EX-99.1 2 umpqq32017ex991earningsrel.htm PRESS RELEASE ANNOUNCING THIRD QUARTER 2017 FINANCIAL RESULTS Exhibit
Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 1


EXHIBIT 99.1 
 
 umpquaholdingsa01a02a01a08.jpg
  
Contacts:
Ron Farnsworth
Bradley Howes
EVP/Chief Financial Officer
SVP/Director of Investor Relations
Umpqua Holdings Corporation
Umpqua Holdings Corporation
503-727-4108
503-727-4226
ronfarnsworth@umpquabank.com
bradhowes@umpquabank.com
 
UMPQUA REPORTS THIRD QUARTER 2017 RESULTS

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

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

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

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

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





Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 2


Third Quarter 2017 Highlights (compared to prior quarter):

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

Balance Sheet
Total consolidated assets were $25.7 billion as of September 30, 2017, compared to $25.3 billion as of June 30, 2017 and $24.7 billion as of September 30, 2016. Including secured off-balance sheet lines of credit, total available liquidity was $9.5 billion as of September 30, 2017, representing 37% of total assets and 48% of total deposits.
 
Gross loans and leases were $18.7 billion as of September 30, 2017, an increase of $356.6 million, or 8% annualized, from $18.3 billion as of June 30, 2017. This increase reflects balanced growth across the Company's commercial, leasing, commercial real-estate and consumer loan portfolios. During the third quarter of 2017, the Company sold $19.2 million of leases and equipment finance loans and $72.5 million of portfolio residential mortgage loans.

Total deposits were $19.9 billion as of September 30, 2017, an increase of $392.0 million, or 8% annualized, from $19.5 billion as of June 30, 2017. This increase was primarily attributable to growth in non-interest bearing demand accounts.
 
Net Interest Income
Net interest income was $220.5 million for the third quarter of 2017, an increase of $8.4 million, or 4%, from the prior quarter. This increase was primarily attributable to the strong growth in loans and leases, along with a 3 basis point increase in net interest margin. Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) increased by $2.1 million from the prior quarter level, driven by higher accretion on credit impaired loans.

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

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


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 3


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

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

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

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

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

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

The Company’s estimated total risk-based capital ratio was 14.1% and its estimated Tier 1 common to risk weighted
assets ratio was 11.1% as of September 30, 2017. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of September 30, 2017 are estimates, pending completion and filing of the Company’s regulatory reports.

1 "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided
under the heading Non-GAAP Financial Measures below.


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 4


Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

Management believes tangible common equity and the tangible common equity ratio are useful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs).  The tangible common equity ratio is calculated as tangible common shareholders’ equity divided by tangible assets.
 
The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).
 
(In thousands, except per share data)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
Total shareholders' equity
 
$
3,985,260

 
$
3,958,845

 
$
3,931,150

 
$
3,916,795

 
$
3,920,208

Subtract:
 
 

 
 

 
 
 
 
 
 

Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

Other intangible assets, net
 
31,819

 
33,508

 
35,197

 
36,886

 
38,753

Tangible common shareholders' equity
 
$
2,165,790

 
$
2,137,686

 
$
2,108,302

 
$
2,092,258

 
$
2,093,804

Total assets
 
$
25,695,663

 
$
25,257,784

 
$
24,861,458

 
$
24,813,119

 
$
24,744,214

Subtract:
 
 

 
 

 
 
 
 
 
 

Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

Other intangible assets, net
 
31,819

 
33,508

 
35,197

 
36,886

 
38,753

Tangible assets
 
$
23,876,193

 
$
23,436,625

 
$
23,038,610

 
$
22,988,582

 
$
22,917,810

Common shares outstanding at period end
 
220,225

 
220,205

 
220,349

 
220,177

 
220,207

 
 
 
 
 
 
 
 
 
 
 
Common equity ratio
 
15.51
%
 
15.67
%
 
15.81
%
 
15.79
%
 
15.84
%
Tangible common equity ratio
 
9.07
%
 
9.12
%
 
9.15
%
 
9.10
%
 
9.14
%
Book value per common share
 
$
18.10

 
$
17.98

 
$
17.84

 
$
17.79

 
$
17.80

Tangible book value per common share
 
$
9.83

 
$
9.71

 
$
9.57

 
$
9.50

 
$
9.51



Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 5


About Umpqua Holdings Corporation
Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon, and Pivotus Ventures, an innovation studio headquartered in Silicon Valley focused on creating key technologies and business models that transform finance and commerce. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.
 
Earnings Conference Call Information
The Company will host its third quarter 2017 earnings conference call on Thursday, October 19, 2017, at 10:00 a.m. PDT (1:00 p.m. EDT). During the call, the Company will provide an update on recent activities and discuss its third quarter 2017 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (800) 210-9006 ten minutes prior to the start time and enter conference ID: 7723316. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 7723316. The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at umpquabank.com.
 
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. In this press release we make forward-looking statements about fee revenue and operating efficiency initiatives and the credit discount accretion related to loans acquired from Sterling. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; the effect of interest rate increases on the cost of deposits; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our ability to effectively manage problem credits; our ability to successfully implement efficiency initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 6


Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
% Change
(In thousands, except per share data)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
 
$
223,321

 
$
212,998

 
$
205,996

 
$
209,812

 
$
212,037

 
5
 %
 
5
 %
Interest and dividends on investments:
 
 
 
 

 
 
 
 
 
 
 


 


Taxable
 
13,979

 
15,220

 
13,931

 
10,630

 
10,779

 
(8
)%
 
30
 %
Exempt from federal income tax
 
2,125

 
2,237

 
2,242

 
2,229

 
2,181

 
(5
)%
 
(3
)%
Dividends
 
357

 
360

 
388

 
336

 
332

 
(1
)%
 
8
 %
Temporary investments and interest bearing deposits
 
934

 
324

 
1,557

 
1,696

 
1,090

 
188
 %
 
(14
)%
Total interest income
 
240,716

 
231,139

 
224,114

 
224,703

 
226,419

 
4
 %
 
6
 %
Interest expense:
 
 

 
 

 
 

 
 

 
 

 


 


Deposits
 
12,052

 
10,641

 
9,648

 
9,288

 
8,999

 
13
 %
 
34
 %
Repurchase agreements and federal funds purchased
 
81

 
321

 
30

 
32

 
32

 
(75
)%
 
153
 %
Term debt
 
3,491

 
3,662

 
3,510

 
3,413

 
3,558

 
(5
)%
 
(2
)%
Junior subordinated debentures
 
4,628

 
4,437

 
4,201

 
4,174

 
3,938

 
4
 %
 
18
 %
Total interest expense
 
20,252

 
19,061

 
17,389

 
16,907

 
16,527

 
6
 %
 
23
 %
Net interest income
 
220,464

 
212,078

 
206,725

 
207,796

 
209,892

 
4
 %
 
5
 %
Provision for loan and lease losses
 
11,997

 
10,657

 
11,672

 
13,171

 
13,091

 
13
 %
 
(8
)%
Non-interest income:
 
 

 
 

 
 

 
 

 
 

 


 


Service charges on deposits
 
15,849

 
15,478

 
14,729

 
15,323

 
15,762

 
2
 %
 
1
 %
Brokerage revenue
 
3,832

 
3,903

 
4,122

 
4,230

 
4,129

 
(2
)%
 
(7
)%
Residential mortgage banking revenue, net
 
33,430

 
33,894

 
26,834

 
58,448

 
47,206

 
(1
)%
 
(29
)%
(Loss) gain on investment securities, net
 
(6
)
 
35

 
(2
)
 
—

 
—

 
(117
)%
 
nm

Gain on loan sales
 
7,969

 
3,310

 
1,754

 
4,060

 
1,285

 
141
 %
 
520
 %
Loss on junior subordinated debentures carried at fair value
 
(1,590
)
 
(1,572
)
 
(1,555
)
 
(1,589
)
 
(1,590
)
 
1
 %
 
0
 %
BOLI income
 
2,041

 
2,089

 
2,069

 
2,107

 
2,116

 
(2
)%
 
(4
)%
Other income
 
13,877

 
13,982

 
12,274

 
16,041

 
11,802

 
(1
)%
 
18
 %
Total non-interest income
 
75,402

 
71,119

 
60,225

 
98,620

 
80,710

 
6
 %
 
(7
)%
Non-interest expense:
 
 

 
 

 
 

 
 

 
 

 


 


Salaries and employee benefits
 
108,732

 
108,561

 
106,473

 
105,406

 
105,341

 
0
 %
 
3
 %
Occupancy and equipment, net
 
37,648

 
36,955

 
38,673

 
37,618

 
38,181

 
2
 %
 
(1
)%
Intangible amortization
 
1,689

 
1,689

 
1,689

 
1,867

 
1,867

 
0
 %
 
(10
)%
FDIC assessments
 
4,405

 
4,447

 
4,087

 
3,985

 
4,109

 
(1
)%
 
7
 %
(Gain) loss on other real estate owned, net
 
(99
)
 
(457
)
 
82

 
(197
)
 
(14
)
 
(78
)%
 
607
 %
Merger related expenses
 
6,664

 
1,640

 
1,020

 
3,218

 
2,011

 
306
 %
 
231
 %
Other expense
 
29,315

 
31,186

 
30,690

 
31,571

 
29,692

 
(6
)%
 
(1
)%
Total non-interest expense
 
188,354

 
184,021

 
182,714

 
183,468

 
181,187

 
2
 %
 
4
 %
Income before provision for income taxes
 
95,515

 
88,519

 
72,564

 
109,777

 
96,324

 
8
 %
 
(1
)%
Provision for income taxes
 
34,182

 
31,707

 
26,561

 
40,502

 
34,515

 
8
 %
 
(1
)%
Net income
 
61,333

 
56,812

 
46,003

 
69,275

 
61,809

 
8
 %
 
(1
)%
Dividends and undistributed earnings allocated to participating securities
 
14

 
14

 
12

 
33

 
31

 
0
 %
 
(55
)%
Net earnings available to common shareholders
 
$
61,319

 
$
56,798

 
$
45,991

 
$
69,242

 
$
61,778

 
8
 %
 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 


 


Weighted average basic shares outstanding
 
220,215

 
220,310

 
220,287

 
220,190

 
220,291

 
0
 %
 
0
 %
Weighted average diluted shares outstanding
 
220,755

 
220,753

 
220,779

 
220,756

 
220,751

 
0
 %
 
0
 %
Earnings per common share – basic
 
$
0.28

 
$
0.26

 
$
0.21

 
$
0.31

 
$
0.28

 
8
 %
 
0
 %
Earnings per common share – diluted
 
$
0.28

 
$
0.26

 
$
0.21

 
$
0.31

 
$
0.28

 
8
 %
 
0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nm = not meaningful
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 7


Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
 
 
 
 
 
 
 
Nine Months Ended
 
% Change
(In thousands, except per share data)
 
Sep 30, 2017
 
Sep 30, 2016
 
Year over Year
Interest income
 
 
 
 
 
 
Loans and leases
 
$
642,315

 
$
640,255

 
0
 %
Interest and dividends on investments:
 
 
 
 
 
 

Taxable
 
43,130

 
35,797

 
20
 %
Exempt from federal income tax
 
6,604

 
6,599

 
0
 %
Dividends
 
1,105

 
1,063

 
4
 %
Temporary investments and interest bearing deposits
 
2,815

 
2,222

 
27
 %
Total interest income
 
695,969

 
685,936

 
1
 %
Interest expense
 
 

 
 
 


Deposits
 
32,341

 
25,952

 
25
 %
Repurchase agreements and federal funds purchased
 
432

 
100

 
332
 %
Term debt
 
10,663

 
11,592

 
(8
)%
Junior subordinated debentures
 
13,266

 
11,500

 
15
 %
Total interest expense
 
56,702

 
49,144

 
15
 %
Net interest income
 
639,267

 
636,792

 
0
 %
Provision for loan and lease losses
 
34,326

 
28,503

 
20
 %
Non-interest income
 
 

 
 
 


Service charges on deposits
 
46,056

 
45,945

 
0
 %
Brokerage revenue
 
11,857

 
12,803

 
(7
)%
Residential mortgage banking revenue, net
 
94,158

 
99,415

 
(5
)%
Gain on investment securities, net
 
27

 
858

 
(97
)%
Gain on loan sales
 
13,033

 
9,296

 
40
 %
Loss on junior subordinated debentures carried at fair value
 
(4,717
)
 
(4,734
)
 
0
 %
BOLI income
 
6,199

 
6,407

 
(3
)%
Other income
 
40,133

 
31,330

 
28
 %
Total non-interest income
 
206,746

 
201,320

 
3
 %
Non-interest expense
 
 

 
 
 


Salaries and employee benefits
 
323,766

 
319,424

 
1
 %
Occupancy and equipment, net
 
113,276

 
114,326

 
(1
)%
Intangible amortization
 
5,067

 
6,755

 
(25
)%
FDIC assessments
 
12,939

 
11,523

 
12
 %
Gain on other real estate owned, net
 
(474
)
 
(82
)
 
478
 %
Merger related expenses
 
9,324

 
12,095

 
(23
)%
Goodwill impairment
 
—

 
142

 
nm

Other expense
 
91,191

 
89,504

 
2
 %
Total non-interest expense
 
555,089

 
553,687

 
0
 %
Income before provision for income taxes
 
256,598

 
255,922

 
0
 %
Provision for income taxes
 
92,450

 
92,257

 
0
 %
Net income
 
164,148

 
163,665

 
0
 %
Dividends and undistributed earnings
 
 

 
 
 


allocated to participating securities
 
40

 
92

 
(57
)%
Net earnings available to common shareholders
 
$
164,108

 
$
163,573

 
0
 %
 
 
 
 
 
 


Weighted average basic shares outstanding
 
220,270

 
220,313

 
0
 %
Weighted average diluted shares outstanding
 
220,793

 
220,936

 
0
 %
Earnings per common share – basic
 
$
0.75

 
$
0.74

 
1
 %
Earnings per common share – diluted
 
$
0.74

 
$
0.74

 
0
 %
 
 
 
 
 
 
 
nm = not meaningful
 
 

 
 

 
 


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 8


Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
(In thousands, except per share data)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
304,760

 
$
320,027

 
$
262,655

 
$
331,994

 
$
364,013

 
(5
)%
 
(16
)%
Interest bearing cash and temporary investments
 
540,806

 
295,937

 
421,991

 
1,117,438

 
1,102,428

 
83
 %
 
(51
)%
Investment securities:
 
 

 
 

 
 

 
 

 
 

 


 


Trading, at fair value
 
11,919

 
11,467

 
11,241

 
10,964

 
10,866

 
4
 %
 
10
 %
Available for sale, at fair value
 
3,047,358

 
3,132,566

 
3,243,408

 
2,701,220

 
2,520,037

 
(3
)%
 
21
 %
Held to maturity, at amortized cost
 
3,905

 
4,017

 
4,121

 
4,216

 
4,302

 
(3
)%
 
(9
)%
Loans held for sale
 
417,470

 
451,350

 
372,073

 
387,318

 
565,624

 
(8
)%
 
(26
)%
Loans and leases
 
18,677,762

 
18,321,142

 
17,829,638

 
17,508,663

 
17,392,051

 
2
 %
 
7
 %
Allowance for loan and lease losses
 
(139,503
)
 
(136,867
)
 
(136,292
)
 
(133,984
)
 
(133,692
)
 
2
 %
 
4
 %
Loans and leases, net
 
18,538,259

 
18,184,275

 
17,693,346

 
17,374,679

 
17,258,359

 
2
 %
 
7
 %
Restricted equity securities
 
45,509

 
45,511

 
45,522

 
45,528

 
47,537

 
0
 %
 
(4
)%
Premises and equipment, net
 
276,316

 
288,853

 
293,133

 
303,882

 
306,287

 
(4
)%
 
(10
)%
Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
0
 %
 
0
 %
Other intangible assets, net
 
31,819

 
33,508

 
35,197

 
36,886

 
38,753

 
(5
)%
 
(18
)%
Residential mortgage servicing rights, at fair value
 
141,225

 
141,832

 
142,344

 
142,973

 
114,446

 
0
 %
 
23
 %
Other real estate owned
 
4,160

 
4,804

 
6,518

 
6,738

 
8,309

 
(13
)%
 
(50
)%
Bank owned life insurance
 
305,572

 
303,894

 
301,777

 
299,673

 
297,561

 
1
 %
 
3
 %
Deferred tax assets, net
 
—

 
—

 
8,464

 
34,322

 
27,587

 
nm

 
(100
)%
Other assets
 
238,934

 
252,092

 
232,017

 
227,637

 
290,454

 
(5
)%
 
(18
)%
Total assets
 
$
25,695,663

 
$
25,257,784

 
$
24,861,458

 
$
24,813,119

 
$
24,744,214

 
2
 %
 
4
 %
Liabilities:
 
 

 
 

 
 

 
 

 
 

 


 


Deposits
 
$
19,851,910

 
$
19,459,950

 
$
19,167,293

 
$
19,020,985

 
$
18,918,780

 
2
 %
 
5
 %
Securities sold under agreements to repurchase
 
321,542

 
330,189

 
304,280

 
352,948

 
309,463

 
(3
)%
 
4
 %
Term debt
 
852,306

 
852,219

 
852,308

 
852,397

 
902,678

 
0
 %
 
(6
)%
Junior subordinated debentures, at fair value
 
266,875

 
265,423

 
263,605

 
262,209

 
260,114

 
1
 %
 
3
 %
Junior subordinated debentures, at amortized cost
 
100,690

 
100,770

 
100,851

 
100,931

 
101,012

 
0
 %
 
0
 %
Deferred tax liability, net
 
51,423

 
34,296

 
—

 
—

 
—

 
50
 %
 
100
 %
Other liabilities
 
265,657

 
256,092

 
241,971

 
306,854

 
331,959

 
4
 %
 
(20
)%
Total liabilities
 
21,710,403

 
21,298,939

 
20,930,308

 
20,896,324

 
20,824,006

 
2
 %
 
4
 %
Shareholders' equity:
 
 

 
 

 
 

 
 

 
 

 


 


Common stock
 
3,516,558

 
3,514,094

 
3,516,537

 
3,515,299

 
3,514,858

 
0
 %
 
0
 %
Retained earnings
 
476,226

 
454,802

 
433,417

 
422,839

 
388,678

 
5
 %
 
23
 %
Accumulated other comprehensive (loss) income
 
(7,524
)
 
(10,051
)
 
(18,804
)
 
(21,343
)
 
16,672

 
(25
)%
 
(145
)%
Total shareholders' equity
 
3,985,260

 
3,958,845

 
3,931,150

 
3,916,795

 
3,920,208

 
1
 %
 
2
 %
Total liabilities and shareholders' equity
 
$
25,695,663

 
$
25,257,784

 
$
24,861,458

 
$
24,813,119

 
$
24,744,214

 
2
 %
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Common shares outstanding at period end
 
220,225

 
220,205

 
220,349

 
220,177

 
220,207

 
0
 %
 
0
 %
Book value per common share
 
$
18.10

 
$
17.98

 
$
17.84

 
$
17.79

 
$
17.80

 
1
 %
 
2
 %
Tangible book value per common share
 
$
9.83

 
$
9.71

 
$
9.57

 
$
9.50

 
$
9.51

 
1
 %
 
3
 %
Tangible equity - common
 
$
2,165,790

 
$
2,137,686

 
$
2,108,302

 
$
2,092,258

 
$
2,093,804

 
1
 %
 
3
 %
Tangible common equity to tangible assets
 
9.07
%
 
9.12
%
 
9.15
%
 
9.10
%
 
9.14
%
 
(0.05
)
 
(0.07
)

Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 9


Umpqua Holdings Corporation
Loan and Lease Portfolio
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
% Change
 
 
Amount
 
Amount
 
Amount
 
Amount
 
Amount
 
Seq. Quarter
 
Year over Year
Loans and leases:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Commercial real estate:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Non-owner occupied term, net
 
$
3,475,243

 
$
3,401,679

 
$
3,410,914

 
$
3,330,442

 
$
3,280,660

 
2
 %
 
6
 %
Owner occupied term, net
 
2,467,995

 
2,593,395

 
2,584,183

 
2,599,055

 
2,573,942

 
(5
)%
 
(4
)%
Multifamily, net
 
2,993,203

 
2,964,851

 
2,885,164

 
2,858,956

 
2,968,019

 
1
 %
 
1
 %
Commercial construction, net
 
521,666

 
464,690

 
471,007

 
463,625

 
388,934

 
12
 %
 
34
 %
Residential development, net
 
186,400

 
165,956

 
145,479

 
142,984

 
127,447

 
12
 %
 
46
 %
Commercial:
 
 
 
 
 
 
 
 
 
 
 


 


Term, net
 
1,819,664

 
1,686,597

 
1,620,311

 
1,508,780

 
1,480,173

 
8
 %
 
23
 %
Lines of credit and other, net
 
1,134,045

 
1,153,409

 
1,114,160

 
1,116,259

 
1,142,946

 
(2
)%
 
(1
)%
Leases and equipment finance, net
 
1,137,732

 
1,082,651

 
1,000,376

 
950,588

 
927,857

 
5
 %
 
23
 %
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 


 


Mortgage, net
 
3,094,361

 
3,021,331

 
2,916,924

 
2,887,971

 
2,868,337

 
2
 %
 
8
 %
Home equity lines and loans, net
 
1,079,931

 
1,056,848

 
1,015,138

 
1,011,844

 
1,008,219

 
2
 %
 
7
 %
   Consumer and other, net
 
767,522

 
729,735

 
665,982

 
638,159

 
625,517

 
5
 %
 
23
 %
Total, net of deferred fees and costs
 
$
18,677,762

 
$
18,321,142

 
$
17,829,638

 
$
17,508,663

 
$
17,392,051

 
2
 %
 
7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan and leases mix:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Non-owner occupied term, net
 
19
%
 
19
%
 
19
%
 
19
%
 
19
%
 
 
 
 
   Owner occupied term, net
 
13
%
 
14
%
 
14
%
 
15
%
 
15
%
 
 
 
 
   Multifamily, net
 
16
%
 
16
%
 
16
%
 
16
%
 
17
%
 
 
 
 
Commercial construction, net
 
3
%
 
3
%
 
3
%
 
3
%
 
2
%
 
 
 
 
Residential development, net
 
1
%
 
1
%
 
1
%
 
1
%
 
1
%
 
 
 
 
Commercial:
 
 

 
 
 


 


 


 
 
 
 
Term, net
 
10
%
 
9
%
 
9
%
 
9
%
 
8
%
 
 
 
 
Lines of credit and other, net
 
6
%
 
6
%
 
6
%
 
6
%
 
7
%
 
 
 
 
Leases and equipment finance, net
 
6
%
 
6
%
 
6
%
 
5
%
 
5
%
 
 
 
 
Residential real estate:
 
 

 


 


 


 


 
 
 
 
Mortgage, net
 
16
%
 
16
%
 
16
%
 
16
%
 
16
%
 
 
 
 
Home equity lines and loans, net
 
6
%
 
6
%
 
6
%
 
6
%
 
6
%
 
 
 
 
   Consumer and other, net
 
4
%
 
4
%
 
4
%
 
4
%
 
4
%
 
 
 
 
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 



Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 10


Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
% Change
 
 
Amount
 
Amount
 
Amount
 
Amount
 
Amount
 
Seq. Quarter
 
Year over Year
Deposits:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Demand, non-interest bearing
 
$
6,571,471

 
$
6,112,480

 
$
6,021,585

 
$
5,861,469

 
$
5,993,793

 
8
 %
 
10
 %
Demand, interest bearing
 
2,394,240

 
2,371,386

 
2,327,226

 
2,296,532

 
2,218,782

 
1
 %
 
8
 %
Money market
 
6,700,261

 
6,755,707

 
6,784,442

 
6,932,717

 
6,841,700

 
(1
)%
 
(2
)%
Savings
 
1,444,801

 
1,427,677

 
1,400,330

 
1,325,757

 
1,303,816

 
1
 %
 
11
 %
Time
 
2,741,137

 
2,792,700

 
2,633,710

 
2,604,510

 
2,560,689

 
(2
)%
 
7
 %
Total
 
$
19,851,910

 
$
19,459,950

 
$
19,167,293

 
$
19,020,985

 
$
18,918,780

 
2
 %
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Total core deposits (1)
 
$
18,005,730

 
$
17,561,956

 
$
17,427,832

 
$
17,318,003

 
$
17,257,663

 
3
 %
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposit mix:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand, non-interest bearing
 
33
%
 
32
%
 
31
%
 
31
%
 
31
%
 
 
 
 
Demand, interest bearing
 
12
%
 
12
%
 
12
%
 
12
%
 
12
%
 
 
 
 
Money market
 
34
%
 
35
%
 
36
%
 
36
%
 
36
%
 
 
 
 
Savings
 
7
%
 
7
%
 
7
%
 
7
%
 
7
%
 
 
 
 
Time
 
14
%
 
14
%
 
14
%
 
14
%
 
14
%
 
 
 
 
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of open accounts:
 
 

 
 

 
 

 
 
 
 

 
 

 
 

Demand, non-interest bearing
 
394,755

 
389,767

 
385,859

 
384,040

 
382,687

 


 


Demand, interest bearing
 
79,899

 
80,594

 
81,570

 
82,520

 
83,501

 


 


Money market
 
55,659

 
55,795

 
55,903

 
56,031

 
56,128

 


 


Savings
 
162,556

 
161,369

 
160,323

 
159,080

 
158,760

 


 


Time
 
47,129

 
47,339

 
47,365

 
47,705

 
47,689

 


 


Total
 
739,998

 
734,864

 
731,020

 
729,376

 
728,765

 


 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average balance per account:
 
 

 
 

 
 

 
 
 
 

 
 

 
 

Demand, non-interest bearing
 
$
16.6

 
$
15.7

 
$
15.6

 
$
15.3

 
$
15.7

 
 

 
 

Demand, interest bearing
 
30.0

 
29.4

 
28.5

 
27.8

 
26.6

 
 

 
 

Money market
 
120.4

 
121.1

 
121.4

 
123.7

 
121.9

 
 

 
 

Savings
 
8.9

 
8.8

 
8.7

 
8.3

 
8.2

 
 

 
 

Time
 
58.2

 
59.0

 
55.6

 
54.6

 
53.7

 
 

 
 

Total
 
$
26.8

 
$
26.5

 
$
26.2

 
$
26.1

 
$
26.0

 
 

 
 

 
(1) Core deposits are defined as total deposits less time deposits greater than $100,000.



Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 11


 
Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Non-performing assets:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

Loans and leases on non-accrual status
 
$
44,573

 
$
26,566

 
$
28,915

 
$
27,765

 
$
27,791

 
68
 %
 
60
 %
Loans and leases past due 90+ days and accruing (1)
 
29,073

 
27,252

 
23,421

 
28,369

 
26,189

 
7
 %
 
11
 %
Total non-performing loans and leases
 
73,646

 
53,818

 
52,336

 
56,134

 
53,980

 
37
 %
 
36
 %
Other real estate owned
 
4,160

 
4,804

 
6,518

 
6,738

 
8,309

 
(13
)%
 
(50
)%
Total non-performing assets
 
$
77,806

 
$
58,622

 
$
58,854

 
$
62,872

 
$
62,289

 
33
 %
 
25
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Performing restructured loans and leases
 
$
45,813

 
$
52,861

 
$
43,029

 
$
40,667

 
$
36,645

 
(13
)%
 
25
 %
Loans and leases past due 31-89 days
 
$
32,251

 
$
31,153

 
$
49,530

 
$
30,425

 
$
39,708

 
4
 %
 
(19
)%
Loans and leases past due 31-89 days to total loans and leases
 
0.17
%
 
0.17
%
 
0.28
%
 
0.17
%
 
0.23
%
 
 

 
 

Non-performing loans and leases to total loans and leases (1)
 
0.39
%
 
0.29
%
 
0.29
%
 
0.32
%
 
0.31
%
 
 

 
 

Non-performing assets to total assets (1)
 
0.30
%
 
0.23
%
 
0.24
%
 
0.25
%
 
0.25
%
 
 

 
 


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


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 12


Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
 (Unaudited)
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance beginning of period
 
$
136,867

 
$
136,292

 
$
133,984

 
$
133,692

 
$
131,042

 
 
 
 
Provision for loan and lease losses
 
11,997

 
10,657

 
11,672

 
13,171

 
13,091

 
13
 %
 
(8
)%
Charge-offs
 
(13,222
)
 
(13,944
)
 
(13,002
)
 
(16,303
)
 
(13,088
)
 
(5
)%
 
1
 %
Recoveries
 
3,861

 
3,862

 
3,638

 
3,424

 
2,647

 
0
 %
 
46
 %
Net charge-offs
 
(9,361
)
 
(10,082
)
 
(9,364
)
 
(12,879
)
 
(10,441
)
 
(7
)%
 
(10
)%
Total allowance for loan and lease losses
 
139,503

 
136,867

 
136,292

 
133,984

 
133,692

 
2
 %
 
4
 %
Reserve for unfunded commitments
 
3,932

 
3,816

 
3,495

 
3,611

 
3,536

 
3
 %
 
11
 %
Total allowance for credit losses
 
$
143,435

 
$
140,683

 
$
139,787

 
$
137,595

 
$
137,228

 
2
 %
 
5
 %
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 

Net charge-offs to average loans and leases (annualized)
 
0.20
%
 
0.22
%
 
0.22
%
 
0.29
%
 
0.24
%
 
 

 
 

Recoveries to gross charge-offs
 
29.20
%
 
27.70
%
 
27.98
%
 
21.00
%
 
20.22
%
 
 
 
 

Allowance for loan and lease losses to loans and leases
 
0.75
%
 
0.75
%
 
0.76
%
 
0.77
%
 
0.77
%
 
 

 
 

Allowance for credit losses to loans and leases
 
0.77
%
 
0.77
%
 
0.78
%
 
0.79
%
 
0.79
%
 
 

 
 



Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 13


Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
 
 
Nine Months Ended
 
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Sep 30, 2016
 
Year over Year
Allowance for loan and lease losses:
 
 
 
 
Balance beginning of period
 
$
133,984

 
$
130,322

 
 
Provision for loan and lease losses
 
34,326

 
28,503

 
20
%
Charge-offs
 
(40,168
)
 
(33,620
)
 
19
%
Recoveries
 
11,361

 
8,487

 
34
%
Net charge-offs
 
(28,807
)
 
(25,133
)
 
15
%
Total allowance for loan and lease losses
 
139,503

 
133,692

 
4
%
Reserve for unfunded commitments
 
3,932

 
3,536

 
11
%
Total allowance for credit losses
 
$
143,435

 
$
137,228

 
5
%
 
 
 

 
 

 
 
Net charge-offs to average loans and leases (annualized)
 
0.21
%
 
0.20
%
 
 
Recoveries to gross charge-offs
 
28.28
%
 
25.24
%
 
 




Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 14


Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
% Change
 
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Average Rates:
 
 

 
 

 
 

 
 
 
 

 
 
 
 
Yield on loans and leases
 
4.70
%
 
4.67
%
 
4.65
%
 
4.70
%
 
4.75
%
 
0.03

 
(0.05
)
Yield on loans held for sale
 
3.89
%
 
3.26
%
 
3.86
%
 
3.79
%
 
3.79
%
 
0.63

 
0.10

Yield on taxable investments
 
2.00
%
 
2.07
%
 
2.10
%
 
1.85
%
 
1.96
%
 
(0.07
)
 
0.04

Yield on tax-exempt investments (1)
 
4.59
%
 
4.64
%
 
4.76
%
 
4.72
%
 
4.68
%
 
(0.05
)
 
(0.09
)
Yield on interest bearing cash and temporary investments
 
1.47
%
 
1.03
%
 
0.79
%
 
0.56
%
 
0.50
%
 
0.44

 
0.97

Total yield on earning assets (1)
 
4.30
%
 
4.26
%
 
4.18
%
 
4.14
%
 
4.26
%
 
0.04

 
0.04

 
 
 
 
 
 
 
 
 
 
 
 


 


Cost of interest bearing deposits
 
0.36
%
 
0.33
%
 
0.30
%
 
0.28
%
 
0.28
%
 
0.03

 
0.08

Cost of securities sold under agreements
 
 

 
 

 
 

 
 
 
 
 


 


to repurchase and fed funds purchased
 
0.10
%
 
0.32
%
 
0.04
%
 
0.04
%
 
0.04
%
 
(0.22
)
 
0.06

Cost of term debt
 
1.63
%
 
1.72
%
 
1.67
%
 
1.53
%
 
1.57
%
 
(0.09
)
 
0.06

Cost of junior subordinated debentures
 
5.02
%
 
4.88
%
 
4.70
%
 
4.59
%
 
4.36
%
 
0.14

 
0.66

Total cost of interest bearing liabilities
 
0.55
%
 
0.52
%
 
0.48
%
 
0.46
%
 
0.46
%
 
0.03

 
0.09

 
 
 
 
 
 
 
 
 
 
 
 


 


Net interest spread (1)
 
3.75
%
 
3.74
%
 
3.70
%
 
3.68
%
 
3.80
%
 
0.01

 
(0.05
)
Net interest margin (1)
 
3.94
%
 
3.91
%
 
3.85
%
 
3.83
%
 
3.95
%
 
0.03

 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 


 


Performance Ratios:
 
 

 
 

 
 

 
 
 
 
 


 


Return on average assets
 
0.96
%
 
0.92
%
 
0.75
%
 
1.11
%
 
1.01
%
 
0.04

 
(0.05
)
Return on average tangible assets
 
1.04
%
 
0.99
%
 
0.81
%
 
1.20
%
 
1.09
%
 
0.05

 
(0.05
)
Return on average common equity
 
6.10
%
 
5.76
%
 
4.74
%
 
7.04
%
 
6.28
%
 
0.34

 
(0.18
)
Return on average tangible common equity
 
11.23
%
 
10.67
%
 
8.83
%
 
13.19
%
 
11.79
%
 
0.56

 
(0.56
)
Efficiency ratio – Consolidated
 
63.43
%
 
64.71
%
 
68.15
%
 
59.65
%
 
62.11
%
 
(1.28
)
 
1.32

Efficiency ratio – Bank
 
61.42
%
 
62.45
%
 
65.75
%
 
57.96
%
 
60.45
%
 
(1.03
)
 
0.97


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


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 15


Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
 
 
 
 
 
 
 
Nine Months Ended
 
% Change
 
 
Sep 30, 2017
 
Sep 30, 2016
 
Year over Year
Average Rates:
 
 

 
 

 
 
Yield on loans and leases
 
4.67
%
 
4.88
%
 
(0.21
)
Yield on loans held for sale
 
3.67
%
 
3.86
%
 
(0.19
)
Yield on taxable investments
 
2.06
%
 
2.14
%
 
(0.08
)
Yield on tax-exempt investments (1)
 
4.66
%
 
4.71
%
 
(0.05
)
Yield on interest bearing cash and temporary investments
 
0.96
%
 
0.51
%
 
0.45

Total yield on earning assets (1)
 
4.25
%
 
4.43
%
 
(0.18
)
 
 
 
 
 
 


Cost of interest bearing deposits
 
0.33
%
 
0.27
%
 
0.06

Cost of securities sold under agreements
 
 

 
 

 


to repurchase and fed funds purchased
 
0.16
%
 
0.04
%
 
0.12

Cost of term debt
 
1.67
%
 
1.72
%
 
(0.05
)
Cost of junior subordinated debentures
 
4.87
%
 
4.29
%
 
0.58

Total cost of interest bearing liabilities
 
0.52
%
 
0.46
%
 
0.06

 
 
 
 
 
 


Net interest spread (1)
 
3.73
%
 
3.97
%
 
(0.24
)
Net interest margin (1)
 
3.91
%
 
4.12
%
 
(0.21
)
 
 
 
 
 
 


Performance Ratios:
 
 

 
 

 


Return on average assets
 
0.88
%
 
0.91
%
 
(0.03
)
Return on average tangible assets
 
0.95
%
 
0.99
%
 
(0.04
)
Return on average common equity
 
5.54
%
 
5.61
%
 
(0.07
)
Return on average tangible common equity
 
10.26
%
 
10.59
%
 
(0.33
)
Efficiency ratio – Consolidated
 
65.35
%
 
65.79
%
 
(0.44
)
Efficiency ratio – Bank
 
63.13
%
 
63.96
%
 
(0.83
)
        
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.


Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 16


Umpqua Holdings Corporation
Average Balances
(Unaudited)
 
 
 
 
 
 
 
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Temporary investments and interest bearing cash
 
$
253,015

 
$
125,886

 
$
804,354

 
$
1,194,904

 
$
874,410

 
101
 %
 
(71
)%
Investment securities, taxable
 
2,867,292

 
3,008,079

 
2,723,576

 
2,373,652

 
2,265,883

 
(5
)%
 
27
 %
Investment securities, tax-exempt
 
281,139

 
292,553

 
286,444

 
287,359

 
283,818

 
(4
)%
 
(1
)%
Loans held for sale
 
420,282

 
392,183

 
351,570

 
482,028

 
481,740

 
7
 %
 
(13
)%
Loans and leases
 
18,537,827

 
18,024,651

 
17,598,314

 
17,386,385

 
17,400,657

 
3
 %
 
7
 %
Total interest earning assets
 
22,359,555

 
21,843,352

 
21,764,258

 
21,724,328

 
21,306,508

 
2
 %
 
5
 %
Goodwill and other intangible assets, net
 
1,820,394

 
1,822,032

 
1,823,799

 
1,825,491

 
1,827,405

 
0
 %
 
0
 %
Total assets
 
25,311,994

 
24,792,869

 
24,730,285

 
24,740,986

 
24,422,986

 
2
 %
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Non-interest bearing demand deposits
 
6,354,591

 
5,951,670

 
5,883,924

 
5,939,223

 
5,766,022

 
7
 %
 
10
 %
Interest bearing deposits
 
13,155,462

 
13,037,064

 
13,119,736

 
13,026,614

 
12,836,987

 
1
 %
 
2
 %
Total deposits
 
19,510,053

 
18,988,734

 
19,003,660

 
18,965,837

 
18,603,009

 
3
 %
 
5
 %
Interest bearing liabilities
 
14,705,842

 
14,659,650

 
14,661,558

 
14,606,120

 
14,446,687

 
0
 %
 
2
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Shareholders’ equity - common
 
3,986,868

 
3,956,777

 
3,936,340

 
3,914,624

 
3,911,323

 
1
 %
 
2
 %
Tangible common equity (1)
 
2,166,474

 
2,134,745

 
2,112,541

 
2,089,133

 
2,083,918

 
1
 %
 
4
 %
 
 
 
 
 
 
 
Umpqua Holdings Corporation
Average Balances
(Unaudited)
 
 
Nine Months Ended
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Sep 30, 2016
 
Year over Year
Temporary investments and interest bearing cash
 
$
392,399

 
$
583,056

 
(33
)%
Investment securities, taxable
 
2,866,842

 
2,294,054

 
25
 %
Investment securities, tax-exempt
 
286,693

 
283,914

 
1
 %
Loans held for sale
 
388,263

 
394,797

 
(2
)%
Loans and leases
 
18,057,039

 
17,215,000

 
5
 %
Total interest earning assets
 
21,991,236

 
20,770,821

 
6
 %
Goodwill and other intangible assets, net
 
1,822,063

 
1,829,611

 
0
 %
Total assets
 
24,947,180

 
23,913,446

 
4
 %
 
 
 
 
 
 


Non-interest bearing demand deposits
 
6,065,119

 
5,508,255

 
10
 %
Interest bearing deposits
 
13,104,218

 
12,631,564

 
4
 %
Total deposits
 
19,169,337

 
18,139,819

 
6
 %
Interest bearing liabilities
 
14,675,845

 
14,225,049

 
3
 %
 
 
 
 
 
 


Shareholders’ equity - common
 
3,960,180

 
3,893,218

 
2
 %
Tangible common equity (1)
 
2,138,117

 
2,063,607

 
4
 %

(1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders’ equity less average goodwill and other intangible assets, net (excluding MSRs).

Umpqua Reports Third Quarter 2017 Results
October 18, 2017
Page 17


Umpqua Holdings Corporation
Residential Mortgage Banking Activity
(unaudited)
 
 
 
 
 
 
 
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
Seq. Quarter
 
Year over Year
Residential mortgage servicing rights:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans serviced for others
 
$
15,007,942

 
$
14,797,242

 
$
14,541,171

 
$
14,327,368

 
$
13,880,660

 
1
 %
 
8
 %
MSR asset, at fair value
 
141,225

 
141,832

 
142,344

 
142,973

 
114,446

 
0
 %
 
23
 %
MSR as % of serviced portfolio
 
0.94
%
 
0.96
%
 
0.98
 %
 
1.00
%
 
0.82
%
 
(2
)%
 
15
 %
Residential mortgage banking revenue:
 
 

 
 

 
 
 
 
 
 

 


 


Origination and sale
 
$
32,784

 
$
32,385

 
$
24,647

 
$
32,386

 
$
45,631

 
1
 %
 
(28
)%
Servicing
 
9,879

 
9,839

 
9,858

 
9,597

 
9,401

 
0
 %
 
5
 %
Change in fair value of MSR asset
 
(9,233
)
 
(8,330
)
 
(7,671
)
 
16,465

 
(7,826
)
 
11
 %
 
18
 %
Total
 
$
33,430

 
$
33,894

 
$
26,834

 
$
58,448

 
$
47,206

 
(1
)%
 
(29
)%
 
 
 
 
 
 
 
 
 
 
 
 


 


Closed loan volume:
 
 
 
 
 
 
 
 
 
 
 


 


Closed loan volume - portfolio
 
$
336,362

 
$
312,022

 
$
245,334

 
$
250,000

 
$
305,648

 
8
 %
 
10
 %
Closed loan volume - for-sale
 
891,063

 
918,200

 
754,715

 
1,061,327

 
1,118,526

 
(3
)%
 
(20
)%
Closed loan volume - total
 
$
1,227,425

 
$
1,230,222

 
$
1,000,049

 
$
1,311,327

 
$
1,424,174

 
0
 %
 
(14
)%
 
 
 
 
 
 
 
 
 
 
 
 


 


Gain on sale margin:
 
 
 
 
 
 
 
 
 
 
 


 


Based on for-sale volume
 
3.68
%
 
3.53
%
 
3.27
 %
 
3.05
%
 
4.08
%
 
0.15

 
(0.40
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
% Change
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Sep 30, 2017
 
Sep 30, 2016
 
Year over Year
 
 
 
 
 
 
 
 
Residential mortgage banking revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Origination and sale
 
$
89,816

 
$
116,123

 
(23
)%
 
 
 
 
 
 
 
 
Servicing
 
29,576

 
25,683

 
15
 %
 
 
 
 
 
 
 
 
Change in fair value of MSR asset
 
(25,234
)
 
(42,391
)
 
(40
)%
 
 
 
 
 
 
 
 
Total
 
$
94,158

 
$
99,415

 
(5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Closed loan volume:
 
 
 
 
 


 
 
 
 
 
 
 
 
Closed loan volume - portfolio
 
$
893,718

 
$
1,004,492

 
(11
)%
 
 
 
 
 
 
 
 
Closed loan volume - for-sale
 
2,563,978

 
2,928,951

 
(12
)%
 
 
 
 
 
 
 
 
Closed loan volume - total
 
$
3,457,696

 
$
3,933,443

 
(12
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Gain on sale margin:
 
 
 
 
 


 
 
 
 
 
 
 
 
Based on for-sale volume
 
3.50
%
 
3.96
%
 
(0.46
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



###