PORTLAND, Ore., July 17, 2019 /PRNewswire/ -- Umpqua Holdings Corporation (NASDAQ: UMPQ) (the "Company") reported net income of $111.8 million for the second quarter of 2019, compared to $74.0 million for the first quarter of 2019 and $66.0 million for the second quarter of 2018.  Earnings per diluted common share were $0.51 for the second quarter of 2019, compared to $0.34 for the first quarter of 2019 and $0.30 for the second quarter of 2018.

"Umpqua's strong deposit growth of $575 million and loan and lease growth of $547 million demonstrate our focus on the growth initiatives within our Next Gen strategy," said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. "Last quarter we made several strategic moves to enhance the Company's long-term profitability. These included an opportunistic sale of our Visa Class B shares, which generated proceeds to strategically re-balance our securities portfolio and continue to invest in efficient, revenue-generating businesses. We've also begun the process of selling material portions of our mortgage servicing rights portfolio to reduce volatility and expect the sale of the first tranche to close in the fourth quarter. We also continue to innovate and invest in our human digital banking experience and are pleased with the early results and strong customer response to our Go-To app, which launched in April."

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

  • $81.9 million gain on sale for all shares of Visa Class B stock held by the Company, partially offset by a $7.2 million loss on debt securities.
  • $24.7 million loss on fair value change of the MSR asset attributable to the decrease in long-term interest rates during the quarter, compared to a $14.0 million loss in the prior quarter and a $5.4 million loss in the same period of the prior year.
  • $4.0 million loss related to the fair value of the debt capital market swap derivatives attributable to the decrease in long-term interest rates during the quarter, compared to a loss of $2.5 million in the prior quarter and a gain of $0.3 million in the same period of the prior year.
  • $1.5 million of exit and disposal costs, compared to $1.4 million in the prior quarter and $2.6 million in the same period of the prior year.

Second Quarter 2019 Highlights (compared to prior quarter):

  • Net interest income decreased by $10.5 million on a quarter to quarter basis primarily driven by higher levels of bond premium amortization as the decrease in long-term rates during the second quarter resulted in higher prepayment speeds compared to the prior quarter;
  • Provision for loan and lease losses increased by $5.7 million, due to growth in the overall loan portfolio;
  • Net charge-offs decreased by one basis point to 0.26% of average loans and leases (annualized);
  • Non-interest income increased by $76.1 million, driven primary by the $81.9 million gain resulting from the sale of the Visa Class B stock and partially offset by a $7.2 million loss on debt securities;
  • Non-interest expense increased by $8.8 million, driven primarily by higher mortgage banking-related expenses, higher loss on OREO, higher marketing expenses, partially offset by a seasonal decrease in payroll taxes and lower group insurance charges;
  • Non-performing assets to total assets improved to 0.28% from 0.32%;
  • Estimated total risk-based capital ratio of 13.7% and estimated Tier 1 common to risk weighted assets ratio of 10.9%;
  • Declared a quarterly cash dividend of $0.21 per common share.

Balance Sheet
Total consolidated assets were $28.0 billion as of June 30, 2019, compared to $27.4 billion as of March 31, 2019 and $26.5 billion as of June 30, 2018.  Including secured off-balance sheet lines of credit, total available liquidity was $10.5 billion as of June 30, 2019, representing 38% of total assets and 48% of total deposits.

Gross loans and leases were $21.0 billion as of June 30, 2019, an increase of $547.4 million relative to March 31, 2019.  Strong loan production in the commercial loan category as well as residential real estate fueled the balance sheet growth.

Total deposits were $21.8 billion as of June 30, 2019, an increase of $575.1 million from $21.2 billion as of March 31, 2019.  This increase was attributable to growth in non-interest bearing demand deposits of $275.5 million and money market deposit growth of $319.8 million.

Net Interest Income
Net interest income was $227.2 million for the second quarter of 2019, down $10.5 million from the prior quarter.  This decrease was primarily attributable to taxable bond premium amortization of $10.4 million in the second quarter compared to $1.6 million in the first quarter of 2019.

The Company's net interest margin was 3.70% for the second quarter of 2019, down 33 basis points from 4.03% for the first quarter of 2019 primarily driven by the aforementioned higher levels of bond premium amortization and higher  cost of interest bearing deposits compared to the prior quarter.

Credit Quality
The allowance for loan and lease losses was $151.1 million, or 0.72% of loans and leases, as of June 30, 2019, which was up from $144.9 million, or 0.71% of loans and leases, as of March 31, 2019.  The provision for loan and lease losses was $19.4 million for the second quarter of 2019, an increase of $5.7 million from the prior quarter level, driven primarily by growth in the loan portfolio.  Net charge-offs decreased by one basis point to 0.26% of average loans and leases (annualized).  As of June 30, 2019, non-performing assets were 0.28% of total assets, compared to 0.32% as of March 31, 2019 and 0.34% as of June 30, 2018.

Non-interest Income
Non-interest income was $121.8 million for the second quarter of 2019, up $76.1 million from the prior quarter,  reflecting the nonrecurring $81.9 million gain on sale of Visa Class B stock.

Revenue from the origination and sale of residential mortgages was $23.2 million for the second quarter of 2019, an increase of $8.8 million from the prior quarter.  This increase reflects a sequential quarter increase of 43% in for-sale mortgage origination volume and an increase of 37 basis points in the home lending gain on sale margin to 3.32% for the second quarter of 2019.  Of the current quarter's mortgage production, 70% related to purchase activity, compared to 71% for the prior quarter and 81% for the same period of the prior year.

Non-interest Expense
Non-interest expense was $180.4 million for the second quarter of 2019, up $8.8 million from the prior quarter level.  This increase was driven primarily by higher mortgage banking-related expenses, higher loss on OREO, and higher marketing expenses, partially offset by a seasonal decrease in payroll taxes and lower group insurance charges.

Capital
As of June 30, 2019, the Company's tangible book value per common share1 was $10.97, compared to $10.44 in the prior quarter and $9.84 in the same period of the prior year.  During the second quarter of 2019, the Company declared a dividend of $0.21 per common share.

The Company's estimated total risk-based capital ratio was 13.7% and its estimated Tier 1 common to risk weighted assets ratio was 10.9% as of June 30, 2019.  The Company remains above current "well-capitalized" regulatory minimums.  The regulatory capital ratios as of June 30, 2019 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 these non-GAAP financial measures provide investors with information useful in understanding the Company's financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

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

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

(In thousands, except per share data)


Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018

Total shareholders' equity


$

4,228,507



$

4,112,326



$

4,056,442



$

4,003,893



$

3,981,087


Subtract:











Goodwill


1,787,651



1,787,651



1,787,651



1,787,651



1,787,651


Other intangible assets, net


21,155



22,560



23,964



25,506



27,047


Tangible common shareholders' equity


$

2,419,701



$

2,302,115



$

2,244,827



$

2,190,736



$

2,166,389


Total assets


$

27,986,075



$

27,355,625



$

26,939,781



$

26,615,067



$

26,480,601


Subtract:











Goodwill


1,787,651



1,787,651



1,787,651



1,787,651



1,787,651


Other intangible assets, net


21,155



22,560



23,964



25,506



27,047


Tangible assets


$

26,177,269



$

25,545,414



$

25,128,166



$

24,801,910



$

24,665,903


Common shares outstanding at period end


220,499



220,457



220,255



220,238



220,205













Total shareholders' equity to total assets ratio


15.11

%


15.03

%


15.06

%


15.04

%


15.03

%

Tangible common equity ratio


9.24

%


9.01

%


8.93

%


8.83

%


8.78

%

Book value per common share


$

19.18



$

18.65



$

18.42



$

18.18



$

18.08


Tangible book value per common share


$

10.97



$

10.44



$

10.19



$

9.95



$

9.84


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 umpquabank.com.

Earnings Conference Call Information
The Company will host its second quarter 2019 earnings conference call on July 18, 2019, 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 second quarter 2019 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (800) 289-0459 ten minutes prior to the start time and enter conference ID: 942314.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 2627879.  The earnings conference call will also be available as an audiocast, which can be accessed on the Company's investor relations page at umpquabank.com.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. In this press release we make forward-looking statements about strategic investments, fee income initiatives, sale of MSR and MSR fair value volatility. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; the effect of interest rate increases on the cost of deposits; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our ability to effectively manage problem credits; our ability to successfully implement efficiency and operational excellence initiatives on time and in amounts projected; our ability to successfully develop and market new products and technology; and changes in laws or regulations.


Umpqua Holdings Corporation

Consolidated Statements of Income

(Unaudited)



Quarter Ended


% Change

(In thousands, except per share data)


Jun 30,
2019


Mar 31,
2019


Dec 31,
2018


Sep 30,
2018


Jun 30,
2018


Seq.
Quarter


Year
over
Year

Interest income:















Loans and leases


$

264,110



$

258,747



$

254,093



$

246,410



$

242,123



2

%


9

%

Interest and dividends on investments:















Taxable


10,287



19,956



27,381



24,435



8,499



(48)

%


21

%

Exempt from federal income tax


1,921



2,114



2,135



2,048



2,057



(9)

%


(7)

%

Dividends


574



517



538



549



433



11

%


33

%

Temporary investments and interest bearing deposits


4,708



925



2,621



2,800



2,080



409

%


126

%

Total interest income


281,600



282,259



286,768



276,242



255,192



0

%


10

%

Interest expense:















Deposits


43,591



34,094



30,124



25,692



21,259



28

%


105

%

Securities sold under agreement to repurchase and federal funds purchased


403



810



185



103



155



(50)

%


160

%

Term debt


4,563



3,683



3,326



3,439



3,478



24

%


31

%

Junior subordinated debentures


5,881



5,987



5,743



5,640



5,400



(2)

%


9

%

Total interest expense


54,438



44,574



39,378



34,874



30,292



22

%


80

%

Net interest income


227,162



237,685



247,390



241,368



224,900



(4)

%


1

%

Provision for loan and lease losses


19,352



13,684



17,219



11,711



13,319



41

%


45

%

Non-interest income:















Service charges on deposits


15,953



15,278



16,035



15,574



15,520



4

%


3

%

Brokerage revenue


3,980



3,810



4,178



3,947



4,161



4

%


(4)

%

Residential mortgage banking revenue, net


9,529



11,231



15,150



31,484



33,163



(15)

%


(71)

%

(Loss) gain on sale of debt securities, net


(7,186)









14



nm


nm

Gain (loss) on equity securities, net


82,607



695



410



(462)



(1,432)



nm


nm

Gain on loan sales, net


3,333



769



2,484



2,772



1,348



333

%


147

%

BOLI income


2,093



2,168



2,116



2,051



2,060



(3)

%


2

%

Other income


11,514



11,789



16,438



17,022



16,817



(2)

%


(32)

%

Total non-interest income


121,823



45,740



56,811



72,388



71,651



166

%


70

%

Non-interest expense:















Salaries and employee benefits


104,049



100,658



102,109



103,575



113,340



3

%


(8)

%

Occupancy and equipment, net


36,032



36,245



35,949



36,530



37,584



(1)

%


(4)

%

Intangible amortization


1,405



1,404



1,542



1,541



1,542



0

%


(9)

%

FDIC assessments


2,837



2,942



2,619



4,303



4,692



(4)

%


(40)

%

Loss (gain) on other real estate owned, net


2,678



(51)



1,125



(128)



(92)



nm


nm

Other expenses


33,414



30,394



35,144



33,471



38,506



10

%


(13)

%

Total non-interest expense


180,415



171,592



178,488



179,292



195,572



5

%


(8)

%

Income before provision for income taxes


149,218



98,149



108,494



122,753



87,660



52

%


70

%

Provision for income taxes


37,408



24,116



28,183



31,772



21,661



55

%


73

%

Net income


$

111,810



$

74,033



$

80,311



$

90,981



$

65,999



51

%


69

%
















Weighted average basic shares outstanding


220,487



220,366



220,247



220,224



220,283



0

%


0

%

Weighted average diluted shares outstanding


220,719



220,655



220,668



220,620



220,647



0

%


0

%

Earnings per common share – basic


$

0.51



$

0.34



$

0.36



$

0.41



$

0.30



50

%


70

%

Earnings per common share – diluted


$

0.51



$

0.34



$

0.36



$

0.41



$

0.30



50

%


70

%
















nm = not meaningful

 


Umpqua Holdings Corporation

Consolidated Statements of Income

(Unaudited)



Six Months Ended


% Change

(In thousands, except per share data)


Jun 30, 2019


Jun 30, 2018


Year
over
Year

Interest income:







Loans and leases


$

522,857



$

471,611



11

%

Interest and dividends on investments:







Taxable


30,243



24,198



25

%

Exempt from federal income tax


4,035



4,185



(4)

%

Dividends


1,091



901



21

%

Temporary investments and interest bearing deposits


5,633



3,244



74

%

Total interest income


563,859



504,139



12

%

Interest expense:







Deposits


77,685



36,869



111

%

Securities sold under agreement to repurchase and federal funds purchased


1,213



218



456

%

Term debt


8,246



6,839



21

%

Junior subordinated debentures


11,868



10,332



15

%

Total interest expense


99,012



54,258



82

%

Net interest income


464,847



449,881



3

%

Provision for loan and lease losses


33,036



26,975



22

%

Non-interest income:







Service charges on deposits


31,231



30,515



2

%

Brokerage revenue


7,790



8,355



(7)

%

Residential mortgage banking revenue, net


20,760



71,601



(71)

%

(Loss) gain on sale of debt securities, net


(7,186)



14



nm

Gain (loss) on equity securities, net


83,302



(1,432)



nm

Gain on loan sales, net


4,102



2,578



59

%

BOLI income


4,261



4,130



3

%

Other income


23,303



34,457



(32)

%

Total non-interest income


167,563



150,218



12

%

Non-interest expense:







Salaries and employee benefits


204,707



219,891



(7)

%

Occupancy and equipment, net


72,277



76,245



(5)

%

Intangible amortization


2,809



3,083



(9)

%

FDIC assessments


5,779



9,172



(37)

%

Loss (gain) on other real estate owned, net


2,627



(130)



nm

Other expenses


63,808



73,424



(13)

%

Total non-interest expense


352,007



381,685



(8)

%

Income before provision for income taxes


247,367



191,439



29

%

Provision for income taxes


61,524



46,468



32

%

Net income


$

185,843



$

144,971



28

%








Weighted average basic shares outstanding


220,427



220,326



0

%

Weighted average diluted shares outstanding


220,692



220,760



0

%

Earnings per common share – basic


$

0.84



$

0.66



27

%

Earnings per common share – diluted


$

0.84



$

0.66



27

%








nm = not meaningful







 


Umpqua Holdings Corporation

Consolidated Balance Sheets

(Unaudited)












% Change

(In thousands, except per share data)

Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018


Seq.
Quarter


Year
over
Year

Assets:














Cash and due from banks

$

342,508



$

296,967



$

335,419



$

308,938



$

314,513



15

%


9

%

Interest bearing cash and temporary investments

691,283



605,841



287,218



570,321



488,499



14

%


42

%

Investment securities:














Equity and other, at fair value

66,358



63,327



61,841



62,454



64,297



5

%


3

%

Available for sale, at fair value

2,698,398



2,894,778



2,977,108



2,864,394



2,854,398



(7)

%


(5)

%

Held to maturity, at amortized cost

3,416



3,478



3,606



3,672



3,586



(2)

%


(5)

%

Loans held for sale, at fair value

356,645



240,302



166,461



289,537



432,642



48

%


(18)

%

Loans and leases

20,953,371



20,405,997



20,422,666



19,854,033



19,639,494



3

%


7

%

Allowance for loan and lease losses

(151,069)



(144,872)



(144,871)



(144,026)



(144,556)



4

%


5

%

Net loans and leases

20,802,302



20,261,125



20,277,795



19,710,007



19,494,938



3

%


7

%

Restricted equity securities

43,063



47,466



40,268



40,269



42,320



(9)

%


2

%

Premises and equipment, net

210,285



217,595



227,423



237,456



245,954



(3)

%


(15)

%

Operating lease right-of-use assets

112,752



109,807









3

%


nm

Goodwill

1,787,651



1,787,651



1,787,651



1,787,651



1,787,651



0

%


0

%

Other intangible assets, net

21,155



22,560



23,964



25,506



27,047



(6)

%


(22)

%

Residential mortgage servicing rights, at fair value

139,780



158,946



169,025



175,038



166,217



(12)

%


(16)

%

Other real estate owned

8,423



10,488



10,958



11,774



12,101



(20)

%


(30)

%

Bank owned life insurance

316,435



314,303



313,626



311,922



309,844



1

%


2

%

Other assets

385,621



320,991



257,418



216,128



236,594



20

%


63

%

Total assets

$

27,986,075



$

27,355,625



$

26,939,781



$

26,615,067



$

26,480,601



2

%


6

%

Liabilities:














Deposits

$

21,819,013



$

21,243,894



$

21,137,486



$

20,892,774



$

20,744,526



3

%


5

%

Securities sold under agreements to repurchase

308,052



288,944



297,151



286,975



273,666



7

%


13

%

Term debt

821,712



932,420



751,788



751,764



801,739



(12)

%


2

%

Junior subordinated debentures, at fair value

277,028



294,121



300,870



282,846



280,669



(6)

%


(1)

%

Junior subordinated debentures, at amortized cost

88,610



88,667



88,724



88,781



88,838



0

%


0

%

Operating lease liabilities

121,742



118,520









3

%


nm

Deferred tax liability, net

57,757



45,202



25,846



22,413



27,255



28

%


112

%

Other liabilities

263,654



231,531



281,474



285,621



282,821



14

%


(7)

%

Total liabilities

23,757,568



23,243,299



22,883,339



22,611,174



22,499,514



2

%


6

%

Shareholders' equity:














Common stock

3,514,391



3,511,731



3,512,874



3,510,949



3,509,146



0

%


0

%

Retained earnings

695,003



629,877



602,482



568,619



524,031



10

%


33

%

Accumulated other comprehensive income (loss)

19,113



(29,282)



(58,914)



(75,675)



(52,090)



(165)

%


(137)

%

Total shareholders' equity

4,228,507



4,112,326



4,056,442



4,003,893



3,981,087



3

%


6

%

Total liabilities and shareholders' equity

$

27,986,075



$

27,355,625



$

26,939,781



$

26,615,067



$

26,480,601



2

%


6

%















Common shares outstanding at period end

220,499



220,457



220,255



220,238



220,205



0

%


0

%

Book value per common share

$

19.18



$

18.65



$

18.42



$

18.18



$

18.08



3

%


6

%

Tangible book value per common share

$

10.97



$

10.44



$

10.19



$

9.95



$

9.84



5

%


11

%

Tangible equity - common

$

2,419,701



$

2,302,115



$

2,244,827



$

2,190,736



$

2,166,389



5

%


12

%

Tangible common equity to tangible assets

9.24

%


9.01

%


8.93

%


8.83

%


8.78

%


0.23



0.46



nm = not meaningful

 


Umpqua Holdings Corporation

Loan and Lease Portfolio

(Unaudited)

(Dollars in thousands)


Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018


% Change



Amount


Amount


Amount


Amount


Amount


Seq.
Quarter


Year
over
Year

Loans and leases:















Commercial real estate:















Non-owner occupied term, net


$

3,537,084



$

3,476,972



$

3,573,065



$

3,527,357



$

3,518,982



2

%


1

%

Owner occupied term, net


2,396,674



2,449,648



2,480,371



2,474,845



2,473,734



(2)

%


(3)

%

Multifamily, net


3,341,547



3,302,936



3,304,763



3,225,538



3,185,923



1

%


5

%

Construction & development, net


732,932



686,107



736,254



646,684



568,562



7

%


29

%

Residential development, net


199,421



205,963



196,890



198,518



183,114



(3)

%


9

%

Commercial:















Term, net


2,271,346



2,185,322



2,232,923



2,149,376



2,106,658



4

%


8

%

Lines of credit & other, net


1,280,587



1,229,092



1,169,525



1,133,508



1,152,853



4

%


11

%

Leases & equipment finance, net


1,449,579



1,378,686



1,330,155



1,282,128



1,265,843



5

%


15

%

Residential:















Mortgage, net


3,995,643



3,768,955



3,635,073



3,468,569



3,405,775



6

%


17

%

Home equity loans & lines, net


1,215,215



1,170,252



1,176,477



1,143,351



1,132,329



4

%


7

%

  Consumer & other, net


533,343



552,064



587,170



604,159



645,721



(3)

%


(17)

%

Total loans, net of deferred fees and costs


$

20,953,371



$

20,405,997



$

20,422,666



$

19,854,033



$

19,639,494



3

%


7

%
















Loan and leases mix:















Commercial real estate:















   Non-owner occupied term, net


17

%


17

%


17

%


18

%


18

%





   Owner occupied term, net


11

%


12

%


12

%


13

%


13

%





   Multifamily, net


16

%


16

%


16

%


16

%


16

%





Construction & development, net


3

%


3

%


4

%


3

%


3

%





Residential development, net


1

%


1

%


1

%


1

%


1

%





Commercial:















Term, net


11

%


11

%


11

%


11

%


11

%





Lines of credit & other, net


6

%


6

%


6

%


6

%


6

%





Leases & equipment finance, net


7

%


7

%


6

%


6

%


6

%





Residential:















Mortgage, net


19

%


18

%


18

%


17

%


17

%





Home equity loans & lines, net


6

%


6

%


6

%


6

%


6

%





 Consumer & other, net


3

%


3

%


3

%


3

%


3

%





Total


100

%


100

%


100

%


100

%


100

%





 

Umpqua Holdings Corporation

Deposits by Type/Core Deposits

(Unaudited)

(Dollars in thousands)


Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018


% Change



Amount


Amount


Amount


Amount


Amount


Seq.
Quarter


Year
over
Year

Deposits:















Demand, non-interest bearing


$

6,771,087



$

6,495,562



$

6,667,467



$

6,859,411



$

6,819,325



4

%


(1)

%

Demand, interest bearing


2,355,473



2,341,441



2,340,471



2,320,560



2,321,691



1

%


1

%

Money market


6,789,036



6,469,286



6,645,390



6,325,808



6,161,907



5

%


10

%

Savings


1,446,332



1,479,509



1,492,685



1,499,872



1,465,154



(2)

%


(1)

%

Time


4,457,085



4,458,096



3,991,473



3,887,123



3,976,449



0

%


12

%

Total


$

21,819,013



$

21,243,894



$

21,137,486



$

20,892,774



$

20,744,526



3

%


5

%
















Total core deposits (1)


$

18,529,797



$

17,903,754



$

18,190,402



$

18,012,992



$

17,743,888



3

%


4

%
















Deposit mix:















Demand, non-interest bearing


31

%


31

%


32

%


33

%


33

%





Demand, interest bearing


11

%


11

%


11

%


11

%


11

%





Money market


31

%


30

%


31

%


30

%


30

%





Savings


7

%


7

%


7

%


7

%


7

%





Time


20

%


21

%


19

%


19

%


19

%





Total


100

%


100

%


100

%


100

%


100

%




















Number of open accounts:















Demand, non-interest bearing


409,235



406,039



406,240



404,913



402,771






Demand, interest bearing


76,686



76,712



77,099



77,546



77,918






Money market


58,158



56,602



56,196



55,895



55,393






Savings


160,708



161,039



161,656



162,387



162,414






Time


60,571



58,210



54,388



52,482



51,073






Total


765,358



758,602



755,579



753,223



749,569





















Average balance per account:















Demand, non-interest bearing


$

16.5



$

16.0



$

16.4



$

16.9



$

16.9






Demand, interest bearing


30.7



30.5



30.4



29.9



29.8






Money market


116.7



114.3



118.3



113.2



111.2






Savings


9.0



9.2



9.2



9.2



9.0






Time


73.6



76.6



73.4



74.1



77.9






Total


$

28.5



$

28.0



$

28.0



$

27.7



$

27.7








(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)


Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018


Seq.
Quarter


Year
over
Year

Non-performing assets:















Loans and leases on non-accrual status


$

35,022



$

44,586



$

50,823



$

54,059



$

43,392



(21)

%


(19)

%

Loans and leases past due 90+ days and accruing (1)


35,700



31,424



36,444



33,812



34,535



14

%


3

%

Total non-performing loans and leases


70,722



76,010



87,267



87,871



77,927



(7)

%


(9)

%

Other real estate owned


8,423



10,488



10,958



11,774



12,101



(20)

%


(30)

%

Total non-performing assets


$

79,145



$

86,498



$

98,225



$

99,645



$

90,028



(9)

%


(12)

%
















Performing restructured loans and leases


$

15,267



$

15,726



$

13,924



$

14,531



$

27,167



(3)

%


(44)

%

Loans and leases past due 31-89 days


$

40,619



$

53,009



$

37,373



$

33,825



$

44,734



(23)

%


(9)

%

Loans and leases past due 31-89 days to total loans and leases


0.19

%


0.26

%


0.18

%


0.17

%


0.23

%





Non-performing loans and leases to total loans and leases (1)


0.34

%


0.37

%


0.43

%


0.44

%


0.40

%





Non-performing assets to total assets(1)


0.28

%


0.32

%


0.36

%


0.37

%


0.34

%







(1)

Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $5.4 million, $158,000, $8.9 million, $8.0 million, and $9.2 million at June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, and June 30, 2018, respectively.

 


Umpqua Holdings Corporation

Credit Quality – Allowance for Loan and Lease Losses

 (Unaudited)



Quarter Ended


% Change

(Dollars in thousands)


Jun 30,
2019


Mar 31,
2019


Dec 31,
2018


Sep 30,
2018


Jun 30,
2018


Seq.
Quarter


Year over
Year

Allowance for loan and lease losses:















Balance beginning of period


$

144,872



$

144,871



$

144,026



$

144,556



$

141,933






Provision for loan and lease losses


19,352



13,684



17,219



11,711



13,319



41

%


45

%

Charge-offs


(16,707)



(17,152)



(19,527)



(15,896)



(14,815)



(3)

%


13

%

Recoveries


3,552



3,469



3,153



3,655



4,119



2

%


(14)

%

Net charge-offs


(13,155)



(13,683)



(16,374)



(12,241)



(10,696)



(4)

%


23

%

Total allowance for loan and lease losses


151,069



144,872



144,871



144,026



144,556



4

%


5

%

Reserve for unfunded commitments


4,857



4,654



4,523



4,294



4,130



4

%


18

%

Total allowance for credit losses


$

155,926



$

149,526



$

149,394



$

148,320



$

148,686



4

%


5

%
















Net charge-offs to average loans and leases (annualized)


0.26

%


0.27

%


0.32

%


0.25

%


0.22

%





Recoveries to gross charge-offs


21.26

%


20.23

%


16.15

%


22.99

%


27.80

%





Allowance for loan and lease losses to loans and leases


0.72

%


0.71

%


0.71

%


0.73

%


0.74

%





Allowance for credit losses to loans and leases


0.74

%


0.73

%


0.73

%


0.75

%


0.76

%





 


Umpqua Holdings Corporation

Credit Quality – Allowance for Loan and Lease Losses

(Unaudited)



Six Months Ended


% Change

(Dollars in thousands)


Jun 30, 2019


Jun 30, 2018


Year over Year

Allowance for loan and lease losses:





Balance beginning of period


$

144,871



$

140,608




Provision for loan and lease losses


33,036



26,975



22

%

Charge-offs


(33,859)



(30,627)



11

%

Recoveries


7,021



7,600



(8)

%

Net charge-offs


(26,838)



(23,027)



17

%

Total allowance for loan and lease losses


151,069



144,556



5

%

Reserve for unfunded commitments


4,857



4,130



18

%

Total allowance for credit losses


$

155,926



$

148,686



5

%








Net charge-offs to average loans and leases (annualized)


0.26

%


0.24

%



Recoveries to gross charge-offs


20.74

%


24.81

%



 


Umpqua Holdings Corporation

Selected Ratios

(Unaudited)



Quarter Ended


% Change



Jun 30,
2019


Mar 31,
2019


Dec 31,
2018


Sep 30,
2018


Jun 30,
2018


Seq.
Quarter


Year
over
Year

Average Rates:















Yield on loans held for sale


5.03

%


5.95

%


5.81

%


5.27

%


4.86

%


(0.92)



0.17


Yield on loans and leases


5.07

%


5.06

%


4.97

%


4.89

%


4.91

%


0.01



0.16


Yield on taxable investments


1.62

%


2.96

%


4.11

%


3.72

%


1.31

%


(1.34)



0.31


Yield on tax-exempt investments (1)


3.42

%


3.59

%


3.70

%


3.61

%


3.64

%


(0.17)



(0.22)


Yield on interest bearing cash and temporary investments


2.41

%


2.44

%


2.25

%


1.99

%


1.82

%


(0.03)



0.59


Total yield on earning assets (1)


4.59

%


4.79

%


4.81

%


4.67

%


4.41

%


(0.20)



0.18

















Cost of interest bearing deposits


1.16

%


0.97

%


0.85

%


0.73

%


0.62

%


0.19



0.54


Cost of securities sold under agreements















to repurchase and fed funds purchased


0.55

%


0.88

%


0.26

%


0.15

%


0.22

%


(0.33)



0.33


Cost of term debt


2.03

%


1.88

%


1.75

%


1.73

%


1.74

%


0.15



0.29


Cost of junior subordinated debentures


6.17

%


6.24

%


6.13

%


6.06

%


5.89

%


(0.07)



0.28


Total cost of interest bearing liabilities


1.31

%


1.14

%


1.00

%


0.90

%


0.80

%


0.17



0.51

















Net interest spread (1)


3.28

%


3.65

%


3.81

%


3.77

%


3.61

%


(0.37)



(0.33)


Net interest margin (1)


3.70

%


4.03

%


4.15

%


4.09

%


3.89

%


(0.33)



(0.19)

















Performance Ratios:















Return on average assets


1.62

%


1.12

%


1.19

%


1.36

%


1.02

%


0.50



0.60


Return on average tangible assets


1.73

%


1.20

%


1.28

%


1.46

%


1.09

%


0.53



0.64


Return on average common equity


10.80

%


7.34

%


7.90

%


9.00

%


6.64

%


3.46



4.16


Return on average tangible common equity


19.14

%


13.17

%


14.34

%


16.42

%


12.18

%


5.97



6.96


Efficiency ratio – Consolidated


51.64

%


60.44

%


58.58

%


57.06

%


65.84

%


(8.80)



(14.20)


Efficiency ratio – Bank


50.16

%


58.57

%


57.67

%


54.70

%


63.04

%


(8.41)



(12.88)




(1)

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

 


Umpqua Holdings Corporation

Selected Ratios

(Unaudited)



Six Months Ended


% Change



Jun 30, 2019


Jun 30, 2018


Year over Year

Average Rates:







Yield on loans held for sale


5.41

%


4.57

%


0.84


Yield on loans and leases


5.07

%


4.87

%


0.20


Yield on taxable investments


2.30

%


1.82

%


0.48


Yield on tax-exempt investments (1)


3.51

%


3.66

%


(0.15)


Yield on interest bearing cash and temporary investments


2.42

%


1.72

%


0.70


Total yield on earning assets (1)


4.69

%


4.44

%


0.25









Cost of interest bearing deposits


1.07

%


0.55

%


0.52


Cost of securities sold under agreements







to repurchase and fed funds purchased


0.74

%


0.15

%


0.59


Cost of term debt


1.96

%


1.72

%


0.24


Cost of junior subordinated debentures


6.20

%


5.62

%


0.58


Total cost of interest bearing liabilities


1.23

%


0.73

%


0.50









Net interest spread (1)


3.46

%


3.71

%


(0.25)


Net interest margin (1)


3.86

%


3.96

%


(0.10)









Performance Ratios:







Return on average assets


1.37

%


1.13

%


0.24


Return on average tangible assets


1.47

%


1.22

%


0.25


Return on average common equity


9.09

%


7.34

%


1.75


Return on average tangible common equity


16.21

%


13.50

%


2.71


Efficiency ratio – Consolidated


55.58

%


63.50

%


(7.92)


Efficiency ratio – Bank


53.94

%


61.12

%


(7.18)




(1)

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

 


Umpqua Holdings Corporation

Average Balances

(Unaudited)


Quarter Ended


% Change

(Dollars in thousands)

Jun 30,
2019


Mar 31,
2019


Dec 31,
2018


Sep 30,
2018


Jun 30,
2018


Seq.
Quarter


Year
over
Year

Temporary investments and interest bearing cash

$

783,703



$

153,347



$

462,621



$

558,597



$

458,133



411

%


71

%

Investment securities, taxable

2,683,472



2,757,644



2,716,616



2,687,635



2,723,406



(3)

%


(1)

%

Investment securities, tax-exempt

271,633



287,366



282,998



278,937



279,158



(5)

%


(3)

%

Loans held for sale

264,445



187,656



238,958



320,494



326,427



41

%


(19)

%

Loans and leases

20,605,963



20,388,988



20,051,674



19,709,113



19,387,537



1

%


6

%

Total interest earning assets

24,609,216



23,775,001



23,752,867



23,554,776



23,174,661



4

%


6

%

Goodwill and other intangible assets, net

1,809,583



1,811,007



1,812,487



1,814,000



1,815,529



0

%


0

%

Total assets

27,709,310



26,811,621



26,672,224



26,461,526



26,076,142



3

%


6

%















Non-interest bearing demand deposits

6,556,090



6,505,615



6,828,730



6,865,676



6,645,689



1

%


(1)

%

Interest bearing deposits

15,069,198



14,304,325



14,138,852



13,897,141



13,745,089



5

%


10

%

Total deposits

21,625,288



20,809,940



20,967,582



20,762,817



20,390,778



4

%


6

%

Interest bearing liabilities

16,646,949



15,858,561



15,547,250



15,331,529



15,199,900



5

%


10

%















Shareholders' equity - common

4,153,175



4,091,174



4,035,125



4,011,856



3,988,825



2

%


4

%

Tangible common equity (1)

2,343,592



2,280,167



2,222,638



2,197,856



2,173,296



3

%


8

%

 

Umpqua Holdings Corporation

Average Balances

(Unaudited)



Six Months Ended

% Change

(Dollars in thousands)


Jun 30, 2019


Jun 30, 2018


Year over Year

Temporary investments and interest bearing cash


$

470,266



$

381,328



23

%

Investment securities, taxable


2,720,353



2,758,235



(1)

%

Investment securities, tax-exempt


279,456



282,860



(1)

%

Loans held for sale


226,263



296,992



(24)

%

Loans and leases


20,498,075



19,239,586



7

%

Total interest earning assets


24,194,413



22,959,001



5

%

Goodwill and other intangible assets, net


1,810,291



1,816,294



0

%

Total assets


27,262,945



25,856,690



5

%








Non-interest bearing demand deposits


6,530,992



6,548,566



0

%

Interest bearing deposits


14,688,875



13,619,723



8

%

Total deposits


21,219,867



20,168,289



5

%

Interest bearing liabilities


16,254,933



15,086,460



8

%








Shareholders' equity - common


4,122,346



3,981,948



4

%

Tangible common equity (1)


2,312,055



2,165,654



7

%








(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
Average Rates and Balances

(Unaudited)

(dollars in thousands)

Quarter Ended


June 30, 2019


March 31, 2019


June 30, 2018


Average
Balance


Interest
Income
or
Expense


Average
Yields
or
Rates


Average
Balance


Interest
Income
or
Expense


Average
Yields
or
Rates


Average
Balance


Interest
Income
or
Expense


Average
Yields
or
Rates

INTEREST-EARNING ASSETS:


















Loans held for sale

$

264,445



$

3,326



5.03

%


$

187,656



$

2,790



5.95

%


$

326,427



$

3,967



4.86

%

Loans and leases (1)

20,605,963



260,784



5.07

%


20,388,988



255,957



5.06

%


19,387,537



238,156



4.91

%

Taxable securities

2,683,472



10,861



1.62

%


2,757,644



20,473



2.96

%


2,723,406



8,932



1.31

%

Non-taxable securities (2)

271,633



2,325



3.42

%


287,366



2,580



3.59

%


279,158



2,539



3.64

%

Temporary investments and interest-bearing cash

783,703



4,708



2.41

%


153,347



925



2.44

%


458,133



2,080



1.82

%

Total interest-earning assets

24,609,216



$

282,004



4.59

%


23,775,001



282,725



4.79

%


23,174,661



$

255,674



4.41

%

Other assets

3,100,094







3,036,620







2,901,481






Total assets

$

27,709,310







$

26,811,621







$

26,076,142






INTEREST-BEARING LIABILITIES:


















Interest-bearing demand deposits

$

2,332,535



$

2,798



0.48

%


$

2,319,718



$

2,640



0.46

%


$

2,322,359



$

1,565



0.27

%

Money market deposits

6,747,290



15,351



0.91

%


6,391,721



11,017



0.70

%


6,332,372



5,896



0.37

%

Savings deposits

1,454,908



410



0.11

%


1,488,530



270



0.07

%


1,456,625



252



0.07

%

Time deposits

4,534,465



25,032



2.21

%


4,104,356



20,167



1.99

%


3,633,733



13,546



1.50

%

Total interest-bearing deposits

15,069,198



43,591



1.16

%


14,304,325



34,094



0.97

%


13,745,089



21,259



0.62

%

Repurchase agreements and federal funds purchased

292,057



403



0.55

%


371,336



810



0.88

%


285,338



155



0.22

%

Term debt

903,164



4,563



2.03

%


793,797



3,683



1.88

%


801,768



3,478



1.74

%

Junior subordinated debentures

382,530



5,881



6.17

%


389,103



5,987



6.24

%


367,705



5,400



5.89

%

Total interest-bearing liabilities

16,646,949



$

54,438



1.31

%


15,858,561



$

44,574



1.14

%


15,199,900



$

30,292



0.80

%

Non-interest-bearing deposits

6,556,090







6,505,615







6,645,689






Other liabilities

353,096







356,271







241,728






Total liabilities

23,556,135







22,720,447







22,087,317






Common equity

4,153,175







4,091,174







3,988,825






Total liabilities and shareholders' equity

$

27,709,310







$

26,811,621







$

26,076,142






NET INTEREST INCOME



$

227,566







$

238,151







$

225,382




NET INTEREST SPREAD





3.28

%






3.65

%






3.61

%

NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)





3.70

%






4.03

%






3.89

%



(1)

Non-accrual loans and leases are included in the average balance.   

(2)

Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $404,000 for the three months ended June 30, 2019 as compared to $466,000 for March 31, 2019 and $482,000 for June 30, 2018.

 


Umpqua Holdings Corporation
Average Rates and Balances

(Unaudited)

(dollars in thousands)

Six Months Ended


June 30, 2019


June 30, 2018


Average
Balance


Interest
Income
or
Expense


Average
Yields
or
Rates


Average
Balance


Interest
Income
or
Expense


Average
Yields
or
Rates

INTEREST-EARNING ASSETS:












Loans held for sale

$

226,263



$

6,116



5.41

%


$

296,992



$

6,782



4.57

%

Loans and leases (1)

20,498,075



516,741



5.07

%


19,239,586



464,829



4.87

%

Taxable securities

2,720,353



31,334



2.30

%


2,758,235



25,099



1.82

%

Non-taxable securities (2)

279,456



4,905



3.51

%


282,860



5,179



3.66

%

Temporary investments and interest-bearing cash

470,266



5,633



2.42

%


381,328



3,244



1.72

%

Total interest-earning assets

24,194,413



$

564,729



4.69

%


22,959,001



$

505,133



4.44

%

Other assets

3,068,532







2,897,689






Total assets

$

27,262,945







$

25,856,690






INTEREST-BEARING LIABILITIES:












Interest-bearing demand deposits

$

2,326,162



$

5,438



0.47

%


$

2,322,793



$

2,775



0.24

%

Money market deposits

6,570,488



26,368



0.81

%


6,618,629



11,609



0.35

%

Savings deposits

1,471,626



680



0.09

%


1,459,824



414



0.06

%

Time deposits

4,320,599



45,199



2.11

%


3,218,477



22,071



1.38

%

Total interest-bearing deposits

14,688,875



77,685



1.07

%


13,619,723



36,869



0.55

%

Repurchase agreements and federal funds purchased

331,477



1,213



0.74

%


294,150



218



0.15

%

Term debt

848,783



8,246



1.96

%


802,031



6,839



1.72

%

Junior subordinated debentures

385,798



11,868



6.20

%


370,556



10,332



5.62

%

Total interest-bearing liabilities

16,254,933



$

99,012



1.23

%


15,086,460



$

54,258



0.73

%

Non-interest-bearing deposits

6,530,992







6,548,566






Other liabilities

354,674







239,716






Total liabilities

23,140,599







21,874,742






Common equity

4,122,346







3,981,948






Total liabilities and shareholders' equity

$

27,262,945







$

25,856,690






NET INTEREST INCOME



$

465,717







$

450,875




NET INTEREST SPREAD





3.46

%






3.71

%

NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)





3.86

%






3.96

%



(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 $870,000 for the six months ended June 30, 2019 as compared to $1.0 million for the same period in 2018.

 

Umpqua Holdings Corporation
Residential Mortgage Banking Activity

(Unaudited)



Quarter Ended


% Change

(Dollars in thousands)


Jun 30, 2019


Mar 31, 2019


Dec 31, 2018


Sep 30, 2018


Jun 30, 2018


Seq.
Quarter


Year
over Year

Residential mortgage banking revenue:















Origination and sale


$

23,151



$

14,373



$

16,665



$

20,983



$

28,159



61

%


(18)

%

Servicing


11,036



10,824



11,555



10,302



10,407



2

%


6

%

Change in fair value of MSR asset:















Changes due to collection/realization of expected cash flows over time


(6,905)



(6,431)



(6,425)



(6,007)



(5,903)



7

%


17

%

Changes due to valuation inputs or assumptions


(17,753)



(7,535)



(6,645)



6,206



500



136

%


(3,651)

%

Total


$

9,529



$

11,231



$

15,150



$

31,484



$

33,163



(15)

%


(71)

%
















Closed loan volume:















Portfolio


$

481,878



$

318,612



$

312,524



$

323,941



$

294,581



51

%


64

%

For-sale


698,150



487,090



589,355



756,924



839,489



43

%


(17)

%

Total


$

1,180,028



$

805,702



$

901,879



$

1,080,865



$

1,134,070



46

%


4

%
















Gain on sale margin:















Based on for-sale volume


3.32

%


2.95

%


2.83

%


2.77

%


3.35

%


0.37



(0.03)

















Residential mortgage servicing rights:















Balance, beginning of period


$

158,946



$

169,025



$

175,038



$

166,217



$

164,760



(6)

%


(4)

%

Additions for new MSR capitalized


5,492



3,887



7,057



8,622



6,860



41

%


(20)

%

Changes in fair value of MSR asset:















Changes due to collection/realization of expected cash flows over time


(6,905)



(6,431)



(6,425)



(6,007)



(5,903)



7

%


17

%

Changes due to valuation inputs or assumptions


(17,753)



(7,535)



(6,645)



6,206



500



136

%


(3,651)

%

Balance, end of period


$

139,780



$

158,946



$

169,025



$

175,038



$

166,217



(12)

%


(16)

%
















Residential mortgage loans serviced for others


$

15,796,102



$

15,902,587



$

15,978,885



$

15,810,455



$

15,508,182



(1)

%


2

%

MSR as % of serviced portfolio


0.88

%


1.00

%


1.06

%


1.11

%


1.07

%


(0.12)



(0.19)


















 

Umpqua Holdings Corporation
Residential Mortgage Banking Activity

(Unaudited)



Six Months Ended


% Change

(Dollars in thousands)


Jun 30, 2019


Jun 30, 2018


Year over Year

Residential mortgage banking revenue:







Origination and sale


$

37,524



$

50,996



(26)

%

Servicing


21,860



20,929



4

%

Change in fair value of MSR asset:







Changes due to collection/realization of expected cash flows over time


(13,336)



(12,101)



10

%

Changes due to valuation inputs or assumptions


(25,288)



11,777



(315)

%

Total


$

20,760



$

71,601



(71)

%








Closed loan volume:







Portfolio


$

800,490



$

532,364



50

%

For-sale


1,185,240



1,526,715



(22)

%

Total


$

1,985,730



$

2,059,079



(4)

%








Gain on sale margin:







Based on for-sale volume


3.17

%


3.34

%


(0.17)









Residential mortgage servicing rights:







Balance, beginning of period


$

169,025



$

153,151



10

%

Additions for new MSR capitalized


9,379



13,390



(30)

%

Changes in fair value of MSR asset:







Changes due to collection/realization of expected cash flows over time


(13,336)



(12,101)



10

%

Changes due to valuation inputs or assumptions


(25,288)



11,777



(315)

%

Balance, end of period


$

139,780



$

166,217



(16)

%








 

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SOURCE Umpqua Holdings Corporation


Source: Umpqua Holdings Corporation