Allowance for Loan and Lease Loss and Credit Quality (Tables)

9 Months Ended

Sep. 30, 2017

Activity In The Non-Covered Allowance For Loan And Lease Losses

The following tables summarize activity related to the allowance for loan and lease losses by loan and lease portfolio segment for the three and nine months ended September 30, 2017 and 2016:



(in thousands)	Three Months Ended September 30, 2017
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	47,414		$	60,057		$	18,051		$	11,345		$	136,867
Charge-offs	(503		)	(10,504		)	(128		)	(2,087		)	(13,222		)
Recoveries	676			2,121			287			777			3,861
(Recapture) provision	(696		)	9,900			755			2,038			11,997
Balance, end of period	$	46,891		$	61,574		$	18,965		$	12,073		$	139,503

	Three Months Ended September 30, 2016
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	50,584		$	52,355		$	20,146		$	7,957		$	131,042
Charge-offs	(1,071		)	(8,975		)	(915		)	(2,127		)	(13,088		)
Recoveries	628			1,186			137			696			2,647
(Recapture) provision	(2,839		)	12,846			626			2,458			13,091
Balance, end of period	$	47,302		$	57,412		$	19,994		$	8,984		$	133,692




(in thousands)	Nine Months Ended September 30, 2017
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	47,795		$	58,840		$	17,946		$	9,403		$	133,984
Charge-offs	(1,651		)	(31,304		)	(745		)	(6,468		)	(40,168		)
Recoveries	2,533			5,662			597			2,569			11,361
(Recapture) provision	(1,786		)	28,376			1,167			6,569			34,326
Balance, end of period	$	46,891		$	61,574		$	18,965		$	12,073		$	139,503

	Nine Months Ended September 30, 2016
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	54,293		$	47,487		$	22,017		$	6,525		$	130,322
Charge-offs	(2,137		)	(23,224		)	(1,546		)	(6,713		)	(33,620		)
Recoveries	1,348			3,633			661			2,845			8,487
(Recapture) provision	(6,202		)	29,516			(1,138		)	6,327			28,503
Balance, end of period	$	47,302		$	57,412		$	19,994		$	8,984		$	133,692

The valuation allowance on purchased impaired loans was increased by provision expense, which includes amounts related to subsequent deterioration of purchased impaired loans of $96,000 for the nine months ended September 30, 2017, and $1.4 million for the nine months ended September 30, 2016. There was no provision expense that related to subsequent deterioration of purchased impaired loans recorded during the three months ended September 30, 2017 and 2016. The valuation allowance on purchased impaired loans was decreased by recaptured provision of $317,000 and $531,000 for the three and nine months ended September 30, 2017, respectively, and $55,000 and $902,000 for the three and nine months ended September 30, 2016, respectively.

The following tables present the allowance and recorded investment in loans and leases by portfolio segment as of September 30, 2017 and 2016:



(in thousands)	September 30, 2017
	Commercial						Consumer
	Real Estate		Commercial		Residential		& Other		Total
Allowance for loans and leases:
Collectively evaluated for impairment	$	43,792	$	60,809	$	18,383	$	12,045	$	135,029
Individually evaluated for impairment	749		416		—		—		1,165
Loans acquired with deteriorated credit quality	2,350		349		582		28		3,309
Total	$	46,891	$	61,574	$	18,965	$	12,073	$	139,503
Loans and leases:
Collectively evaluated for impairment	$	9,440,129	$	4,054,600	$	4,136,418	$	767,054	$	18,398,201
Individually evaluated for impairment	40,832		32,125		—		—		72,957
Loans acquired with deteriorated credit quality	163,546		4,716		37,874		468		206,604
Total	$	9,644,507	$	4,091,441	$	4,174,292	$	767,522	$	18,677,762



(in thousands)	September 30, 2016
	Commercial						Consumer
	Real Estate		Commercial		Residential		& Other		Total
Allowance for loans and leases:
Collectively evaluated for impairment	$	43,473	$	55,735	$	19,225	$	8,913	$	127,346
Individually evaluated for impairment	1,099		1,327		—		—		2,426
Loans acquired with deteriorated credit quality	2,730		350		769		71		3,920
Total	$	47,302	$	57,412	$	19,994	$	8,984	$	133,692
Loans and leases:
Collectively evaluated for impairment	$	9,051,925	$	3,521,571	$	3,830,060	$	624,708	$	17,028,264
Individually evaluated for impairment	39,737		22,736		—		—		62,473
Loans acquired with deteriorated credit quality	247,340		6,669		46,496		809		301,314
Total	$	9,339,002	$	3,550,976	$	3,876,556	$	625,517	$	17,392,051

Schedule of Reserve for Unfunded Commitments

The following table presents a summary of activity in the RUC and unfunded commitments for the three and nine months ended September 30, 2017 and 2016:



(in thousands)	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Balance, beginning of period	$	3,816	$	3,531	$	3,611	$	3,574
Net charge to other expense	116		5		321		(38		)
Balance, end of period	$	3,932	$	3,536	$	3,932	$	3,536



(in thousands)
	Total
Unfunded loan and lease commitments:
September 30, 2017	$	4,839,882
September 30, 2016	$	4,118,259

Non-Covered Non-Accrual Loans And Loans Past Due

The following tables summarize our non-accrual loans and leases and loans and leases past due, by loan and lease class, as of September 30, 2017 and December 31, 2016:



(in thousands)	September 30, 2017
	Greater than 30 to 59 Days Past Due		60 to 89 Days Past Due		Greater than 90 Days and Accruing		Total Past Due		Non-Accrual		Current & Other (1)		Total Loans and Leases
Commercial real estate
Non-owner occupied term, net	$	258	$	947	$	599	$	1,804	$	3,500	$	3,469,939	$	3,475,243
Owner occupied term, net	2,087		2,397		1		4,485		6,780		2,456,730		2,467,995
Multifamily, net	—		325		—		325		366		2,992,512		2,993,203
Construction & development, net	—		—		—		—		1,091		520,575		521,666
Residential development, net	—		—		—		—		6,153		180,247		186,400
Commercial
Term, net	131		973		—		1,104		13,081		1,805,479		1,819,664
LOC & other, net	583		169		505		1,257		3,700		1,129,088		1,134,045
Leases and equipment finance, net	5,379		8,072		2,411		15,862		9,902		1,111,968		1,137,732
Residential
Mortgage, net (2)	—		5,024		35,532		40,556		—		3,053,805		3,094,361
Home equity loans & lines, net	1,235		1,309		2,023		4,567		—		1,075,364		1,079,931
Consumer & other, net	2,360		1,002		304		3,666		—		763,856		767,522
Total, net of deferred fees and costs	$	12,033	$	20,218	$	41,375	$	73,626	$	44,573	$	18,559,563	$	18,677,762

(1) Other includes purchased credit impaired loans of $206.6 million.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $12.3 million at September 30, 2017.



(in thousands)	December 31, 2016
	Greater than 30 to 59 Days Past Due		60 to 89 Days Past Due		Greater than 90 Days and Accruing		Total Past Due		Non-Accrual		Current & Other (1)		Total Loans and Leases
Commercial real estate
Non-owner occupied term, net	$	718	$	1,027	$	1,047	$	2,792	$	2,100	$	3,325,550	$	3,330,442
Owner occupied term, net	974		4,539		1		5,514		4,391		2,589,150		2,599,055
Multifamily, net	—		—		—		—		476		2,858,480		2,858,956
Construction & development, net	—		—		—		—		—		463,625		463,625
Residential development, net	—		—		—		—		—		142,984		142,984
Commercial
Term, net	319		233		—		552		6,880		1,501,348		1,508,780
LOC & other, net	1,673		27		—		1,700		4,998		1,109,561		1,116,259
Leases and equipment finance, net	5,343		6,865		1,808		14,016		8,920		927,652		950,588
Residential
Mortgage, net (2)	10		3,114		33,703		36,827		—		2,851,144		2,887,971
Home equity loans & lines, net	289		848		2,080		3,217		—		1,008,627		1,011,844
Consumer & other, net	3,261		1,185		587		5,033		—		633,126		638,159
Total, net of deferred fees and costs	$	12,587	$	17,838	$	39,226	$	69,651	$	27,765	$	17,411,247	$	17,508,663

(1) Other includes purchased credit impaired loans of $280.4 million.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $10.9 million at December 31, 2016.

Non-Covered Impaired Loans

The following tables summarize our impaired loans by loan class as of September 30, 2017 and December 31, 2016:



(in thousands)	September 30, 2017
	Unpaid		Recorded Investment
	Principal		Without		With		Related
	Balance		Allowance		Allowance		Allowance
Commercial real estate
Non-owner occupied term, net	$	18,726	$	2,143	$	16,485	$	319
Owner occupied term, net	10,617		4,216		6,039		284
Multifamily, net	3,998		366		3,519		141
Construction & development, net	1,091		1,091		—		—
Residential development, net	6,974		6,153		820		5
Commercial
Term, net	28,340		16,911		5,044		113
LOC & other, net	11,845		3,518		6,652		303
Total, net of deferred fees and costs	$	81,591	$	34,398	$	38,559	$	1,165



(in thousands)	December 31, 2016
	Unpaid		Recorded Investment
	Principal		Without		With		Related
	Balance		Allowance		Allowance		Allowance
Commercial real estate
Non-owner occupied term, net	$	19,797	$	278	$	19,116	$	524
Owner occupied term, net	8,467		1,768		6,445		131
Multifamily, net	4,015		476		3,520		123
Construction & development, net	1,091		—		1,091		9
Residential development, net	7,304		—		7,304		72
Commercial
Term, net	16,875		5,982		3,239		8
LOC & other, net	8,279		4,755		—		—
Total, net of deferred fees and costs	$	65,828	$	13,259	$	40,715	$	867

The following tables summarize our average recorded investment and interest income recognized on impaired loans by loan class for the three and nine months ended September 30, 2017 and 2016:



(in thousands)	Three Months Ended				Three Months Ended
	September 30, 2017				September 30, 2016
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Commercial real estate
Non-owner occupied term, net	$	18,706	$	149	$	18,544	$	155
Owner occupied term, net	10,159		14		3,682		—
Multifamily, net	3,890		30		4,209		31
Construction & development, net	1,091		—		1,860		21
Residential development, net	7,096		13		7,671		77
Commercial
Term, net	19,269		88		17,884		67
LOC & other, net	7,560		5		4,536		20
Leases and equipment finance, net	137		—		—		—
Total, net of deferred fees and costs	$	67,908	$	299	$	58,386	$	371




(in thousands)	Nine Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2016
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Commercial real estate
Non-owner occupied term, net	$	17,220	$	447	$	12,634	$	350
Owner occupied term, net	9,556		141		7,950		86
Multifamily, net	3,914		91		3,792		91
Construction & development, net	1,201		22		1,412		61
Residential development, net	7,270		163		7,871		238
Commercial
Term, net	16,048		242		21,223		180
LOC & other, net	6,263		55		3,686		60
Leases and equipment finance, net	185		—		—		—
Total, net of deferred fees and costs	$	61,657	$	1,161	$	58,568	$	1,066

Internal Risk Rating By Loan Class

The following tables summarize our internal risk rating by loan and lease class for the loan and lease portfolio, including purchased credit impaired loans, as of September 30, 2017 and December 31, 2016:



(in thousands)	September 30, 2017
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired (1)		Total
Commercial real estate
Non-owner occupied term, net	$	3,381,062	$	40,560	$	34,711	$	282	$	—	$	18,628	$	3,475,243
Owner occupied term, net	2,374,238		43,483		39,662		—		357		10,255		2,467,995
Multifamily, net	2,963,655		16,695		8,968		—		—		3,885		2,993,203
Construction & development, net	516,139		1,934		2,502		—		—		1,091		521,666
Residential development, net	178,239		—		1,188		—		—		6,973		186,400
Commercial
Term, net	1,773,745		9,176		14,700		85		3		21,955		1,819,664
LOC & other, net	1,082,301		10,005		31,293		276		—		10,170		1,134,045
Leases and equipment finance, net	1,111,968		5,379		8,072		11,148		1,165		—		1,137,732
Residential
Mortgage, net (2)	3,050,451		6,071		35,919		—		1,920		—		3,094,361
Home equity loans & lines, net	1,074,788		2,942		2,119		—		82		—		1,079,931
Consumer & other, net	763,815		3,367		302		—		38		—		767,522
Total, net of deferred fees and costs	$	18,270,401	$	139,612	$	179,436	$	11,791	$	3,565	$	72,957	$	18,677,762

(1) The percentage of impaired loans classified as pass/watch, special mention, and substandard was 5.8%, 1.1% and 93.1%, respectively, as of September 30, 2017.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $12.3 million at September 30, 2017, which is included in the substandard category.



(in thousands)	December 31, 2016
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired (1)		Total
Commercial real estate
Non-owner occupied term, net	$	3,205,241	$	55,194	$	48,699	$	1,368	$	546	$	19,394	$	3,330,442
Owner occupied term, net	2,466,247		75,189		46,781		972		1,653		8,213		2,599,055
Multifamily, net	2,828,370		11,903		14,687		—		—		3,996		2,858,956
Construction & development, net	458,328		1,712		2,494		—		—		1,091		463,625
Residential development, net	134,491		—		1,189		—		—		7,304		142,984
Commercial
Term, net	1,458,699		15,716		24,678		119		347		9,221		1,508,780
LOC & other, net	1,063,305		10,565		37,387		3		244		4,755		1,116,259
Leases and equipment finance, net	927,378		5,614		6,866		9,752		978		—		950,588
Residential
Mortgage, net (2)	2,830,547		1,803		53,607		—		2,014		—		2,887,971
Home equity loans & lines, net	1,006,647		1,490		2,727		—		980		—		1,011,844
Consumer & other, net	633,098		4,446		527		—		88		—		638,159
Total, net of deferred fees and costs	$	17,012,351	$	183,632	$	239,642	$	12,214	$	6,850	$	53,974	$	17,508,663

(1) The percentage of impaired loans classified as pass/watch, special mention, substandard and doubtful was 8.1%, 6.5%, 82.5%, and 2.9%, respectively, as of December 31, 2016.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $10.9 million at December 31, 2016, which is included in the substandard category.

Schedule Of Troubled Debt Restructurings

The following tables present newly restructured loans that occurred during the three and nine months ended September 30, 2017 and 2016:



(in thousands)	Three Months Ended September 30, 2017
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial real estate, net	$	—	$	—	$	—	$	—	$	5,086	$	5,086
Commercial, net	—		—		—		—		9,053		9,053
Residential, net	—		187		—		—		—		187
Total, net of deferred fees and costs	$	—	$	187	$	—	$	—	$	14,139	$	14,326

	Three Months Ended September 30, 2016
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial, net	$	—	$	—	$	—	$	—	$	1,009	$	1,009
Residential, net	—		—		—		—		2,117		2,117
Total, net of deferred fees and costs	$	—	$	—	$	—	$	—	$	3,126	$	3,126




	Nine Months Ended September 30, 2017
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial real estate, net	$	—	$	—	$	—	$	—	$	5,086	$	5,086
Commercial, net	—		—		—		—		21,846		21,846
Residential, net	—		187		—		—		1,134		1,321
Total, net of deferred fees and costs	$	—	$	187	$	—	$	—	$	28,066	$	28,253

(in thousands)	Nine Months Ended September 30, 2016
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial real estate, net	$	—	$	—	$	—	$	—	$	5,659	$	5,659
Commercial, net	—		—		—		—		4,405		4,405
Residential, net	—		—		—		—		2,845		2,845
Consumer & other, net	—		—		—		—		77		77
Total, net of deferred fees and costs	$	—	$	—	$	—	$	—	$	12,986	$	12,986

The following tables present troubled debt restructurings by accrual versus non-accrual status and by loan class as of September 30, 2017 and December 31, 2016:



(in thousands)	September 30, 2017
	Accrual		Non-Accrual		Total
	Status		Status		Modifications
Commercial real estate, net	$	22,807	$	7,244	$	30,051
Commercial, net	16,439		11,654		28,093
Residential, net	6,567		—		6,567
Total, net of deferred fees and costs	$	45,813	$	18,898	$	64,711



(in thousands)	December 31, 2016
	Accrual		Non-Accrual		Total
	Status		Status		Modifications
Commercial real estate, net	$	30,563	$	—	$	30,563
Commercial, net	3,054		3,345		6,399
Residential, net	7,050		—		7,050
Total, net of deferred fees and costs	$	40,667	$	3,345	$	44,012