UMPQUA HOLDINGS CORP - FORM 8-K - EX-99.1 - PRESS RELEASE ACCOUNCING FOURTH QUARTER AND FULL YEAR 2018 FINANCIAL RESULTS

Attached files

file	filename
EX-99.2 - FOURTH QUARTER 2018 INVESTOR PRESENTATION - UMPQUA HOLDINGS CORP	umpqq42018earningspresen.htm
8-K - 8-K - UMPQUA HOLDINGS CORP	umpqq420188-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 QUARTERLY AND ANNUAL RESULTS

Fourth quarter 2018 net earnings of $80.3 million, or $0.36 per diluted common share

Full-year 2018 net earnings of $316.2 million, or $1.43 per diluted common share

30% increase in year-over-year earnings per share reflecting success of Umpqua Next Gen initiatives

Annual loan and lease growth of 7% and deposit growth of 6%

PORTLAND, Ore. – January 23, 2019 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net earnings available to common shareholders of $80.3 million for the fourth quarter of 2018, compared to $91.0 million for the third quarter of 2018 and $75.2 million for the fourth quarter of 2017. Earnings per diluted common share were $0.36 for the fourth quarter of 2018, compared to $0.41 for the third quarter of 2018 and $0.34 for the fourth quarter of 2017.

For the twelve months ended December 31, 2018, the Company reported net earnings available to common shareholders of $316.2 million, or $1.43 per diluted common share, up from $242.3 million, or $1.10 per diluted common share, for the twelve months ended December 31, 2017.

“We finished 2018 on a strong note, delivering another quarter of solid financial performance to cap a year in which we made terrific progress implementing the priorities laid out in our Next Gen strategy,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. “The significant improvement in Umpqua’s 2018 financial performance reflects our success implementing key Next Gen initiatives, which included generating strong loan and deposit growth and higher fee income to offset the decrease in mortgage banking revenues while reducing expenses. Building on that momentum, we’re focused on achieving the remaining cost savings and continuing to advance our human digital strategy, which we’re confident will continue to drive sustained profitability and long-term shareholder value.”

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


•	$5.8 million net gain related to the previously announced sale of substantially all of the assets of Pivotus, Inc.


•	$4.0 million in professional fees related to operational excellence initiatives, compared to $3.5 million in the prior quarter.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 2


•	$13.1 million loss on the fair value of the MSR asset attributable to the decrease in long-term interest rates during the quarter. This compares to $0.2 million gain in the prior quarter and $2.0 million gain in the same period of the prior year.


•	$3.0 million loss on the fair value of the debt capital market swap derivatives attributable to the decrease in long-term interest rates during the quarter. This compares to gains of $0.2 million in both the prior quarter and in the same period of the prior year.


•	$0.8 million of exit or disposal costs, related primarily to planned store consolidations, compared to $1.0 million in the prior quarter and $3.1 million in the same period of the prior year.


•	$0.4 million unrealized holding gain on equity securities, compared to a loss of $0.5 million in the prior quarter and no gain or loss recorded in the same period of the prior year.

Full-Year 2018 Highlights (compared to prior year):


•	Gross loan and lease growth of $1.4 billion, or 7%;


•	Deposit growth of $1.2 billion, or 6%;


•	Net interest income increased by $73.0 million, driven primarily by higher average balances of loans and leases, along with a 10 basis point increase in net interest margin;


•	Provision for loan and lease losses increased by $8.7 million primarily due to loan and lease growth and higher net charge-offs;


•	Non-interest income increased by $0.9 million, reflecting higher levels of other fee income, the gain related to Pivotus, Inc. (see notable items above) and the net loss on junior subordinated debentures carried at fair value no longer being recognized in earnings, partially offset by lower net mortgage banking revenue and lower portfolio loan sale gains;


•	Non-interest expense decreased by $8.4 million, driven primarily by lower salaries and benefits expense and lower merger-related expense, partially offset by higher services expense;


•	Paid dividends of $0.82 per common share (versus $0.68 per share in the prior year) and repurchased 327,000 shares of stock; and


•	Book value increased by 2%, or $0.39 per common share, and tangible book value¹ increased by 4%, or $0.42 per common share.

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.

Fourth Quarter 2018 Highlights (compared to prior quarter):


•	Gross loan and lease growth of $568.6 million, or 11% annualized;


•	Deposit growth of $244.7 million, or 5% annualized;


•	Net interest income increased by $6.0 million, attributable to higher average balances of loans and leases, along with an increase in average yields on loans and leases and a lower level of premium amortization on the investment securities portfolio, partially offset by higher funding costs;


•	Provision for loan and lease losses increased by $5.5 million, driven primarily by the strong loan and lease growth during the quarter and a seven basis point increase in net charge-offs to 0.32% of average loans and leases (annualized);


•	Non-interest income decreased by $15.6 million, reflecting the linked quarter declines in the fair value of the MSR asset and debt capital market swap derivatives (see notable items above), partially offset by the gain related to Pivotus, Inc. (see notable items above);


•	Non-interest expense decreased by $0.8 million, driven primarily by lower salaries and benefits and FDIC assessments, partially offset by higher other expense and loss on other real estate owned;


•	Non-performing assets to total assets decreased by one basis point to 0.36%;


•	Estimated total risk-based capital ratio of 13.4% and estimated Tier 1 common to risk weighted assets ratio of 10.7%; and


•	Declared quarterly cash dividend of $0.21 per common share;

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 3

Balance Sheet

Total consolidated assets were $26.9 billion as of December 31, 2018, compared to $26.6 billion as of September 30, 2018 and $25.7 billion as of December 31, 2017. Including secured off-balance sheet lines of credit, total available liquidity was $10.4 billion as of December 31, 2018, representing 39% of total assets and 49% of total deposits.

Gross loans and leases were $20.4 billion as of December 31, 2018, an increase of $568.6 million from $19.9 billion as of September 30, 2018. This increase reflects balanced growth across the Company's commercial, commercial real estate and residential real estate portfolios.

Total deposits were $21.1 billion as of December 31, 2018, an increase of $244.7 million from $20.9 billion as of September 30, 2018. This increase was primarily attributable to growth in money market and time accounts, partially offset by a decline in non-interest demand deposits due to the timing of year-end deposit inflows.

Net Interest Income

Net interest income was $247.4 million for the fourth quarter of 2018, up $6.0 million from the prior quarter. This increase was driven primarily by higher average loans and leases, resulting from the strong growth during the quarter, and a lower level of premium amortization on the investment securities portfolio. These were partially offset by lower accretion related to acquired loans, which decreased to $4.2 million for the fourth quarter of 2018, compared to

$4.9 million in the prior quarter.

The Company’s net interest margin was 4.15% for the fourth quarter of 2018, up 6 basis points from 4.09% for the third quarter of 2018. This increase was driven primarily by the lower level of premium amortization on the investment securities portfolio and an increase in average yields on loans and leases, partially offset by higher funding costs.

Credit Quality

The allowance for loan and lease losses was $144.9 million, or 0.71% of loans and leases, as of December 31, 2018. The provision for loan and lease losses was $17.2 million for the fourth quarter of 2018, an increase of $5.5 million from the prior quarter level driven primarily by the growth in the loan and lease portfolio and higher net charge-offs.

Net charge-offs increased by 7 basis points from the prior quarter to 0.32% of average loans and leases for the fourth quarter of 2018 (annualized). As of December 31, 2018, non-performing assets decreased to 0.36% of total assets, from 0.37% as of September 30, 2018 and December 31, 2017.

Non-interest Income

Non-interest income was $56.8 million for the fourth quarter of 2018, down $15.6 million from the prior quarter. This decrease reflects the decline in fair value for both the MSR asset and the debt capital market swap derivatives (see notable items above), partially offset by the gain related to Pivotus, Inc. (see notable items above).

Net revenue from the origination and sale of residential mortgages was $16.7 million for the fourth quarter of 2018, down $4.3 million from the prior quarter. For-sale mortgage origination volume decreased by 22% from the prior quarter, while the home lending gain on sale margin increased by 6 basis points to 2.83% for the fourth quarter of 2018. Of the current quarter’s mortgage production, 80% related to purchase activity, compared to 82% for the prior quarter and 67% for the same period in the prior year.

Non-interest Expense

Non-interest expense was $178.5 million for the fourth quarter of 2018, down $0.8 million from the prior quarter level. This decrease was attributable to lower mortgage banking-related expense, consistent with the decrease in mortgage originations, additional savings associated with the operational excellence initiatives and lower FDIC assessments. These were partially offset by higher group insurance, annual incentive compensation expenses and loss on other real estate owned.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 4

Capital

As of December 31, 2018, the Company’s book value per common share increased to $18.42 from $18.18 in the prior quarter, and its tangible book value per common share¹ increased to $10.19 from $9.95 in the prior quarter. During the fourth quarter of 2018, the Company declared a dividend of $0.21 per share.

The Company’s estimated total risk-based capital ratio was 13.4% and its estimated Tier 1 common equity to risk weighted assets ratio was 10.7% as of December 31, 2018. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of December 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.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 5

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).



(Dollars in thousands, except per share data)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017
Total shareholders' equity	$	4,056,442		$	4,003,893		$	3,981,087		$	3,969,766		$	3,969,367
Subtract:
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651
Other intangible assets, net	23,964			25,506			27,047			28,589			30,130
Tangible common shareholders' equity	$	2,244,827		$	2,190,736		$	2,166,389		$	2,153,526		$	2,151,586
Total assets	$	26,939,781		$	26,615,067		$	26,480,601		$	25,816,401		$	25,680,447
Subtract:
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651
Other intangible assets, net	23,964			25,506			27,047			28,589			30,130
Tangible assets	$	25,128,166		$	24,801,910		$	24,665,903		$	24,000,161		$	23,862,666
Common shares outstanding at period end	220,255			220,238			220,205			220,461			220,149

Total shareholders' equity to total assets ratio	15.06		%	15.04		%	15.03		%	15.38		%	15.46		%
Tangible common equity ratio	8.93		%	8.83		%	8.78		%	8.97		%	9.02		%
Book value per common share	$	18.42		$	18.18		$	18.08		$	18.01		$	18.03
Tangible book value per common share	$	10.19		$	9.95		$	9.84		$	9.77		$	9.77

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 6

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.

Earnings Conference Call Information

The Company will host its fourth quarter 2018 earnings conference call on Thursday, January 24, 2019, at 10:00 a.m. PT (1:00 p.m. ET). During the call, the Company will provide an update on recent activities and discuss its fourth quarter and full-year 2018 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (800) 458-4148 ten minutes prior to the start time and enter conference ID: 2359675. A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 2359675. 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 the timing and impact of digital and technology 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; the effect of interest rate increases on the cost of deposits; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our ability to effectively manage problem credits; our ability to successfully implement efficiency and operational excellence initiatives on time and in amounts projected; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 7



Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Quarter Ended														% Change
(In thousands, except per share data)	Dec 31, 2018		Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Seq. Quarter		Year over Year
Interest income:
Loans and leases	$	254,093	$	246,410		$	242,123		$	229,488		$	225,538		3	%	13	%
Interest and dividends on investments:
Taxable	27,381		24,435			8,499			15,699			14,857			12	%	84	%
Exempt from federal income tax	2,135		2,048			2,057			2,128			2,121			4	%	1	%
Dividends	538		549			433			468			386			(2	)%	39	%
Temporary investments and interest bearing deposits	2,621		2,800			2,080			1,164			1,565			(6	)%	67	%
Total interest income	286,768		276,242			255,192			248,947			244,467			4	%	17	%
Interest expense:
Deposits	30,124		25,692			21,259			15,610			13,241			17	%	128	%
Securities sold under agreement to repurchase and federal funds purchased	185		103			155			63			43			80	%	330	%
Term debt	3,326		3,439			3,478			3,361			3,496			(3	)%	(5	)%
Junior subordinated debentures	5,743		5,640			5,400			4,932			4,734			2	%	21	%
Total interest expense	39,378		34,874			30,292			23,966			21,514			13	%	83	%
Net interest income	247,390		241,368			224,900			224,981			222,953			2	%	11	%
Provision for loan and lease losses	17,219		11,711			13,319			13,656			12,928			47	%	33	%
Non-interest income:
Service charges on deposits	16,035		15,574			15,520			14,995			15,413			3	%	4	%
Brokerage revenue	4,178		3,947			4,161			4,194			4,226			6	%	(1	)%
Residential mortgage banking revenue, net	15,150		31,484			33,163			38,438			42,118			(52	)%	(64	)%
Gain on sale of investment securities, net	—		—			14			—			—			0	%	0	%
Unrealized holding gains (losses) on equity securities	410		(462		)	(1,432		)	—			—			(189	)%	nm
Gain on loan sales, net	2,484		2,772			1,348			1,230			3,688			(10	)%	(33	)%
Loss on junior subordinated debentures carried at fair value	—		—			—			—			(10,010		)	0	%	(100	)%
BOLI income	2,116		2,051			2,060			2,070			2,015			3	%	5	%
Other income	16,438		17,022			16,817			17,640			13,000			(3	)%	26	%
Total non-interest income	56,811		72,388			71,651			78,567			70,450			(22	)%	(19	)%
Non-interest expense:
Salaries and employee benefits	102,109		103,575			113,340			106,551			114,414			(1	)%	(11	)%
Occupancy and equipment, net	35,949		36,530			37,584			38,661			37,269			(2	)%	(4	)%
Intangible amortization	1,542		1,541			1,542			1,541			1,689			0	%	(9	)%
FDIC assessments	2,619		4,303			4,692			4,480			2,075			(39	)%	26	%
Loss (gain) on other real estate owned, net	1,125		(128		)	(92		)	(38		)	(83		)	(979	)%	(1,455	)%
Other expenses	35,144		33,471			38,506			34,918			37,422			5	%	(6	)%
Total non-interest expense	178,488		179,292			195,572			186,113			192,786			0	%	(7	)%
Income before provision for income taxes	108,494		122,753			87,660			103,779			87,689			(12	)%	24	%
Provision for income taxes	28,183		31,772			21,661			24,807			12,438			(11	)%	127	%
Net income	80,311		90,981			65,999			78,972			75,251			(12	)%	7	%
Dividends and undistributed earnings allocated to participating securities	1		5			4			6			15			(80	)%	(93	)%
Net earnings available to common shareholders	$	80,310	$	90,976		$	65,995		$	78,966		$	75,236		(12	)%	7	%

Weighted average basic shares outstanding	220,247		220,224			220,283			220,370			220,194			0	%	0	%
Weighted average diluted shares outstanding	220,668		220,620			220,647			220,825			220,873			0	%	0	%
Earnings per common share – basic	$	0.36	$	0.41		$	0.30		$	0.36		$	0.34		(12	)%	6	%
Earnings per common share – diluted	$	0.36	$	0.41		$	0.30		$	0.36		$	0.34		(12	)%	6	%

nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 8



Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

	Year Ended						% Change
(In thousands, except per share data)	Dec 31, 2018			Dec 31, 2017			Year over Year
Interest income:
Loans and leases	$	972,114		$	871,318		12	%
Interest and dividends on investments:
Taxable	76,014			57,987			31	%
Exempt from federal income tax	8,368			8,725			(4	)%
Dividends	1,988			1,491			33	%
Temporary investments and interest bearing deposits	8,665			4,380			98	%
Total interest income	1,067,149			943,901			13	%
Interest expense:
Deposits	92,685			45,582			103	%
Securities sold under agreement to repurchase and federal funds purchased	506			475			7	%
Term debt	13,604			14,159			(4	)%
Junior subordinated debentures	21,715			18,000			21	%
Total interest expense	128,510			78,216			64	%
Net interest income	938,639			865,685			8	%
Provision for loan and lease losses	55,905			47,254			18	%
Non-interest income:
Service charges on deposits	62,124			61,469			1	%
Brokerage revenue	16,480			16,083			2	%
Residential mortgage banking revenue, net	118,235			136,276			(13	)%
Gain on sale of investment securities, net	14			27			(48	)%
Unrealized holding losses on equity securities	(1,484		)	—			nm
Gain on loan sales, net	7,834			18,012			(57	)%
Loss on junior subordinated debentures carried at fair value	—			(14,727		)	(100	)%
BOLI income	8,297			8,214			1	%
Other income	67,917			53,133			28	%
Total non-interest income	279,417			278,487			0	%
Non-interest expense:
Salaries and employee benefits	425,575			438,180			(3	)%
Occupancy and equipment, net	148,724			150,545			(1	)%
Intangible amortization	6,166			6,756			(9	)%
FDIC assessments	16,094			15,014			7	%
Loss (gain) on other real estate owned, net	867			(557		)	(256	)%
Merger related expenses	—			9,324			(100	)%
Other expenses	142,039			128,613			10	%
Total non-interest expense	739,465			747,875			(1	)%
Income before provision for income taxes	422,686			349,043			21	%
Provision for income taxes	106,423			106,730			0	%
Net income	316,263			242,313			31	%
Dividends and undistributed earnings allocated to participating securities	16			55			(71	)%
Net earnings available to common shareholders	$	316,247		$	242,258		31	%

Weighted average basic shares outstanding	220,280			220,251			0	%
Weighted average diluted shares outstanding	220,737			220,836			0	%
Earnings per common share – basic	$	1.44		$	1.10		31	%
Earnings per common share – diluted	$	1.43		$	1.10		30	%

nm = not meaningful

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 9



Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)

																% Change
(In thousands, except per share data)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$	335,419		$	308,938		$	314,513		$	304,681		$	330,856		9	%	1	%
Interest bearing cash and temporary investments	287,218			570,321			488,499			264,508			303,424			(50	)%	(5	)%
Investment securities:
Equity and other, at fair value	61,841			62,454			64,297			63,295			12,255			(1	)%	405	%
Available for sale, at fair value	2,977,108			2,864,394			2,854,398			2,947,414			3,065,769			4	%	(3	)%
Held to maturity, at amortized cost	3,606			3,672			3,586			3,667			3,803			(2	)%	(5	)%
Loans held for sale, at fair value	166,461			289,537			432,642			299,739			259,518			(43	)%	(36	)%
Loans and leases	20,422,666			19,854,033			19,639,494			19,255,347			19,019,192			3	%	7	%
Allowance for loan and lease losses	(144,871		)	(144,026		)	(144,556		)	(141,933		)	(140,608		)	1	%	3	%
Net loans and leases	20,277,795			19,710,007			19,494,938			19,113,414			18,878,584			3	%	7	%
Restricted equity securities	40,268			40,269			42,320			43,501			43,508			0	%	(7	)%
Premises and equipment, net	227,423			237,456			245,954			259,354			269,182			(4	)%	(16	)%
Goodwill	1,787,651			1,787,651			1,787,651			1,787,651			1,787,651			0	%	0	%
Other intangible assets, net	23,964			25,506			27,047			28,589			30,130			(6	)%	(20	)%
Residential mortgage servicing rights, at fair value	169,025			175,038			166,217			164,760			153,151			(3	)%	10	%
Other real estate owned	10,958			11,774			12,101			13,055			11,734			(7	)%	(7	)%
Bank owned life insurance	313,626			311,922			309,844			307,745			306,864			1	%	2	%
Other assets	257,418			216,128			236,594			215,028			224,018			19	%	15	%
Total assets	$	26,939,781		$	26,615,067		$	26,480,601		$	25,816,401		$	25,680,447		1	%	5	%
Liabilities:
Deposits	$	21,137,486		$	20,892,774		$	20,744,526		$	20,106,856		$	19,948,300		1	%	6	%
Securities sold under agreements to repurchase	297,151			286,975			273,666			291,984			294,299			4	%	1	%
Term debt	751,788			751,764			801,739			801,868			802,357			0	%	(6	)%
Junior subordinated debentures, at fair value	300,870			282,846			280,669			278,410			277,155			6	%	9	%
Junior subordinated debentures, at amortized cost	88,724			88,781			88,838			88,895			100,609			0	%	(12	)%
Deferred tax liability, net	25,846			22,413			27,255			24,151			21,930			15	%	18	%
Other liabilities	281,474			285,621			282,821			254,471			266,430			(1	)%	6	%
Total liabilities	22,883,339			22,611,174			22,499,514			21,846,635			21,711,080			1	%	5	%
Shareholders' equity:
Common stock	3,512,874			3,510,949			3,509,146			3,515,506			3,517,258			0	%	0	%
Retained earnings	602,482			568,619			524,031			502,214			477,101			6	%	26	%
Accumulated other comprehensive loss	(58,914		)	(75,675		)	(52,090		)	(47,954		)	(24,992		)	(22	)%	136	%
Total shareholders' equity	4,056,442			4,003,893			3,981,087			3,969,766			3,969,367			1	%	2	%
Total liabilities and shareholders' equity	$	26,939,781		$	26,615,067		$	26,480,601		$	25,816,401		$	25,680,447		1	%	5	%

Common shares outstanding at period end	220,255			220,238			220,205			220,461			220,149			0	%	0	%
Book value per common share	$	18.42		$	18.18		$	18.08		$	18.01		$	18.03		1	%	2	%
Tangible book value per common share	$	10.19		$	9.95		$	9.84		$	9.77		$	9.77		2	%	4	%
Tangible equity - common	$	2,244,827		$	2,190,736		$	2,166,389		$	2,153,526		$	2,151,586		2	%	4	%
Tangible common equity to tangible assets	8.93		%	8.83		%	8.78		%	8.97		%	9.02		%	0.10		(0.09	)

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 10



Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)

(Dollars in thousands)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Loans and leases:
Commercial real estate:
Non-owner occupied term, net	$	3,573,065		$	3,527,357		$	3,518,982		$	3,519,366		$	3,483,197		1	%	3	%
Owner occupied term, net	2,480,371			2,474,845			2,473,734			2,464,705			2,476,654			0	%	0	%
Multifamily, net	3,304,763			3,225,538			3,185,923			3,103,794			3,060,616			2	%	8	%
Construction & development, net	736,254			646,684			568,562			522,670			540,696			14	%	36	%
Residential development, net	196,890			198,518			183,114			179,954			165,941			(1	)%	19	%
Commercial:
Term, net	2,232,923			2,149,376			2,106,658			2,025,052			1,944,925			4	%	15	%
Lines of credit & other, net	1,169,525			1,133,508			1,152,853			1,147,123			1,166,275			3	%	0	%
Leases & equipment finance, net	1,330,155			1,282,128			1,265,843			1,228,709			1,167,503			4	%	14	%
Residential real estate:
Mortgage, net	3,635,073			3,468,569			3,405,775			3,275,088			3,182,888			5	%	14	%
Home equity loans & lines, net	1,176,477			1,143,351			1,132,329			1,103,048			1,097,877			3	%	7	%
Consumer & other, net	587,170			604,159			645,721			685,838			732,620			(3	)%	(20	)%
Total, net of deferred fees and costs	$	20,422,666		$	19,854,033		$	19,639,494		$	19,255,347		$	19,019,192		3	%	7	%

Loan and leases mix:
Commercial real estate:
Non-owner occupied term, net	17		%	18		%	18		%	18		%	18		%
Owner occupied term, net	12		%	13		%	13		%	13		%	13		%
Multifamily, net	16		%	16		%	16		%	16		%	16		%
Construction & development, net	4		%	3		%	3		%	3		%	3		%
Residential development, net	1		%	1		%	1		%	1		%	1		%
Commercial:
Term, net	11		%	11		%	11		%	11		%	10		%
Lines of credit & other, net	6		%	6		%	6		%	6		%	6		%
Leases & equipment finance, net	6		%	6		%	6		%	6		%	6		%
Residential real estate:
Mortgage, net	18		%	17		%	17		%	17		%	17		%
Home equity loans & lines, net	6		%	6		%	6		%	6		%	6		%
Consumer & other, net	3		%	3		%	3		%	3		%	4		%
Total	100		%	100		%	100		%	100		%	100		%

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 11



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

(Dollars in thousands)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			% Change
	Amount			Amount			Amount			Amount			Amount			Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$	6,667,467		$	6,859,411		$	6,819,325		$	6,699,399		$	6,505,628		(3	)%	2	%
Demand, interest bearing	2,340,471			2,320,560			2,321,691			2,354,873			2,384,133			1	%	(2	)%
Money market	6,645,390			6,325,808			6,161,907			6,546,704			7,037,891			5	%	(6	)%
Savings	1,492,685			1,499,872			1,465,154			1,482,560			1,446,860			0	%	3	%
Time	3,991,473			3,887,123			3,976,449			3,023,320			2,573,788			3	%	55	%
Total	$	21,137,486		$	20,892,774		$	20,744,526		$	20,106,856		$	19,948,300		1	%	6	%

Total core deposits (1)	$	18,190,402		$	18,012,992		$	17,743,888		$	18,007,169		$	18,263,802		1	%	0	%

Deposit mix:
Demand, non-interest bearing	32		%	33		%	33		%	33		%	33		%
Demand, interest bearing	11		%	11		%	11		%	12		%	12		%
Money market	31		%	30		%	30		%	33		%	35		%
Savings	7		%	7		%	7		%	7		%	7		%
Time	19		%	19		%	19		%	15		%	13		%
Total	100		%	100		%	100		%	100		%	100		%

Number of open accounts:
Demand, non-interest bearing	406,240			404,913			402,771			399,721			397,427
Demand, interest bearing	77,099			77,546			77,918			78,181			78,853
Money market	56,196			55,895			55,393			54,752			55,175
Savings	161,656			162,387			162,414			162,841			162,453
Time	54,388			52,482			51,073			48,529			46,861
Total	755,579			753,223			749,569			744,024			740,769

Average balance per account:
Demand, non-interest bearing	$	16.4		$	16.9		$	16.9		$	16.8		$	16.4
Demand, interest bearing	30.4			29.9			29.8			30.1			30.2
Money market	118.3			113.2			111.2			119.6			127.6
Savings	9.2			9.2			9.0			9.1			8.9
Time	73.4			74.1			77.9			62.3			54.9
Total	$	28.0		$	27.7		$	27.7		$	27.0		$	26.9

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

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 12



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

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Seq. Quarter		Year over Year
Non-performing assets:
Loans and leases on non-accrual status	$	50,823		$	54,059		$	43,392		$	45,702		$	51,355		(6	)%	(1	)%
Loans and leases past due 90+ days and accruing (1)	36,444			33,812			34,535			25,456			30,963			8	%	18	%
Total non-performing loans and leases	87,267			87,871			77,927			71,158			82,318			(1	)%	6	%
Other real estate owned	10,958			11,774			12,101			13,055			11,734			(7	)%	(7	)%
Total non-preforming assets	$	98,225		$	99,645		$	90,028		$	84,213		$	94,052		(1	)%	4	%

Performing restructured loans and leases	$	13,924		$	14,531		$	27,167		$	31,677		$	32,168		(4	)%	(57	)%
Loans and leases past due 31-89 days	$	37,373		$	33,825		$	44,734		$	38,569		$	43,853		10	%	(15	)%
Loans and leases past due 31-89 days to total loans and leases	0.18		%	0.17		%	0.23		%	0.20		%	0.23		%
Non-performing loans and leases to total loans and leases (1)	0.43		%	0.44		%	0.40		%	0.37		%	0.43		%
Non-performing assets to total assets (1)	0.36		%	0.37		%	0.34		%	0.33		%	0.37		%


(1)	Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $8.9 million, $8.0 million, $9.2 million, $6.3 million, and $12.4 million at December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 13



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Seq. Quarter		Year over Year
Allowance for loan and lease losses:
Balance beginning of period	$	144,026		$	144,556		$	141,933		$	140,608		$	139,503
Provision for loan and lease losses	17,219			11,711			13,319			13,656			12,928			47	%	33	%
Charge-offs	(19,527		)	(15,896		)	(14,815		)	(15,812		)	(15,751		)	23	%	24	%
Recoveries	3,153			3,655			4,119			3,481			3,928			(14	)%	(20	)%
Net charge-offs	(16,374		)	(12,241		)	(10,696		)	(12,331		)	(11,823		)	34	%	38	%
Total allowance for loan and lease losses	144,871			144,026			144,556			141,933			140,608			1	%	3	%
Reserve for unfunded commitments	4,523			4,294			4,130			4,129			3,963			5	%	14	%
Total allowance for credit losses	$	149,394		$	148,320		$	148,686		$	146,062		$	144,571		1	%	3	%

Net charge-offs to average loans and leases (annualized)	0.32		%	0.25		%	0.22		%	0.26		%	0.25		%
Recoveries to gross charge-offs	16.15		%	22.99		%	27.80		%	22.01		%	24.94		%
Allowance for loan and lease losses to loans and leases	0.71		%	0.73		%	0.74		%	0.74		%	0.74		%
Allowance for credit losses to loans and leases	0.73		%	0.75		%	0.76		%	0.76		%	0.76		%



Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
	Year Ended						% Change
(Dollars in thousands)	Dec 31, 2018			Dec 31, 2017			Year over Year
Allowance for credit losses:
Balance beginning of period	$	140,608		$	133,984
Provision for loan and lease losses	55,905			47,254			18	%
Charge-offs	(66,050		)	(55,919		)	18	%
Recoveries	14,408			15,289			(6	)%
Net charge-offs	(51,642		)	(40,630		)	27	%
Total allowance for loan and lease losses	144,871			140,608			3	%
Reserve for unfunded commitments	4,523			3,963			14	%
Total allowance for credit losses	$	149,394		$	144,571		3	%

Net charge-offs to average loans and leases	0.26		%	0.22		%
Recoveries to gross charge-offs	21.81		%	27.34		%

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 14



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Quarter Ended										% Change
	Dec 31, 2018		Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Seq. Quarter		Year over Year
Average Rates:
Yield on loans held for sale	5.81	%	5.27	%	4.86	%	4.21	%	3.99	%	0.54		1.82
Yield on loans and leases	4.97	%	4.89	%	4.91	%	4.80	%	4.72	%	0.08		0.25
Yield on taxable investments	4.11	%	3.72	%	1.31	%	2.31	%	2.17	%	0.39		1.94
Yield on tax-exempt investments (1)	3.70	%	3.61	%	3.64	%	3.68	%	4.49	%	0.09		(0.79	)
Yield on interest bearing cash and temporary investments	2.25	%	1.99	%	1.82	%	1.55	%	1.22	%	0.26		1.03
Total yield on earning assets (1)	4.81	%	4.67	%	4.41	%	4.43	%	4.31	%	0.14		0.50

Cost of interest bearing deposits	0.85	%	0.73	%	0.62	%	0.47	%	0.40	%	0.12		0.45
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.26	%	0.15	%	0.22	%	0.08	%	0.06	%	0.11		0.20
Cost of term debt	1.75	%	1.73	%	1.74	%	1.70	%	1.67	%	0.02		0.08
Cost of junior subordinated debentures	6.13	%	6.06	%	5.89	%	5.36	%	5.11	%	0.07		1.02
Total cost of interest bearing liabilities	1.00	%	0.90	%	0.80	%	0.65	%	0.58	%	0.10		0.42

Net interest spread (1)	3.81	%	3.77	%	3.61	%	3.78	%	3.73	%	0.04		0.08
Net interest margin (1)	4.15	%	4.09	%	3.89	%	4.00	%	3.93	%	0.06		0.22

Performance Ratios:
Return on average assets	1.19	%	1.36	%	1.02	%	1.25	%	1.17	%	(0.17	)	0.02
Return on average tangible assets	1.28	%	1.46	%	1.09	%	1.35	%	1.26	%	(0.18	)	0.02
Return on average common equity	7.90	%	9.00	%	6.64	%	8.06	%	7.54	%	(1.10	)	0.36
Return on average tangible common equity	14.34	%	16.42	%	12.18	%	14.84	%	13.93	%	(2.08	)	0.41
Efficiency ratio – Consolidated	58.58	%	57.06	%	65.84	%	61.21	%	65.46	%	1.52		(6.88	)
Efficiency ratio – Bank	57.67	%	54.70	%	63.04	%	59.24	%	61.61	%	2.97		(3.94	)

(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 Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 15



Umpqua Holdings Corporation
Selected Ratios
(Unaudited)

	Year Ended				% Change
	Dec 31, 2018		Dec 31, 2017		Year over Year
Average Rates:
Yield on loans held for sale	5.02	%	3.75	%	1.27
Yield on loans and leases	4.90	%	4.72	%	0.18
Yield on taxable investments	2.86	%	2.09	%	0.77
Yield on tax-exempt investments (1)	3.66	%	4.62	%	(0.96	)
Yield on temporary investments and interest bearing cash	1.94	%	1.04	%	0.90
Total yield on earning assets (1)	4.59	%	4.29	%	0.30

Cost of interest bearing deposits	0.67	%	0.35	%	0.32
Cost of securities sold under agreements
to repurchase and fed funds purchased	0.18	%	0.14	%	0.04
Cost of term debt	1.73	%	1.67	%	0.06
Cost of junior subordinated debentures	5.86	%	4.93	%	0.93
Total cost of interest bearing liabilities	0.84	%	0.53	%	0.31

Net interest spread (1)	3.75	%	3.76	%	(0.01	)
Net interest margin (1)	4.04	%	3.94	%	0.10

Performance Ratios:
Return on average assets	1.21	%	0.97	%	0.24
Return on average tangible assets	1.30	%	1.04	%	0.26
Return on average common equity	7.90	%	6.17	%	1.73
Return on average tangible common equity	14.45	%	11.49	%	2.96
Efficiency ratio – Consolidated	60.61	%	65.11	%	(4.50	)
Efficiency ratio – Bank	58.60	%	62.48	%	(3.88	)

(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 Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 16



Umpqua Holdings Corporation Average Balances
(Unaudited)

	Quarter Ended								% Change
(Dollars in thousands)	Dec 31, 2018	Sep 30, 2018	Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Seq. Quarter		Year over Year
Temporary investments and interest bearing cash	462,621	558,597	$	458,133	$	303,670	$	509,187	(17	)%	(9	)%
Investment securities, taxable	2,716,616	2,687,635	2,723,406		2,793,449		2,804,530		1	%	(3	)%
Investment securities, tax-exempt	282,998	278,937	279,158		286,603		286,345		1	%	(1	)%
Loans held for sale	238,958	320,494	326,427		267,231		370,564		(25	)%	(36	)%
Loans and leases	20,051,674	19,709,113	19,387,537		19,089,713		18,703,202		2	%	7	%
Total interest earning assets	23,752,867	23,554,776	23,174,661		22,740,666		22,673,828		1	%	5	%
Goodwill and other intangible assets, net	1,812,487	1,814,000	1,815,529		1,817,068		1,818,730		0	%	0	%
Total assets	26,672,224	26,461,526	26,076,142		25,625,869		25,599,516		1	%	4	%

Non-interest bearing demand deposits	6,828,730	6,865,676	6,645,689		6,450,364		6,611,493		(1	)%	3	%
Interest bearing deposits	14,138,852	13,897,141	13,745,089		13,492,965		13,281,502		2	%	6	%
Total deposits	20,967,582	20,762,817	20,390,778		19,943,329		19,892,995		1	%	5	%
Interest bearing liabilities	15,547,250	15,331,529	15,199,900		14,971,759		14,790,883		1	%	5	%

Shareholders’ equity - common	4,035,125	4,011,856	3,988,825		3,974,788		3,960,987		1	%	2	%
Tangible common equity (1)	2,222,638	2,197,856	2,173,296		2,157,720		2,142,257		1	%	4	%



Umpqua Holdings Corporation Average Balances
(Unaudited)
	Year Ended				% Change
(Dollars in thousands)	Dec 31, 2018		Dec 31, 2017		Year over Year
Temporary investments and interest bearing cash	$	446,500	$	421,836	6	%
Investment securities, taxable	2,729,950		2,851,136		(4	)%
Investment securities, tax-exempt	281,906		286,605		(2	)%
Loans held for sale	288,288		383,802		(25	)%
Loans and leases	19,562,369		18,169,449		8	%
Total interest earning assets	23,309,013		22,112,828		5	%
Goodwill and other intangible assets, net	1,814,756		1,821,223		0	%
Total assets	26,210,933		25,074,144		5	%

Non-interest bearing demand deposits	6,699,112		6,202,835		8	%
Interest bearing deposits	13,820,497		13,148,903		5	%
Total deposits	20,519,609		19,351,738		6	%
Interest bearing liabilities	15,264,375		14,704,841		4	%

Shareholders’ equity - common	4,002,700		3,929,566		2	%
Tangible common equity (1)	2,187,944		2,108,343		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 Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 17



Umpqua Holdings Corporation Average Rates and Balances
(unaudited)
(dollars in thousands)	Quarter Ended
	December 31, 2018							September 30, 2018							December 31, 2017
	Average Balance			Interest Income or Expense		Average Yields or Rates		Average Balance			Interest Income or Expense		Average Yields or Rates		Average Balance			Interest Income or Expense		Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$	238,958		$	3,473	5.81	%	$	320,494		$	4,220	5.27	%	$	370,564		$	3,696	3.99	%
Loans and leases (1)	20,051,674			250,620		4.97	%	19,709,113			242,190		4.89	%	18,703,202			221,842		4.72	%
Taxable securities	2,716,616			27,919		4.11	%	2,687,635			24,984		3.72	%	2,804,530			15,243		2.17	%
Non-taxable securities (2)	282,998			2,619		3.70	%	278,937			2,519		3.61	%	286,345			3,216		4.49	%
Temporary investments and interest-bearing cash	462,621			2,621		2.25	%	558,597			2,800		1.99	%	509,187			1,565		1.22	%
Total interest-earning assets	23,752,867			$	287,252	4.81	%	23,554,776			$	276,713	4.67	%	22,673,828			$	245,562	4.31	%
Allowance for loan and lease losses	(144,057		)					(145,873		)					(141,701		)
Other assets	3,063,414							3,052,623							3,067,389
Total assets	$	26,672,224						$	26,461,526						$	25,599,516
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$	2,319,613		$	2,659	0.45	%	$	2,369,092		$	2,241	0.38	%	$	2,351,848		$	1,215	0.21	%
Money market deposits	6,371,127			9,170		0.57	%	6,150,199			6,820		0.44	%	6,790,140			4,102		0.24	%
Savings deposits	1,488,768			490		0.13	%	1,483,687			452		0.12	%	1,439,036			253		0.07	%
Time deposits	3,959,344			17,805		1.78	%	3,894,163			16,179		1.65	%	2,700,478			7,671		1.13	%
Total interest-bearing deposits	14,138,852			30,124		0.85	%	13,897,141			25,692		0.73	%	13,281,502			13,241		0.40	%
Repurchase agreements and federal funds purchased	284,847			185		0.26	%	278,131			103		0.15	%	312,285			43		0.06	%
Term debt	751,773			3,326		1.75	%	787,074			3,439		1.73	%	829,502			3,496		1.67	%
Junior subordinated debentures	371,778			5,743		6.13	%	369,183			5,640		6.06	%	367,594			4,734		5.11	%
Total interest-bearing liabilities	15,547,250			$	39,378	1.00	%	15,331,529			$	34,874	0.90	%	14,790,883			$	21,514	0.58	%
Non-interest-bearing deposits	6,828,730							6,865,676							6,611,493
Other liabilities	261,119							252,465							236,153
Total liabilities	22,637,099							22,449,670							21,638,529
Common equity	4,035,125							4,011,856							3,960,987
Total liabilities and shareholders' equity	$	26,672,224						$	26,461,526						$	25,599,516
NET INTEREST INCOME				$	247,874						$	241,839						$	224,048
NET INTEREST SPREAD						3.81	%						3.77	%						3.73	%
AVERAGE YIELD ON EARNING ASSETS (1), (2)						4.81	%						4.67	%						4.31	%
INTEREST EXPENSE TO EARNING ASSETS						0.66	%						0.58	%						0.38	%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)						4.15	%						4.09	%						3.93	%


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


(2)	Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate for 2018 and a 35% tax rate for 2017. The amount of such adjustment was an addition to recorded income of approximately $484,000 for the three months ended December 31, 2018 as compared to $471,000 for September 30, 2018 and $1.1 million for December 31, 2017.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 18



Umpqua Holdings Corporation Average Rates and Balances
(unaudited)
(dollars in thousands)	Twelve months ended
	December 31, 2018							December 31, 2017
	Average Balance			Interest Income or Expense		Average Yields or Rates		Average Balance			Interest Income or Expense		Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$	288,288		$	14,475	5.02	%	$	383,802		$	14,374	3.75	%
Loans and leases (1)	19,562,369			957,639		4.90	%	18,169,449			856,944		4.72	%
Taxable securities	2,729,950			78,002		2.86	%	2,851,136			59,478		2.09	%
Non-taxable securities (2)	281,906			10,316		3.66	%	286,605			13,244		4.62	%
Temporary investments and interest-bearing cash	446,500			8,665		1.94	%	421,836			4,380		1.04	%
Total interest-earning assets	23,309,013			$	1,069,097	4.59	%	22,112,828			$	948,420	4.29	%
Allowance for loan and lease losses	(144,243		)					(138,587		)
Other assets	3,046,163							3,099,903
Total assets	$	26,210,933						$	25,074,144
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$	2,333,662		$	7,675	0.33	%	$	2,322,194		$	3,725	0.16	%
Money market deposits	6,438,175			27,599		0.43	%	6,741,983			13,069		0.19	%
Savings deposits	1,473,134			1,356		0.09	%	1,412,039			699		0.05	%
Time deposits	3,575,526			56,055		1.57	%	2,672,687			28,089		1.05	%
Total interest-bearing deposits	13,820,497			92,685		0.67	%	13,148,903			45,582		0.35	%
Repurchase agreements and federal funds purchased	287,767			506		0.18	%	344,200			475		0.14	%
Term debt	785,593			13,604		1.73	%	846,542			14,159		1.67	%
Junior subordinated debentures	370,518			21,715		5.86	%	365,196			18,000		4.93	%
Total interest-bearing liabilities	15,264,375			$	128,510	0.84	%	14,704,841			$	78,216	0.53	%
Non-interest-bearing deposits	6,699,112							6,202,835
Other liabilities	244,746							236,902
Total liabilities	22,208,233							21,144,578
Common equity	4,002,700							3,929,566
Total liabilities and shareholders' equity	$	26,210,933						$	25,074,144
NET INTEREST INCOME				$	940,587						$	870,204
NET INTEREST SPREAD						3.75	%						3.76	%
AVERAGE YIELD ON EARNING ASSETS (1), (2)						4.59	%						4.29	%
INTEREST EXPENSE TO EARNING ASSETS						0.55	%						0.35	%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)						4.04	%						3.94	%


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


(2)	Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate for 2018 and a 35% tax rate for 2017. The amount of such adjustment was an addition to recorded income of approximately $1.9 million for the twelve months ended December 31, 2018 as compared to $4.5 million for the same period in 2017.

Umpqua Reports Fourth Quarter and Full-Year 2018 Results

January 23, 2019

Page 19



Umpqua Holdings Corporation Residential Mortgage Banking Activity
(unaudited)

	Quarter Ended															% Change
(Dollars in thousands)	Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Seq. Quarter		Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others	$	15,978,885		$	15,810,455		$	15,508,182		$	15,442,915		$	15,336,597		1	%	4	%
MSR asset, at fair value	169,025			175,038			166,217			164,760			153,151			(3	)%	10	%
MSR as % of serviced portfolio	1.06		%	1.11		%	1.07		%	1.07		%	1.00		%
Residential mortgage banking revenue:
Origination and sale	$	16,665		$	20,983		$	28,159		$	22,837		$	29,864		(21	)%	(44	)%
Servicing	11,555			10,302			10,407			10,522			10,287			12	%	12	%
Change in fair value of MSR asset	(13,070		)	199			(5,403		)	5,079			1,967			nm		(764	)%
Total	$	15,150		$	31,484		$	33,163		$	38,438		$	42,118		(52	)%	(64	)%

Closed loan volume:
Closed loan volume - portfolio	$	312,524		$	323,941		$	294,581		$	237,783		$	265,718		(4	)%	18	%
Closed loan volume - for-sale	589,355			756,924			839,489			687,226			850,453			(22	)%	(31	)%
Closed loan volume - total	$	901,879		$	1,080,865		$	1,134,070		$	925,009		$	1,116,171		(17	)%	(19	)%

Gain on sale margin:
Based on for-sale volume	2.83		%	2.77		%	3.35		%	3.32		%	3.51		%	0.06		(0.68	)

	Year Ended						% Change
	Dec 31, 2018			Dec 31, 2017			Year over Year
Residential mortgage banking revenue:
Origination and sale	$	88,644		$	119,680		(26		)%
Servicing	42,786			39,863			7		%
Change in fair value of MSR asset	(13,195		)	(23,267		)	(43		)%
Total	$	118,235		$	136,276		(13		)%

Closed loan volume:
Closed loan volume - portfolio	$	1,168,829		$	1,159,436		1		%
Closed loan volume - for-sale	2,872,994			3,414,431			(16		)%
Closed loan volume - total	$	4,041,823		$	4,573,867		(12		)%

Gain on sale margin:
Based on for-sale volume	3.09		%	3.51		%	(0.42		)

nm = not meaningful

###

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UMPQUA HOLDINGS CORP Reports