	592

Investment Securities Pledged To Secure Borrowings And Public Deposits

(in thousands)
	Amortized Cost		Fair Value
To Federal Home Loan Bank to secure borrowings	$	183,909	$	190,176
To state and local governments to secure public deposits		738,780		759,019
Other securities pledged		191,740		194,200
Total pledged securities	$	1,114,429	$	1,143,395

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Allowance For Non-Covered Loan Loss And Credit Quality (Schedule Of Troubled Debt Restructurings) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Financing receivables modified as troubled debt restructurings	$ 11,549	$ 7,158
Mortgage [Member] | Residential [Member]
Financing receivables modified as troubled debt restructurings		944
Home Equity Loans & Lines [Member] | Residential [Member]
Financing receivables modified as troubled debt restructurings
Residential Development [Member] | Commercial Real Estate [Member]
Financing receivables modified as troubled debt restructurings	1,767
Consumer & Other [Member]
Financing receivables modified as troubled debt restructurings
Construction & Development [Member] | Commercial Real Estate [Member]
Financing receivables modified as troubled debt restructurings
Term & Multifamily [Member] | Commercial Real Estate [Member]
Financing receivables modified as troubled debt restructurings	9,642	5,553
Term [Member] | Commercial [Member]
Financing receivables modified as troubled debt restructurings	$ 140	$ 661

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Commitments And Contingencies (Summary Of Commitments And Contingent Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Commitments and contingent liabilities
Commitments To Extend Credit [Member]
Commitments and contingent liabilities	1,222,920
Commitments To Extend Overdrafts [Member]
Commitments and contingent liabilities	226,749
Commitments To Originate Loans Held For Sale [Member]
Commitments and contingent liabilities	143,512
Forward Sales Commitments [Member]
Commitments and contingent liabilities	182,671
Standby Letters Of Credit [Member]
Commitments and contingent liabilities	$ 61,316

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Mortgage Servicing Rights (Schedule Of Changes In Mortgage Servicing Rights) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Mortgage Servicing Rights [Abstract]
Balance, beginning of year	$ 14,454		$ 12,625		$ 8,205
Additions for new mortgage servicing rights capitalized	6,720		5,645		7,570
Acquired mortgage servicing rights			62
Due to changes in model inputs or assumptions	(858)	[1]	(1,598)	[1]	(3,469)	[1]
Other	(2,132)	[2]	(2,280)	[2]	319	[2]
Balance, end of year	18,184		14,454		12,625
Balance of loans serviced for others	$ 2,009,849		$ 1,603,414		$ 1,277,832
MSR as a percentage of serviced loans	0.90%		0.90%		0.99%

[1] Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

[2] Represents changes due to collection/realization of expected cash flows over time.

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Consolidated Statements Of Changes In Shareholders' Equity (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements Of Changes In Shareholders' Equity [Abstract]
Cash dividends on common stock, per share	$ 0.24	$ 0.2	$ 0.2

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Allowance For Non-Covered Loan Loss And Credit Quality (Schedule Of Troubled Debt Restructuring By Concession With Terms Modified) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consumer & Other [Member]
Accrual Status
Non-Accrual Status
Total Modifications
Commercial [Member] | LOC & Other [Member]
Accrual Status		298
Non-Accrual Status	6,973	11,040
Total Modifications	6,973	11,338
Commercial [Member] | Term [Member]
Accrual Status	3,863	904
Non-Accrual Status	1,762	725
Total Modifications	5,625	1,629
Commercial Real Estate [Member] | Residential Development [Member]
Accrual Status	33,964	48,929
Non-Accrual Status	11,969	8,036
Total Modifications	45,933	56,965
Commercial Real Estate [Member] | Construction & Development [Member]
Accrual Status	19,996	5,434
Non-Accrual Status	921
Total Modifications	20,917	5,434
Commercial Real Estate [Member] | Term & Multifamily [Member]
Accrual Status	22,611	28,697
Non-Accrual Status	21,951	3,185
Total Modifications	44,562	31,882
Residential [Member] | Mortgage [Member]
Accrual Status		179
Non-Accrual Status
Total Modifications		179
Residential [Member] | Home Equity Loans & Lines [Member]
Accrual Status	129
Non-Accrual Status
Total Modifications	129
Total [Member]
Accrual Status	80,563	84,441
Non-Accrual Status	43,576	22,986
Total Modifications	$ 124,139	$ 107,427

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Derivatives (Summary of Types Of Derivatives And Gains (Losses) Recorded) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Derivative gains (losses)	$ (9,153)	$ (2,888)	$ (1,431)
Interest Rate Swap [Member] | Other Income [Member]
Derivative gains (losses)	(187)
Interest Rate Contracts [Member] | Rate Lock Commitments [Member] | Mortgage Banking Revenue [Member]
Derivative gains (losses)	1,613	146	(1,176)
Interest Rate Contracts [Member] | Forward Sales Commitments [Member] | Mortgage Banking Revenue [Member]
Derivative gains (losses)	$ (10,579)	$ (3,034)	$ (255)

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Shareholders' Equity (Summary Of Stock Option Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Shareholders' Equity [Abstract]
Options Outstanding, Balance, beginning of year	2,067	1,763	1,819
Options Outstanding, Granted	237	450	229
Options Outstanding, Exercised	(40)	(112)	(51)
Options Outstanding, Forfeited/expired	(113)	(34)	(234)
Options Outstanding, Balance, end of year	2,151	2,067	1,763
Weighted Avg. Exercise Price, Balance beginning of year	$ 14.82	$ 15.05	$ 15.66
Weighted-Avg Exercise Price, Granted	$ 11.01	$ 12.39	$ 9.34
Weighted-Avg Exercise Price, Exercised	$ 7.67	$ 8.97	$ 5.93
Weighted-Avg Exercise Price, Forfeited/expired	$ 15.72	$ 13.83	$ 16.20
Weighted Avg. Exercise Price, Balance, end of year	$ 14.48	$ 14.82	$ 15.05
Options exercisable, end of year, Options Outstanding	1,334	1,217	1,071
Options exercisable, end of year, Weighted Avg. Exercise Price	$ 16.13	$ 16.65	$ 15.90

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Commitments And Contingencies (Tables)

12 Months Ended

Dec. 31, 2011

Commitments And Contingencies [Abstract]

Future Minimum Lease Payments And Future Minimum Income Receivable Under Non-Cancelable Operating Leases

(in thousands)
	Lease Payments		Sublease Income
2012	$	15,695	$	1,019
2013		13,444		696
2014		11,856		514
2015		10,002		421
2016		7,724		260
Thereafter		21,386		802
Total	$	80,107	$	3,712

Schedule Of Commitments And Contingencies

(in thousands)
	As of December 31, 2011
Commitments to extend credit	$	1,222,920
Commitments to extend overdrafts	$	226,749
Forward sales commitments	$	182,671
Commitments to originate loans held for sale	$	143,512
Standby letters of credit	$	61,316

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Covered Assets And Indemnification Asset (Estimated Fair Value Of Acquired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Estimated Fair Value [Member]	Jan. 22, 2010 Estimated Fair Value [Member] Evergreen Bank [Member]	Feb. 26, 2010 Estimated Fair Value [Member] Rainier Pacific Bank [Member]	Jun. 18, 2010 Estimated Fair Value [Member] Nevada Security Bank [Member]
Commercial real estate, Term & multifamily	$ 3,558,295	$ 3,483,475	$ 627,064	$ 141,076	$ 331,869	$ 154,119
Commercial real estate, Construction & development	165,066	247,814	28,875	18,832	562	9,481
Commercial real estate, Residential development	90,073	147,813	42,200	16,219	10,340	15,641
Commercial, Term	625,766	509,453	60,379	27,272	14,850	18,257
Commercial, LOC & other	832,999	747,419	53,542	23,965	18,169	11,408
Residential, Mortgage	315,927	222,416	53,322	11,886	39,897	1,539
Residential, Home equity loans & lines	272,192	278,585	43,758	8,308	31,029	4,421
Consumer & other	38,860	33,043	17,200	4,935	11,624	641
Total	$ 5,899,178	$ 5,670,018	$ 926,340	$ 252,493	$ 458,340	$ 215,507

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Operating Segments

12 Months Ended

Dec. 31, 2011

Operating Segments [Abstract]

Operating Segments

NOTE 26. OPERATING SEGMENTS

The Company operates three primary segments: Community Banking, Mortgage Banking and Wealth Management. The Community Banking segment's principal business focus is the offering of loan and deposit products to its business and retail customers in its primary market areas. As of December 31, 2011, the Community Banking segment operates 194 locations throughout Oregon, Northern California, Washington and Nevada.

The Mortgage Banking segment, which operates as a division of the Bank, originates, sells and services residential mortgage loans.

The Wealth Management segment consists of the operations of Umpqua Investments, which offers a full range of retail brokerage services and products to its clients who consist primarily of individual investors, and Umpqua Private Bank, which serves high net worth individuals with liquid investable assets and provides customized financial solutions and offerings, and Umpqua Financial Advisors. The Company accounts for intercompany fees and services between Umpqua Investments and the Bank at estimated fair value according to regulatory requirements for services provided. Intercompany items relate primarily to management services, referral fees and deposit rebates.

Prior to January 1, 2011, the Company reported Retail Brokerage, consisting of Umpqua Investments, as its own segment. Effective in 2011, the Company began reporting Umpqua Investments, Umpqua Private Bank, and Umpqua Financial Advisors under the Wealth Management segment. Umpqua Private Bank and Umpqua Financial Advisors do not meet the quantitative thresholds for reporting as separate segments and service the same customer base as Umpqua Investments. As a result of the change in reportable segment, prior periods have been adjusted in the financial information below.

Summarized financial information concerning the Company's reportable segments and the reconciliation to the consolidated financial results is shown in the following tables:

Year Ended December 31, 2011

(in thousands)

	Community Banking		Wealth Management		Mortgage Banking		Consolidated
Interest income	$	474,167	$	13,362	$	14,224	$	501,753
Interest expense		68,751		2,067		2,483		73,301
Net interest income		405,416		11,295		11,741		428,452
Provision for non-covered loan and lease losses		46,220		—		—		46,220
Provision for covered loan and lease losses		16,141		—		—		16,141
Non-interest income		43,282		13,963		26,873		84,118
Non-interest expense		302,883		15,630		20,458		338,971
Income before provision for income taxes		83,454		9,628		18,156		111,238
Provision for income taxes		26,023		3,457		7,262		36,742
Net income		57,431		6,171		10,894		74,496
Dividends and undistributed earnings allocated to participating securities		356		—		—		356
Net earnings available to common shareholders	$	57,075	$	6,171	$	10,894	$	74,140
Total assets	$	11,086,493	$	53,044	$	423,818	$	11,563,355
Total loans (covered and non-covered)	$	6,171,368	$	38,810	$	300,371	$	6,510,549
Total deposits	$	8,830,353	$	390,992	$	15,345	$	9,236,690

Year Ended December 31, 2010

(in thousands)

	Community Banking			Wealth Management		Mortgage Banking		Consolidated
Interest income	$	466,054		$	9,978	$	12,564	$	488,596
Interest expense		89,622			1,435		2,755		93,812
Net interest income		376,432			8,543		9,809		394,784
Provision for non-covered loan and lease losses		113,668			—		—		113,668
Provision for covered loan and lease losses		5,151			—		—		5,151
Non-interest income		41,534			12,967		21,403		75,904
Non-interest expense		286,629			15,503		15,606		317,738
Income before (benefit from) provision for income taxes		12,518			6,007		15,606		34,131
(Benefit from) provision for income taxes		(2,342	)		1,905		6,242		5,805
Net income		14,860			4,102		9,364		28,326
Preferred stock dividends		12,192			—		—		12,192
Dividends and undistributed earnings allocated to participating securities		67			—		—		67
Net earnings available to common shareholders	$	2,601		$	4,102	$	9,364	$	16,067
Total assets	$	11,314,681		$	37,757	$	316,272	$	11,668,710
Total loans (covered and non-covered)	$	6,198,532		$	23,631	$	222,722	$	6,444,885
Total deposits	$	9,160,058		$	262,148	$	11,599	$	9,433,805

Year Ended December 31, 2009

(in thousands)

	Community Banking			Wealth Management			Mortgage Banking		Consolidated
Interest income	$	406,460		$	4,467		$	12,805	$	423,732
Interest expense		99,382			1			3,641		103,024
Net interest income		307,078			4,466			9,164		320,708
Provision for loan and lease losses		209,124			—			—		209,124
Non-interest income		45,280			9,344			18,892		73,516
Non-interest expense		352,290			12,910			14,203		379,403
(Loss) income before (benefit from) provision for income taxes		(209,056	)		900			13,853		(194,303	)
(Benefit from) provision for income taxes		(46,383	)		(95	)		5,541		(40,937	)
Net (loss) income		(162,673	)		995			8,312		(153,366	)
Preferred stock dividends		12,866			—			—		12,866
Dividends and undistributed earnings allocated to participating securities		30			—			—		30
Net (loss) earnings available to common shareholders	$	(175,569	)	$	995		$	8,312	$	(166,262	)
Total assets	$	9,109,542		$	31,196		$	240,634	$	9,381,372
Total loans (covered and non-covered)	$	5,789,730		$	17,484		$	192,053	$	5,999,267
Total deposits	$	7,432,549		$	98		$	7,787	$	7,440,434

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Fair Values (Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009	Dec. 31, 2008
Trading securities	$ 2,309		$ 3,024
Available for sale securities	3,168,578		2,919,180
Mortgage servicing rights, at fair value	18,184		14,454		12,625	8,205
Derivatives	7,955		1,060
Total assets measured at fair value	3,197,026		2,937,718
Junior subordinated debentures, at fair value	82,905		80,688
Derivatives	6,509		361
Total liabilities measured at fair value	89,414		81,049
Level 1 [Member]
Total assets measured at fair value	2,309		3,024
Level 2 [Member]
Derivatives	7,955		1,060
Total assets measured at fair value	3,176,533		2,920,240
Derivatives	6,509		361
Total liabilities measured at fair value	6,509		361
Level 3 [Member]
Mortgage servicing rights, at fair value	18,184		14,454
Total assets measured at fair value	18,184		14,454
Junior subordinated debentures, at fair value	82,905		80,688
Total liabilities measured at fair value	82,905		80,688
Obligations Of States And Political Subdivisions [Member]
Trading securities	296		1,282
Available for sale securities	253,553		216,726
Obligations Of States And Political Subdivisions [Member] | Level 1 [Member]
Trading securities	296		1,282
Obligations Of States And Political Subdivisions [Member] | Level 2 [Member]
Available for sale securities	253,553		216,726
Equity Securities [Member]
Trading securities	1,918		1,645
Equity Securities [Member] | Level 1 [Member]
Trading securities	1,918		1,645
Other Investments Securities [Member]
Trading securities	95	[1]	97	[1]
Other Investments Securities [Member] | Level 1 [Member]
Trading securities	95	[1]	97	[1]
U.S. Treasury And Agencies [Member]
Available for sale securities	118,465		118,789
U.S. Treasury And Agencies [Member] | Level 2 [Member]
Available for sale securities	118,465		118,789
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member]
Available for sale securities	2,794,355		2,581,504
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member] | Level 2 [Member]
Available for sale securities	2,794,355		2,581,504
Other Debt Securities [Member]
Available for sale securities	134		152
Other Debt Securities [Member] | Level 2 [Member]
Available for sale securities	134		152
Investments In Mutual Funds And Other Equity Securities [Member]
Available for sale securities	2,071		2,009
Investments In Mutual Funds And Other Equity Securities [Member] | Level 2 [Member]
Available for sale securities	$ 2,071		$ 2,009

[1] Principally represents U.S. Treasury and agencies or residential mortgage-backed securities issued or guaranteed by governmental agencies.

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Junior Subordinated Debentures (Junior Subordinated Debentures) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Issued Amount	$ 230,061
Carrying Value	185,449	[1]
Estimated Fair Value [Member]
Issued Amount	134,024
Carrying Value	82,905	[1]
Amortized Cost [Member]
Issued Amount	96,037
Carrying Value	102,544	[1]
Umpqua Statutory Trust II [Member] | Estimated Fair Value [Member]
Issue Date	October 2002
Issued Amount	20,619
Carrying Value	14,166	[1]
Rate	Floating	[2],[3]
Effective Rate	5.50%	[4]
Maturity Date	October 2032
Redemption Date	October 2007
Interest Rate Adjustment	3.35%
Umpqua Statutory Trust III [Member] | Estimated Fair Value [Member]
Issue Date	October 2002
Issued Amount	30,928
Carrying Value	21,476	[1]
Rate	Floating	[2],[5]
Effective Rate	5.62%	[4]
Maturity Date	November 2032
Redemption Date	November 2007
Umpqua Statutory Trust IV [Member] | Estimated Fair Value [Member]
Issue Date	December 2003
Issued Amount	10,310
Carrying Value	6,641	[1]
Rate	Floating	[2],[6]
Effective Rate	5.05%	[4]
Maturity Date	January 2034
Redemption Date	January 2009
Umpqua Statutory Trust V [Member] | Estimated Fair Value [Member]
Issue Date	December 2003
Issued Amount	10,310
Carrying Value	6,625	[1]
Rate	Floating	[2],[6]
Effective Rate	5.31%	[4]
Maturity Date	March 2034
Redemption Date	March 2009
Umpqua Master Trust I [Member] | Estimated Fair Value [Member]
Issue Date	August 2007
Issued Amount	41,238
Carrying Value	21,134	[1]
Rate	Floating	[2],[7]
Effective Rate	3.70%	[4]
Maturity Date	September 2037
Redemption Date	September 2012
Interest Rate Adjustment	1.35%
Umpqua Master Trust IB [Member] | Estimated Fair Value [Member]
Issue Date	September 2007
Issued Amount	20,619
Carrying Value	12,863	[1]
Rate	Floating	[2],[8]
Effective Rate	5.28%	[4]
Maturity Date	December 2037
Redemption Date	December 2012
Interest Rate Adjustment	2.75%
HB Capital Trust I [Member] | Amortized Cost [Member]
Issue Date	March 2000
Issued Amount	5,310
Carrying Value	6,329	[1]
Rate	10.875	[2]
Effective Rate	8.24%	[4]
Maturity Date	March 2030
Redemption Date	March 2010
Humboldt Bancorp Statutory Trust I [Member] | Amortized Cost [Member]
Issue Date	February 2001
Issued Amount	5,155
Carrying Value	5,897	[1]
Rate	10.200	[2]
Effective Rate	8.26%	[4]
Maturity Date	February 2031
Redemption Date	February 2011
Humboldt Bancorp Statutory Trust II [Member] | Amortized Cost [Member]
Issue Date	December 2001
Issued Amount	10,310
Carrying Value	11,378	[1]
Rate	Floating	[2],[9]
Effective Rate	3.29%	[4]
Maturity Date	December 2031
Redemption Date	December 2006
Humboldt Bancorp Statutory Trust III [Member] | Amortized Cost [Member]
Issue Date	September 2003
Issued Amount	27,836
Carrying Value	30,605	[1]
Rate	Floating	[10],[2]
Effective Rate	2.76%	[4]
Maturity Date	September 2033
Redemption Date	September 2008
Interest Rate Adjustment	2.95%
CIB Capital Trust [Member] | Amortized Cost [Member]
Issue Date	November 2002
Issued Amount	10,310
Carrying Value	11,219	[1]
Rate	Floating	[2],[5]
Effective Rate	3.20%	[4]
Maturity Date	November 2032
Redemption Date	November 2007
Western Sierra Statutory Trust I [Member] | Amortized Cost [Member]
Issue Date	July 2001
Issued Amount	6,186
Carrying Value	6,186	[1]
Rate	Floating	[11],[2]
Effective Rate	4.01%	[4]
Maturity Date	July 2031
Redemption Date	July 2006
Interest Rate Adjustment	3.58%
Western Sierra Statutory Trust II [Member] | Amortized Cost [Member]
Issue Date	December 2001
Issued Amount	10,310
Carrying Value	10,310	[1]
Rate	Floating	[2],[9]
Effective Rate	4.15%	[4]
Maturity Date	December 2031
Redemption Date	December 2006
Western Sierra Statutory Trust III [Member] | Amortized Cost [Member]
Issue Date	September 2003
Issued Amount	10,310
Carrying Value	10,310	[1]
Rate	Floating	[12],[2]
Effective Rate	3.30%	[4]
Maturity Date	September 2033
Redemption Date	September 2008
Western Sierra Statutory Trust IV [Member] | Amortized Cost [Member]
Issue Date	September 2003
Issued Amount	10,310
Carrying Value	$ 10,310	[1]
Rate	Floating	[12],[2]
Effective Rate	3.30%	[4]
Maturity Date	September 2033
Redemption Date	September 2008
Umpqua Statutory Trust III [Member] | CIB Capital Trust [Member] | Estimated Fair Value [Member]
Interest Rate Adjustment	3.45%
Umpqua Statutory Trust IV [Member] | Umpqua Statutory Trust V [Member] | Estimated Fair Value [Member]
Interest Rate Adjustment	2.85%
Western Sierra Statutory Trust II [Member] | Humboldt Bancorp Statutory Trust I [Member] | Amortized Cost [Member]
Interest Rate Adjustment	3.60%
Western Sierra Statutory Trust III [Member] | Western Sierra Statutory Trust IV [Member] | Amortized Cost [Member]
Interest Rate Adjustment	2.90%

[1] Includes purchase accounting adjustments, net of accumulated amortization, for junior subordinated debentures assumed in connection with previous mergers as well as fair value adjustments related to trusts recorded at fair value.

[2] Contractual interest rate of junior subordinated debentures.

[3] Rate based on LIBOR plus 3.35%, adjusted quarterly.

[4] Effective interest rate based upon the carrying value as of December 2011.

[5] Rate based on LIBOR plus 3.45%, adjusted quarterly.

[6] Rate based on LIBOR plus 2.85%, adjusted quarterly.

[7] Rate based on LIBOR plus 1.35%, adjusted quarterly.

[8] Rate based on LIBOR plus 2.75%, adjusted quarterly.

[9] Rate based on LIBOR plus 3.60%, adjusted quarterly.

[10] Rate based on LIBOR plus 2.95%, adjusted quarterly.

[11] Rate based on LIBOR plus 3.58%, adjusted quarterly.

[12] Rate based on LIBOR plus 2.90%, adjusted quarterly.

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Operating Segments (Tables)

12 Months Ended

Dec. 31, 2011

Operating Segments [Abstract]

Summary Of Financial Information By Reportable Segment

Year Ended December 31, 2011

(in thousands)

	Community Banking		Wealth Management		Mortgage Banking		Consolidated
Interest income	$	474,167	$	13,362	$	14,224	$	501,753
Interest expense		68,751		2,067		2,483		73,301
Net interest income		405,416		11,295		11,741		428,452
Provision for non-covered loan and lease losses		46,220		—		—		46,220
Provision for covered loan and lease losses		16,141		—		—		16,141
Non-interest income		43,282		13,963		26,873		84,118
Non-interest expense		302,883		15,630		20,458		338,971
Income before provision for income taxes		83,454		9,628		18,156		111,238
Provision for income taxes		26,023		3,457		7,262		36,742
Net income		57,431		6,171		10,894		74,496
Dividends and undistributed earnings allocated to participating securities		356		—		—		356
Net earnings available to common shareholders	$	57,075	$	6,171	$	10,894	$	74,140
Total assets	$	11,086,493	$	53,044	$	423,818	$	11,563,355
Total loans (covered and non-covered)	$	6,171,368	$	38,810	$	300,371	$	6,510,549
Total deposits	$	8,830,353	$	390,992	$	15,345	$	9,236,690

Year Ended December 31, 2010

(in thousands)

	Community Banking			Wealth Management		Mortgage Banking		Consolidated
Interest income	$	466,054		$	9,978	$	12,564	$	488,596
Interest expense		89,622			1,435		2,755		93,812
Net interest income		376,432			8,543		9,809		394,784
Provision for non-covered loan and lease losses		113,668			—		—		113,668
Provision for covered loan and lease losses		5,151			—		—		5,151
Non-interest income		41,534			12,967		21,403		75,904
Non-interest expense		286,629			15,503		15,606		317,738
Income before (benefit from) provision for income taxes		12,518			6,007		15,606		34,131
(Benefit from) provision for income taxes		(2,342	)		1,905		6,242		5,805
Net income		14,860			4,102		9,364		28,326
Preferred stock dividends		12,192			—		—		12,192
Dividends and undistributed earnings allocated to participating securities		67			—		—		67
Net earnings available to common shareholders	$	2,601		$	4,102	$	9,364	$	16,067
Total assets	$	11,314,681		$	37,757	$	316,272	$	11,668,710
Total loans (covered and non-covered)	$	6,198,532		$	23,631	$	222,722	$	6,444,885
Total deposits	$	9,160,058		$	262,148	$	11,599	$	9,433,805

Year Ended December 31, 2009

(in thousands)

	Community Banking			Wealth Management			Mortgage Banking		Consolidated
Interest income	$	406,460		$	4,467		$	12,805	$	423,732
Interest expense		99,382			1			3,641		103,024
Net interest income		307,078			4,466			9,164		320,708
Provision for loan and lease losses		209,124			—			—		209,124
Non-interest income		45,280			9,344			18,892		73,516
Non-interest expense		352,290			12,910			14,203		379,403
(Loss) income before (benefit from) provision for income taxes		(209,056	)		900			13,853		(194,303	)
(Benefit from) provision for income taxes		(46,383	)		(95	)		5,541		(40,937	)
Net (loss) income		(162,673	)		995			8,312		(153,366	)
Preferred stock dividends		12,866			—			—		12,866
Dividends and undistributed earnings allocated to participating securities		30			—			—		30
Net (loss) earnings available to common shareholders	$	(175,569	)	$	995		$	8,312	$	(166,262	)
Total assets	$	9,109,542		$	31,196		$	240,634	$	9,381,372
Total loans (covered and non-covered)	$	5,789,730		$	17,484		$	192,053	$	5,999,267
Total deposits	$	7,432,549		$	98		$	7,787	$	7,440,434

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Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

NOTE 13. INCOME TAXES

The following table presents the components of income tax expense (benefit) attributable to continuing operations included in the Consolidated Statements of Operations for the years ended December 31:

(in thousands)
	Current			Deferred			Total
YEAR ENDED DECEMBER 31, 2011:
Federal	$	29,932		$	(40	)	$	29,892
State		4,810			2,040			6,850
	$	34,742		$	2,000		$	36,742
YEAR ENDED DECEMBER 31, 2010:
Federal	$	(1,714	)	$	6,364		$	4,650
State		3,126			(1,971	)		1,155
	$	1,412		$	4,393		$	5,805
YEAR ENDED DECEMBER 31, 2009:
Federal	$	(24,339	)	$	(7,471	)	$	(31,810	)
State		1,762			(10,889	)		(9,127	)
	$	(22,577	)	$	(18,360	)	$	(40,937	)

The following table presents a reconciliation of income taxes computed at the Federal statutory rate to the actual effective rate for the years ended December 31:

	2011			2010			2009
Statutory Federal income tax rate		35.0	%		35.0	%		35.0	%
Goodwill impairment		—			—			-20.0	%
State tax, net of Federal income tax		3.8	%		2.5	%		2.9	%
Tax-exempt income		-3.7	%		-13.6	%		2.2	%
Tax credits		-1.5	%		-5.5	%		1.0	%
Other		-0.6	%		-1.4	%		-0.1	%
Effective income tax rate		33.0	%		17.0	%		21.0	%

The following table reflects the effects of temporary differences that give rise to the components of the net deferred tax (liabilities) assets (recorded in other liabilities or/and other assets on the consolidated balance sheets) as of December 31:

(in thousands)
	2011			2010
DEFERRED TAX ASSETS:
Covered loans	$	38,812		$	49,334
Allowance for loan and lease losses		36,221			41,084
Accrued severance and deferred compensation		10,976			10,690
Tax credits		6,815			13,289
Non-covered other real estate owned		6,566			3,741
Covered other real estate owned		6,284			8,132
Non-covered loans		2,607			3,401
Discount on trust preferred securities		2,535			2,753
Basis differences of stock and securities		2,335			2,998
Net operating loss carryforwards		1,291			8,897
Other		9,826			7,719
Total gross deferred tax assets		124,268			152,038
DEFERRED TAX LIABILITIES:
FDIC indemnification asset		45,817			73,719
Unrealized gain on investment securities		22,713			16,966
Fair market value adjustment on junior subordinated debentures		20,099			20,801
Premises and equipment depreciation		8,789			5,581
Mortgage servicing rights		7,058			5,782
Deferred loan fees		4,983			4,297
Intangibles		4,928			5,228
Leased assets		4,251			4,879
Other		6,063			5,136
Total gross deferred tax liabilities		124,701			142,389
Net deferred tax (liabilities) assets	$	(433	)	$	9,649

The Company has determined that it is not required to establish a valuation allowance for the deferred tax assets as management believes it is more likely than not that the deferred tax assets of $124.3 million and $152.0 million at December 31, 2011 and 2010, respectively, will be realized principally through carry-back to taxable income in prior years and future reversals of existing taxable temporary differences. Management further believes that future taxable income will be sufficient to realize the benefits of temporary deductible differences that cannot be realized through carry-back to prior years or through the reversal of future temporary taxable differences.

The tax credits consist of state tax credits of $6.8 and $8.9 million at December 31, 2011 and 2010, respectively, and none and $4.3 million of federal low income housing credits at December 31, 2011 and 2010, respectively. The state tax credits, comprised primarily of State of Oregon Business Energy Tax Credits ("BETC"), will be utilized to offset future state income taxes. Most of the state tax credits benefit a five-year period, with an eight-year carry-forward allowed. Federal low income housing credits have a twenty-year carry forward. Management believes, based upon the Company's historical performance, that the deferred tax assets relating to these tax credits will be realized in the normal course of operations, and, accordingly, management has not reduced these deferred tax assets by a valuation allowance.

The Company has California state net operating loss carry forwards of $1.3 million at both December 31, 2011 and 2010. The California state net operating losses may be carried forward twenty years. Management believes, based upon the Company's historical performance, that the deferred tax assets relating to federal and state net operating losses will be realized in the normal course of operations, and, accordingly, management has not reduced these deferred tax assets by a valuation allowance.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, as well as the Oregon and California state jurisdictions. Except for the California amended returns of an acquired institution for the tax years 2001, 2002, and 2003, and only as it relates to the net interest deduction taken on these amended returns, the Company is no longer subject to U.S. federal or Oregon state tax authority examinations for years before 2008 and California state tax authority examinations for years before 2004. The Internal Revenue Service concluded an examination of the Company's U.S. income tax returns for 2006 through 2008 in 2010. The results of these examinations had no significant impact on the Company's financial statements.

In accordance with the provisions of FASB ASC 740, Income Taxes, ("ASC 740"), relating to the accounting for uncertainty in income taxes, the Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities' examinations of the Company's tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

The Company recorded a reduction in its liability for unrecognized tax benefits relating to California tax incentives and temporary differences in the amount of $39,000 and $1.7 million during 2011 and 2010, respectively. The Company had gross unrecognized tax benefits recorded as of December 31, 2011 and 2010 in the amounts of $550,000 and $589,000, respectively. If recognized the unrecognized tax benefit would impact the 2011 annual effective tax rate by 0.3%. During 2011, the Company recognized a benefit of $4,000 in interest related to its liability for unrecognized tax benefits during the same period. During 2010, the Company accrued $194,000 of interest related to unrecognized tax benefits, which is reported by the Company as a component of tax expense. As of December 31, 2011 and 2010, the accrued interest related to unrecognized tax benefits is $167,000 and $171,000, respectively.

Detailed below is a reconciliation of the Company's unrecognized tax benefits, gross of any related tax benefits, for the years ended December 31, 2011 and 2010, respectively:

(in thousands)
	2011			2010
Balance, beginning of period	$	589		$	2,263
Changes based on tax positions related to prior years		—			(1,674	)
Reductions for tax positions of prior years		(39	)		—
Balance, end of period	$	550		$	589

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Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 27. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Bank has made loans to its directors and executive officers (and their associated and affiliated companies). All such loans have been made on the same terms as those prevailing at the time of origination to other borrowers.

The following table presents a summary of aggregate activity involving related party borrowers for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011			2010			2009
Loans outstanding at beginning of year	$	9,264		$	12,301		$	13,968
New loans and advances		10,041			1,409			1,819
Less loan repayments		(7,060	)		(3,467	)		(3,471	)
Reclassification(1)		—			(979	)		(15	)
Loans outstanding at end of year	$	12,245		$	9,264		$	12,301

(1) Represents loans that were once considered related party but are no longer considered related party, or loans that were not related party that subsequently became related party loans.

At December 31, 2011 and 2010 deposits of related parties amounted to $18.9 million and $14.7 million, respectively.

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Covered Assets And Indemnification Asset (Number Of Loans And Acquired Unpaid Principal Balance) (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended
	Jan. 22, 2010 Evergreen Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Jun. 18, 2010 Nevada Security Bank [Member]	Jan. 22, 2010 Performing Loans [Member] Evergreen Bank [Member]	Feb. 26, 2010 Performing Loans [Member] Rainier Pacific Bank [Member]	Jun. 18, 2010 Performing Loans [Member] Nevada Security Bank [Member]	Jan. 22, 2010 Non-Performing Loans [Member] Evergreen Bank [Member]	Feb. 26, 2010 Non-Performing Loans [Member] Rainier Pacific Bank [Member]	Jun. 18, 2010 Non-Performing Loans [Member] Nevada Security Bank [Member]
Number of Pools	23	29	28	15	19	19	8	10	9
Number of Loans	1,390	3,686	508	1,263	3,647	402	127	39	106
Acquired Unpaid Principal Balance	$ 368.5	$ 561.4	$ 327.6	$ 247.9	$ 516.9	$ 224.2	$ 120.6	$ 44.5	$ 103.4

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Interest Bearing Deposits (Maturities Of Time Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Interest Bearing Deposits [Abstract]
2012	$ 1,589,811
2013	469,152
2014	45,831
2015	37,493
2016	136,685
Thereafter	2,705
Total time deposits	$ 2,281,677

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Securities Sold Under Agreements To Repurchase

12 Months Ended

Dec. 31, 2011

Securities Sold Under Agreements To Repurchase [Abstract]

Securities Sold Under Agreements To Repurchase

NOTE 15. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The following table presents information regarding securities sold under agreements to repurchase at December 31, 2011 and 2010:

(dollars in thousands)
	Repurchase Amount		Weighted Average Interest Rate			Carrying Value of Underlying Assets		Market Value of Underlying Assets
December 31, 2011	$	124,605		0.35	%	$	129,810	$	129,810
December 31, 2010	$	73,759		0.66	%	$	75,305	$	75,305

The securities underlying agreements to repurchase entered into by the Bank are for the same securities originally sold, with a one-day maturity. In all cases, the Bank maintains control over the securities. Securities sold under agreements to repurchase averaged approximately $113.1 million, $54.7 million, and $60.7 million for the years ended December 31, 2011, 2010 and 2009, respectively. The maximum amount outstanding at any month end for the years ended December 31, 2011, 2010 and 2009 was $148.2 million, $73.8 million, and $64.3 million, respectively. Investment securities are pledged as collateral in an amount equal to or greater than the repurchase agreements.

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Quarterly Financial Information (Tables)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information [Abstract]

Schedule Of Quarterly Financial Information

2011
	December 31		September 30		June 30		March 31		Four Quarters
Interest income	$	121,917	$	126,527	$	128,417	$	124,892	$	501,753
Interest expense		15,262		18,993		19,056		19,990		73,301
Net interest income		106,655		107,534		109,361		104,902		428,452
Provision for non-covered loan and lease losses		6,642		9,089		15,459		15,030		46,220
Provision for covered loan and lease losses		698		4,420		3,755		7,268		16,141
Non-interest income		18,128		24,778		19,627		21,585		84,118
Non-interest expense		85,339		86,224		83,207		84,201		338,971
Income before provision for income taxes		32,104		32,579		26,567		19,988		111,238
Provision for income taxes		10,722		10,717		8,782		6,521		36,742
Net income		21,382		21,862		17,785		13,467		74,496
Dividends and undistributed earnings allocated to participating securities		103		105		86		62		356
Net earnings available to common shareholders	$	21,279	$	21,757	$	17,699	$	13,405	$	74,140
Basic earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Diluted earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Cash dividends declared per common share	$	0.07	$	0.07	$	0.05	$	0.05

2010
	December 31		September 30		June 30		March 31			Four Quarters
Interest income	$	130,677	$	132,946	$	115,604	$	109,369		$	488,596
Interest expense		23,562		24,629		23,304		22,317			93,812
Net interest income		107,115		108,317		92,300		87,052			394,784
Provision for non-covered loan and lease losses		17,567		24,228		29,767		42,106			113,668
Provision for covered loan and lease losses		4,484		667		—		—			5,151
Non-interest income		15,161		12,133		18,563		30,047			75,904
Non-interest expense		87,864		85,170		74,833		69,871			317,738
Income before provision for (benefit from) income taxes		12,361		10,385		6,263		5,122			34,131
Provision for (benefit from) income taxes		4,203		2,194		2,800		(3,392	)		5,805
Net income		8,158		8,191		3,463		8,514			28,326
Preferred stock dividends		—		—		—		12,192			12,192
Dividends and undistributed earnings allocated to participating securities		18		18		16		15			67
Net earnings (loss) available to common shareholders	$	8,140	$	8,173	$	3,447	$	(3,693	)	$	16,067
Basic earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Diluted earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Cash dividends declared per common share	$	0.05	$	0.05	$	0.05	$	0.05

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Premises And Equipment (Components Of Premises And Equipment) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Premises And Equipment [Abstract]
Land	$ 24,855,000	$ 23,174,000
Buildings and improvements	127,028,000	115,807,000
Furniture, fixtures and equipment	108,599,000	95,909,000
Construction in progress	10,360,000	4,471,000
Total premises and equipment	270,842,000	239,361,000
Less: Accumulated depreciation and amortization	(118,476,000)	(102,762,000)
Premises and equipment, net	152,366,000	136,599,000
Depreciation expense	$ 16,500,000	$ 14,400,000	$ 12,800,000

XML

Operating Segments (Narrative) (Details)	Dec. 31, 2011
Number of primary segments	3
Community Banking [Member]
Number of locations in operation	194

XML

Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ 74,496	$ 28,326	$ (153,366)
Available for sale securities:
Unrealized gains arising during the year	22,101	1,305	23,888
Reclassification adjustment for gains realized in net income (net of tax expense of $3,094, $930, and $3,431 in 2011, 2010, and 2009, respectively)	(4,641)	(1,396)	(5,147)
Income tax expense related to unrealized gains	(8,840)	(522)	(9,555)
Net change in unrealized gains	8,620	(613)	9,186
Held to maturity securities:
Reclassification adjustment for impairments realized in net income (net of tax benefit of $1,716 in 2009)			2,574
Amortization of unrealized losses on investment securities transferred to held to maturity (net of tax benefit of $70 in 2009)			103
Net change in unrealized losses on investment securities transferred to held to maturity			2,677
Unrealized (losses) gain related to factors other than credit (net of tax expense of $34 and $1,080 in 2011 and 2009, respectively and tax benefit of $150 in 2010)	(52)	225	(1,620)
Reclassification adjustment for impairments realized in net income (net of tax benefit of $108, $137 and $307 in 2011, 2010 and 2009, respectively)	161	205	460
Accretion of unrealized losses related to factors other than credit to investment securities held to maturity (net of tax benefit of $66, $115 and $120 in 2011, 2010 and 2009, respectively)	100	173	180
Net change in unrealized losses related to factors other than credit	209	603	(980)
Other comprehensive (loss) income, net of tax	8,829	(10)	10,883
Comprehensive income (loss)	$ 83,325	$ 28,316	$ (142,483)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	112,164,891	114,536,814
Common stock, shares outstanding	112,164,891	114,536,814
Covered Loans And Leases Receivable Allowance	$ 14,320	$ 2,721

XML

Premises And Equipment

12 Months Ended

Dec. 31, 2011

Premises And Equipment [Abstract]

Premises And Equipment

NOTE 8. PREMISES AND EQUIPMENT

The following table presents the major components of premises and equipment at December 31, 2011 and 2010:

(in thousands)
	2011			2010
Land	$	24,855		$	23,174
Buildings and improvements		127,028			115,807
Furniture, fixtures and equipment		108,599			95,909
Construction in progress		10,360			4,471
Total premises and equipment		270,842			239,361
Less: Accumulated depreciation and amortization		(118,476	)		(102,762	)
Premises and equipment, net	$	152,366		$	136,599

Depreciation expense totaled $16.5 million, $14.4 million and $12.8 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Umpqua's subsidiaries have entered into a number of non-cancelable lease agreements with respect to premises and equipment. See Note 20 for more information regarding rental expense, net of rent income, and minimum annual rental commitments under non-cancelable lease agreements.

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Covered Assets And Indemnification Asset (Activity In The Covered Allowance For Loan And Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Balance, end of period	$ 0
Covered loans and leases [Member]
Balance, beginning of period	2,721
Charge-offs	(6,686)	(2,705)
Recoveries	2,144	275
Provision	16,141	5,151
Balance, end of period	14,320	2,721
Commercial Real Estate [Member] | Covered loans and leases [Member]
Balance, beginning of period	2,465
Charge-offs	(3,177)	(2,439)
Recoveries	1,348	11
Provision	8,303	4,893
Balance, end of period	8,939	2,465
Commercial [Member] | Covered loans and leases [Member]
Balance, beginning of period	176
Charge-offs	(660)	(266)
Recoveries	512	263
Provision	3,936	179
Balance, end of period	3,964	176
Residential [Member] | Covered loans and leases [Member]
Balance, beginning of period	56
Charge-offs	(1,657)
Recoveries	142
Provision	2,450	56
Balance, end of period	991	56
Consumer & Other [Member] | Covered loans and leases [Member]
Balance, beginning of period	24
Charge-offs	(1,192)
Recoveries	142	1
Provision	1,452	23
Balance, end of period	$ 426	$ 24

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Allowance For Non-Covered Loan Loss And Credit Quality (Internal Risk Rating By Loan Class) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Commercial real estate, Term & multifamily	$ 3,558,295	$ 3,483,475
Commercial real estate, Construction & development	165,066	247,814
Commercial real estate, Residential development	90,073	147,813
Commercial, Term	625,766	509,453
Commercial, LOC & other	832,999	747,419
Residential, Mortgage	315,927	222,416
Residential, Home equity loans & lines	272,192	278,585
Consumer & other	38,860	33,043
Total	5,899,178	5,670,018
Deferred loan fees, net	(11,080)	(11,031)
Total loans and leases	5,888,098	5,658,987
Pass/Watch [Member]
Commercial real estate, Term & multifamily	3,075,452	2,978,116
Commercial real estate, Construction & development	102,786	145,108
Commercial real estate, Residential development	25,062	27,428
Commercial, Term	586,365	472,512
Commercial, LOC & other	775,233	646,163
Residential, Mortgage	309,478	216,899
Residential, Home equity loans & lines	268,731	275,906
Consumer & other	38,098	32,008
Total	5,181,205	4,794,140
Special Mention [Member]
Commercial real estate, Term & multifamily	275,475	314,094
Commercial real estate, Construction & development	19,946	25,295
Commercial real estate, Residential development	6,740	13,764
Commercial, Term	16,631	17,658
Commercial, LOC & other	22,051	30,761
Residential, Mortgage	2,106	2,414
Residential, Home equity loans & lines	683	2,447
Consumer & other	82	595
Total	343,714	407,028
Substandard [Member]
Commercial real estate, Term & multifamily	146,919	113,405
Commercial real estate, Construction & development	12,342	51,853
Commercial real estate, Residential development	8,733	23,106
Commercial, Term	9,608	12,109
Commercial, LOC & other	22,706	42,162
Residential, Mortgage	296	786
Residential, Home equity loans & lines	773	125
Consumer & other	254	29
Total	201,631	243,575
Doubtful [Member]
Commercial real estate, Term & multifamily
Commercial real estate, Construction & development
Commercial real estate, Residential development
Commercial, Term
Commercial, LOC & other
Residential, Mortgage
Residential, Home equity loans & lines
Consumer & other
Total
Deferred loan fees, net
Total loans and leases
Loss [Member]
Residential, Mortgage	4,047	2,138
Residential, Home equity loans & lines	1,876	107
Consumer & other	426	411
Total	6,349	2,656
Impaired [Member]
Commercial real estate, Term & multifamily	60,449	77,860
Commercial real estate, Construction & development	29,992	25,558
Commercial real estate, Residential development	49,538	83,515
Commercial, Term	13,162	7,174
Commercial, LOC & other	13,009	28,333
Residential, Mortgage		179
Residential, Home equity loans & lines	129
Total	$ 166,279	$ 222,619

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Allowance For Non-Covered Loan Loss And Credit Quality (Non-Covered Non-Accrual Loans And Loans Past Due) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Total Non-covered Loans and Leases	$ 5,888,098	$ 5,658,987
Deferred loan fees, net	(11,080)	(11,031)
Non-covered loans and leases	5,888,098	5,658,987
Consumer & Other [Member]
30-59 Days Past Due	67	361
60-89 Days Past Due	16	233
Greater Than 90 Days and Accruing	679	441
Total Past Due	762	1,035
Nonaccrual
Current	38,098	32,008
Total Non-covered Loans and Leases	38,860	33,043
Total Loan [Member]
30-59 Days Past Due	19,774	28,128
60-89 Days Past Due	15,453	20,089
Greater Than 90 Days and Accruing	10,821	7,071
Total Past Due	46,048	55,288
Nonaccrual	80,562	138,177
Current	5,772,568	5,476,553
Total Non-covered Loans and Leases	5,899,178	5,670,018
Commercial [Member] | Term [Member]
30-59 Days Past Due	2,075	2,010
60-89 Days Past Due	738	932
Greater Than 90 Days and Accruing	1,179
Total Past Due	3,992	2,942
Nonaccrual	8,120	6,271
Current	613,654	500,240
Total Non-covered Loans and Leases	625,766	509,453
Commercial [Member] | LOC & Other [Member]
30-59 Days Past Due	5,435	5,939
60-89 Days Past Due	1,697	1,418
Greater Than 90 Days and Accruing	1,397	18
Total Past Due	8,529	7,375
Nonaccrual	8,772	28,034
Current	815,698	712,010
Total Non-covered Loans and Leases	832,999	747,419
Commercial Real Estate [Member] | Term & Multifamily [Member]
30-59 Days Past Due	7,319	14,596
60-89 Days Past Due	11,184	8,328
Greater Than 90 Days and Accruing		3,008
Total Past Due	18,503	25,932
Nonaccrual	44,486	49,162
Current	3,495,306	3,408,381
Total Non-covered Loans and Leases	3,558,295	3,483,475
Commercial Real Estate [Member] | Construction & Development [Member]
30-59 Days Past Due		2,172
60-89 Days Past Due	662	6,726
Greater Than 90 Days and Accruing	575
Total Past Due	1,237	8,898
Nonaccrual	3,348	20,124
Current	160,481	218,792
Total Non-covered Loans and Leases	165,066	247,814
Commercial Real Estate [Member] | Residential Development [Member]
30-59 Days Past Due	4,171	640
60-89 Days Past Due
Greater Than 90 Days and Accruing
Total Past Due	4,171	640
Nonaccrual	15,836	34,586
Current	70,066	112,587
Total Non-covered Loans and Leases	90,073	147,813
Residential [Member] | Mortgage [Member]
30-59 Days Past Due	215	1,314
60-89 Days Past Due	965	1,101
Greater Than 90 Days and Accruing	4,343	3,372
Total Past Due	5,523	5,787
Nonaccrual
Current	310,404	216,629
Total Non-covered Loans and Leases	315,927	222,416
Residential [Member] | Home Equity Loans & Lines [Member]
30-59 Days Past Due	492	1,096
60-89 Days Past Due	191	1,351
Greater Than 90 Days and Accruing	2,648	232
Total Past Due	3,331	2,679
Nonaccrual
Current	268,861	275,906
Total Non-covered Loans and Leases	$ 272,192	$ 278,585

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Interest Bearing Deposits (Interest Expense For Each Deposit Type) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest Bearing Deposits [Abstract]
Interest bearing demand	$ 3,056	$ 4,677	$ 4,884
Money market	17,236	26,412	26,885
Savings	356	543	572
Time, $100,000 and over	25,771	31,735	36,070
Other time less than $100,000	9,324	12,874	20,331
Interest on deposits	$ 55,743	$ 76,241	$ 88,742

XML

Employee Benefit Plans (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Percentage eligible officers may elect, retirement plan	50.00%
Present value of future salary contribution plan benefits	$ 16,900,000	$ 16,300,000
Cash Surrender Value of Life Insurance	92,555,000	90,161,000
Post-retirement benefits payable	1,500,000	1,400,000
Postemployment benefits, period expense	1,800,000	1,800,000	1,800,000
Liabilities recorded in connection with deferred compensation plan benefits	1,300,000	1,500,000
Plan balance recorded in other liabilities	2,500,000	3,000,000
Defined contribution plan cost recognized	2,700,000	2,200,000	2,100,000
Supplemental Retirement Plan [Member]
Contributions	96,000	56,000	6,000
Pension and other postretirement defined benefit plans, liabilities	530,000	387,000
Deferred Compensation Plan [Member]
Pension and other postretirement defined benefit plans, liabilities	$ 532,000	$ 300,000

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Fair Values (Schedule Of Carrying Value And Fair Value Of Financial Instruments Not Recorded At Fair Value) (Details) (USD $) In Thousands, unless otherwise specified							12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2011 Carrying Value [Member]	Dec. 31, 2010 Carrying Value [Member]	Dec. 31, 2011 Estimated Fair Value [Member]	Dec. 31, 2010 Estimated Fair Value [Member]
Cash and cash equivalents	$ 152,265	$ 111,946			$ 598,766	$ 1,004,125	$ 598,766	$ 1,004,125
Trading securities	2,309	3,024			2,309	3,024	2,309	3,024
Securities available for sale	3,168,578	2,919,180			3,168,578	2,919,180	3,168,578	2,919,180
Securities held to maturity	4,714	4,762			4,714	4,762	4,759	4,774
Loans held for sale	98,691	75,626			98,691	75,626	98,691	75,626
Non-covered loans and leases, net	5,888,098	5,658,987			5,795,130	5,557,066	5,816,714	5,767,506
Covered loans and leases	622,451	785,898			622,451	785,898	722,295	893,682
Restricted equity securities	32,581	34,475			32,581	34,475	32,581	34,475
Mortgage servicing rights	18,184	14,454	12,625	8,205	18,184	14,454	18,184	14,454
Bank owned life insurance assets					92,555	90,161	92,555	90,161
FDIC indemnification asset	91,089	146,413			91,089	146,413	47,008	90,011
Derivatives	7,955	1,060			7,955	1,060	7,955	1,060
Visa Class B common stock							19,230	15,987
Deposits	9,236,690	9,433,805	7,440,434		9,236,690	9,433,805	9,260,327	9,464,406
Securities sold under agreement to repurchase	124,605	73,759			124,605	73,759	124,605	73,759
Term debt	255,676	262,760			255,676	262,760	284,911	282,127
Junior subordinated debentures, at fair value	82,905	80,688			82,905	80,688	82,905	80,688
Junior subordinated debentures, at amortized cost	102,544	102,866			102,544	102,866	68,698	65,771
Derivatives	$ 6,509	$ 361			$ 6,509	$ 361	$ 6,509	$ 361

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Income Taxes (Components Of The Net Deferred Tax (Liabilities) Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Abstract]
Covered Loans	$ 38,812	$ 49,334
Allowance for loan and lease losses	36,221	41,084
Accrued severance and deferred compensation	10,976	10,690
Tax credits	6,815	13,289
Non-covered other real estate owned	6,566	3,741
Covered other real estate owned	6,284	8,132
Non-covered loans	2,607	3,401
Discount on trust preferred securities	2,535	2,753
Basis differences of stock and securities	2,335	2,998
Net operating loss carryforwards	1,291	8,897
Other	9,826	7,719
Total gross deferred tax assets	124,268	152,038
FDIC indemnification asset	45,817	73,719
Unrealized gain on investment securities	22,713	16,966
Fair market value adjustment on junior subordinated debentures	20,099	20,801
Premises and equipment depreciation	8,789	5,581
Mortgage servicing rights	7,058	5,782
Deferred loan fees	4,983	4,297
Intangibles	4,928	5,228
Leased assets	4,251	4,879
Other	6,063	5,136
Total gross deferred tax liabilities	124,701	142,389
Net deferred tax (liabilities) assets	$ (433)	$ 9,649

XML

Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Jan. 31, 2012	Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2011
Entity Registrant Name	UMPQUA HOLDINGS CORP
Entity Central Index Key	0001077771
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding		112,193,401
Entity Public Float			$ 1,312,077,500

XML

Securities Sold Under Agreements To Repurchase (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Securities Sold Under Agreements To Repurchase [Abstract]
Securities sold under agreements to repurchase average	$ 113.1	$ 54.7	$ 60.7
Securities sold under agreements to repurchase maximum outstanding	$ 148.2	$ 73.8	$ 64.3

XML

Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

NOTE 9.    GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the Company's goodwill and other intangible assets for the years ended December 31, 2008, 2009, 2010, and 2011. Goodwill is reflected by operating segment; all other intangible assets are related to the Community Banking segment.

(in thousands)

	Goodwill
	Community Banking									Wealth Management
	Gross			Accumulated Impairment			Total			Gross		Accumulated Impairment			Total
Balance, December 31, 2008	$	719,336		$	—		$	719,336		$	3,697	$	(982	)	$	2,715
Reductions		(81	)		—			(81	)		—		—			—
Impairment		—			(111,952	)		(111,952	)		—		—			—
Balance, December 31, 2009		719,255			(111,952	)		607,303			3,697		(982	)		2,715
Net additions		45,954			—			45,954			—		—			—
Reductions		(96	)		—			(96	)		—		—			—
Balance, December 31, 2010		765,113			(111,952	)		653,161			3,697		(982	)		2,715
Net additions		247			—			247			—		—			—
Reductions		(44	)		—			(44	)		—		—			—
Balance, December 31, 2011	$	765,316		$	(111,952	)	$	653,364		$	3,697	$	(982	)	$	2,715
	Other Intangible Assets
	Gross			Accumulated Amortization			Net
Balance, December 31, 2008	$	56,213		$	(20,432	)	$	35,781
Impairment		—			(804	)		(804	)
Amortization		—			(5,361	)		(5,361	)
Balance, December 31, 2009		56,213			(26,597	)		29,616
Net additions		7,016			—			7,016
Reductions		(5,150	)		—			(5,150	)
Amortization		—			(5,389	)		(5,389	)
Balance, December 31, 2010		58,079			(31,986	)		26,093
Net additions		—			—			—
Amortization		—			(4,948	)		(4,948	)
Balance, December 31, 2011	$	58,079		$	(36,934	)	$	21,145

Goodwill additions in 2011 relate to purchase accounting adjustments finalized relating to the Rainier acquisition. The 2010 goodwill additions relate to the Rainier and Nevada Security acquisitions and represent the excess of the total purchase price paid over the fair values of the assets acquired, net of the fair values of liabilities assumed. Additional information on the acquisition and purchase price allocation is provided in Note 2. The reductions to goodwill include decreases of $44,000, $96,000, and $81,000 in 2011, 2010, and 2009, respectively, due to the recognition of tax benefits upon exercise of fully vested acquired stock options.

Intangible additions in 2010 relate to the Evergreen, Rainier, and Nevada Security acquisitions and represent core deposits, which includes all deposits except certificates of deposit, and an insurance related customer relationship, which was sold in the second quarter of 2010 for the same value recorded in the purchase price allocation. The values of the core deposit intangible assets were determined by an analysis of the cost differential between the core deposits and alternative funding sources. The value of the insurance related customer relationship was determined based on market indicators. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and are also reviewed for impairment. We amortize other intangible assets on an accelerated or straight-line basis over an estimated ten to fifteen year life. No impairment losses separate from the scheduled amortization have been recognized in the periods presented.

The Company performed a goodwill impairment analysis of the Community Banking operating segment as of June 30, 2009, due to a decline in the Company's market capitalization below book value of equity and continued weakness in the banking industry. The Company engaged an independent valuation consultant to assist us in determining whether and to what extent our goodwill asset was impaired. The results of the Company's and valuation specialist's step one impairment test indicated that the reporting unit's fair value was less than its carrying value, and therefore the Company performed a step two analysis. As part of the second step of the goodwill impairment analysis, we calculated the fair value of the reporting unit's assets and liabilities, as well as its unrecognized identifiable intangible assets, such as the core deposit intangible and trade name. Fair value adjustments to items on the balance sheet primarily related to investment securities held to maturity, loans, other real estate owned, Visa Class B common stock, deferred taxes, deposits, term debt, and junior subordinated debentures carried at amortized cost. The external valuation specialist assisted management to estimate the fair value of our unrecognized identifiable assets, such as the core deposit intangible and trade name.

The most significant fair value adjustment made in this analysis was to adjust the carrying value of the Company's loans receivable portfolio to fair value. The fair value of the Company's loan receivable portfolio at June 30, 2009 was estimated in a manner similar to methodology utilized as part of the December 31, 2008 goodwill impairment evaluation. As part of the December 31, 2008 loan valuation, the loan portfolio was stratified into sixty-eight loan pools that shared common characteristics, namely loan type, payment terms, and whether the loans were performing or non-performing. Each loan pool was discounted at a rate that considers current market interest rates, credit risk, and assumed liquidity premiums required based upon the nature of the underlying pool. Due to the disruption in the financial markets experienced during 2008 and continuing through 2009, the liquidity premium reflects the reduction in demand in the secondary markets for all grades of non-conforming credit, including those that are performing. Liquidity premiums for individual loan categories generally ranged from 4.6% for performing loans to 30% for construction and non-performing loans. At December 31, 2008, the fair value of the overall loan portfolio was calculated to be at a 9% discount relative to its book value. The composition of the loan portfolio at June 30, 2009, including loan type and performance indicators, was substantially similar to the loan portfolio at December 31, 2008. At June 30, 2009, the fair value of the loan portfolio was estimated to be at a 12% discount relative to its carrying value. The additional discount is primarily attributed to the additional liquidity premium required as of the measurement date associated with the Company's concentration of commercial real estate loans.

Other significant fair value adjustments utilized in this goodwill impairment analysis included the value of the core deposit intangible asset which was calculated as 0.53% of core deposits, and includes all deposits except certificates of deposit. The carrying value of other real estate owned was discounted by 25%, representing a liquidity adjustment given the current market conditions. The fair value of our trade name, which represents the competitive advantage associated with our brand recognition and ability to attract and retain relationships, was estimated to be $19.3 million. The fair value of our junior subordinated debentures carried at amortized cost was determined in a manner and utilized inputs, primarily the credit risk adjusted spread, consistent with our methodology for determining the fair value of junior subordinated debentures recorded at fair value.

Based on the results of the step two analysis, the Company determined that the implied fair value of the goodwill was less than its carrying amount on the Company's balance sheet, and as a result, recognized a goodwill impairment loss of $112.0 million in the second quarter of 2009. This write-down of goodwill was a non-cash charge that did not affect the Company's or the Bank's liquidity or operations. In addition, because goodwill is excluded in the calculation of regulatory capital, the Company's "well-capitalized" capital ratios were not affected by this charge.

The Company conducted its annual evaluation of goodwill for impairment at both December 31, 2011 and 2010, respectively. At both dates, in the first step of the goodwill impairment test, the Company determined that the fair value of the Community Banking reporting unit exceeded its carrying amount. This determination is consistent with the events occurring after the Company recognized the $112.0 million impairment of goodwill in the second quarter of 2009. First, the market capitalization and estimated fair value of the Company increased significantly subsequent to the recognition of the impairment charge, as the fair value of the Company's stock increased 60% from June 30, 2009 to December 31, 2011. Secondly, the Company's successful public common stock offerings in the third quarter of 2009 and first quarter of 2010 diluted the carrying value of the reporting unit's book equity on a per share basis, against which the fair value of the reporting unit is measured. The significant assumptions and methodology utilized to test for goodwill impairment as of December 31, 2011 were consistent with those used at December 31, 2010.

If the Company's common stock price should significantly decline or continues to trade below book value per common share, or should general economic conditions deteriorate further or remain depressed for a prolonged period of time, particularly in the financial industry, the Company may be required to recognize additional impairment of all, or some portion of, its goodwill. It is possible that changes in circumstances, existing at the measurement date or at other times in the future, or changes in the numerous estimates associated with management's judgments, assumptions and estimates made in assessing the fair value of our goodwill, such as valuation multiples, discount rates, or projected earnings, could result in an impairment charge in future periods. Additional impairment charges, if any, may be material to the Company's results of operations and financial position. However, any potential future impairment charge will have no effect on the Company's or the Bank's cash balances, liquidity, or regulatory capital ratios.

The inputs management utilizes to estimate the fair value of a reporting unit in step one of the goodwill impairment test, and estimating the fair values of the underlying assets and liabilities of a reporting unit in the second step of the goodwill impairment test, require management to make significant judgments, assumptions and estimates where observable market may not readily exist. Such inputs include, but are not limited to, trading multiples from comparable transactions, control premiums, the value that may arise from synergies and other benefits that would accrue from control over an entity, and the appropriate rates to discount projected cash flows. Additionally, there may be limited current market inputs to value certain assets or liabilities, particularly loans and junior subordinated debentures. These valuation inputs are considered to be Level 3 inputs.

Management will continue to monitor the relationship of the Company's market capitalization to both its book value and tangible book value, which management attributes to both financial services industry-wide and Company specific factors, and to evaluate the carrying value of goodwill and other intangible assets.

The Company evaluated the Wealth Management reporting segment's goodwill for impairment as of December 31, 2011. The first step of the goodwill impairment test indicated that the reporting unit's fair value exceeded its carrying value, therefore, no additional impairment was recognized.

In 2009, the Company recognized an $804,000 impairment related to the merchant servicing portfolio as a result of a decrease in the actual and expected future cash flows related to the income stream. Additional information on intangible assets related to acquisitions is provided in Note 2.

The table below presents the forecasted amortization expense for intangible assets acquired in all mergers:

(in thousands)

Year	Expected Amortization
2012	$	4,795
2013		4,623
2014		4,403
2015		4,182
2016		2,433
Thereafter		709
	$	21,145

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Investment Securities (Other-Than-Temporary Impairment Losses, Investment Securities) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Investment Securities [Abstract]
Total other-than-temporary impairment losses, Held To Maturity	$ 190		$ 93		$ 12,317
Total other-than-temporary impairment losses, Available For Sale					239
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income, Held To Maturity	169	[1]	321	[1]	(1,983)	[1]
Net impairment losses recognized in earnings, Held to Maturity	359	[2]	414	[2]	10,334	[2]
Net impairment losses recognized in earnings					$ 239	[2]

[1] Represents other-than-temporary impairment losses related to all other factors.

[2] Represents other-than-temporary impairment losses related to credit losses.

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Allowance For Non-Covered Loan Loss And Credit Quality (Non-Covered Loans Sold) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Total	$ 11,185	$ 38,744	$ 12,519
Residential Development [Member] | Commercial Real Estate [Member]
Total	1,123	15,255
LOC & Other [Member] | Commercial [Member]
Total	2,740	40
Construction & Development [Member] | Commercial Real Estate [Member]
Total	28	4,686
Term & Multifamily [Member] | Commercial Real Estate [Member]
Total	7,143	8,848
Term [Member] | Commercial [Member]
Total	$ 151	$ 9,915

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
INTEREST INCOME
Interest and fees on non-covered loans	$ 319,702		$ 336,320		$ 355,195
Interest and fees on covered loans	86,011		73,812
Interest and dividends on investment securities
Taxable	85,785		67,388		60,195
Exempt from federal income tax	8,653		8,839		7,794
Dividends	12		14		22
Interest on temporary investments and interest bearing deposits	1,590		2,223		526
Total interest income	501,753		488,596		423,732
INTEREST EXPENSE
Interest on deposits	55,743		76,241		88,742
Interest on securities sold under agreements to repurchase and federal funds purchased	539		517		680
Interest on term debt	9,255		9,229		4,576
Interest on junior subordinated debentures	7,764		7,825		9,026
Total interest expense	73,301		93,812		103,024
Net interest income	428,452		394,784		320,708
PROVISION FOR NON-COVERED LOAN AND LEASE LOSSES	46,220		113,668		209,124
PROVISION FOR COVERED LOAN AND LEASE LOSSES	16,141		5,151
Net interest income after provision for loan and lease losses	366,091		275,965		111,584
NON-INTEREST INCOME
Service charges on deposit accounts	33,096		34,874		32,957
Brokerage commissions and fees	12,787		11,661		7,597
Mortgage banking revenue, net	26,550		21,214		18,688
Gain (loss) on investment securities, net
Gain on sale of investment securities, net	7,735		2,326		8,896
Total other-than-temporary impairment losses	(190)		(93)		(12,556)
Portion of other-than-temporary impairment losses (transferred from) recognized in other comprehensive income	(169)		(321)		1,983
Total gain (loss) on investment securities, net	7,376		1,912		(1,677)
(Loss) gain on junior subordinated debentures carried at fair value	(2,197)		4,980		6,482
Bargain purchase gain on acquisition			6,437
Change in FDIC indemnification asset	(6,168)		(16,445)
Other income	12,674		11,271		9,469
Total non-interest income	84,118		75,904		73,516
NON-INTEREST EXPENSE
Salaries and employee benefits	179,480		162,875		126,850
Net occupancy and equipment	51,284		45,940		39,673
Communications	11,214		10,464		7,671
Marketing	6,138		6,225		4,529
Services	24,170		22,576		21,918
Supplies	2,824		3,998		3,257
FDIC assessments	10,768		15,095		15,825
Net loss on non-covered other real estate owned	10,690		8,097		23,204
Net loss (gain) on covered other real estate owned	7,481		(2,172)
Intangible amortization and impairment	4,948		5,389		6,165
Goodwill impairment					111,952
Merger-related expenses	360		6,675		273
Other expenses	29,614		32,576		18,086
Total non-interest expense	338,971		317,738		379,403
Income (loss) before provision for (benefit from) income taxes	111,238		34,131		(194,303)
Provision for (benefit from) income taxes	36,742		5,805		(40,937)
Net income (loss)	74,496		28,326		(153,366)
Preferred stock dividends			12,192		12,866
Dividends and undistributed earnings allocated to participating securities	356	[1]	67	[1]	30	[1]
Net earnings (loss) available to common shareholders	$ 74,140		$ 16,067		$ (166,262)
Earnings (loss) per common share:
Basic	$ 0.65		$ 0.15		$ (2.36)
Diluted	$ 0.65		$ 0.15		$ (2.36)
Weighted average number of common shares outstanding:
Basic	114,220		107,922		70,399
Diluted	114,409		108,153		70,399

[1] Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

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Cash And Due From Banks

12 Months Ended

Dec. 31, 2011

Cash And Due From Banks [Abstract]

Cash And Due From Banks

NOTE 3. CASH AND DUE FROM BANKS

The Bank is required to maintain an average reserve balance with the Federal Reserve Bank or maintain such reserve balance in the form of cash. The amount of required reserve balance at December 31, 2011 and 2010 was approximately $33.6 million and $31.8 million, respectively, and was met by holding cash and maintaining an average balance with the Federal Reserve Bank.

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Business Combinations

12 Months Ended

Dec. 31, 2011

Business Combinations [Abstract]

Business Combinations

NOTE 2. BUSINESS COMBINATIONS

On January 22, 2010, the Washington Department of Financial Institutions closed EvergreenBank ("Evergreen"), Seattle, Washington and appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. That same date, Umpqua Bank assumed the banking operations of Evergreen from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, other real estate owned ("OREO") and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $90.0 million on covered assets for Evergreen and absorb 95% of losses and share in 95% of loss recoveries exceeding $90.0 million, except the Bank will incur losses up to $30.2 million before the loss-sharing will commence. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date. With this agreement, Umpqua Bank assumed six additional store locations in the greater Seattle, Washington market. This acquisition is consistent with our community banking expansion strategy and provides further opportunity to fill in our market presence in the greater Seattle, Washington market.

On February 26, 2010, the Washington Department of Financial Institutions closed Rainier Pacific Bank ("Rainier"), Tacoma, Washington and appointed the FDIC as receiver. That same date, Umpqua Bank assumed the banking operations of Rainier from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on the first $95.0 million of losses on covered assets and absorb 95% of losses and share in 95% of loss recoveries exceeding $95.0 million. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates. With this agreement, Umpqua Bank assumed 14 additional store locations in Pierce County and surrounding areas. This acquisition expands our presence in the south Puget Sound region of Washington State.

The operations of Evergreen and Rainier are included in our operating results from January 23, 2010 and February 27, 2010, respectively, and added combined revenue of $46.2 million and $54.0 million, non-interest expense of $25.3 million and $23.6 million, and earnings of $13.8 million and $11.0 million, net of tax, for the years ended December 31, 2011 and 2010, respectively. These operating results include a bargain purchase gain of $6.4 million for the year ended December 31, 2010, which is not indicative of future operating results. Evergreen's and Rainiers's results of operations prior to the acquisition are not included in our operating results. Merger-related expenses of $92,000 and $4.4 million for the years ended December 31, 2011 and 2010 have been incurred in connection with these acquisitions and recognized in a separate line item on the Condensed Consolidated Statements of Operations.

On June 18, 2010, the Nevada State Financial Institutions Division closed Nevada Security Bank ("Nevada Security"), Reno, Nevada and appointed the FDIC as receiver. That same date, Umpqua Bank assumed the banking operations of Nevada Security from the FDIC under a whole bank purchase and assumption agreement with loss-sharing. Under the terms of the loss-sharing agreement, the FDIC will cover a substantial portion of any future losses on loans, related unfunded loan commitments, OREO, and accrued interest on loans for up to 90 days. The FDIC will absorb 80% of losses and share in 80% of loss recoveries on all covered assets. The loss-sharing arrangements for non-single family residential and single family residential loans are in effect for 5 years and 10 years, respectively, and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition dates. With this agreement, Umpqua Bank now assumed five additional store locations, including three in Reno, Nevada, one in Incline Village, Nevada, and one in Roseville, California. This acquisition expands our presence into the State of Nevada.

The operations of Nevada Security are included in our operating results from June 19, 2010, and added revenue of $18.6 million and $15.1 million, non-interest expense of $11.3 million and $7.3 million, and earnings of $2.1 million and $1.3 million, net of tax, for the years ended December 31, 2011 and 2010, respectively. Nevada Security's results of operations prior to the acquisition are not included in our operating results. Merger-related expenses of $101,000 and $1.7 million for the years ended December 31, 2011 and 2010 have been incurred in connection with the acquisition of Nevada Security and recognized as a separate line item on the Condensed Consolidated Statements of Operations.

We refer to the acquired loan portfolios and other real estate owned as "covered loans" and "covered other real estate owned", respectively, and these are presented as separate line items in our consolidated balance sheet. Collectively these balances are referred to as "covered assets".

The assets acquired and liabilities assumed from the Evergreen, Rainier, and Nevada Security acquisitions have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition dates. The fair values of the assets acquired and liabilities assumed were determined based on the requirements of the Fair Value Measurements and Disclosures topic of the Financial Accounting Standards Board Accounting Standards Codification (the "FASB ASC"). The terms of the agreements provide for the FDIC to indemnify the Bank against claims with respect to liabilities of Evergreen, Rainier, and Nevada Security not assumed by the Bank and certain other types of claims identified in the agreement. The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain of $6.4 million in the Evergreen acquisition, $35.8 million of goodwill in the Rainier acquisition and $10.4 million of goodwill in the Nevada Security acquisition.

A summary of the net assets (liabilities) received from the FDIC and the estimated fair value adjustments are presented below:

(in thousands)
	Evergreen			Rainier			Nevada Security
	January 22, 2010			February 26, 2010			June 18, 2010
Cost basis net assets (liabilities)	$	58,811		$	(50,295	)	$	53,629
Cash payment received from (paid to) the FDIC		—			59,351			(29,950	)
Fair value adjustments:
Loans		(117,449	)		(103,137	)		(112,975	)
Other real estate owned		(2,422	)		(6,581	)		(17,939	)
Other intangible assets		440			6,253			322
FDIC indemnification asset		71,755			76,603			99,160
Deposits		(1,023	)		(1,828	)		(1,950	)
Term debt		(2,496	)		(13,035	)		—
Other		(1,179	)		(3,139	)		(690	)
Bargain purchase gain (goodwill)	$	6,437		$	(35,808	)	$	(10,393	)

In FDIC-assisted transactions, only certain assets and liabilities are transferred to the acquirer and, depending on the nature and amount of the acquirer's bid, the FDIC may be required to make a cash payment to the acquirer or the acquirer may be required to make payment to the FDIC.

In the Evergreen acquisition, cost basis net assets of $58.8 million were transferred to the Company. The bargain purchase gain represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed.

In the Rainier acquisition, cost basis net liabilities of $50.3 million and a cash payment received from the FDIC of $59.4 million were transferred to the Company. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired. Goodwill of $27.6 million and core deposit intangible assets of $1.1 million recognized are deductible for income tax purposes.

In the Nevada Security acquisition, cost basis net assets of $53.6 million were transferred to the Company and a cash payment of $30.0 million was made to the FDIC. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired. Goodwill of $36.8 million and core deposit intangible assets of $322,000 recognized are deductible for income tax purposes.

The Bank did not immediately acquire all the real estate, banking facilities, furniture or equipment of Evergreen, Rainier, or Nevada Security as part of the purchase and assumption agreements. Rather, the Bank was granted the option to purchase or lease the real estate and furniture and equipment from the FDIC. The term of this option expired 90 days from the acquisition dates, unless extended by the FDIC. Acquisition costs of the real estate and furniture and equipment are based on current mutually agreed upon appraisals. Prior to the expiration of option term, Umpqua exercised the right to purchase approximately $344,000 of furniture and equipment for Evergreen, $26.3 million of real estate and furniture and equipment for Rainier, and $2.0 million of real estate, furniture and equipment for Nevada Security.

The statement of assets acquired and liabilities assumed at their estimated fair values of Evergreen, Rainier, and Nevada Security are presented below:

(in thousands)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Assets Acquired:
Cash and equivalents	$	18,919	$	94,067	$	66,060
Investment securities		3,850		26,478		22,626
Covered loans		252,493		458,340		215,507
Premises and equipment		—		17		50
Restricted equity securities		3,073		13,712		2,951
Goodwill		—		35,808		10,393
Other intangible assets		440		6,253		322
Mortgage servicing rights		—		62		—
Covered other real estate owned		2,421		6,580		17,938
FDIC indemnification asset		71,755		76,603		99,160
Other assets		328		3,254		2,588
Total assets acquired	$	353,279	$	721,174	$	437,595
Liabilities Assumed:
Deposits	$	285,775	$	425,771	$	437,299
Term debt		60,813		293,191		—
Other liabilities		254		2,212		296
Total liabilities assumed		346,842		721,174		437,595
Net assets acquired/bargain purchase gain	$	6,437	$	—	$	—

Rainier's assets and liabilities were significant at a level to require disclosure of one year of historical financial statements and related pro forma financial disclosure. However, given the pervasive nature of the loss-sharing agreement entered into with the FDIC, the historical information of Rainier is much less relevant for purposes of assessing the future operations of the combined entity. In addition, prior to closure Rainier had not completed an audit of their financial statements, and we determined that audited financial statements were not and would not be reasonably available for the year ended December 31, 2009. Given these considerations, the Company requested, and received, relief from the Securities and Exchange Commission from submitting certain financial information of Rainier. The assets and liabilities of Evergreen and Nevada Security were not at a level that requires disclosure of historical or pro forma financial information.

The Company incurs significant expenses related to mergers that cannot be capitalized. Generally, these expenses begin to be recognized while due diligence is being conducted and continue until such time as all systems have been converted and operational functions become fully integrated. Merger-related expenses are presented as a line item on the Consolidated Statements of Operations.

The following table presents the key components of merger-related expense for years ended December 31, 2011, 2010 and 2009. Substantially all of the merger-related expenses incurred during 2010 were in connection with the FDIC-assisted purchase and assumption of Evergreen, Rainier, and Nevada Security. Substantially all of the merger-related expenses incurred during 2009 were in connection with the FDIC-assisted purchase and assumption of certain assets and liabilities of the Bank of Clark County.

Merger-Related Expense
(in thousands)
	2011		2010		2009
Professional fees	$	173	$	2,984	$	143
Compensation and relocation		—		962		39
Communications		—		330		61
Premises and equipment		82		630		2
Travel		11		710		—
Other		94		1,059		28
Total	$	360	$	6,675	$	273

No additional merger-related expenses are expected in connection with the FDIC-assisted purchase and assumption of Evergreen, Rainier, and Nevada Security assumptions or any other prior acquisitions.

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Regulatory Capital (Summary Of Company's Capital Amounts And Ratios) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Total Capital, Actual Amount	$ 1,287,560	$ 1,253,333
Total Capital, Actual Ratio	17.16%	17.62%
Total Capital, For Capital Adequacy purposes Amount	600,261	569,050
Total Capital, For Capital Adequacy purposes Ratio	8.00%	8.00%
Total Capital, To be Well Capitalized Amount	750,326	711,313
Total Capital, To be Well Capitalized Ratio	10.00%	10.00%
Tier I Capital , Actual Amount	1,193,740	1,164,226
Tier I Capital , Actual Ratio	15.91%	16.36%
Tier I Capital , For Capital Adequacy purposes Amount	300,123	284,652
Tier I Capital , For Capital Adequacy purposes Ratio	4.00%	4.00%
Tier I Capital , To be Well Capitalized Amount	450,185	426,978
Tier I Capital , To be Well Capitalized Ratio	6.00%	6.00%
Tier I Capital (to Average Assets) , Actual Amount	1,193,740	1,164,226
Tier I Capital (to Average Assets), Actual Ratio	10.91%	10.56%
Tier I Capital (to Average Assets), For Capital Adequacy purposes Amount	437,668	440,995
Tier I Capital (to Average Assets), For Capital Adequacy purposes Ratio	4.00%	4.00%
Tier I Capital (to Average Assets), To be Well Capitalized Amount	547,085	551,243
Tier I Capital (to Average Assets), To be Well Capitalized Ratio	5.00%	5.00%
Umpqua Bank [Member]
Total Capital, Actual Amount	1,163,611	1,085,839
Total Capital, Actual Ratio	15.53%	15.27%
Total Capital, For Capital Adequacy purposes Amount	599,413	568,874
Total Capital, For Capital Adequacy purposes Ratio	8.00%	8.00%
Total Capital, To be Well Capitalized Amount	749,267	711,093
Total Capital, To be Well Capitalized Ratio	10.00%	10.00%
Tier I Capital , Actual Amount	1,069,914	996,798
Tier I Capital , Actual Ratio	14.28%	14.02%
Tier I Capital , For Capital Adequacy purposes Amount	299,696	284,393
Tier I Capital , For Capital Adequacy purposes Ratio	4.00%	4.00%
Tier I Capital , To be Well Capitalized Amount	449,544	426,590
Tier I Capital , To be Well Capitalized Ratio	6.00%	6.00%
Tier I Capital (to Average Assets) , Actual Amount	1,069,914	996,798
Tier I Capital (to Average Assets), Actual Ratio	9.78%	9.04%
Tier I Capital (to Average Assets), For Capital Adequacy purposes Amount	437,593	441,061
Tier I Capital (to Average Assets), For Capital Adequacy purposes Ratio	4.00%	4.00%
Tier I Capital (to Average Assets), To be Well Capitalized Amount	$ 546,991	$ 551,326
Tier I Capital (to Average Assets), To be Well Capitalized Ratio	5.00%	5.00%

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Interest Bearing Deposits

12 Months Ended

Dec. 31, 2011

Interest Bearing Deposits [Abstract]

Interest Bearing Deposits

NOTE 14. INTEREST BEARING DEPOSITS

The following table presents the major types of interest bearing deposits at December 31, 2011 and 2010:

(in thousands)
	2011		2010
Interest bearing demand	$	993,579	$	927,224
Money market		3,661,785		3,467,549
Savings		386,528		349,696
Time, $100,000 and over		1,629,505		2,191,055
Time less than $100,000		652,172		881,594
Total interest bearing deposits	$	7,323,569	$	7,817,118

The following table presents interest expense for each deposit type for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011		2010		2009
Interest bearing demand	$	3,056	$	4,677	$	4,884
Money market		17,236		26,412		26,885
Savings		356		543		572
Time, $100,000 and over		25,771		31,735		36,070
Other time less than $100,000		9,324		12,874		20,331
Total interest on deposits	$	55,743	$	76,241	$	88,742

The following table presents the scheduled maturities of time deposits as of December 31, 2011:

(in thousands)
Year	Amount
2012	$	1,589,811
2013		469,152
2014		45,831
2015		37,493
2016		136,685
Thereafter		2,705
Total time deposits	$	2,281,677

The following table presents the remaining maturities of time deposits of $100,000 or more as of December 31, 2011:

(in thousands)
Year	Amount
Three months or less	$	493,587
Over three months through six months		192,775
Over six months through twelve months		463,446
Over twelve months		479,697
Time, $100,000 and over	$	1,629,505

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Mortgage Servicing Rights

12 Months Ended

Dec. 31, 2011

Mortgage Servicing Rights [Abstract]

Mortgage Servicing Rights

NOTE 10. MORTGAGE SERVICING RIGHTS

The following table presents the changes in the Company's mortgage servicing rights ("MSR") for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011			2010			2009
Balance, beginning of year	$	14,454		$	12,625		$	8,205
Additions for new mortgage servicing rights capitalized		6,720			5,645			7,570
Acquired mortgage servicing rights		—			62			—
Changes in fair value:
Due to changes in model inputs or assumptions(1)		(858	)		(1,598	)		(3,469	)
Other(2)		(2,132	)		(2,280	)		319
Balance, end of year	$	18,184		$	14,454		$	12,625
Balance of loans serviced for others	$	2,009,849		$	1,603,414		$	1,277,832
MSR as a percentage of serviced loans		0.90	%		0.90	%		0.99	%

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2) Represents changes due to collection/realization of expected cash flows over time.

The amount of contractually specified servicing fees, late fees and ancillary fees earned, recorded in mortgage banking revenue on the Consolidated Statements of Operations, were $4.7 million, $3.9 million, and $3.0 million, respectively, for the years ended December 31, 2011, 2010, and 2009.

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Investment Securities (Gross Realized Gains And Losses On Sales Of Available-For-Sale Securities Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Gains	$ 8,552	$ 2,334	$ 9,409
Losses	817	8	592
U.S. Treasury And Agencies [Member]
Gains
Losses		1
Obligations Of States And Political Subdivisions [Member]
Gains	8	3
Losses		7	1
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member]
Gains	8,544	2,331	9,409
Losses	$ 817		$ 591

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Allowance For Non-Covered Loan Loss And Credit Quality

12 Months Ended

Dec. 31, 2011

Allowance For Non-Covered Loan Loss And Credit Quality [Abstract]

Allowance For Non-Covered Loan Loss And Credit Quality

NOTE 6. ALLOWANCE FOR NON-COVERED LOAN LOSS AND CREDIT QUALITY

The Bank has a management Allowance for Loan and Lease Losses ("ALLL") Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank's Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Our methodology for assessing the appropriateness of the ALLL consists of three key elements, which include 1) the formula allowance; 2) the specific allowance; and 3) the unallocated allowance. By incorporating these factors into a single allowance requirement analysis, all risk-based activities within the loan portfolio are simultaneously considered.

Formula Allowance

The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality and adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the formula allowance.

The formula allowance is calculated by applying risk factors to various segments of pools of outstanding loans. Risk factors are assigned to each portfolio segment based on management's evaluation of the losses inherent within each segment. Segments or regions with greater risk of loss will therefore be assigned a higher risk factor.

Base risk – The portfolio is segmented into loan categories, and these categories are assigned a Base Risk factor based on an evaluation of the loss inherent within each segment.

Extra risk – Additional risk factors provide for an additional allocation of ALLL based on the loan risk rating system and loan delinquency, and reflect the increased level of inherent losses associated with more adversely classified loans.

Changes to risk factors – Risk factors are assigned at origination and may be changed periodically based on management's evaluation of the following factors: loss experience; changes in the level of non-performing loans; regulatory exam results; changes in the level of adversely classified loans (positive or negative); improvement or deterioration in local economic conditions; and any other factors deemed relevant.

Specific Allowance

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize an impairment reserve as a Specific Allowance to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. Loans determined to be impaired with a specific allowance are excluded from the formula allowance so as not to double-count the loss exposure. The non-accrual impaired loans as of period end have already been partially charged off to their estimated net realizable value, and are expected to be resolved over the coming quarters with no additional material loss, absent further decline in market prices.

The combination of the formula allowance component and the specific allowance component represent the allocated allowance for loan and lease losses.

Unallocated Allowance

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of deteriorating economic conditions characterized by falling real estate values. The unallocated amount is reviewed quarterly with consideration of factors including, but not limited to:

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

• Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

• Changes in the nature and volume of the portfolio and in the terms of loans;

• Changes in the experience and ability of lending management and other relevant staff;

• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

• Changes in the quality of the institution's loan review system;

• Changes in the value of underlying collateral for collateral-depending loans;

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations;

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institutions' existing portfolio.

These factors are evaluated through a management survey of the Chief Credit Officer, Chief Lending Officers, Special Asset Manager, and Credit Review Manager. The survey requests responses to evaluate current changes in the nine qualitative factors. This information is then incorporated into our understanding of the reasonableness of the formula factors and our evaluation of the unallocated portion of the ALLL.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our loan portfolio. A continued deterioration in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

The reserve for unfunded commitments ("RUC") is established to absorb inherent losses associated with our commitment to lend funds, such as with a letter or line of credit. The adequacy of the ALLL and RUC are monitored on a regular basis and are based on management's evaluation of numerous factors. For each portfolio segment, these factors include:

• The quality of the current loan portfolio;

• The trend in the loan portfolio's risk ratings;

• Current economic conditions;

• Loan concentrations;

• Loan growth rates;

• Past-due and non-performing trends;

• Evaluation of specific loss estimates for all significant problem loans;

• Historical short (one year), medium (three year), and long-term charge-off rates;

• Recovery experience;

• Peer comparison loss rates.

There have been no significant changes to the Bank's methodology or policies in the periods presented.

Activity in the Non-Covered Allowance for Loan and Lease Losses

The following table summarizes activity related to the allowance for non-covered loan and lease losses by non-covered loan portfolio segment for the years ended December 31, 2011 and 2010:

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921
Charge-offs		(36,011	)		(21,071	)		(6,333	)		(1,636	)		—			(65,051	)
Recoveries		5,906			3,348			239			385			—			9,878
Provision		25,274			16,062			7,793			1,315			(4,224	)		46,220
Balance, end of period	$	59,574		$	20,485		$	7,625		$	867		$	4,417		$	92,968
	December 31, 2010
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Unallocated			Total
Balance, beginning of period	$	67,281		$	24,583		$	5,811		$	455		$	9,527		$	107,657
Charge-offs		(71,030	)		(50,242	)		(5,168	)		(2,061	)		—			(128,501	)
Recoveries		6,980			1,318			334			465			—			9,097
Provision		61,174			46,487			4,949			1,944			(886	)		113,668
Balance, end of period	$	64,405		$	22,146		$	5,926		$	803		$	8,641		$	101,921

The following table presents the allowance and recorded investment in non-covered loans by portfolio segment and balances individually or collectively evaluated for impairment as of December 31, 2011 and 2010, respectively:

(in thousands)
	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	58,402	$	17,877	$	7,621	$	867	$	4,417	$	89,184
Individually evaluated for impairment		1,172		2,608		4		—		—		3,784
Total	$	59,574	$	20,485	$	7,625	$	867	$	4,417	$	92,968
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,673,455	$	1,432,594	$	587,990	$	38,860			$	5,732,899
Individually evaluated for impairment		139,979		26,171		129		—				166,279
Total	$	3,813,434	$	1,458,765	$	588,119	$	38,860			$	5,899,178
	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Unallocated		Total
Allowance for non-covered loans and leases:
Collectively evaluated for impairment	$	61,885	$	19,435	$	5,918	$	803	$	8,641	$	96,682
Individually evaluated for impairment		2,520		2,711		8		—		—		5,239
Total	$	64,405	$	22,146	$	5,926	$	803	$	8,641	$	101,921
Non-covered loans and leases:
Collectively evaluated for impairment	$	3,692,169	$	1,221,365	$	500,822	$	33,043			$	5,447,399
Individually evaluated for impairment		186,933		35,507		179		—				222,619
Total	$	3,879,102	$	1,256,872	$	501,001	$	33,043			$	5,670,018

(1) The gross non-covered loan and lease balance excludes deferred loans fees of $11.1 million and $11.0 million for the years ended December 31, 2011 and 2010, respectively.

Summary of Reserve for Unfunded Commitments Activity

The following table presents a summary of activity in the reserve for unfunded commitments ("RUC") and unfunded commitments at December 31, 2011 and 2010:

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	33		$	575	$	158	$	52	$	818
Net change to other expense		26			58		27		11		122
Balance, end of period	$	59		$	633	$	185	$	63	$	940
	December 31, 2010
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Balance, beginning of period	$	57		$	484	$	144	$	46	$	731
Net change to other expense		(24	)		91		14		6		87
Balance, end of period	$	33		$	575	$	158	$	52	$	818
	Commercial Real Estate			Commercial		Residential		Consumer & Other		Total
Unfunded commitments:
December 31, 2011	$	58,013		$	605,001	$	233,990	$	47,577	$	944,581
December 31, 2010	$	33,326		$	548,920	$	210,574	$	45,556	$	838,376

Non-Covered Loans Sold

In the course of managing the loan portfolio, at certain times, management may decide to sell loans prior to resolution. The following table summarizes non-covered loans sold by loan portfolio during the years ended December 31:

(In thousands)
	2011		2010
Commercial Real Estate
Term & multifamily	$	7,143	$	8,848
Construction & development		28		4,686
Residential development		1,123		15,255
Commercial
Term		151		9,915
LOC & other		2,740		40
Total	$	11,185	$	38,744

Asset Quality and Non-Performing Loans

We manage asset quality and control credit risk through diversification of the non-covered loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank's Credit Quality Group is charged with monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of non-performing, past due non-covered loans and larger credits, designed to identify potential charges to the allowance for loan and lease losses, and to determine the adequacy of the allowance, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers, the value of the applicable collateral, loan loss experience, estimated loan losses, growth in the loan portfolio, prevailing economic conditions and other factors.

A loan is considered impaired when based on current information and events, we determine it is probable that we will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Generally, when loans are identified as impaired they are moved to our Special Assets Division. When we identify a loan as impaired, we measure the loan for potential impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of collateral, less selling costs. The starting point for determining the fair value of collateral is through obtaining external appraisals. Generally, external appraisals are updated every six to nine months. We obtain appraisals from a pre-approved list of independent, third party, local appraisal firms. Approval and addition to the list is based on experience, reputation, character, consistency and knowledge of the respective real estate market. At a minimum, it is ascertained that the appraiser is: (a) currently licensed in the state in which the property is located, (b) is experienced in the appraisal of properties similar to the property being appraised, (c) is actively engaged in the appraisal work, (d) has knowledge of current real estate market conditions and financing trends, (e) is reputable, and (f) is not on Freddie Mac's nor the Bank's Exclusionary List of appraisers and brokers. In certain cases appraisals will be reviewed by our Real Estate Valuation Services group to ensure the quality of the appraisal and the expertise and independence of the appraiser. Upon receipt and review, an external appraisal is utilized to measure a loan for potential impairment. Our impairment analysis documents the date of the appraisal used in the analysis, whether the officer preparing the report deems it current, and, if not, allows for internal valuation adjustments with justification. Typical justified adjustments might include discounts for continued market deterioration subsequent to appraisal date, adjustments for the release of collateral contemplated in the appraisal, or the value of other collateral or consideration not contemplated in the appraisal. An appraisal over one year old in most cases will be considered stale dated and an updated or new appraisal will be required. Any adjustments from appraised value to net realizable value are detailed and justified in the impairment analysis, which is reviewed and approved by senior credit quality officers and the Company's Allowance for Loan and Lease Losses ("ALLL") Committee. Although an external appraisal is the primary source to value collateral dependent loans, we may also utilize values obtained through purchase and sale agreements, negotiated short sales, broker price opinions, or the sales price of the note. These alternative sources of value are used only if deemed to be more representative of value based on updated information regarding collateral resolution. Impairment analyses are updated, reviewed and approved on a quarterly basis at or near the end of each reporting period. Appraisals or other alternative sources of value received subsequent to the reporting period, but prior to our filing of periodic reports, are considered and evaluated to ensure our periodic filings are materially correct and not misleading. Based on these processes, we do not believe there are significant time lapses for the recognition of additional loan loss provisions or charge-offs from the date they become known.

Loans are classified as non-accrual when collection of principal or interest is doubtful—generally if they are past due as to maturity or payment of principal or interest by 90 days or more—unless such loans are well-secured and in the process of collection. Additionally, all loans that are impaired are considered for non-accrual status. Loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospects for future payments in accordance with the loan agreement appear relatively certain.

Loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan's carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

Loans are reported as past due when installment payments, interest payments, or maturity payments are past due based on contractual terms. All loans determined to be impaired are individually assessed for impairment except for impaired consumer loans which are collectively evaluated for impairment in accordance with FASB ASC 450, Contingencies ("ASC 450"). The specific factors considered in determining that a loan is impaired include borrower financial capacity, current economic, business and market conditions, collection efforts, collateral position and other factors deemed relevant. Generally, impaired loans are placed on non-accrual status and all cash receipts are applied to the principal balance. Continuation of accrual status and recognition of interest income is generally limited to performing restructured loans.

The Company has written down impaired, non-accrual loans as of December 31, 2011 to their estimated net realizable value, generally based on disposition value, and expects resolution with no additional material loss, absent further decline in market prices.

Non-Covered Non-Accrual Loans and Loans Past Due

The following table summarizes our non-covered, non-accrual loans and loans past due by loan class as of December 31, 2011 and December 31, 2010:

(in thousands)
	December 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non-covered Loans and Leases
Commercial real estate
Term & multifamily	$	7,319	$	11,184	$	—	$	18,503	$	44,486	$	3,495,306	$	3,558,295
Construction & development		—		662		575		1,237		3,348		160,481		165,066
Residential development		4,171		—		—		4,171		15,836		70,066		90,073
Commercial
Term		2,075		738		1,179		3,992		8,120		613,654		625,766
LOC & other		5,435		1,697		1,397		8,529		8,772		815,698		832,999
Residential
Mortgage		215		965		4,343		5,523		—		310,404		315,927
Home equity loans & lines		492		191		2,648		3,331		—		268,861		272,192
Consumer & other		67		16		679		762		—		38,098		38,860
Total	$	19,774	$	15,453	$	10,821	$	46,048	$	80,562	$	5,772,568	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098
	December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Total Past Due		Nonaccrual		Current		Total Non-covered Loans and Leases
Commercial real estate
Term & multifamily	$	14,596	$	8,328	$	3,008	$	25,932	$	49,162	$	3,408,381	$	3,483,475
Construction & development		2,172		6,726		—		8,898		20,124		218,792		247,814
Residential development		640		—		—		640		34,586		112,587		147,813
Commercial
Term		2,010		932		—		2,942		6,271		500,240		509,453
LOC & other		5,939		1,418		18		7,375		28,034		712,010		747,419
Residential
Mortgage		1,314		1,101		3,372		5,787		—		216,629		222,416
Home equity loans & lines		1,096		1,351		232		2,679		—		275,906		278,585
Consumer & other		361		233		441		1,035		—		32,008		33,043
Total	$	28,128	$	20,089	$	7,071	$	55,288	$	138,177	$	5,476,553	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

Non-covered Impaired Loans

The following table summarizes our non-covered impaired loans by loan class as of December 31, 2011 and December 31, 2010:

(in thousands)
	2011
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	54,673	$	47,344	$	—	$	50,459	$	—
Construction & development		22,553		17,744		—		21,498		—
Residential development		30,575		23,212		—		33,864		—
Commercial
Term		14,205		11,311		—		9,339		—
LOC & other		23,132		9,034		—		16,121		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		22,611		13,105		557		18,792		894
Construction & development		3,762		12,248		151		6,560		798
Residential development		26,326		26,326		464		32,810		1,120
Commercial
Term		1,851		1,851		608		627		140
LOC & other		3,975		3,975		2,000		3,642		—
Residential
Mortgage		—		—		—		143		—
Home equity loans & lines		129		129		4		52		3
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	160,500	$	139,979	$	1,172	$	163,983	$	2,812
Commercial		43,163		26,171		2,608		29,729		140
Residential		129		129		4		195		3
Consumer & Other		—		—		—		—		—
Total	$	203,792	$	166,279	$	3,784	$	193,907	$	2,955

	2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial real estate
Term & multifamily	$	62,605	$	49,790	$	—	$	56,003	$	—
Construction & development		33,091		25,558		—		27,588		—
Residential development		63,859		39,011		—		37,603		—
Commercial
Term		8,024		6,969		—		9,420		—
LOC & other		56,046		19,814		—		38,215		—
Residential
Mortgage		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—
Consumer & other		—		—		—		—		—
With an allowance recorded
Commercial real estate
Term & multifamily		29,926		28,070		1,614		28,518		823
Construction & development		—		—		—		1,706		38
Residential development		46,059		44,504		906		54,607		1,474
Commercial
Term		205		205		9		402		48
LOC & other		9,878		8,519		2,702		1,884		14
Residential
Mortgage		179		179		8		3,750		6
Home equity loans & lines		—		—		—		21		—
Consumer & other		—		—		—		—		—
Total
Commercial Real Estate	$	235,540	$	186,933	$	2,520	$	206,025	$	2,335
Commercial		74,153		35,507		2,711		49,921		62
Residential		179		179		8		3,771		6
Consumer & Other		—		—		—		—		—
Total	$	309,872	$	222,619	$	5,239	$	259,717	$	2,403

Loans with no related allowance reported generally represent non-accrual loans. The Company recognizes the charge-off of impairment reserves on impaired loans in the period it arises for collateral dependent loans. Therefore, the non-accrual loans as of December 31, 2011 have already been written-down to their estimated net realizable value, based on disposition value, and are expected to be resolved with no additional material loss, absent further decline in market prices. The valuation allowance on impaired loans primarily represents the impairment reserves on performing restructured loans, and is measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan's carrying value.

At December 31, 2011 and 2010, non-covered impaired loans of $80.6 million and $84.4 million were classified as accruing restructured loans, respectively. The restructurings were granted in response to borrower financial difficulty, and generally provide for a temporary modification of loan repayment terms. The restructured loans on accrual status and two loans included in loans past due 30+ days and accruing represent the only impaired loans accruing interest at December 31, 2011. The restructured loans on accrual status represent the only impaired loans accruing interest at December 31, 2010. In order for a restructured loan to be considered for accrual status, the loan's collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow. The Company had obligations of $205,000 to lend additional funds on the restructured loans as of December 31, 2011.

For the years ended December 31, 2011, 2010 and 2009, interest income of approximately $3.0 million, $2.4 million and $2.4 million, respectively, was recognized in connection with impaired loans. The impaired loans for which these interest income amounts were recognized primarily relate to accruing restructured loans.

Non-covered Credit Quality Indicators

As previously noted, the Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The Bank differentiates its lending portfolios into homogeneous loans (generally consumer loans) and non-homogeneous loans (generally all non-consumer loans). The 10 risk rating categories can be generally described by the following groupings for non-homogeneous loans:

Minimal Risk—A minimal risk loan, risk rated 1, is to a borrower of the highest quality. The borrower has an unquestioned ability to produce consistent profits and service all obligations and can absorb severe market disturbances with little or no difficulty.

Low Risk—A low risk loan, risk rated 2, is similar in characteristics to a minimal risk loan. Margins may be smaller or protective elements may be subject to greater fluctuation. The borrower will have a strong demonstrated ability to produce profits, provide ample debt service coverage and to absorb market disturbances.

Modest Risk—A modest risk loan, risk rated 3, is a desirable loan with excellent sources of repayment and no currently identifiable risk of collection. The borrower exhibits a very strong capacity to repay the credit in accordance with the repayment agreement. The borrower may be susceptible to economic cycles, but will have reserves to weather these cycles.

Average Risk—An average risk loan, risk rated 4, is an attractive loan with sound sources of repayment and no material collection or repayment weakness evident. The borrower has an acceptable capacity to pay in accordance with the agreement. The borrower is susceptible to economic cycles and more efficient competition, but should have modest reserves sufficient to survive all but the most severe downturns or major setbacks.

Acceptable Risk—An acceptable risk loan, risk rated 5, is a loan with lower than average, but still acceptable credit risk. These borrowers may have higher leverage, less certain but viable repayment sources, have limited financial reserves and may possess weaknesses that can be adequately mitigated through collateral, structural or credit enhancement. The borrower is susceptible to economic cycles and is less resilient to negative market forces or financial events. Reserves may be insufficient to survive a modest downturn.

Watch—A watch loan, risk rated 6, is still pass-rated, but represents the lowest level of acceptable risk due to an emerging risk element or declining performance trend. Watch ratings are expected to be temporary, with issues resolved or manifested to the extent that a higher or lower rating would be appropriate. The borrower should have a plausible plan, with reasonable certainty of success, to correct the problems in a short period of time. Borrowers rated Watch are characterized by elements of uncertainty, such as:

• Borrower may be experiencing declining operating trends, strained cash flows or less-than anticipated performance. Cash flow should still be adequate to cover debt service, and the negative trends should be identified as being of a short-term or temporary nature.

• The borrower may have experienced a minor, unexpected covenant violation.

• Companies who may be experiencing tight working capital or have a cash cushion deficiency.

• Loans may also be a Watch if financial information is late, there is a documentation deficiency, the borrower has experienced unexpected management turnover, or if they face industry issues that, when combined with performance factors create uncertainty in their future ability to perform.

• Delinquent payments, increasing and material overdraft activity, request for bulge and/or out-of-formula advances may be an indicator of inadequate working capital and may suggest a lower rating.

• Failure of the intended repayment source to materialize as expected, or renewal of a loan (other than cash/marketable security secured or lines of credit) without reduction are possible indicators of a Watch or worse risk rating.

Special Mention—A Special Mention loan, risk rated 7, has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or the institutions credit position at some future date. They contain unfavorable characteristics and are generally undesirable. Loans in this category are currently protected but are potentially weak and constitute an undue and unwarranted credit risk, but not to the point of a Substandard classification. A Special Mention loan has potential weaknesses, which if not checked or corrected, weaken the asset or inadequately protect the Bank's position at some future date. Such weaknesses include:

• Performance is poor or significantly less than expected. There may be a temporary debt-servicing deficiency or inadequate working capital as evidenced by a cash cushion deficiency, but not to the extent that repayment is compromised. Material violation of financial covenants is common.

• Loans with unresolved material issues that significantly cloud the debt service outlook, even though a debt servicing deficiency does not currently exist.

• Modest underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt as structured. Depth of support for interest carry provided by owner/guarantors may mitigate and provide for improved rating.

• This rating may be assigned when a loan officer is unable to supervise the credit properly, an inadequate loan agreement, an inability to control collateral, failure to obtain proper documentation, or any other deviation from prudent lending practices.

• Unlike a Substandard credit, there should be a reasonable expectation that these temporary issues will be corrected within the normal course of business, rather than liquidation of assets, and in a reasonable period of time.

Substandard—A substandard asset, risk rated 8, is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. Loans are classified as Substandard when they have unsatisfactory characteristics causing unacceptable levels of risk. A substandard loan normally has one or more well-defined weaknesses that could jeopardize repayment of the debt. The likely need to liquidate assets to correct the problem, rather than repayment from successful operations is the key distinction between Special Mention and Substandard. The following are examples of well-defined weaknesses:

• Cash flow deficiencies or trends are of a magnitude to jeopardize current and future payments with no immediate relief. A loss is not presently expected, however the outlook is sufficiently uncertain to preclude ruling out the possibility.

• Borrower has been unable to adjust to prolonged and unfavorable industry or economic trends.

• Material underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt and risk is not mitigated by willingness and capacity of owner/guarantor to support interest payments.

• Management character or honesty has become suspect. This includes instances where the borrower has become uncooperative.

• Due to unprofitable or unsuccessful business operations, some form of restructuring of the business, including liquidation of assets, has become the primary source of loan repayment. Cash flow has deteriorated, or been diverted, to the point that sale of collateral is now the Bank's primary source of repayment (unless this was the original source of repayment). If the collateral is under the Bank's control and is cash or other liquid, highly marketable securities and properly margined, then a more appropriate rating might be Special Mention or Watch.

• The borrower is bankrupt, or for any other reason, future repayment is dependent on court action.

• There is material, uncorrectable faulty documentation or materially suspect financial information.

Doubtful—Loans classified as doubtful, risk rated 9, have all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work towards strengthening of the asset, classification as a loss (and immediate charge-off) is deferred until more exact status may be determined. Pending factors include proposed merger, acquisition, liquidation procedures, capital injection, and perfection of liens on additional collateral and refinancing plans. In certain circumstances, a Doubtful rating will be temporary, while the Bank is awaiting an updated collateral valuation. In these cases, once the collateral is valued and appropriate margin applied, the remaining un-collateralized portion will be charged off. The remaining balance, properly margined, may then be upgraded to Substandard, however must remain on non-accrual.

Loss—Loans classified as loss, risk rated 10, are considered un-collectible and of such little value that the continuance as an active Bank asset is not warranted. This rating does not mean that the loan has no recovery or salvage value, but rather that the loan should be charged off now, even though partial or full recovery may be possible in the future.

Impaired—Loans are classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement, without unreasonable delay. This generally includes all loans classified as non-accrual and troubled debt restructurings. Impaired loans are risk rated for internal and regulatory rating purposes, but presented separately for clarification.

Homogeneous loans are not risk rated until they are greater than 30 days past due, and risk rating is based primarily on the past due status of the loan. The risk rating categories can be generally described by the following groupings for commercial and commercial real estate homogeneous loans:

Special Mention—A homogeneous special mention loan, risk rated 7, is 30-59 days past due from the required payment date at month-end.

Substandard—A homogeneous substandard loan, risk rated 8, is 60-119 days past due from the required payment date at month-end.

Doubtful—A homogeneous doubtful loan, risk rated 9, is 120-149 days past due from the required payment date at month-end.

Loss—A homogeneous loss loan, risk rated 10, is 150 days and more past due from the required payment date. These loans are generally charged-off in the month in which the 150- day time period elapses.

The risk rating categories can be generally described by the following groupings for residential and consumer and other homogeneous loans:

Special Mention—A homogeneous retail special mention loan, risk rated 7, is 30-89 days past due from the required payment date at month-end.

Substandard—A homogeneous retail substandard loan, risk rated 8, is an open-end loan 90-180 days past due from the required payment date at month-end or a closed-end loan 90-120 days past due from the required payment date at month-end.

Loss—A homogeneous retail loss loan, risk rated 10, is a closed-end loan that becomes past due 120 cumulative days or an open-end retail loan that becomes past due 180 cumulative days from the contractual due date. These loans are generally charged-off in the month in which the 120- or 180-day period elapses.

The following table summarizes our internal risk rating by loan class for the non-covered loan portfolio as of December 30, 2011 and December 31, 2010:

(in thousands)
	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	3,075,452	$	275,475	$	146,919	$	—	$	—	$	60,449	$	3,558,295
Construction & development		102,786		19,946		12,342		—		—		29,992		165,066
Residential development		25,062		6,740		8,733		—		—		49,538		90,073
Commercial
Term		586,365		16,631		9,608		—		—		13,162		625,766
LOC & other		775,233		22,051		22,706		—		—		13,009		832,999
Residential
Mortgage		309,478		2,106		296		—		4,047		—		315,927
Home equity loans & lines		268,731		683		773		—		1,876		129		272,192
Consumer & other		38,098		82		254		—		426		—		38,860
Total	$	5,181,205	$	343,714	$	201,631	$	—	$	6,349	$	166,279	$	5,899,178
Deferred loan fees, net														(11,080	)
Total													$	5,888,098
	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired		Total
Commercial real estate
Term & multifamily	$	2,978,116	$	314,094	$	113,405	$	—	$	—	$	77,860	$	3,483,475
Construction & development		145,108		25,295		51,853		—		—		25,558		247,814
Residential development		27,428		13,764		23,106		—		—		83,515		147,813
Commercial
Term		472,512		17,658		12,109		—		—		7,174		509,453
LOC & other		646,163		30,761		42,162		—		—		28,333		747,419
Residential
Mortgage		216,899		2,414		786		—		2,138		179		222,416
Home equity loans & lines		275,906		2,447		125		—		107		—		278,585
Consumer & other		32,008		595		29		—		411		—		33,043
Total	$	4,794,140	$	407,028	$	243,575	$	—	$	2,656	$	222,619	$	5,670,018
Deferred loan fees, net														(11,031	)
Total													$	5,658,987

The percentage of non-covered impaired loans classified as special mention, substandard, and loss was 3.8%, 96.0%, and 0.2%, respectively, as of December 31, 2011.

Troubled Debt Restructurings

At December 31, 2011 and December 31, 2010, non-covered impaired loans of $80.6 million and $84.4 million were classified as accruing restructured loans, respectively. The restructurings were granted in response to borrower financial difficulty, and generally provide for a temporary modification of loan repayment terms. The restructured loans on accrual status and two loans included in loans past due 30+ days and accruing represent the only impaired loans accruing interest. In order for a restructured loan to be considered for accrual status, the loan's collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow.

Impaired restructured loans carry a specific allowance calculated and the allowance on impaired restructured loans is calculated consistently across the portfolios.

As a result of adopting the amendments in Accounting Standards Update No. 2011-02, the Company reassessed all restructurings that occurred on or after the beginning of the current fiscal year (January 1, 2011) for identification as troubled debt restructurings. The Company identified as troubled debt restructurings certain receivables for which the allowance for credit losses had previously been measured under a general allowance for credit losses methodology. Upon identifying those receivables as troubled debt restructurings, the Company identified them as impaired under the guidance in Section 310-10-35. The amendments in Accounting Standards Update No. 2011-02 require prospective application of the impairment measurement guidance in Section 310-10-35 for those receivables newly identified as impaired. At the end of the first year of adoption (December 31, 2011), the recorded investment in receivables for which the allowance for credit losses was previously measured under a general allowance for credit losses methodology and are now impaired under Section 310-10-35 was $5.4 million, and there was no allowance for credit losses associated with those receivables, on the basis of a current evaluation of loss. In evaluating concessions made during the year, the Company frequently obtained adequate compensation for concessions made. As a result, few loans qualified as troubled debt restructuring under the new definitions outlined in Section 310-10-35.

Available commitments for non-covered troubled debt restructurings outstanding as of December 31, 2011 totaled $205,000. As of December, 2010, no available commitments were outstanding on non-covered troubled debt restructurings.

The following tables present non-covered troubled debt restructurings by accrual versus non-accrual status and by loan class as of December 31, 2011 and 2010:

(in thousands)
	December 31, 2011
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	22,611	$	21,951	$	44,562
Construction & development		19,996		921		20,917
Residential development		33,964		11,969		45,933
Commercial
Term		3,863		1,762		5,625
LOC & other		—		6,973		6,973
Residential
Mortgage		—		—		—
Home equity loans & lines		129		—		129
Consumer & other		—		—		—
Total	$	80,563	$	43,576	$	124,139
	December 31, 2010
	Accrual Status		Non-Accrual Status		Total Modifications
Commercial real estate
Term & multifamily	$	28,697	$	3,185	$	31,882
Construction & development		5,434		—		5,434
Residential development		48,929		8,036		56,965
Commercial
Term		904		725		1,629
LOC & other		298		11,040		11,338
Residential
Mortgage		179		—		179
Home equity loans & lines		—		—		—
Consumer & other		—		—		—
Total	$	84,441	$	22,986	$	107,427

The Bank's policy is that loans placed on non-accrual will typically remain on non-accrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appear relatively certain. The Bank's policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status.

The types of modifications offered can generally be described in the following categories:

Rate Modification—A modification in which the interest rate is modified.

Term Modification —A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification—A modification in which the loan is converted to interest only payments for a period of time.

Payment Modification—A modification in which the payment amount is changed, other than an interest only modification described above.

Combination Modification—Any other type of modification, including the use of multiple types of modifications.

The following tables present newly non-covered restructured loans that occurred during the years ended December 31, 2011 and 2010, respectively:

(in thousands)
	2011
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	34,943	$	34,943
Construction & development		—		—		—		—		13,760		13,760
Residential development		279		354		—		—		9,090		9,723
Commercial
Term		—		—		—		70		5,311		5,381
LOC & other		—		—		—		—		4,050		4,050
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		130		—		—		—		130
Consumer & other		—		—		—		—		—		—
Total	$	279	$	484	$	—	$	70	$	67,154	$	67,987
(in thousands)
	2010
	Rate Modifications		Term Modifications		Interest Only Modifications		Payment Modifications		Combination Modifications		Total Modifications
Commercial real estate
Term & multifamily	$	—	$	—	$	—	$	—	$	13,018	$	13,018
Construction & development		—		—		—		—		5,534		5,534
Residential development		—		1,459		—		—		3,691		5,150
Commercial
Term		—		—		—		—		—		—
LOC & other		—		1,371		—		—		—		1,371
Residential
Mortgage		—		—		—		—		—		—
Home equity loans & lines		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—
Total	$	—	$	2,830	$	—	$	—	$	22,243	$	25,073

For the periods presented in the tables above, the outstanding recorded investment was the same pre and post modification.

The following tables represent financing receivables modified as troubled debt restructurings within the previous 12 months for which there was a payment default during the years ended December 31, 2011 and 2010, respectively:

(in thousands)
	2011		2010
Commercial real estate
Term & multifamily	$	9,642	$	5,553
Construction & development		—		—
Residential development		1,767		—
Commercial
Term		140		661
LOC & other		—		—
Residential
Mortgage		—		944
Home equity loans & lines		—		—
Consumer & other		—		—
Total	$	11,549	$	7,158

XML

Fair Values (Schedule of Losses Resulting From Nonrecurring Fair Value Adjustments) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Total loss from nonrecurring measurements	$ 69,898	$ 125,669	$ 321,147
Residential Mortgage-Backed Securities And Collateralized Mortgage Obligations [Member]
Loss from nonrecurring measurements	359	414	10,334
Non-Covered Loans [Member]
Loss from nonrecurring measurements	51,883	119,240	185,810
Goodwill [Member]
Loss from nonrecurring measurements			111,952
Other Intangible Assets, Net [Member]
Loss from nonrecurring measurements			804
Non-Covered Other Real Estate Owned [Member]
Loss from nonrecurring measurements	8,947	4,074	12,247
Covered Other Real Estate Owned [Member]
Loss from nonrecurring measurements	$ 8,709	$ 1,941

XML

Derivatives (Tables)

12 Months Ended

Dec. 31, 2011

Derivatives [Abstract]

Summary Of Types Of Derivatives, Separately By Assets And Liabilities And Fair Value Of Derivatives

Derivatives not designated as hedging instrument	Balance Sheet Location	Asset Derivatives				Liability Derivatives
		December 31, 2011		December 31, 2010		December 31, 2011		December 31, 2010
Interest rate lock commitments	Other assets/Other liabilities	$	1,752	$	306	$	3	$	170
Interest rate forward sales commitments	Other assets/Other liabilities		—		754		90		191
Interest rate swaps	Other assets/Other liabilities		6,203		—		6,416		—
Total		$	7,955	$	1,060	$	6,509	$	361

Summary Of Types Of Derivatives And Gains (Losses) Recorded

(in thousands)
Derivatives not designated as hedging instrument	Income Statement Location	2011			2010			2009
Interest rate lock commitments	Mortgage banking revenue	$	1,613		$	146		$	(1,176	)
Interest rate forward sales commitments	Mortgage banking revenue		(10,579	)		(3,034	)		(255	)
Interest rate swaps	Other income		(187	)		—			—
Total		$	(9,153	)	$	(2,888	)	$	(1,431	)

XML

Operating Segments (Summary Of Financial Information By Reportable Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest income	$ 121,917	$ 126,527	$ 128,417	$ 124,892	$ 130,677	$ 132,946	$ 115,604	$ 109,369	$ 501,753	$ 488,596	$ 423,732
Interest expense	15,262	18,993	19,056	19,990	23,562	24,629	23,304	22,317	73,301	93,812	103,024
Net interest income	106,655	107,534	109,361	104,902	107,115	108,317	92,300	87,052	428,452	394,784	320,708
Provision for non-covered loan and lease losses	6,642	9,089	15,459	15,030	17,567	24,228	29,767	42,106	46,220	113,668	209,124
Provision for covered loan and lease losses									16,141	5,151
Non-interest income	18,128	24,778	19,627	21,585	15,161	12,133	18,563	30,047	84,118	75,904	73,516
Non-interest expense	85,339	86,224	83,207	84,201	87,864	85,170	74,833	69,871	338,971	317,738	379,403
(Loss) income before (benefit from) provision for income taxes	32,104	32,579	26,567	19,988	12,361	10,385	6,263	5,122	111,238	34,131	(194,303)
(Benefit from) provision for income taxes	10,722	10,717	8,782	6,521	4,203	2,194	2,800	(3,392)	36,742	5,805	(40,937)
Net income	21,382	21,862	17,785	13,467	8,158	8,191	3,463	8,514	74,496	28,326	(153,366)
Preferred stock dividends										3,686	10,739
Dividends and undistributed earnings allocated to participating securities									356	67	30
Net earnings (loss) available to common shareholders	21,279	21,757	17,699	13,405	8,140	8,173	3,447	(3,693)	74,140	16,067	(166,262)
Total assets	11,563,355				11,668,710				11,563,355	11,668,710	9,381,372
Total loans (covered and non-covered)	6,510,549				6,444,885				6,510,549	6,444,885	5,999,267
Total deposits	9,236,690				9,433,805				9,236,690	9,433,805	7,440,434
Community Banking [Member]
Interest income									474,167	466,054	406,460
Interest expense									68,751	89,622	99,382
Net interest income									405,416	376,432	307,078
Provision for non-covered loan and lease losses									46,220	113,668	209,124
Provision for covered loan and lease losses									16,141	5,151
Non-interest income									43,282	41,534	45,280
Non-interest expense									302,883	286,629	352,290
(Loss) income before (benefit from) provision for income taxes									83,454	12,518	(209,056)
(Benefit from) provision for income taxes									26,023	(2,342)	(46,383)
Net income									57,431	14,860	(162,673)
Dividends and undistributed earnings allocated to participating securities									356	67	30
Net earnings (loss) available to common shareholders									57,075	2,601	(175,569)
Total assets	11,086,493				11,314,681				11,086,493	11,314,681	9,109,542
Total loans (covered and non-covered)	6,171,368				6,198,532				6,171,368	6,198,532	5,789,730
Total deposits	8,830,353				9,160,058				8,830,353	9,160,058	7,432,549
Wealth Management [Member]
Interest income									13,362	9,978	4,467
Interest expense									2,067	1,435	1
Net interest income									11,295	8,543	4,466
Non-interest income									13,963	12,967	9,344
Non-interest expense									15,630	15,503	12,910
(Loss) income before (benefit from) provision for income taxes									9,628	6,007	900
(Benefit from) provision for income taxes									3,457	1,905	(95)
Net income									6,171	4,102	995
Net earnings (loss) available to common shareholders									6,171	4,102	995
Total assets	53,044				37,757				53,044	37,757	31,196
Total loans (covered and non-covered)	38,810				23,631				38,810	23,631	17,484
Total deposits	390,992				262,148				390,992	262,148	98
Mortgage Banking [Member]
Interest income									14,224	12,564	12,805
Interest expense									2,483	2,755	3,641
Net interest income									11,741	9,809	9,164
Non-interest income									26,873	21,403	18,892
Non-interest expense									20,458	15,606	14,203
(Loss) income before (benefit from) provision for income taxes									18,156	15,606	13,853
(Benefit from) provision for income taxes									7,262	6,242	5,541
Net income									10,894	9,364	8,312
Net earnings (loss) available to common shareholders									10,894	9,364	8,312
Total assets	423,818				316,272				423,818	316,272	240,634
Total loans (covered and non-covered)	300,371				222,722				300,371	222,722	192,053
Total deposits	$ 15,345				$ 11,599				$ 15,345	$ 11,599	$ 7,787

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Goodwill And Other Intangible Assets (Goodwill and Other Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Impairment			$ (111,952)
Amortization	(4,948)	(5,389)	(6,165)
Community Banking [Member]
Goodwill, Gross	765,316	765,113	719,255	719,336
Goodwill, Impaired, Accumulated Impairment Loss	(111,952)	(111,952)	(111,952)
Goodwill	653,364	653,161	607,303	719,336
Net additions	247	45,954
Reductions	(44)	(96)	(81)
Impairment			(111,952)
Wealth Management [Member]
Goodwill, Gross	3,697	3,697	3,697	3,697
Goodwill, Impaired, Accumulated Impairment Loss	(982)	(982)	(982)	(982)
Goodwill	2,715	2,715	2,715	2,715
Other Intagible Assets [Member]
Reductions		(5,150)
Impairment			(804)
Amortization	(4,948)	(5,389)	(5,361)
Finite-Lived Intangible Assets, Gross	58,079	58,079	56,213	56,213
Other intangible net additions		7,016
Finite-Lived Intangible Assets, Accumulated Amortization	(36,934)	(31,986)	(26,597)	(20,432)
Finite-Lived Intangible Assets, Net	$ 21,145	$ 26,093	$ 29,616	$ 35,781

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Investment Securities

12 Months Ended

Dec. 31, 2011

Investment Securities [Abstract]

Investment Securities

NOTE 4. INVESTMENT SECURITIES

The following table presents the amortized costs, unrealized gains, unrealized losses and approximate fair values of investment securities at December 31, 2011 and 2010:

December 31, 2011
(in thousands)
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,232	$	1,234	$	(1	)	$	118,465
Obligations of states and political subdivisions		237,302		16,264		(13	)		253,553
Residential mortgage-backed securities and collateralized mortgage obligations		2,755,153		43,152		(3,950	)		2,794,355
Other debt securities		151		—		(17	)		134
Investments in mutual funds and other equity securities		1,959		112		—			2,071
	$	3,111,797	$	60,762	$	(3,981	)	$	3,168,578
HELD TO MATURITY:
Obligations of states and political subdivisions	$	1,335	$	2	$	—		$	1,337
Residential mortgage-backed securities and collateralized mortgage obligations		3,379		120		(77	)		3,422
	$	4,714	$	122	$	(77	)	$	4,759

December 31, 2010

(in thousands)

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	117,551	$	1,239	$	(1	)	$	118,789
Obligations of states and political subdivisions		213,129		4,985		(1,388	)		216,726
Residential mortgage-backed securities and collateralized mortgage obligations		2,543,974		57,506		(19,976	)		2,581,504
Other debt securities		152		—		—			152
Investments in mutual funds and other equity securities		1,959		50		—			2,009
	$	2,876,765	$	63,780	$	(21,365	)	$	2,919,180
HELD TO MATURITY:
Obligations of states and political subdivisions	$	2,370	$	5	$	—		$	2,375
Residential mortgage-backed securities and collateralized mortgage obligations		2,392		216		(209	)		2,399
	$	4,762	$	221	$	(209	)	$	4,774

Investment securities that were in an unrealized loss position as of December 31, 2011 and 2010 are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position. In the opinion of management, these securities are considered only temporarily impaired due to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral:

December 31, 2011

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	85	$	1	$	85	$	1
Obligations of states and political subdivisions		516		13		—		—		516		13
Residential mortgage-backed securities and collateralized mortgage obligations		489,475		3,160		52,222		790		541,697		3,950
Other debt securities		—		—		134		17		134		17
Total temporarily impaired securities	$	489,991	$	3,173	$	52,441	$	808	$	542,432	$	3,981
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	602	$	77	$	602	$	77
Total temporarily impaired securities	$	—	$	—	$	602	$	77	$	602	$	77

December 31, 2010

(in thousands)

	Less than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
AVAILABLE FOR SALE:
U.S. Treasury and agencies	$	—	$	—	$	110	$	1	$	110	$	1
Obligations of states and political subdivisions		60,110		1,366		1,003		22		61,113		1,388
Residential mortgage-backed securities and collateralized mortgage obligations		1,238,483		19,968		1,539		8		1,240,022		19,976
Total temporarily impaired securities	$	1,298,593	$	21,334	$	2,652	$	31	$	1,301,245	$	21,365
HELD TO MATURITY:
Residential mortgage-backed securities and collateralized mortgage obligations	$	—	$	—	$	658	$	209	$	658	$	209
Total temporarily impaired securities	$	—	$	—	$	658	$	209	$	658	$	209

The unrealized losses on investments in U.S. Treasury and agencies securities were caused by interest rate increases subsequent to the purchase of these securities. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than par. Because the Bank does not intend to sell the securities in this class and it is not likely that the Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until contractual maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

The unrealized losses on obligations of political subdivisions were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities. Management monitors published credit ratings of these securities and no adverse ratings changes have occurred since the date of purchase of obligations of political subdivisions which are in an unrealized loss position as of December 31, 2011. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because the Bank does not intend to sell the securities in this class and it is not likely that Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

All of the available for sale residential mortgage-backed securities and collateralized mortgage obligations portfolio in an unrealized loss position at December 31, 2011 are issued or guaranteed by governmental agencies. The unrealized losses on residential mortgage-backed securities and collateralized mortgage obligations were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, and not concerns regarding the underlying credit of the issuers or the underlying collateral. It is expected that these securities will not be settled at a price less than the amortized cost of each investment. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because the Bank does not intend to sell the securities in this class and it is not likely that the Bank will be required to sell these securities before recovery of their amortized cost bases, which may include holding each security until contractual maturity, the unrealized losses on these investments are not considered other-than-temporarily impaired.

We review investment securities on an ongoing basis for the presence of other-than-temporary impairment ("OTTI") or permanent impairment, taking into consideration current market conditions, fair value in relationship to cost, extent and nature of the decline in fair value, issuer rating changes and trends, whether we intend to sell a security or if it is likely that we will be required to sell the security before recovery of our amortized cost basis of the investment, which may be maturity, and other factors. For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income ("OCI"). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the OTTI amount recorded in OCI will increase the carrying value of the investment, and would not affect earnings. If there is an indication of additional credit losses, the security is re-evaluated accordingly to the procedures described above.

The following tables present the OTTI losses for the years ended December 31, 2011, 2010 and 2009.

(in thousands)

	2011				2010				2009
	Held To Maturity		Available For Sale		Held To Maturity		Available For Sale		Held To Maturity			Available For Sale
Total other-than-temporary impairment losses	$	190	$	—	$	93	$	—	$	12,317		$	239
Portion of other-than-temporary impairment losses transferred from (recognized in) other comprehensive income(1)		169		—		321		—		(1,983	)		—
Net impairment losses recognized in earnings(2)	$	359	$	—	$	414	$	—	$	10,334		$	239

(1) Represents other-than-temporary impairment losses related to all other factors.

(2) Represents other-than-temporary impairment losses related to credit losses.

New guidance related to the recognition and presentation of OTTI of debt securities became effective beginning in the second quarter of 2009. Rather than asserting whether a Company has the ability and intent to hold an investment until a market price recovery, a Company must consider whether they intend to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. The $8.2 million in OTTI recognized on investment securities held to maturity subsequent to March 31, 2009 primarily relates to 29 non-agency residential collateralized mortgage obligations. Each of these securities holds various levels of credit subordination. The underlying mortgage loans of these securities were originated from 2003 through 2007. At origination, the weighted average loan-to-value of the underlying mortgages was 69%; the underlying borrowers had weighted average FICO scores of 731, and 59% were limited documentation loans. These securities are valued by third-party pricing services using matrix or model pricing methodologies and were corroborated by broker indicative bids. We estimate cash flows of the underlying collateral for each security considering credit, interest and prepayment risk models that incorporate management's estimate of projected key assumptions including prepayment rates, collateral default rates and loss severity. Assumptions utilized vary from security to security, and are influenced by factors such as loan interest rates, geographic location, borrower characteristics and vintage, and historical experience. We then used a third party to obtain information about the structure of each security, including subordination and other credit enhancements, in order to determine how the underlying collateral cash flows will be distributed to each security issued in the structure. These cash flows are then discounted at the interest rate used to recognize interest income on each security. We review the actual collateral performance of these securities on a quarterly basis and update the inputs as appropriate to determine the projected cash flows. The following table presents a summary of the significant inputs utilized to measure management's estimate of the credit loss component on these non-agency residential collateralized mortgage obligations as of December 31, 2011 and 2010:

	2011									2010
	Range						Weighted			Range						Weighted Average
	Minimum			Maximum			Average			Minimum			Maximum
Constant prepayment rate		10.0	%		20.0	%		14.0	%		5.0	%		20.0	%		14.9	%
Collateral default rate		5.0	%		60.0	%		22.6	%		5.0	%		15.0	%		10.6	%
Loss severity		27.5	%		50.0	%		32.5	%		25.0	%		55.0	%		37.9	%

In the second quarter of 2009 the Company recorded an OTTI charge of $239,000 related to an available for sale collateralized debt obligation that holds trust preferred securities. Management noted certain deferrals and defaults in the pool and believes the impairment represents credit loss in its entirety. Through December 31, 2011, no further OTTI charges have been recorded on available for sale securities.

The following table presents a roll forward of the credit loss component of held to maturity debt securities that have been written down for OTTI with the credit loss component recognized in earnings and the remaining impairment loss related to all other factors recognized in OCI for the years ended December 31, 2011 and 2010, respectively, since the adoption of the revised guidance related to the recognition and presentation of OTTI of debt securities:

	2011			2010
Balance, beginning of period	$	12,778		$	12,364
Additions:
Subsequent OTTI credit losses		359			414
Reductions:
Securities sold, matured or paid-off		(3,563	)		—
Balance, end of period	$	9,574		$	12,778

Prior to the Company's adoption of the new guidance related to the recognition and presentation of OTTI of debt securities which became effective in the second quarter of 2009, the Company would assess an OTTI or permanent impairment based on the nature of the decline and whether the Company had the ability and intent to hold the investments until a market price recovery. In the three months ended March 31, 2009, the Company recorded a $2.1 million OTTI charge. This charge related to three non-agency residential collateralized mortgage obligations carried as held to maturity for which the default rates and loss severities of the underlying collateral and credit coverage ratios of the security indicated that it was probable that credit losses were expected to occur. These securities were valued by third party pricing services using matrix or model pricing methodologies, and were corroborated by broker indicative bids. The remaining non-agency securities within residential mortgage-backed securities and collateralized mortgage obligations carried as held to maturity were specifically evaluated for OTTI, and the default rates and loss severities of the underlying collateral indicated that credit losses are not expected to occur. Upon adoption of the new OTTI guidance in the second quarter of 2009, the Company analyzed these securities as well as other securities where OTTI had been previously recognized, and determined that as of the adoption date such losses were credit related. As such, there was no cumulative effect adjustment to the opening balance of retained earnings or a corresponding adjustment to accumulated OCI.

The following table presents the maturities of investment securities at December 31, 2011:

(in thousands)
	Available For Sale				Held To Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
AMOUNTS MATURING IN:
Three months or less	$	22,142	$	22,217	$	—	$	—
Over three months through twelve months		424,824		429,396		330		331
After one year through five years		2,272,876		2,310,113		1,096		1,155
After five years through ten years		310,639		323,164		1,023		1,010
After ten years		79,357		81,617		2,265		2,263
Other investment securities		1,959		2,071		—		—
	$	3,111,797	$	3,168,578	$	4,714	$	4,759

The amortized cost and fair value of collateralized mortgage obligations and mortgage-backed securities are presented by expected average life, rather than contractual maturity, in the preceding table. Expected maturities may differ from contractual maturities because borrowers have the right to prepay underlying loans without prepayment penalties.

The following table presents the gross realized gains and gross realized losses on the sale of securities available for sale for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011				2010				2009
	Gains		Losses		Gains		Losses		Gains		Losses
U.S. Treasury and agencies	$	—	$	—	$	—	$	1	$	—	$	—
Obligations of states and political subdivisions		8		—		3		7		—		1
Residential mortgage-backed securities and collateralized mortgage obligations		8,544		817		2,331		—		9,409		591
	$	8,552	$	817	$	2,334	$	8	$	9,409	$	592

The following table presents, as of December 31, 2011, investment securities which were pledged to secure borrowings and public deposits as permitted or required by law:

(in thousands)
	Amortized Cost		Fair Value
To Federal Home Loan Bank to secure borrowings	$	183,909	$	190,176
To state and local governments to secure public deposits		738,780		759,019
Other securities pledged		191,740		194,200
Total pledged securities	$	1,114,429	$	1,143,395

The carrying value of investment securities pledged as of December 31, 2011 and December 31, 2010 was $1.1 billion and $1.5 billion.

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Non-Covered Loans And Leases

12 Months Ended

Dec. 31, 2011

Non-Covered Loans And Leases [Abstract]

Non-Covered Loans And Leases

NOTE 5. NON-COVERED LOANS AND LEASES

The following table presents the major types of non-covered loans recorded in the balance sheets as of December 31, 2011 and 2010:

(in thousands)
	2011			2010
Commercial real estate
Term & multifamily	$	3,558,295		$	3,483,475
Construction & development		165,066			247,814
Residential development		90,073			147,813
Commercial
Term		625,766			509,453
LOC & other		832,999			747,419
Residential
Mortgage		315,927			222,416
Home equity loans & lines		272,192			278,585
Consumer & other		38,860			33,043
Total		5,899,178			5,670,018
Deferred loan fees, net		(11,080	)		(11,031	)
Total	$	5,888,098		$	5,658,987

As of December 31, 2011, loans totaling $5.1 billion were pledged to secure borrowings and available lines of credit.

XML

Derivatives (Summary Of Types Of Derivatives, Separately By Assets And Liabilities And Fair Value Of Derivatives) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Total asset derivatives	$ 7,955	$ 1,060
Total liability derivatives	6,509	361
Other [Member]
Total asset derivatives	7,955	1,060
Other Liabilities [Member]
Total liability derivatives	6,509	361
Interest Rate Swap [Member] | Other [Member]
Total asset derivatives	6,203
Interest Rate Swap [Member] | Other Liabilities [Member]
Total liability derivatives	6,416
Interest Rate Contracts [Member] | Rate Lock Commitments [Member] | Other [Member]
Total asset derivatives	1,752	306
Interest Rate Contracts [Member] | Rate Lock Commitments [Member] | Other Liabilities [Member]
Total liability derivatives	3	170
Interest Rate Contracts [Member] | Forward Sales Commitments [Member] | Other [Member]
Total asset derivatives		754
Interest Rate Contracts [Member] | Forward Sales Commitments [Member] | Other Liabilities [Member]
Total liability derivatives	$ 90	$ 191

XML

Covered Assets And Indemnification Asset

12 Months Ended

Dec. 31, 2011

Covered Assets And Indemnification Asset [Abstract]

Covered Assets And Indemnification Asset

NOTE 7. COVERED ASSETS AND INDEMNIFICATION ASSET

Covered Loans

Loans acquired in a FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as "covered loans" and reported separately in our statements of financial condition. Covered loans are reported exclusive of the expected cash flow reimbursements expected from the FDIC.

Acquired loans are valued as of acquisition date in accordance with ASC 805. Loans purchased with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Because of the significant fair value discounts associated with the acquired portfolios, the concentration of real estate related loans (to finance or secured by real estate collateral) and the decline in real estate values in the regions serviced, and after considering the underwriting standards of the acquired originating bank, the Company elected to account for all acquired loans under ASC 310-30. Under ASC 805 and ASC 310-30, loans are to be recorded at fair value at acquisition date, factoring in credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for loan losses is not carried over or recorded as of the acquisition date. We have aggregated the acquired loans into various loan pools based on multiple layers of common risk characteristics for the purpose of determining their respective fair values as of their acquisition dates, and for applying the subsequent recognition and measurement provisions for income accretion and impairment testing.

Acquired loans were first segregated between those designated as performing versus those designated as non-performing. In this application, 'performing' and 'non-performing' loans were defined in accordance with the scoping requirements of ASC 310-30, that is the 'non-performing' loans individually exhibited evidence of deteriorated credit quality since origination for which it is probable that we will not be able to collect all contractually required payments receivable. Our Credit Quality and Credit Review teams identified these non-performing credits on a loan-by-loan basis during the due diligence process. Generally, identified non-performing loans tended to be risk rated substandard or worse on the acquired institution's books. Collectively, the non-performing loans would be considered the 'classic' application of ASC 310-30. The remaining performing notes were accounted for under ASC 310-30 by analogy due to the significant fair value discounts associated with the pools resulting from the underwriting standards of the acquired bank (that often contributed to the bank's failure), the concentration of loans for the purpose of, and collateralized by, real estate, and the general economic condition of the regions each acquired bank serviced. We deem analogizing all loans to ASC 310-30 acceptable as a significant component of the fair value discount applied to each loan pool is attributed to estimated credit losses that are anticipated to occur over the life of each respective loan pool.

Once notes were separated based on their expected future performance, they were further segregated based on specific loan types (purpose/collateral) and then their principal cash flow and interest rate characteristics. The most significant loan type categories utilized (in no particular order) were commercial residential development, commercial construction, farmland, 1^st lien single family mortgages, 2^nd lien single family loans, single family revolving lines of credit, multifamily mortgages, owner occupied commercial real estate, non-owner occupied commercial real estate, commercial loans, commercial lines of credit, consumer installment loans, and consumer lines of credit. Next, groups of loans were segregated based on repayment characteristics, specifically whether the notes' principal balances were amortizing or interest-only. Lastly, loans were separated by various interest rate characteristics, such as whether the interest rate was fixed or variable. For those loans whose interest rates were variable, they were also segregated by their underlying indices (e.g. PRIME, Federal Home Loan Bank, or constant maturity treasury) and whether or not there were interest rate floors.

The following table presents the number of pools, number of loans and acquired unpaid principal balance, by performing ("analogized 310-30"), non-performing ("classic 310-30") and in total, separately for each institution acquired in 2010.

(dollars in millions)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010
Performing loans ("Analogized ASC 310-30"):
Number of Pools		15		19		19
Number of Loans		1,263		3,647		402
Acquired Unpaid Principal Balance	$	247.9	$	516.9	$	224.2
Non-performing loans ("Classic ASC 310-30"):
Number of Pools		8		10		9
Number of Loans		127		39		106
Acquired Unpaid Principal Balance	$	120.6	$	44.5	$	103.4
Total Portfolio
Number of Pools		23		29		28
Number of Loans		1,390		3,686		508
Acquired Unpaid Principal Balance	$	368.5	$	561.4	$	327.6

The fair value of each loan pool was computed by discounting the expected cash flows at their estimated market discount rate. Cash flows expected to be collected at acquisition date were estimated by applying certain key assumptions to each loan pool, such as credit loss rates, prepayment speeds, and resolution terms related to nonperforming loans, against the contractual cash flows of the underlying loans. Credit loss estimates for each pool were determined by considering factors such as, underlying collateral types, collateral locations, estimated collateral values, and credit quality indicators such as risk ratings. Market discount rates were determined using a buildup approach which included assumptions with respect to funding cost and funding mix, a market participant's required rate of return on equity capital, servicing costs and a liquidity premium.

The following table reflects the estimated fair value of the acquired loans at the acquisition dates:

(in thousands)
	Evergreen		Rainier		Nevada Security
	January 22, 2010		February 26, 2010		June 18, 2010		Total
Commercial real estate
Term & multifamily	$	141,076	$	331,869	$	154,119	$	627,064
Construction & development		18,832		562		9,481		28,875
Residential development		16,219		10,340		15,641		42,200
Commercial
Term		27,272		14,850		18,257		60,379
LOC & other		23,965		18,169		11,408		53,542
Residential
Mortgage		11,886		39,897		1,539		53,322
Home equity loans & lines		8,308		31,029		4,421		43,758
Consumer & other		4,935		11,624		641		17,200
Total	$	252,493	$	458,340	$	215,507	$	926,340

In estimating the fair value of the covered loans at the acquisition date, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments and (b) estimated the amount and timing of undiscounted expected principal and interest payments. The difference between these two amounts represents the nonaccretable difference. On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the "accretable yield". The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans.

The following table presents a reconciliation of the undiscounted contractual cash flows, nonaccretable difference, accretable yield, and fair value of covered loans for each respective acquired loan portfolio at the acquisition dates:

(in thousands)
	Evergreen January  22, 2010			Rainier February  26, 2010			Nevada  Security June 18, 2010			Total
Undiscounted contractual cash flows	$	498,216		$	821,972		$	396,134		$	1,716,322
Undiscounted cash flows not expected to be collected (nonaccretable difference)		(124,131	)		(125,774	)		(115,021	)		(364,926	)
Undiscounted cash flows expected to be collected		374,085			696,198			281,113			1,351,396
Accretable yield at acquisition		(121,592	)		(237,858	)		(65,606	)		(425,056	)
Estimated fair value of loans acquired at acquisition	$	252,493		$	458,340		$	215,507		$	926,340

The covered loan portfolio also includes revolving lines of credit with funded and unfunded commitments. Balances outstanding at the time of acquisition are included in the loan pools and are accounted for under ASC 310-30. Any additional advances on these loans subsequent to the acquisition date may or may not be covered depending on the nature of the disbursement and the terms of each respective loss-sharing agreement, and are not accounted for under ASC 310-30.

The covered loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring. To the extent there is experienced or projected credit deterioration on the acquired loan pools subsequent to amounts estimated at the previous remeasurement date, this deterioration will be measured, and a provision for credit losses will be charged to earnings. Additionally, provision for credit losses will be recorded on advances on covered loans subsequent to acquisition date in a manner consistent with the allowance for non-covered loan and lease losses. These provisions will be mostly offset by an increase to the FDIC indemnification asset, which is recognized in non-interest income.

Covered Loans

The following table presents the major types of covered loans as of December 31, 2011 and 2010:

(in thousands)
	2011
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	99,346	$	248,206	$	126,502	$	474,054
Construction & development		7,241		711		6,868		14,820
Residential development		7,809		227		9,727		17,763
Commercial
Term		14,911		5,807		13,432		34,150
LOC & other		8,776		8,854		5,796		23,426
Residential
Mortgage		6,320		27,320		1,863		35,503
Home equity loans & lines		4,660		21,055		3,370		29,085
Consumer & other		2,394		5,541		35		7,970
Total	$	151,457	$	317,721	$	167,593		636,771
Allowance for covered loans								(14,320	)
Total							$	622,451
	2010
	Evergreen		Rainier		Nevada Security		Total
Commercial real estate
Term & multifamily	$	124,743	$	303,585	$	141,314	$	569,642
Construction & development		14,470		854		9,389		24,713
Residential development		11,024		2,497		11,372		24,893
Commercial
Term		18,895		10,881		13,000		42,776
LOC & other		11,876		14,320		9,031		35,227
Residential
Mortgage		8,129		35,026		1,669		44,824
Home equity loans & lines		6,740		25,214		3,726		35,680
Consumer & other		2,793		8,071		—		10,864
Total	$	198,670	$	400,448	$	189,501		788,619
Allowance for covered loans								(2,721	)
Total							$	785,898

The outstanding contractual unpaid principal balance, excluding purchase accounting adjustments, at December 31, 2011 was $209.5 million, $379.0 million and $260.2 million, for Evergreen, Rainier, and Nevada Security, respectively, as compared to $286.6 million, $481.7 million and $295.4 million, for Evergreen, Rainier, and Nevada Security, respectively, at December 31, 2010.

In estimating the fair value of the covered loans at the acquisition date, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments and (b) estimated the amount and timing of undiscounted expected principal and interest payments. The difference between these two amounts represents the nonaccretable difference.

On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the "accretable yield". The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans.

The following table presents the changes in the accretable yield for the years ended December 31, 2011 and 2010 for each respective acquired loan portfolio:

	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	90,770		$	172,614		$	73,515		$	336,899
Accretion to interest income		(26,240	)		(35,382	)		(22,580	)		(84,202	)
Disposals		(10,575	)		(19,893	)		(4,595	)		(35,063	)
Reclassifications from nonaccretable difference		2,524			2,994			14,681			20,199
Balance, end of period	$	56,479		$	120,333		$	61,021		$	237,833
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Additions resulting from acquisitions		121,592			237,858			65,606			425,056
Accretion to interest income		(29,060	)		(32,979	)		(10,978	)		(73,017	)
Disposals		(6,572	)		(12,830	)		(2,376	)		(21,778	)
Reclassifications (to)/from nonaccretable difference		4,810			(19,435	)		21,263			6,638
Balance, end of period	$	90,770		$	172,614		$	73,515		$	336,899

The estimated fair value of the loan portfolios and expected credit losses continued to be based on a weighted average pool-level basis. However, the undiscounted contractual cash flows estimate was refined to be based off of the underlying individual loans and resulted in a reduction in the undiscounted contractual cash flows and a corresponding decrease in accretable yield. As these acquisitions occurred in the first quarter of 2010, the Company elected to reflect these changes, beginning in the second quarter of 2010, in the reclassification to nonaccretable difference line item of the accretable yield reconciliation, rather than adjust the acquisition date balance disclosure as the estimated fair values did not change. The updated initial cash flows did not have a material impact on or result in retrospective adjustments to the Company's consolidated financial statements.

Allowance for Covered Loan and Lease Losses

The following table summarizes activity related to the allowance for covered loan and lease losses by covered loan portfolio segment for the years ended December 31, 2011 and 2010, respectively:

(in thousands)
	December 31, 2011
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Total
Balance, beginning of period	$	2,465		$	176		$	56		$	24		$	2,721
Charge-offs		(3,177	)		(660	)		(1,657	)		(1,192	)		(6,686	)
Recoveries		1,348			512			142			142			2,144
Provision		8,303			3,936			2,450			1,452			16,141
Balance, end of period	$	8,939		$	3,964		$	991		$	426		$	14,320
	December 31, 2010
	Commercial Real Estate			Commercial			Residential			Consumer & Other			Total
Balance, beginning of period	$	—		$	—		$	—		$	—		$	—
Charge-offs		(2,439	)		(266	)		—			—			(2,705	)
Recoveries		11			263			—			1			275
Provision		4,893			179			56			23			5,151
Balance, end of period	$	2,465		$	176		$	56		$	24		$	2,721

The following table presents the allowance and recorded investment in covered loans by portfolio segment as of December 31, 2011 and 2010:

(in thousands)
	December 31, 2011
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	8,491	$	3,366	$	955	$	395	$	13,207
Collectively evaluated for impairment(2)		448		598		36		31		1,113
Total	$	8,939	$	3,964	$	991	$	426	$	14,320
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	503,575	$	39,427	$	59,980	$	5,410	$	608,392
Collectively evaluated for impairment(2)		3,062		18,149		4,608		2,560		28,379
Total	$	506,637	$	57,576	$	64,588	$	7,970	$	636,771
	December 31, 2010
	Commercial Real Estate		Commercial		Residential		Consumer & Other		Total
Allowance for covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	2,345	$	—	$	—	$	—	$	2,345
Collectively evaluated for impairment		120		176		56		24		376
Total	$	2,465	$	176	$	56	$	24	$	2,721
Covered loans and leases:
Loans acquired with deteriorated credit quality(1)	$	614,361	$	63,252	$	72,650	$	8,610	$	758,873
Collectively evaluated for impairment		4,887		14,751		7,854		2,254		29,746
Total	$	619,248	$	78,003	$	80,504	$	10,864	$	788,619

(1) In accordance with ASC 310-30, the valuation allowance is netted against the carrying value of the covered loan and lease balance.

(2) The allowance on covered loan and lease losses includes an allowance on covered loan advances on acquired loans subsequent to acquisition.

The valuation allowance on covered loans was reduced by recaptured provision of $3.5 million and none for the years ended December 31, 2011 and 2010, respectively.

Covered Credit Quality Indicators

Covered loans are risk rated in a manner consistent with non-covered loans. As previously noted, the Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating groupings are described fully in Note 6. The below table includes both loans acquired with deteriorated credit quality accounted for under ASC 310-30 and covered loan advances on acquired loans subsequent to acquisition.

The following table summarizes our internal risk rating grouping by class of covered loans, net as of December 31, 2011 and 2010:

(in thousands)
	December 31, 2011
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	329,273	$	58,610	$	68,521	$	12,343	$	—	$	468,747
Construction & development		1,552		1,410		6,733		3,410		—		13,105
Residential development		1,187		405		8,394		5,808		—		15,794
Commercial
Term		18,006		1,661		8,244		3,228		—		31,139
LOC & other		13,605		2,756		5,607		556		—		22,524
Residential
Mortgage		35,233		—		—		—		—		35,233
Home equity loans & lines		28,223		—		143		—		—		28,366
Consumer & other		7,543		—		—		—		—		7,543
Total	$	434,622	$	64,842	$	97,642	$	25,345	$	—	$	622,451
	December 31, 2010
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Total
Commercial real estate
Term & multifamily	$	485,238	$	32,150	$	44,833	$	7,421	$	—	$	569,642
Construction & development		6,155		3,799		7,640		4,841		—		22,435
Residential development		6,625		1,322		12,907		3,852		—		24,706
Commercial
Term		31,760		2,119		7,087		1,634		—		42,600
LOC & other		22,960		4,246		7,183		838		—		35,227
Residential
Mortgage		44,524		—		300		—		—		44,824
Home equity loans & lines		34,998		—		627		—		—		35,625
Consumer & other		10,827		—		12		—		—		10,839
Total	$	643,087	$	43,636	$	80,589	$	18,586	$	—	$	785,898

Covered Other Real Estate Owned

All other real estate owned ("OREO") acquired in FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement are referred to as "covered OREO" and reported separately in our statements of financial position. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral's net realizable value, less selling costs.

Covered OREO was initially recorded at its estimated fair value on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to non-interest expense, and will be mostly offset by non-interest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to non-interest expense with a corresponding charge to non-interest income for the portion of the recovery that is due to the FDIC.

The following table summarizes the activity related to the covered OREO for the years ended December 31, 2011 and 2010:

(in thousands)
	2011			2010
Balance, beginning of period	$	29,863		$	—
Acquisition		—			26,939
Additions to covered OREO		15,271			15,350
Dispositions of covered OREO		(16,934	)		(10,485	)
Valuation adjustments in the period		(8,709	)		(1,941	)
Balance, end of period	$	19,491		$	29,863

FDIC Indemnification Asset

The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations. The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into non-interest income over the life of the FDIC indemnification asset.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered assets. These adjustments are measured on the same basis as the related covered loans and covered other real estate owned. Any increases in cash flow of the covered assets over those expected will reduce the FDIC indemnification asset and any decreases in cash flow of the covered assets under those expected will increase the FDIC indemnification asset. Increases and decreases to the FDIC indemnification asset are recorded as adjustments to non-interest income. The resulting carrying value of the indemnification asset represents the amounts recoverable from the FDIC for future expected losses, and the amounts due from the FDIC for claims related to covered losses the Company have incurred less amounts due back to the FDIC relating to shared recoveries.

The following table summarizes the activity related to the FDIC indemnification asset for each respective acquired portfolio for the years ended December 31, 2011 and 2010:

(in thousands)
	2011
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	40,606		$	43,726		$	62,081		$	146,413
Change in FDIC indemnification asset		1,357			(7,343	)		(182	)		(6,168	)
Transfers to due from FDIC		(13,416	)		(8,111	)		(27,629	)		(49,156	)
Balance, end of period	$	28,547		$	28,272		$	34,270		$	91,089
	2010
	Evergreen			Rainier			Nevada Security			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Acquisitions		71,755			76,603			99,160			247,518
Change in FDIC indemnification asset		(12,864	)		(7,045	)		3,464			(16,445	)
Transfers to due from FDIC		(18,285	)		(25,832	)		(40,543	)		(84,660	)
Balance, end of period	$	40,606		$	43,726		$	62,081		$	146,413

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Earnings Per Common Share (Tables)

12 Months Ended

Dec. 31, 2011

Earnings Per Common Share [Abstract]

Computation Of Basic And Diluted Earnings (Loss) Per Common Share

(in thousands, except per share data)
	2011		2010		2009
NUMERATORS:
Net income (loss)	$	74,496	$	28,326	$	(153,366	)
Preferred stock dividends		—		12,192		12,866
Dividends and undistributed earnings allocated to participating securities(1)		356		67		30
Net earnings (loss) available to common shareholders	$	74,140	$	16,067	$	(166,262	)
DENOMINATORS:
Weighted average number of common shares outstanding - basic		114,220		107,922		70,399
Effect of potentially dilutive common shares(2)		189		231		—
Weighted average number of common shares outstanding - diluted		114,409		108,153		70,399
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	0.65	$	0.15	$	(2.36	)
Diluted	$	0.65	$	0.15	$	(2.36	)

(1) Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

(2) Represents the effect of the assumed exercise of warrants, assumed exercise of stock options, vesting of non-participating restricted shares, and vesting of restricted stock units, based on the treasury stock method.

Schedule Of Weighted Average Outstanding Securities Not Included In The Computation Of Diluted Earnings Per Common Share

(in thousands)
	2011		2010		2009
Stock options		1,815		1,450		1,826
CPP warrant		—		274		1,811
Non-participating, nonvested restricted shares		—		9		17
Restricted stock units		—		—		100
		1,815		1,733		3,754

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Income Taxes (Schedule Of Company's Unrecognized Tax Benefits) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Abstract]
Unrecognized Tax Benefits, Beginning Balance	$ 589	$ 2,263
Changes based on tax positions related to prior years		1,674
Reductions for tax positions of prior years	(39)
Unrecognized Tax Benefits, Ending Balance	$ 550	$ 589

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Investment Securities (Investment Securities Pledged To Secure Borrowings And Public Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Investment Securities [Abstract]
To Federal Home Loan Bank to secure borrowings, Amortized Cost	$ 183,909
To Federal Home Loan Bank to secure borrowings, Fair Value	190,176
To state and local governments to secure public deposits, Amortized Cost	738,780
To state and local governments to secure public deposits, Fair Value	759,019
Other securities pledged, Amortized Cost	191,740
Other securities pledged, Fair Value	194,200
Total pledged securities, Amortized Cost	1,114,429
Total pledged securities, Fair Value	$ 1,143,395

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Schedule Of Aggregate Activity Involving Related Party Borrowers

(in thousands)
	2011			2010			2009
Loans outstanding at beginning of year	$	9,264		$	12,301		$	13,968
New loans and advances		10,041			1,409			1,819
Less loan repayments		(7,060	)		(3,467	)		(3,471	)
Reclassification(1)		—			(979	)		(15	)
Loans outstanding at end of year	$	12,245		$	9,264		$	12,301

(1) Represents loans that were once considered related party but are no longer considered related party, or loans that were not related party that subsequently became related party loans.

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Covered Assets And Indemnification Asset (Changes In Accretable Yield In Acquired Loans) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Balance, beginning of period	$ 336,899
Additions resulting from acquisitions		425,056
Accretion to interest income	(84,202)	(73,017)
Disposals	(35,063)	(21,778)
Reclassifications (to)/from nonaccretable difference	20,199	6,638
Balance, end of period	237,833	336,899
Evergreen Bank [Member]
Balance, beginning of period	90,770
Additions resulting from acquisitions		121,592
Accretion to interest income	(26,240)	(29,060)
Disposals	(10,575)	(6,572)
Reclassifications (to)/from nonaccretable difference	2,524	4,810
Balance, end of period	56,479	90,770
Rainier Pacific Bank [Member]
Balance, beginning of period	172,614
Additions resulting from acquisitions		237,858
Accretion to interest income	(35,382)	(32,979)
Disposals	(19,893)	(12,830)
Reclassifications (to)/from nonaccretable difference	2,994	(19,435)
Balance, end of period	120,333	172,614
Nevada Security Bank [Member]
Balance, beginning of period	73,515
Additions resulting from acquisitions		65,606
Accretion to interest income	(22,580)	(10,978)
Disposals	(4,595)	(2,376)
Reclassifications (to)/from nonaccretable difference	14,681	21,263
Balance, end of period	$ 61,021	$ 73,515

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Fair Values (Tables)

12 Months Ended

Dec. 31, 2011

Fair Values [Abstract]

Schedule Of Carrying Value And Fair Value Of Financial Instruments Not Recorded At Fair Value

	2011				2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
FINANCIAL ASSETS:
Cash and cash equivalents	$	598,766	$	598,766	$	1,004,125	$	1,004,125
Trading securities		2,309		2,309		3,024		3,024
Securities available for sale		3,168,578		3,168,578		2,919,180		2,919,180
Securities held to maturity		4,714		4,759		4,762		4,774
Loans held for sale		98,691		98,691		75,626		75,626
Non-covered loans and leases, net		5,795,130		5,816,714		5,557,066		5,767,506
Covered loans and leases		622,451		722,295		785,898		893,682
Restricted equity securities		32,581		32,581		34,475		34,475
Mortgage servicing rights		18,184		18,184		14,454		14,454
Bank owned life insurance assets		92,555		92,555		90,161		90,161
FDIC indemnification asset		91,089		47,008		146,413		90,011
Derivatives		7,955		7,955		1,060		1,060
Visa Class B common stock		—		19,230		—		15,987
FINANCIAL LIABILITIES:
Deposits	$	9,236,690	$	9,260,327	$	9,433,805	$	9,464,406
Securities sold under agreement to repurchase		124,605		124,605		73,759		73,759
Term debt		255,676		284,911		262,760		282,127
Junior subordinated debentures, at fair value		82,905		82,905		80,688		80,688
Junior subordinated debentures, at amortized cost		102,544		68,698		102,866		65,771
Derivatives		6,509		6,509		361		361

Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis

(in thousands)
	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Description
Trading securities
Obligations of states and political subdivisions	$	296	$	296	$	—	$	—
Equity securities		1,918		1,918		—		—
Other investments securities(1)		95		95		—		—
Available for sale securities
U.S. Treasury and agencies		118,465		—		118,465		—
Obligations of states and political subdivisions		253,553		—		253,553		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,794,355		—		2,794,355		—
Other debt securities		134		—		134		—
Investments in mutual funds and other equity securities		2,071		—		2,071		—
Mortgage servicing rights, at fair value		18,184		—		—		18,184
Derivatives		7,955		—		7,955		—
Total assets measured at fair value	$	3,197,026	$	2,309	$	3,176,533	$	18,184
Junior subordinated debentures, at fair value	$	82,905	$	—	$	—	$	82,905
Derivatives		6,509		—		6,509		—
Total liabilities measured at fair value	$	89,414	$	—	$	6,509	$	82,905
	Fair Value at December 31, 2010
	Total		Level 1		Level 2		Level 3
Description
Trading securities
Obligations of states and political subdivisions	$	1,282	$	1,282	$	—	$	—
Equity securities		1,645		1,645		—		—
Other investments securities(1)		97		97		—		—
Available for sale securities
U.S. Treasury and agencies		118,789		—		118,789		—
Obligations of states and political subdivisions		216,726		—		216,726		—
Residential mortgage-backed securities and collateralized mortgage obligations		2,581,504		—		2,581,504		—
Other debt securities		152		—		152		—
Investments in mutual funds and other equity securities		2,009		—		2,009		—
Mortgage servicing rights, at fair value		14,454		—		—		14,454
Derivatives		1,060		—		1,060		—
Total assets measured at fair value	$	2,937,718	$	3,024	$	2,920,240	$	14,454
Junior subordinated debentures, at fair value	$	80,688	$	—	$	—	$	80,688
Derivatives		361		—		361		—
Total liabilities measured at fair value	$	81,049	$	—	$	361	$	80,688

(1) Principally represents U.S. Treasury and agencies or residential mortgage-backed securities issued or guaranteed by governmental agencies.

Schedule Of Reconciliation Of Assets And Liabilities Measured At Fair Value Using Significant Unobservable Inputs (Level 3) On A Recurring Basis

(in thousands)
	Beginning Balance		Change included in earnings			Issuances		Settlements			Ending Balance		Net change in unrealized gains or losses relating to items held at end of period
2011
Mortgage servicing rights	$	14,454	$	(2,990	)	$	6,720	$	—		$	18,184	$	(961	)
Junior subordinated debentures		80,688		6,134			—		(3,917	)		82,905		6,134
2010
Mortgage servicing rights	$	12,625	$	(3,878	)	$	5,707	$	—		$	14,454	$	(1,965	)
Junior subordinated debentures		85,666		(1,004	)		—		(3,974	)		80,688		(1,004	)

Fair Value Assets And Liabilities Measured On Nonrecurring Basis

(in thousands)
	December 31, 2011
	Total		Level 1		Level 2		Level 3
Description
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	487	$	—	$	—	$	487
Non-covered loans and leases		53,847		—		—		53,847
Non-covered other real estate owned		11,321		—		—		11,321
Covered other real estate owned		12,561		—		—		12,561
	$	78,216	$	—	$	—	$	78,216
	December 31, 2010
	Total		Level 1		Level 2		Level 3
Description
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	1,226	$	—	$	—	$	1,226
Non-covered loans and leases		74,639		—		—		74,639
Non-covered other real estate owned		7,958		—		—		7,958
Covered other real estate owned		8,708		—		—		8,708
	$	92,531	$	—	$	—	$	92,531

Fair Value, Assets And Liabilities Measured On Recurring Basis, Gain (Loss) Included In Earnings

(in thousands)
	2011		2010		2009
Investment securities, held to maturity
Residential mortgage-backed securities and collateralized mortgage obligations	$	359	$	414	$	10,334
Non-covered loans and leases		51,883		119,240		185,810
Goodwill		—		—		111,952
Other intangible assets, net		—		—		804
Non-covered other real estate owned		8,947		4,074		12,247
Covered other real estate owned		8,709		1,941		—
Total loss from nonrecurring measurements	$	69,898	$	125,669	$	321,147

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Allowance For Non-Covered Loan Loss And Credit Quality (Non-Covered Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Unpaid Principal Balance	$ 203,792	$ 309,872
Recorded Investment	166,279	222,619
Related Allowance	3,784	5,239
Average Recorded Investment	193,907	259,717
Interest Income Recognized	2,955	2,403	2,400
Commercial [Member]
Unpaid Principal Balance	43,163	74,153
Recorded Investment	26,171	35,507
Related Allowance	2,608	2,711
Average Recorded Investment	29,729	49,921
Interest Income Recognized	140	62
Commercial Real Estate [Member]
Unpaid Principal Balance	160,500	235,540
Recorded Investment	139,979	186,933
Related Allowance	1,172	2,520
Average Recorded Investment	163,983	206,025
Interest Income Recognized	2,812	2,335
Residential [Member]
Unpaid Principal Balance	129	179
Recorded Investment	129	179
Related Allowance	4	8
Average Recorded Investment	195	3,771
Interest Income Recognized	3	6
With An Allowance Recorded [Member] | Consumer & Other [Member]
Unpaid Principal Balance
Recorded Investment
Related Allowance
Average Recorded Investment
Interest Income Recognized
With An Allowance Recorded [Member] | Commercial [Member] | LOC & Other [Member]
Unpaid Principal Balance	3,975	9,878
Recorded Investment	3,975	8,519
Related Allowance	2,000	2,702
Average Recorded Investment	3,642	1,884
Interest Income Recognized		14
With An Allowance Recorded [Member] | Commercial [Member] | Term [Member]
Unpaid Principal Balance	1,851	205
Recorded Investment	1,851	205
Related Allowance	608	9
Average Recorded Investment	627	402
Interest Income Recognized	140	48
With An Allowance Recorded [Member] | Commercial Real Estate [Member] | Residential Development [Member]
Unpaid Principal Balance	26,326	46,059
Recorded Investment	26,326	44,504
Related Allowance	464	906
Average Recorded Investment	32,810	54,607
Interest Income Recognized	1,120	1,474
With An Allowance Recorded [Member] | Commercial Real Estate [Member] | Construction & Development [Member]
Unpaid Principal Balance	3,762
Recorded Investment	12,248
Related Allowance	151
Average Recorded Investment	6,560	1,706
Interest Income Recognized	798	38
With An Allowance Recorded [Member] | Commercial Real Estate [Member] | Term & Multifamily [Member]
Unpaid Principal Balance	22,611	29,926
Recorded Investment	13,105	28,070
Related Allowance	557	1,614
Average Recorded Investment	18,792	28,518
Interest Income Recognized	894	823
With An Allowance Recorded [Member] | Residential [Member] | Mortgage [Member]
Unpaid Principal Balance		179
Recorded Investment		179
Related Allowance		8
Average Recorded Investment	143	3,750
Interest Income Recognized		6
With An Allowance Recorded [Member] | Residential [Member] | Home Equity Loans & Lines [Member]
Unpaid Principal Balance	129
Recorded Investment	129
Related Allowance	4
Average Recorded Investment	52	21
Interest Income Recognized	3
With No Related Allowance Recorded [Member] | Commercial [Member] | LOC & Other [Member]
Unpaid Principal Balance	23,132	56,046
Recorded Investment	9,034	19,814
Average Recorded Investment	16,121	38,215
With No Related Allowance Recorded [Member] | Commercial [Member] | Term [Member]
Unpaid Principal Balance	14,205	8,024
Recorded Investment	11,311	6,969
Average Recorded Investment	9,339	9,420
With No Related Allowance Recorded [Member] | Commercial Real Estate [Member] | Residential Development [Member]
Unpaid Principal Balance	30,575	63,859
Recorded Investment	23,212	39,011
Average Recorded Investment	33,864	37,603
With No Related Allowance Recorded [Member] | Commercial Real Estate [Member] | Construction & Development [Member]
Unpaid Principal Balance	22,553	33,091
Recorded Investment	17,744	25,558
Average Recorded Investment	21,498	27,588
With No Related Allowance Recorded [Member] | Commercial Real Estate [Member] | Term & Multifamily [Member]
Unpaid Principal Balance	54,673	62,605
Recorded Investment	47,344	49,790
Average Recorded Investment	50,459	56,003
With No Related Allowance Recorded [Member] | Residential [Member] | Mortgage [Member]
Unpaid Principal Balance
Recorded Investment
Related Allowance
Average Recorded Investment
Interest Income Recognized
With No Related Allowance Recorded [Member] | Residential [Member] | Home Equity Loans & Lines [Member]
Unpaid Principal Balance
Recorded Investment
Related Allowance
Average Recorded Investment
Interest Income Recognized
With No Related Allowance Recorded [Member] | Residential [Member] | Consumer & Other [Member]
Unpaid Principal Balance
Recorded Investment
Related Allowance
Average Recorded Investment
Interest Income Recognized

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Term Debt (Schedule Of Future Contractual Maturities Of Borrowed Funds) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Term Debt [Abstract]
2012
2013
2014
2015
2016	190,016
Thereafter	55,519
Total borrowed funds	$ 245,535

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Earnings Per Common Share

12 Months Ended

Dec. 31, 2011

Earnings Per Common Share [Abstract]

Earnings Per Common Share

NOTE 25. EARNINGS PER COMMON SHARE

The following is a computation of basic and diluted earnings per common share for the years ended December 31, 2011, 2010 and 2009:

(in thousands, except per share data)
	2011		2010		2009
NUMERATORS:
Net income (loss)	$	74,496	$	28,326	$	(153,366	)
Preferred stock dividends		—		12,192		12,866
Dividends and undistributed earnings allocated to participating securities(1)		356		67		30
Net earnings (loss) available to common shareholders	$	74,140	$	16,067	$	(166,262	)
DENOMINATORS:
Weighted average number of common shares outstanding - basic		114,220		107,922		70,399
Effect of potentially dilutive common shares(2)		189		231		—
Weighted average number of common shares outstanding - diluted		114,409		108,153		70,399
EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	0.65	$	0.15	$	(2.36	)
Diluted	$	0.65	$	0.15	$	(2.36	)

(1) Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

(2) Represents the effect of the assumed exercise of warrants, assumed exercise of stock options, vesting of non-participating restricted shares, and vesting of restricted stock units, based on the treasury stock method.

The following table presents the weighted average outstanding non-participating securities that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011		2010		2009
Stock options		1,815		1,450		1,826
CPP warrant		—		274		1,811
Non-participating, nonvested restricted shares		—		9		17
Restricted stock units		—		—		100
		1,815		1,733		3,754

In the fourth quarter of 2008, the Company issued the CPP warrant to the U.S. Treasury to purchase up to 2,221,795 shares of common stock. This security was not included in the computation of diluted EPS for the year ended December 31, 2009 because the warrant's exercise price was greater than the average market price of common shares. The weighted average number of outstanding common stock underlying the CPP warrant in 2009 reflects the 50% reduction of the number of shares of common stock underlying the warrant in connection with the Company's qualifying public offering in the third quarter of 2009. The weighted average number of outstanding common stock underlying the CPP warrant in 2010 reflects the repurchase of the warrants in connection with the Company's full repayment of TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

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Shareholders' Equity (Summary Of Restricted Stock Unit Activity) (Details) (Restricted Stock [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restricted Stock [Member]
Restricted Shares Outstanding - Balance, beginning of year	225	335	301
Restricted Shares Outstanding - Granted	105		114
Restricted Shares Outstanding - Released	(63)	(16)	(23)
Restricted Shares Outstanding - Forfeited/expired	(48)	(94)	(57)
Restricted Shares Outstanding - Balance, end of year	219	225	335
Weighted Average Grant Date Fair Value - Balance, beginning of year	$ 11.13	$ 15.54	$ 19.48
Weighted Average Grant Date Fair Value - Granted	$ 10.42		$ 8.01
Weighted Average Grant Date Fair Value - Released	$ 14.33	$ 24.52	$ 21.33
Weighted Average Grant Date Fair Value - Forfeited/expired	$ 14.33	$ 24.52	$ 18.98
Weighted Average Grant Date Fair Value - Balance, end of year	$ 9.17	$ 11.13	$ 15.54

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Mortgage Servicing Rights (Tables)

12 Months Ended

Dec. 31, 2011

Mortgage Servicing Rights [Abstract]

Schedule Of Changes In Mortgage Servicing Rights

(in thousands)
	2011			2010			2009
Balance, beginning of year	$	14,454		$	12,625		$	8,205
Additions for new mortgage servicing rights capitalized		6,720			5,645			7,570
Acquired mortgage servicing rights		—			62			—
Changes in fair value:
Due to changes in model inputs or assumptions(1)		(858	)		(1,598	)		(3,469	)
Other(2)		(2,132	)		(2,280	)		319
Balance, end of year	$	18,184		$	14,454		$	12,625
Balance of loans serviced for others	$	2,009,849		$	1,603,414		$	1,277,832
MSR as a percentage of serviced loans		0.90	%		0.90	%		0.99	%

(1) Principally reflects changes in discount rates and prepayment speed assumptions, which are primarily affected by changes in interest rates.

(2) Represents changes due to collection/realization of expected cash flows over time.

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Other Assets

12 Months Ended

Dec. 31, 2011

Other Assets [Abstract]

Other Assets

NOTE 12. OTHER ASSETS

Other assets consisted of the following at December 31, 2011 and 2010:

(in thousands)
	2011		2010
Cash surrender value of life insurance policies	$	92,555	$	90,161
Accrued interest receivable		30,617		30,307
Due from FDIC		26,510		36,461
Prepaid FDIC deposit assessment		18,739		29,369
Income taxes receivable		14,715		516
Equity method investments		12,400		8,377
Derivative assets		7,955		1,060
Investment in unconsolidated Trusts		6,934		6,933
Deferred tax assets, net		—		9,649
Other		37,181		29,632
Total	$	247,606	$	242,465

The amount due from the FDIC relates to the FDIC-assisted acquisitions of Evergreen, Rainier, and Nevada Security. See further discussion at Note 7.

The Company invests in limited partnerships that operate qualified affordable housing projects to receive tax benefits in the form of tax deductions from operating losses and tax credits. The Company accounts for the investments under the equity method. The Company's remaining capital commitments to these partnerships at December 31, 2011 and 2010 were approximately $6.9 million and $1.9 million, respectively. Such amounts are included in other liabilities on the consolidated balance sheets.

Also see Note 18 for information on the Company's investment in Trusts and Note 21 for information on the Company's derivatives.

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Other Assets (Schedule Of Other Assets) (Details) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Other Assets [Abstract]
Cash surrender value of life insurance policies	$ 92,555,000	$ 90,161,000
Accrued interest receivable	30,617,000	30,307,000
Due from FDIC	26,510,000	36,461,000
Prepaid FDIC deposit assessment	18,739,000	29,369,000
Income taxes receivable	14,715,000	516,000
Equity method investments	12,400,000	8,377,000
Derivative assets	7,955,000	1,060,000
Investment in unconsolidated Trusts	6,934,000	6,933,000
Deferred tax assets, net		9,649,000
Other	37,181,000	29,632,000
Total	247,606,000	242,465,000
Capital commitments relating to investments	$ 6,900,000	$ 1,900,000

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Term Debt

12 Months Ended

Dec. 31, 2011

Term Debt [Abstract]

Term Debt

NOTE 17. TERM DEBT

The Bank had outstanding secured advances from the FHLB and other creditors at December 31, 2011 and 2010 with carrying values of $255.7 million and $262.8 million, respectively.

The following table summarizes the future contractual maturities of borrowed funds (excluding the remaining unamortized purchase accounting adjustments relating to the Rainier acquisition of $10.1 million) as of December 31, 2011:

(dollars in thousands)
Year	Amount
2012	$	—
2013		—
2014		—
2015		—
2016		190,016
Thereafter		55,519
Total borrowed funds	$	245,535

The maximum amount outstanding from the FHLB under term advances at month end during 2011 and 2010 was $250.0 million and $355.2 million, respectively. The average balance outstanding on FHLB term advances during 2011 and 2010 was $245.8 and $247.5 million, respectively. The average interest rate on the borrowings (excluding the accretion of purchase accounting adjustments) was 4.6% in 2011 and 4.4% in 2010. The FHLB requires the Bank to maintain a required level of investment in FHLB and sufficient collateral to qualify for notes. The Bank has pledged as collateral for these notes all FHLB stock, all funds on deposit with the FHLB, and its investments and commercial real estate portfolios, accounts, general intangibles, equipment and other property in which a security interest can be granted by the Bank to the FHLB.

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Allowance For Non-Covered Loan Loss And Credit Quality (Schedule Of Newly Restructured Loans) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Rate Modifications [Member]
Outstanding Recorded Investment	$ 279
Term Modifications [Member]
Outstanding Recorded Investment	484	2,830
Interest Only Modifications [Member]
Outstanding Recorded Investment
Payment Modifications [Member]
Outstanding Recorded Investment	70
Combination Modifications [Member]
Outstanding Recorded Investment	67,154	22,243
Total Modifications [Member]
Outstanding Recorded Investment	67,987	25,073
Mortgage [Member] | Residential [Member] | Rate Modifications [Member]
Outstanding Recorded Investment
Mortgage [Member] | Residential [Member] | Term Modifications [Member]
Outstanding Recorded Investment
Mortgage [Member] | Residential [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Mortgage [Member] | Residential [Member] | Payment Modifications [Member]
Outstanding Recorded Investment
Mortgage [Member] | Residential [Member] | Combination Modifications [Member]
Outstanding Recorded Investment
Mortgage [Member] | Residential [Member] | Total Modifications [Member]
Outstanding Recorded Investment
Home Equity Loans & Lines [Member] | Residential [Member] | Rate Modifications [Member]
Outstanding Recorded Investment
Home Equity Loans & Lines [Member] | Residential [Member] | Term Modifications [Member]
Outstanding Recorded Investment	130
Home Equity Loans & Lines [Member] | Residential [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Home Equity Loans & Lines [Member] | Residential [Member] | Payment Modifications [Member]
Outstanding Recorded Investment
Home Equity Loans & Lines [Member] | Residential [Member] | Combination Modifications [Member]
Outstanding Recorded Investment
Home Equity Loans & Lines [Member] | Residential [Member] | Total Modifications [Member]
Outstanding Recorded Investment	130
Residential Development [Member] | Commercial Real Estate [Member] | Rate Modifications [Member]
Outstanding Recorded Investment	279
Residential Development [Member] | Commercial Real Estate [Member] | Term Modifications [Member]
Outstanding Recorded Investment	354	1,459
Residential Development [Member] | Commercial Real Estate [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Residential Development [Member] | Commercial Real Estate [Member] | Combination Modifications [Member]
Outstanding Recorded Investment	9,090	3,691
Residential Development [Member] | Commercial Real Estate [Member] | Total Modifications [Member]
Outstanding Recorded Investment	9,723	5,150
Consumer & Other [Member] | Residential [Member] | Rate Modifications [Member]
Outstanding Recorded Investment
Consumer & Other [Member] | Residential [Member] | Term Modifications [Member]
Outstanding Recorded Investment
Consumer & Other [Member] | Residential [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Consumer & Other [Member] | Residential [Member] | Payment Modifications [Member]
Outstanding Recorded Investment
Consumer & Other [Member] | Residential [Member] | Combination Modifications [Member]
Outstanding Recorded Investment
Consumer & Other [Member] | Residential [Member] | Total Modifications [Member]
Outstanding Recorded Investment
LOC & Other [Member] | Commercial [Member] | Term Modifications [Member]
Outstanding Recorded Investment		1,371
LOC & Other [Member] | Commercial [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
LOC & Other [Member] | Commercial [Member] | Combination Modifications [Member]
Outstanding Recorded Investment	4,050
LOC & Other [Member] | Commercial [Member] | Total Modifications [Member]
Outstanding Recorded Investment	4,050	1,371
Construction & Development [Member] | Commercial Real Estate [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Construction & Development [Member] | Commercial Real Estate [Member] | Combination Modifications [Member]
Outstanding Recorded Investment	13,760	5,534
Construction & Development [Member] | Commercial Real Estate [Member] | Total Modifications [Member]
Outstanding Recorded Investment	13,760	5,534
Term & Multifamily [Member] | Commercial Real Estate [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Term & Multifamily [Member] | Commercial Real Estate [Member] | Combination Modifications [Member]
Outstanding Recorded Investment	34,943	13,018
Term & Multifamily [Member] | Commercial Real Estate [Member] | Total Modifications [Member]
Outstanding Recorded Investment	34,943	13,018
Term [Member] | Commercial [Member] | Rate Modifications [Member]
Outstanding Recorded Investment
Term [Member] | Commercial [Member] | Term Modifications [Member]
Outstanding Recorded Investment
Term [Member] | Commercial [Member] | Interest Only Modifications [Member]
Outstanding Recorded Investment
Term [Member] | Commercial [Member] | Payment Modifications [Member]
Outstanding Recorded Investment	70
Term [Member] | Commercial [Member] | Combination Modifications [Member]
Outstanding Recorded Investment	5,311
Term [Member] | Commercial [Member] | Total Modifications [Member]
Outstanding Recorded Investment	$ 5,381

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Premises And Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Premises And Equipment [Abstract]

Components Of Premises And Equipment

(in thousands)
	2011			2010
Land	$	24,855		$	23,174
Buildings and improvements		127,028			115,807
Furniture, fixtures and equipment		108,599			95,909
Construction in progress		10,360			4,471
Total premises and equipment		270,842			239,361
Less: Accumulated depreciation and amortization		(118,476	)		(102,762	)
Premises and equipment, net	$	152,366		$	136,599

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Covered Assets And Indemnification Asset (Internal Risk Rating By Loan Class) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Commercial real estate, Term & multifamily	$ 3,558,295	$ 3,483,475
Commercial real estate, Construction & development	165,066	247,814
Commercial real estate, Residential development	90,073	147,813
Commercial, Term	625,766	509,453
Commercial, LOC & other	832,999	747,419
Residential, Mortgage	315,927	222,416
Residential, Home equity loans & lines	272,192	278,585
Consumer & other	38,860	33,043
Total	5,899,178	5,670,018
Covered Loans [Member]
Commercial real estate, Term & multifamily	468,747	569,642
Commercial real estate, Construction & development	13,105	22,435
Commercial real estate, Residential development	15,794	24,706
Commercial, Term	31,139	42,600
Commercial, LOC & other	22,524	35,227
Residential, Mortgage	35,233	44,824
Residential, Home equity loans & lines	28,366	35,625
Consumer & other	7,543	10,839
Total	622,451	785,898
Covered Loans [Member] | Pass/Watch [Member]
Commercial real estate, Term & multifamily	329,273	485,238
Commercial real estate, Construction & development	1,552	6,155
Commercial real estate, Residential development	1,187	6,625
Commercial, Term	18,006	31,760
Commercial, LOC & other	13,605	22,960
Residential, Mortgage	35,233	44,524
Residential, Home equity loans & lines	28,223	34,998
Consumer & other	7,543	10,827
Total	434,622	643,087
Covered Loans [Member] | Special Mention [Member]
Commercial real estate, Term & multifamily	58,610	32,150
Commercial real estate, Construction & development	1,410	3,799
Commercial real estate, Residential development	405	1,322
Commercial, Term	1,661	2,119
Commercial, LOC & other	2,756	4,246
Total	64,842	43,636
Covered Loans [Member] | Substandard [Member]
Commercial real estate, Term & multifamily	68,521	44,833
Commercial real estate, Construction & development	6,733	7,640
Commercial real estate, Residential development	8,394	12,907
Commercial, Term	8,244	7,087
Commercial, LOC & other	5,607	7,183
Residential, Mortgage		300
Residential, Home equity loans & lines	143	627
Consumer & other		12
Total	97,642	80,589
Covered Loans [Member] | Doubtful [Member]
Commercial real estate, Term & multifamily	12,343	7,421
Commercial real estate, Construction & development	3,410	4,841
Commercial real estate, Residential development	5,808	3,852
Commercial, Term	3,228	1,634
Commercial, LOC & other	556	838
Total	$ 25,345	$ 18,586

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Income Taxes (Policy)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Tax Uncertainties

In accordance with the provisions of FASB ASC 740, Income Taxes, ("ASC 740"), relating to the accounting for uncertainty in income taxes, the Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities' examinations of the Company's tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

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Covered Assets And Indemnification Asset (Summary Of Activity Related To The FDIC Indemnification Asset) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Balance, beginning of period	$ 146,413
Acquisitions		247,518
Change in FDIC indemnification asset	(6,168)	(16,445)
Transfers to due from FDIC	(49,156)	(84,660)
Balance, end of period	91,089	146,413
Evergreen Bank [Member]
Balance, beginning of period	40,606
Acquisitions		71,755
Change in FDIC indemnification asset	1,357	(12,864)
Transfers to due from FDIC	(13,416)	(18,285)
Balance, end of period	28,547	40,606
Rainier Pacific Bank [Member]
Balance, beginning of period	43,726
Acquisitions		76,603
Change in FDIC indemnification asset	(7,343)	(7,045)
Transfers to due from FDIC	(8,111)	(25,832)
Balance, end of period	28,272	43,726
Nevada Security Bank [Member]
Balance, beginning of period	62,081
Acquisitions		99,160
Change in FDIC indemnification asset	(182)	3,464
Transfers to due from FDIC	(27,629)	(40,543)
Balance, end of period	$ 34,270	$ 62,081

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Consolidated Statements Of Changes In Shareholders' Equity (USD $)	Preferred Stock [Member]	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Total
BALANCE, VALUE at Dec. 31, 2008	$ 202,178,000	$ 1,005,820,000	$ 264,938,000	$ 14,072,000	$ 1,487,008,000
BALANCE, SHARES at Dec. 31, 2008		60,146,400
Net income (loss)			(153,366,000)		(153,366,000)
Other comprehensive income, net of tax				10,883,000	10,883,000
Comprehensive income (loss)					(142,483,000)
Issuance of common stock, shares		26,538,461
Issuance of common stock, value		245,697,000			245,697,000
Stock-based compensation		2,188,000			2,188,000
Stock repurchased and retired, shares		(19,516)
Stock repurchased and retired, value		(174,000)			(174,000)
Issuances of common stock under stock plans and related net tax benefit (deficiencies), shares		120,243
Issuances of common stock under stock plans and related net tax benefit (deficiencies), value		(243,000)			(243,000)
Amortization of discount on preferred stock	2,157,000		(2,157,000)
Dividends declared on preferred stock			(10,739,000)		(10,739,000)
Cash dividends on common stock			(14,737,000)		(14,737,000)
BALANCE, VALUE at Dec. 31, 2009	204,335,000	1,253,288,000	83,939,000	24,955,000	1,566,517,000
BALANCE, SHARES at Dec. 31, 2009		86,785,588
Net income (loss)			28,326,000		28,326,000
Other comprehensive income, net of tax				(10,000)	(10,000)
Comprehensive income (loss)					28,316,000
Issuance of common stock, shares		8,625,000
Issuance of common stock, value		89,786,000			89,786,000
Stock-based compensation		3,505,000			3,505,000
Stock repurchased and retired, shares		(22,541)
Stock repurchased and retired, value		(284,000)			(284,000)
Issuances of common stock under stock plans and related net tax benefit (deficiencies), shares		173,767
Issuances of common stock under stock plans and related net tax benefit (deficiencies), value		844,000			844,000
Redemption of preferred stock issued to U.S. Treasury	(214,181,000)				(214,181,000)
Issuance of preferred stock	198,289,000				198,289,000
Conversion of preferred stock to common stock, shares		18,975,000
Conversion of preferred stock to common stock, value	(198,289,000)	198,289,000
Amortization of discount on preferred stock	9,846,000		(9,846,000)
Dividends declared on preferred stock			(3,686,000)		(3,686,000)
Repurchase of warrants issued to U.S. Treasury		(4,500,000)			(4,500,000)
Cash dividends on common stock			(22,032,000)		(22,032,000)
BALANCE, VALUE at Dec. 31, 2010		1,540,928,000	76,701,000	24,945,000	1,642,574,000
BALANCE, SHARES at Dec. 31, 2010		114,536,814			114,536,814
Net income (loss)			74,496,000		74,496,000
Other comprehensive income, net of tax				8,829,000	8,829,000
Comprehensive income (loss)					83,325,000
Stock-based compensation		3,785,000			3,785,000
Stock repurchased and retired, shares		(2,557,056)
Stock repurchased and retired, value		(29,754,000)			(29,754,000)
Issuances of common stock under stock plans and related net tax benefit (deficiencies), shares		185,133
Issuances of common stock under stock plans and related net tax benefit (deficiencies), value		(46,000)			(46,000)
Cash dividends on common stock			(27,471,000)		(27,471,000)
BALANCE, VALUE at Dec. 31, 2011		$ 1,514,913,000	$ 123,726,000	$ 33,774,000	$ 1,672,413,000
BALANCE, SHARES at Dec. 31, 2011		112,164,891			112,164,891

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Allowance For Non-Covered Loan Loss And Credit Quality (Activity In The Non-Covered Allowance For Loan And Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010
Balance, beginning of period, Allowance	$ 101,921		$ 107,657
Charge-offs	(65,051)		(128,501)
Recoveries	9,878		9,097
Provision	46,220		113,668
Balance, end of period, Allowance	92,968		101,921
Collectively evaluated for impairment, Allowance	1,113	[1]	376
Collectively evaluated for impairment, Non-covered loans and leases	28,379	[1]	29,746
Ending balance, Non-covered loans and leases	5,888,098		5,658,987
Commercial [Member]
Balance, beginning of period, Allowance	22,146		24,583
Charge-offs	(21,071)		(50,242)
Recoveries	3,348		1,318
Provision	16,062		46,487
Balance, end of period, Allowance	20,485		22,146
Collectively evaluated for impairment, Allowance	598	[1]	176
Collectively evaluated for impairment, Non-covered loans and leases	18,149	[1]	14,751
Consumer & Other [Member]
Balance, beginning of period, Allowance	803		455
Charge-offs	(1,636)		(2,061)
Recoveries	385		465
Provision	1,315		1,944
Balance, end of period, Allowance	867		803
Collectively evaluated for impairment, Allowance	31	[1]	24
Collectively evaluated for impairment, Non-covered loans and leases	2,560	[1]	2,254
Commercial Real Estate [Member]
Balance, beginning of period, Allowance	64,405		67,281
Charge-offs	(36,011)		(71,030)
Recoveries	5,906		6,980
Provision	25,274		61,174
Balance, end of period, Allowance	59,574		64,405
Collectively evaluated for impairment, Allowance	448	[1]	120
Collectively evaluated for impairment, Non-covered loans and leases	3,062	[1]	4,887
Residential [Member]
Balance, beginning of period, Allowance	5,926		5,811
Charge-offs	(6,333)		(5,168)
Recoveries	239		334
Provision	7,793		4,949
Balance, end of period, Allowance	7,625		5,926
Collectively evaluated for impairment, Allowance	36	[1]	56
Collectively evaluated for impairment, Non-covered loans and leases	4,608	[1]	7,854
Unallocated [Member]
Balance, beginning of period, Allowance	8,641		9,527
Charge-offs
Recoveries
Provision	(4,224)		(886)
Balance, end of period, Allowance	4,417		8,641
Allowance For Non-Covered Loans And Leases [Member]
Balance, end of period, Allowance	92,968
Collectively evaluated for impairment, Allowance	89,184		96,682
Individually evaluated for impairment, Allowance	3,784		5,239
Ending balance, Non-covered loans and leases			101,921
Allowance For Non-Covered Loans And Leases [Member] | Commercial [Member]
Balance, end of period, Allowance	20,485
Collectively evaluated for impairment, Allowance	17,877		19,435
Individually evaluated for impairment, Allowance	2,608		2,711
Ending balance, Non-covered loans and leases			22,146
Allowance For Non-Covered Loans And Leases [Member] | Consumer & Other [Member]
Balance, end of period, Allowance	867
Collectively evaluated for impairment, Allowance	867		803
Individually evaluated for impairment, Allowance
Ending balance, Non-covered loans and leases			803
Allowance For Non-Covered Loans And Leases [Member] | Commercial Real Estate [Member]
Balance, end of period, Allowance	59,574
Collectively evaluated for impairment, Allowance	58,402		61,885
Individually evaluated for impairment, Allowance	1,172		2,520
Ending balance, Non-covered loans and leases			64,405
Allowance For Non-Covered Loans And Leases [Member] | Residential [Member]
Balance, end of period, Allowance	7,625
Collectively evaluated for impairment, Allowance	7,621		5,918
Individually evaluated for impairment, Allowance	4		8
Ending balance, Non-covered loans and leases			5,926
Allowance For Non-Covered Loans And Leases [Member] | Unallocated [Member]
Balance, end of period, Allowance	4,417
Collectively evaluated for impairment, Allowance	4,417		8,641
Individually evaluated for impairment, Allowance
Ending balance, Non-covered loans and leases			8,641
Non-Covered Loans [Member]
Collectively evaluated for impairment, Non-covered loans and leases	5,732,899		5,447,399
Individually evaluated for impairment, Non-covered loans and leases	166,279		222,619
Ending balance, Non-covered loans and leases	5,899,178		5,670,018
Non-Covered Loans [Member] | Commercial [Member]
Collectively evaluated for impairment, Non-covered loans and leases	1,432,594		1,221,365
Individually evaluated for impairment, Non-covered loans and leases	26,171		35,507
Ending balance, Non-covered loans and leases	1,458,765		1,256,872
Non-Covered Loans [Member] | Consumer & Other [Member]
Collectively evaluated for impairment, Non-covered loans and leases	38,860		33,043
Individually evaluated for impairment, Non-covered loans and leases
Ending balance, Non-covered loans and leases	38,860		33,043
Non-Covered Loans [Member] | Commercial Real Estate [Member]
Collectively evaluated for impairment, Non-covered loans and leases	3,673,455		3,692,169
Individually evaluated for impairment, Non-covered loans and leases	139,979		186,933
Ending balance, Non-covered loans and leases	3,813,434		3,879,102
Non-Covered Loans [Member] | Residential [Member]
Collectively evaluated for impairment, Non-covered loans and leases	587,990		500,822
Individually evaluated for impairment, Non-covered loans and leases	129		179
Ending balance, Non-covered loans and leases	$ 588,119		$ 501,001

[1] The allowance on covered loan and lease losses includes an allowance on covered loan advances on acquired loans subsequent to acquisition.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Significant Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations—Umpqua Holdings Corporation (the "Company") is a financial holding company headquartered in Portland, Oregon, that is engaged primarily in the business of commercial and retail banking and the delivery of retail brokerage services. The Company provides a wide range of banking, asset management, mortgage banking and other financial services to corporate, institutional and individual customers through its wholly-owned banking subsidiary Umpqua Bank (the "Bank"). The Company engages in the retail brokerage business through its wholly-owned subsidiary Umpqua Investments, Inc. ("Umpqua Investments"). The Company and its subsidiaries are subject to regulation by certain federal and state agencies and undergo periodic examination by these regulatory agencies.

Basis of Financial Statement Presentation—The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with prevailing practices within the banking and securities industries. In preparing such financial statements, management is required to make certain estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan and lease losses, the valuation of mortgage servicing rights, the fair value of junior subordinated debentures, the valuation of covered loans and the FDIC indemnification asset, and the valuation of goodwill and other intangible assets.

Consolidation—The accompanying consolidated financial statements include the accounts of the Company, the Bank and Umpqua Investments. All significant intercompany balances and transactions have been eliminated in consolidation. As of December 31, 2011, the Company had 14 wholly-owned trusts ("Trusts") that were formed to issue trust preferred securities and related common securities of the Trusts. The Company has not consolidated the accounts of the Trusts in its consolidated financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB") ASC 810, Consolidation ("ASC 810"). As a result, the junior subordinated debentures issued by the Company to the Trusts are reflected on the Company's consolidated balance sheet as junior subordinated debentures.

Subsequent events—The Company has evaluated events and transactions subsequent to December 31, 2011 for potential recognition or disclosure.

Cash and Cash Equivalents—Cash and cash equivalents include cash and due from banks, and temporary investments which are federal funds sold and interest bearing balances due from other banks. Cash and cash equivalents generally have a maturity of 90 days or less at the time of purchase.

Trading Account Securities—Debt and equity securities held for resale are classified as trading account securities and reported at fair value. Realized and unrealized gains or losses are recorded in non-interest income.

Investment Securities—Debt securities are classified as held to maturity if the Company has both the intent and ability to hold those securities to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for amortization of premium and accretion of discount, computed by the effective interest method over their contractual lives.

Securities are classified as available for sale if the Company intends and has the ability to hold those securities for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value. Unrealized holding gains or losses are included in other comprehensive income as a separate component of shareholders' equity, net of tax. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Premiums and discounts are amortized or accreted over the life of the related investment security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned.

Prior to the second quarter of 2009, the Company would assess an other-than-temporary impairment ("OTTI") or permanent impairment based on the nature of the decline and whether the Company has the ability and intent to hold the investments until a market price recovery. If the Company determined a security to be other-than-temporarily or permanently impaired, the full amount of impairment would be recognized through earnings in its entirety. New guidance related to the recognition and presentation of OTTI of debt securities became effective in the second quarter of 2009. Rather than asserting whether a Company has the ability and intent to hold an investment until a market price recovery, a Company must consider whether it intends to sell a security or if it is likely that they would be required to sell the security before recovery of the amortized cost basis of the investment, which may be maturity. For debt securities, if we intend to sell the security or it is likely that we will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings as an OTTI. If we do not intend to sell the security and it is not likely that we will be required to sell the security but we do not expect to recover the entire amortized cost basis of the security, only the portion of the impairment loss representing credit losses would be recognized in earnings. The credit loss on a security is measured as the difference between the amortized cost basis and the present value of the cash flows expected to be collected. Projected cash flows are discounted by the original or current effective interest rate depending on the nature of the security being measured for potential OTTI. The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to other comprehensive income ("OCI"). Impairment losses related to all other factors are presented as separate categories within OCI. For investment securities held to maturity, this amount is accreted over the remaining life of the debt security prospectively based on the amount and timing of future estimated cash flows. The accretion of the amount recorded in OCI increases the carrying value of the investment and does not affect earnings. If there is an indication of additional credit losses the security is re-evaluated according to the procedures described above. OTTI losses totaling $359,000, $414,000, and $10.6 million were recognized through earnings in the years ended December 31, 2011, 2010 and 2009, respectively, within total gain (loss) on investment securities, net.

Transfers of securities from available for sale to held to maturity are accounted for at fair value as of the date of the transfer. The difference between the fair value and the par value at the date of transfer is considered a premium or discount and is accounted for accordingly. Any unrealized gain or loss at the date of the transfer is reported in OCI, and is amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount, and will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held to maturity security.

Loans Held for Sale—Loans held for sale includes mortgage loans and are reported at the lower of cost or market value. Cost generally approximates market value, given the short duration of these assets. Gains or losses on the sale of loans that are held for sale are recognized at the time of the sale and determined by the difference between net sale proceeds and the net book value of the loans less the estimated fair value of any retained mortgage servicing rights.

Non-Covered Loans—Loans are stated at the amount of unpaid principal, net of unearned income and any deferred fees or costs. All discounts and premiums are recognized over the estimated life of the loan as yield adjustments. This estimated life is adjusted for prepayments.

Loans are classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement. The carrying value of impaired loans is based on the present value of expected future cash flows (discounted at each loan's effective interest rate) or, for collateral dependent loans, at fair value of the collateral, less selling costs. If the measurement of each impaired loans' value is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the allowance for loan and lease losses. This can be accomplished by charging-off the impaired portion of the loan or establishing a specific component to be provided for in the allowance for loan and lease losses.

Covered Loans—Loans acquired in a FDIC-assisted acquisition that are subject to a loss-share agreement are referred to as "covered loans" and reported separately in our consolidated balance sheets. Covered loans are reported exclusive of the expected cash flow reimbursements expected from the FDIC. Acquired loans are aggregated into pools based on individually evaluated common risk characteristics and aggregate expected cash flows were estimated for each pool. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. The Company aggregated all of the loans acquired in the FDIC-assisted acquisitions into different pools based on common risk characteristics such as risk rating, underlying collateral, type of interest rate (fixed or adjustable), types of amortization, and other similar factors. A loan will be removed from a pool of loans only if the loan is sold, foreclosed, or assets are received in full satisfaction of the loan, and will be removed from the pool at its carrying value. If an individual loan is removed from a pool of loans, the difference between its relative carrying amount and its cash, fair value of the collateral, or other assets received will be recognized in income immediately as interest income on loans and would not affect the effective yield used to recognize the accretable yield on the remaining pool. Loans originally placed into a performing pool are not reported individually as 30-89 days past due, non-performing (90+ days past due or nonaccrual), or accounted for as a troubled debt restructuring as the pool is the unit of accounting. Rather, these metrics related to the underlying loans within a performing pool will be considered in our ongoing assessment and estimates of future cash flows. If, at acquisition, the loans are collateral dependent and acquired primarily for the rewards of ownership of the underlying collateral, or if cash flows expected to be collected cannot be reasonably estimated, accrual of income is inappropriate.

The cash flows expected to be received over the life of the pool were estimated by management with the assistance of a third party valuation specialist. These cash flows were input into a FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30") compliant loan accounting system which calculates the carrying values of the pools and underlying loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speeds assumptions will be periodically reassessed and updated within the accounting system to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a pool's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan or pool using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through an increase to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for covered loan losses.

The covered loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring. If credit deterioration is experienced subsequent to the initial acquisition fair value amount, such deterioration will be measured, and a provision for credit losses will be charged to earnings. These provisions will be mostly offset by an increase to the FDIC indemnification asset, and will be recognized in non-interest income.

The covered loan portfolio also includes revolving lines of credit with funded and unfunded commitments. Balances outstanding at the time of acquisition are accounted for under ASC 310-30. Any additional advances on these loans subsequent to the acquisition date are not accounted for under ASC 310-30.

FDIC Indemnification Asset—The Company has elected to account for amounts receivable under the loss-share agreement as an indemnification asset in accordance with FASB ASC 805, Business Combinations. The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the loss-share agreement. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC will be accreted into non-interest income over the life of the FDIC indemnification asset.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans, at a pool level, and covered other real estate owned. Generally, any increases in cash flow of the covered assets over those previously expected will result in prospective increases in the loan pool yield and amortization of the FDIC indemnification asset. Any decreases in cash flow of the covered assets under those previously expected will trigger impairments on the underlying loan pools and will result in a corresponding gain of the FDIC indemnification asset. Increases and decreases to the FDIC indemnification asset are recorded as adjustments to non-interest income. The resulting carrying value of the indemnification asset represents the present value of amounts recoverable from the FDIC for future expected losses and the amounts due from the FDIC for claims related to covered losses.

Income Recognition on Non-Covered, Non-Accrual and Impaired Loans—Non-covered loans, including impaired non-covered loans, are classified as non-accrual if the collection of principal and interest is doubtful. Generally, this occurs when a non-covered loan is past due as to maturity or payment of principal or interest by 90 days or more, unless such non-covered loans are well-secured and in the process of collection. Generally, if a non-covered loan or portion thereof is partially charged-off, the non-covered loan is considered impaired and classified as non-accrual. Non-covered loans that are less than 90 days past due may also be classified as non-accrual if repayment in full of principal and/or interest is in doubt.

When a non-covered loan is classified as non-accrual, all uncollected accrued interest is reversed to interest income and the accrual of interest income is terminated. Generally, any cash payments are applied as a reduction of principal outstanding. In cases where the future collectability of the principal balance in full is expected, interest income may be recognized on a cash basis. A non-covered loan may be restored to accrual status when the borrower's financial condition improves so that full collection of future contractual payments is considered likely. For those non-covered loans placed on non-accrual status due to payment delinquency, this will generally not occur until the borrower demonstrates repayment ability over a period of not less than six months.

Non-covered loans are reported as restructured when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include forgiveness of principal or accrued interest, extending the maturity date or providing a lower interest rate than would be normally available for a transaction of similar risk. As a result of these concessions, restructured loans are impaired as the Bank will not collect all amounts due, both principal and interest, in accordance with the terms of the original loan agreement. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan's carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan and lease losses.

The decision to classify a non-covered loan as impaired is made by the Bank's Allowance for Loan and Lease Losses ("ALLL") Committee. The ALLL Committee meets regularly to review the status of all problem and potential problem loans. If the ALLL Committee concludes a loan is impaired but recovery of the full principal and interest is expected, an impaired loan may remain on accrual status.

Allowance for Loan and Lease Losses—The Bank performs regular credit reviews of the loan and lease portfolio to determine the credit quality of the portfolio and the adherence to underwriting standards. When loans and leases are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process. The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The 10 risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan and lease losses. The Bank has a management ALLL Committee, which is responsible for, among other things, regularly reviewing the ALLL methodology, including loss factors, and ensuring that it is designed and applied in accordance with generally accepted accounting principles. The ALLL Committee reviews and approves loans and leases recommended for impaired status. The ALLL Committee also approves removing loans and leases from impaired status. The Bank's Audit and Compliance Committee provides board oversight of the ALLL process and reviews and approves the ALLL methodology on a quarterly basis.

Each risk rating is assessed an inherent credit loss factor that determines the amount of the allowance for loan and lease losses provided for that group of loans and leases with similar risk rating. Credit loss factors may vary by region based on management's belief that there may ultimately be different credit loss rates experienced in each region.

Regular credit reviews of the portfolio also identify loans that are considered potentially impaired. Potentially impaired loans are referred to the ALLL Committee which reviews and approves designated loans as impaired. A loan is considered impaired when based on current information and events, we determine that we will probably not be able to collect all amounts due according to the loan contract, including scheduled interest payments. When we identify a loan as impaired, we measure the impairment using discounted cash flows, except when the sole remaining source of the repayment for the loan is the liquidation of the collateral. In these cases, we use the current fair value of the collateral, less selling costs, instead of discounted cash flows. If we determine that the value of the impaired loan is less than the recorded investment in the loan, we either recognize this impairment reserve as a specific component to be provided for in the allowance for loan and lease losses or charge-off the impaired balance on collateral dependent loans if it is determined that such amount represents a confirmed loss. The combination of the risk rating-based allowance component and the impairment reserve allowance component lead to an allocated allowance for loan and lease losses.

The Bank may also maintain an unallocated allowance amount to provide for other credit losses inherent in a loan and lease portfolio that may not have been contemplated in the credit loss factors. This unallocated amount generally comprises less than 10% of the allowance, but may be maintained at higher levels during times of economic conditions characterized by falling real estate values. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.

As adjustments become necessary, they are reported in earnings in the periods in which they become known as a change in the provision for loan and lease losses and a corresponding charge to the allowance. Loans, or portions thereof, deemed uncollectible are charged to the allowance. Provisions for losses, and recoveries on loans previously charged-off, are added to the allowance.

The adequacy of the ALLL is monitored on a regular basis and is based on management's evaluation of numerous factors. These factors include the quality of the current loan portfolio; the trend in the loan portfolio's risk ratings; current economic conditions; loan concentrations; loan growth rates; past-due and non-performing trends; evaluation of specific loss estimates for all significant problem loans; historical charge-off and recovery experience; and other pertinent information.

Management believes that the ALLL was adequate as of December 31, 2011. There is, however, no assurance that future loan losses will not exceed the levels provided for in the ALLL and could possibly result in additional charges to the provision for loan and lease losses. In addition, bank regulatory authorities, as part of their periodic examination of the Bank, may require additional charges to the provision for loan and lease losses in future periods if warranted as a result of their review. Approximately 80% of our loan portfolio is secured by real estate, and a significant decline in real estate market values may require an increase in the allowance for loan and lease losses. The U.S. recession, the housing market downturn, and declining real estate values in our markets have negatively impacted aspects of our loan portfolio, and have led to an increase in non-performing loans, charge-offs, and the allowance for loan and lease losses. A continued deterioration or prolonged delay in economic recovery in our markets may adversely affect our loan portfolio and may lead to additional charges to the provision for loan and lease losses.

Reserve for Unfunded Commitments—A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Bank's commitment to lend funds under existing agreements such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based upon reviews of individual credit facilities, current economic conditions, the risk characteristics of the various categories of commitments and other relevant factors. The reserve is based on estimates, and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance. Provisions for unfunded commitment losses, and recoveries on loans commitments previously charged-off, are added to the reserve for unfunded commitments, which is included in the Other Liabilities section of the consolidated balance sheets.

Loan Fees and Direct Loan Origination Costs—Loan origination and commitment fees and direct loan origination costs are deferred and recognized as an adjustment to the yield over the life of the related loans.

Restricted Equity Securities—Restricted equity securities were $32.6 million and $34.5 million at December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock amounted to $31.3 million and $33.2 million of the total restricted securities as of December 31, 2011 and 2010, respectively. Federal Home Loan Bank stock represents the Bank's investment in the Federal Home Loan Banks of Seattle and San Francisco ("FHLB") stock and is carried at par value, which reasonably approximates its fair value. Management periodically evaluates FHLB stock for other-than-temporary or permanent impairment. Management's determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB, and (4) the liquidity position of the FHLB.

Moody's Investors Services rating of the FHLB of Seattle as Aaa was confirmed in August 2011, but a negative outlook was assigned as Moody's revised the rating outlook to negative for U.S. government debt and all issuers Moody's considers directly-linked to the U.S. government. Standard and Poors' rating is AA+, but it also issued a negative outlook with the action reflecting the downgrade of the long-term sovereign credit rating of the U.S. in 2011. Based on the above, the Company has determined there is not an other-than-temporary impairment on the FHLB stock investment as of December 31, 2011.

As a member of the FHLB system, the Bank is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding mortgages, total assets, or FHLB advances. At December 31, 2011, the Bank's minimum required investment in FHLB stock was $10.5 million. The Bank may request redemption at par value of any stock in excess of the minimum required investment. Stock redemptions are at the discretion of the FHLB. The remaining restricted equity securities balance primarily represents an investment in Pacific Coast Bankers' Bancshares stock.

Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided over the estimated useful life of equipment, generally three to ten years, on a straight-line or accelerated basis. Depreciation is provided over the estimated useful life of premises, up to 39 years, on a straight-line or accelerated basis. Generally, leasehold improvements are amortized over the life of the related lease, or the life of the related asset, whichever is shorter. Expenditures for major renovations and betterments of the Company's premises and equipment are capitalized.

Management reviews long-lived and intangible assets any time that a change in circumstance indicates that the carrying amount of these assets may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of the asset to the forecasted undiscounted cash flows of the operation associated with the asset. If the evaluation of the forecasted cash flows indicates that the carrying value of the asset is not recoverable, the asset is written down to fair value.

Goodwill and Other Intangibles—Intangible assets are comprised of goodwill and other intangibles acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and also reviewed for impairment. Amortization of intangible assets is included in other non-interest expense in the Consolidated Statements of Operations.

The Company performs a goodwill impairment analysis on an annual basis as of December 31. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

The goodwill impairment test involves a two-step process. The first step compares the fair value of a reporting unit to its carrying value. If the reporting unit's fair value is less than its carrying value, the Company would be required to proceed to the second step. In the second step the Company calculates the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The estimated fair value of the Company is allocated to all of the Company's assets and liabilities, including any unrecognized identifiable intangible assets, as if the Company had been acquired in a business combination and the estimated fair value of the reporting unit is the price paid to acquire it. The allocation process is performed only for purposes of determining the amount of goodwill impairment. No assets or liabilities are written up or down, nor are any additional unrecognized identifiable intangible assets recorded as a part of this process. Any excess of the estimated purchase price over the fair value of the reporting unit's net assets represents the implied fair value of goodwill. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss would be recognized as a charge to earnings in an amount equal to that excess.

Mortgage Servicing Rights ("MSR")— The Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures its residential mortgage servicing assets at fair value and reports changes in fair value through earnings. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time, are each separately reported. Under the fair value method, the MSR is carried in the balance sheet at fair value and the changes in fair value are reported in earnings under the caption mortgage banking revenue in the period in which the change occurs.

Retained mortgage servicing rights are measured at fair value as of the date of sale. We use quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Key assumptions used in measuring the fair value of MSR as of December 31 were as follows:

	2011			2010			2009
Constant prepayment rate		20.39	%		18.54	%		18.35	%
Discount rate		8.60	%		8.62	%		8.70	%
Weighted average life (years)		4.5			4.5			4.5

The expected life of the loan can vary from management's estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management's estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights.

SBA/USDA Loans Sales and Servicing—The Bank, on a limited basis, sells or transfers loans, including the guaranteed portion of Small Business Administration ("SBA") and Department of Agriculture ("USDA") loans (with servicing retained) for cash proceeds equal to the principal amount of loans, as adjusted to yield interest to the investor based upon the current market rates. The Bank records an asset representing the right to service loans for others when it sells a loan and retains the servicing rights. The carrying value of loans is allocated between the loan and the servicing rights, based on their relative fair values. The fair value of servicing rights is estimated by discounting estimated future cash flows from servicing using discount rates that approximate current market rates and using estimated prepayment rates. The servicing rights are carried at the lower of cost or market and are amortized in proportion to, and over the period of, the estimated net servicing income, assuming prepayments.

For purposes of evaluating and measuring impairment, servicing rights are based on a discounted cash flow methodology, current prepayment speeds and market discount rates. Any impairment is measured as the amount by which the carrying value of servicing rights for a stratum exceeds its fair value. The carrying value of SBA/USDA servicing rights at December 31, 2011 and 2010 were $666,000 and $721,000, respectively. No impairment charges were recorded for the years ended December 31, 2011, 2010 or 2009 related to SBA/USDA servicing assets.

A premium over the adjusted carrying value is received upon the sale of the guaranteed portion of an SBA or USDA loan. The Bank's investment in an SBA or USDA loan is allocated among the sold and retained portions of the loan based on the relative fair value of each portion at the time of loan origination, adjusted for payments and other activities. Because the portion retained does not carry an SBA or USDA guarantee, part of the gain recognized on the sold portion of the loan may be deferred and amortized as a yield enhancement on the retained portion in order to obtain a market equivalent yield.

Non-Covered Other Real Estate Owned—Non-covered other real estate owned ("non-covered OREO") represents real estate which the Bank has taken control of in partial or full satisfaction of loans. At the time of foreclosure, other real estate owned is recorded at the lower of the carrying amount of the loan or fair value less costs to sell, which becomes the property's new basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for loan and lease losses. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell. Subsequent valuation adjustments are recognized within net loss on non-covered OREO. Revenue and expenses from operations and subsequent adjustments to the carrying amount of the property are included in other non-interest expense in the Consolidated Statements of Operations.

In some instances, the Bank may make loans to facilitate the sales of other real estate owned. Management reviews all sales for which it is the lending institution for compliance with sales treatment under provisions established within FASB ASC 360-20, Real Estate Sales. Any gains related to sales of other real estate owned may be deferred until the buyer has a sufficient initial and continuing investment in the property.

Covered Other Real Estate Owned—All OREO acquired in FDIC-assisted acquisitions that are subject to a FDIC loss-share agreement are referred to as "covered OREO" and reported separately in our statements of financial position. Covered OREO is reported exclusive of expected reimbursement cash flows from the FDIC. Foreclosed covered loan collateral is transferred into covered OREO at the collateral's net realizable value, less selling costs.

Covered OREO was initially recorded at its estimated fair value on the acquisition date based on similar market comparable valuations less estimated selling costs. Any subsequent valuation adjustments due to declines in fair value will be charged to non-interest expense, and will be mostly offset by non-interest income representing the corresponding increase to the FDIC indemnification asset for the offsetting loss reimbursement amount. Any recoveries of previous valuation adjustments will be credited to non-interest expense with a corresponding charge to non-interest income for the portion of the recovery that is due to the FDIC.

 Income Taxes—Income taxes are accounted for using the asset and liability method. Under this method a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company's income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce the net carrying amount of deferred tax assets if it is determined to be more likely than not, that all or some portion of the potential deferred tax asset will not be realized.

Derivative Loan Commitments—The Bank enters into forward delivery contracts to sell residential mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage loan commitments. The commitments to originate mortgage loans held for sale and the related forward delivery contracts are considered derivatives. Effective in the second quarter of 2011, the Bank began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting the interest rate swaps that the Bank executes with a third party, such that the Bank minimizes its net risk exposure. The Company recognizes all derivatives as either assets or liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to accumulated other comprehensive income and/or current earnings, as appropriate. None of the Company's derivatives are designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, and the Company reports changes in fair values of its derivatives in current period net income.

The fair value of the derivative loan commitments is estimated using the present value of expected future cash flows. Assumptions used include pull-through rate assumption based on historical information, current mortgage interest rates, the stage of completion of the underlying application and underwriting process, the time remaining until the expiration of the derivative loan commitment, and the expected net future cash flows related to the associated servicing of the loan.

Operating Segments—Public enterprises are required to report certain information about their operating segments in a complete set of financial statements to shareholders. They are also required to report certain enterprise-wide information about the Company's products and services, its activities in different geographic areas, and its reliance on major customers. The basis for determining the Company's operating segments is the manner in which management operates the business. Management has identified three primary business segments, Community Banking, Mortgage Banking, and Wealth Management. Prior to January 1, 2011, the Company reported Retail Brokerage, consisting of Umpqua Investments, as its own segment. Effective in 2011, the Company began reporting Umpqua Investments, Umpqua Private Bank, and Umpqua Financial Advisors under the Wealth Management segment. Umpqua Private Bank and Umpqua Financial Advisors do not meet the quantitative thresholds for reporting as separate segments and service the same customer base on Umpqua Investments.

Share-Based Payment—The Company has two active stock-based compensation plans that provide for the granting of stock options and restricted stock to eligible employees and directors. In accordance with FASB ASC 718, Stock Compensation, we recognize in the income statement the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over the employees' requisite service period (generally the vesting period). The requisite service period may be subject to performance conditions.

The Company's 2003 Stock Incentive Plan provides for granting of stock options and restricted stock awards. Stock options and restricted stock awards generally vest ratably over 5 years and are recognized as expense over that same period of time.

The fair value of each option grant is estimated as of the grant date using the Black-Scholes option-pricing model using assumptions noted in the following table. Expected volatility is based on the historical volatility of the price of the Company's common stock. The Company uses historical data to estimate option exercise and stock option forfeiture rates within the valuation model. The expected term of options granted is determined based on historical experience with similar options, giving consideration to the contractual terms and vesting schedules, and represents the period of time that options granted are expected to be outstanding. The expected dividend yield is based on dividend trends and the market value of the Company's common stock at the time of grant. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant corresponding to the estimated expected term of the options granted. The following weighted average assumptions were used to determine the fair value of stock option grants as of the grant date to determine compensation cost for the years ended December 31, 2011, 2010 and 2009:

	2011			2010			2009
Dividend yield		2.79	%		2.72	%		2.23	%
Expected life (years)		7.1			7.1			7.3
Expected volatility		52	%		52	%		46	%
Risk-free rate		2.71	%		2.69	%		2.18	%
Weighted average grant date fair value of options granted	$	4.65		$	5.24		$	3.65

The Company's 2007 Long Term Incentive Plan provides for granting of restricted stock units for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. The current restricted stock units outstanding cliff vest after three years based on performance and service conditions. Compensation expense is recognized over the service period to the extent restricted stock units are expected to vest.

Earnings per Share—According to the provisions of FASB ASC 260, Earnings Per Share, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company's nonvested restricted stock awards qualify as participating securities.

Net income, less any preferred dividends accumulated for the period (whether or not declared), is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings or absorb losses. Basic earnings per common share is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating nonvested restricted shares.

Diluted earnings per common share is computed in a similar manner, except that first the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares, excluding the participating securities, were issued using the treasury stock method. For all periods presented, warrants, stock options, certain restricted stock awards and restricted stock units are the only potentially dilutive non-participating instruments issued by the Company. Next, we determine and include in diluted earnings per common share calculation the more dilutive effect of the participating securities using the treasury stock method or the two-class method. Undistributed losses are not allocated to the nonvested share-based payment awards (the participating securities) under the two-class method as the holders are not contractually obligated to share in the losses of the Company.

Advertising expenses—Advertising costs are generally expensed as incurred.

Fair Value Measurements—FASB ASC 820, Fair Value Measurements and Disclosure, ("ASC 820", defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data. In general, fair values determined by Level 1 inputs utilize quoted prices for identical assets or liabilities traded in active markets that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Recently Issued Accounting Pronouncements—In April 2011, the FASB issued ASU No. 2011-02, A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring. The Update provides additional guidance relating to when creditors should classify loan modifications as troubled debt restructurings. The ASU also ends the deferral issued in January 2010 of the disclosures about troubled debt restructurings required by ASU No. 2010-20. The provisions of ASU No. 2011-02 and the disclosure requirements of ASU No. 2010-20 are effective for the Company's interim reporting period ending September 30, 2011. The guidance applies retrospectively to restructurings occurring on or after January 1, 2011. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements. The Update amends existing guidance to remove from the assessment of effective control, the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and, as well, the collateral maintenance implementation guidance related to that criterion. ASU No. 2011-03 is effective for the Company's reporting period beginning on or after December 15, 2011. The guidance applies prospectively to transactions or modification of existing transactions that occur on or after the effective date and early adoption is not permitted. The adoption of this ASU will not have a material impact on the Company's consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The Update amends existing guidance regarding the highest and best use and valuation premise by clarifying these concepts are only applicable to measuring the fair value of nonfinancial assets. The Update also clarifies that the fair value measurement of financial assets and financial liabilities which have offsetting market risks or counterparty credit risks that are managed on a portfolio basis, when several criteria are met, can be measured at the net risk position. Additional disclosures about Level 3 fair value measurements are required including a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, a description of the valuation process in place, and discussion of the sensitivity of fair value changes in unobservable inputs and interrelationships about those inputs as well disclosure of the level of the fair value of items that are not measured at fair value in the financial statements but disclosure of fair value is required. The provisions of ASU No. 2011-04 are effective for the Company's reporting period beginning after December 15, 2011 and should be applied prospectively. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. The Update amends current guidance to allow a company the option of presenting the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions do not change the items that must be reported in other comprehensive income or when an item of other comprehensive must to reclassified to net income. The amendments do not change the option for a company to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense (benefit) related to the total of other comprehensive income items. The amendments do not affect how earnings per share is calculated or presented. The provisions of ASU No. 2011-05 are effective for the Company's reporting period beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted and there are no required transition disclosures. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The ASU defers indefinitely the requirement to present reclassification adjustments and the effect of those reclassification adjustments on the face of the financial statements where net income is presented, by component of net income, and on the face of the financial statements where other comprehensive income is presented, by component of other comprehensive income. The Company is currently in the process of evaluating the Updates but does not expect either will have a material impact on the Company's consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. With the Update, a company testing goodwill for impairment now has the option of performing a qualitative assessment before calculating the fair value of the reporting unit (the first step of goodwill impairment test). If, on the basis of qualitative factors, the fair value of the reporting unit is more likely than not greater than the carrying amount, a quantitative calculation would not be needed. Additionally, new examples of events and circumstances that an entity should consider in performing its qualitative assessment about whether to proceed to the first step of the goodwill impairment have been made to the guidance and replace the previous guidance for triggering events for interim impairment assessment. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this ASU will not have a material impact on the Company's consolidated financial statements.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update requires an entity to offset, and present as a single net amount, a recognized eligible asset and a recognized eligible liability when it has an unconditional and legally enforceable right of setoff and intends either to settle the asset and liability on a net basis or to realize the asset and settle the liability simultaneously. The ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amendments are effective for annual and interim reporting periods beginning on or after January 1, 2013. The Company is currently in the process of evaluating the ASU but does not expect it will have a material impact on the Company's consolidated financial statements.

Reclassifications—Certain amounts reported in prior years' financial statements have been reclassified to conform to the current presentation. The results of the reclassifications are not considered material and have no effect on previously reported net earnings (losses) available to common shareholders and earnings (losses) per common share.

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Junior Subordinated Debentures (Tables)

12 Months Ended

Dec. 31, 2011

Junior Subordinated Debentures [Abstract]

Junior Subordinated Debentures

(dollars in thousands)
Trust Name	Issue Date	Issued Amount		Carrying Value (1)		Rate (2)			Effective Rate (3)			Maturity Date	Redemption Date
AT FAIR VALUE:
Umpqua Statutory Trust II	October 2002	$	20,619	$	14,166		Floating	(4)		5.50	%	October 2032	October 2007
Umpqua Statutory Trust III	October 2002		30,928		21,476		Floating	(5)		5.62	%	November 2032	November 2007
Umpqua Statutory Trust IV	December 2003		10,310		6,641		Floating	(6)		5.05	%	January 2034	January 2009
Umpqua Statutory Trust V	December 2003		10,310		6,625		Floating	(6)		5.31	%	March 2034	March 2009
Umpqua Master Trust I	August 2007		41,238		21,134		Floating	(7)		3.70	%	September 2037	September 2012
Umpqua Master Trust IB	September 2007		20,619		12,863		Floating	(8)		5.28	%	December 2037	December 2012
			134,024		82,905
AT AMORTIZED COST:
HB Capital Trust I	March 2000		5,310		6,329		10.875	%		8.24	%	March 2030	March 2010
Humboldt Bancorp Statutory Trust I	February 2001		5,155		5,897		10.200	%		8.26	%	February 2031	February 2011
Humboldt Bancorp Statutory Trust II	December 2001		10,310		11,378		Floating	(9)		3.29	%	December 2031	December 2006
Humboldt Bancorp Staututory Trust III	September 2003		27,836		30,605		Floating	(10)		2.76	%	September 2033	September 2008
CIB Capital Trust	November 2002		10,310		11,219		Floating	(5)		3.20	%	November 2032	November 2007
Western Sierra Statutory Trust I	July 2001		6,186		6,186		Floating	(11)		4.01	%	July 2031	July 2006
Western Sierra Statutory Trust II	December 2001		10,310		10,310		Floating	(9)		4.15	%	December 2031	December 2006
Western Sierra Statutory Trust III	September 2003		10,310		10,310		Floating	(12)		3.30	%	September 2033	September 2008
Western Sierra Statutory Trust IV	September 2003		10,310		10,310		Floating	(12)		3.30	%	September 2033	September 2008
			96,037		102,544
	Total	$	230,061	$	185,449

(1) Includes purchase accounting adjustments, net of accumulated amortization, for junior subordinated debentures assumed in connection with previous mergers as well as fair value adjustments related to trusts recorded at fair value.

(2) Contractual interest rate of junior subordinated debentures.

(3) Effective interest rate based upon the carrying value as of December 2011.

(4) Rate based on LIBOR plus 3.35%, adjusted quarterly.

(5) Rate based on LIBOR plus 3.45%, adjusted quarterly.

(6) Rate based on LIBOR plus 2.85%, adjusted quarterly.

(7) Rate based on LIBOR plus 1.35%, adjusted quarterly.

(8) Rate based on LIBOR plus 2.75%, adjusted quarterly.

(9) Rate based on LIBOR plus 3.60%, adjusted quarterly.

(10) Rate based on LIBOR plus 2.95%, adjusted quarterly.

(11) Rate based on LIBOR plus 3.58%, adjusted quarterly.

(12) Rate based on LIBOR plus 2.90%, adjusted quarterly.

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Investment Securities (Roll Forward Of Credit Losses Of Held-To-Maturity Securities Written Down As Other-Than-Temporary Impairment Recognized In Earnings And Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Investment Securities [Abstract]
Balance, beginning of period	$ 12,778	$ 12,364
Subsequent OTTI credit losses	359	414
Securities sold, matured or paid-off	(3,563)
Balance, end of period	$ 9,574	$ 12,778

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Covered Assets And Indemnification Asset (Summary Of Activity In Covered Other Real Estate Owned) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Covered Assets And Indemnification Asset [Abstract]
Balance, beginning of period	$ 29,863
Acquisition		26,939
Additions to covered OREO	15,271	15,350
Dispositions of covered OREO	(16,934)	(10,485)
Valuation adjustments in the period	(8,709)	(1,941)
Balance, end of period	$ 19,491	$ 29,863

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Significant Accounting Policies (Narrative) (Details) (USD $)	0 Months Ended	12 Months Ended					12 Months Ended
	Jun. 17, 2011	Dec. 31, 2011 days	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011 Investment in Federal Home Loan Bank Stock [Member]	Dec. 31, 2010 Investment in Federal Home Loan Bank Stock [Member]	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Number of wholly owned trusts		14
Cash and cash equivalents general maturity		90
Other than temporary impairment losses total		$ 359,000	$ 414,000	$ 10,600,000
Unallocated amount as a percentage of allowance		10.00%
Percentage of loan portfolio is secured by real estate		80.00%
Restricted equity securities		32,581,000	34,475,000		31,300,000	33,200,000
Federal home loan bank stock, minimum investment					10,500,000
Equipment useful life, minimum, years		3
Equipment useful life, maximum, years		10
Premises estimated useful lives, years		39
Impairment charges on servicing assets							0	0	0
Carrying value of Small Business Administration and Department of Agriculture servicing rights		$ 666,000	$ 721,000
Stock options and restricted stock awards generally vested period	four	5

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Junior Subordinated Debentures

12 Months Ended

Dec. 31, 2011

Junior Subordinated Debentures [Abstract]

Junior Subordinated Debentures

NOTE 18. JUNIOR SUBORDINATED DEBENTURES

The following is information about the Company's wholly-owned trusts ("Trusts") as of December 31, 2011:

(dollars in thousands)
Trust Name	Issue Date	Issued Amount		Carrying Value (1)		Rate (2)			Effective Rate (3)			Maturity Date	Redemption Date
AT FAIR VALUE:
Umpqua Statutory Trust II	October 2002	$	20,619	$	14,166		Floating	(4)		5.50	%	October 2032	October 2007
Umpqua Statutory Trust III	October 2002		30,928		21,476		Floating	(5)		5.62	%	November 2032	November 2007
Umpqua Statutory Trust IV	December 2003		10,310		6,641		Floating	(6)		5.05	%	January 2034	January 2009
Umpqua Statutory Trust V	December 2003		10,310		6,625		Floating	(6)		5.31	%	March 2034	March 2009
Umpqua Master Trust I	August 2007		41,238		21,134		Floating	(7)		3.70	%	September 2037	September 2012
Umpqua Master Trust IB	September 2007		20,619		12,863		Floating	(8)		5.28	%	December 2037	December 2012
			134,024		82,905
AT AMORTIZED COST:
HB Capital Trust I	March 2000		5,310		6,329		10.875	%		8.24	%	March 2030	March 2010
Humboldt Bancorp Statutory Trust I	February 2001		5,155		5,897		10.200	%		8.26	%	February 2031	February 2011
Humboldt Bancorp Statutory Trust II	December 2001		10,310		11,378		Floating	(9)		3.29	%	December 2031	December 2006
Humboldt Bancorp Staututory Trust III	September 2003		27,836		30,605		Floating	(10)		2.76	%	September 2033	September 2008
CIB Capital Trust	November 2002		10,310		11,219		Floating	(5)		3.20	%	November 2032	November 2007
Western Sierra Statutory Trust I	July 2001		6,186		6,186		Floating	(11)		4.01	%	July 2031	July 2006
Western Sierra Statutory Trust II	December 2001		10,310		10,310		Floating	(9)		4.15	%	December 2031	December 2006
Western Sierra Statutory Trust III	September 2003		10,310		10,310		Floating	(12)		3.30	%	September 2033	September 2008
Western Sierra Statutory Trust IV	September 2003		10,310		10,310		Floating	(12)		3.30	%	September 2033	September 2008
			96,037		102,544
	Total	$	230,061	$	185,449

(1) Includes purchase accounting adjustments, net of accumulated amortization, for junior subordinated debentures assumed in connection with previous mergers as well as fair value adjustments related to trusts recorded at fair value.

(2) Contractual interest rate of junior subordinated debentures.

(3) Effective interest rate based upon the carrying value as of December 2011.

(4) Rate based on LIBOR plus 3.35%, adjusted quarterly.

(5) Rate based on LIBOR plus 3.45%, adjusted quarterly.

(6) Rate based on LIBOR plus 2.85%, adjusted quarterly.

(7) Rate based on LIBOR plus 1.35%, adjusted quarterly.

(8) Rate based on LIBOR plus 2.75%, adjusted quarterly.

(9) Rate based on LIBOR plus 3.60%, adjusted quarterly.

(10) Rate based on LIBOR plus 2.95%, adjusted quarterly.

(11) Rate based on LIBOR plus 3.58%, adjusted quarterly.

(12) Rate based on LIBOR plus 2.90%, adjusted quarterly.

The Trusts are reflected as junior subordinated debentures in the Consolidated Balance Sheets. The common stock issued by the Trusts is recorded in other assets in the Consolidated Balance Sheets, and totaled $6.9 million and $6.9 million at December 31, 2011 and 2010, respectively.

On January 1, 2007, the Company selected the fair value measurement option for certain pre-existing junior subordinated debentures (the Umpqua Statutory Trusts). The remaining junior subordinated debentures as of the adoption date were acquired through business combinations and were measured at fair value at the time of acquisition. In 2007, the Company issued two series of trust preferred securities and elected to measure each instrument at fair value. Accounting for the junior subordinated debentures originally issued by the Company at fair value enables us to more closely align our financial performance with the economic value of those liabilities. Additionally, we believe it improves our ability to manage the market and interest rate risks associated with the junior subordinated debentures. The junior subordinated debentures measured at fair value and amortized cost are presented as separate line items on the balance sheet. The ending carrying (fair) value of the junior subordinated debentures measured at fair value represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants under current market conditions as of the measurement date.

The significant inputs utilized in the estimation of fair value of these instruments are the credit risk adjusted spread and three month LIBOR. The credit risk adjusted spread represents the nonperformance risk of the liability, contemplating the inherent risk of the obligation. Generally, an increase in the credit risk adjusted spread and/or a decrease in the three month LIBOR will result in positive fair value adjustments. Conversely, a decrease in the credit risk adjusted spread and/or an increase in the three month LIBOR will result in negative fair value adjustments.

Through the first quarter of 2010 we obtained valuations from a third-party pricing service to assist with the estimation and determination of fair value of these liabilities. In these valuations, the credit risk adjusted interest spread for potential new issuances through the primary market and implied spreads of these instruments when traded as assets on the secondary market, were estimated to be significantly higher than the contractual spread of our junior subordinated debentures measured at fair value. The difference between these spreads has resulted in the cumulative gain in fair value, reducing the carrying value of these instruments as reported on our Consolidated Balance Sheets. In July 2010, the Dodd-Frank Act was signed into law which, among other things, limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. This law may require many banks to raise new Tier 1 capital and is expected to effectively close the trust-preferred securities markets from offering new issuances in the future. As a result of this legislation, our third-party pricing service noted that they were no longer to able to provide reliable fair value estimates related to these liabilities given the absence of observable or comparable transactions in the market place in recent history or as anticipated into the future.

Due to inactivity in the junior subordinated debenture market and the inability to obtain observable quotes of our, or similar, junior subordinated debenture liabilities or the related trust preferred securities when traded as assets, we utilize an income approach valuation technique to determine the fair value of these liabilities using our estimation of market discount rate assumptions. The Company monitors activity in the trust preferred and related markets, to the extent available, changes related to the current and anticipated future interest rate environment, and considers our entity-specific creditworthiness, to validate the reasonableness of the credit risk adjusted spread and effective yield utilized in our discounted cash flow model. Regarding the activity in and condition of the junior subordinated debt market, we noted no observable changes in the current period as it relates to companies comparable to our size and condition, in either the primary or secondary markets. Relating to the interest rate environment, we considered the change in slope and shape of the forward LIBOR swap curve in the current period, the affects of which did not result in a significant change in the fair value of these liabilities.

The Company's specific credit risk is implicit in the credit risk adjusted spread used to determine the fair value of our junior subordinated debentures. As our Company is not specifically rated by any credit agency, it is difficult to specifically attribute changes in our estimate of the applicable credit risk adjusted spread to specific changes in our own creditworthiness versus changes in the market's required return from similar companies. As a result, these considerations must be largely based off of qualitative considerations as we do not have a credit rating and we do not regularly issue senior or subordinated debt that would provide us an independent measure of the changes in how the market quantifies our perceived default risk.

On a quarterly basis we assess entity-specific qualitative considerations that if not mitigated or represents a material change from the prior reporting period may result in a change to the perceived creditworthiness and ultimately the estimated credit risk adjusted spread utilized to value these liabilities. Entity-specific considerations that positively impact our creditworthiness include: our strong capital position resulting from our successful public stock offerings in 2009 and 2010, that offers us flexibility to pursue business opportunities such as mergers and acquisitions, or expand our footprint and product offerings; having significant levels of on and off-balance sheet liquidity; being profitable (after excluding the one-time goodwill impairment charge recognized in 2009); and, having an experienced management team. However, these positive considerations are mitigated by significant risks and uncertainties that impact our creditworthiness and ability to maintain capital adequacy in the future. Specific risks and concerns include: given our concentration of loans secured by real estate in our loan portfolio, a continued and sustained deterioration of the real estate market may result in declines in the value of the underlying collateral and increased delinquencies that could result in an increased of charge-offs; despite recent improvement, our credit quality metrics remain negatively elevated since 2007 relative to historical standards; the continuation of current economic downturn that has been particularly severe in our primary markets could adversely affect our business; recent increased regulation facing our industry, such as the Emergency Economic Stabilization Act of 2008, the American Recovery and Reinvestment Act of 2009 and the Dodd-Frank Act, will increase the cost of compliance and restrict our ability to conduct business consistent with historical practices, and could negatively impact profitability; we have a significant amount of goodwill and other intangible assets that dilute our available tangible common equity; and the carrying value of certain material, recently recorded assets on our balance sheet, such as the FDIC loss-sharing indemnification asset, are highly reliant on management estimates, such as the timing or amount of losses that are estimated to be covered, and the assumed continued compliance with the provisions of the loss-share agreement. To the extent assumptions ultimately prove incorrect or should we consciously forego or unknowingly violate the guidelines of the agreement, an impairment of the asset may result which would reduce capital.

Additionally, the Company periodically utilizes an external valuation firm to determine or validate the reasonableness of the assessments of inputs and factors that ultimately determines the estimate fair value of these liabilities. The extent we involve or engage these external third parties correlates to management's assessment of the current subordinate debt market, how the current environment and market compares to the preceding quarter, and perceived changes in the Company's own creditworthiness during the quarter. In periods of potential significant valuation changes and at year-end reporting periods we typically engage third parties to perform a full independent valuation of these liabilities. For periods where management has assessed the market and other factors impacting the underlying valuation assumptions of these liabilities, and has determined significant changes to the valuation of these liabilities in the current period are remote, the scope of the valuation specialist's review is limited to a review the reasonableness of Management's assessment of inputs. In the fourth quarter of 2011, the Company engaged an external valuation firm to prepare an independent valuation of our junior subordinated debentures measured at fair value and the results were consistent with the Company's valuation.

Absent changes to the significant inputs utilized in the discounted cash flow model used to measure the fair value of these instruments at each reporting period, the cumulative discount for each junior subordinated debenture will reverse over time, ultimately returning the carrying values of these instruments to their notional values at their expected redemption dates, in a manner similar to the effective yield method as if these instruments were accounted for under the amortized cost method. This will result in recognizing losses on junior subordinated debentures carried at fair value on a quarterly basis within non-interest income. For the years ended December 31, 2011 and 2010, we recorded a loss of $2.2 million and a gain $5.0 million, respectively, resulting from the change in fair value of the junior subordinated debentures recorded at fair value. Observable activity in the junior subordinated debenture and related markets in future periods may change the effective rate used to discount these liabilities, and could result in additional fair value adjustments (gains or losses on junior subordinated debentures measured at fair value) outside the expected periodic change in fair value had the fair value assumptions remained unchanged.

As noted above, the Dodd-Frank Act limits the ability of certain bank holding companies to treat trust preferred security debt issuances as Tier 1 capital. As the Company had less than $15 billion in assets at December 31, 2009, under the Dodd-Frank Act, the Company will be able to continue to include its existing trust preferred securities, less the common stock of the Trusts, in Tier 1 capital. At December 31, 2011, the Company's restricted core capital elements were 18.41% of total core capital, net of goodwill and any associated deferred tax liability.

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Income Taxes (Schedule Of Components Of Income Tax Expense (Benefit)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Abstract]
Current, Federal									$ 29,932	$ (1,714)	$ (24,339)
Deferred, Federal									(40)	6,364	(7,471)
Total, Federal									29,892	4,650	(31,810)
Current, State									4,810	3,126	1,762
Deferred, State									2,040	(1,971)	(10,889)
Total, State									6,850	1,155	(9,127)
Current Income Tax Expense (Benefit)									34,742	1,412	(22,577)
Deferred Income Tax Expense (Benefit)									2,000	4,393	(18,360)
Total	$ 10,722	$ 10,717	$ 8,782	$ 6,521	$ 4,203	$ 2,194	$ 2,800	$ (3,392)	$ 36,742	$ 5,805	$ (40,937)

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Junior Subordinated Debentures (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Common stock issued by trust owned	$ 6,900,000	$ 6,900,000
Total assets	11,563,355,000	11,668,710,000	9,381,372,000
Restricted core capital percentage	18.41%
(Loss) gain on junior subordinated debentures carried at fair value	(2,197,000)	4,980,000	6,482,000
Dodd-Frank Act [Member]
Total assets			$ 15,000,000,000

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Securities Sold Under Agreements To Repurchase (Securities Sold Under Agreements To Repurchase) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Securities Sold Under Agreements To Repurchase [Abstract]
Repurchase Amount	$ 124,605	$ 73,759
Weighted average interest rate	0.35%	0.66%
Carrying value of underlying assets repurchase agreements	129,810	75,305
Market value of underlying assets repurchase agreements	$ 129,810	$ 75,305

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Business Combinations (Statement Of Assets Acquired And Liabilities Assumed At Estimated Fair Values) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended		0 Months Ended
	Dec. 31, 2010	Dec. 31, 2011	Jan. 22, 2010 Evergreen Bank [Member]	Feb. 26, 2010 Rainier Pacific Bank [Member]	Jun. 18, 2010 Nevada Security Bank [Member]
Cash and equivalents			$ 18,919	$ 94,067	$ 66,060
Investment securities			3,850	26,478	22,626
Covered loans			252,493	458,340	215,507
Premises and equipment				17	50
Restricted equity securities	34,475	32,581	3,073	13,712	2,951
Goodwill				35,808	10,393
Other intangible assets			440	6,253	322
Mortgage servicing rights				62
Covered other real estate owned			2,421	6,580	17,938
FDIC indemnification asset			71,755	76,603	99,160
Other assets			328	3,254	2,588
Total assets acquired			353,279	721,174	437,595
Deposits			285,775	425,771	437,299
Term debt			60,813	293,191
Other liabilities			254	2,212	296
Total liabilities assumed			346,842	721,174	437,595
Net assets acquired/bargain purchase gain	$ 6,437		$ 6,437

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Parent Company Financial Statements (Schedule Of Condensed Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Condensed Financial Statements, Captions [Line Items]
Other income									$ 12,674		$ 11,271		$ 9,469
Other expenses									29,614		32,576		18,086
Income tax benefit	10,722	10,717	8,782	6,521	4,203	2,194	2,800	(3,392)	36,742		5,805		(40,937)
Net income (loss)	21,382	21,862	17,785	13,467	8,158	8,191	3,463	8,514	74,496		28,326		(153,366)
Preferred stock dividends								12,192			12,192		12,866
Dividends and undistributed earnings allocated to participating securities	103	105	86	62	18	18	16	15	356	[1]	67	[1]	30	[1]
Net earnings (loss) available to common shareholders	21,279	21,757	17,699	13,405	8,140	8,173	3,447	(3,693)	74,140		16,067		(166,262)
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Dividends from subsidiaries									17,743		245		18,306
Other income									(2,127)		5,081		6,656
Total income									15,616		5,326		24,962
Management fees paid to subsidiaries									469		291		305
Other expenses									9,072		9,116		10,079
Total expenses									9,541		9,407		10,384
Income (loss) before income tax benefit and equity in undistributed earnings of subsidiaries									6,075		(4,081)		14,578
Income tax benefit									(4,325)		(1,594)		(1,677)
Net income (loss) before equity in undistributed earnings of subsidiaries									10,400		(2,487)		16,255
Equity in (distributions in excess) undistributed earnings of subsidiaries									64,096		30,813		(169,621)
Net income (loss)									74,496		28,326		(153,366)
Preferred stock dividends											12,192		12,866
Dividends and undistributed earnings allocated to participating securities									356		67		30
Net earnings (loss) available to common shareholders									$ 74,140		$ 16,067		$ (166,262)

[1] Represents dividends paid and undistributed earnings allocated to nonvested restricted stock awards.

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Quarterly Financial Information

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information [Abstract]

Quarterly Financial Information

NOTE 29. QUARTERLY FINANCIAL INFORMATION (Unaudited)

The following tables present the summary results for the eight quarters ending December 31, 2011:

2011
(in thousands, except per share information)
	2011
	December 31		September 30		June 30		March 31		Four Quarters
Interest income	$	121,917	$	126,527	$	128,417	$	124,892	$	501,753
Interest expense		15,262		18,993		19,056		19,990		73,301
Net interest income		106,655		107,534		109,361		104,902		428,452
Provision for non-covered loan and lease losses		6,642		9,089		15,459		15,030		46,220
Provision for covered loan and lease losses		698		4,420		3,755		7,268		16,141
Non-interest income		18,128		24,778		19,627		21,585		84,118
Non-interest expense		85,339		86,224		83,207		84,201		338,971
Income before provision for income taxes		32,104		32,579		26,567		19,988		111,238
Provision for income taxes		10,722		10,717		8,782		6,521		36,742
Net income		21,382		21,862		17,785		13,467		74,496
Dividends and undistributed earnings allocated to participating securities		103		105		86		62		356
Net earnings available to common shareholders	$	21,279	$	21,757	$	17,699	$	13,405	$	74,140
Basic earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Diluted earnings per common share	$	0.19	$	0.19	$	0.15	$	0.12
Cash dividends declared per common share	$	0.07	$	0.07	$	0.05	$	0.05

2011
(in thousands, except per share information)
	2010
	December 31		September 30		June 30		March 31			Four Quarters
Interest income	$	130,677	$	132,946	$	115,604	$	109,369		$	488,596
Interest expense		23,562		24,629		23,304		22,317			93,812
Net interest income		107,115		108,317		92,300		87,052			394,784
Provision for non-covered loan and lease losses		17,567		24,228		29,767		42,106			113,668
Provision for covered loan and lease losses		4,484		667		—		—			5,151
Non-interest income		15,161		12,133		18,563		30,047			75,904
Non-interest expense		87,864		85,170		74,833		69,871			317,738
Income before provision for (benefit from) income taxes		12,361		10,385		6,263		5,122			34,131
Provision for (benefit from) income taxes		4,203		2,194		2,800		(3,392	)		5,805
Net income		8,158		8,191		3,463		8,514			28,326
Preferred stock dividends		—		—		—		12,192			12,192
Dividends and undistributed earnings allocated to participating securities		18		18		16		15			67
Net earnings (loss) available to common shareholders	$	8,140	$	8,173	$	3,447	$	(3,693	)	$	16,067
Basic earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Diluted earnings (loss) per common share	$	0.07	$	0.07	$	0.03	$	(0.04	)
Cash dividends declared per common share	$	0.05	$	0.05	$	0.05	$	0.05

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Non-Covered Other Real Estate Owned, Net

12 Months Ended

Dec. 31, 2011

Non-Covered Other Real Estate Owned, Net [Abstract]

Non-Covered Other Real Estate Owned, Net

NOTE 11. NON-COVERED OTHER REAL ESTATE OWNED, NET

The following table presents the changes in other real estate owned ("OREO"), net of valuation allowance, for the years ended December 31, 2011, 2010 and 2009:

(in thousands)
	2011			2010			2009
Balance, beginning of period	$	32,791		$	24,566		$	27,898
Additions to OREO		47,414			41,491			50,914
Dispositions of OREO		(37,083	)		(29,192	)		(41,999	)
Valuation adjustments in the period		(8,947	)		(4,074	)		(12,247	)
Balance, end of period	$	34,175		$	32,791		$	24,566

OREO properties are recorded at the lower of the recorded investment in the loan (prior to foreclosure) or the fair market value of the property less expected selling costs. The Company recognized valuation allowances of $5.1 million, $2.4 million, and $11.4 million on its non-covered OREO balances as of December 31, 2011, 2010 and 2009, respectively. Valuation allowances on non-covered OREO balances are based on updated appraisals of the underlying properties as received during a period or management's authorization to reduce the selling price of a property during the period.

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Covered Assets And Indemnification Asset (Major Types Of Covered Loans) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Commercial real estate, Term & multifamily	$ 3,558,295	$ 3,483,475
Commercial real estate, Construction & development	165,066	247,814
Commercial real estate, Residential development	90,073	147,813
Commercial, Term	625,766	509,453
Commercial, LOC & other	832,999	747,419
Residential, Mortgage	315,927	222,416
Residential, Home equity loans & lines	272,192	278,585
Consumer & other	38,860	33,043
Total	5,899,178	5,670,018
Allowance for covered loans	(92,968)	(101,921)	(107,657)
Total, net	622,451	785,898
Covered Loans [Member]
Commercial real estate, Term & multifamily	474,054	569,642
Commercial real estate, Construction & development	14,820	24,713
Commercial real estate, Residential development	17,763	24,893
Commercial, Term	34,150	42,776
Commercial, LOC & other	23,426	35,227
Residential, Mortgage	35,503	44,824
Residential, Home equity loans & lines	29,085	35,680
Consumer & other	7,970	10,864
Total	636,771	788,619
Allowance for covered loans	(14,320)	(2,721)
Total, net	622,451	785,898
Evergreen Bank [Member] | Covered Loans [Member]
Commercial real estate, Term & multifamily	99,346	124,743
Commercial real estate, Construction & development	7,241	14,470
Commercial real estate, Residential development	7,809	11,024
Commercial, Term	14,911	18,895
Commercial, LOC & other	8,776	11,876
Residential, Mortgage	6,320	8,129
Residential, Home equity loans & lines	4,660	6,740
Consumer & other	2,394	2,793
Total	151,457	198,670
Rainier Pacific Bank [Member] | Covered Loans [Member]
Commercial real estate, Term & multifamily	248,206	303,585
Commercial real estate, Construction & development	711	854
Commercial real estate, Residential development	227	2,497
Commercial, Term	5,807	10,881
Commercial, LOC & other	8,854	14,320
Residential, Mortgage	27,320	35,026
Residential, Home equity loans & lines	21,055	25,214
Consumer & other	5,541	8,071
Total	317,721	400,448
Nevada Security Bank [Member] | Covered Loans [Member]
Commercial real estate, Term & multifamily	126,502	141,314
Commercial real estate, Construction & development	6,868	9,389
Commercial real estate, Residential development	9,727	11,372
Commercial, Term	13,432	13,000
Commercial, LOC & other	5,796	9,031
Residential, Mortgage	1,863	1,669
Residential, Home equity loans & lines	3,370	3,726
Consumer & other	35
Total	$ 167,593	$ 189,501