UMPQUA HOLDINGS CORP - FORM 8-K - EX-99.1 - PRESS RELEASE ANNOUNCING FIRST QUARTER 2018 FINANCIAL RESULTS

Attached files

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EX-99.2 - FIRST QUARTER 2018 INVESTOR PRESENTATION - UMPQUA HOLDINGS CORP	umpqq12018earningspresap.htm
8-K - 8-K - UMPQUA HOLDINGS CORP	umpq-201803318xk.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 FIRST QUARTER 2018 RESULTS

Net earnings of $77.7 million, or $0.35 per common share

Quarterly loan and lease growth of $234.4 million, or 5% annualized

Quarterly deposit growth of $158.6 million, or 3% annualized

PORTLAND, Ore. – April 18, 2018 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $77.7 million for the first quarter of 2018, compared to $81.9 million for the fourth quarter of 2017 and $46.0 million for the first quarter of 2017. Earnings per diluted common share were $0.35 for the first quarter of 2018, compared to $0.37 for the fourth quarter of 2017 and $0.21 for the first quarter of 2017.

“Umpqua’s strong financial performance in the first quarter reflects the success of key initiatives we’ve put in place over the past 12 months,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “As we’ve begun activating our Umpqua Next Gen strategy, we’ve demonstrated our ability to grow in a more consistent and profitable manner, while tightly managing core expenses and building digital and technology capabilities for the future.”

Notable items that impacted the first quarter 2018 financial results included:


•	$5.1 million gain related to the fair value change of the MSR asset, compared to $2.0 million gain in the prior quarter and $7.7 million negative adjustment in the same period of the prior year.


•	$1.1 million gain related to the fair value change of the debt capital market swap derivatives, compared to a gain of $0.2 million in the prior quarter and a negative adjustment of $0.7 million in the same period of the prior year.


•	$2.5 million of exit or disposal costs, compared to $3.1 million in the prior quarter and $0.5 million in the same period of the prior year.

•

No loss related to junior subordinated debentures carried at fair value was included in earnings in the first quarter of 2018, as the related fair value adjustments are now included in accumulated other comprehensive income (loss). Net loss on junior subordinated debentures carried at fair value included in earnings was $10.0 million for the prior quarter and $1.6 million for the same period of the prior year.

First Quarter 2018 Highlights (compared to prior quarter):


•	Net interest income increased by $2.6 million, or 1%, driven primarily by growth in loans and leases and an 8 basis point increase in net interest margin;

Umpqua Reports First Quarter 2018 Results

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•	Provision for loan and lease losses increased by $0.7 million, driven primarily by continued loan growth and higher net charge-offs, which increased by one basis point to 0.26% of average loans and leases (annualized);


•	Non-interest income increased by $8.1 million, driven primarily by the change in accounting principle for the junior subordinated debentures carried at fair value (see notable items above), partially offset by lower mortgage banking revenue and lower gains on portfolio loan sales;


•	Non-interest expense decreased by $6.7 million, driven primarily by lower salaries and benefits expense, partially offset by a linked quarter increase in FDIC assessment expense related to one-time credits recorded in the prior quarter;


•	Provision for income taxes increased by $20.9 million, reflecting the net benefit received in the fourth quarter of 2017 related to the revaluation of the net deferred tax liability, partially offset by a lower corporate tax rate, both attributable to the Tax Cuts and Jobs Act (“Tax Act”);


•	Non-performing assets to total assets decreased by four basis points to 0.33%;


•	Estimated total risk-based capital ratio of 14.0% and estimated Tier 1 common to risk weighted assets ratio of 11.0%; and


•	Increased the quarterly cash dividend by 11.1% to $0.20 per common share.

Balance Sheet

Total consolidated assets were $25.9 billion as of March 31, 2018, compared to $25.7 billion as of December 31, 2017 and $24.9 billion as of March 31, 2017. Including secured off-balance sheet lines of credit, total available liquidity was $10.0 billion as of March 31, 2018, representing 39% of total assets and 50% of total deposits.

Gross loans and leases were $19.3 billion as of March 31, 2018, an increase of $234.4 million, or 5% annualized, from $19.1 billion as of December 31, 2017. This increase reflects balanced growth within the commercial term, leasing, multifamily, and residential mortgage loan portfolios. These were partially offset by a decline in consumer loans attributable to the Company's decision to wind down its indirect auto loan business.

Total deposits were $20.1 billion as of March 31, 2018, an increase of $158.6 million, or 3% annualized, from $19.9 billion as of December 31, 2017. This increase was primarily driven by growth in non-interest bearing demand and time deposits, partially offset by lower money market balances attributable to planned public funds run-off.

Net Interest Income

Net interest income was $223.2 million for the first quarter of 2018, up $2.6 million from the prior quarter. This increase reflects an 8 basis point increase in net interest margin, along with the growth in average loans and leases and a lower level of premium amortization on investment securities. Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) increased by $0.2 million from the prior quarter level.

The Company’s net interest margin was 3.96% for the first quarter of 2018, up 8 basis points from 3.88% for the fourth quarter of 2017. Relative to the prior quarter, this increase reflects higher average yields on loans and leases, a lower level of premium amortization on investment securities, and a lower percentage mix of interest-bearing cash, partially offset by a higher cost of funds.

Credit Quality

The allowance for loan and lease losses was $141.9 million, or 0.73% of loans and leases, as of March 31, 2018. During the first quarter of 2018, the Company recorded $4.3 million of accretion related to the credit discount on acquired loans from Sterling, compared to $4.1 million in the prior quarter. As of March 31, 2018, the Sterling purchased non-credit impaired loans had approximately $23.9 million of remaining credit discount that will accrete into interest income over the life of the loans, and the Sterling purchased credit impaired loan pools had approximately $22.9 million of remaining total discount.

The provision for loan and lease losses was $13.7 million for the first quarter of 2018, a $0.7 million increase from the prior quarter level, driven primarily by the loan and lease growth. Net charge-offs increased by one basis point to 0.26% of average loans and leases (annualized) for the first quarter of 2018. As of March 31, 2018, non-performing

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assets were 0.33% of total assets, a decrease from 0.37% as of December 31, 2017, but an increase from 0.24% as of March 31, 2017.

Non-interest Income

Non-interest income was $78.6 million for the first quarter of 2018, up $8.1 million from the prior quarter, which reflects the change in accounting principle for the junior subordinated debentures carried at fair value this quarter (see notable items above).

The current quarter's non-interest income included gains of $5.1 million and $1.1 million related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively, driven by the increase in long-term interest rates during the quarter. These compare to fair value gains of $2.0 million and $0.2 million for the MSR asset and debt capital market swap derivatives, respectively, during the fourth quarter of 2017.

Net revenue from the origination and sale of residential mortgages was $22.8 million for the first quarter of 2018, down $7.0 million from the prior quarter, reflecting both the seasonal decline in mortgage originations and home lending gain on sale margin. For-sale mortgage origination volume decreased by 19% from the prior quarter, while the home lending gain on sale margin decreased by 19 basis points to 3.32% for the first quarter of 2018. Of the current quarter’s mortgage production, 68% related to purchase activity, compared to 67% for both the prior quarter and the same period in the prior year.

Gain on loan sales decreased by $2.5 million from the prior quarter, reflecting a lower level of portfolio loan sales compared to the prior quarter.

Other income increased by $4.6 million from the prior quarter, driven primarily by higher debt capital market swap fee revenue and higher gains related to the fair value change of the debt capital market swap derivatives.

Non-interest Expense

Non-interest expense was $186.1 million for the first quarter of 2018, down $6.7 million from the prior quarter level. This decrease was driven primarily by lower salaries and benefits expenses, partially offset by higher FDIC assessments.

In addition, fourth quarter 2017 expenses included $3.2 million related to employee profit sharing and $2.0 million for charitable donations, driven by the impact of the Tax Act.

Provision for Income Taxes

Provision for income taxes was $24.4 million for the first quarter of 2018, up $20.9 million compared to $3.5 million in the prior quarter. This increase was primarily attributable to the inclusion of a $26.9 million net benefit to the provision for income taxes in the fourth quarter of 2017, related to the revaluation of the net deferred tax liability and amortization of tax credit investments associated with the passage of the Tax Act, partially offset by the non-deductibility of certain executive compensation. The first quarter of 2018 provision for income taxes, relative to other prior periods, benefited from a lower corporate tax rate as a result of the Tax Act.

Capital

As of March 31, 2018, the Company’s tangible book value per common share¹was $9.97, compared to $9.98 in the prior quarter. During the first quarter of 2018, the Company increased its quarterly cash dividend by 11.1% to $0.20 per common share.

The Company’s estimated total risk-based capital ratio was 14.0% and its estimated Tier 1 common to risk weighted

assets ratio was 11.0% as of March 31, 2018. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of March 31, 2018 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.

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April 18, 2018

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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)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
Total shareholders' equity	$	4,013,882		$	4,014,786		$	3,985,260		$	3,958,845		$	3,931,150
Subtract:
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651
Other intangible assets, net	28,589			30,130			31,819			33,508			35,197
Tangible common shareholders' equity	$	2,197,642		$	2,197,005		$	2,165,790		$	2,137,686		$	2,108,302
Total assets	$	25,875,643		$	25,741,439		$	25,695,663		$	25,257,784		$	24,861,458
Subtract:
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651
Other intangible assets, net	28,589			30,130			31,819			33,508			35,197
Tangible assets	$	24,059,403		$	23,923,658		$	23,876,193		$	23,436,625		$	23,038,610
Common shares outstanding at period end	220,461			220,149			220,225			220,205			220,349

Total shareholders' equity to total assets ratio	15.51		%	15.60		%	15.51		%	15.67		%	15.81		%
Tangible common equity ratio	9.13		%	9.18		%	9.07		%	9.12		%	9.15		%
Book value per common share	$	18.21		$	18.24		$	18.10		$	17.98		$	17.84
Tangible book value per common share	$	9.97		$	9.98		$	9.83		$	9.71		$	9.57

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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 umpquabank.com.

Earnings Conference Call Information

The Company will host its first quarter 2018 earnings conference call on Thursday, April 19, 2018, at 10:00 a.m. PDT (1:00 p.m. EDT). During the call, the Company will provide an update on recent activities and discuss its first quarter 2018 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (800) 839-7875 ten minutes prior to the start time and enter conference ID: 8312792. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 8312792. 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 corporate initiatives and the credit discount accretion related to loans acquired from Sterling. 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 initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

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Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Quarter Ended															% Change
(In thousands, except per share data)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Seq. Quarter		Year over Year
Interest income:
Loans and leases	$	227,738		$	223,206		$	223,321		$	212,998		$	205,996		2	%	11	%
Interest and dividends on investments:
Taxable	15,699			14,857			13,979			15,220			13,931			6	%	13	%
Exempt from federal income tax	2,128			2,121			2,125			2,237			2,242			0	%	(5	)%
Dividends	468			386			357			360			388			21	%	21	%
Temporary investments and interest bearing deposits	1,164			1,565			934			324			1,557			(26	)%	(25	)%
Total interest income	247,197			242,135			240,716			231,139			224,114			2	%	10	%
Interest expense:
Deposits	15,610			13,241			12,052			10,641			9,648			18	%	62	%
Repurchase agreements and federal funds purchased	63			43			81			321			30			47	%	110	%
Term debt	3,361			3,496			3,491			3,662			3,510			(4	)%	(4	)%
Junior subordinated debentures	4,932			4,734			4,628			4,437			4,201			4	%	17	%
Total interest expense	23,966			21,514			20,252			19,061			17,389			11	%	38	%
Net interest income	223,231			220,621			220,464			212,078			206,725			1	%	8	%
Provision for loan and lease losses	13,656			12,928			11,997			10,657			11,672			6	%	17	%
Non-interest income:
Service charges on deposits	14,995			15,413			15,849			15,478			14,729			(3	)%	2	%
Brokerage revenue	4,194			4,226			3,832			3,903			4,122			(1	)%	2	%
Residential mortgage banking revenue, net	38,438			42,118			33,430			33,894			26,834			(9	)%	43	%
(Loss) gain on investment securities, net	—			—			(6		)	35			(2		)	0	%	(100	)%
Gain on loan sales	1,230			3,688			7,969			3,310			1,754			(67	)%	(30	)%
Loss on junior subordinated debentures carried at fair value	—			(10,010		)	(1,590		)	(1,572		)	(1,555		)	(100	)%	(100	)%
BOLI income	2,070			2,015			2,041			2,089			2,069			3	%	0	%
Other income	17,640			13,000			13,877			13,982			12,274			36	%	44	%
Total non-interest income	78,567			70,450			75,402			71,119			60,225			12	%	30	%
Non-interest expense:
Salaries and employee benefits	106,551			114,414			108,732			108,561			106,473			(7	)%	0	%
Occupancy and equipment, net	38,661			37,269			37,648			36,955			38,673			4	%	0	%
Intangible amortization	1,541			1,689			1,689			1,689			1,689			(9	)%	(9	)%
FDIC assessments	4,480			2,075			4,405			4,447			4,087			116	%	10	%
(Gain) loss on other real estate owned, net	(38		)	(83		)	(99		)	(457		)	82			(54	)%	(146	)%
Merger related expenses	—			—			6,664			1,640			1,020			0	%	(100	)%
Other expense	34,918			37,422			29,315			31,186			30,690			(7	)%	14	%
Total non-interest expense	186,113			192,786			188,354			184,021			182,714			(3	)%	2	%
Income before provision for income taxes	102,029			85,357			95,515			88,519			72,564			20	%	41	%
Provision for income taxes	24,360			3,486			34,182			31,707			26,561			599	%	(8	)%
Net income	77,669			81,871			61,333			56,812			46,003			(5	)%	69	%
Dividends and undistributed earnings allocated to participating securities	6			16			14			14			12			(63	)%	(50	)%
Net earnings available to common shareholders	$	77,663		$	81,855		$	61,319		$	56,798		$	45,991		(5	)%	69	%

Weighted average basic shares outstanding	220,370			220,194			220,215			220,310			220,287			0	%	0	%
Weighted average diluted shares outstanding	220,825			220,873			220,755			220,753			220,779			0	%	0	%
Earnings per common share – basic	$	0.35		$	0.37		$	0.28		$	0.26		$	0.21		(5	)%	67	%
Earnings per common share – diluted	$	0.35		$	0.37		$	0.28		$	0.26		$	0.21		(5	)%	67	%

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Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)

																% Change
(In thousands, except per share data)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$	304,681		$	330,856		$	304,760		$	320,027		$	262,655		(8	)%	16	%
Interest bearing cash and temporary investments	264,508			303,424			540,806			295,937			421,991			(13	)%	(37	)%
Investment securities:
Trading, at fair value	12,362			12,255			11,919			11,467			11,241			1	%	10	%
Available for sale, at fair value	2,998,347			3,065,769			3,047,358			3,132,566			3,243,408			(2	)%	(8	)%
Held to maturity, at amortized cost	3,667			3,803			3,905			4,017			4,121			(4	)%	(11	)%
Loans held for sale	299,739			259,518			417,470			451,350			372,073			15	%	(19	)%
Loans and leases	19,314,589			19,080,184			18,677,762			18,321,142			17,829,638			1	%	8	%
Allowance for loan and lease losses	(141,933		)	(140,608		)	(139,503		)	(136,867		)	(136,292		)	1	%	4	%
Loans and leases, net	19,172,656			18,939,576			18,538,259			18,184,275			17,693,346			1	%	8	%
Restricted equity securities	43,501			43,508			45,509			45,511			45,522			0	%	(4	)%
Premises and equipment, net	259,354			269,182			276,316			288,853			293,133			(4	)%	(12	)%
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651			0	%	0	%
Other intangible assets, net	28,589			30,130			31,819			33,508			35,197			(5	)%	(19	)%
Residential mortgage servicing rights, at fair value	164,760			153,151			141,225			141,832			142,344			8	%	16	%
Other real estate owned	13,055			11,734			4,160			4,804			6,518			11	%	100	%
Bank owned life insurance	307,745			306,864			305,572			303,894			301,777			0	%	2	%
Deferred tax assets, net	—			—			—			—			8,464			0	%	(100	)%
Other assets	215,028			224,018			238,934			252,092			232,017			(4	)%	(7	)%
Total assets	$	25,875,643		$	25,741,439		$	25,695,663		$	25,257,784		$	24,861,458		1	%	4	%
Liabilities:
Deposits	$	20,106,856		$	19,948,300		$	19,851,910		$	19,459,950		$	19,167,293		1	%	5	%
Securities sold under agreements to repurchase	291,984			294,299			321,542			330,189			304,280			(1	)%	(4	)%
Term debt	801,868			802,357			852,306			852,219			852,308			0	%	(6	)%
Junior subordinated debentures, at fair value	278,410			277,155			266,875			265,423			263,605			0	%	6	%
Junior subordinated debentures, at amortized cost	88,895			100,609			100,690			100,770			100,851			(12	)%	(12	)%
Deferred tax liability, net	39,277			37,503			51,423			34,296			—			5	%	100	%
Other liabilities	254,471			266,430			265,657			256,092			241,971			(4	)%	5	%
Total liabilities	21,861,761			21,726,653			21,710,403			21,298,939			20,930,308			1	%	4	%
Shareholders' equity:
Common stock	3,515,506			3,517,258			3,516,558			3,514,094			3,516,537			0	%	0	%
Retained earnings	546,330			522,520			476,226			454,802			433,417			5	%	26	%
Accumulated other comprehensive loss	(47,954		)	(24,992		)	(7,524		)	(10,051		)	(18,804		)	92	%	155	%
Total shareholders' equity	4,013,882			4,014,786			3,985,260			3,958,845			3,931,150			0	%	2	%
Total liabilities and shareholders' equity	$	25,875,643		$	25,741,439		$	25,695,663		$	25,257,784		$	24,861,458		1	%	4	%

Common shares outstanding at period end	220,461			220,149			220,225			220,205			220,349			0	%	0	%
Book value per common share	$	18.21		$	18.24		$	18.10		$	17.98		$	17.84		0	%	2	%
Tangible book value per common share	$	9.97		$	9.98		$	9.83		$	9.71		$	9.57		0	%	4	%
Tangible equity - common	$	2,197,642		$	2,197,005		$	2,165,790		$	2,137,686		$	2,108,302		0	%	4	%
Tangible common equity to tangible assets	9.13		%	9.18		%	9.07		%	9.12		%	9.15		%	(0.05	)	(0.02	)

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Umpqua Holdings Corporation
Loan and Lease Portfolio
(Unaudited)

(Dollars in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Loans and leases:
Commercial real estate:
Non-owner occupied term, net	$	3,526,221		$	3,491,137		$	3,475,243		$	3,401,679		$	3,410,914		1	%	3	%
Owner occupied term, net	2,476,287			2,488,251			2,467,995			2,593,395			2,584,183			0	%	(4	)%
Multifamily, net	3,131,275			3,087,792			2,993,203			2,964,851			2,885,164			1	%	9	%
Commercial construction, net	522,680			540,707			521,666			464,690			471,007			(3	)%	11	%
Residential development, net	179,871			165,865			186,400			165,956			145,479			8	%	24	%
Commercial:
Term, net	2,025,213			1,944,987			1,819,664			1,686,597			1,620,311			4	%	25	%
Lines of credit and other, net	1,147,028			1,166,173			1,134,045			1,153,409			1,114,160			(2	)%	3	%
Leases and equipment finance, net	1,228,709			1,167,503			1,137,732			1,082,651			1,000,376			5	%	23	%
Residential real estate:
Mortgage, net	3,283,945			3,192,185			3,094,361			3,021,331			2,916,924			3	%	13	%
Home equity lines and loans, net	1,107,822			1,103,297			1,079,931			1,056,848			1,015,138			0	%	9	%
Consumer and other, net	685,538			732,287			767,522			729,735			665,982			(6	)%	3	%
Total, net of deferred fees and costs	$	19,314,589		$	19,080,184		$	18,677,762		$	18,321,142		$	17,829,638		1	%	8	%

Loan and leases mix:
Commercial real estate:
Non-owner occupied term, net	18		%	18		%	19		%	19		%	19		%
Owner occupied term, net	13		%	13		%	13		%	14		%	14		%
Multifamily, net	16		%	16		%	16		%	16		%	16		%
Commercial construction, net	3		%	3		%	3		%	3		%	3		%
Residential development, net	1		%	1		%	1		%	1		%	1		%
Commercial:
Term, net	10		%	10		%	10		%	9		%	9		%
Lines of credit and other, net	6		%	6		%	6		%	6		%	6		%
Leases and equipment finance, net	6		%	6		%	6		%	6		%	6		%
Residential real estate:
Mortgage, net	17		%	17		%	16		%	16		%	16		%
Home equity lines and loans, net	6		%	6		%	6		%	6		%	6		%
Consumer and other, net	4		%	4		%	4		%	4		%	4		%
Total	100		%	100		%	100		%	100		%	100		%

Umpqua Reports First Quarter 2018 Results

April 18, 2018

Page 9



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

(Dollars in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$	6,699,399		$	6,505,628		$	6,571,471		$	6,112,480		$	6,021,585		3	%	11	%
Demand, interest bearing	2,354,873			2,384,133			2,394,240			2,371,386			2,327,226			(1	)%	1	%
Money market	6,546,704			7,037,891			6,700,261			6,755,707			6,784,442			(7	)%	(4	)%
Savings	1,482,560			1,446,860			1,444,801			1,427,677			1,400,330			2	%	6	%
Time	3,023,320			2,573,788			2,741,137			2,792,700			2,633,710			17	%	15	%
Total	$	20,106,856		$	19,948,300		$	19,851,910		$	19,459,950		$	19,167,293		1	%	5	%

Total core deposits⁽¹⁾	$	18,007,169		$	18,263,802		$	18,005,730		$	17,561,956		$	17,427,832		(1	)%	3	%

Deposit mix:
Demand, non-interest bearing	33		%	33		%	33		%	32		%	31		%
Demand, interest bearing	12		%	12		%	12		%	12		%	12		%
Money market	33		%	35		%	34		%	35		%	36		%
Savings	7		%	7		%	7		%	7		%	7		%
Time	15		%	13		%	14		%	14		%	14		%
Total	100		%	100		%	100		%	100		%	100		%

Number of open accounts:
Demand, non-interest bearing	399,721			397,427			394,755			389,767			385,859
Demand, interest bearing	78,181			78,853			79,899			80,594			81,570
Money market	54,752			55,175			55,659			55,795			55,903
Savings	162,841			162,453			162,556			161,369			160,323
Time	48,529			46,861			47,129			47,339			47,365
Total	744,024			740,769			739,998			734,864			731,020

Average balance per account:
Demand, non-interest bearing	$	16.8		$	16.4		$	16.6		$	15.7		$	15.6
Demand, interest bearing	30.1			30.2			30.0			29.4			28.5
Money market	119.6			127.6			120.4			121.1			121.4
Savings	9.1			8.9			8.9			8.8			8.7
Time	62.3			54.9			58.2			59.0			55.6
Total	$	27.0		$	26.9		$	26.8		$	26.5		$	26.2

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

Umpqua Reports First Quarter 2018 Results

April 18, 2018

Page 10



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

	Quarter Ended															% Change
(Dollars in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Seq. Quarter		Year over Year
Non-performing assets:
Loans and leases on non-accrual status	$	45,775		$	51,465		$	44,573		$	26,566		$	28,915		(11	)%	58	%
Loans and leases past due 90+ days and accruing⁽¹⁾	25,478			30,994			29,073			27,252			23,421			(18	)%	9	%
Total non-performing loans and leases	71,253			82,459			73,646			53,818			52,336			(14	)%	36	%
Other real estate owned	13,055			11,734			4,160			4,804			6,518			11	%	100	%
Total non-performing assets	$	84,308		$	94,193		$	77,806		$	58,622		$	58,854		(10	)%	43	%

Performing restructured loans and leases	$	31,659		$	32,157		$	45,813		$	52,861		$	43,029		(2	)%	(26	)%
Loans and leases past due 31-89 days	$	38,650		$	43,870		$	32,251		$	31,153		$	49,530		(12	)%	(22	)%
Loans and leases past due 31-89 days to total loans and leases	0.20		%	0.23		%	0.17		%	0.17		%	0.28		%
Non-performing loans and leases to total loans and leases ⁽¹⁾	0.37		%	0.43		%	0.39		%	0.29		%	0.29		%
Non-performing assets to total assets⁽¹⁾	0.33		%	0.37		%	0.30		%	0.23		%	0.24		%


⁽¹⁾	Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $6.3 million, $12.4 million, $12.3 million, $16.3 million, and $5.3 million at March 31,2018, December 31, 2017, September 30, 2017, June 30, 2017, and March 31, 2017, respectively.

Umpqua Reports First Quarter 2018 Results

April 18, 2018

Page 11



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Quarter Ended															% Change
(Dollars in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Seq. Quarter		Year over Year
Allowance for loan and lease losses:
Balance beginning of period	$	140,608		$	139,503		$	136,867		$	136,292		$	133,984
Provision for loan and lease losses	13,656			12,928			11,997			10,657			11,672			6	%	17	%
Charge-offs	(15,812		)	(15,751		)	(13,222		)	(13,944		)	(13,002		)	0	%	22	%
Recoveries	3,481			3,928			3,861			3,862			3,638			(11	)%	(4	)%
Net charge-offs	(12,331		)	(11,823		)	(9,361		)	(10,082		)	(9,364		)	4	%	32	%
Total allowance for loan and lease losses	141,933			140,608			139,503			136,867			136,292			1	%	4	%
Reserve for unfunded commitments	4,129			3,963			3,932			3,816			3,495			4	%	18	%
Total allowance for credit losses	$	146,062		$	144,571		$	143,435		$	140,683		$	139,787		1	%	4	%

Net charge-offs to average loans and leases (annualized)	0.26		%	0.25		%	0.20		%	0.22		%	0.22		%
Recoveries to gross charge-offs	22.01		%	24.94		%	29.20		%	27.70		%	27.98		%
Allowance for loan and lease losses to loans and leases	0.73		%	0.74		%	0.75		%	0.75		%	0.76		%
Allowance for credit losses to loans and leases	0.76		%	0.76		%	0.77		%	0.77		%	0.78		%

Umpqua Reports First Quarter 2018 Results

April 18, 2018

Page 12



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Quarter Ended										% Change
	Mar 31, 2018		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Seq. Quarter		Year over Year
Average Rates:
Yield on loans and leases	4.75	%	4.65	%	4.70	%	4.67	%	4.65	%	0.10		0.10
Yield on loans held for sale	4.21	%	3.99	%	3.89	%	3.26	%	3.86	%	0.22		0.35
Yield on taxable investments	2.31	%	2.17	%	2.00	%	2.07	%	2.10	%	0.14		0.21
Yield on tax-exempt investments ⁽¹⁾	3.68	%	4.49	%	4.59	%	4.64	%	4.76	%	(0.81	)	(1.08	)
Yield on interest bearing cash and temporary investments	1.55	%	1.22	%	1.47	%	1.03	%	0.79	%	0.33		0.76
Total yield on earning assets ⁽¹⁾	4.39	%	4.26	%	4.30	%	4.26	%	4.18	%	0.13		0.21

Cost of interest bearing deposits	0.47	%	0.40	%	0.36	%	0.33	%	0.30	%	0.07		0.17
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.08	%	0.06	%	0.10	%	0.32	%	0.04	%	0.02		0.04
Cost of term debt	1.70	%	1.67	%	1.63	%	1.72	%	1.67	%	0.03		0.03
Cost of junior subordinated debentures	5.36	%	5.11	%	5.02	%	4.88	%	4.70	%	0.25		0.66
Total cost of interest bearing liabilities	0.65	%	0.58	%	0.55	%	0.52	%	0.48	%	0.07		0.17

Net interest spread ⁽¹⁾	3.74	%	3.68	%	3.75	%	3.74	%	3.70	%	0.06		0.04
Net interest margin ⁽¹⁾	3.96	%	3.88	%	3.94	%	3.91	%	3.85	%	0.08		0.11

Performance Ratios:
Return on average assets	1.23	%	1.27	%	0.96	%	0.92	%	0.75	%	(0.04	)	0.48
Return on average tangible assets	1.32	%	1.36	%	1.04	%	0.99	%	0.81	%	(0.04	)	0.51
Return on average common equity	7.84	%	8.12	%	6.10	%	5.76	%	4.74	%	(0.28	)	3.10
Return on average tangible common equity	14.30	%	14.90	%	11.23	%	10.67	%	8.83	%	(0.60	)	5.47
Efficiency ratio – Consolidated	61.56	%	65.99	%	63.43	%	64.71	%	68.15	%	(4.43	)	(6.59	)
Efficiency ratio – Bank	59.58	%	62.09	%	61.42	%	62.45	%	65.75	%	(2.51	)	(6.17	)

⁽¹⁾ Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate for 2018 and a 35% tax rate for 2017.

Umpqua Reports First Quarter 2018 Results

April 18, 2018

Page 13



Umpqua Holdings Corporation Average Balances
(Unaudited)

	Quarter Ended										% Change
(Dollars in thousands)	Mar 31, 2018		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Seq. Quarter		Year over Year
Temporary investments and interest bearing cash	$	303,670	$	509,187	$	253,015	$	125,886	$	804,354	(40	)%	(62	)%
Investment securities, taxable	2,793,449		2,804,530		2,867,292		3,008,079		2,723,576		0	%	3	%
Investment securities, tax-exempt	286,603		286,345		281,139		292,553		286,444		0	%	0	%
Loans held for sale	267,231		370,564		420,282		392,183		351,570		(28	)%	(24	)%
Loans and leases	19,150,315		18,765,251		18,537,827		18,024,651		17,598,314		2	%	9	%
Total interest earning assets	22,801,268		22,735,877		22,359,555		21,843,352		21,764,258		0	%	5	%
Goodwill and other intangible assets, net	1,817,068		1,818,730		1,820,394		1,822,032		1,823,799		0	%	0	%
Total assets	25,686,471		25,661,566		25,311,994		24,792,869		24,730,285		0	%	4	%

Non-interest bearing demand deposits	6,450,364		6,611,493		6,354,591		5,951,670		5,883,924		(2	)%	10	%
Interest bearing deposits	13,492,965		13,281,502		13,155,462		13,037,064		13,119,736		2	%	3	%
Total deposits	19,943,329		19,892,995		19,510,053		18,988,734		19,003,660		0	%	5	%
Interest bearing liabilities	14,971,759		14,790,883		14,705,842		14,659,650		14,661,558		1	%	2	%

Shareholders’ equity - common	4,019,822		3,998,609		3,989,868		3,956,777		3,936,340		1	%	2	%
Tangible common equity ⁽¹⁾	2,202,754		2,179,879		2,166,474		2,134,745		2,112,541		1	%	4	%

⁽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 First Quarter 2018 Results

April 18, 2018

Page 14



Umpqua Holdings Corporation Residential Mortgage Banking Activity
(unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Seq. Quarter		Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others	$	15,442,915		$	15,336,597		$	15,007,942		$	14,797,242		$	14,541,171		1	%	6	%
MSR asset, at fair value	164,760			153,151			141,225			141,832			142,344			8	%	16	%
MSR as % of serviced portfolio	1.07		%	1.00		%	0.94		%	0.96		%	0.98		%	7	%	9	%
Residential mortgage banking revenue:
Origination and sale	$	22,837		$	29,864		$	32,784		$	32,385		$	24,647		(24	)%	(7	)%
Servicing	10,522			10,287			9,879			9,839			9,858			2	%	7	%
Change in fair value of MSR asset	5,079			1,967			(9,233		)	(8,330		)	(7,671		)	158	%	(166	)%
Total	$	38,438		$	42,118		$	33,430		$	33,894		$	26,834		(9	)%	43	%

Closed loan volume:
Closed loan volume - portfolio	$	237,783		$	265,718		$	336,362		$	312,022		$	245,334		(11	)%	(3	)%
Closed loan volume - for-sale	687,226			850,453			891,063			918,200			754,715			(19	)%	(9	)%
Closed loan volume - total	$	925,009		$	1,116,171		$	1,227,425		$	1,230,222		$	1,000,049		(17	)%	(8	)%

Gain on sale margin:
Based on for-sale volume	3.32		%	3.51		%	3.68		%	3.53		%	3.27		%	(0.19	)	0.05

###

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UMPQUA HOLDINGS CORP Reports