EX-99.1 2 umpq-20191231ex991earn.htm PRESS RELEASE ANNOUNCING FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS Document

EXHIBIT 99.1 
image1.jpg 


Contacts:
Ron FarnsworthDrew Anderson
EVP/Chief Financial OfficerSVP/Investor Relations Director
Umpqua Holdings CorporationUmpqua Holdings Corporation
503-727-4108503-727-4192
ronfarnsworth@umpquabank.comdrewanderson@umpquabank.com
 
UMPQUA REPORTS QUARTERLY AND ANNUAL RESULTS

Fourth quarter 2019 net income of $83.8 million, or $0.38 per diluted common share
Full-year 2019 net income of $354.1 million, or $1.60 per diluted common share
Annual loan and lease growth of 4% and deposit growth of 6%

 
PORTLAND, Ore. – January 22, 2020 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net income of $83.8 million for the fourth quarter of 2019, compared to $84.5 million for the third quarter of 2019 and $80.3 million for the fourth quarter of 2018. Earnings per diluted common share were $0.38 for the fourth quarter of 2019, compared to $0.38 for the third quarter of 2019 and $0.36 for the fourth quarter of 2018.

For the twelve months ended December 31, 2019, the Company reported net income of $354.1 million, or $1.60 per diluted common share, up from $316.3 million, or $1.43 per diluted common share, for the twelve months ended December 31, 2018.

“I am very pleased with the continued progress we made in 2019 on executing against our ambitious Next Gen goals,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “Annual loan and lease growth of $773 million in addition to deposit growth of $1.3 billion shows our emphasis on balanced growth has been effective. We took the opportunity to reposition a portion of the balance sheet in the fourth quarter by selling loans with lower yields while reducing higher cost time deposits. We will continue to focus on balanced growth, executing on our expense initiatives and investing in strategic digital initiatives in 2020, which will drive sustained profitability and long-term shareholder value.”

Notable items that impacted the fourth quarter 2019 financial results included:

•$10.4 million loss on the fair value of the MSR asset, compared to the net $4.2 million gain in the prior quarter and the $13.1 million loss in the same period of the prior year.
•$5.0 million gain on the fair value of the debt capital market swap derivatives attributable to the increase in long-term interest rates during the quarter. This compares to the $4.6 million loss in the prior quarter and the $3.0 million loss in the same period of the prior year.
•$1.9 million of exit or disposal costs, related primarily to planned store consolidations, compared to $2.0 million in the prior quarter and $0.8 million in the same period of the prior year.





Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 2

Full-Year 2019 Highlights (compared to prior year):

•Gross loan and lease growth of $773.0 million, or 4%;
•Deposit growth of $1.3 billion, or 6%;
•Net interest income decreased by $18.0 million, driven primarily by a decrease in short and long-term interest rates during the annual period which led to a decline in net interest margin, partially offset by an increase in loans and leases;
•Provision for loan and lease losses increased by $16.6 million primarily due to loan and lease growth and a slightly higher net charge-off ratio;
•Non-interest income increased by $60.4 million, driven primarily by the $76.3 million net gain recorded from the sale of the Visa Class B stock and other debt securities, partially offset by a reduction in net residential mortgage banking revenue;
•Non-interest expense decreased by $20.4 million, driven primarily by lower salaries and benefits expense, lower occupancy and equipment expense, lower professional fees, and lower FDIC assessment expense, partially offset by a higher loss on other real estate owned (OREO);
•Paid dividends of $0.84 per common share (versus $0.82 per share in the prior year) and repurchased 300,000 shares of common stock; and
•Book value increased by 6%, or $1.17 per common share, and tangible book value1 increased by 12%, or $1.20 per common share.


Fourth Quarter 2019 Highlights (compared to prior quarter):

•Gross loan and lease balance diminishment of $325.1 million, or 2%, partially due to $117.9 million in non-SBA loan sales closed during the quarter. Average loan and lease balances increased $208.3 million, or 1%, compared to the prior quarter;
•Deposit growth of $46.8 million;
•Net interest income decreased by $2.2 million, attributable to a lower average yield on loans and leases, partially offset by lower funding costs;
•Provision for loan and lease losses decreased by $7.0 million, driven by lower net charge offs of $14.9 million during the quarter compared to $18.0 million in the prior quarter;
•Non-interest income decreased by $4.8 million reflecting the linked quarter decline in the fair value of the MSR asset, partially offset by the linked quarter increase in the fair value of debt capital market swap derivatives;
•Non-interest expense decreased by $0.1 million, driven by lower state and local business taxes, lower marketing expense, and a lower loss on OREO, partially offset by lower deferred origination costs and higher charitable contribution expense;
•Non-performing assets to total assets decreased by two basis points to 0.23%;
•Estimated total risk-based capital ratio of 13.9% and estimated Tier 1 common to risk weighted assets ratio of 11.2%; and
•Declared quarterly cash dividend of $0.21 per common share.

Balance Sheet
Total consolidated assets were $28.8 billion as of December 31, 2019, compared to $28.9 billion as of September 30, 2019 and $26.9 billion as of December 31, 2018. Including secured off-balance sheet lines of credit, total available liquidity was $11.4 billion as of December 31, 2019, representing 40% of total assets and 51% of total deposits.
Gross loans and leases were $21.2 billion as of December 31, 2019, a decrease of $0.3 billion from $21.5 billion as of September 30, 2019. This decrease reflects non-SBA loan sales of $117.9 million consistent with management plans to reposition a portion of the balance sheet by reducing lower yielding loans and leases while also reducing higher cost time deposits.

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 Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 3

Total deposits were $22.5 billion as of December 31, 2019, an increase of $46.8 million from $22.4 billion as of September 30, 2019. This increase was primarily attributable to growth in money market and interest bearing demand accounts, partially offset by a seasonal decline in non-interest demand deposits.

Net Interest Income
Net interest income was $226.8 million for the fourth quarter of 2019, down $2.2 million from the prior quarter. This decrease was driven primarily by lower average yields on earnings assets, partially offset by lower funding costs and a higher average balance of loans and leases.

The Company’s net interest margin was 3.51% for the fourth quarter of 2019, down 12 basis points from 3.63% for the third quarter of 2019. This decrease was driven primarily by the lower average yields on loans and leases, partially offset by lower funding costs and lower bond premium amortization.

Credit Quality
The allowance for loan and lease losses was $157.6 million, or 0.74% of loans and leases, as of December 31, 2019. The provision for loan and lease losses was $16.3 million for the fourth quarter of 2019, a decrease of $7.0 million from the prior quarter level driven primarily lower net charge-offs. Net charge-offs decreased by 6 basis points from the prior quarter to 0.28% of average loans and leases for the fourth quarter of 2019 (annualized). As of December 31, 2019, non-performing assets decreased to 0.23% of total assets, from 0.25% as of September 30, 2019 and 0.36% as of December 31, 2018.

Non-interest Income
Non-interest income was $83.7 million for the fourth quarter of 2019, down $4.8 million from the prior quarter. This decrease reflects the decline in fair value for the MSR asset, partially offset by the gain on the debt capital market swap derivatives (see notable items above) and the $4.6 million gain related to the sale of loans recorded in the period compared to $1.8 million recorded in the third quarter of 2019.

Net revenue from the origination and sale of residential mortgages was $35.4 million for the fourth quarter of 2019, up $4.0 million from the prior quarter. For-sale mortgage origination volume increased by 26% from the prior quarter, while the home lending gain on sale margin decreased to 3.34% for the fourth quarter of 2019. Of the current quarter’s mortgage production, 55% related to purchase activity, compared to 60% for the prior quarter and 80% for the same period in the prior year.

Non-interest Expense
Non-interest expense was $183.4 million for the fourth quarter of 2019, down $0.1 million from the prior quarter level. This decrease was attributable to lower state and local business taxes, lower marketing expense, a lower loss on OREO, partially offset by lower deferred origination costs and higher charitable contribution expense.

Capital
As of December 31, 2019, the Company’s book value per common share increased to $19.59 from $19.48 in the prior quarter, and its tangible book value per common share1 increased to $11.39 from $11.27 in the prior quarter. During the fourth quarter of 2019, the Company declared a dividend of $0.21 per share.

The Company’s estimated total risk-based capital ratio was 13.9% and its estimated Tier 1 common equity to risk weighted assets ratio was 11.2% as of December 31, 2019. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of December 31, 2019 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 Fourth Quarter and Full-Year 2019 Results
January 22, 2020
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).
 
(Dollars in thousands, except per share data)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018
Total shareholders' equity$4,313,915  $4,289,516  $4,228,507  $4,112,326  $4,056,442  
Subtract:   
Goodwill1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  
Other intangible assets, net18,346  19,750  21,155  22,560  23,964  
Tangible common shareholders' equity$2,507,918  $2,482,115  $2,419,701  $2,302,115  $2,244,827  
Total assets$28,846,809  $28,930,855  $27,986,075  $27,355,625  $26,939,781  
Subtract:   
Goodwill1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  
Other intangible assets, net18,346  19,750  21,155  22,560  23,964  
Tangible assets$27,040,812  $27,123,454  $26,177,269  $25,545,414  $25,128,166  
Common shares outstanding at period end220,229  220,212  220,499  220,457  220,255  
Total shareholders' equity to total assets ratio14.95 %14.83 %15.11 %15.03 %15.06 %
Tangible common equity ratio9.27 %9.15 %9.24 %9.01 %8.93 %
Book value per common share$19.59  $19.48  $19.18  $18.65  $18.42  
Tangible book value per common share$11.39  $11.27  $10.97  $10.44  $10.19  



Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
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. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquabank.com.
 
Earnings Conference Call Information
The Company will host its fourth quarter 2019 earnings conference call on Thursday, January 23, 2020, at 10:00 a.m. PT (1:00 p.m. ET). During the call, the Company will provide an update on recent activities and discuss its fourth quarter and full year 2019 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (866) 440-7407 ten minutes prior to the start time and enter conference ID: 9756638. A re-broadcast will be available approximately two hours after the call by dialing (855) 859-2056 and entering conference ID 9756638. The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at www.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 the projected impact of strategic investments. 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; 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 Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 6

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
  
 Quarter Ended% Change
(In thousands, except per share data)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear over Year
Interest income:     
Loans and leases$262,109  $266,111  $264,110  $258,747  $254,093  (2)%3 %
Interest and dividends on investments:
Taxable13,361  12,546  10,287  19,956  27,381  6 %(51)%
Exempt from federal income tax1,638  1,727  1,921  2,114  2,135  (5)%(23)%
Dividends579  599  574  517  538  (3)%8 %
Temporary investments and interest bearing deposits4,343  4,204  4,708  925  2,621  3 %66 %
Total interest income282,030  285,187  281,600  282,259  286,768  (1)%(2)%
Interest expense:
Deposits44,380  45,876  43,591  34,094  30,124  (3)%47 %
Securities sold under agreement to repurchase and federal funds purchased431  448  403  810  185  (4)%133 %
Borrowings5,080  4,238  4,563  3,683  3,326  20 %53 %
Junior subordinated debentures5,325  5,652  5,881  5,987  5,743  (6)%(7)%
Total interest expense55,216  56,214  54,438  44,574  39,378  (2)%40 %
Net interest income226,814  228,973  227,162  237,685  247,390  (1)%(8)%
Provision for loan and lease losses16,252  23,227  19,352  13,684  17,219  (30)%(6)%
Non-interest income:
Service charges on deposits16,656  16,627  15,953  15,278  16,035  0 %4 %
Brokerage revenue4,027  4,060  3,980  3,810  4,178  (1)%(4)%
Residential mortgage banking revenue, net34,050  47,000  9,529  11,231  15,150  (28)%125 %
Gain (loss) on sale of debt securities, net2  —  (7,186) —  —  nm  nm  
(Loss) gain on equity securities, net(84) 257  82,607  695  410  (133)%(120)%
Gain on loan and lease sales, net4,603  1,762  3,333  769  2,484  161 %85 %
BOLI income2,078  2,067  2,093  2,168  2,116  1 %(2)%
Other income22,417  16,739  11,514  11,789  16,438  34 %36 %
Total non-interest income83,749  88,512  121,823  45,740  56,811  (5)%47 %
Non-interest expense:
Salaries and employee benefits108,847  106,819  104,049  100,658  102,109  2 %7 %
Occupancy and equipment, net36,513  35,446  36,032  36,245  35,949  3 %2 %
Intangible amortization1,404  1,405  1,405  1,404  1,542  0 %(9)%
FDIC assessments2,867  2,587  2,837  2,942  2,619  11 %9 %
Loss (gain) on other real estate owned, net48  1,188  2,678  (51) 1,125  (96)%(96)%
Other expenses33,764  36,145  33,414  30,394  35,144  (7)%(4)%
Total non-interest expense183,443  183,590  180,415  171,592  178,488  0 %3 %
Income before provision for income taxes110,868  110,668  149,218  98,149  108,494  0 %2 %
Provision for income taxes27,118  26,166  37,408  24,116  28,183  4 %(4)%
Net income$83,750  $84,502  $111,810  $74,033  $80,311  (1)%4 %
Weighted average basic shares outstanding220,222  220,285  220,487  220,366  220,247  0 %0 %
Weighted average diluted shares outstanding220,671  220,583  220,719  220,655  220,668  0 %0 %
Earnings per common share – basic$0.38  $0.38  $0.51  $0.34  $0.36  0 %6 %
Earnings per common share – diluted$0.38  $0.38  $0.51  $0.34  $0.36  0 %6 %
nm = not meaningful     



Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 7

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
  
 Year Ended% Change
(In thousands, except per share data)Dec 31, 2019Dec 31, 2018Year over Year
Interest income:   
Loans and leases$1,051,077  $972,114  8 %
Interest and dividends on investments:
Taxable56,150  76,014  (26)%
Exempt from federal income tax7,400  8,368  (12)%
Dividends2,269  1,988  14 %
Temporary investments and interest bearing deposits14,180  8,665  64 %
Total interest income1,131,076  1,067,149  6 %
Interest expense: 
Deposits167,941  92,685  81 %
Securities sold under agreement to repurchase and federal funds purchased2,092  506  313 %
Borrowings17,564  13,604  29 %
Junior subordinated debentures22,845  21,715  5 %
Total interest expense210,442  128,510  64 %
Net interest income920,634  938,639  (2)%
Provision for loan and lease losses72,515  55,905  30 %
Non-interest income: 
Service charges on deposits64,514  62,124  4 %
Brokerage revenue15,877  16,480  (4)%
Residential mortgage banking revenue, net101,810  118,235  (14)%
(Loss) gain on sale of debt securities, net(7,184) 14  nm  
Gain (loss) on equity securities, net83,475  (1,484) nm  
Gain on loan and lease sales, net10,467  7,834  34 %
BOLI income8,406  8,297  1 %
Other income62,459  67,917  (8)%
Total non-interest income339,824  279,417  22 %
Non-interest expense: 
Salaries and employee benefits420,373  425,575  (1)%
Occupancy and equipment, net144,236  148,724  (3)%
Intangible amortization5,618  6,166  (9)%
FDIC assessments11,233  16,094  (30)%
Loss on other real estate owned, net3,863  867  346 %
Other expenses133,717  142,039  (6)%
Total non-interest expense719,040  739,465  (3)%
Income before provision for income taxes468,903  422,686  11 %
Provision for income taxes114,808  106,423  8 %
Net income$354,095  $316,263  12 %
Weighted average basic shares outstanding220,339  220,280  0 %
Weighted average diluted shares outstanding220,650  220,737  0 %
Earnings per common share – basic$1.61  $1.44  12 %
Earnings per common share – diluted$1.60  $1.43  12 %
nm = not meaningful   




Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 8

Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
    % Change
(In thousands, except per share data)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear over Year
Assets:     
Cash and due from banks$382,598  $433,620  $342,508  $296,967  $335,419  (12)%14 %
Interest bearing cash and temporary investments980,158  757,824  691,283  605,841  287,218  29 %241 %
Investment securities:     
Equity and other, at fair value80,165  64,764  66,358  63,327  61,841  24 %30 %
Available for sale, at fair value2,814,682  2,842,076  2,698,398  2,894,778  2,977,108  (1)%(5)%
Held to maturity, at amortized cost3,260  3,320  3,416  3,478  3,606  (2)%(10)%
Loans held for sale, at fair value513,431  355,022  356,645  240,302  166,461  45 %208 %
Loans and leases21,195,684  21,520,794  20,953,371  20,405,997  20,422,666  (2)%4 %
Allowance for loan and lease losses(157,629) (156,288) (151,069) (144,872) (144,871) 1 %9 %
Net loans and leases21,038,055  21,364,506  20,802,302  20,261,125  20,277,795  (2)%4 %
Restricted equity securities46,463  54,463  43,063  47,466  40,268  (15)%15 %
Premises and equipment, net201,460  203,391  210,285  217,595  227,423  (1)%(11)%
Operating lease right-of-use assets110,718  108,187  112,752  109,807  —  2 %nm  
Goodwill1,787,651  1,787,651  1,787,651  1,787,651  1,787,651  0 %0 %
Other intangible assets, net18,346  19,750  21,155  22,560  23,964  (7)%(23)%
Residential mortgage servicing rights, at fair value115,010  151,383  139,780  158,946  169,025  (24)%(32)%
Bank owned life insurance320,611  318,533  316,435  314,303  313,626  1 %2 %
Other assets434,201  466,365  394,044  331,479  268,376  (7)%62 %
Total assets$28,846,809  $28,930,855  $27,986,075  $27,355,625  $26,939,781  0 %7 %
Liabilities:     
Deposits$22,481,504  $22,434,734  $21,819,013  $21,243,894  $21,137,486  0 %6 %
Securities sold under agreements to repurchase311,308  296,717  308,052  288,944  297,151  5 %5 %
Borrowings906,635  1,106,674  821,712  932,420  751,788  (18)%21 %
Junior subordinated debentures, at fair value274,812  267,798  277,028  294,121  300,870  3 %(9)%
Junior subordinated debentures, at amortized cost88,496  88,553  88,610  88,667  88,724  0 %0 %
Operating lease liabilities119,429  116,924  121,742  118,520  —  2 %nm  
Deferred tax liability, net52,928  67,055  57,757  45,202  25,846  (21)%105 %
Other liabilities297,782  262,884  263,654  231,531  281,474  13 %6 %
Total liabilities24,532,894  24,641,339  23,757,568  23,243,299  22,883,339  0 %7 %
Shareholders' equity:     
Common stock3,514,000  3,511,493  3,514,391  3,511,731  3,512,874  0 %0 %
Retained earnings770,366  733,059  695,003  629,877  602,482  5 %28 %
Accumulated other comprehensive income (loss)29,549  44,964  19,113  (29,282) (58,914) (34)%(150)%
Total shareholders' equity4,313,915  4,289,516  4,228,507  4,112,326  4,056,442  1 %6 %
Total liabilities and shareholders' equity$28,846,809  $28,930,855  $27,986,075  $27,355,625  $26,939,781  0 %7 %
Common shares outstanding at period end220,229  220,212  220,499  220,457  220,255  0 %0 %
Book value per common share$19.59  $19.48  $19.18  $18.65  $18.42  1 %6 %
Tangible book value per common share$11.39  $11.27  $10.97  $10.44  $10.19  1 %12 %
Tangible equity - common$2,507,918  $2,482,115  $2,419,701  $2,302,115  $2,244,827  1 %12 %
Tangible common equity to tangible assets9.27 %9.15 %9.24 %9.01 %8.93 %0.12  0.34  



Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 9

Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)
    
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018% Change
 AmountAmountAmountAmountAmountSeq. QuarterYear over Year
Loans and leases:     
Commercial real estate:     
Non-owner occupied term, net$3,545,566  $3,495,555  $3,537,084  $3,476,972  $3,573,065  1 %(1)%
Owner occupied term, net2,496,088  2,566,299  2,396,674  2,449,648  2,480,371  (3)%1 %
Multifamily, net3,514,774  3,479,986  3,341,547  3,302,936  3,304,763  1 %6 %
Construction & development, net678,740  771,214  732,932  686,107  736,254  (12)%(8)%
Residential development, net189,010  191,500  199,421  205,963  196,890  (1)%(4)%
Commercial:
Term, net2,232,817  2,310,759  2,271,346  2,185,322  2,232,923  (3)%0 %
Lines of credit & other, net1,212,393  1,254,755  1,280,587  1,229,092  1,169,525  (3)%4 %
Leases & equipment finance, net1,465,489  1,485,753  1,449,579  1,378,686  1,330,155  (1)%10 %
Residential real estate:
Mortgage, net4,215,424  4,245,674  3,995,643  3,768,955  3,635,073  (1)%16 %
Home equity loans & lines, net1,237,512  1,224,578  1,215,215  1,170,252  1,176,477  1 %5 %
   Consumer & other, net407,871  494,721  533,343  552,064  587,170  (18)%(31)%
Total loans, net of deferred fees and costs$21,195,684  $21,520,794  $20,953,371  $20,405,997  $20,422,666  (2)%4 %
Loan and leases mix:
Commercial real estate:
   Non-owner occupied term, net17 %16 %17 %17 %17 %
   Owner occupied term, net12 %12 %11 %12 %12 %
   Multifamily, net16 %16 %16 %16 %16 %
Construction & development, net3 %4 %3 %3 %4 %
Residential development, net1 %1 %1 %1 %1 %
Commercial: 
Term, net10 %11 %11 %11 %11 %
Lines of credit & other, net6 %6 %6 %6 %6 %
Leases & equipment finance, net7 %7 %7 %7 %6 %
Residential real estate: 
Mortgage, net20 %20 %19 %18 %18 %
Home equity loans & lines, net6 %5 %6 %6 %6 %
   Consumer & other, net2 %2 %3 %3 %3 %
    Total100 %100 %100 %100 %100 %




Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 10

Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
    
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018% Change
 AmountAmountAmountAmountAmountSeq. QuarterYear over Year
Deposits:     
Demand, non-interest bearing$6,913,375  $7,123,180  $6,771,087  $6,495,562  $6,667,467  (3)%4 %
Demand, interest bearing2,524,534  2,406,404  2,355,473  2,341,441  2,340,471  5 %8 %
Money market6,930,815  6,646,383  6,789,036  6,469,286  6,645,390  4 %4 %
Savings1,471,475  1,469,302  1,446,332  1,479,509  1,492,685  0 %(1)%
Time4,641,305  4,789,465  4,457,085  4,458,096  3,991,473  (3)%16 %
Total$22,481,504  $22,434,734  $21,819,013  $21,243,894  $21,137,486  0 %6 %
Total core deposits (1)
$19,061,058  $18,845,328  $18,529,797  $17,903,754  $18,190,402  1 %5 %
Deposit mix:
Demand, non-interest bearing31 %32 %31 %31 %32 %
Demand, interest bearing11 %11 %11 %11 %11 %
Money market31 %30 %31 %30 %31 %
Savings6 %6 %7 %7 %7 %
Time21 %21 %20 %21 %19 %
Total100 %100 %100 %100 %100 %
Number of open accounts:          
Demand, non-interest bearing415,254  413,633  409,235  406,039  406,240  
Demand, interest bearing75,900  76,390  76,686  76,712  77,099  
Money market58,888  58,796  58,158  56,602  56,196  
Savings159,948  160,673  160,708  161,039  161,656  
Time62,952  62,122  60,571  58,210  54,388  
Total772,942  771,614  765,358  758,602  755,579  
Average balance per account:      
Demand, non-interest bearing$16.6  $17.2  $16.5  $16.0  $16.4    
Demand, interest bearing33.3  31.5  30.7  30.5  30.4    
Money market117.7  113.0  116.7  114.3  118.3    
Savings9.2  9.1  9.0  9.2  9.2    
Time73.7  77.1  73.6  76.6  73.4    
Total$29.1  $29.1  $28.5  $28.0  $28.0    
 
(1) Core deposits are defined as total deposits less time deposits greater than $100,000.




Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 11

Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
 (Unaudited)
    
 Quarter Ended% Change
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear over Year
Non-performing assets:     
Loans and leases on non-accrual status$26,244  $31,636  $35,022  $44,586  $50,823  (17)%(48)%
Loans and leases past due 90+ days and accruing (1)
37,969  35,745  35,700  31,424  36,444  6 %4 %
Total non-performing loans and leases64,213  67,381  70,722  76,010  87,267  (5)%(26)%
Other real estate owned3,295  4,026  8,423  10,488  10,958  (18)%(70)%
Total non-performing assets$67,508  $71,407  $79,145  $86,498  $98,225  (5)%(31)%
Performing restructured loans and leases$18,576  $14,309  $15,267  $15,726  $13,924  30 %33 %
Loans and leases past due 31-89 days$41,882  $44,390  $40,619  $53,009  $37,373  (6)%12 %
Loans and leases past due 31-89 days to total loans and leases0.20 %0.21 %0.19 %0.26 %0.18 %  
Non-performing loans and leases to total loans and leases (1)
0.30 %0.31 %0.34 %0.37 %0.43 %  
Non-performing assets to total assets (1)
0.23 %0.25 %0.28 %0.32 %0.36 %  

(1)Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $4.3 million, $5.2 million, $5.4 million, $158,000, and $8.9 million at December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively.


Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 12

Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
 (Unaudited)
    
 Quarter Ended% Change
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear over Year
Allowance for loan and lease losses:    
Balance beginning of period$156,288  $151,069  $144,872  $144,871  $144,026  
Provision for loan and lease losses16,252  23,227  19,352  13,684  17,219  (30)%(6)%
Charge-offs(18,734) (23,112) (16,707) (17,152) (19,527) (19)%(4)%
Recoveries3,823  5,104  3,552  3,469  3,153  (25)%21 %
Net charge-offs(14,911) (18,008) (13,155) (13,683) (16,374) (17)%(9)%
Total allowance for loan and lease losses157,629  156,288  151,069  144,872  144,871  1 %9 %
Reserve for unfunded commitments5,106  5,085  4,857  4,654  4,523  0 %13 %
Total allowance for credit losses$162,735  $161,373  $155,926  $149,526  $149,394  1 %9 %
     
Net charge-offs to average loans and leases (annualized)0.28 %0.34 %0.26 %0.27 %0.32 %  
Recoveries to gross charge-offs20.41 %22.08 %21.26 %20.23 %16.15 % 
Allowance for loan and lease losses to loans and leases0.74 %0.73 %0.72 %0.71 %0.71 %  
Allowance for credit losses to loans and leases0.77 %0.75 %0.74 %0.73 %0.73 %  


Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
Year Ended% Change
(Dollars in thousands)Dec 31, 2019Dec 31, 2018Year over Year
Allowance for credit losses: 
Balance beginning of period$144,871  $140,608  
Provision for loan and lease losses72,515  55,905  30 %
Charge-offs(75,705) (66,050) 15 %
Recoveries15,948  14,408  11 %
Net charge-offs(59,757) (51,642) 16 %
Total allowance for loan and lease losses157,629  144,871  9 %
Reserve for unfunded commitments5,106  4,523  13 %
Total allowance for credit losses$162,735  $149,394  9 %
  
Net charge-offs to average loans and leases0.29 %0.26 %
Recoveries to gross charge-offs21.07 %21.81 %



Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 13

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
  
 Quarter Ended% Change
 Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear
over
Year
Average Rates:     
Yield on loans held for sale4.25 %4.82 %5.03 %5.95 %5.81 %(0.57) (1.56) 
Yield on loans and leases4.80 %4.93 %5.07 %5.06 %4.97 %(0.13) (0.17) 
Yield on taxable investments2.05 %1.99 %1.62 %2.96 %4.11 %0.06  (2.06) 
Yield on tax-exempt investments (1)
3.23 %3.30 %3.42 %3.59 %3.70 %(0.07) (0.47) 
Yield on interest bearing cash and temporary investments1.65 %2.20 %2.41 %2.44 %2.25 %(0.55) (0.60) 
Total yield on earning assets (1)
4.36 %4.52 %4.59 %4.79 %4.81 %(0.16) (0.45) 
Cost of interest bearing deposits1.13 %1.19 %1.16 %0.97 %0.85 %(0.06) 0.28  
Cost of securities sold under agreements         
to repurchase and fed funds purchased0.56 %0.57 %0.55 %0.88 %0.26 %(0.01) 0.30  
Cost of borrowings1.96 %1.95 %2.03 %1.88 %1.75 %0.01  0.21  
Cost of junior subordinated debentures5.92 %6.14 %6.17 %6.24 %6.13 %(0.22) (0.21) 
Total cost of interest bearing liabilities1.27 %1.33 %1.31 %1.14 %1.00 %(0.06) 0.27  
Net interest spread (1)
3.09 %3.19 %3.28 %3.65 %3.81 %(0.10) (0.72) 
Net interest margin (1)
3.51 %3.63 %3.70 %4.03 %4.15 %(0.12) (0.64) 
Performance Ratios:         
Return on average assets1.15 %1.18 %1.62 %1.12 %1.19 %(0.03) (0.04) 
Return on average tangible assets1.22 %1.26 %1.73 %1.20 %1.28 %(0.04) (0.06) 
Return on average common equity7.70 %7.87 %10.80 %7.34 %7.90 %(0.17) (0.20) 
Return on average tangible common equity13.24 %13.67 %19.14 %13.17 %14.34 %(0.43) (1.10) 
Efficiency ratio – Consolidated59.00 %57.76 %51.64 %60.44 %58.58 %1.24  0.42  
Efficiency ratio – Bank57.56 %56.22 %50.16 %58.57 %57.67 %1.34  (0.11) 

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





Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 14

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
  
 Year Ended% Change
 Dec 31, 2019Dec 31, 2018Year over Year
Average Rates:   
Yield on loans held for sale4.83 %5.02 %(0.19) 
Yield on loans and leases4.96 %4.90 %0.06  
Yield on taxable investments2.16 %2.86 %(0.70) 
Yield on tax-exempt investments (1)3.40 %3.66 %(0.26) 
Yield on temporary investments and interest bearing cash2.06 %1.94 %0.12  
Total yield on earning assets (1)
4.56 %4.59 %(0.03) 
Cost of interest bearing deposits1.12 %0.67 %0.45  
Cost of securities sold under agreements      
to repurchase and fed funds purchased0.65 %0.18 %0.47  
Cost of borrowings1.96 %1.73 %0.23  
Cost of junior subordinated debentures6.12 %5.86 %0.26  
Total cost of interest bearing liabilities1.26 %0.84 %0.42  
Net interest spread (1)
3.30 %3.75 %(0.45) 
Net interest margin (1)
3.71 %4.04 %(0.33) 
Performance Ratios:      
Return on average assets1.27 %1.21 %0.06  
Return on average tangible assets1.35 %1.30 %0.05  
Return on average common equity8.42 %7.90 %0.52  
Return on average tangible common equity14.77 %14.45 %0.32  
Efficiency ratio – Consolidated56.97 %60.61 %(3.64) 
Efficiency ratio – Bank55.40 %58.60 %(3.20) 


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





Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 15

Umpqua Holdings Corporation
Average Balances
(Unaudited)
  
 Quarter Ended% Change
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear over Year
Temporary investments and interest bearing cash$1,045,975  $759,416  $783,703  $153,347  $462,621  38 %126 %
Investment securities, taxable2,719,089  2,648,092  2,683,472  2,757,644  2,716,616  3 %0 %
Investment securities, tax-exempt244,895  252,765  271,633  287,366  282,998  (3)%(13)%
Loans held for sale415,169  328,155  264,445  187,656  238,958  27 %74 %
Loans and leases21,379,239  21,170,915  20,605,963  20,388,988  20,051,674  1 %7 %
Total interest earning assets25,804,367  25,159,343  24,609,216  23,775,001  23,752,867  3 %9 %
Goodwill and other intangible assets, net1,806,791  1,808,191  1,809,583  1,811,007  1,812,487  0 %0 %
Total assets28,981,387  28,356,982  27,709,310  26,811,621  26,672,224  2 %9 %
Non-interest bearing demand deposits7,037,320  6,880,093  6,556,090  6,505,615  6,828,730  2 %3 %
Interest bearing deposits15,550,483  15,289,464  15,069,198  14,304,325  14,138,852  2 %10 %
Total deposits22,587,803  22,169,557  21,625,288  20,809,940  20,967,582  2 %8 %
Interest bearing liabilities17,237,770  16,827,917  16,646,949  15,858,561  15,547,250  2 %11 %
Shareholders’ equity - common4,317,277  4,260,810  4,153,175  4,091,174  4,035,125  1 %7 %
Tangible common equity (1)
2,510,486  2,452,619  2,343,592  2,280,167  2,222,638  2 %13 %

Umpqua Holdings Corporation
Average Balances
(Unaudited)
 Year Ended% Change
(Dollars in thousands)Dec 31, 2019Dec 31, 2018Year over Year
Temporary investments and interest bearing cash$688,258  $446,500  54 %
Investment securities, taxable2,701,821  2,729,950  (1)%
Investment securities, tax-exempt264,017  281,906  (6)%
Loans held for sale299,560  288,288  4 %
Loans and leases20,889,769  19,562,369  7 %
Total interest earning assets24,843,425  23,309,013  7 %
Goodwill and other intangible assets, net1,808,879  1,814,756  0 %
Total assets27,971,844  26,210,933  7 %
Non-interest bearing demand deposits6,746,607  6,699,112  1 %
Interest bearing deposits15,057,428  13,820,497  9 %
Total deposits21,804,035  20,519,609  6 %
Interest bearing liabilities16,647,085  15,264,375  9 %
Shareholders’ equity - common4,206,380  4,002,700  5 %
Tangible common equity (1)
2,397,501  2,187,944  10 %

(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 Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 16

Umpqua Holdings Corporation
Average Rates and Balances 		 
(Unaudited)
(dollars in thousands)Quarter Ended
December 31, 2019September 30, 2019December 31, 2018
 Average BalanceInterest Income or ExpenseAverage Yields or RatesAverage BalanceInterest Income or ExpenseAverage Yields or RatesAverage BalanceInterest Income or ExpenseAverage Yields or Rates
INTEREST-EARNING ASSETS:        
Loans held for sale$415,169  $4,408  4.25 %$328,155  $3,953  4.82 %$238,958  $3,473  5.81 %
Loans and leases (1)21,379,239  257,701  4.80 %21,170,915  262,158  4.93 %20,051,674  250,620  4.97 %
Taxable securities2,719,089  13,940  2.05 %2,648,092  13,145  1.99 %2,716,616  27,919  4.11 %
Non-taxable securities (2)244,895  1,980  3.23 %252,765  2,086  3.30 %282,998  2,619  3.70 %
Temporary investments and interest-bearing cash1,045,975  4,343  1.65 %759,416  4,204  2.20 %462,621  2,621  2.25 %
Total interest-earning assets25,804,367  $282,372  4.36 %25,159,343  $285,546  4.52 %23,752,867  $287,252  4.81 %
Other assets3,177,020      3,197,639      2,919,357      
Total assets$28,981,387      $28,356,982      $26,672,224      
INTEREST-BEARING LIABILITIES:               
Interest-bearing demand deposits$2,446,137  $3,485  0.57 %$2,363,626  $3,117  0.52 %$2,319,613  $2,659  0.45 %
Money market deposits6,853,118  13,690  0.79 %6,962,370  16,575  0.94 %6,371,127  9,170  0.57 %
Savings deposits1,463,744  509  0.14 %1,462,198  557  0.15 %1,488,768  490  0.13 %
Time deposits4,787,484  26,696  2.21 %4,501,270  25,627  2.26 %3,959,344  17,805  1.78 %
Total interest-bearing deposits15,550,483  44,380  1.13 %15,289,464  45,876  1.19 %14,138,852  30,124  0.85 %
Repurchase agreements and federal funds purchased303,230  431  0.56 %313,089  448  0.57 %284,847  185  0.26 %
Borrowings1,027,311  5,080  1.96 %860,285  4,238  1.95 %751,773  3,326  1.75 %
Junior subordinated debentures356,746  5,325  5.92 %365,079  5,652  6.14 %371,778  5,743  6.13 %
Total interest-bearing liabilities17,237,770  $55,216  1.27 %16,827,917  $56,214  1.33 %15,547,250  $39,378  1.00 %
Non-interest-bearing deposits7,037,320      6,880,093      6,828,730      
Other liabilities389,020      388,162      261,119      
Total liabilities24,664,110      24,096,172      22,637,099      
Common equity4,317,277      4,260,810      4,035,125      
Total liabilities and shareholders' equity$28,981,387      $28,356,982      $26,672,224      
NET INTEREST INCOME$227,156      $229,332     $247,874     
NET INTEREST SPREAD 3.09 %  3.19 % 3.81 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)3.51 %  3.63 %4.15 %
(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. The amount of such adjustment was an addition to recorded income of approximately $342,000 for the three months ended December 31, 2019 as compared to $359,000 for September 30, 2019 and $484,000 for December 31, 2018. 


Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 17

Umpqua Holdings Corporation
Average Rates and Balances
(Unaudited)
(dollars in thousands)Year Ended
 December 31, 2019December 31, 2018
 Average BalanceInterest Income or ExpenseAverage Yields or RatesAverage BalanceInterest Income or ExpenseAverage Yields or Rates
INTEREST-EARNING ASSETS:        
Loans held for sale$299,560  $14,477  4.83 %$288,288  $14,475  5.02 %
Loans and leases (1)
20,889,769  1,036,600  4.96 %19,562,369  957,639  4.90 %
Taxable securities2,701,821  58,419  2.16 %2,729,950  78,002  2.86 %
Non-taxable securities (2)264,017  8,971  3.40 %281,906  10,316  3.66 %
Temporary investments and interest-bearing cash688,258  14,180  2.06 %446,500  8,665  1.94 %
Total interest-earning assets24,843,425  $1,132,647  4.56 %23,309,013  $1,069,097  4.59 %
Other assets3,128,419      2,901,920      
Total assets$27,971,844      $26,210,933      
INTEREST-BEARING LIABILITIES:          
Interest-bearing demand deposits$2,365,845  $12,040  0.51 %$2,333,662  $7,675  0.33 %
Money market deposits6,740,502  56,633  0.84 %6,438,175  27,599  0.43 %
Savings deposits1,467,263  1,746  0.12 %1,473,134  1,356  0.09 %
Time deposits4,483,818  97,522  2.17 %3,575,526  56,055  1.57 %
Total interest-bearing deposits15,057,428  167,941  1.12 %13,820,497  92,685  0.67 %
Repurchase agreements and federal funds purchased319,723  2,092  0.65 %287,767  506  0.18 %
Borrowings896,681  17,564  1.96 %785,593  13,604  1.73 %
Junior subordinated debentures373,253  22,845  6.12 %370,518  21,715  5.86 %
Total interest-bearing liabilities16,647,085  $210,442  1.26 %15,264,375  $128,510  0.84 %
Non-interest-bearing deposits6,746,607      6,699,112      
Other liabilities371,772      244,746      
Total liabilities23,765,464      22,208,233      
Common equity4,206,380      4,002,700      
Total liabilities and shareholders' equity$27,971,844      $26,210,933      
NET INTEREST INCOME$922,205     $940,587     
NET INTEREST SPREAD 3.30 % 3.75 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)  3.71 %  4.04 %
(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. The amount of such adjustment was an addition to recorded income of approximately $1.6 million for the twelve months ended December 31, 2019 as compared to $1.9 million for the same period in 2018. 



Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 18

Umpqua Holdings Corporation
Residential Mortgage Banking Activity 		 
(Unaudited)
Quarter Ended% Change
(Dollars in thousands)Dec 31, 2019Sep 30, 2019Jun 30, 2019Mar 31, 2019Dec 31, 2018Seq. QuarterYear
over Year
Residential mortgage banking revenue:
Origination and sale$35,438  $31,432  $23,151  $14,373  $16,665  13 %113 %
Servicing8,981  11,358  11,036  10,824  11,555  (21)%(22)%
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time(5,237) (6,835) (6,905) (6,431) (6,425) (23)%(18)%
Changes due to valuation inputs or assumptions(5,132) 11,045  (17,753) (7,535) (6,645) (146)%(23)%
Total$34,050  $47,000  $9,529  $11,231  $15,150  (28)%125 %
Closed loan volume:
Portfolio$335,511  $611,022  $481,878  $318,612  $312,524  (45)%7 %
For-sale1,060,016  844,442  698,150  487,090  589,355  26 %80 %
Total$1,395,527  $1,455,464  $1,180,028  $805,702  $901,879  (4)%55 %
Gain on sale margin:
Based on for-sale volume3.34 %3.72 %3.32 %2.95 %2.83 %(0.38) 0.51  
Residential mortgage servicing rights:
Balance, beginning of period$151,383  $139,780  $158,946  $169,025  $175,038  8 %(14)%
Additions for new MSR capitalized8,397  7,393  5,492  3,887  7,057  14 %19 %
Sale of MSR assets(34,401) —  —  —  —  nm  nm  
Changes in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time(5,237) (6,835) (6,905) (6,431) (6,425) (23)%(18)%
Changes due to valuation inputs or assumptions(5,132) 11,045  (17,753) (7,535) (6,645) (146)%(23)%
Balance, end of period$115,010  $151,383  $139,780  $158,946  $169,025  (24)%(32)%
Residential mortgage loans serviced for others$12,276,943  $15,707,519  $15,796,102  $15,902,587  $15,978,885  (22)%(23)%
MSR as % of serviced portfolio0.94 %0.96 %0.88 %1.00 %1.06 %(0.02) (0.12) 


Umpqua Reports Fourth Quarter and Full-Year 2019 Results
January 22, 2020
Page 19

Umpqua Holdings Corporation
Residential Mortgage Banking Activity 		 
(Unaudited)
Year Ended% Change  
(Dollars in thousands)Dec 31, 2019Dec 31, 2018Year over Year  
Residential mortgage banking revenue:
Origination and sale$104,394  $88,644  18 %
Servicing42,199  42,786  (1)%
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time(25,408) (24,533) 4 %
Changes due to valuation inputs or assumptions(19,375) 11,338  (271)%
Total$101,810  $118,235  (14)%
Closed loan volume:
Portfolio$1,747,023  $1,168,829  49 %
For-sale3,089,698  2,872,994  8 %
Total$4,836,721  $4,041,823  20 %
Gain on sale margin:
Based on for-sale volume3.38 %3.09 %0.29  
Residential mortgage servicing rights:
Balance, beginning of period$169,025  $153,151  10 %
Additions for new MSR capitalized25,169  29,069  (13)%
Sale of MSR assets(34,401) —  nm  
Changes in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time(25,408) (24,533) 4 %
Changes due to valuation inputs or assumptions(19,375) 11,338  (271)%
Balance, end of period$115,010  $169,025  (32)%

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