Umpqua Reports Third Quarter 2015 Results

Operating earnings1 of $62.1 million, or $0.28 per share

Operating results include $11.3 million in negative fair-value adjustments to mortgage servicing rights and swap instruments driven by decline in long-term rates

Strong loan and lease growth (before sales) of $469 million, or 12% annualized, and deposit growth of $322 million, or 8% annualized

Tangible book value per share1 increased by 1.8% sequentially to $9.08

PORTLAND, Ore.--()--Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $57.5 million for the third quarter of 2015, compared to $54.7 million for the second quarter of 2015 and $58.7 million for the third quarter of 2014. Earnings per diluted common share were $0.26 for the third quarter of 2015, compared to $0.25 for the second quarter of 2015 and $0.27 for the third quarter of 2014.

Operating earnings1, which represent earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, and merger related expenses, net of tax, were $62.1 million for the third quarter of 2015, compared to $68.7 million for the second quarter of 2015 and $65.0 million for the third quarter of 2014. Operating earnings per diluted common share were $0.28 for the third quarter of 2015, compared to $0.31 for the second quarter of 2015 and $0.30 for the third quarter of 2014.

“Umpqua’s financial performance in the third quarter reflects the strength of our footprint and unique position in strategic growth markets, as well as our focus on both managing capital wisely and increasing shareholder value,” said Ray Davis, President and CEO of Umpqua Holdings Corporation. “Despite the difficult low interest rate environment, the company performed strongly, including robust loan and deposit growth, decreased non-interest expense, additional cost synergies, and an increased quarterly dividend per share. We also continue to invest in the future of the company, and look forward to introducing new developments in the coming months that will continue advancing the innovative customer experience and product delivery for which Umpqua is known.”

Highlights (as compared to the prior quarter):

  • Third quarter of 2015 operating earnings1 decreased to $62.1 million:
    • Net interest income increased by $1.6 million, driven primarily by strong loan growth;
    • Provision for loan and lease losses decreased by $3.1 million, driven primarily by improved portfolio performance;
    • Non-interest income decreased by $20.0 million, reflecting $11.3 million in negative fair value adjustments to the mortgage servicing rights ("MSR") asset and swap instruments, lower revenues from the origination and sale of residential mortgages, and lower gains related to portfolio loan sales;
    • Non-interest expense (excluding merger-related expense) decreased by $3.4 million, driven primarily by a $2.3 million decrease in variable mortgage banking expenses related to lower mortgage origination volume and additional merger-related cost synergies, partially offset by higher other operating expenses;
  • Strong loan and deposit growth:
    • Gross loans and leases (before sales) grew by $468.7 million, or 12% annualized;
    • Deposits grew by $322.0 million, or 8% annualized;
  • Prudently managed capital:
    • Tangible book value per common share1 increased to $9.08, from $8.92;
    • Under Basel III rules, estimated total risk-based capital ratio of 14.4% and estimated Tier 1 common to risk weighted assets ratio of 11.4%;
    • Increased quarterly dividend to $0.16 per common share; and
    • Repurchased 150,000 shares of common stock for $2.5 million.

For the nine months ended September 30, 2015, the Company reported net earnings available to common shareholders of $159.3 million, or $0.72 per diluted common share, compared to $94.7 million, or $0.54 per diluted common share, for the nine months ended September 30, 2014. For the nine months ended September 30, 2015, operating earnings1 were $187.2 million, or $0.85 per diluted common share, compared to $143.1 million, or $0.81 per diluted common share, for the nine months ended September 30, 2014.

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.

Balance Sheet

Total consolidated assets were $23.2 billion as of September 30, 2015, compared to $22.8 billion as of June 30, 2015 and $22.5 billion as of September 30, 2014. Including secured off-balance sheet lines of credit, the Company had total available liquidity of $7.4 billion as of September 30, 2015, representing 32% of total assets and 43% of total deposits.

Gross loans and leases were $16.4 billion as of September 30, 2015, an increase of $413.7 million, or 10% annualized, from $16.0 billion as of June 30, 2015. This increase was driven by strong loan growth within the commercial, multifamily and mortgage portfolios, partially offset by a decline in non-owner occupied commercial real estate loans. During the third quarter of 2015, the Company also sold $54.9 million of portfolio residential mortgage loans. Excluding the impact of these sales, gross loan growth was $468.7 million, or 12% annualized.

Total deposits were $17.5 billion as of September 30, 2015, an increase of $322.0 million, or 8% annualized, from $17.1 billion as of June 30, 2015. This increase was primarily attributable to growth in non-interest bearing demand and money market deposits, partially offset by a decrease in time deposits.

Net Interest Income

Net interest income was $219.7 million for the third quarter of 2015, up $1.6 million from the prior quarter, but down $6.0 million from the same period in the prior year. The increase from the prior quarter was primarily driven by strong loan growth and one additional day in the quarter, partially offset by a 7 basis point decline in net interest margin. In addition, the level of interest income arising from the accretion of the credit discount recorded on loans acquired from Sterling decreased to $14.3 million for the third quarter of 2015, compared to $16.1 million in the prior quarter.

The Company’s net interest margin was 4.43% for the third quarter of 2015, down from 4.50% for the second quarter of 2015 and from 4.75% for the third quarter of 2014. The decrease from the prior quarter was primarily driven by a lower average yield on interest earning assets and a lower level of interest income arising from the accretion of the credit discount recorded on loans acquired from Sterling.

Credit Quality

Under acquisition accounting, loans (including those considered non-performing) acquired from Sterling were recorded at their estimated fair value, and the related allowance for loan losses was eliminated. As a result, the Company wrote down the value of the loan and lease portfolio acquired from Sterling as of the acquisition date. The credit portion of the fair value mark is not reflected in the reported allowance for loan and lease losses, or its related allowance coverage ratios, but we believe should be considered when comparing the current quarter ratios to similar ratios in periods prior to the acquisition of Sterling.

Loans acquired with significant deteriorated credit quality are accounted for as purchased credit impaired pools. Accordingly, loans included in the purchased credit impaired pools are not reported as non-performing loans based upon their individual performance status.

During the third quarter of 2015, the Company reported $14.3 million of accretion related to the Sterling credit discount in interest income. As of September 30, 2015, the purchased non-credit impaired loans had approximately $82.5 million of remaining credit discount that will accrete into interest income over the life of the loans, and the purchased credit impaired loan pools had approximately $49.8 million of remaining total discount.

The allowance for loan and lease losses was $130.1 million, or 0.79% of loans and leases, as of September 30, 2015. To provide better comparability to prior periods, this pro-forma ratio would have been approximately 1.6% after grossing up the allowance for loan and lease losses and the loans and leases by the amount of the credit discount remaining as of quarter-end. This compares to a pro-forma ratio of approximately 1.7% as of June 30, 2015.

The provision for loan and lease losses was $8.2 million for the third quarter of 2015, a decrease of $3.1 million from the prior quarter. The decrease from the prior quarter was primarily driven by improved credit performance within the loan and lease portfolio. Charge-offs, net of recoveries, were $5.1 million for the third quarter of 2015, compared to $4.3 million in the prior quarter.

Non-performing assets decreased to $64.8 million, or 0.28% of total assets, as of September 30, 2015, compared to $70.1 million, or 0.31% of total assets, as of June 30, 2015. Loans past due 31 to 89 days were $28.9 million, or 0.18% of loans and leases, as of September 30, 2015, compared to $25.6 million, or 0.16% of loans and leases, as of June 30, 2015. Restructured loans on accrual status were $35.7 million as of September 30, 2015, compared to $37.0 million as of June 30, 2015.

Non-interest Income

Total non-interest income was $60.3 million for the third quarter of 2015, down $20.1 million from the prior quarter and $1.8 million from the same period in the prior year. The decrease from the prior quarter was primarily driven by lower mortgage banking revenue, lower gains related to portfolio loan sales, and lower other income. The decrease in other income was primarily attributable to a fair value loss of $1.2 million on debt capital market swap derivatives, compared to a gain of $1.4 million in the prior quarter, resulting from the decline in long-term interest rates.

Residential mortgage banking revenue, which includes revenue from the origination and sale of residential mortgage loans, revenue from the servicing of residential mortgage loans and changes to the fair value of the residential MSR asset, decreased by $16.0 million from the prior quarter. Revenue from the origination and sale of residential mortgages decreased by $6.8 million from the prior quarter, driven primarily by a 15% decrease in for sale mortgage originations and a lower home lending gain on sale margin, reflecting increased competitive pressures in the mortgage market. The change in fair value related to the MSR asset resulted in a loss of $10.1 million for the third quarter of 2015, as compared to a loss of $0.4 million for the prior quarter, reflecting the linked quarter decline in interest rates and its impact on the prepayment speed assumption for the MSR asset.

The Company’s gain on sale margin was 3.19% for the third quarter of 2015, down from 3.38% in the prior quarter. Of the current quarter’s mortgage production, 70% related to purchase activity, as compared to 59% for the prior quarter and 71% for the same period in the prior year.

As of September 30, 2015, the Company serviced $12.7 billion of residential mortgage loans for others, and its related MSR asset was valued at $124.8 million, or 0.98% of the total serviced portfolio principal balance. This compares to $12.3 billion of residential mortgage loans serviced for others as of June 30, 2015, with a related MSR asset of $127.2 million, or 1.03% of the total serviced portfolio principal balance. As of September 30, 2014, the Company serviced $11.3 billion of residential mortgage loans for others, and its related MSR asset was valued at $118.7 million, or 1.05% of the total serviced portfolio principal balance.

Non-interest Expense

Non-interest expense was $182.7 million for the third quarter of 2015, which included $6.0 million of merger-related expenses. This compares to $201.9 million, including $21.8 million of merger-related expenses, for the second quarter of 2015 and $182.6 million, including $8.6 million of merger-related expenses, for the third quarter of 2014.

Excluding merger-related expenses, non-interest expense decreased by $3.4 million from the prior quarter. The decrease from the prior quarter reflected a $2.3 million decrease in variable mortgage banking expenses, driven by lower mortgage volume, and additional merger-related cost synergies realized during the quarter, partially offset by higher other operating expenses.

The third quarter of 2015 non-interest expense run-rate does not reflect the full benefit of the anticipated Sterling merger cost synergies. The remaining cost synergies are expected to be realized over the next several months.

Income taxes

The Company recorded a provision for income taxes of $31.6 million for the third quarter of 2015, representing an effective tax rate of 35.4% for the quarter, compared to $30.6 million, with an effective tax rate of 35.8%, for the second quarter of 2015.

Capital

As of September 30, 2015, the Company’s tangible book value per common share1 was $9.08 and its ratio of tangible common equity to tangible assets1 was 9.37%, compared to $8.92 and 9.38%, respectively, in the prior quarter.

During the third quarter of 2015, the Company repurchased 150,000 shares of common stock for $2.5 million. Year-to-date through September 30, 2015, the Company has repurchased 510,000 shares for $8.9 million. The Company may repurchase up to 11.5 million of additional shares under the current stock repurchase plan, which was recently extended to July 31, 2017 by the Company's Board of Directors.

Based on Basel III rules, as of September 30, 2015, the Company’s estimated total risk-based capital ratio was 14.4% and its estimated Tier 1 common to risk weighted assets ratio was 11.4%, compared to 14.6% and 11.5%, respectively, as of June 30, 2015. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of September 30, 2015 are estimates, pending completion and filing of the Company’s regulatory reports.

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 certain 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.

The Company recognizes gains or losses on its junior subordinated debentures carried at fair value resulting from changes in interest rates and the estimated market credit risk adjusted spread that do not directly correlate with the Company’s operating performance. Also, the Company incurs significant expenses related to the completion and integration of mergers and acquisitions. Additionally, it may recognize goodwill impairment losses that have no direct effect on the Company’s or the Bank’s cash balances, liquidity, or regulatory capital ratios. Lastly, the Company may recognize one-time bargain purchase gains on certain acquisitions that are not reflective of the Company’s on-going earnings power. Accordingly, management believes that our operating results are best measured on a comparative basis excluding the impact of gains or losses on junior subordinated debentures measured at fair value, net of tax, merger-related expenses, net of tax, and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains, net of tax. The Company defines operating earnings as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax, bargain purchase gains on acquisitions, net of tax, merger related expenses, net of tax, and goodwill impairment, and we calculate operating earnings per diluted share by dividing operating earnings by the same diluted share total used in determining diluted earnings per common share.

The following table provides the reconciliation of net earnings available to common shareholders (GAAP) to operating earnings (non-GAAP), and earnings per diluted common share (GAAP) to operating earnings per diluted share (non-GAAP) for the periods presented:

   
Quarter Ended % Change
(In thousands, except per share data)

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year
over
Year

Net earnings available to common shareholders $ 57,523   $ 54,691   $ 47,045   $ 52,436   $ 58,741 5

 %

  (2 )%
Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1) 954 943 933 953 955 1

 %

0

 %

Merger related expenses, net of tax (1) 3,595     13,078     8,449     6,038     5,274   (73 )% (32 )%
Operating earnings $ 62,072     $ 68,712     $ 56,427     $ 59,427     $ 64,970   (10 )% (4 )%
 

Earnings per diluted share:

Earnings available to common shareholders $ 0.26 $ 0.25 $ 0.21 $ 0.24 $ 0.27 4

 %

(4 )%
Operating earnings $ 0.28 $ 0.31 $ 0.26 $ 0.27 $ 0.30 (10 )% (7 )%
 
Nine Months Ended

%
Change

Sep 30,
2015

 

Sep 30,
2014

Year
over
Year

 
Net earnings available to common shareholders $ 159,259 $ 94,738 68

 %

Adjustments:
Net loss on junior subordinated debentures carried at fair value, net of tax (1) 2,830 2,101 35

 %

Merger related expenses, net of tax (1) 25,122     46,273   (46 )%
Operating earnings $ 187,211     $ 143,112   31

 %

 

Earnings per diluted share:

Earnings available to common shareholders $ 0.72 $ 0.54 33 %
Operating earnings $ 0.85 $ 0.81 5 %
 
(1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.
nm = not meaningful.
 

Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders’ equity divided by tangible assets.

The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

         
(In thousands, except per share data) Sep 30, 2015   Jun 30, 2015   Mar 31, 2015   Dec 31, 2014   Sep 30, 2014
Total shareholders' equity $ 3,835,552 $ 3,804,179 $ 3,800,970 $ 3,777,626 $ 3,749,101
Subtract:
Goodwill and other intangible assets, net 1,836,954     1,839,760     1,842,567     1,842,958     1,845,242  
Tangible common shareholders' equity $ 1,998,598     $ 1,964,419     $ 1,958,403     $ 1,934,668     $ 1,903,859  
Total assets $ 23,162,304 $ 22,793,331 $ 22,953,158 $ 22,609,903 $ 22,484,652
Subtract:
Goodwill and other intangible assets, net 1,836,954     1,839,760     1,842,567     1,842,958     1,845,242  
Tangible assets $ 21,325,350     $ 20,953,571     $ 21,110,591     $ 20,766,945     $ 20,639,410  
Common shares outstanding at period end 220,217 220,280 220,454 220,161 217,262
Tangible common equity ratio 9.37 % 9.38 % 9.28 % 9.32 % 9.22 %
Tangible book value per common share $ 9.08 $ 8.92 $ 8.88 $ 8.79 $ 8.76
 

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 use of technology, 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 Private Bank serves high net worth individuals and nonprofits, providing trust and investment services. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquaholdingscorp.com.

Earnings Conference Call Information

The Company will host its third quarter 2015 earnings conference call on Thursday, October 22, 2015, at 10:00 a.m. PST (1:00 p.m. EST). During the call, the Company will provide an update on recent activities and discuss its third quarter 2015 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (888) 471-3840 ten minutes prior to the start time and enter conference ID: 370250. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 370250. The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at www.umpquaholdingscorp.com. A slide presentation to accompany the call will also be posted on the website before the call.

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 integration of the merger with Sterling Financial Corporation; timing and amount of merger-related synergies; credit discount accretion related to the merger, and planned investments and initiatives. Specific risks that could cause results to differ from these forward looking statements are Umpqua’s ability to promptly and effectively integrate the businesses of Sterling and Umpqua and achieve the synergies and earnings accretion contemplated by the Sterling merger. Additional 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, changes in the discounted cash flow model used to determine the fair value of subordinated debentures; prolonged low interest rate environment; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; material reductions in revenue or material increases in expenses; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; certain loan assets becoming ineligible for loss sharing; unanticipated increases in the cost of deposits; the consequences of a phase-out of junior subordinated debentures from Tier 1 capital; the diversion of management time on issues related to merger integration; changes in laws or regulations; and changes in general economic conditions.

 
Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
         
Quarter Ended % Change
(In thousands, except per share data)

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year
over
Year

Interest income:    
Loans and leases $ 219,488 $ 217,828 $ 214,663 $ 226,853 $ 223,972 1

 %

(2 )%
Interest and dividends on investments:
Taxable 11,639 11,268 11,551 11,629 12,136 3

 %

(4 )%
Exempt from federal income tax 2,637 2,657 2,720 2,746 2,790 (1 )% (5 )%
Dividends 113 168 101 66 81 (33 )% 40

 %

Temporary investments & interest bearing deposits 440     549     825     857     544   (20 )% (19 )%
Total interest income 234,317 232,470 229,860 242,151 239,523 1

 %

(2 )%
Interest expense:
Deposits 7,450 7,381 7,103 7,119 6,773 1

 %

10

 %

Repurchase agreements 43 43 48 48 54 0

 %

(20 )%
Term debt 3,629 3,492 3,464 3,570 3,586 4

 %

1

 %

Junior subordinated debentures 3,465     3,406     3,337     3,399     3,394   2

 %

2

 %

Total interest expense 14,587 14,322 13,952 14,136 13,807 2

 %

6

 %

Net interest income 219,730 218,148 215,908 228,015 225,716 1

 %

(3 )%
Provision for loan and lease losses 8,153 11,254 12,637 5,241 14,333 (28 )% (43 )%
Non-interest income:
Service charges on deposits 15,638 14,825 14,296 15,472 16,090 5

 %

(3 )%
Brokerage revenue 5,003 4,648 4,769 4,960 4,882 8

 %

2

 %

Residential mortgage banking revenue, net 24,041 40,014 28,227 16,489 25,996 (40 )% (8 )%
Gain on investment securities, net 220 19 116 1,026 902 nm (76 )%
Gain on loan sales 5,212 8,711 6,728 5,730 8,309 (40 )% (37 )%
Loss on junior subordinated debentures carried at fair value (1,590 ) (1,572 ) (1,555 ) (1,589 ) (1,590 ) 1

 %

0

 %

Change in FDIC indemnification asset 1,432 (1,199 ) (1,286 ) (1,982 ) (2,728 ) (219 )% (152 )%
BOLI income 1,656 2,023 2,781 1,971 2,161 (18 )% (23 )%
Other income 8,737     12,930     9,519     8,228     8,143   (32 )% 7

 %

Total non-interest income 60,349 80,399 63,595 50,305 62,165 (25 )% (3 )%
Non-interest expense:
Salaries and employee benefits 105,974 110,786 107,923 104,039 102,564 (4 )% 3

 %

Occupancy and equipment, net 37,235 34,868 32,150 32,987 33,029 7

 %

13

 %

Intangible amortization 2,806 2,807 2,806 3,102 3,103 0

 %

(10 )%
FDIC assessments 3,369 3,155 3,214 3,522 3,038 7

 %

11

 %

(Gain) loss on other real estate owned, net (158 ) 480 1,814 3,609 313 (133 )% (150 )%
Merger related expenses 5,991 21,797 14,082 10,171 8,632 (73 )% (31 )%
Other expense 27,469     28,004     31,109     33,426     31,879   (2 )% (14 )%
Total non-interest expense 182,686 201,897 193,098 190,856 182,558 (10 )% 0

 %

Income before provision for income taxes 89,240 85,396 73,768 82,223 90,990 5

 %

(2 )%
Provision for income taxes 31,633     30,612     26,639     29,641     32,107   3

 %

(1 )%
Net income 57,607 54,784 47,129 52,582 58,883 5

 %

(2 )%
Dividends and undistributed earnings allocated to participating securities 84     93     84     146     142   (10 )% (41 )%
Net earnings available to common shareholders $ 57,523     $ 54,691     $ 47,045     $ 52,436     $ 58,741   5

 %

(2 )%
 
Weighted average basic shares outstanding 220,297 220,463 220,349 218,963 217,245 0

 %

1

 %

Weighted average diluted shares outstanding 220,904 221,150 221,051 219,974 218,941 0

 %

1

 %

Earnings per common share – basic $ 0.26 $ 0.25 $ 0.21 $ 0.24 $ 0.27 4

 %

(4 )%
Earnings per common share – diluted $ 0.26 $ 0.25 $ 0.21 $ 0.24 $ 0.27 4

 %

(4 )%
nm = not meaningful
 

 
Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
 
Nine Months Ended

% Change

(In thousands, except per share data) Sep 30, 2015   Sep 30, 2014

Year
over
Year

Interest income
Loans and leases $ 651,979 $ 536,950 21

 %

Interest and dividends on investments:
Taxable 34,458 34,155 1

 %

Exempt from federal income tax 8,014 7,599 5

 %

Dividends 382 259 47

 %

Temporary investments & interest bearing deposits 1,814   1,407   29

 %

Total interest income 696,647 580,370 20

 %

Interest expense
Deposits 21,934 16,696 31

 %

Repurchase agreements 134 298 (55 )%
Term debt 10,585 9,223 15

 %

Junior subordinated debentures 10,208   8,340   22

 %

Total interest expense 42,861 34,557 24

 %

Net interest income 653,786 545,813 20

 %

Provision for loan and lease losses 32,044 35,000 (8 )%
Non-interest income
Service charges on deposits 44,759 39,228 14

 %

Brokerage revenue 14,420 13,173 9

 %

Residential mortgage banking revenue, net 92,282 60,776 52

 %

Gain on investment securities, net 355 1,878 (81 )%
Gain on loan sales 20,651 9,383 120

 %

Loss on junior subordinated debentures carried at fair value (4,717 ) (3,501 ) 35

 %

Change in FDIC indemnification asset (1,053 ) (13,169 ) (92 )%
BOLI Income 6,460 4,864 33

 %

Other income 31,186   18,237   71

 %

Total non-interest income 204,343 130,869 56

 %

Non-interest expense
Salaries and employee benefits 324,683 251,340 29

 %

Occupancy and equipment, net 104,253 78,276 33

 %

Intangible amortization 8,419 7,105 18

 %

FDIC assessments 9,738 7,476 30

 %

Loss on other real estate owned, net 2,136 507 nm
Merger related expenses 41,870 72,146 (42 )%
Other expense 86,582   76,357   13

 %

Total non-interest expense 577,681 493,207 17

 %

Income before provision for income taxes 248,404 148,475 67

 %

Provision for income taxes 88,884   53,399   66

 %

Net income 159,520 95,076 68

 %

Dividends and undistributed earnings allocated to participating securities

261   338   (23 )%
Net earnings available to common shareholders $ 159,259   $ 94,738   68

 %

 
Weighted average basic shares outstanding 220,370 175,627 25

 %

Weighted average diluted shares outstanding 221,062 176,656 25

 %

Earnings per common share – basic $ 0.72 $ 0.54 33

 %

Earnings per common share – diluted $ 0.72 $ 0.54 33

 %

nm = not meaningful
 
 
Umpqua Holdings Corporation

Consolidated Balance Sheets

(Unaudited)
           
% Change
(In thousands, except per share data) Sep 30, 2015   Jun 30, 2015   Mar 31, 2015   Dec 31, 2014   Sep 30, 2014

Seq.
Quarter

 

Year
over
Year

Assets:  
Cash and due from banks $ 283,773 $ 364,256 $ 292,558 $ 282,455 $ 266,624 (22 )% 6

 %

Interest bearing cash and temporary investments 673,843 515,691 1,088,316 1,322,716 1,177,086 31

 %

(43 )%
Investment securities:
Trading, at fair value 9,509 10,005 10,452 9,999 9,727 (5 )% (2 )%
Available for sale, at fair value 2,482,478 2,557,245 2,535,121 2,298,555 2,400,061 (3 )% 3

 %

Held to maturity, at amortized cost 4,699 4,807 4,953 5,211 5,356 (2 )% (12 )%
Loans held for sale 398,015 419,704 406,487 286,802 265,800 (5 )% 50

 %

Loans and leases 16,387,934 15,974,197 15,548,957 15,327,732 15,259,201 3

 %

7

 %

Allowance for loan and lease losses (130,133 )   (127,071 )   (120,104 )   (116,167 )   (115,635 ) 2

 %

13

 %

Loans and leases, net 16,257,801 15,847,126 15,428,853 15,211,565 15,143,566 3

 %

7

 %

Restricted equity securities 46,904 46,917 117,218 119,334 120,759 0

 %

(61 )%
Premises and equipment, net 330,306 331,208 322,925 317,834 314,364 0

 %

5

 %

Goodwill 1,788,640 1,788,640 1,788,640 1,786,225 1,785,407 0

 %

0

 %

Other intangible assets, net 48,314 51,120 53,927 56,733 59,835 (5 )% (19 )%
Residential mortgage servicing rights, at fair value 124,814 127,206 116,365 117,259 118,725 (2 )% 5

 %

Other real estate owned 23,892 23,038 32,064 37,942 34,456 4

 %

(31 )%
FDIC indemnification asset 892 432 1,861 4,417 7,811 106

 %

(89 )%
Bank owned life insurance 297,321 295,551 294,697 294,296 293,511 1

 %

1

 %

Deferred tax assets, net 149,320 181,245 198,778 230,442 251,854 (18 )% (41 )%
Other assets 241,783     229,140     259,943     228,118     229,710   6

 %

5

 %

Total assets $ 23,162,304     $ 22,793,331     $ 22,953,158     $ 22,609,903     $ 22,484,652   2

 %

3

 %

Liabilities:
Deposits $ 17,467,024 $ 17,145,046 $ 17,222,566 $ 16,892,099 $ 16,727,610 2

 %

4

 %

Securities sold under agreements to repurchase 323,722 325,711 321,202 313,321 339,367 (1 )% (5 )%
Term debt 889,358 889,997 965,675 1,006,395 1,057,140 0

 %

(16 )%
Junior subordinated debentures, at fair value 253,665 252,214 250,652 249,294 247,528 1

 %

2

 %

Junior subordinated debentures, at amortized cost 101,334 101,415 101,496 101,576 101,657 0

 %

0

 %

Other liabilities 291,649     274,769     290,597     269,592     262,249   6

 %

11

 %

Total liabilities 19,326,752 18,989,152 19,152,188 18,832,277 18,735,551 2

 %

3

 %

Shareholders' equity:
Common stock 3,517,751 3,517,557 3,521,201 3,519,316 3,515,621 0

 %

0

 %

Retained earnings 303,729 281,573 260,128 246,242 226,895 8

 %

34

 %

Accumulated other comprehensive income 14,072     5,049     19,641     12,068     6,585   179

 %

114

 %

Total shareholders' equity 3,835,552     3,804,179     3,800,970     3,777,626     3,749,101   1

 %

2

 %

Total liabilities and shareholders' equity $ 23,162,304     $ 22,793,331     $ 22,953,158     $ 22,609,903     $ 22,484,652   2

 %

3

 %

 
Common shares outstanding at period end 220,217 220,280 220,454 220,161 217,262 0

 %

1

 %

Book value per common share $ 17.42 $ 17.27 $ 17.24 $ 17.16 $ 17.26 1

 %

1

 %

Tangible book value per common share $ 9.08 $ 8.92 $ 8.88 $ 8.79 $ 8.76 2

 %

4

 %

Tangible equity - common $ 1,998,598 $ 1,964,419 $ 1,958,403 $ 1,934,668 $ 1,903,859 2

 %

5

 %

Tangible common equity to tangible assets 9.37 % 9.38 % 9.28 % 9.32 % 9.22 % 0

 %

2

 %

 
Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)
             
(Dollars in thousands) Sep 30, 2015   Jun 30, 2015   Mar 31, 2015   Dec 31, 2014   Sep 30, 2014 % Change
Amount   Amount   Amount   Amount   Amount

Seq.
Quarter

 

Year
over
Year

Loans & leases:

Commercial real estate:
Non-owner occupied term, net $ 3,148,288 $ 3,294,359 $ 3,303,629 $ 3,290,610 $ 3,423,453 (4 )% (8 )%
Owner occupied term, net 2,655,340 2,636,800 2,577,484 2,633,864 2,682,870 1

 %

(1 )%
Multifamily, net 2,961,609 2,859,884 2,764,403 2,638,618 2,565,711 4

 %

15

 %

Commercial construction, net 287,757 244,354 238,303 258,722 247,816 18

 %

16

 %

Residential development, net 94,380 76,734 81,160 81,846 76,849 23

 %

23

 %

Commercial:
Term, net 1,398,346 1,374,528 1,411,043 1,396,089 1,427,121 2

 %

(2 )%
Lines of credit & other, net 1,014,523 981,897 993,814 1,029,620 1,037,278 3

 %

(2 )%
Leases & equipment finance, net 679,033 630,695 570,492 523,114 492,221 8

 %

38

 %

Residential real estate:
Mortgage, net 2,740,228 2,533,042 2,330,325 2,233,735 2,102,333 8

 %

30

 %

Home equity lines & loans, net 910,287 882,596 863,269 852,478 836,054 3

 %

9

 %

Consumer & other, net 498,143     459,308     415,035     389,036     367,495   8

 %

36

 %

Total, net of deferred fees and costs $ 16,387,934     $ 15,974,197     $ 15,548,957     $ 15,327,732     $ 15,259,201   3

 %

7

 %

 

Loan & leases mix:

Commercial real estate:
Non-owner occupied term, net 19 % 20 % 20 % 20 % 22 %
Owner occupied term, net 16 % 17 % 17 % 17 % 18 %
Multifamily, net 17 % 17 % 17 % 17 % 17 %
Commercial construction, net 2 % 2 % 2 % 2 % 2 %
Residential development, net 1 % % 1 % 1 % 1 %
Commercial:
Term, net 9 % 9 % 9 % 9 % 9 %
Lines of credit & other, net 6 % 6 % 6 % 7 % 7 %
Leases & equipment finance, net 4 % 4 % 4 % 3 % 3 %
Residential real estate:
Mortgage, net 17 % 16 % 15 % 15 % 14 %
Home equity lines & loans, net 6 % 6 % 6 % 6 % 5 %
Consumer & other, net 3 %   3 %   3 %   3 %   2 %
Total 100 %   100 %   100 %   100 %   100 %
 
 
Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
             
(Dollars in thousands) Sep 30, 2015   Jun 30, 2015   Mar 31, 2015   Dec 31, 2014   Sep 30, 2014 % Change
Amount   Amount   Amount   Amount   Amount

Seq.
Quarter

 

Year
over
Year

Deposits:

Demand, non-interest bearing $ 5,207,129 $ 4,927,526 $ 4,930,642 $ 4,744,804 $ 4,741,897 6

 %

10

 %

Demand, interest bearing 2,098,223 2,090,595 2,085,368 2,054,994 1,942,792 0

 %

8

 %

Money market 6,514,174 6,374,624 6,287,165 6,113,138 5,998,339 2

 %

9

 %

Savings 1,102,611 1,058,337 1,022,829 971,185 952,122 4

 %

16

 %

Time 2,544,887     2,693,964     2,896,562     3,007,978     3,092,460   (6 )% (18 )%
Total $ 17,467,024     $ 17,145,046     $ 17,222,566     $ 16,892,099     $ 16,727,610   2

 %

4

 %

 
Total core deposits (1) $ 15,940,229 $ 15,529,997 $ 15,304,001 $ 15,126,378 $ 14,653,183 3

 %

9

 %

 

Deposit mix:

Demand, non-interest bearing 30 % 29 % 29 % 28 % 28 %
Demand, interest bearing 12 % 12 % 12 % 12 % 12 %
Money market 37 % 37 % 36 % 36 % 36 %
Savings 6 % 6 % 6 % 6 % 6 %
Time 15 %   16 %   17 %   18 %   18 %
Total 100 %   100 %   100 %   100 %   100 %
 

Number of open accounts:

Demand, non-interest bearing 370,128 367,086 368,701 367,854 366,279
Demand, interest bearing 88,171 90,021 85,082 86,135 87,223
Money market 57,622 58,156 61,991 63,095 63,979
Savings 153,534 152,404 150,989 150,548 150,527
Time 48,168     49,983     52,179     53,530     54,565  
Total 717,623     717,650     718,942     721,162     722,573  
 

Average balance per account:

Demand, non-interest bearing $ 14.1 $ 13.4 $ 13.4 $ 12.9 $ 12.9
Demand, interest bearing 23.8 23.2 24.5 23.9 22.3
Money market 113.1 109.6 101.4 96.9 93.8
Savings 7.2 6.9 6.8 6.5 6.3
Time 52.8 53.9 55.5 56.2 56.7
Total $ 24.3 $ 23.9 $ 24.0 $ 23.4 $ 23.2
 

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

 
 

Umpqua Holdings Corporation

Credit Quality – Non-performing Assets
(Unaudited)
             
Quarter Ended % Change
(Dollars in thousands)

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year
over
Year

Non-performing assets:

Loans and leases on non-accrual status $ 30,989 $ 33,572 $ 40,246 $ 52,041 $ 42,397 (8 )% (27 )%
Loans and leases past due 90+ days & accruing 9,967     13,529     10,416     7,512     7,416   (26 )% 34

 %

Total non-performing loans and leases 40,956 47,101 50,662 59,553 49,813 (13 )% (18 )%
Other real estate owned 23,892     23,038     32,064     37,942     34,456   4

 %

(31 )%
Total $ 64,848     $ 70,139     $ 82,726     $ 97,495     $ 84,269   (8 )% (23 )%
 
Performing restructured loans and leases $ 35,706 $ 37,023 $ 60,896 $ 54,836 $ 63,507 (4 )% (44 )%
Loans and leases past due 31-89 days $ 28,919 $ 25,553 $ 20,488 $ 24,659 $ 34,025 13

 %

(15 )%
Loans and leases past due 31-89 days to total loans and leases 0.18 % 0.16 % 0.13 % 0.16 % 0.22 %
Non-performing loans and leases to total loans and leases 0.25 % 0.29 % 0.33 % 0.39 % 0.33 %
Non-performing assets to total assets 0.28 % 0.31 % 0.36 % 0.43 % 0.37 %
 
 
Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
  Quarter Ended   % Change
(Dollars in thousands)

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year over
Year

Allowance for loan and lease losses:

         
Balance beginning of period $ 127,071 $ 120,104 $ 116,167 $ 115,635 $ 106,495
Provision for loan and lease losses 8,153 11,254 12,637 5,241 14,333 (28 )% (43 )%
Charge-offs (8,476 ) (7,442 ) (12,545 ) (9,088 ) (7,524 ) 14

 %

13

 %

Recoveries 3,385     3,155     3,845     4,379     2,331   7

 %

45

 %

Net charge-offs (5,091 )   (4,287 )   (8,700 )   (4,709 )   (5,193 ) 19

 %

(2 )%
Total allowance for loan and lease losses 130,133 127,071 120,104 116,167 115,635 2

 %

13

 %

Reserve for unfunded commitments 3,081     2,864     3,194     3,539     4,388  
Total allowance for credit losses $ 133,214     $ 129,935     $ 123,298     $ 119,706     $ 120,023  
 
Net charge-offs to average loans and leases (annualized) 0.13 % 0.11 % 0.23 % 0.12 % 0.14 %
Recoveries to gross charge-offs 39.94 % 42.39 % 30.65 % 48.18 % 30.98 %
Allowance for loan and lease losses to loans and leases 0.79 % 0.80 % 0.77 % 0.76 % 0.76 %
Allowance for credit losses to loans and leases 0.81 % 0.81 % 0.79 % 0.78 % 0.79 %
 
 
Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
Nine Months Ended   % Change
(Dollars in thousands) Sep 30, 2015   Sep 30, 2014 Year over Year

Allowance for loan and lease losses:

 
Balance beginning of period $ 116,167 $ 95,085
Provision for loan and lease losses 32,044 35,000 (8 )%
Charge-offs (28,463 ) (21,090 ) 35

 %

Recoveries 10,385     6,640   56

 %

Net charge-offs

(18,078 )   (14,450 ) 25

 %

Total allowance for loan and lease losses 130,133 115,635 13

 %

Reserve for unfunded commitments 3,081     4,388   (30 )%
Total allowance for credit losses $ 133,214     $ 120,023   11

 %

 
Net charge-offs to average loans and leases (annualized) 0.15 % 0.16 %
Recoveries to gross charge-offs 36.49 % 31.48 %
Allowance for loan and lease losses to loans and leases 0.79 % 0.76 %
Allowance for credit losses to loans and leases 0.81 % 0.79 %
 
 
Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
         
Quarter Ended % Change

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year
over
Year

Average Rates:

   
Yield on loans and leases 5.30 % 5.48 % 5.61 % 5.82 % 5.78 % (0.18 ) (0.48 )
Yield on loans held for sale 4.07 % 3.24 % 3.95 % 4.01 % 3.86 % 0.83 0.21
Yield on taxable investments 2.07 % 1.99 % 2.10 % 2.16 % 2.12 % 0.08 (0.05 )
Yield on tax-exempt investments (1) 5.12 % 5.07 % 5.10 % 5.09 % 5.12 % 0.05
Yield on interest bearing cash and temporary investments 0.25 % 0.26 % 0.25 % 0.25 % 0.25 % (0.01 )
Total yield on earning assets (1) 4.72 % 4.79 % 4.82 % 4.98 % 5.04 % (0.07 ) (0.32 )
 
Cost of interest bearing deposits 0.24 % 0.24 % 0.24 % 0.23 % 0.22 % 0.02

Cost of securities sold under agreements to repurchase and fed funds purchased

0.05 % 0.05 % 0.06 % 0.06 % 0.07 % (0.02 )
Cost of term debt 1.62 % 1.51 % 1.42 % 1.41 % 1.35 % 0.11 0.27
Cost of junior subordinated debentures 3.89 % 3.88 % 3.86 % 3.86 % 3.87 % 0.01 0.02
Total cost of interest bearing liabilities 0.42 % 0.41 % 0.41 % 0.41 % 0.40 % 0.01 0.02
 
Net interest spread (1) 4.30 % 4.38 % 4.41 % 4.57 % 4.64 % (0.08 ) (0.34 )
Net interest margin – Consolidated (1) 4.43 % 4.50 % 4.53 % 4.69 % 4.75 % (0.07 ) (0.32 )
Net interest margin – Bank (1) 4.50 % 4.56 % 4.59 % 4.75 % 4.82 % (0.06 ) (0.32 )
 

As reported (GAAP):

Return on average assets 0.99 % 0.96 % 0.84 % 0.92 % 1.05 % 0.03 (0.06 )
Return on average tangible assets 1.08 % 1.05 % 0.92 % 1.00 % 1.14 % 0.03 (0.06 )
Return on average common equity 5.98 % 5.77 % 5.02 % 5.59 % 6.28 % 0.21 (0.30 )
Return on average tangible common equity 11.52 % 11.18 % 9.76 % 11.08 % 12.46 % 0.34 (0.94 )
Efficiency ratio – Consolidated 64.91 % 67.32 % 68.74 % 68.23 % 63.10 % (2.41 ) 1.81
Efficiency ratio – Bank 62.99 % 65.71 % 67.09 % 66.23 % 61.63 % (2.72 ) 1.36
 

Operating basis (non-GAAP): (2)

Return on average assets 1.07 % 1.21 % 1.01 % 1.04 % 1.16 % (0.14 ) (0.09 )
Return on average tangible assets 1.17 % 1.32 % 1.10 % 1.13 % 1.26 % (0.15 ) (0.09 )
Return on average common equity 6.45 % 7.25 % 6.03 % 6.34 % 6.94 % (0.80 ) (0.49 )
Return on average tangible common equity 12.43 % 14.05 % 11.71 % 12.56 % 13.78 % (1.62 ) (1.35 )
Efficiency ratio – Consolidated 62.43 % 59.74 % 63.38 % 64.23 % 59.79 % 2.69 2.64
Efficiency ratio – Bank 61.05 % 58.46 % 62.09 % 62.61 % 58.65 % 2.59 2.40
 

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
(2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger related expenses, net of tax.

 
Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
   
Nine Months Ended % Change
Sep 30, 2015   Sep 30, 2014

Year over
Year

Average Rates:

 
Yield on loans and leases 5.46 % 5.81 % (0.35 )
Yield on loans held for sale 3.73 % 4.07 % (0.34 )
Yield on taxable investments 2.05 % 2.25 % (0.20 )
Yield on tax-exempt investments (1) 5.10 % 5.25 % (0.15 )
Yield on interest bearing cash and temporary investments 0.25 % 0.25 %
Total yield on earning assets (1) 4.78 % 5.04 % (0.26 )
 
Cost of interest bearing deposits 0.24 % 0.23 % 0.01

Cost of securities sold under agreements to repurchase and fed funds purchased

0.06 % 0.13 % (0.07 )
Cost of term debt 1.51 % 1.64 % (0.13 )
Cost of junior subordinated debentures 3.88 % 3.91 % (0.03 )
Total cost of interest bearing liabilities 0.41 % 0.41 %
 
Net interest spread (1) 4.37 % 4.63 % (0.26 )
Net interest margin – Consolidated (1) 4.48 % 4.74 % (0.26 )
Net interest margin – Bank (1) 4.55 % 4.81 % (0.26 )
 

As reported (GAAP):

Return on average assets 0.93 % 0.70 % 0.23
Return on average tangible assets 1.02 % 0.76 % 0.26
Return on average common equity 5.59 % 4.31 % 1.28
Return on average tangible common equity 10.83 % 8.37 % 2.46
Efficiency ratio – Consolidated 67.00 % 72.47 % (5.47 )
Efficiency ratio – Bank 65.27 % 70.86 % (5.59 )
 

Operating basis (non-GAAP): (2)

Return on average assets 1.10 % 1.06 % 0.04
Return on average tangible assets 1.19 % 1.15 % 0.04
Return on average common equity 6.58 % 6.51 % 0.07
Return on average tangible common equity 12.73 % 12.65 % 0.08
Efficiency ratio – Consolidated 61.80 % 61.55 % 0.25
Efficiency ratio – Bank 60.49 % 60.26 % 0.23
 

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
(2) Operating earnings is calculated as earnings available to common shareholders excluding gain (loss) on junior subordinated debentures carried at fair value, net of tax, bargain purchase gain on acquisitions, net of tax, goodwill impairment, and merger related expenses, net of tax.

 
Umpqua Holdings Corporation

Average Balances

(Unaudited)
     
Quarter Ended % Change
(Dollars in thousands)

Sep 30,
2015

 

Jun 30,
2015

 

Mar 31,
2015

 

Dec 31,
2014

 

Sep 30,
2014

Seq.
Quarter

 

Year
over
Year

Temporary investments & interest bearing cash $ 693,114   $ 861,775   $ 1,323,671   $ 1,368,726   $ 849,399 (20 )% (18 )%
Investment securities, taxable 2,272,676 2,300,123 2,222,174 2,169,504 2,307,732 (1 )% (2 )%
Investment securities, tax-exempt 311,984 317,655 323,852 326,858 330,902 (2 )% (6 )%
Loans held for sale 357,905 368,112 262,777 255,830 274,834 (3 )% 30

 %

Loans and leases 16,155,792   15,731,298   15,334,555   15,300,425   15,200,893   3

 %

6

 %

Total interest earning assets 19,791,471 19,578,963 19,467,029 19,421,343 18,963,760 1

 %

4

 %

Goodwill & other intangible assets, net 1,838,740 1,841,535 1,842,390 1,844,084 1,841,668 0

 %

0

 %

Total assets 22,943,563 22,777,421 22,687,515 22,625,461 22,220,999 1

 %

3

 %

 
Non-interest bearing demand deposits 5,109,047 4,852,989 4,808,062 4,836,517 4,558,672 5

 %

12

 %

Interest bearing deposits 12,225,691     12,274,814     12,187,132   12,153,481   11,948,731   0

 %

2

 %

Total deposits 17,334,738 17,127,803 16,995,194 16,989,998 16,507,403 1

 %

5

 %

Interest bearing liabilities 13,798,350 13,880,474 13,838,515 13,833,126 13,681,205 (1 )% 1

 %

 
Shareholders’ equity - common 3,819,303 3,803,634 3,797,108 3,721,003 3,712,813 0

 %

3

 %

Tangible common equity (1) 1,980,563 1,962,099 1,954,718 1,876,919 1,871,145 1

 %

6

 %

 
     
Umpqua Holdings Corporation

Average Balances

(Unaudited)
Nine Months Ended   % Change
(Dollars in thousands) Sep 30, 2015 Sep 30, 2014 Year over Year
Temporary investments & interest bearing cash $ 957,210 $ 743,179 29%
Investment securities, taxable 2,265,175 2,040,394 11%
Investment securities, tax-exempt 317,787 293,000 8%
Loans held for sale 329,946 188,646 75%
Loans and leases 15,743,558   12,229,795   29%
Total interest earning assets 19,613,676 15,495,014 27%
Goodwill & other intangible assets, net 1,840,875 1,428,705 29%
Total assets 22,803,723 18,004,316 27%
 
Non-interest bearing demand deposits 4,924,464 3,653,158 35%
Interest bearing deposits 12,229,354   9,883,824   24%
Total deposits 17,153,818 13,536,982 27%
Interest bearing liabilities 13,838,966 11,216,190 23%
 
Shareholders’ equity - common 3,806,719 2,941,341 29%
Tangible common equity (1) 1,965,844 1,512,636 30%
 

(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 Holdings Corporation

Residential Mortgage Banking Activity

(unaudited)
     
Quarter Ended % Change
(Dollars in thousands) Sep 30, 2015   Jun 30, 2015   Mar 31, 2015   Dec 31, 2014   Sep 30, 2014

Seq.
Quarter

 

Year over
Year

Residential mortgage servicing rights:

       
Residential mortgage loans serviced for others $ 12,693,451 $ 12,302,866 $ 11,874,910 $ 11,590,310 $ 11,300,947 3

 %

12

 %

MSR asset, at fair value 124,814 127,206 116,365 117,259 118,725 (2 )% 5

 %

MSR as % of serviced portfolio 0.98 % 1.03 % 0.98 % 1.01 % 1.05 %

Residential mortgage banking revenue:

Origination and sale $ 26,904 $ 33,667 $ 31,498 $ 18,378 $ 24,097 (20 )% 12

 %

Servicing 7,240 6,770 6,457 6,306 6,178 7

 %

17

 %

Change in fair value of MSR asset (10,103 )   (423 )   (9,728 )   (8,195 )   (4,279 ) nm 136

 %

Total $ 24,041     $ 40,014     $ 28,227     $ 16,489     $ 25,996   (40 )% (8 )%
 

Closed loan volume:

Closed loan volume - portfolio $ 446,088 $ 446,712 $ 311,149 $ 319,779 $ 292,154 0

 %

53

 %

Closed loan volume - for-sale 843,720     997,225     862,155     622,133     695,877   (15 )% 21

 %

Closed loan volume - total $ 1,289,808     $ 1,443,937     $ 1,173,304     $ 941,912     $ 988,031   (11 )% 31

 %

 

Gain on sale margin:

Based on for-sale volume 3.19 % 3.38 % 3.65 % 2.95 % 3.46 % (0.19 ) (0.27 )
 
Nine Months Ended % Change
Sep 30, 2015   Sep 30, 2014

Year over
Year

Residential mortgage banking revenue:

Origination and sale $ 92,069 $ 54,660 68 %
Servicing 20,467 14,508 41 %
Change in fair value of MSR asset (20,254 )   (8,392 ) 141 %
Total $ 92,282     $ 60,776   52 %
 

Closed loan volume:

Closed loan volume - portfolio $ 1,203,949 $ 652,202 85 %
Closed loan volume - for-sale 2,703,100   1,523,959   77 %
Closed loan volume - total $ 3,907,049   $ 2,176,161   80 %
 
 

Gain on sale margin:

Based on for-sale volume 3.41 % 3.59 % (0.18 )
 
nm = not meaningful

Contacts

Umpqua Holdings Corporation
Ron Farnsworth, 503-727-4108
EVP/Chief Financial Officer
ronfarnsworth@umpquabank.com
Bradley Howes, 503-727-4226
SVP/Director of Investor Relations
bradhowes@umpquabank.com

Release Summary

Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $57.5 million for the third quarter of 2015.

Contacts

Umpqua Holdings Corporation
Ron Farnsworth, 503-727-4108
EVP/Chief Financial Officer
ronfarnsworth@umpquabank.com
Bradley Howes, 503-727-4226
SVP/Director of Investor Relations
bradhowes@umpquabank.com