UMPQUA HOLDINGS CORP - FORM 8-K - EX-99.1 - PRESS RELEASE ANNOUNCING SECOND QUARTER 2016 FINANCIAL RESULTS

Attached files

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EX-99.2 - SECOND QUARTER 2016 INVESTOR PRESENTATION - UMPQUA HOLDINGS CORP	umpqq22016earningspresen.htm
8-K - 8-K - UMPQUA HOLDINGS CORP	umpqq220168-k.htm

EXHIBIT 99.1

Contacts:



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

UMPQUA REPORTS SECOND QUARTER 2016 RESULTS

Net earnings of $54.3 million, or $0.25 per common share, up from $0.22 in first quarter

Operating earnings¹ of $69.2 million, or $0.31 per common share, up from $0.29 in first quarter

Top-line revenue growth reflecting robust mortgage banking business and strong loan and lease growth

Continued progress in organization-wide efficiency initiatives

PORTLAND, Ore. – July 20, 2016 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $54.3 million for the second quarter of 2016, compared to $47.5 million for the first quarter of 2016 and $54.7 million for the second quarter of 2015. Earnings per diluted common share were $0.25 for the second quarter of 2016, compared to $0.22 for the first quarter of 2016 and $0.25 for the second quarter of 2015.

“Despite the continuing low interest rate environment, Umpqua's financial performance for the second quarter was solid; highlighted by strong performance in the mortgage banking business and double-digit growth in loans and leases, combined with further reductions in the core expense base from ongoing efficiency initiatives,” said Ray Davis, president and CEO of Umpqua Holdings Corporation. “We recognize that ongoing margin pressure increases our need to become as efficient as possible, while not eroding the quality of the customer service experience the company provides. As we move into the second half of the year, our loan pipeline remains at record levels and further efficiency initiatives are in process. We will also continue to look for, and take advantage of, growth opportunities such as our FinPac and Pivotus subsidiaries.”

Reconciliation of Net Earnings (GAAP) to Operating Earnings (non-GAAP):

The Company’s financial results include several significant items which have been excluded in the presentation of operating earnings, which is a non-GAAP financial measure. A summary of these items, and a reconciliation of earnings available to common shareholders (GAAP) to operating earnings (non-GAAP), is presented below. More information is provided in the non-GAAP financial measures section of this release, which we urge you to read.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 2



	Quarter Ended
(In thousands, except per share data)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015
Net earnings available to common shareholders	$	54,255		$	47,540		$	62,923		$	57,523		$	54,691
Adjustments:
Loss from change in fair value of MSR asset	13,940			20,625			469			10,103			423
Gain on investment securities, net	(162		)	(696		)	(2,567		)	(220		)	(19		)
Net loss on junior subordinated debentures carried at fair value	1,572			1,572			1,589			1,590			1,572
Loss (gain) from change in fair value of swap derivative	1,493			1,793			(715		)	1,181			(1,408		)
Merger related expenses	6,634			3,450			3,712			5,991			21,797
Goodwill impairment	—			142			—			—			—
Exit or disposal costs	1,434			347			—			—			—
Total pre-tax adjustments	24,911			27,233			2,488			18,645			22,365
Income tax effect (1)	(9,965		)	(10,836		)	(995		)	(7,458		)	(8,946		)
Net adjustments	14,946			16,397			1,493			11,187			13,419
Operating earnings	$	69,201		$	63,937		$	64,416		$	68,710		$	68,110

Earnings per diluted share:
Earnings available to common shareholders	$	0.25		$	0.22		$	0.28		$	0.26		$	0.25
Operating earnings	$	0.31		$	0.29		$	0.29		$	0.31		$	0.31

(1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.

Financial Highlights (compared to prior quarter):


•	Delivered solid financial performance:

◦

Net interest income decreased by $8.5 million, primarily driven by a lower level of credit discount accretion recorded on loans acquired from Sterling, as well as lower average yields on interest-earning assets. Net interest income in the first quarter of 2016 included $6.5 million of accelerated credit discount accreted from the sale of purchase credit impaired loans, which did not recur in the second quarter of 2016;


◦	Provision for loan and lease losses increased by $5.8 million, driven primarily by higher net charge-offs;

◦

Non-interest income increased by $28.7 million, driven primarily by increased for sale mortgage originations and a higher home lending gain on sale margin, along with increased services charges, income from portfolio loan sales and debt capital markets revenue. Current period non-interest income includes a charge of $13.9 million related to negative fair value adjustments to the mortgage servicing rights (“MSR”) asset and a charge of $1.5 million related to a decline in the fair value of debt capital market swap derivatives, both driven by the decline in long-term interest rates during the quarter. Excluding the impact of non-operating items¹, total non-interest income increased by $22.3 million;


◦	Non-interest expense increased by $4.5 million. Excluding the impact of non-operating items¹, total non-interest expense increased by $393,000, and included a $5.9 million increase in mortgage banking expenses related to higher mortgage origination volume;

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

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•	Strong balance sheet:


◦	Loan and lease growth of $399.7 million, or 9% annualized, including $135.7 million of loan sales and $9.8 million of loans transferred to held for sale. Gross loan and lease growth (prior to the impact of loan sales and transfers) of $545.2 million, or 13% annualized;


◦	Deposit growth of $95.5 million, or 2% annualized, which included large seasonal outflows related to tax payments;


◦	Loan to deposit ratio increased to 95% from 93%;

Prudently managed capital:


◦	Book value per share increased to $17.70 per share from $17.62 per share, and tangible book value per share¹increased to $9.41 from $9.30 per share;


◦	Estimated total risk-based capital ratio of 14.1% and estimated Tier 1 common to risk weighted assets ratio of 10.9%; and


◦	Paid quarterly cash dividend of $0.16 per common share.

Balance Sheet

Total consolidated assets were $24.1 billion as of June 30, 2016, compared to $23.9 billion as of March 31, 2016 and $22.8 billion as of June 30, 2015. Including secured off-balance sheet lines of credit, the Company had total available liquidity of $7.8 billion as of June 30, 2016, representing 32% of total assets and 43% of total deposits.

Gross loans and leases were $17.4 billion as of June 30, 2016, an increase of $399.7 million, or 9% annualized, from $17.0 billion as of March 31, 2016. During the second quarter of 2016, the Company sold $135.7 million of portfolio residential mortgage loans. In addition, $9.8 million of portfolio residential mortgage loans were transferred to held for sale, and are expected to be sold during the third quarter of 2016. Excluding the combined impact of the loan sales and transfers to held for sale, gross loan growth was $545.2 million, or 13% annualized.

Total deposits were $18.3 billion as of June 30, 2016, an increase of $95.5 million, or 2% annualized, from $18.2 billion as of March 31, 2016. This increase was primarily attributable to growth in savings and time deposits, and was partially offset by seasonal deposit outflows related to tax payments.

Net Interest Income

Net interest income was down $8.5 million from the prior quarter, driven primarily by a $6.4 million linked quarter decline in the level of interest income arising from the accretion of the credit discount recorded on loans acquired from Sterling, along with lower average yields on interest-earnings assets. These decreases were partially offset by growth in earning assets.

The Company’s net interest margin was 4.08% for the second quarter of 2016, down from 4.34% for the first quarter of 2016. This decrease reflects the lower level of accretion of the credit discount, as well as lower average yields on interest-earning assets resulting from the continued low interest-rate environment and the Company's ongoing efforts to manage the target long-term portfolio mix.

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.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

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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 second quarter of 2016, the Company reported $10.1 million of accretion related to the Sterling credit discount in interest income, as compared to $16.5 million in the prior quarter. As of June 30, 2016, the purchased non-credit impaired loans had approximately $57.5 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 $37.4 million of remaining total discount.

The allowance for loan and lease losses was $131.0 million, or 0.76% of loans and leases, as of June 30, 2016. To provide better comparability to prior periods, on a pro-forma basis this ratio would have been approximately 1.3% as of June 30, 2016 and 1.4% as of March 31, 2016, after grossing up the allowance for loan and lease losses and total loans and leases by the amount of the credit discount remaining as of the respective quarter-end.

The provision for loan and lease losses was $10.6 million for the second quarter of 2016, a $5.8 million increase from the prior quarter level. This increase was driven primarily by higher charge-offs, net of recoveries, which increased to $9.8 million for the second quarter of 2016, compared to $4.9 million in the prior quarter. Non-performing assets decreased to $64.6 million, or 0.27% of total assets, as of June 30, 2016, compared to $72.6 million, or 0.30% of total assets, as of March 31, 2016.

Non-interest Income

Total reported non-interest income was $74.7 million for the second quarter of 2016, up $28.7 million from the prior quarter. The current quarter non-interest income included a charge of $13.9 million related to negative fair value adjustments to the MSR asset, attributable to the decline in long-term interest rates during the quarter, and its impact on the prepayment speed assumption for the MSR asset. Also included was a charge of $1.5 million related to a decline in the fair value of debt capital market swap derivatives, also driven by the decline in long-term interest rates during the quarter.

On an operating basis¹, non-interest income increased by $22.3 million from the prior quarter, driven primarily by higher revenue from the origination and sale of residential mortgages, service charges, debt capital markets revenue and income related to portfolio loan sales. Home lending gain on sale margin increased to 4.02%, as compared to 3.72% in the prior quarter. For sale mortgage originations increased by 37% from the prior quarter level, reflecting higher seasonal purchase originations and heightened refinance activity due to the decline in long-term interest rates. Of the current quarter’s mortgage production, 70% related to purchase activity, as compared to 58% for the prior quarter and 59% for the same period in the prior year.

Revenue related to the servicing of residential mortgage loans increased by 13% from the prior quarter, and has increased by 28% from the same period in the prior year. These increases reflect a higher net servicing fee revenue due to the conversion of the Company's customers to its own mortgage servicing platform, along with the growth in residential mortgage loans serviced for others.

Non-interest Expense

Non-interest expense was $188.5 million for the second quarter of 2016, which included $6.6 million of merger-related expenses and $1.4 million of exit or disposal costs. This compares to $184.0 million, including $3.5 million of merger-related expenses and $347,000 of exit or disposal costs for the first quarter of 2016.

On an operating basis¹, non-interest expense increased by $393,000 from the prior quarter. Mortgage banking expenses increased by $5.9 million from the prior quarter, consistent with the higher level of mortgage origination volume in the quarter. This increase was mostly offset by lower expense in several other categories, along with a $2.8 million linked quarter decrease in loss on other real estate owned.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

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Capital

As of June 30, 2016, the Company’s book value per share increased to $17.70, from $17.62 in the prior quarter, and its tangible book value per common share¹increased to $9.41, from $9.30 in the prior quarter.

The Company’s estimated total risk-based capital ratio was 14.1% and its estimated Tier 1 common to risk weighted

assets ratio was 10.9% as of June 30, 2016. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of June 30, 2016 are estimates, pending completion and filing of the Company’s regulatory reports.

¹ "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 6

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.

The Company incurs significant expenses related to the completion and integration of mergers and acquisitions. It also 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. 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. The Company recognizes gains and losses related to the change in the fair value of its MSR, which are primarily tied to movements in interest rates, and are not indicative of the fundamental operating activities for the period. It also recognizes gains or losses related to the change in the fair value of its swap derivatives, which are driven by movements in interest rates and are beyond our control. On occasion, the Company may sell certain securities in its investment portfolio, and recognize an associated gain or loss, which can be highly discretionary based on the timing of the sales, market opportunities, and interest rates, and therefore are not reflective of the Company's operating performance. The Company also may incur expenses related to the exit or disposal of certain business activities, such as the consolidation of bank branches, which do not reflect the on-going operating performance of the Company. 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 after-tax impact of merger-related expenses, gains or losses on junior subordinated debentures measured at fair value, gains or losses from the change in fair value of the MSR, gains or losses from the change in fair value of the swap derivative, net gains or losses in investment securities, exit or disposal costs and other charges related to business combinations such as goodwill impairment charges or bargain purchase gains. The Company defines operating earnings as earnings available to common shareholders before these items, and calculates 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:

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 7



	Quarter Ended															% Change
(In thousands, except per share data)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Net earnings available to common shareholders	$	54,255		$	47,540		$	62,923		$	57,523		$	54,691		14	%	(1	)%
Adjustments:
Loss from change in fair value of MSR asset	13,940			20,625			469			10,103			423			(32	)%	nm
Gain on investment securities, net	(162		)	(696		)	(2,567		)	(220		)	(19		)	(77	)%	753	%
Net loss on junior subordinated debentures carried at fair value	1,572			1,572			1,589			1,590			1,572			0	%	0	%
Loss (gain) from change in fair value of swap derivative	1,493			1,793			(715		)	1,181			(1,408		)	(17	)%	(206	)%
Merger related expenses	6,634			3,450			3,712			5,991			21,797			92	%	(70	)%
Goodwill impairment	—			142			—			—			—			nm		nm
Exit or disposal costs	1,434			347			—			—			—			313	%	nm
Total pre-tax adjustments	24,911			27,233			2,488			18,645			22,365			(9	)%	11	%
Income tax effect (1)	(9,965		)	(10,836		)	(995		)	(7,458		)	(8,946		)	(8	)%	11	%
Net adjustments	14,946			16,397			1,493			11,187			13,419			(9	)%	11	%
Operating earnings	$	69,201		$	63,937		$	64,416		$	68,710		$	68,110		8	%	2	%

Earnings per diluted share:
Earnings available to common shareholders	$	0.25		$	0.22		$	0.28		$	0.26		$	0.25		14	%	0	%
Operating earnings	$	0.31		$	0.29		$	0.29		$	0.31		$	0.31		7	%	0	%

	Six Months Ended						% Change
	Jun 30, 2016			Jun 30, 2015			Year over Year
Net earnings available to common shareholders	$	101,795		$	101,736		0		%
Adjustments:
Loss from change in fair value of MSR asset	34,565			10,151			241		%
Gain on investment securities, net	(858		)	(135		)	536		%
Net loss on junior subordinated debentures carried at fair value	3,144			3,127			1		%
Loss (gain) from change in fair value of swap derivative	3,286			(627		)	(624		)%
Merger related expenses	10,084			35,879			(72		)%
Goodwill impairment	142			—			nm
Exit or disposal costs	1,781			—			nm
Total pre-tax adjustments	52,144			48,395			8		%
Income tax effect (1)	(20,801		)	(19,358		)	7		%
Net adjustments	31,343			29,037			8		%
Operating earnings	$	133,138		$	130,773		2		%

Earnings per diluted share:
Earnings available to common shareholders	$	0.46		$	0.46		0		%
Operating earnings	$	0.60		$	0.59		2		%

(1) Income tax effect of pro forma operating earnings adjustments at 40% for tax-deductible items.
nm = not meaningful.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 8

The following tables provide the reconciliation of non-interest income (GAAP) to non-interest income, on an operating basis, (non-GAAP), and non-interest expense (GAAP) to non-interest expense, on an operating basis, (non-GAAP) for the periods presented:



	Quarter Ended
(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015
Non-interest income (GAAP)	$	74,659		$	45,951		$	69,345		$	61,372		$	81,102
Adjustments:
Loss from change in fair value of MSR asset	13,940			20,625			469			10,103			423
Loss (gain) from change in fair value of swap derivative	1,493			1,793			(715		)	1,181			(1,408		)
Net loss on junior subordinated debentures carried at fair value	1,572			1,572			1,589			1,590			1,572
Gain on investment securities, net	(162		)	(696		)	(2,567		)	(220		)	(19		)
Non-interest income (operating basis)	$	91,502		$	69,245		$	68,121		$	74,026		$	81,670

	Quarter Ended
	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015
Non-interest expense (GAAP)	$	188,511		$	183,989		185,911			$	183,194		$	201,918
Adjustments:
Merger related expenses	(6,634		)	(3,450		)	(3,712		)	(5,991		)	(21,797		)
Goodwill impairment	—			(142		)	—			—			—
Exit or disposal costs	(1,434		)	(347		)	—			—			—
Non-interest expense (operating basis)	$	180,443		$	180,050		$	182,199		$	177,203		$	180,121

	Six Months Ended
(Dollars in thousands)	Jun 30, 2016			Jun 30, 2015
Non-interest income (GAAP)	$	120,610		$	145,007
Adjustments:
Loss from change in fair value of MSR asset	34,565			10,151
Loss (gain) from change in fair value of swap derivative	3,286			(627		)
Net loss on junior subordinated debentures carried at fair value	3,144			3,127
Gain on investment securities, net	(858		)	(135		)
Non-interest income (operating basis)	$	160,747		$	157,523

	Six Months Ended
	Jun 30, 2016			Jun 30, 2015
Non-interest expense (GAAP)	$	372,500		$	394,537
Adjustments:
Merger related expenses	(10,084		)	(35,879		)
Goodwill impairment	(142		)	—
Exit or disposal costs	(1,781		)	—
Non-interest expense (operating basis)	$	360,493		$	358,658

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 9

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)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015
Total shareholders' equity	$	3,902,158		$	3,878,630		$	3,849,334		$	3,835,552		$	3,804,179
Subtract:
Goodwill	1,787,651			1,787,651			1,787,793			1,788,640			1,788,640
Other intangible assets, net	40,620			42,948			45,508			48,314			51,120
Tangible common shareholders' equity	$	2,073,887		$	2,048,031		$	2,016,033		$	1,998,598		$	1,964,419
Total assets	$	24,132,507		$	23,935,686		$	23,406,381		$	23,181,006		$	22,807,886
Subtract:
Goodwill	1,787,651			1,787,651			1,787,793			1,788,640			1,788,640
Other intangible assets, net	40,620			42,948			45,508			48,314			51,120
Tangible assets	$	22,304,236		$	22,105,087		$	21,573,080		$	21,344,052		$	20,968,126
Common shares outstanding at period end	220,482			220,171			220,171			220,217			220,280

Common equity ratio	16.17		%	16.20		%	16.45		%	16.55		%	16.68		%
Tangible common equity ratio	9.30		%	9.26		%	9.35		%	9.36		%	9.37		%
Book value per common share	$	17.70		$	17.62		$	17.48		$	17.42		$	17.27
Tangible book value per common share	$	9.41		$	9.30		$	9.16		$	9.08		$	8.92

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 10

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon, and Pivotus Ventures, an innovation studio headquartered in Silicon Valley focused on creating key technologies and business models that transform finance and commerce. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquaholdingscorp.com.

Earnings Conference Call Information

The Company will host its second quarter 2016 earnings conference call on Thursday, July 21, 2016, 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 second quarter 2016 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (888) 471-3842 ten minutes prior to the start time and enter conference ID: 4454894. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 4454894. 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 credit discount accretion related to loans acquired from Sterling Financial Corporation, loan and lease growth and loan sales, growth opportunities at FinPac and with Pivotus Ventures, and results of efficiency initiatives. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation, prolonged low interest rate environment; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our inability to effectively manage problem credits; our inability to successfully implement efficiency initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; and changes in general economic conditions.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 11



Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Quarter Ended															% Change
(In thousands, except per share data)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Interest income:
Loans and leases	$	210,290		$	217,928		$	219,440		$	218,975		$	217,143		(4	)%	(3	)%
Interest and dividends on investments:
Taxable	11,963			13,055			12,654			11,882			11,517			(8	)%	4	%
Exempt from federal income tax	2,183			2,235			2,363			2,393			2,410			(2	)%	(9	)%
Dividends	365			366			326			112			169			0	%	116	%
Temporary investments & interest bearing deposits	652			480			422			440			549			36	%	19	%
Total interest income	225,453			234,064			235,205			233,802			231,788			(4	)%	(3	)%
Interest expense:
Deposits	8,540			8,413			7,905			7,450			7,381			2	%	16	%
Repurchase agreements	32			36			39			43			43			(11	)%	(26	)%
Term debt	3,848			4,186			3,885			3,629			3,492			(8	)%	10	%
Junior subordinated debentures	3,835			3,727			3,542			3,465			3,406			3	%	13	%
Total interest expense	16,255			16,362			15,371			14,587			14,322			(1	)%	13	%
Net interest income	209,198			217,702			219,834			219,215			217,466			(4	)%	(4	)%
Provision for loan and lease losses	10,589			4,823			4,545			8,153			11,254			120	%	(6	)%
Non-interest income:
Service charges on deposits	15,667			14,516			15,039			15,616			14,811			8	%	6	%
Brokerage revenue	4,580			4,094			4,061			5,003			4,648			12	%	(1	)%
Residential mortgage banking revenue, net	36,783			15,426			32,440			24,041			40,014			138	%	(8	)%
Gain on investment securities, net	162			696			2,567			220			19			(77	)%	753	%
Gain on loan sales	5,640			2,371			1,729			5,212			8,711			138	%	(35	)%
Loss on junior subordinated debentures carried at fair value	(1,572		)	(1,572		)	(1,589		)	(1,590		)	(1,572		)	0	%	0	%
BOLI income	2,152			2,139			1,841			2,165			2,043			1	%	5	%
Other income	11,247			8,281			13,257			10,705			12,428			36	%	(10	)%
Total non-interest income	74,659			45,951			69,345			61,372			81,102			62	%	(8	)%
Non-interest expense:
Salaries and employee benefits	107,545			106,538			106,203			106,482			110,807			1	%	(3	)%
Occupancy and equipment, net	37,850			38,295			38,722			37,235			34,868			(1	)%	9	%
Intangible amortization	2,328			2,560			2,806			2,806			2,807			(9	)%	(17	)%
FDIC assessments	3,693			3,721			3,742			3,369			3,155			(1	)%	17	%
(Gain) loss on other real estate owned, net	(1,457		)	1,389			(242		)	(158		)	480			(205	)%	(404	)%
Merger related expenses	6,634			3,450			3,712			5,991			21,797			92	%	(70	)%
Goodwill impairment	—			142			—			—			—			nm		nm
Other expense	31,918			27,894			30,968			27,469			28,004			14	%	14	%
Total non-interest expense	188,511			183,989			185,911			183,194			201,918			2	%	(7	)%
Income before provision for income taxes	84,757			74,841			98,723			89,240			85,396			13	%	(1	)%
Provision for income taxes	30,470			27,272			35,704			31,633			30,612			12	%	0	%
Net income	54,287			47,569			63,019			57,607			54,784			14	%	(1	)%
Dividends and undistributed earnings allocated to participating securities	32			29			96			84			93			10	%	(66	)%
Net earnings available to common shareholders	$	54,255		$	47,540		$	62,923		$	57,523		$	54,691		14	%	(1	)%

Weighted average basic shares outstanding	220,421			220,227			220,202			220,297			220,463			0	%	0	%
Weighted average diluted shares outstanding	220,907			221,052			220,930			220,904			221,150			0	%	0	%
Earnings per common share – basic	$	0.25		$	0.22		$	0.29		$	0.26		$	0.25		14	%	0	%
Earnings per common share – diluted	$	0.25		$	0.22		$	0.28		$	0.26		$	0.25		14	%	0	%
nm = not meaningful

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 12



Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Six Months Ended						% Change
(In thousands, except per share data)	Jun 30, 2016			Jun 30, 2015			Year over Year
Interest income
Loans and leases	$	428,218		$	431,018		(1	)%
Interest and dividends on investments:
Taxable	25,018			23,306			7	%
Exempt from federal income tax	4,418			4,891			(10	)%
Dividends	731			270			171	%
Temporary investments & interest bearing deposits	1,132			1,374			(18	)%
Total interest income	459,517			460,859			0	%
Interest expense
Deposits	16,953			14,484			17	%
Repurchase agreements	68			91			(25	)%
Term debt	8,034			6,956			15	%
Junior subordinated debentures	7,562			6,743			12	%
Total interest expense	32,617			28,274			15	%
Net interest income	426,900			432,585			(1	)%
Provision for loan and lease losses	15,412			23,891			(35	)%
Non-interest income
Service charges on deposits	30,183			29,085			4	%
Brokerage revenue	8,674			9,417			(8	)%
Residential mortgage banking revenue, net	52,209			68,241			(23	)%
Gain on investment securities, net	858			135			536	%
Gain on loan sales	8,011			15,439			(48	)%
Loss on junior subordinated debentures carried at fair value	(3,144		)	(3,127		)	1	%
BOLI Income	4,291			4,345			(1	)%
Other income	19,528			21,472			(9	)%
Total non-interest income	120,610			145,007			(17	)%
Non-interest expense
Salaries and employee benefits	214,083			218,251			(2	)%
Occupancy and equipment, net	76,145			67,018			14	%
Intangible amortization	4,888			5,613			(13	)%
FDIC assessments	7,414			6,369			16	%
(Gain) loss on other real estate owned, net	(68		)	2,294			(103	)%
Merger related expenses	10,084			35,879			(72	)%
Goodwill impairment	142			—			nm
Other expense	59,812			59,113			1	%
Total non-interest expense	372,500			394,537			(6	)%
Income before provision for income taxes	159,598			159,164			0	%
Provision for income taxes	57,742			57,251			1	%
Net income	101,856			101,913			0	%
Dividends and undistributed earnings
allocated to participating securities	61			177			(66	)%
Net earnings available to common shareholders	$	101,795		$	101,736		0	%

Weighted average basic shares outstanding	220,324			220,406			0	%
Weighted average diluted shares outstanding	221,001			221,088			0	%
Earnings per common share – basic	$	0.46		$	0.46		0	%
Earnings per common share – diluted	$	0.46		$	0.46		0	%
nm = not meaningful

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 13



Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)

																% Change
(In thousands, except per share data)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$	369,535		$	299,871		$	277,645		$	283,773		$	364,256		23	%	1	%
Interest bearing cash and temporary investments	535,828			613,049			496,080			673,843			515,691			(13	)%	4	%
Investment securities:
Trading, at fair value	10,188			9,791			9,586			9,509			10,005			4	%	2	%
Available for sale, at fair value	2,482,072			2,542,535			2,522,539			2,482,478			2,557,245			(2	)%	(3	)%
Held to maturity, at amortized cost	4,382			4,525			4,609			4,699			4,807			(3	)%	(9	)%
Loans held for sale	552,681			659,264			363,275			398,015			419,704			(16	)%	32	%
Loans and leases	17,355,240			16,955,583			16,866,536			16,406,636			15,988,752			2	%	9	%
Allowance for loan and lease losses	(131,042		)	(130,243		)	(130,322		)	(130,133		)	(127,071		)	1	%	3	%
Loans and leases, net	17,224,198			16,825,340			16,736,214			16,276,503			15,861,681			2	%	9	%
Restricted equity securities	47,542			47,545			46,949			46,904			46,917			0	%	1	%
Premises and equipment, net	312,647			322,822			328,734			330,306			331,208			(3	)%	(6	)%
Goodwill	1,787,651			1,787,651			1,787,793			1,788,640			1,788,640			0	%	0	%
Other intangible assets, net	40,620			42,948			45,508			48,314			51,120			(5	)%	(21	)%
Residential mortgage servicing rights, at fair value	112,095			117,172			131,817			124,814			127,206			(4	)%	(12	)%
Other real estate owned	16,437			20,411			22,307			23,892			23,038			(19	)%	(29	)%
Bank owned life insurance	295,444			293,703			291,892			297,321			295,551			1	%	0	%
Deferred tax assets, net	63,038			108,865			138,082			149,320			181,245			(42	)%	(65	)%
Other assets	278,149			240,194			203,351			242,675			229,572			16	%	21	%
Total assets	$	24,132,507		$	23,935,686		$	23,406,381		$	23,181,006		$	22,807,886		1	%	6	%
Liabilities:
Deposits	$	18,258,474		$	18,162,974		$	17,707,189		$	17,467,024		$	17,145,046		1	%	6	%
Securities sold under agreements to repurchase	360,234			325,203			304,560			323,722			325,711			11	%	11	%
Term debt	902,999			903,382			888,769			889,358			889,997			0	%	1	%
Junior subordinated debentures, at fair value	258,660			256,917			255,457			253,665			252,214			1	%	3	%
Junior subordinated debentures, at amortized cost	101,093			101,173			101,254			101,334			101,415			0	%	0	%
Other liabilities	348,889			307,407			299,818			310,351			289,324			13	%	21	%
Total liabilities	20,230,349			20,057,056			19,557,047			19,345,454			19,003,707			1	%	6	%
Shareholders' equity:
Common stock	3,517,240			3,518,792			3,520,591			3,517,751			3,517,557			0	%	0	%
Retained earnings	362,258			343,421			331,301			303,729			281,573			5	%	29	%
Accumulated other comprehensive income (loss)	22,660			16,417			(2,558		)	14,072			5,049			38	%	349	%
Total shareholders' equity	3,902,158			3,878,630			3,849,334			3,835,552			3,804,179			1	%	3	%
Total liabilities and shareholders' equity	$	24,132,507		$	23,935,686		$	23,406,381		$	23,181,006		$	22,807,886		1	%	6	%

Common shares outstanding at period end	220,482			220,171			220,171			220,217			220,280			0	%	0	%
Book value per common share	$	17.70		$	17.62		$	17.48		$	17.42		$	17.27		0	%	2	%
Tangible book value per common share	$	9.41		$	9.30		$	9.16		$	9.08		$	8.92		1	%	5	%
Tangible equity - common	$	2,073,887		$	2,048,031		$	2,016,033		$	1,998,598		$	1,964,419		1	%	6	%
Tangible common equity to tangible assets	9.30		%	9.26		%	9.35		%	9.36		%	9.37		%	0.04		(0.07	)
nm = not meaningful

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 14



Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)

(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Loans & leases:
Commercial real estate:
Non-owner occupied term, net	$	3,230,173		$	3,165,154		$	3,140,845		$	3,148,288		$	3,294,359		2	%	(2	)%
Owner occupied term, net	2,714,800			2,731,228			2,691,921			2,655,340			2,636,800			(1	)%	3	%
Multifamily, net	2,972,060			2,945,826			3,074,918			2,961,609			2,859,884			1	%	4	%
Commercial construction, net	370,600			343,519			301,892			287,757			244,354			8	%	52	%
Residential development, net	111,941			121,025			99,459			94,380			76,734			(8	)%	46	%
Commercial:
Term, net	1,478,784			1,437,992			1,425,009			1,398,346			1,374,528			3	%	8	%
Lines of credit & other, net	1,123,182			1,041,516			1,043,076			1,014,523			981,897			8	%	14	%
Leases & equipment finance, net	884,506			791,798			729,161			679,033			630,695			12	%	40	%
Residential real estate:
Mortgage, net	2,882,076			2,879,600			2,909,399			2,758,930			2,547,597			0	%	13	%
Home equity lines & loans, net	989,814			943,254			923,667			910,287			882,596			5	%	12	%
Consumer & other, net	597,304			554,671			527,189			498,143			459,308			8	%	30	%
Total, net of deferred fees and costs	$	17,355,240		$	16,955,583		$	16,866,536		$	16,406,636		$	15,988,752		2	%	9	%

Loan & leases mix:
Commercial real estate:
Non-owner occupied term, net	19		%	19		%	19		%	19		%	20		%
Owner occupied term, net	16		%	16		%	16		%	16		%	16		%
Multifamily, net	17		%	17		%	18		%	17		%	18		%
Commercial construction, net	2		%	2		%	2		%	2		%	2		%
Residential development, net	1		%	1		%	1		%	1		%	—		%
Commercial:
Term, net	9		%	8		%	9		%	9		%	9		%
Lines of credit & other, net	6		%	6		%	6		%	6		%	6		%
Leases & equipment finance, net	4		%	5		%	4		%	4		%	4		%
Residential real estate:
Mortgage, net	17		%	17		%	17		%	17		%	16		%
Home equity lines & loans, net	6		%	6		%	5		%	6		%	6		%
Consumer & other, net	3		%	3		%	3		%	3		%	3		%
Total	100		%	100		%	100		%	100		%	100		%

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 15



Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)

(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$	5,475,986		$	5,460,310		$	5,318,591		$	5,207,129		$	4,927,526		0	%	11	%
Demand, interest bearing	2,186,164			2,178,446			2,157,376			2,098,223			2,090,595			0	%	5	%
Money market	6,782,232			6,814,160			6,599,516			6,514,174			6,374,624			0	%	6	%
Savings	1,254,675			1,213,049			1,136,809			1,102,611			1,058,337			3	%	19	%
Time	2,559,417			2,497,009			2,494,897			2,544,887			2,693,964			2	%	(5	)%
Total	$	18,258,474		$	18,162,974		$	17,707,189		$	17,467,024		$	17,145,046		1	%	6	%

Total core deposits (1)	$	16,598,065		$	16,559,943		$	16,102,743		$	15,940,229		$	15,529,997		0	%	7	%

Deposit mix:
Demand, non-interest bearing	30		%	30		%	30		%	30		%	29		%
Demand, interest bearing	12		%	12		%	12		%	12		%	12		%
Money market	37		%	37		%	37		%	37		%	37		%
Savings	7		%	7		%	6		%	6		%	6		%
Time	14		%	14		%	15		%	15		%	16		%
Total	100		%	100		%	100		%	100		%	100		%

Number of open accounts:
Demand, non-interest bearing	379,996			375,913			371,745			370,128			367,086
Demand, interest bearing	84,434			85,731			86,745			88,171			90,021
Money market	56,492			56,927			57,194			57,622			58,156
Savings	157,849			156,846			154,176			153,534			152,404
Time	47,850			47,794			47,672			48,168			49,983
Total	726,621			723,211			717,532			717,623			717,650

Average balance per account:
Demand, non-interest bearing	$	14.4		$	14.5		$	14.3		$	14.1		$	13.4
Demand, interest bearing	25.9			25.4			24.9			23.8			23.2
Money market	120.1			119.7			115.4			113.1			109.6
Savings	7.9			7.7			7.4			7.2			6.9
Time	53.5			52.2			52.3			52.8			53.9
Total	$	25.1		$	25.1		$	24.7		$	24.3		$	23.9

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

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 16



Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
(Unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Non-performing assets:
Loans and leases on non-accrual status	$	25,136		$	30,045		$	29,215		$	30,989		$	33,572		(16	)%	(25	)%
Loans and leases past due 90+ days & accruing (1)	23,076			22,144			15,169			9,967			13,529			4	%	71	%
Total non-performing loans and leases	48,212			52,189			44,384			40,956			47,101			(8	)%	2	%
Other real estate owned	16,437			20,411			22,307			23,892			23,038			(19	)%	(29	)%
Total non-performing assets	$	64,649		$	72,600		$	66,691		$	64,848		$	70,139		(11	)%	(8	)%

Performing restructured loans and leases	$	40,848		$	31,409		$	31,355		$	35,706		$	37,023		30	%	10	%
Loans and leases past due 31-89 days	$	29,640		$	29,054		$	28,423		$	28,919		$	25,553		2	%	16	%
Loans and leases past due 31-89 days to total loans and leases	0.17		%	0.17		%	0.17		%	0.18		%	0.16		%
Non-performing loans and leases to total loans and leases (1)	0.28		%	0.31		%	0.26		%	0.25		%	0.29		%
Non-performing assets to total assets (1)	0.27		%	0.30		%	0.28		%	0.28		%	0.31		%


(1)	Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $11.3 million, $14.2 million, $19.2 million, $18.7 million, and $14.6 million at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 17



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Quarter Ended															% Change
(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Allowance for loan and lease losses:
Balance beginning of period	$	130,243		$	130,322		$	130,133		$	127,071		$	120,104
Provision for loan and lease losses	10,589			4,823			4,545			8,153			11,254			120	%	(6	)%
Charge-offs	(12,682		)	(7,850		)	(7,108		)	(8,476		)	(7,442		)	62	%	70	%
Recoveries	2,892			2,948			2,752			3,385			3,155			(2	)%	(8	)%
Net charge-offs	(9,790		)	(4,902		)	(4,356		)	(5,091		)	(4,287		)	100	%	128	%
Total allowance for loan and lease losses	131,042			130,243			130,322			130,133			127,071			1	%	3	%
Reserve for unfunded commitments	3,531			3,482			3,574			3,081			2,864			1	%	23	%
Total allowance for credit losses	$	134,573		$	133,725		$	133,896		$	133,214		$	129,935		1	%	4	%

Net charge-offs to average loans and leases (annualized)	0.23		%	0.12		%	0.10		%	0.13		%	0.11		%
Recoveries to gross charge-offs	22.80		%	37.55		%	38.72		%	39.94		%	42.39		%
Allowance for loan and lease losses to loans and leases	0.76		%	0.77		%	0.77		%	0.79		%	0.79		%
Allowance for credit losses to loans and leases	0.78		%	0.79		%	0.79		%	0.81		%	0.81		%

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 18



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Six Months Ended						% Change
(Dollars in thousands)	Jun 30, 2016			Jun 30, 2015			Year over Year
Allowance for loan and lease losses:
Balance beginning of period	$	130,322		$	116,167
Provision for loan and lease losses	15,412			23,891			(35	)%
Charge-offs	(20,532		)	(19,987		)	3	%
Recoveries	5,840			7,000			(17	)%
Net charge-offs	(14,692		)	(12,987		)	13	%
Total allowance for loan and lease losses	131,042			127,071			3	%
Reserve for unfunded commitments	3,531			2,864			23	%
Total allowance for credit losses	$	134,573		$	129,935		4	%

Net charge-offs to average loans and leases (annualized)	0.17		%	0.17		%
Recoveries to gross charge-offs	28.44		%	35.02		%

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 19



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Quarter Ended										% Change
	Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Sep 30, 2015		Jun 30, 2015		Seq. Quarter		Year over Year
Average Rates:
Yield on loans and leases	4.82	%	5.08	%	5.19	%	5.29	%	5.46	%	(0.26	)	(0.64	)
Yield on loans held for sale	3.82	%	4.08	%	3.80	%	4.07	%	3.24	%	(0.26	)	0.58
Yield on taxable investments	2.14	%	2.32	%	2.26	%	2.11	%	2.03	%	(0.18	)	0.11
Yield on tax-exempt investments (1)	4.73	%	4.73	%	4.76	%	4.73	%	4.67	%	—		0.06
Yield on interest bearing cash and temporary investments	0.51	%	0.54	%	0.28	%	0.25	%	0.26	%	(0.03	)	0.25
Total yield on earning assets (1)	4.39	%	4.67	%	4.68	%	4.71	%	4.77	%	(0.28	)	(0.38	)

Cost of interest bearing deposits	0.27	%	0.27	%	0.26	%	0.24	%	0.24	%	—		0.03
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.04	%	0.05	%	0.05	%	0.05	%	0.05	%	(0.01	)	(0.01	)
Cost of term debt	1.72	%	1.88	%	1.73	%	1.62	%	1.51	%	(0.16	)	0.21
Cost of junior subordinated debentures	4.30	%	4.20	%	3.96	%	3.89	%	3.88	%	0.10		0.42
Total cost of interest bearing liabilities	0.46	%	0.47	%	0.44	%	0.42	%	0.41	%	(0.01	)	0.05

Net interest spread (1)	3.93	%	4.20	%	4.24	%	4.29	%	4.36	%	(0.27	)	(0.43	)
Net interest margin (1)	4.08	%	4.34	%	4.37	%	4.42	%	4.48	%	(0.26	)	(0.40	)

As reported (GAAP):
Return on average assets	0.91	%	0.82	%	1.08	%	0.99	%	0.96	%	0.09		(0.05	)
Return on average tangible assets	0.99	%	0.89	%	1.17	%	1.08	%	1.05	%	0.10		(0.06	)
Return on average common equity	5.61	%	4.93	%	6.49	%	5.97	%	5.76	%	0.68		(0.15	)
Return on average tangible common equity	10.59	%	9.34	%	12.41	%	11.51	%	11.16	%	1.25		(0.57	)
Efficiency ratio – Consolidated	66.15	%	69.48	%	64.02	%	65.00	%	67.35	%	(3.33	)	(1.20	)
Efficiency ratio – Bank	64.44	%	67.29	%	62.40	%	63.08	%	65.74	%	(2.85	)	(1.30	)

Operating basis (non-GAAP): (2)
Return on average assets	1.16	%	1.10	%	1.10	%	1.19	%	1.20	%	0.06		(0.04	)
Return on average tangible assets	1.26	%	1.19	%	1.20	%	1.29	%	1.30	%	0.07		(0.04	)
Return on average common equity	7.16	%	6.63	%	6.64	%	7.13	%	7.17	%	0.53		(0.01	)
Return on average tangible common equity	13.51	%	12.57	%	12.70	%	13.74	%	13.89	%	0.94		(0.38	)
Efficiency ratio – Consolidated	59.78	%	62.49	%	63.00	%	60.17	%	59.96	%	(2.71	)	(0.18	)
Efficiency ratio – Bank	58.48	%	60.89	%	61.72	%	58.84	%	58.68	%	(2.41	)	(0.20	)

(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 the after-tax impact of merger-related expenses, gains or losses on junior subordinated debentures carried at fair value, gains or losses from the change in fair value of the MSR, gains or losses from the change in fair value of the swap derivative, net gains or losses in investment securities, exit or disposal costs, bargain purchase gain on acquisitions and goodwill impairment.

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 20



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Six Months Ended				% Change
	Jun 30, 2016		Jun 30, 2015		Year over Year
Average Rates:
Yield on loans and leases	4.95	%	5.52	%	(0.57	)
Yield on loans held for sale	3.93	%	3.48	%	0.45
Yield on taxable investments	2.23	%	2.08	%	0.15
Yield on tax-exempt investments (1)	4.73	%	4.71	%	0.02
Yield on interest bearing cash and temporary investments	0.52	%	0.25	%	0.27
Total yield on earning assets (1)	4.53	%	4.79	%	(0.26	)

Cost of interest bearing deposits	0.27	%	0.24	%	0.03
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.04	%	0.06	%	(0.02	)
Cost of term debt	1.80	%	1.46	%	0.34
Cost of junior subordinated debentures	4.25	%	3.87	%	0.38
Total cost of interest bearing liabilities	0.46	%	0.41	%	0.05

Net interest spread (1)	4.07	%	4.38	%	(0.31	)
Net interest margin (1)	4.21	%	4.49	%	(0.28	)

As reported (GAAP):
Return on average assets	0.87	%	0.90	%	(0.03	)
Return on average tangible assets	0.94	%	0.98	%	(0.04	)
Return on average common equity	5.27	%	5.39	%	(0.12	)
Return on average tangible common equity	9.97	%	10.45	%	(0.48	)
Efficiency ratio – Consolidated	67.75	%	68.01	%	(0.26	)
Efficiency ratio – Bank	65.81	%	66.38	%	(0.57	)

Operating basis (non-GAAP): (2)
Return on average assets	1.13	%	1.16	%	(0.03	)
Return on average tangible assets	1.23	%	1.26	%	(0.03	)
Return on average common equity	6.89	%	6.93	%	(0.04	)
Return on average tangible common equity	13.04	%	13.43	%	(0.39	)
Efficiency ratio – Consolidated	61.11	%	60.52	%	0.59
Efficiency ratio – Bank	59.66	%	59.25	%	0.41

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

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 21



Umpqua Holdings Corporation Average Balances
(Unaudited)

	Quarter Ended										% Change
(Dollars in thousands)	Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Sep 30, 2015		Jun 30, 2015		Seq. Quarter		Year over Year
Temporary investments & interest bearing cash	$	514,881	$	356,674	$	608,250	$	693,114	$	861,775	44	%	(40	)%
Investment securities, taxable	2,304,998		2,311,589		2,293,429		2,276,698		2,303,879		0	%	0	%
Investment securities, tax-exempt	280,841		287,085		302,443		307,960		313,899		(2	)%	(11	)%
Loans held for sale	403,964		297,732		334,428		357,905		368,111		36	%	10	%
Loans and leases	17,234,220		17,007,929		16,514,740		16,155,395		15,730,269		1	%	10	%
Total interest earning assets	20,738,904		20,261,009		20,053,290		19,791,072		19,577,933		2	%	6	%
Goodwill & other intangible assets, net	1,829,407		1,832,046		1,835,821		1,838,740		1,841,535		0	%	(1	)%
Total assets	23,896,315		23,415,252		23,196,213		22,946,464		22,781,479		2	%	5	%

Non-interest bearing demand deposits	5,466,098		5,289,810		5,285,992		5,108,430		4,852,455		3	%	13	%
Interest bearing deposits	12,644,442		12,411,005		12,249,333		12,225,691		12,274,814		2	%	3	%
Total deposits	18,110,540		17,700,815		17,535,325		17,334,121		17,127,269		2	%	6	%
Interest bearing liabilities	14,249,349		13,976,678		13,812,644		13,798,350		13,880,480		2	%	3	%

Shareholders’ equity - common	3,889,593		3,878,540		3,847,587		3,822,201		3,807,703		0	%	2	%
Tangible common equity (1)	2,060,186		2,046,494		2,011,766		1,983,461		1,966,168		1	%	5	%




Umpqua Holdings Corporation Average Balances
(Unaudited)
	Six Months Ended				% Change
(Dollars in thousands)	Jun 30, 2016		Jun 30, 2015		Year over Year
Temporary investments & interest bearing cash	$	435,777	$	1,091,447	(60	)%
Investment securities, taxable	2,308,294		2,265,801		2	%
Investment securities, tax-exempt	283,963		316,258		(10	)%
Loans held for sale	350,848		320,545		9	%
Loans and leases	17,121,152		15,534,593		10	%
Total interest earning assets	20,500,034		19,528,644		5	%
Goodwill & other intangible assets, net	1,830,726		1,841,960		(1	)%
Total assets	23,655,877		22,737,077		4	%

Non-interest bearing demand deposits	5,377,954		4,830,793		11	%
Interest bearing deposits	12,527,723		12,233,057		2	%
Total deposits	17,905,677		17,063,850		5	%
Interest bearing liabilities	14,113,013		13,861,456		2	%

Shareholders’ equity - common	3,884,067		3,805,879		2	%
Tangible common equity (1)	2,053,341		1,963,919		5	%

(1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders’ equity less average goodwill and other intangible assets, net (excluding MSRs).

Umpqua Reports Second Quarter 2016 Results

July 20, 2016

Page 22



Umpqua Holdings Corporation Residential Mortgage Banking Activity
(unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015			Jun 30, 2015			Seq. Quarter		Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others	$	13,564,242		$	13,304,468		$	13,047,266		$	12,693,451		$	12,302,866		2	%	10	%
MSR asset, at fair value	112,095			117,172			131,817			124,814			127,206			(4	)%	(12	)%
MSR as % of serviced portfolio	0.83		%	0.88		%	1.01		%	0.98		%	1.03		%
Residential mortgage banking revenue:
Origination and sale	$	42,083		$	28,409		$	25,363		$	26,904		$	33,667		48	%	25	%
Servicing	8,640			7,642			7,546			7,240			6,770			13	%	28	%
Change in fair value of MSR asset	(13,940		)	(20,625		)	(469		)	(10,103		)	(423		)	(32	)%	nm
Total	$	36,783		$	15,426		$	32,440		$	24,041		$	40,014		138	%	(8	)%

Closed loan volume:
Closed loan volume - portfolio	$	365,926		$	332,918		$	352,465		$	446,088		$	446,712		10	%	(18	)%
Closed loan volume - for-sale	1,046,349			764,076			794,820			843,720			997,225			37	%	5	%
Closed loan volume - total	$	1,412,275		$	1,096,994		$	1,147,285		$	1,289,808		$	1,443,937		29	%	(2	)%

Gain on sale margin:
Based on for-sale volume	4.02		%	3.72		%	3.19		%	3.19		%	3.38		%	0.30		0.64

	Six Months Ended						% Change
	Jun 30, 2016			Jun 30, 2015			Year over Year
Residential mortgage banking revenue:
Origination and sale	$	70,492		$	65,165		8		%
Servicing	16,282			13,227			23		%
Change in fair value of MSR asset	(34,565		)	(10,151		)	241		%
Total	$	52,209		$	68,241		(23		)%

Closed loan volume:
Closed loan volume - portfolio	$	698,844		$	757,861		(8		)%
Closed loan volume - for-sale	1,810,425			1,859,380			(3		)%
Closed loan volume - total	$	2,509,269		$	2,617,241		(4		)%


Gain on sale margin:
Based on for-sale volume	3.89		%	3.50		%	0.39

nm = not meaningful

###

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UMPQUA HOLDINGS CORP Reports