0001077771-18-000112.txt : 20180718 0001077771-18-000112.hdr.sgml : 20180718 20180718163103 ACCESSION NUMBER: 0001077771-18-000112 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 22 CONFORMED PERIOD OF REPORT: 20180718 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180718 DATE AS OF CHANGE: 20180718 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UMPQUA HOLDINGS CORP CENTRAL INDEX KEY: 0001077771 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 931261319 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34624 FILM NUMBER: 18958695 BUSINESS ADDRESS: STREET 1: ONE SW COLUMBIA STREET STREET 2: SUITE 1200 CITY: PORTLAND STATE: OR ZIP: 97258 BUSINESS PHONE: 503-727-4100 MAIL ADDRESS: STREET 1: ONE SW COLUMBIA STREET STREET 2: SUITE 1200 CITY: PORTLAND STATE: OR ZIP: 97258 8-K 1 umpq-201806308k.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
 
 
Date of Report: July 18, 2018
(Date of earliest event reported)
 
Umpqua Holdings Corporation
(Exact Name of Registrant as Specified in Its Charter)
 
 
OREGON
(State or Other Jurisdiction of Incorporation or Organization)
001-34624
(Commission File Number)
93-1261319
(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)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[  ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[  ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]





Item 2.02
Results of Operations and Financial Condition.
 
On July 18, 2018, Umpqua Holdings Corporation issued a press release announcing second quarter 2018 financial results. The release is attached hereto as Exhibit 99.1. The information included in the press release is considered to be "furnished" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Umpqua Holdings Corporation will include final financial statements and additional analyses for the quarter ended June 30, 2018 as part of its quarterly report on Form 10-Q covering that period.
 
Item 7.01
Regulation FD Disclosure.
 
Umpqua Holdings Corporation is filing an investor slide presentation that it intends to review in conjunction with its earnings release conference call on July 19, 2018. The slides are included as Exhibit 99.2 to this report and shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
UMPQUA HOLDINGS CORPORATION
(Registrant)
 
Dated: July 18, 2018
By:/s/ Andrew H. Ognall
Andrew H. Ognall
Executive Vice President, General Counsel and Secretary




EX-99.1 2 umpq-20180630ex991earnings.htm PRESS RELEASE ANNOUNCING SECOND QUARTER 2018 FINANCIAL RESULTS Exhibit

EXHIBIT 99.1 
 
 umpquaholdingsa01a02a01a11.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 SECOND QUARTER 2018 RESULTS

Net earnings of $67.8 million, or $0.31 per common share
Quarterly loan and lease growth of $379.4 million, or 8% annualized, and deposit growth of $637.7 million, or 13% annualized
Organization simplification and design complete, results include pre-tax restructuring charges of $8.2 million

PORTLAND, Ore. – July 18, 2018 Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $67.8 million for the second quarter of 2018, compared to $77.7 million for the first quarter of 2018 and $56.8 million for the second quarter of 2017. Earnings per diluted common share were $0.31 for the second quarter of 2018, compared to $0.35 for the first quarter of 2018 and $0.26 for the second quarter of 2017.

“Our second quarter results were highlighted by strong growth in loans and deposits, higher net interest income and stable credit quality,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “Building on the foundation of Umpqua Next Gen, during the second quarter we completed important elements of our operational excellence initiative, including organizational simplification and design phases, while advancing our human digital strategy. We are starting to see good traction from these Phase I levers, and remain on pace to deliver on the previously announced $18 to $24 million in annual savings.”

Notable items that impacted the second quarter 2018 financial results included:

$8.2 million in restructuring charges related to the organization simplification and design and procurement phases of Umpqua Next Gen, including $4.1 million in severance-related expense and $4.1 million in professional fees. This compares to $0.8 million in severance-related expense and $2.7 in professional fees in the prior quarter.
$5.4 million negative adjustment related to the fair value change of the MSR asset, compared to $5.1 million gain in the prior quarter and $8.3 million negative adjustment in the same period of the prior year.
$0.3 million gain related to the fair value change of the debt capital market swap derivatives, compared to a gain of $1.1 million in the prior quarter and a loss of $0.8 million in the same period of the prior year.
$2.6 million of exit or disposal costs, compared to $2.5 million in the prior quarter and $0.7 million in the same period of the prior year.
$1.4 million unrealized holding loss on equity securities, compared to no gain or loss recorded in the prior quarters.



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 2


Second Quarter 2018 Highlights (compared to prior quarter):

Net interest income increased by $4.1 million, or 2%, attributable to the strong growth in loans and leases and the benefit from increases in short-term interest rates;
Provision for loan and lease losses decreased by $0.3 million, driven primarily by lower net charge-offs, which decreased by four basis points to 0.22% of average loans and leases (annualized);
Non-interest income decreased by $6.9 million, reflecting the $10.5 million linked quarter change in fair value of the MSR asset (see notable items above), partially offset by higher net revenue from the origination and sale of residential mortgages;
Non-interest expense increased by $9.5 million, driven primarily by higher restructuring charges (see notable items above) and higher mortgage banking-related expense, consistent with the increase in mortgage originations;
Non-performing assets to total assets increased by one basis point to 0.34%;
Estimated total risk-based capital ratio of 13.7% and estimated Tier 1 common to risk weighted assets ratio of 10.8%;
Declared quarterly cash dividend of $0.20 per common share; and
Repurchased 327,000 shares of common stock for $8.0 million.

Balance Sheet
Total consolidated assets were $26.5 billion as of June 30, 2018, compared to $25.9 billion as of March 31, 2018 and $25.3 billion as of June 30, 2017. Including secured off-balance sheet lines of credit, total available liquidity was $10.4 billion as of June 30, 2018, representing 39% of total assets and 50% of total deposits.
 
Gross loans and leases were $19.7 billion as of June 30, 2018, an increase of $379.4 million, or 8% annualized, from $19.3 billion as of March 31, 2018. This increase reflects balanced growth within the commercial term, leasing, multifamily, and residential mortgage loan portfolios, partially offset by a decline in consumer loans attributable to the Company's decision to wind down its indirect auto loan business.

Total deposits were $20.7 billion as of June 30, 2018, an increase of $637.7 million, or 13% annualized, from $20.1 billion as of March 31, 2018. This increase was attributable to higher balances of time and non-interest bearing deposits, partially offset by lower money market deposits.
 
Net Interest Income
Net interest income was $227.3 million for the second quarter of 2018, up $4.1 million from the prior quarter. This increase reflects higher average loans and leases, driven by strong growth during the quarter, as well as higher average yields on earning assets from the short-term rate increases. Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) increased by $1.7 million from the prior quarter level, driven by a higher level of accretion on credit impaired loans associated with higher pay-offs.

The Company’s net interest margin was 3.93% for the second quarter of 2018, down 3 basis points from 3.96% for the first quarter of 2018, reflecting an increase in the cost of interest bearing liabilities and a higher average balance of interest-bearing cash, partially offset by higher average yields on interest-earning assets. The increase in the cost of interest-bearing liabilities was attributable to an increase in average rates paid on interest-bearing deposits, as well as a higher percentage mix of time deposits, relative to the prior quarter.

Credit Quality
The allowance for loan and lease losses was $144.6 million, or 0.73% of loans and leases, as of June 30, 2018. During the second quarter of 2018, the Company recorded $6.0 million of accretion related to the credit discount on acquired loans from Sterling, compared to $4.3 million in the prior quarter. As of June 30, 2018, the Sterling purchased non-credit impaired loans had approximately $19.3 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 $21.6 million of remaining total discount.



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 3


The provision for loan and lease losses was $13.3 million for the second quarter of 2018, a decrease of $0.3 million from the prior quarter level, driven primarily by lower net charge-offs, which decreased by four basis points to 0.22% of average loans and leases (annualized). As of June 30, 2018, non-performing assets were 0.34% of total assets, compared to 0.33% as of March 31, 2018 and 0.23% as of June 30, 2017.

Non-interest Income
Non-interest income was $71.7 million for the second quarter of 2018, down $6.9 million from the prior quarter, reflecting the negative linked quarter fair value change on the MSR asset (see notable items above), partially offset by an increase in net revenue from the origination and sale of residential mortgages.

Net revenue from the origination and sale of residential mortgages was $28.2 million for the second quarter of 2018, up $5.3 million from the prior quarter, reflecting stronger seasonal purchase activity. For-sale mortgage origination volume increased by 22% from the prior quarter, and the home lending gain on sale margin increased by 3 basis points to 3.35% for the second quarter of 2018. Of the current quarter’s mortgage production, 81% related to purchase activity, compared to 68% for the prior quarter and 77% for the same period of the prior year.

Non-interest Expense
Non-interest expense was $195.6 million for the second quarter of 2018, and included $8.2 million in restructuring charges related to the organization simplification and design and procurement phases of Umpqua Next Gen. Excluding the impact of restructuring charges, non-interest expense increased by $4.7 million from the prior quarter. This increase included $2.6 million in higher mortgage banking-related expense, reflecting the increase in mortgage originations, and $1.3 million in higher marketing expense.
   
Capital
As of June 30, 2018, the Company’s tangible book value per common share1 was $10.02, compared to $9.97 in the prior quarter and $9.71 in the same period of the prior year. During the second quarter of 2018, the Company repurchased 327,000 shares of common stock for $8.0 million.

The Company’s estimated total risk-based capital ratio was 13.7% and its estimated Tier 1 common to risk weighted
assets ratio was 10.8% as of June 30, 2018. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of June 30, 2018 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 Second Quarter 2018 Results
July 18, 2018
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)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
Total shareholders' equity
 
$
4,021,643

 
$
4,013,882

 
$
4,014,786

 
$
3,985,260

 
$
3,958,845

Subtract:
 
 

 
 

 
 
 
 
 
 

Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

Other intangible assets, net
 
27,047

 
28,589

 
30,130

 
31,819

 
33,508

Tangible common shareholders' equity
 
$
2,206,945

 
$
2,197,642

 
$
2,197,005

 
$
2,165,790

 
$
2,137,686

Total assets
 
$
26,533,230

 
$
25,875,643

 
$
25,741,439

 
$
25,695,663

 
$
25,257,784

Subtract:
 
 

 
 

 
 
 
 
 
 

Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

Other intangible assets, net
 
27,047

 
28,589

 
30,130

 
31,819

 
33,508

Tangible assets
 
$
24,718,532

 
$
24,059,403

 
$
23,923,658

 
$
23,876,193

 
$
23,436,625

Common shares outstanding at period end
 
220,205

 
220,461

 
220,149

 
220,225

 
220,205

 
 
 
 
 
 
 
 
 
 
 
Total shareholders' equity to total assets ratio
 
15.16
%
 
15.51
%
 
15.60
%
 
15.51
%
 
15.67
%
Tangible common equity ratio
 
8.93
%
 
9.13
%
 
9.18
%
 
9.07
%
 
9.12
%
Book value per common share
 
$
18.26

 
$
18.21

 
$
18.24

 
$
18.10

 
$
17.98

Tangible book value per common share
 
$
10.02

 
$
9.97

 
$
9.98

 
$
9.83

 
$
9.71




Umpqua Reports Second Quarter 2018 Results
July 18, 2018
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 enterprise software and innovation company headquartered in Silicon Valley. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.
 
Earnings Conference Call Information
The Company will host its second quarter 2018 earnings conference call on Thursday, July 19, 2018, at 10:00 a.m. PDT (1:00 p.m. EDT). During the call, the Company will provide an update on recent activities and discuss its second quarter 2018 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (888) 505-4378 ten minutes prior to the start time and enter conference ID: 5308253. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 5308253. 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 corporate initiatives and related cost savings. 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 and operational excellence initiatives on time and in amounts projected; our ability to successfully develop and market new products and technology; and changes in laws or regulations.


Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 6


Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
 
 
Quarter Ended
 
% Change
(In thousands, except per share data)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
 
$
237,343

 
$
227,738

 
$
223,206

 
$
223,321

 
$
212,998

 
4
 %
 
11
 %
Interest and dividends on investments:
 
 
 
 

 
 
 
 
 
 
 


 


Taxable
 
15,678

 
15,699

 
14,857

 
13,979

 
15,220

 
0
 %
 
3
 %
Exempt from federal income tax
 
2,057

 
2,128

 
2,121

 
2,125

 
2,237

 
(3
)%
 
(8
)%
Dividends
 
433

 
468

 
386

 
357

 
360

 
(7
)%
 
20
 %
Temporary investments and interest bearing deposits
 
2,080

 
1,164

 
1,565

 
934

 
324

 
79
 %
 
542
 %
Total interest income
 
257,591

 
247,197

 
242,135

 
240,716

 
231,139

 
4
 %
 
11
 %
Interest expense:
 
 

 
 

 
 

 
 

 
 

 


 


Deposits
 
21,259

 
15,610

 
13,241

 
12,052

 
10,641

 
36
 %
 
100
 %
Securities sold under agreement to repurchase and federal funds purchased
 
155

 
63

 
43

 
81

 
321

 
146
 %
 
(52
)%
Term debt
 
3,478

 
3,361

 
3,496

 
3,491

 
3,662

 
3
 %
 
(5
)%
Junior subordinated debentures
 
5,400

 
4,932

 
4,734

 
4,628

 
4,437

 
9
 %
 
22
 %
Total interest expense
 
30,292

 
23,966

 
21,514

 
20,252

 
19,061

 
26
 %
 
59
 %
Net interest income
 
227,299

 
223,231

 
220,621

 
220,464

 
212,078

 
2
 %
 
7
 %
Provision for loan and lease losses
 
13,319

 
13,656

 
12,928

 
11,997

 
10,657

 
(2
)%
 
25
 %
Non-interest income:
 
 

 
 

 
 

 
 

 
 

 


 


Service charges on deposits
 
15,520

 
14,995

 
15,413

 
15,849

 
15,478

 
4
 %
 
0
 %
Brokerage revenue
 
4,161

 
4,194

 
4,226

 
3,832

 
3,903

 
(1
)%
 
7
 %
Residential mortgage banking revenue, net
 
33,163

 
38,438

 
42,118

 
33,430

 
33,894

 
(14
)%
 
(2
)%
Gain (loss) on sale of investment securities, net
 
14

 

 

 
(6
)
 
35

 
nm

 
(60
)%
Unrealized holding losses on equity securities not held for trading
 
(1,432
)
 

 

 

 

 
nm

 
nm

Gain on loan sales, net
 
1,348

 
1,230

 
3,688

 
7,969

 
3,310

 
10
 %
 
(59
)%
Loss on junior subordinated debentures carried at fair value
 

 

 
(10,010
)
 
(1,590
)
 
(1,572
)
 
0
 %
 
(100
)%
BOLI income
 
2,060

 
2,070

 
2,015

 
2,041

 
2,089

 
0
 %
 
(1
)%
Other income
 
16,817

 
17,640

 
13,000

 
13,877

 
13,982

 
(5
)%
 
20
 %
Total non-interest income
 
71,651

 
78,567

 
70,450

 
75,402

 
71,119

 
(9
)%
 
1
 %
Non-interest expense:
 
 

 
 

 
 

 
 

 
 

 


 


Salaries and employee benefits
 
113,340

 
106,551

 
114,414

 
108,732

 
108,561

 
6
 %
 
4
 %
Occupancy and equipment, net
 
37,584

 
38,661

 
37,269

 
37,648

 
36,955

 
(3
)%
 
2
 %
Intangible amortization
 
1,542

 
1,541

 
1,689

 
1,689

 
1,689

 
0
 %
 
(9
)%
FDIC assessments
 
4,692

 
4,480

 
2,075

 
4,405

 
4,447

 
5
 %
 
6
 %
Gain on other real estate owned, net
 
(92
)
 
(38
)
 
(83
)
 
(99
)
 
(457
)
 
142
 %
 
(80
)%
Merger related expenses
 

 

 

 
6,664

 
1,640

 
0
 %
 
(100
)%
Other expenses
 
38,506

 
34,918

 
37,422

 
29,315

 
31,186

 
10
 %
 
23
 %
Total non-interest expense
 
195,572

 
186,113

 
192,786

 
188,354

 
184,021

 
5
 %
 
6
 %
Income before provision for income taxes
 
90,059

 
102,029

 
85,357

 
95,515

 
88,519

 
(12
)%
 
2
 %
Provision for income taxes
 
22,273

 
24,360

 
3,486

 
34,182

 
31,707

 
(9
)%
 
(30
)%
Net income
 
67,786

 
77,669

 
81,871

 
61,333

 
56,812

 
(13
)%
 
19
 %
Dividends and undistributed earnings allocated to participating securities
 
4

 
6

 
16

 
14

 
14

 
(33
)%
 
(71
)%
Net earnings available to common shareholders
 
$
67,782

 
$
77,663

 
$
81,855

 
$
61,319

 
$
56,798

 
(13
)%
 
19
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Weighted average basic shares outstanding
 
220,283

 
220,370

 
220,194

 
220,215

 
220,310

 
0
 %
 
0
 %
Weighted average diluted shares outstanding
 
220,647

 
220,825

 
220,873

 
220,755

 
220,753

 
0
 %
 
0
 %
Earnings per common share – basic
 
$
0.31

 
$
0.35

 
$
0.37

 
$
0.28

 
$
0.26

 
(11
)%
 
19
 %
Earnings per common share – diluted
 
$
0.31

 
$
0.35

 
$
0.37

 
$
0.28

 
$
0.26

 
(11
)%
 
19
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nm = not meaningful
 
 

 
 

 
 

 
 

 
 

 
 
 
 


Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 7


Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
 
 
Six Months Ended
 
% Change
(In thousands, except per share data)
 
Jun 30, 2018
 
Jun 30, 2017
 
Year over Year
Interest income
 
 
 
 
 
 
Loans and leases
 
$
465,081

 
$
418,994

 
11
 %
Interest and dividends on investments:
 
 
 
 
 
 

Taxable
 
31,377

 
29,151

 
8
 %
Exempt from federal income tax
 
4,185

 
4,479

 
(7
)%
Dividends
 
901

 
748

 
20
 %
Temporary investments and interest bearing deposits
 
3,244

 
1,881

 
72
 %
Total interest income
 
504,788

 
455,253

 
11
 %
Interest expense
 
 

 
 
 


Deposits
 
36,869

 
20,289

 
82
 %
Securities sold under agreement to repurchase and federal funds purchased
 
218

 
351

 
(38
)%
Term debt
 
6,839

 
7,172

 
(5
)%
Junior subordinated debentures
 
10,332

 
8,638

 
20
 %
Total interest expense
 
54,258

 
36,450

 
49
 %
Net interest income
 
450,530

 
418,803

 
8
 %
Provision for loan and lease losses
 
26,975

 
22,329

 
21
 %
Non-interest income
 
 

 
 
 


Service charges on deposits
 
30,515

 
30,207

 
1
 %
Brokerage revenue
 
8,355

 
8,025

 
4
 %
Residential mortgage banking revenue, net
 
71,601

 
60,728

 
18
 %
Gain on sale of investment securities, net
 
14

 
33

 
(58
)%
Unrealized holding losses on equity securities not held for trading
 
(1,432
)
 

 
nm

Gain on loan sales, net
 
2,578

 
5,064

 
(49
)%
Loss on junior subordinated debentures carried at fair value
 

 
(3,127
)
 
(100
)%
BOLI income
 
4,130

 
4,158

 
(1
)%
Other income
 
34,457

 
26,256

 
31
 %
Total non-interest income
 
150,218

 
131,344

 
14
 %
Non-interest expense
 
 

 
 
 


Salaries and employee benefits
 
219,891

 
215,034

 
2
 %
Occupancy and equipment, net
 
76,245

 
75,628

 
1
 %
Intangible amortization
 
3,083

 
3,378

 
(9
)%
FDIC assessments
 
9,172

 
8,534

 
7
 %
Gain on other real estate owned, net
 
(130
)
 
(375
)
 
(65
)%
Merger related expenses
 

 
2,660

 
(100
)%
Other expenses
 
73,424

 
61,876

 
19
 %
Total non-interest expense
 
381,685

 
366,735

 
4
 %
Income before provision for income taxes
 
192,088

 
161,083

 
19
 %
Provision for income taxes
 
46,633

 
58,268

 
(20
)%
Net income
 
145,455

 
102,815

 
41
 %
Dividends and undistributed earnings allocated to participating securities
 
10

 
26

 
(62
)%
Net earnings available to common shareholders
 
$
145,445

 
$
102,789

 
41
 %
 
 
 
 
 
 


Weighted average basic shares outstanding
 
220,326

 
220,298

 
0
 %
Weighted average diluted shares outstanding
 
220,760

 
220,790

 
0
 %
Earnings per common share – basic
 
$
0.66

 
$
0.47

 
40
 %
Earnings per common share – diluted
 
$
0.66

 
$
0.47

 
40
 %
 
 
 
 
 
 
 
nm = not meaningful
 
 

 
 

 
 



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 8


Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
% Change
(In thousands, except per share data)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
314,513

 
$
304,681

 
$
330,856

 
$
304,760

 
$
320,027

 
3
 %
 
(2
)%
Interest bearing cash and temporary investments
 
488,499

 
264,508

 
303,424

 
540,806

 
295,937

 
85
 %
 
65
 %
Investment securities:
 
 

 
 

 
 

 
 

 
 

 


 


Equity and other, at fair value
 
64,297

 
63,295

 
12,255

 
11,919

 
11,467

 
2
 %
 
461
 %
Available for sale, at fair value
 
2,854,398

 
2,947,414

 
3,065,769

 
3,047,358

 
3,132,566

 
(3
)%
 
(9
)%
Held to maturity, at amortized cost
 
3,586

 
3,667

 
3,803

 
3,905

 
4,017

 
(2
)%
 
(11
)%
Loans held for sale, at fair value
 
432,642

 
299,739

 
259,518

 
417,470

 
451,350

 
44
 %
 
(4
)%
Loans and leases
 
19,693,955

 
19,314,589

 
19,080,184

 
18,677,762

 
18,321,142

 
2
 %
 
7
 %
Allowance for loan and lease losses
 
(144,556
)
 
(141,933
)
 
(140,608
)
 
(139,503
)
 
(136,867
)
 
2
 %
 
6
 %
Loans and leases, net
 
19,549,399

 
19,172,656

 
18,939,576

 
18,538,259

 
18,184,275

 
2
 %
 
8
 %
Restricted equity securities
 
42,320

 
43,501

 
43,508

 
45,509

 
45,511

 
(3
)%
 
(7
)%
Premises and equipment, net
 
245,954

 
259,354

 
269,182

 
276,316

 
288,853

 
(5
)%
 
(15
)%
Goodwill
 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
1,787,651

 
0
 %
 
0
 %
Other intangible assets, net
 
27,047

 
28,589

 
30,130

 
31,819

 
33,508

 
(5
)%
 
(19
)%
Residential mortgage servicing rights, at fair value
 
166,217

 
164,760

 
153,151

 
141,225

 
141,832

 
1
 %
 
17
 %
Other real estate owned
 
12,101

 
13,055

 
11,734

 
4,160

 
4,804

 
(7
)%
 
152
 %
Bank owned life insurance
 
309,844

 
307,745

 
306,864

 
305,572

 
303,894

 
1
 %
 
2
 %
Other assets
 
234,762

 
215,028

 
224,018

 
238,934

 
252,092

 
9
 %
 
(7
)%
Total assets
 
$
26,533,230

 
$
25,875,643

 
$
25,741,439

 
$
25,695,663

 
$
25,257,784

 
3
 %
 
5
 %
Liabilities:
 
 

 
 

 
 

 
 

 
 

 


 


Deposits
 
$
20,744,526

 
$
20,106,856

 
$
19,948,300

 
$
19,851,910

 
$
19,459,950

 
3
 %
 
7
 %
Securities sold under agreements to repurchase
 
273,666

 
291,984

 
294,299

 
321,542

 
330,189

 
(6
)%
 
(17
)%
Term debt
 
801,739

 
801,868

 
802,357

 
852,306

 
852,219

 
0
 %
 
(6
)%
Junior subordinated debentures, at fair value
 
280,669

 
278,410

 
277,155

 
266,875

 
265,423

 
1
 %
 
6
 %
Junior subordinated debentures, at amortized cost
 
88,838

 
88,895

 
100,609

 
100,690

 
100,770

 
0
 %
 
(12
)%
Deferred tax liability, net
 
39,328

 
39,277

 
37,503

 
51,423

 
34,296

 
0
 %
 
15
 %
Other liabilities
 
282,821

 
254,471

 
266,430

 
265,657

 
256,092

 
11
 %
 
10
 %
Total liabilities
 
22,511,587

 
21,861,761

 
21,726,653

 
21,710,403

 
21,298,939

 
3
 %
 
6
 %
Shareholders' equity:
 
 

 
 

 
 

 
 

 
 

 


 


Common stock
 
3,509,146

 
3,515,506

 
3,517,258

 
3,516,558

 
3,514,094

 
0
 %
 
0
 %
Retained earnings
 
569,933

 
546,330

 
522,520

 
476,226

 
454,802

 
4
 %
 
25
 %
Accumulated other comprehensive loss
 
(57,436
)
 
(47,954
)
 
(24,992
)
 
(7,524
)
 
(10,051
)
 
20
 %
 
471
 %
Total shareholders' equity
 
4,021,643

 
4,013,882

 
4,014,786

 
3,985,260

 
3,958,845

 
0
 %
 
2
 %
Total liabilities and shareholders' equity
 
$
26,533,230

 
$
25,875,643

 
$
25,741,439

 
$
25,695,663

 
$
25,257,784

 
3
 %
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Common shares outstanding at period end
 
220,205

 
220,461

 
220,149

 
220,225

 
220,205

 
0
 %
 
0
 %
Book value per common share
 
$
18.26

 
$
18.21

 
$
18.24

 
$
18.10

 
$
17.98

 
0
 %
 
2
 %
Tangible book value per common share
 
$
10.02

 
$
9.97

 
$
9.98

 
$
9.83

 
$
9.71

 
1
 %
 
3
 %
Tangible equity - common
 
$
2,206,945

 
$
2,197,642

 
$
2,197,005

 
$
2,165,790

 
$
2,137,686

 
0
 %
 
3
 %
Tangible common equity to tangible assets
 
8.93
%
 
9.13
%
 
9.18
%
 
9.07
%
 
9.12
%
 
(0.20
)
 
(0.19
)


Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 9


Umpqua Holdings Corporation
Loan and Lease Portfolio
(Unaudited)
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
% Change
 
 
Amount
 
Amount
 
Amount
 
Amount
 
Amount
 
Seq. Quarter
 
Year over Year
Loans and leases:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Commercial real estate:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Non-owner occupied term, net
 
$
3,525,001

 
$
3,526,221

 
$
3,491,137

 
$
3,475,243

 
$
3,401,679

 
0
 %
 
4
 %
Owner occupied term, net
 
2,484,960

 
2,476,287

 
2,488,251

 
2,467,995

 
2,593,395

 
0
 %
 
(4
)%
Multifamily, net
 
3,210,796

 
3,131,275

 
3,087,792

 
2,993,203

 
2,964,851

 
3
 %
 
8
 %
Construction & development, net
 
568,572

 
522,680

 
540,707

 
521,666

 
464,690

 
9
 %
 
22
 %
Residential development, net
 
183,114

 
179,871

 
165,865

 
186,400

 
165,956

 
2
 %
 
10
 %
Commercial:
 
 
 
 
 
 
 
 
 
 
 


 


Term, net
 
2,106,804

 
2,025,213

 
1,944,987

 
1,819,664

 
1,686,597

 
4
 %
 
25
 %
Lines of credit & other, net
 
1,152,841

 
1,147,028

 
1,166,173

 
1,134,045

 
1,153,409

 
1
 %
 
0
 %
Leases & equipment finance, net
 
1,265,843

 
1,228,709

 
1,167,503

 
1,137,732

 
1,082,651

 
3
 %
 
17
 %
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 


 


Mortgage, net
 
3,414,216

 
3,283,945

 
3,192,185

 
3,094,361

 
3,021,331

 
4
 %
 
13
 %
Home equity loans & lines, net
 
1,136,378

 
1,107,822

 
1,103,297

 
1,079,931

 
1,056,848

 
3
 %
 
8
 %
   Consumer & other, net
 
645,430

 
685,538

 
732,287

 
767,522

 
729,735

 
(6
)%
 
(12
)%
Total, net of deferred fees and costs
 
$
19,693,955

 
$
19,314,589

 
$
19,080,184

 
$
18,677,762

 
$
18,321,142

 
2
 %
 
7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan and leases mix:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Non-owner occupied term, net
 
18
%
 
18
%
 
18
%
 
19
%
 
19
%
 
 
 
 
   Owner occupied term, net
 
13
%
 
13
%
 
13
%
 
13
%
 
14
%
 
 
 
 
   Multifamily, net
 
16
%
 
16
%
 
16
%
 
16
%
 
16
%
 
 
 
 
Construction & development, net
 
3
%
 
3
%
 
3
%
 
3
%
 
3
%
 
 
 
 
Residential development, net
 
1
%
 
1
%
 
1
%
 
1
%
 
1
%
 
 
 
 
Commercial:
 
 

 
 
 


 


 


 
 
 
 
Term, net
 
11
%
 
10
%
 
10
%
 
10
%
 
9
%
 
 
 
 
Lines of credit & other, net
 
6
%
 
6
%
 
6
%
 
6
%
 
6
%
 
 
 
 
Leases & equipment finance, net
 
6
%
 
6
%
 
6
%
 
6
%
 
6
%
 
 
 
 
Residential real estate:
 
 

 


 


 


 


 
 
 
 
Mortgage, net
 
17
%
 
17
%
 
17
%
 
16
%
 
16
%
 
 
 
 
Home equity loans & lines, net
 
6
%
 
6
%
 
6
%
 
6
%
 
6
%
 
 
 
 
   Consumer & other, net
 
3
%
 
4
%
 
4
%
 
4
%
 
4
%
 
 
 
 
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 




Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 10


Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
% Change
 
 
Amount
 
Amount
 
Amount
 
Amount
 
Amount
 
Seq. Quarter
 
Year over Year
Deposits:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

Demand, non-interest bearing
 
$
6,819,325

 
$
6,699,399

 
$
6,505,628

 
$
6,571,471

 
$
6,112,480

 
2
 %
 
12
 %
Demand, interest bearing
 
2,321,691

 
2,354,873

 
2,384,133

 
2,394,240

 
2,371,386

 
(1
)%
 
(2
)%
Money market
 
6,161,907

 
6,546,704

 
7,037,891

 
6,700,261

 
6,755,707

 
(6
)%
 
(9
)%
Savings
 
1,465,154

 
1,482,560

 
1,446,860

 
1,444,801

 
1,427,677

 
(1
)%
 
3
 %
Time
 
3,976,449

 
3,023,320

 
2,573,788

 
2,741,137

 
2,792,700

 
32
 %
 
42
 %
Total
 
$
20,744,526

 
$
20,106,856

 
$
19,948,300

 
$
19,851,910

 
$
19,459,950

 
3
 %
 
7
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Total core deposits (1)
 
$
17,743,888

 
$
18,007,169

 
$
18,263,802

 
$
18,005,730

 
$
17,561,956

 
(1
)%
 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposit mix:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand, non-interest bearing
 
33
%
 
33
%
 
33
%
 
33
%
 
32
%
 
 
 
 
Demand, interest bearing
 
11
%
 
12
%
 
12
%
 
12
%
 
12
%
 
 
 
 
Money market
 
30
%
 
33
%
 
35
%
 
34
%
 
35
%
 
 
 
 
Savings
 
7
%
 
7
%
 
7
%
 
7
%
 
7
%
 
 
 
 
Time
 
19
%
 
15
%
 
13
%
 
14
%
 
14
%
 
 
 
 
Total
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of open accounts:
 
 

 
 

 
 

 
 
 
 

 
 

 
 

Demand, non-interest bearing
 
402,771

 
399,721

 
397,427

 
394,755

 
389,767

 


 


Demand, interest bearing
 
77,918

 
78,181

 
78,853

 
79,899

 
80,594

 


 


Money market
 
55,393

 
54,752

 
55,175

 
55,659

 
55,795

 


 


Savings
 
162,414

 
162,841

 
162,453

 
162,556

 
161,369

 


 


Time
 
51,073

 
48,529

 
46,861

 
47,129

 
47,339

 


 


Total
 
749,569

 
744,024

 
740,769

 
739,998

 
734,864

 


 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average balance per account:
 
 

 
 

 
 

 
 
 
 

 
 

 
 

Demand, non-interest bearing
 
$
16.9

 
$
16.8

 
$
16.4

 
$
16.6

 
$
15.7

 
 

 
 

Demand, interest bearing
 
29.8

 
30.1

 
30.2

 
30.0

 
29.4

 
 

 
 

Money market
 
111.2

 
119.6

 
127.6

 
120.4

 
121.1

 
 

 
 

Savings
 
9.0

 
9.1

 
8.9

 
8.9

 
8.8

 
 

 
 

Time
 
77.9

 
62.3

 
54.9

 
58.2

 
59.0

 
 

 
 

Total
 
$
27.7

 
$
27.0

 
$
26.9

 
$
26.8

 
$
26.5

 
 

 
 

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




Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 11


 
Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
 (Unaudited)
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Non-performing assets:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

Loans and leases on non-accrual status
 
$
43,485

 
$
45,775

 
$
51,465

 
$
44,573

 
$
26,566

 
(5
)%
 
64
 %
Loans and leases past due 90+ days and accruing (1)
 
34,494

 
25,478

 
30,994

 
29,073

 
27,252

 
35
 %
 
27
 %
Total non-performing loans and leases
 
77,979

 
71,253

 
82,459

 
73,646

 
53,818

 
9
 %
 
45
 %
Other real estate owned
 
12,101

 
13,055

 
11,734

 
4,160

 
4,804

 
(7
)%
 
152
 %
Total non-performing assets
 
$
90,080

 
$
84,308

 
$
94,193

 
$
77,806

 
$
58,622

 
7
 %
 
54
 %
 
 
 
 
 
 
 
 
 
 
 
 


 


Performing restructured loans and leases
 
$
27,144

 
$
31,659

 
$
32,157

 
$
45,813

 
$
52,861

 
(14
)%
 
(49
)%
Loans and leases past due 31-89 days
 
$
45,114

 
$
38,650

 
$
43,870

 
$
32,251

 
$
31,153

 
17
 %
 
45
 %
Loans and leases past due 31-89 days to total loans and leases
 
0.23
%
 
0.20
%
 
0.23
%
 
0.17
%
 
0.17
%
 
 

 
 

Non-performing loans and leases to total loans and leases (1)
 
0.40
%
 
0.37
%
 
0.43
%
 
0.39
%
 
0.29
%
 
 

 
 

Non-performing assets to total assets(1)
 
0.34
%
 
0.33
%
 
0.37
%
 
0.30
%
 
0.23
%
 
 

 
 


(1) 
Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $9.2 million, $6.3 million, $12.4 million, $12.3 million, and $16.3 million at June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017, and June 30, 2017, respectively.



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 12


Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
 (Unaudited)
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance beginning of period
 
$
141,933

 
$
140,608

 
$
139,503

 
$
136,867

 
$
136,292

 
 
 
 
Provision for loan and lease losses
 
13,319

 
13,656

 
12,928

 
11,997

 
10,657

 
(2
)%
 
25
%
Charge-offs
 
(14,815
)
 
(15,812
)
 
(15,751
)
 
(13,222
)
 
(13,944
)
 
(6
)%
 
6
%
Recoveries
 
4,119

 
3,481

 
3,928

 
3,861

 
3,862

 
18
 %
 
7
%
Net charge-offs
 
(10,696
)
 
(12,331
)
 
(11,823
)
 
(9,361
)
 
(10,082
)
 
(13
)%
 
6
%
Total allowance for loan and lease losses
 
144,556

 
141,933

 
140,608

 
139,503

 
136,867

 
2
 %
 
6
%
Reserve for unfunded commitments
 
4,130

 
4,129

 
3,963

 
3,932

 
3,816

 
0
 %
 
8
%
Total allowance for credit losses
 
$
148,686

 
$
146,062

 
$
144,571

 
$
143,435

 
$
140,683

 
2
 %
 
6
%
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 

Net charge-offs to average loans and leases (annualized)
 
0.22
%
 
0.26
%
 
0.25
%
 
0.20
%
 
0.22
%
 
 

 
 

Recoveries to gross charge-offs
 
27.80
%
 
22.01
%
 
24.94
%
 
29.20
%
 
27.70
%
 
 
 
 

Allowance for loan and lease losses to loans and leases
 
0.73
%
 
0.73
%
 
0.74
%
 
0.75
%
 
0.75
%
 
 

 
 

Allowance for credit losses to loans and leases
 
0.75
%
 
0.76
%
 
0.76
%
 
0.77
%
 
0.77
%
 
 

 
 


Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
 
 
Six Months Ended
 
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Jun 30, 2017
 
Year over Year
Allowance for loan and lease losses:
 
 
 
 
Balance beginning of period
 
$
140,608

 
$
133,984

 
 
Provision for loan and lease losses
 
26,975

 
22,329

 
21
%
Charge-offs
 
(30,627
)
 
(26,946
)
 
14
%
Recoveries
 
7,600

 
7,500

 
1
%
Net charge-offs
 
(23,027
)
 
(19,446
)
 
18
%
Total allowance for loan and lease losses
 
144,556

 
136,867

 
6
%
Reserve for unfunded commitments
 
4,130

 
3,816

 
8
%
Total allowance for credit losses
 
$
148,686

 
$
140,683

 
6
%
 
 
 

 
 

 
 
Net charge-offs to average loans and leases (annualized)
 
0.24
%
 
0.22
%
 
 
Recoveries to gross charge-offs
 
24.81
%
 
27.83
%
 
 





Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 13


Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
 
 
Quarter Ended
 
% Change
 
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Average Rates:
 
 

 
 

 
 

 
 
 
 

 
 
 
 
Yield on loans and leases
 
4.81
%
 
4.75
%
 
4.65
%
 
4.70
%
 
4.67
%
 
0.06

 
0.14

Yield on loans held for sale
 
4.86
%
 
4.21
%
 
3.99
%
 
3.89
%
 
3.26
%
 
0.65

 
1.60

Yield on taxable investments
 
2.37
%
 
2.31
%
 
2.17
%
 
2.00
%
 
2.07
%
 
0.06

 
0.30

Yield on tax-exempt investments (1)
 
3.64
%
 
3.68
%
 
4.49
%
 
4.59
%
 
4.64
%
 
(0.04
)
 
(1.00
)
Yield on interest bearing cash and temporary investments
 
1.82
%
 
1.55
%
 
1.22
%
 
1.47
%
 
1.03
%
 
0.27

 
0.79

Total yield on earning assets (1)
 
4.45
%
 
4.39
%
 
4.26
%
 
4.30
%
 
4.26
%
 
0.06

 
0.19

 
 
 
 
 
 
 
 
 
 
 
 


 


Cost of interest bearing deposits
 
0.62
%
 
0.47
%
 
0.40
%
 
0.36
%
 
0.33
%
 
0.15

 
0.29

Cost of securities sold under agreements
 
 

 
 

 
 

 
 
 
 
 


 


to repurchase and fed funds purchased
 
0.22
%
 
0.08
%
 
0.06
%
 
0.10
%
 
0.32
%
 
0.14

 
(0.10
)
Cost of term debt
 
1.74
%
 
1.70
%
 
1.67
%
 
1.63
%
 
1.72
%
 
0.04

 
0.02

Cost of junior subordinated debentures
 
5.89
%
 
5.36
%
 
5.11
%
 
5.02
%
 
4.88
%
 
0.53

 
1.01

Total cost of interest bearing liabilities
 
0.80
%
 
0.65
%
 
0.58
%
 
0.55
%
 
0.52
%
 
0.15

 
0.28

 
 
 
 
 
 
 
 
 
 
 
 


 


Net interest spread (1)
 
3.65
%
 
3.74
%
 
3.68
%
 
3.75
%
 
3.74
%
 
(0.09
)
 
(0.09
)
Net interest margin (1)
 
3.93
%
 
3.96
%
 
3.88
%
 
3.94
%
 
3.91
%
 
(0.03
)
 
0.02

 
 
 
 
 
 
 
 
 
 
 
 


 


Performance Ratios:
 
 

 
 

 
 

 
 
 
 
 


 


Return on average assets
 
1.04
%
 
1.23
%
 
1.27
%
 
0.96
%
 
0.92
%
 
(0.19
)
 
0.12

Return on average tangible assets
 
1.12
%
 
1.32
%
 
1.36
%
 
1.04
%
 
0.99
%
 
(0.20
)
 
0.13

Return on average common equity
 
6.74
%
 
7.84
%
 
8.12
%
 
6.10
%
 
5.76
%
 
(1.10
)
 
0.98

Return on average tangible common equity
 
12.27
%
 
14.30
%
 
14.90
%
 
11.23
%
 
10.67
%
 
(2.03
)
 
1.60

Efficiency ratio – Consolidated
 
65.31
%
 
61.56
%
 
65.99
%
 
63.43
%
 
64.71
%
 
3.75

 
0.60

Efficiency ratio – Bank
 
62.53
%
 
59.58
%
 
62.09
%
 
61.42
%
 
62.45
%
 
2.95

 
0.08


(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate for 2018 and a 35% tax rate for 2017.



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 14


Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
 
 
Six Months Ended
 
% Change
 
 
Jun 30, 2018
 
Jun 30, 2017
 
Year over Year
Average Rates:
 
 

 
 

 
 
Yield on loans and leases
 
4.78
%
 
4.66
%
 
0.12

Yield on loans held for sale
 
4.57
%
 
3.54
%
 
1.03

Yield on taxable investments
 
2.34
%
 
2.09
%
 
0.25

Yield on tax-exempt investments (1)
 
3.66
%
 
4.70
%
 
(1.04
)
Yield on interest bearing cash and temporary investments
 
1.72
%
 
0.82
%
 
0.90

Total yield on earning assets (1)
 
4.43
%
 
4.23
%
 
0.20

 
 
 
 
 
 


Cost of interest bearing deposits
 
0.55
%
 
0.31
%
 
0.24

Cost of securities sold under agreements
 
 

 
 

 


to repurchase and fed funds purchased
 
0.15
%
 
0.19
%
 
(0.04
)
Cost of term debt
 
1.72
%
 
1.70
%
 
0.02

Cost of junior subordinated debentures
 
5.62
%
 
4.79
%
 
0.83

Total cost of interest bearing liabilities
 
0.73
%
 
0.50
%
 
0.23

 
 
 
 
 
 


Net interest spread (1)
 
3.70
%
 
3.73
%
 
(0.03
)
Net interest margin (1)
 
3.96
%
 
3.89
%
 
0.07

 
 
 
 
 
 


Performance Ratios:
 
 

 
 

 


Return on average assets
 
1.13
%
 
0.84
%
 
0.29

Return on average tangible assets
 
1.22
%
 
0.90
%
 
0.32

Return on average common equity
 
7.29
%
 
5.25
%
 
2.04

Return on average tangible common equity
 
13.28
%
 
9.76
%
 
3.52

Efficiency ratio – Consolidated
 
63.43
%
 
66.38
%
 
(2.95
)
Efficiency ratio – Bank
 
61.06
%
 
64.05
%
 
(2.99
)
        
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate for 2018 and a 35% tax rate for 2017.



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 15


Umpqua Holdings Corporation
Average Balances
(Unaudited)
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Temporary investments and interest bearing cash
 
$
458,133

 
$
303,670

 
$
509,187

 
$
253,015

 
$
125,886

 
51
 %
 
264
 %
Investment securities, taxable
 
2,723,406

 
2,793,449

 
2,804,530

 
2,867,292

 
3,008,079

 
(3
)%
 
(9
)%
Investment securities, tax-exempt
 
279,158

 
286,603

 
286,345

 
281,139

 
292,553

 
(3
)%
 
(5
)%
Loans held for sale
 
326,427

 
267,231

 
370,564

 
420,282

 
392,183

 
22
 %
 
(17
)%
Loans and leases
 
19,444,890

 
19,150,315

 
18,765,251

 
18,537,827

 
18,024,651

 
2
 %
 
8
 %
Total interest earning assets
 
23,232,014

 
22,801,268

 
22,735,877

 
22,359,555

 
21,843,352

 
2
 %
 
6
 %
Goodwill and other intangible assets, net
 
1,815,529

 
1,817,068

 
1,818,730

 
1,820,394

 
1,822,032

 
0
 %
 
0
 %
Total assets
 
26,127,935

 
25,686,471

 
25,661,566

 
25,311,994

 
24,792,869

 
2
 %
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing demand deposits
 
6,645,689

 
6,450,364

 
6,611,493

 
6,354,591

 
5,951,670

 
3
 %
 
12
 %
Interest bearing deposits
 
13,745,089

 
13,492,965

 
13,281,502

 
13,155,462

 
13,037,064

 
2
 %
 
5
 %
Total deposits
 
20,390,778

 
19,943,329

 
19,892,995

 
19,510,053

 
18,988,734

 
2
 %
 
7
 %
Interest bearing liabilities
 
15,199,900

 
14,971,759

 
14,790,883

 
14,705,842

 
14,659,650

 
2
 %
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders’ equity - common
 
4,031,253

 
4,019,822

 
3,998,609

 
3,989,868

 
3,956,777

 
0
 %
 
2
 %
Tangible common equity (1)
 
2,215,724

 
2,202,754

 
2,179,879

 
2,166,474

 
2,134,745

 
1
 %
 
4
 %
Umpqua Holdings Corporation
Average Balances
(Unaudited)
 
 
Six Months Ended
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Jun 30, 2017
 
Year over Year
Temporary investments and interest bearing cash
 
$
381,328

 
$
463,245

 
(18
)%
Investment securities, taxable
 
2,758,235

 
2,866,614

 
(4
)%
Investment securities, tax-exempt
 
282,860

 
289,515

 
(2
)%
Loans held for sale
 
296,992

 
371,989

 
(20
)%
Loans and leases
 
19,298,416

 
17,812,660

 
8
 %
Total interest earning assets
 
23,017,831

 
21,804,023

 
6
 %
Goodwill and other intangible assets, net
 
1,816,294

 
1,822,910

 
0
 %
Total assets
 
25,908,423

 
24,761,749

 
5
 %
 
 
 
 
 
 
 
Non-interest bearing demand deposits
 
6,548,566

 
5,917,984

 
11
 %
Interest bearing deposits
 
13,619,723

 
13,078,171

 
4
 %
Total deposits
 
20,168,289

 
18,996,155

 
6
 %
Interest bearing liabilities
 
15,086,460

 
14,660,598

 
3
 %
 
 
 
 
 
 
 
Shareholders’ equity - common
 
4,025,569

 
3,946,615

 
2
 %
Tangible common equity (1)
 
2,209,275

 
2,123,705

 
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 Second Quarter 2018 Results
July 18, 2018
Page 16


Umpqua Holdings Corporation
Average Rates and Balances
(unaudited)
(dollars in thousands)
Quarter Ended
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Loans held for sale
$
326,427

 
$
3,967

 
4.86
%
 
$
267,231

 
$
2,815

 
4.21
%
 
$
392,183

 
$
3,193

 
3.26
%
Loans and leases (1)
19,444,890

 
233,376

 
4.81
%
 
19,150,315

 
224,923

 
4.75
%
 
18,024,651

 
209,805

 
4.67
%
Taxable securities
2,723,406

 
16,111

 
2.37
%
 
2,793,449

 
16,167

 
2.31
%
 
3,008,079

 
15,580

 
2.07
%
Non-taxable securities (2)
279,158

 
2,539

 
3.64
%
 
286,603

 
2,640

 
3.68
%
 
292,553

 
3,397

 
4.64
%
Temporary investments and interest-bearing cash
458,133

 
2,080

 
1.82
%
 
303,670

 
1,164

 
1.55
%
 
125,886

 
324

 
1.03
%
Total interest-earning assets
23,232,014

 
$
258,073

 
4.45
%
 
22,801,268

 
247,709

 
4.39
%
 
21,843,352

 
$
232,299

 
4.26
%
Allowance for loan and lease losses
(144,598
)
 
 
 
 
 
(142,409
)
 
 

 
 
 
(137,445
)
 
 
 
 
Other assets
3,040,519

 
 
 
 
 
3,027,612

 
 
 
 
 
3,086,962

 
 
 
 
Total assets
$
26,127,935

 
 
 
 
 
$
25,686,471

 
 
 
 
 
$
24,792,869

 
 
 
 
INTEREST-BEARING LIABILITIES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
2,322,359

 
$
1,565

 
0.27
%
 
$
2,323,232

 
$
1,210

 
0.21
%
 
$
2,311,555

 
$
798

 
0.14
%
Money market deposits
6,332,372

 
5,896

 
0.37
%
 
6,908,067

 
5,713

 
0.34
%
 
6,682,937

 
2,975

 
0.18
%
Savings deposits
1,456,625

 
252

 
0.07
%
 
1,463,058

 
163

 
0.05
%
 
1,401,238

 
146

 
0.04
%
Time deposits
3,633,733

 
13,546

 
1.50
%
 
2,798,608

 
8,524

 
1.24
%
 
2,641,334

 
6,722

 
1.02
%
Total interest-bearing deposits
13,745,089

 
21,259

 
0.62
%
 
13,492,965

 
15,610

 
0.47
%
 
13,037,064

 
10,641

 
0.33
%
Repurchase agreements and federal funds purchased
285,338

 
155

 
0.22
%
 
303,059

 
63

 
0.08
%
 
405,892

 
321

 
0.32
%
Term debt
801,768

 
3,478

 
1.74
%
 
802,297

 
3,361

 
1.70
%
 
852,254

 
3,662

 
1.72
%
Junior subordinated debentures
367,705

 
5,400

 
5.89
%
 
373,438

 
4,932

 
5.36
%
 
364,440

 
4,437

 
4.88
%
Total interest-bearing liabilities
15,199,900

 
$
30,292

 
0.80
%
 
14,971,759

 
$
23,966

 
0.65
%
 
14,659,650

 
$
19,061

 
0.52
%
Non-interest-bearing deposits
6,645,689

 
 
 
 
 
6,450,364

 
 
 
 
 
5,951,670

 
 
 
 
Other liabilities
251,093

 
 
 
 
 
244,526

 
 
 
 
 
224,772

 
 
 
 
Total liabilities
22,096,682

 
 
 
 
 
21,666,649

 
 
 
 
 
20,836,092

 
 
 
 
Common equity
4,031,253

 
 
 
 
 
4,019,822

 
 
 
 
 
3,956,777

 
 
 
 
Total liabilities and shareholders' equity
$
26,127,935

 
 
 
 
 
$
25,686,471

 
 
 
 
 
$
24,792,869

 
 
 
 
NET INTEREST INCOME
 
 
$
227,781

 
 
 
 
 
$
223,743

 
 
 
 
 
$
213,238

 
 
NET INTEREST SPREAD
 
 
 
 
3.65
%
 
 
 
 
 
3.74
%
 
 
 
 
 
3.74
%
AVERAGE YIELD ON EARNING ASSETS (1), (2)
 
 
 
 
4.45
%
 
 
 
 
 
4.39
%
 
 
 
 
 
4.26
%
INTEREST EXPENSE TO EARNING ASSETS
 
 
 
 
0.52
%
 
 
 
 
 
0.43
%
 
 
 
 
 
0.35
%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)
 
 
 
 
3.93
%
 
 
 
 
 
3.96
%
 
 
 
 
 
3.91
%
(1)
Non-accrual loans and leases are included in the average balance.   
(2)
Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate for 2018 and a 35% tax rate for 2017. The amount of such adjustment was an addition to recorded income of approximately $482,000 for the three months ended June 30, 2018 as compared to $512,000 for March 31, 2018 and $1.2 million for June 30, 2017



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 17



Umpqua Holdings Corporation Average Rates and Balances
(unaudited)
(dollars in thousands)
Six Months Ended
 
June 30, 2018
 
June 30, 2017
 
Average Balance
 
Interest Income or Expense
 
Average Yields or Rates
 
Average Balance
 
Interest Income or Expense
 
Average Yields or Rates
INTEREST-EARNING ASSETS:
 
 
 
 
 
 
 
 
 
 
 

Loans held for sale
$
296,992

 
$
6,782

 
4.57
%
 
$
371,989

 
$
6,588

 
3.54
%
Loans and leases (1)
19,298,416

 
458,299

 
4.78
%
 
17,812,660

 
412,406

 
4.66
%
Taxable securities
2,758,235

 
32,278

 
2.34
%
 
2,866,614

 
29,899

 
2.09
%
Non-taxable securities (2)
282,860

 
5,179

 
3.66
%
 
289,515

 
6,806

 
4.70
%
Temporary investments and interest-bearing cash
381,328

 
3,244

 
1.72
%
 
463,245

 
1,881

 
0.82
%
Total interest-earning assets
23,017,831

 
$
505,782

 
4.43
%
 
21,804,023

 
$
457,580

 
4.23
%
Allowance for loan and lease losses
(143,509
)
 
 
 
 
 
(136,834
)
 
 
 
 
Other assets
3,034,101

 
 
 
 
 
3,094,560

 
 
 
 
Total assets
$
25,908,423

 
 
 
 
 
$
24,761,749

 
 
 
 
INTEREST-BEARING LIABILITIES:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
2,322,793

 
$
2,775

 
0.24
%
 
$
2,288,870

 
$
1,443

 
0.13
%
Money market deposits
6,618,629

 
11,609

 
0.35
%
 
6,776,705

 
5,644

 
0.17
%
Savings deposits
1,459,824

 
414

 
0.06
%
 
1,383,124

 
274

 
0.04
%
Time deposits
3,218,477

 
22,071

 
1.38
%
 
2,629,472

 
12,928

 
0.99
%
Total interest-bearing deposits
13,619,723

 
36,869

 
0.55
%
 
13,078,171

 
20,289

 
0.31
%
Repurchase agreements and federal funds purchased
294,150

 
218

 
0.15
%
 
366,498

 
351

 
0.19
%
Term debt
802,031

 
6,839

 
1.72
%
 
852,302

 
7,172

 
1.70
%
Junior subordinated debentures
370,556

 
10,332

 
5.62
%
 
363,627

 
8,638

 
4.79
%
Total interest-bearing liabilities
15,086,460

 
$
54,258

 
0.73
%
 
14,660,598

 
$
36,450

 
0.50
%
Non-interest-bearing deposits
6,548,566

 
 
 
 
 
5,917,984

 
 
 
 
Other liabilities
247,828

 
 
 
 
 
236,552

 
 
 
 
Total liabilities
21,882,854

 
 
 
 
 
20,815,134

 
 
 
 
Common equity
4,025,569

 
 
 
 
 
3,946,615

 
 
 
 
Total liabilities and shareholders' equity
$
25,908,423

 
 
 
 
 
$
24,761,749

 
 
 
 
NET INTEREST INCOME
 
 
$
451,524

 
 
 
 
 
$
421,130

 
 
NET INTEREST SPREAD
 
 
 
 
3.70
%
 
 
 
 
 
3.73
%
AVERAGE YIELD ON EARNING ASSETS (1), (2)
 
 
 
 
4.43
%
 
 
 
 
 
4.23
%
INTEREST EXPENSE TO EARNING ASSETS
 
 
 
 
0.47
%
 
 
 
 
 
0.34
%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)
 
 
 
 
3.96
%
 
 
 
 
 
3.89
%
(1)
Non-accrual loans and leases are included in the average balance.   
(2)
Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate for 2018 and a 35% tax rate for 2017. The amount of such adjustment was an addition to recorded income of approximately $1.0 million for the six months ended June 30, 2018 as compared to $2.3 million for the same period in 2017



Umpqua Reports Second Quarter 2018 Results
July 18, 2018
Page 18



Umpqua Holdings Corporation
Residential Mortgage Banking Activity
(unaudited)
 
 
Quarter Ended
 
% Change
(Dollars in thousands)
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
Jun 30, 2017
 
Seq. Quarter
 
Year over Year
Residential mortgage servicing rights:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage loans serviced for others
 
$
15,508,182

 
$
15,442,915

 
$
15,336,597

 
$
15,007,942

 
$
14,797,242

 
0
 %
 
5
 %
MSR asset, at fair value
 
166,217

 
164,760

 
153,151

 
141,225

 
141,832

 
1
 %
 
17
 %
MSR as % of serviced portfolio
 
1.07
%
 
1.07
%
 
1.00
 %
 
0.94
%
 
0.96
%
 
0
 %
 
11
 %
Residential mortgage banking revenue:
 
 

 
 

 
 
 
 
 
 

 


 


Origination and sale
 
$
28,159

 
$
22,837

 
$
29,864

 
$
32,784

 
$
32,385

 
23
 %
 
(13
)%
Servicing
 
10,407

 
10,522

 
10,287

 
9,879

 
9,839

 
(1
)%
 
6
 %
Change in fair value of MSR asset
 
(5,403
)
 
5,079

 
1,967

 
(9,233
)
 
(8,330
)
 
(206
)%
 
(35
)%
Total
 
$
33,163

 
$
38,438

 
$
42,118

 
$
33,430

 
$
33,894

 
(14
)%
 
(2
)%
 
 
 
 
 
 
 
 
 
 
 
 


 


Closed loan volume:
 
 
 
 
 
 
 
 
 
 
 


 


Closed loan volume - portfolio
 
$
294,581

 
$
237,783

 
$
265,718

 
$
336,362

 
$
312,022

 
24
 %
 
(6
)%
Closed loan volume - for-sale
 
839,489

 
687,226

 
850,453

 
891,063

 
918,200

 
22
 %
 
(9
)%
Closed loan volume - total
 
$
1,134,070

 
$
925,009

 
$
1,116,171

 
$
1,227,425

 
$
1,230,222

 
23
 %
 
(8
)%
 
 
 
 
 
 
 
 
 
 
 
 


 


Gain on sale margin:
 
 
 
 
 
 
 
 
 
 
 


 


Based on for-sale volume
 
3.35
%
 
3.32
%
 
3.51
 %
 
3.68
%
 
3.53
%
 
0.03

 
(0.18
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
% Change
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
Jun 30, 2018
 
Jun 30, 2017
 
Year over Year
 
 
 
 
 
 
 
 
Residential mortgage banking revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Origination and sale
 
$
50,996

 
$
57,032

 
(11
)%
 
 
 
 
 
 
 
 
Servicing
 
20,929

 
19,697

 
6
 %
 
 
 
 
 
 
 
 
Change in fair value of MSR asset
 
(324
)
 
(16,001
)
 
(98
)%
 
 
 
 
 
 
 
 
Total
 
$
71,601

 
$
60,728

 
18
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Closed loan volume:
 
 
 
 
 


 
 
 
 
 
 
 
 
Closed loan volume - portfolio
 
$
532,364

 
$
557,356

 
(4
)%
 
 
 
 
 
 
 
 
Closed loan volume - for-sale
 
1,526,715

 
1,672,915

 
(9
)%
 
 
 
 
 
 
 
 
Closed loan volume - total
 
$
2,059,079

 
$
2,230,271

 
(8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Gain on sale margin:
 
 
 
 
 


 
 
 
 
 
 
 
 
Based on for-sale volume
 
3.34
%
 
3.41
%
 
(0.07
)
 
 
 
 
 
 
 
 



###

EX-99.2 3 umpqq22018earningspres.htm SECOND QUARTER 2018 INVESTOR PRESENTATION umpqq22018earningspres
UMPQUA HOLDINGS CORPORATION 2nd Quarter 2018 Earnings Conference Call Presentation July 19, 2018


 
Forward-looking Statements This presentation 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 presentation we make forward- looking statements about corporate initiatives and the related savings & restructuring charges, store consolidations and facilities optimization and related costs and savings, and indirect auto wind down. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; the effect of interest rate increases on the cost of deposits; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; our inability to successfully implement efficiency and operational excellence initiatives on time and in amounts projected; our ability to successfully develop and market new products and technology; and changes in laws or regulations. 2


 
Q2 2018 Highlights (compared to Q1 2018)  Net earnings available to common shareholders of $67.8 million, or $0.31 per diluted common share  Organization simplification and design complete, results include pre-tax restructuring charges of $8.2 million  Quarterly loan and lease growth of $379.4 million, or 8% annualized, and deposit growth of $637.7 million, or 13% annualized  Net interest income increased by $4.1 million, or 2%, attributable to the strong growth in loans and leases and the benefit from increases in short-term interest rates  Provision for loan and lease losses decreased by $0.3 million, driven primarily by lower net charge-offs, which decreased by four basis points to 0.22% of average loans and leases (annualized)  Non-interest income decreased by $6.9 million, reflecting $10.5 million linked quarter negative fair value change of the MSR asset, partially offset by higher net revenue from the origination and sale of residential mortgages  Non-interest expense increased by $9.5 million, driven primarily by higher restructuring charges and higher mortgage banking-related expense, consistent with the increase in mortgage originations  Non-performing assets to total assets increased by one basis point to 0.34%  Estimated total risk-based capital ratio of 13.7% and estimated Tier 1 common to risk weighted assets ratio of 10.8%  Declared quarterly cash dividend of $0.20 per common share  Repurchased 327,000 shares of common stock for $8.0 million 3


 
Umpqua Next Gen: Operational Excellence Update  Engaged The Boston Consulting Group to help identify and implement Operational and  Focused on non-customer facing areas Back Office  Organizational simplification and design complete, procurement underway Efficiency  Stronger financial performance and improved profitability Review  Better customer experience  Phase I savings increase ROATCE goals to >15.0% in “flat rate” scenario and >17.5% in “moderately increasing” rate scenario (2) Financial Targets Workstreams • Phase I • Phase I • $18 - $24 million in annual run-rate savings, or 6% - 8% (1) • Organizational simplification and design Complete • $12 - $16 million annual run-rate savings achieved by Q4 • Procurement Under way 2018 • 100% run-rate savings achieved by mid-2019 • $8.2 million in restructuring charges (severance, professional fees) in Q2 2018, with $2-3 million planned in both Q3 2018 and Q4 2018 • Phase II • Phase II • Additional $6 - $12 million in annual run-rate savings, or 2% - 4% (1) • Real-estate optimization 2019 • Run-rate savings achieved by end of 2019 • Technology simplification 2019 • ~$1-2 million in restructuring charges planned in both Q3 2018 and • Commercial end-to-end journey redesign Q3 / Q4 2018 Q4 2018 • Other end-to-end journey redesign 2019 • Additional costs to achieve to be determined (1) Percentage savings calculated off of $300 million in back-office and operations expense base. 4 (2) ROATCE goals as presented in the 4Q 2017 earnings call slide presentation on January 24, 2018.


 
Selected Ratios For the quarter ended Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Return on average assets 1.04% 1.23% 1.27% 0.96% 0.92% Return on average tangible assets 1.12% 1.32% 1.36% 1.04% 0.99% Return on average common equity 6.74% 7.84% 8.12% 6.10% 5.76% Performance Return on average tangible common equity 12.27% 14.30% 14.90% 11.23% 10.67% Efficiency ratio ‐ consolidated 65.31% 61.56% 65.99% 63.43% 64.71% Net interest margin ‐ consolidated 3.93% 3.96% 3.88% 3.94% 3.91% Non‐performing loans and leases to loans and leases 0.40% 0.37% 0.43% 0.39% 0.29% Non‐performing assets to total assets 0.34% 0.33% 0.37% 0.30% 0.23% Credit Quality Net charge‐offs to average loans and leases (annualized) 0.22% 0.26% 0.25% 0.20% 0.22% Tangible common equity to tangible assets  (1) 8.93% 9.13% 9.18% 9.07% 9.12% Capital Tier 1 common to risk‐weighted asset ratio  (2) 10.8% 11.0% 11.1% 11.1% 11.2% Total risk‐based capital ratio  (2) 13.7% 13.9% 14.1% 14.2% 14.3% > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided at the end of this slide presentation. 5 > (2) Capital ratio estimated for current quarter, pending completion and filing of regulatory reports.


 
Summary Income Statement Quarter ended ($ in millions except per share data) Q2 2018 Q1 2018 Q2 2017 Net interest income before provision $ 227.3 $ 223.2 $ 212.1 Provision for loan and lease losses 13.3 13.7 10.7 Net interest income after provision 214.0 209.6 201.4 Non-interest income 71.7 78.6 71.1 Non-interest expense 195.6 186.1 184.0 Income before provision for income taxes 90.1 102.0 88.5 Provision for income taxes 22.3 24.4 31.7 Net income 67.8 77.7 56.8 Dividends and undistributed earnings allocated to participating securities 0.0 0.0 0.0 Net earnings available to common shareholders $ 67.8 $ 77.7 $ 56.8 Earnings per share - diluted $0.31 $0.35 $0.26 > Note: tables may not foot due to rounding. 6


 
Net Interest Income and Margin (in millions) $227.3 6.00% $220.5 $220.6 $223.2 $220 $212.1 5.50% 5.00% $200 4.50% $180 3.94% 3.88% 3.96% 3.93% 3.91% 4.00% $160 3.50% 3.00% $140 2.50% $120 2.00% $100 1.50% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Net interest income Net interest margin Adjusted 3.78% 3.78% NIM (1) 3.79% 3.86% 3.81% > (1) Net interest margin, excluding interest income related to credit discount from Sterling deal and related to 310-30 covered loan PIFs 7


 
Provision for Loan and Lease Losses (in millions) Provision for Loan and Lease Losses $16 $14 $12 $10 $8 $13.7 $12.9 $13.3 $6 $12.0 $10.7 $4 $2 $0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 8


 
Non-interest Income (in millions) $90 $78.6 $80 $75.4 $71.1 $70.5 $71.7 $70 $15.0 $15.8 $15.5 $15.4 $15.5 $60 $4.2 $3.8 $3.9 $4.2 $4.2 $50 $40 $33.4 $38.4 $33.9 $33.2 $30 $42.1 $2.0 $2.1 $20 $2.1 $2.1 $1.2 $1.3 $3.3 $8.0 $10 $2.0 $17.6 $15.4 $12.4 $12.3 $3.7 $0 $3.0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Other (1) Gain on loan sales BOLI income Residential mortgage banking revenue, net Brokerage revenue Service charges > (1) Includes other income, gains or losses on investment securities, unrealized holding losses on equity securities not held for trading, and losses on junior subordinated debentures carried at fair value. 9 > Note: tables may not foot due to rounding.


 
Mortgage Banking (in millions) Closed mortgage volume $1,400 $1,230 $1,227 $1,200 $1,116 $1,134 $1,000 $925 $800 $918 $891 $850 $839 $600 $687 $400 $200 $312 $336 $266 $238 $295 $0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Portfolio For Sale Gain on sale margin 4.50% 4.00% 3.68% 3.53% 3.51% 3.35% 3.50% 3.32% 3.00% 2.50% 2.00% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 > Note: tables may not foot due to rounding. 10


 
Non-interest Expense Non-interest Expense and Efficiency Ratio Non-interest Expense Bridge (in millions) $(1.3) $195.6 (in millions) $(2.6) $205.0 130.0% $(4.1) $195.6 $(4.7) $195.0 $192.8 120.0% $188.4 $184.0 $186.1 $186.1 $185.0 110.0% $2.2 $1.0 $175.0 100.0% $165.0 90.0% $155.0 80.0% 64.7% 66.0% 65.3% $145.0 63.4% 61.6% 70.0% $135.0 60.0% $125.0 50.0% $115.0 40.0% (1) (1) Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Non-interest expense Efficiency ratio (1) Restructuring charges related to organization simplification and design and procurement phases of Umpqua Next Gen totaled $3.5 million and $8.2 million, respectively, in Q1 2018 and Q2 2018. 11


 
Selected Balance Sheet ($ in millions) Q2 2018 Q1 2018 Q2 2017 Total assets $          26,533.2 $           25,875.6 $           25,257.8 Interest bearing cash and temporary investments                   488.5                    264.5                    295.9 Investment securities available for sale, fair value                2,854.4                 2,947.4                 3,132.6 Loans and leases, gross             19,694.0              19,314.6              18,321.1 Allowance for loan and lease losses                  (144.6)                   (141.9)                   (136.9) Goodwill and other intangibles, net                1,814.7                 1,816.2                 1,821.2 Deposits             20,744.5              20,106.9              19,460.0 Securities sold under agreements to repurchase                   273.7 292.                   0                    330.2 Term debt                   801.7                    801.9                    852.2 Total shareholders' equity                4,021.6                 4,013.9                 3,958.8 Ratios: Loan to deposit ratio 94.9% 96.1% 94.1% Book value per common share $18.26 $18.21 $17.98 Tangible book value per common share (1) $10.02 $9.97 $9.71 Tangible common equity to tangible assets  (1) 8.93% 9.13% 9.12% > (1) Non-GAAP financial measure. A reconciliation to the comparable GAAP measurement is provided in the appendix of this slide presentation. 12


 
Loan and Deposit Growth (in billions) Loans and Leases (Gross) As of Jun 30, 2018 $19.1 $19.7 3% Non-owner occupied term CRE $16.9 $17.5 Owner occupied term CRE $15.3 6% Multifamily 18% Commercial construction 17% $7.7 13% Residential development $6.5 $7.2 $6.4 Commercial term 6% Commercial lines of credit & other 6% Leases & equipment finance 16% 11% Mortgage Home equity lines & loans 1% 3% Consumer & other (in billions) Total Deposits $20.7 As of Jun 30, 2018 $19.0 $19.9 $16.9 $17.7 Demand, non-interest 19% bearing $9.4 $9.2 $9.4 $9.1 Demand, interest bearing 33% 7% Money market Savings 30% 11% Time 13


 
Credit Quality Non-performing assets to total assets Net charge-offs to average loans and leases (annualized) 1.00% 1.00% 0.80% 0.80% 0.60% 0.60% 0.37% 0.30% 0.33% 0.34% 0.40% 0.40% 0.25% 0.26% 0.23% 0.20% 0.22% 0.22% 0.20% 0.20% 0.00% 0.00% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Allowance for loan and lease losses to loans and leases 1.00% 0.80% 0.75% 0.75% 0.60% 0.74% 0.73% 0.73% 0.40% 0.20% 0.00% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 14


 
Prudent Capital Management > All regulatory capital ratios remained in excess of well-capitalized and internal policy limits > Focused on prudently managing capital • Quarterly dividend of $0.20 per share, ~3.6% current dividend yield • Q2 total payout ratio of 77% Q2 2018 Capital Ratios (1) 13.7% 10.8% 10.8% 8.9% 9.3% Tangible Common Tier 1 Leverage Tier 1 Common Risk Based Tier 1 Risk Based Total Risk Based Equity/Tangible Assets > (1) Regulatory capital ratios are estimates pending completion and filing of the Company’s regulatory reports. 15


 
Appendix – Non-GAAP Reconciliation


 
Non-GAAP Reconciliation – Tangible Book Value 17


 
Thank you


 
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