EXHIBIT 99.1

FOR IMMEDIATE RELEASE                          

UMPQUA HOLDINGS REPORTS FIRST QUARTER 2011 RESULTS

First quarter 2011 net income and operating income of $0.12 per diluted share

Non-covered, non-performing assets at 1.53% of total assets

Non-covered provision for loan and lease losses of $15.0 million, the lowest quarterly level since 2007

Non-interest bearing demand deposits increased 3% on a sequential quarter basis

Non-covered commercial & industrial loans increased $14 million, or 1%, over prior quarter

PORTLAND, Ore. – Apr. 21, 2011 – Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc. today announced first quarter 2011 net earnings available to common shareholders of $13.4 million, or $0.12 per diluted common share, compared to a net loss available to common shareholders of $3.7 million, or $0.04 per diluted common share, for the same period in the prior year. 

Operating income, defined 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, was $13.8 million, or $0.12 per diluted common share for the first quarter of 2011, compared to an operating loss of $10.1 million, or $0.11 per diluted common share, for the same period in the prior year.  Operating income or loss is considered a “non-GAAP” financial measure.  More information regarding this measurement and reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Significant financial statement items for the first quarter of 2011 include:

·         Net interest margin increases to 4.23% due to larger investment portfolio balances, increased yields on the covered loan portfolio, and decreased cost of interest bearing liabilities;

·         Non-covered, non-performing assets remained stable at 1.53% of total assets;

·         Provision for non-covered loan losses of $15.0 million, a 14% decrease, and total net charge-offs of $19.1 million, a 19% decrease, on a sequential quarter basis.  Net charge-offs exceeded the provision for non-covered loan losses during the quarter due to improving credit quality of the loan portfolio and specific reserves from the previous quarter which were charged off in the first quarter;

·         The allowance for credit losses ended the quarter at 1.75% of non-covered total loans and leases;

·         Provision for covered loan losses of $7.3 million, mostly offset by a corresponding gain in the FDIC indemnification asset;

·         Loss on other real estate owned of $3.8 million, compared to a loss of $4.9 million for the fourth quarter of 2010;

·         Non-covered loans ended the quarter at $5.63 billion, a decline of $26.6 million, or 0.5%, on a sequential quarter basis;

·         The cost of interest bearing deposits for the first quarter of 2011 was 0.83%, a decrease of 14 basis points on a sequential quarter basis;

·         Opened Debt Capital Markets Group to enhance available credit product offerings to commercial clientele, including interest rate swap products and loan syndications;

·         Tangible common equity ratio of 8.93%; and

·         Total risk-based capital of 17.53%, and tier 1 common to risk weighted asset ratio of 13.17%.

“This quarter’s results demonstrate the Company’s strong position as loan production and earnings momentum are building, as a result of management’s success positioning the Bank for continued growth,” said Ray Davis, CEO of Umpqua Holdings Corporation.  “Umpqua has emerged from this difficult economic period and challenging credit cycle with a stronger balance sheet. This financial strength provides us the flexibility to continue pursuing strategic growth opportunities that will build shareholder value over time.”

Asset quality – Non-covered loan portfolio

Non-performing assets were $177.0 million, or 1.53% of total assets, as of March 31, 2011, compared to $178.0 million, or 1.53% of total assets as of December 31, 2010, and $209.6 million, or 1.99% of total assets as of March 31, 2010.  Of this amount, as of March 31, 2011, $136.1 million represented non-accrual loans, $6.3 million represented loans past due greater than 90 days and still accruing interest, and $34.5 million was other real estate owned (“OREO”).

The Company has aggressively charged-down impaired assets to their disposition values, and the assets are expected to be resolved at those levels, absent further declines in market prices.  As of March 31, 2011, the non-performing assets of $177.0 million have been written down by 41%, or $121.1 million, from their current par balance of $298.1 million.

The provision for loan losses for the first quarter of 2011 was $15.0 million, the lowest level of provision since the second quarter of 2007, due to improving credit quality of the loan portfolio and stabilization of non-performing loans.  Total net charge-offs for the first quarter of 2011 were $19.1 million, reducing the allowance for credit losses to 1.75% of non-covered loans and leases at March 31, 2011, as compared to 1.82% of total non-covered loans as of December 31, 2010 and 1.91% of total non-covered loans as of March 31, 2010.  The annualized net charge-off rate for the first quarter of 2011 was 1.38%.

Non-covered loans past due 30 to 89 days were $70.7 million, or 1.25% of non-covered loans and leases as of March 31, 2011, as compared to $48.2 million, or 0.85% as of December 31, 2010, and $53.9 million, or 0.93% as of March 31, 2010.

Since 2007, the Company has been aggressively resolving problems arising from the current economic downturn.  The following table recaps the Company’s credit quality trends since the second quarter of 2007 as it relates to the non-covered loan portfolio: 

Credit quality trends – Non-covered loans

Non-covered construction loan portfolio

Total non-covered construction loans continued to decline in the quarter to $367 million as of March 31, 2011, representing a decrease of 11% since December 31, 2010, and a decrease of 34% from March 31, 2010.  Within this portfolio, the residential development loan segment was $132 million, or 2% of the total non-covered loan portfolio.  Of this amount, $34 million represented non-performing loans, and $98 million represented performing loans.  The residential development loan segment has decreased $70 million, or 35%, since March 31, 2010. 

The remaining $235 million in non-covered construction loans as of March 31, 2011 primarily represents commercial construction projects.  Total non-covered, non-performing commercial construction loans were $19.7 million at March 31, 2011, and $5.5 million were past due 30 to 89 days as of March 31, 2011.

Non-covered commercial real estate loan portfolio

The total non-covered term commercial real estate loan portfolio was $3.5 billion as of March 31, 2011.  Of this total, $2.24 billion are non-owner occupied and $1.25 billion are owner occupied.  Of the total term commercial real estate portfolio, $55.1 million were on non-accrual status, and $32.8 million, or 0.94%, are past due 30-89 days as of March 31, 2011.  Of the total non-covered commercial real estate portfolio, 8% matures in 2011-2012, 17% in years 2013-2014, and 24% in years 2015-2016.  The remaining 51% of the portfolio matures in or after the year 2017.

The portfolio was conservatively underwritten at origination to a minimum debt service coverage ratio of 1.20, and as a result, in many cases, the loan-to-value was substantially less than our in-house maximum of 75%.  This underwriting serves to protect against the low capitalization rate environment of the past several years.

During the past two years, the Company has completed several rounds of stress testing on the commercial real estate portfolio, focusing on items such as capitalization rates, interest rates and vacancy factors.  The results of the stress testing showed no significant unidentified risks, unlike our experience in the residential development construction portfolio.  As we remain in a difficult economic environment, we anticipate that some borrowers will struggle, but that potential issues within the commercial real estate portfolio will result from individual loans within distinct geographic areas and not represent a systemic weakness in the portfolio. 

We believe we are well positioned to manage the exposure and work with our customers until the economic climate improves.

Non-covered restructured loans

Restructured loans on accrual status were $67.5 million as of March 31, 2011, down 20% from $84.4 million as of December 31, 2010, and down 31% from $98.0 million as of March 31, 2010.  The decrease during the first quarter primarily resulted from the reclassification of certain commercial real estate relationships previously restructured to non-accrual status.  The Company does not enter into restructurings on loans in non-performing status, and generally requires the customer to pledge additional collateral, maintain a minimum debt service coverage ratio of 1.0, and show substantial external sources of repayment prior to the Company agreeing to restructure.

Additional information related to asset quality

Additional tables can be found at the end of this earnings release covering the following aspects of the Company's non-covered loan portfolio: residential development loan trends by region, residential development loan stratification by size and by region, non-performing asset detail by type and by region, loans past due 30 to 89 days by type and by region, loans past due 30 to 89 days trends, and restructured loans on accrual status by type and by region.

Asset quality – Covered loan portfolio

Covered non-performing assets were $29.5 million, or 0.26% of total assets, as of March 31, 2011, as compared to $29.9 million, or 0.26% of total assets, as of December 31, 2010. The amount at March 31, 2011 represents OREO.  In conjunction with the guidance governing the accounting for purchased loan portfolios with evidence of credit deterioration subsequent to origination, the covered loans acquired have been assembled into pools of loans.  As a result, individual loans underlying the loan pools are not reported as non-performing.  Rather, accretable yield of the pool is recognized to the extent pool level expected future cash flows discounted at the effective rate exceed the carrying value of the pool.  To the extent discounted expected future cash flows are less than the carrying value of the pool, provisions for covered credit losses are recognized as a charge to earnings, but the adjusted carrying value of loan pool continues to accrete income at the effective rate.  

As of acquisition date, covered non-performing assets were written-down to their estimated fair value, incorporating our estimate of future expected cash flows until the ultimate resolution of these credits.  The estimated credit losses embedded in these acquired non-performing loan portfolios were based on management’s and third-party consultants’ credit reviews of the portfolios performed during due diligence.  To the extent actual or projected cash flows are less than originally estimated, additional provisions for loan losses on the covered loan portfolio will be recognized; however, these provisions would be mostly offset by a corresponding increase in the FDIC indemnification (loss sharing) asset recognized within non-interest income.  To the extent actual or projected cash flows are more than originally estimated, the increase in cash flows is prospectively recognized in interest income; however, the increase in interest income would be offset by a corresponding decrease in the FDIC indemnification (loss sharing) asset recognized within non-interest income. 

Net interest margin

The Company reported a tax equivalent net interest margin of 4.23% for the first quarter of 2011, as compared to 4.14% for the fourth quarter of 2010, and 4.04% for the first quarter of 2010.  The increase in net interest margin in the current quarter over the prior quarter resulted primarily from investing excess interest bearing cash into the investment portfolio and declining costs of interest bearing deposits, partially offset by an increase in interest and fee reversals on non-accrual loans and a decline in loans outstanding.  The increase in net interest margin in the current quarter over the same quarter  of the prior year resulted from investing excess interest bearing cash into the investment portfolio, an increase in covered loans outstanding, increased yield on the covered loan portfolio as a result of payoffs ahead of

Umpqua Holdings Corporation Announces First Quarter Results

April 21, 2011

Page 5 of 22

Non-interest expense

Total non-interest expense for the first quarter of 2011 was $84.2 million, compared to $87.9 million for the fourth quarter of 2010 and $69.9 million for the first quarter of 2010.  Included in non-interest expense are several categories which are outside of the operational control of the Company or depend on changes in market values, including FDIC deposit insurance assessments and gain or loss on other real estate owned, as well as infrequently occurring expenses such as merger related costs.  Excluding these non-controllable or infrequently occurring items, the remaining non-interest expense items totaled $76.4 million for the first quarter of 2011, compared to $77.8 million for the fourth quarter of 2010 and $62.2 million for the first quarter of 2010.  The decline in non-interest expense from the prior quarter results from cost control measures related to compensation and other expenses.  The increase over the same period prior year relates to the assumption of Evergreen’s, Rainier’s and Nevada Security’s banking operations, increases in variable expenses related to the mortgage banking division’s production, higher loan collection and OREO management expenses, and investment in various infrastructure and growth initiatives. 

During the first quarter of 2011, the Company incurred loan collection and OREO management expense of $4.8 million, compared to $5.0 million for the fourth quarter of 2010, and $1.7 million for the first quarter of 2010.  Mortgage production related expense was $4.3 million in the first quarter of 2011, compared to $4.9 million in the fourth quarter of 2010, and $3.1 million for the first quarter of 2010. Total FDIC deposit insurance assessments during the first quarter of 2011 were $3.9 million. The decrease as compared to the prior quarter’s assessment of $4.2 million is a result of the seasonal decline in average deposit balances that typically occurs in the first quarter of the year and termination of the special assessment for the Bank’s participations in the Transaction Account Guarantee Program of the FDIC.

Income taxes

The Company recorded a provision for income taxes of $6.5 million in the first quarter of 2011, representing an effective tax rate of 32.6%.  The change in the effective income tax rate in the quarter reflects the effects of permanent differences on our taxable income year to date.

Balance sheet

Total consolidated assets as of March 31, 2011 were $11.6 billion, compared to $11.7 billion on December 31, 2010 and $10.5 billion a year ago.  Total gross loans and leases (covered and non-covered), and deposits, were $6.4 billion and $9.3 billion, respectively, as of March 31, 2011, as compared to $6.4 billion and $9.4 billion, respectively, as of December 31, 2010, and $6.5 billion and $8.2 billion, respectively, as of March 31, 2010. 

Total loans held for investment (including covered and non-covered) decreased $70.9 million during the first quarter of 2011. This decrease is principally attributable to non-covered charge-offs, paydowns on the covered loans, and transfers to other real estate owned. Excluding non-covered charge-offs of $20.9 million, the non-covered loan portfolio decreased only $5.7 million in the current quarter.

Total deposits decreased $141 million, or 1%, during the first quarter of 2011, which is consistent with the seasonal drop in deposits that typically occurs in the first quarter of any given year.  Of this amount, $164 million of the decrease relates to the run-off of higher cost time deposits.  Despite the decline in total deposits in the quarter, non-interest bearing deposits increased $55 million, or 3%, and low cost savings accounts increased $21 million, or 6%, on a sequential quarter basis. Total deposits have increased $1.1 billion, or 13%, since March 31, 2010. 

Due to the significant amount of liquidity in the banking system and generally unattractive bond market conditions since the second half of 2009, the Company has been holding larger levels of interest bearing cash rather than investing all excess liquidity into the bond market.  At March 31, 2011, the Company had $515 million of interest bearing cash earning 0.25%, the target Federal Funds Rate.  This on balance sheet liquidity has declined since the prior year as investment security yields in the current

Umpqua Holdings Corporation Announces First Quarter Results

April 21, 2011

Page 7 of 22

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

Management believes pre-tax, pre-credit cost operating income is a useful financial measure because it enables investors to assess the Company’s ability to generate income and capital to cover credit losses through a credit cycle.  Management uses this measure to evaluate core operating results exclusive of credit costs, which are often market driven or outside of the Company’s control, to monitor how we are growing core pre-tax income of the Company over time, through organic growth and acquisitions. Pre-tax, pre-credit cost operating income is calculated starting with operating earnings (as defined above) and adding back operating provision for income taxes, preferred stock dividends, earnings allocated to participating securities, provision for loan and lease losses, net gains or losses on other real estate owned and credit related external workout costs.  For covered losses and expenses that are subject to loss-share, we have also deducted the associated gain recognized on FDIC indemnification asset.

The following table provides the reconciliation of operating earnings (loss) (non-GAAP) to pre-tax, pre-credit cost operating income (non-GAAP) for the periods presented (the reconciliation of earnings (loss) available to common shareholders (GAAP) to operating earnings (loss) (non-GAAP) is provided in the preceding tables):

Management believes tangible common equity and the tangible common equity ratio are meaningful measures of capital adequacy. Tangible common equity is calculated as total shareholders' equity less preferred stock and less goodwill and other intangible assets, net (excluding MSRs).  In addition, 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).

About Umpqua Holdings Corporation

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 improved loan production, earnings momentum, the prospects for strategic growth that will build shareholder value, our success in resolving remaining credits at the estimated disposition value of related collateral, the mitigating effect of FDIC loss sharing agreements on the covered loan portfolio, our expectation that any weakness in our CRE portfolio will arise from local market weakness and not a systemic weakness, valuations of junior subordinated debentures and our plans to hold a large interest bearing cash position, relative to historical levels.   Specific risks that could cause results to differ from the forward-looking statements are set forth in our filings with the SEC and include, without limitation, unanticipated weakness in loan demand, 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 stock trades at historically low earnings multiples, our inability to effectively manage problem credits, unanticipated further declines in real estate values, certain loan assets becoming ineligible for loss sharing, unanticipated deterioration in the commercial real estate loan portfolio, and continued negative pressure on interest income associated with our large cash position.

Umpqua Holdings Corporation

Covered loan & lease portfolio balances represent the loan portfolios acquired through the assumption of EvergreenBank on January 22, 2010, Rainier Pacific Bank on February 26, 2010, and Nevada Security Bank on June 18, 2010, from the FDIC through whole bank purchase and assumption agreements with loss sharing.

(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.