Attached files
| file | filename |
|---|---|
| EX-99.2 - THIRD QUARTER INVESTOR PRESENTATION - UMPQUA HOLDINGS CORP | umpqq32020earningspresen.htm |
| 8-K - 8-K - UMPQUA HOLDINGS CORP | umpq-20201021.htm |
EXHIBIT 99.1
Contacts:
| Ron Farnsworth | Drew Anderson | ||||
| EVP/Chief Financial Officer | SVP/Investor Relations Director | ||||
| Umpqua Holdings Corporation | Umpqua Holdings Corporation | ||||
| 503-727-4108 | 503-727-4192 | ||||
| ronfarnsworth@umpquabank.com | drewanderson@umpquabank.com | ||||
UMPQUA REPORTS THIRD QUARTER 2020 RESULTS
Third quarter 2020 net income of $124.9 million, or $0.57 per common share
Mortgage production volume of $2.2 billion and gain on sale of 5.13%
Loans currently on deferral decreased to 2.3% of total portfolio
Launched Next Gen 2.0 with focus on growth, technology investments, and operational excellence initiatives
PORTLAND, Ore. – October 21, 2020 – Umpqua Holdings Corporation (NASDAQ: UMPQ) (the “Company”) reported net income of $124.9 million for the third quarter of 2020, compared to $52.9 million for the second quarter of 2020 and $84.5 million for the third quarter of 2019. Earnings per diluted common share were $0.57 for the third quarter of 2020, compared to $0.24 for the second quarter of 2020 and $0.38 for the third quarter of 2019.
"Umpqua’s third quarter results represent a record level of net income driven by another outstanding performance by our home lending division who generated production of $2.2 billion this past quarter and by a continued decline in our cost of interest bearing deposits. In addition, we remain confident in the credit quality of our loan portfolio as our current deferral levels decreased to 2.3%.” said Cort O’Haver, president and CEO of Umpqua Holdings Corporation. "We launched Next Gen 2.0 this quarter as a continuation of the great progress we have made these past three years modernizing the bank, advancing technology initiatives and improving operating leverage."
Ongoing impact of COVID-19 on our business operations:
•Operations have been modified to comply with multiple state-level proclamations and Center for Disease Control and Prevention (CDC) guidance and best practices; we continue to:
◦restrict travel.
◦maintain a remote work program for associates other than store associates and small groups of other functions that cannot be completed remotely. About 90% of our non-store associates are operating remotely.
◦transitioned store operations to restrict lobby access and serve customers in-store by appointment only which has allowed over 94% of stores on any given day to remain open throughout the crisis.
◦increased cleaning scope and frequency at our store locations and installed other protective devices for our associates and customers.
•Mobile banking usage trends are up 9% and unique sessions are up 7% year over year in addition to an expected decline in store transactions of over 27%.
•Continue to offer our Umpqua Go-To® application with over 70,000 customers using the application. Go-To usage increased 38% from the prior quarter levels as customers used the platform as a safe and effective way of conducting banking.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 2
•We enhanced associate benefits, including:
◦supplemental front line associate pay.
◦pandemic pay bank for associates needing additional paid time off due to COVID-19 impacts.
◦flexible work rotations and remote work for higher-risk associates.
•Active participant in PPP, including:
◦over 16,900 PPP loans produced.
◦$2.05 billion in total loans were funded.
◦average loan size was $121,000.
•Addressing other customer needs during pandemic:
◦payment deferrals.
◦waiving deferral associated fees.
◦ATM fee waivers.
•Enhanced community support:
◦announced a total of $3.0 million in combined grants and investments to organizations providing COVID-19 community relief and small business microloans.
◦initiated virtual volunteerism program.
◦activated an associate 3:1 giving match to donations.
Notable items that impacted the third quarter 2020 financial results included:
•Provision for credit losses decreased by $87.4 million as compared to the previous quarter and $23.6 million as compared to the same period of the prior year, due to changes in loan portfolio mix and balances as well as the stabilization of credit quality metrics and economic forecasts used in credit models.
•$12.2 million loss on the fair value change of the mortgage servicing rights (MSR) asset due to changes in model inputs compared to a $6.4 million loss in the prior quarter and a $11.0 million gain in the same period of the prior year.
•$1.8 million gain related to the fair value of the debt capital market swap derivatives, compared to a loss of $0.8 million in the prior quarter and a loss of $4.6 million in the same period of the prior year.
Third Quarter 2020 Highlights (compared to prior quarter):
•Net interest income increased by $4.1 million on a quarter to quarter basis primarily driven by lower costs of interest-bearing deposits;
•Provision for credit losses decreased by $87.4 million due to changes in loan portfolio mix and balances as well as the stabilization of credit quality metrics and economic forecasts used in credit models;
•Net charge-offs decreased by five basis points to 0.24% of average loans and leases (annualized);
•Non-interest income increased by $16.4 million, driven primarily by an increase in net mortgage banking revenue and the sale of three store locations completed during the quarter;
•Non-interest expense increased by $8.3 million, primarily due to an increase in group insurance costs, lower deferred origination costs, higher mortgage commissions due to strong mortgage production, and higher other expenses, partially offset by lower FDIC assessment costs;
•Non-performing assets to total assets increased two basis points to 0.27% from 0.25%;
•Estimated total risk-based capital ratio of 14.9% and estimated Tier 1 common to risk weighted assets ratio of 11.6%;
•Paid a quarterly cash dividend of $0.21 per common share on August 31, 2020 to shareholders of record as of August 20, 2020.
Balance Sheet
Total consolidated assets were $29.4 billion as of September 30, 2020, compared to $29.6 billion as of June 30, 2020 and $28.9 billion as of September 30, 2019. Including secured off-balance sheet lines of credit, total available liquidity was $11.2 billion as of September 30, 2020, representing 38% of total assets and 45% of total deposits.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 3
Gross loans and leases were $22.4 billion as of September 30, 2020, a decrease of $245.0 million relative to June 30, 2020. The decrease in gross loans and leases is primarily due to the payoffs in commercial real estate that occurred during the quarter as well as a decrease in utilization rates of commercial lines of credit. Please refer to the additional loan tables in the Q3 2020 Earnings Presentation for select underwriting characteristics of the loan portfolio and specific industry concentrations impacted by COVID-19.
Total deposits were $24.7 billion as of September 30, 2020, a decrease of $174.6 million from $24.8 billion as of June 30, 2020. This decrease was attributable to a decline in time deposits of $612.5 million partially offset by growth in non-interest bearing demand deposits of $303.0 million.
Net Interest Income
Net interest income was $216.6 million for the third quarter of 2020, up $4.1 million from the prior quarter. The increase was primarily driven by lower costs of interest bearing deposits compared to the previous quarter.
The Company's net interest margin was 3.08% for the third quarter of 2020, down one basis point from 3.09% for the second quarter of 2020 primarily driven by lower yields on loans held for investment offset by lower costs of interest bearing deposits.
Credit Quality
The allowance for credit losses was $369.4 million, or 1.65% of loans and leases, as of September 30, 2020, which was down from $383.1 million, or 1.69% of loans and leases, as of June 30, 2020. The provision for credit losses decreased by $87.4 million from the prior quarter level primarily due to changes in portfolio mix and balances as well as the stabilization of credit quality metrics and economic forecasts used in credit models.
Net charge-offs as a percentage of average loans and leases decreased by five basis points to 0.24% of average loans and leases (annualized) as of September 30, 2020. The decrease in net charge-offs for the quarter was primarily due to continued, stable credit performance of the loan portfolio in addition to a select amount of borrowers using available deferral options. As of September 30, 2020, non-performing assets were 0.27% of total assets, compared to 0.25% as of June 30, 2020 and 0.25% as of September 30, 2019.
Current Expected Credit Loss (CECL)
As described in our first quarter 2020 quarterly report on Form 10-Q filed on May 7, 2020 ("Q1 2020 10-Q"), on January 1, 2020, we adopted Accounting Standards Update No. 2016-13, Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). In applying CECL, our financial results are affected as soon as weak or deteriorating economic conditions are forecasted which alters our expectations for credit losses. In addition, due to the expansion of the time horizon over which we are required to estimate future credit losses under CECL, we may experience increased volatility in our future provisions for credit losses. Specifically, we use credit models that factor in economic forecasts, which at the beginning of the COVID-19 pandemic projected significant, negative COVID-19 impacts to the economy; therefore we recorded significant provisions for credit losses in the first and second quarters of 2020. As those future economic forecasts have stabilized, we recorded a small recapture of the allowance for credit losses in the current period.
Non-interest Income
Non-interest income was $131.9 million for the third quarter of 2020, up $16.4 million from the prior quarter driven primarily by the increase in net mortgage banking revenue and the sale of three store locations completed during the period.
Revenue from the origination and sale of residential mortgages was $98.7 million for the third quarter of 2020, an increase of $11.9 million from the prior quarter. This increase reflects a sequential quarter increase of $96.7 million or 5% in for-sale mortgage origination volume and an increase of 38 basis points in the home lending gain on sale margin to 5.13% for the third quarter of 2020. Of the current quarter's mortgage production, 46% related to purchase activity, compared to 34% for the prior quarter and 60% for the same period of the prior year.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 4
Non-interest Expense
Non-interest expense was $190.2 million for the third quarter of 2020, up $8.3 million from the prior quarter level. This increase was primarily due to higher group insurance costs, lower deferred origination costs, higher mortgage commissions due to strong mortgage production, and higher other expenses, partially offset by lower FDIC assessment costs.
Goodwill
As described in our Q1 2020 10-Q, the Company completed the analysis of goodwill prior to filing the Q1 2020 10-Q with the Securities and Exchange Commission. The Company updated its goodwill assessment for the Wholesale Bank and Retail Bank reporting units as of March 31, 2020, due to events and circumstances indicating potential impairment. Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. A goodwill impairment is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Upon completing the quantitative impairment analysis, the Company recorded a goodwill impairment of $1.8 billion during the first quarter, which represented the entire amount of goodwill allocated to the Wholesale Bank and Retail Bank reporting units. The remaining goodwill of $2.7 million after the impairment relates to the Wealth Management reporting unit. The goodwill impairment was material to reported earnings in the first quarter, but was a non-cash charge and had no effect on the Company’s cash balances, liquidity or tangible equity. In addition, because goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company’s well-capitalized regulatory capital ratios were not impacted by the impairment.
Capital
As of September 30, 2020, the Company's tangible book value per common share1 was $11.77, compared to $11.44 in the prior quarter and $11.27 in the same period of the prior year.
The Company's estimated total risk-based capital ratio was 14.9% and its estimated Tier 1 common to risk weighted
assets ratio was 11.6% as of September 30, 2020. The Company remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of September 30, 2020 are estimates, pending completion and filing of the Company's regulatory reports.
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide investors with information useful in understanding the Company's financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.
Management believes tangible common equity and the tangible common equity ratio are useful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders' equity divided by tangible assets.
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.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 5
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) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |||||||||||||||||||||||||||
| Total shareholders' equity | $ | 2,610,244 | $ | 2,538,339 | $ | 2,507,611 | $ | 4,313,915 | $ | 4,289,516 | ||||||||||||||||||||||
| Subtract: | ||||||||||||||||||||||||||||||||
| Goodwill | 2,715 | 2,715 | 2,715 | 1,787,651 | 1,787,651 | |||||||||||||||||||||||||||
| Other intangible assets, net | 14,606 | 15,853 | 17,099 | 18,346 | 19,750 | |||||||||||||||||||||||||||
| Tangible common shareholders' equity | $ | 2,592,923 | $ | 2,519,771 | $ | 2,487,797 | $ | 2,507,918 | $ | 2,482,115 | ||||||||||||||||||||||
| Total assets | $ | 29,437,441 | $ | 29,645,248 | $ | 27,540,382 | $ | 28,846,809 | $ | 28,930,855 | ||||||||||||||||||||||
| Subtract: | ||||||||||||||||||||||||||||||||
| Goodwill | 2,715 | 2,715 | 2,715 | 1,787,651 | 1,787,651 | |||||||||||||||||||||||||||
| Other intangible assets, net | 14,606 | 15,853 | 17,099 | 18,346 | 19,750 | |||||||||||||||||||||||||||
| Tangible assets | $ | 29,420,120 | $ | 29,626,680 | $ | 27,520,568 | $ | 27,040,812 | $ | 27,123,454 | ||||||||||||||||||||||
| Common shares outstanding at period end | 220,222 | 220,219 | 220,175 | 220,229 | 220,212 | |||||||||||||||||||||||||||
| Total shareholders' equity to total assets ratio | 8.87 | % | 8.56 | % | 9.11 | % | 14.95 | % | 14.83 | % | ||||||||||||||||||||||
| Tangible common equity ratio | 8.81 | % | 8.51 | % | 9.04 | % | 9.27 | % | 9.15 | % | ||||||||||||||||||||||
| Book value per common share | $ | 11.85 | $ | 11.53 | $ | 11.39 | $ | 19.59 | $ | 19.48 | ||||||||||||||||||||||
| Tangible book value per common share | $ | 11.77 | $ | 11.44 | $ | 11.30 | $ | 11.39 | $ | 11.27 | ||||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
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 third quarter 2020 earnings conference call on October 22, 2020, 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 third quarter 2020 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (866) 440-7407 ten minutes prior to the start time and enter conference ID: 4653597. A re-broadcast will be available approximately two hours after the call by dialing (855) 859-2056 and entering conference ID 4653597. The earnings conference call will also be available as an audio cast, 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. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In this press release we make forward-looking statements about Next Gen 2.0 initiatives, the projected impact on our business operations of the COVID-19 global pandemic and future credit losses under CECL. 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: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, and any slowdown in economic growth particularly in the western United States; the effect of the COVID-19 pandemic, including on our credit quality, deferral programs, and business operations, as well as its impact on general economic and financial market conditions; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that exceeds current consensus estimates; our ability to effectively manage problem credits; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 7
| Umpqua Holdings Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | ||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||||||||||||||
| Loans and leases | $ | 229,457 | $ | 235,174 | $ | 245,993 | $ | 262,109 | $ | 266,111 | (2) | % | (14) | % | |||||||||||||||||||||||||||
| Interest and dividends on investments: | |||||||||||||||||||||||||||||||||||||||||
| Taxable | 10,168 | 9,015 | 16,605 | 13,361 | 12,546 | 13 | % | (19) | % | ||||||||||||||||||||||||||||||||
| Exempt from federal income tax | 1,490 | 1,520 | 1,562 | 1,638 | 1,727 | (2) | % | (14) | % | ||||||||||||||||||||||||||||||||
| Dividends | 710 | 568 | 678 | 579 | 599 | 25 | % | 19 | % | ||||||||||||||||||||||||||||||||
| Temporary investments and interest bearing deposits | 474 | 403 | 3,331 | 4,343 | 4,204 | 18 | % | (89) | % | ||||||||||||||||||||||||||||||||
| Total interest income | 242,299 | 246,680 | 268,169 | 282,030 | 285,187 | (2) | % | (15) | % | ||||||||||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||||||||||||||
| Deposits | 19,121 | 26,222 | 40,290 | 44,380 | 45,876 | (27) | % | (58) | % | ||||||||||||||||||||||||||||||||
| Securities sold under agreement to repurchase and federal funds purchased | 84 | 194 | 395 | 431 | 448 | (57) | % | (81) | % | ||||||||||||||||||||||||||||||||
| Borrowings | 3,271 | 3,839 | 4,046 | 5,080 | 4,238 | (15) | % | (23) | % | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 3,249 | 3,922 | 4,903 | 5,325 | 5,652 | (17) | % | (43) | % | ||||||||||||||||||||||||||||||||
| Total interest expense | 25,725 | 34,177 | 49,634 | 55,216 | 56,214 | (25) | % | (54) | % | ||||||||||||||||||||||||||||||||
| Net interest income | 216,574 | 212,503 | 218,535 | 226,814 | 228,973 | 2 | % | (5) | % | ||||||||||||||||||||||||||||||||
| (Recapture) provision for credit losses | (338) | 87,085 | 118,085 | 16,252 | 23,227 | (100) | % | (101) | % | ||||||||||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||||||||||||||
| Service charges on deposits | 14,438 | 11,831 | 15,638 | 16,656 | 16,627 | 22 | % | (13) | % | ||||||||||||||||||||||||||||||||
| Brokerage revenue | 3,686 | 3,805 | 4,015 | 4,027 | 4,060 | (3) | % | (9) | % | ||||||||||||||||||||||||||||||||
| Residential mortgage banking revenue, net | 90,377 | 83,877 | 17,540 | 34,050 | 47,000 | 8 | % | 92 | % | ||||||||||||||||||||||||||||||||
| Gain (loss) on sale of debt securities, net | — | 323 | (133) | 2 | — | (100) | % | nm | |||||||||||||||||||||||||||||||||
| (Loss) gain on equity securities, net | (112) | 240 | 814 | (84) | 257 | (147) | % | (144) | % | ||||||||||||||||||||||||||||||||
| Gain on loan and lease sales, net | 1,092 | 1,074 | 1,167 | 4,603 | 1,762 | 2 | % | (38) | % | ||||||||||||||||||||||||||||||||
| BOLI income | 2,087 | 2,116 | 2,129 | 2,078 | 2,067 | (1) | % | 1 | % | ||||||||||||||||||||||||||||||||
| Other income (expense) | 20,356 | 12,214 | (525) | 22,417 | 16,739 | 67 | % | 22 | % | ||||||||||||||||||||||||||||||||
| Total non-interest income | 131,924 | 115,480 | 40,645 | 83,749 | 88,512 | 14 | % | 49 | % | ||||||||||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 120,337 | 116,676 | 109,774 | 108,847 | 106,819 | 3 | % | 13 | % | ||||||||||||||||||||||||||||||||
| Occupancy and equipment, net | 36,720 | 36,171 | 37,001 | 36,513 | 35,446 | 2 | % | 4 | % | ||||||||||||||||||||||||||||||||
| Intangible amortization | 1,247 | 1,246 | 1,247 | 1,404 | 1,405 | 0 | % | (11) | % | ||||||||||||||||||||||||||||||||
| FDIC assessments | 2,989 | 3,971 | 2,542 | 2,867 | 2,587 | (25) | % | 16 | % | ||||||||||||||||||||||||||||||||
| Goodwill impairment | — | — | 1,784,936 | — | — | nm | nm | ||||||||||||||||||||||||||||||||||
| Other expenses | 28,914 | 23,846 | 27,158 | 33,812 | 37,333 | 21 | % | (23) | % | ||||||||||||||||||||||||||||||||
| Total non-interest expense | 190,207 | 181,910 | 1,962,658 | 183,443 | 183,590 | 5 | % | 4 | % | ||||||||||||||||||||||||||||||||
| Income (loss) before provision for income taxes | 158,629 | 58,988 | (1,821,563) | 110,868 | 110,668 | 169 | % | 43 | % | ||||||||||||||||||||||||||||||||
| Provision for income taxes | 33,758 | 6,062 | 30,384 | 27,118 | 26,166 | 457 | % | 29 | % | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 124,871 | $ | 52,926 | $ | (1,851,947) | $ | 83,750 | $ | 84,502 | 136 | % | 48 | % | |||||||||||||||||||||||||||
| Weighted average basic shares outstanding | 220,221 | 220,210 | 220,216 | 220,222 | 220,285 | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | 220,418 | 220,320 | 220,216 | 220,671 | 220,583 | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| Earnings (loss) per common share – basic | $ | 0.57 | $ | 0.24 | $ | (8.41) | $ | 0.38 | $ | 0.38 | 138 | % | 50 | % | |||||||||||||||||||||||||||
| Earnings (loss) per common share – diluted | $ | 0.57 | $ | 0.24 | $ | (8.41) | $ | 0.38 | $ | 0.38 | 138 | % | 50 | % | |||||||||||||||||||||||||||
| nm = not meaningful | |||||||||||||||||||||||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 8
| Umpqua Holdings Corporation | ||||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Nine Months Ended | % Change | |||||||||||||||||||
| (In thousands, except per share data) | Sep 30, 2020 | Sep 30, 2019 | Year over Year | |||||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans and leases | $ | 710,624 | $ | 788,968 | (10) | % | ||||||||||||||
| Interest and dividends on investments: | ||||||||||||||||||||
| Taxable | 35,788 | 42,789 | (16) | % | ||||||||||||||||
| Exempt from federal income tax | 4,572 | 5,762 | (21) | % | ||||||||||||||||
| Dividends | 1,956 | 1,690 | 16 | % | ||||||||||||||||
| Temporary investments and interest bearing deposits | 4,208 | 9,837 | (57) | % | ||||||||||||||||
| Total interest income | 757,148 | 849,046 | (11) | % | ||||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 85,633 | 123,561 | (31) | % | ||||||||||||||||
| Securities sold under agreement to repurchase and federal funds purchased | 673 | 1,661 | (59) | % | ||||||||||||||||
| Borrowings | 11,156 | 12,484 | (11) | % | ||||||||||||||||
| Junior subordinated debentures | 12,074 | 17,520 | (31) | % | ||||||||||||||||
| Total interest expense | 109,536 | 155,226 | (29) | % | ||||||||||||||||
| Net interest income | 647,612 | 693,820 | (7) | % | ||||||||||||||||
| Provision for credit losses | 204,832 | 56,263 | 264 | % | ||||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Service charges on deposits | 41,907 | 47,858 | (12) | % | ||||||||||||||||
| Brokerage revenue | 11,506 | 11,850 | (3) | % | ||||||||||||||||
| Residential mortgage banking revenue, net | 191,794 | 67,760 | 183 | % | ||||||||||||||||
| Gain (loss) on sale of debt securities, net | 190 | (7,186) | (103) | % | ||||||||||||||||
| Gain on equity securities, net | 942 | 83,559 | (99) | % | ||||||||||||||||
| Gain on loan and lease sales, net | 3,333 | 5,864 | (43) | % | ||||||||||||||||
| BOLI income | 6,332 | 6,328 | 0 | % | ||||||||||||||||
| Other income | 32,045 | 40,042 | (20) | % | ||||||||||||||||
| Total non-interest income | 288,049 | 256,075 | 12 | % | ||||||||||||||||
| Non-interest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 346,787 | 311,526 | 11 | % | ||||||||||||||||
| Occupancy and equipment, net | 109,892 | 107,723 | 2 | % | ||||||||||||||||
| Intangible amortization | 3,740 | 4,214 | (11) | % | ||||||||||||||||
| FDIC assessments | 9,502 | 8,366 | 14 | % | ||||||||||||||||
| Goodwill impairment | 1,784,936 | — | nm | |||||||||||||||||
| Other expenses | 79,918 | 103,768 | (23) | % | ||||||||||||||||
| Total non-interest expense | 2,334,775 | 535,597 | 336 | % | ||||||||||||||||
| (Loss) income before provision for income taxes | (1,603,946) | 358,035 | (548) | % | ||||||||||||||||
| Provision for income taxes | 70,204 | 87,690 | (20) | % | ||||||||||||||||
| Net (loss) income | $ | (1,674,150) | $ | 270,345 | (719) | % | ||||||||||||||
| Weighted average basic shares outstanding | 220,216 | 220,379 | 0 | % | ||||||||||||||||
| Weighted average diluted shares outstanding | 220,216 | 220,642 | 0 | % | ||||||||||||||||
| (Loss) earnings per common share – basic | $ | (7.60) | $ | 1.23 | (718) | % | ||||||||||||||
| (Loss) earnings per common share – diluted | $ | (7.60) | $ | 1.23 | (718) | % | ||||||||||||||
| nm = not meaningful | ||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 9
| Umpqua Holdings Corporation Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| % Change | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 370,595 | $ | 410,769 | $ | 406,426 | $ | 382,598 | $ | 433,620 | (10) | % | (15) | % | |||||||||||||||||||||||||||
| Interest bearing cash and temporary investments | 1,849,132 | 1,853,505 | 1,251,290 | 980,158 | 757,824 | 0 | % | 144 | % | ||||||||||||||||||||||||||||||||
| Investment securities: | |||||||||||||||||||||||||||||||||||||||||
| Equity and other, at fair value | 82,769 | 81,958 | 80,797 | 80,165 | 64,764 | 1 | % | 28 | % | ||||||||||||||||||||||||||||||||
| Available for sale, at fair value | 2,898,700 | 2,865,690 | 2,890,475 | 2,814,682 | 2,842,076 | 1 | % | 2 | % | ||||||||||||||||||||||||||||||||
| Held to maturity, at amortized cost | 3,088 | 3,143 | 3,200 | 3,260 | 3,320 | (2) | % | (7) | % | ||||||||||||||||||||||||||||||||
| Loans held for sale, at fair value | 683,960 | 605,399 | 481,541 | 513,431 | 355,022 | 13 | % | 93 | % | ||||||||||||||||||||||||||||||||
| Loans and leases | 22,426,473 | 22,671,455 | 21,251,478 | 21,195,684 | 21,520,794 | (1) | % | 4 | % | ||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | (345,049) | (356,745) | (291,420) | (157,629) | (156,288) | (3) | % | 121 | % | ||||||||||||||||||||||||||||||||
| Net loans and leases | 22,081,424 | 22,314,710 | 20,960,058 | 21,038,055 | 21,364,506 | (1) | % | 3 | % | ||||||||||||||||||||||||||||||||
| Restricted equity securities | 50,062 | 54,062 | 58,062 | 46,463 | 54,463 | (7) | % | (8) | % | ||||||||||||||||||||||||||||||||
| Premises and equipment, net | 185,104 | 192,041 | 195,390 | 201,460 | 203,391 | (4) | % | (9) | % | ||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 107,321 | 111,487 | 115,485 | 110,718 | 108,187 | (4) | % | (1) | % | ||||||||||||||||||||||||||||||||
| Goodwill | 2,715 | 2,715 | 2,715 | 1,787,651 | 1,787,651 | 0 | % | (100) | % | ||||||||||||||||||||||||||||||||
| Other intangible assets, net | 14,606 | 15,853 | 17,099 | 18,346 | 19,750 | (8) | % | (26) | % | ||||||||||||||||||||||||||||||||
| Residential mortgage servicing rights, at fair value | 93,248 | 96,356 | 94,346 | 115,010 | 151,383 | (3) | % | (38) | % | ||||||||||||||||||||||||||||||||
| Bank owned life insurance | 326,120 | 324,873 | 322,717 | 320,611 | 318,533 | 0 | % | 2 | % | ||||||||||||||||||||||||||||||||
| Other assets | 688,597 | 712,687 | 660,781 | 434,201 | 466,365 | (3) | % | 48 | % | ||||||||||||||||||||||||||||||||
| Total assets | $ | 29,437,441 | $ | 29,645,248 | $ | 27,540,382 | $ | 28,846,809 | $ | 28,930,855 | (1) | % | 2 | % | |||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Deposits | $ | 24,669,783 | $ | 24,844,378 | $ | 22,699,375 | $ | 22,481,504 | $ | 22,434,734 | (1) | % | 10 | % | |||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 388,028 | 398,414 | 346,245 | 311,308 | 296,717 | (3) | % | 31 | % | ||||||||||||||||||||||||||||||||
| Borrowings | 996,520 | 1,096,559 | 1,196,597 | 906,635 | 1,106,674 | (9) | % | (10) | % | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures, at fair value | 247,045 | 232,936 | 195,521 | 274,812 | 267,798 | 6 | % | (8) | % | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures, at amortized cost | 88,325 | 88,382 | 88,439 | 88,496 | 88,553 | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| Operating lease liabilities | 115,790 | 119,885 | 123,962 | 119,429 | 116,924 | (3) | % | (1) | % | ||||||||||||||||||||||||||||||||
| Deferred tax liability, net | 13,239 | 21,439 | 51,061 | 52,928 | 67,055 | (38) | % | (80) | % | ||||||||||||||||||||||||||||||||
| Other liabilities | 308,467 | 304,916 | 331,571 | 297,782 | 262,884 | 1 | % | 17 | % | ||||||||||||||||||||||||||||||||
| Total liabilities | 26,827,197 | 27,106,909 | 25,032,771 | 24,532,894 | 24,641,339 | (1) | % | 9 | % | ||||||||||||||||||||||||||||||||
| Shareholders' equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 3,512,153 | 3,510,145 | 3,507,680 | 3,514,000 | 3,511,493 | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| (Accumulated deficit) retained earnings | (1,036,931) | (1,115,414) | (1,168,340) | 770,366 | 733,059 | (7) | % | (241) | % | ||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income | 135,022 | 143,608 | 168,271 | 29,549 | 44,964 | (6) | % | 200 | % | ||||||||||||||||||||||||||||||||
| Total shareholders' equity | 2,610,244 | 2,538,339 | 2,507,611 | 4,313,915 | 4,289,516 | 3 | % | (39) | % | ||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 29,437,441 | $ | 29,645,248 | $ | 27,540,382 | $ | 28,846,809 | $ | 28,930,855 | (1) | % | 2 | % | |||||||||||||||||||||||||||
| Common shares outstanding at period end | 220,222 | 220,219 | 220,175 | 220,229 | 220,212 | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| Book value per common share | $ | 11.85 | $ | 11.53 | $ | 11.39 | $ | 19.59 | $ | 19.48 | 3 | % | (39) | % | |||||||||||||||||||||||||||
| Tangible book value per common share | $ | 11.77 | $ | 11.44 | $ | 11.30 | $ | 11.39 | $ | 11.27 | 3 | % | 4 | % | |||||||||||||||||||||||||||
| Tangible equity - common | $ | 2,592,923 | $ | 2,519,771 | $ | 2,487,797 | $ | 2,507,918 | $ | 2,482,115 | 3 | % | 4 | % | |||||||||||||||||||||||||||
| Tangible common equity to tangible assets | 8.81 | % | 8.51 | % | 9.04 | % | 9.27 | % | 9.15 | % | 0.30 | (0.34) | |||||||||||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 10
| Umpqua Holdings Corporation | |||||||||||||||||||||||||||||||||||||||||
| Loan and Lease Portfolio | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | % Change | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Loans and leases: | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term, net | $ | 3,533,776 | $ | 3,589,484 | $ | 3,613,420 | $ | 3,545,566 | $ | 3,495,555 | (2) | % | 1 | % | |||||||||||||||||||||||||||
| Owner occupied term, net | 2,411,098 | 2,459,954 | 2,472,187 | 2,496,088 | 2,566,299 | (2) | % | (6) | % | ||||||||||||||||||||||||||||||||
| Multifamily, net | 3,389,034 | 3,466,829 | 3,464,217 | 3,514,774 | 3,479,986 | (2) | % | (3) | % | ||||||||||||||||||||||||||||||||
| Construction & development, net | 757,462 | 662,703 | 667,975 | 678,740 | 771,214 | 14 | % | (2) | % | ||||||||||||||||||||||||||||||||
| Residential development, net | 163,400 | 164,180 | 187,594 | 189,010 | 191,500 | 0 | % | (15) | % | ||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
Term, net (1) | 4,246,229 | 4,265,092 | 2,317,573 | 2,232,817 | 2,310,759 | 0 | % | 84 | % | ||||||||||||||||||||||||||||||||
| Lines of credit & other, net | 894,782 | 940,443 | 1,208,051 | 1,212,393 | 1,254,755 | (5) | % | (29) | % | ||||||||||||||||||||||||||||||||
| Leases & equipment finance, net | 1,496,650 | 1,522,369 | 1,492,762 | 1,465,489 | 1,485,753 | (2) | % | 1 | % | ||||||||||||||||||||||||||||||||
| Residential: | |||||||||||||||||||||||||||||||||||||||||
| Mortgage, net | 4,042,416 | 4,056,588 | 4,193,908 | 4,215,424 | 4,245,674 | 0 | % | (5) | % | ||||||||||||||||||||||||||||||||
| Home equity loans & lines, net | 1,172,697 | 1,189,428 | 1,249,152 | 1,237,512 | 1,224,578 | (1) | % | (4) | % | ||||||||||||||||||||||||||||||||
| Consumer & other, net | 318,929 | 354,385 | 384,639 | 407,871 | 494,721 | (10) | % | (36) | % | ||||||||||||||||||||||||||||||||
| Total loans, net of deferred fees and costs | $ | 22,426,473 | $ | 22,671,455 | $ | 21,251,478 | $ | 21,195,684 | $ | 21,520,794 | (1) | % | 4 | % | |||||||||||||||||||||||||||
(1)The Bank participates in the Payroll Protection Program ("PPP") to originate SBA loans designated to help businesses maintain their workforce and cover other working capital needs during the COVID-19 pandemic. The Commercial Term loans in the table above include 16,900 PPP loans, totaling $2.0 billion, net of deferred fees and costs as of September 30, 2020. | |||||||||||||||||||||||||||||||||||||||||
| Loan and leases mix: | |||||||||||||||||||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied term, net | 16 | % | 16 | % | 17 | % | 17 | % | 16 | % | |||||||||||||||||||||||||||||||
| Owner occupied term, net | 11 | % | 11 | % | 12 | % | 12 | % | 12 | % | |||||||||||||||||||||||||||||||
| Multifamily, net | 15 | % | 15 | % | 16 | % | 16 | % | 16 | % | |||||||||||||||||||||||||||||||
| Construction & development, net | 3 | % | 3 | % | 3 | % | 3 | % | 4 | % | |||||||||||||||||||||||||||||||
| Residential development, net | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||
| Term, net | 19 | % | 19 | % | 11 | % | 10 | % | 11 | % | |||||||||||||||||||||||||||||||
| Lines of credit & other, net | 4 | % | 4 | % | 5 | % | 6 | % | 6 | % | |||||||||||||||||||||||||||||||
| Leases & equipment finance, net | 7 | % | 7 | % | 7 | % | 7 | % | 7 | % | |||||||||||||||||||||||||||||||
| Residential: | |||||||||||||||||||||||||||||||||||||||||
| Mortgage, net | 18 | % | 18 | % | 20 | % | 20 | % | 20 | % | |||||||||||||||||||||||||||||||
| Home equity loans & lines, net | 5 | % | 5 | % | 6 | % | 6 | % | 5 | % | |||||||||||||||||||||||||||||||
| Consumer & other, net | 1 | % | 1 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 11
| Umpqua Holdings Corporation | |||||||||||||||||||||||||||||||||||||||||
| Deposits by Type/Core Deposits | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | % Change | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||
| Demand, non-interest bearing | $ | 9,475,244 | $ | 9,172,210 | $ | 7,169,907 | $ | 6,913,375 | $ | 7,123,180 | 3 | % | 33 | % | |||||||||||||||||||||||||||
| Demand, interest bearing | 2,931,990 | 2,813,722 | 2,482,908 | 2,524,534 | 2,406,404 | 4 | % | 22 | % | ||||||||||||||||||||||||||||||||
| Money market | 7,160,838 | 7,262,777 | 7,082,011 | 6,930,815 | 6,646,383 | (1) | % | 8 | % | ||||||||||||||||||||||||||||||||
| Savings | 1,848,639 | 1,730,051 | 1,486,909 | 1,471,475 | 1,469,302 | 7 | % | 26 | % | ||||||||||||||||||||||||||||||||
| Time | 3,253,072 | 3,865,618 | 4,477,640 | 4,641,305 | 4,789,465 | (16) | % | (32) | % | ||||||||||||||||||||||||||||||||
| Total | $ | 24,669,783 | $ | 24,844,378 | $ | 22,699,375 | $ | 22,481,504 | $ | 22,434,734 | (1) | % | 10 | % | |||||||||||||||||||||||||||
Total core deposits (1) | $ | 22,439,241 | $ | 22,095,314 | $ | 19,434,228 | $ | 19,061,058 | $ | 18,845,328 | 2 | % | 19 | % | |||||||||||||||||||||||||||
| Deposit mix: | |||||||||||||||||||||||||||||||||||||||||
| Demand, non-interest bearing | 38 | % | 37 | % | 32 | % | 31 | % | 32 | % | |||||||||||||||||||||||||||||||
| Demand, interest bearing | 12 | % | 11 | % | 11 | % | 11 | % | 11 | % | |||||||||||||||||||||||||||||||
| Money market | 29 | % | 29 | % | 31 | % | 31 | % | 30 | % | |||||||||||||||||||||||||||||||
| Savings | 8 | % | 7 | % | 7 | % | 6 | % | 6 | % | |||||||||||||||||||||||||||||||
| Time | 13 | % | 16 | % | 19 | % | 21 | % | 21 | % | |||||||||||||||||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||||||
| Number of open accounts: | |||||||||||||||||||||||||||||||||||||||||
| Demand, non-interest bearing | 423,658 | 423,456 | 416,270 | 415,254 | 413,633 | ||||||||||||||||||||||||||||||||||||
| Demand, interest bearing | 73,812 | 74,813 | 75,514 | 75,900 | 76,390 | ||||||||||||||||||||||||||||||||||||
| Money market | 59,083 | 59,445 | 59,203 | 58,888 | 58,796 | ||||||||||||||||||||||||||||||||||||
| Savings | 162,234 | 161,710 | 159,870 | 159,948 | 160,673 | ||||||||||||||||||||||||||||||||||||
| Time | 52,572 | 57,501 | 62,515 | 62,952 | 62,122 | ||||||||||||||||||||||||||||||||||||
| Total | 771,359 | 776,925 | 773,372 | 772,942 | 771,614 | ||||||||||||||||||||||||||||||||||||
| Average balance per account: | |||||||||||||||||||||||||||||||||||||||||
| Demand, non-interest bearing | $ | 22.4 | $ | 21.7 | $ | 17.2 | $ | 16.6 | $ | 17.2 | |||||||||||||||||||||||||||||||
| Demand, interest bearing | 39.7 | 37.6 | 32.9 | 33.3 | 31.5 | ||||||||||||||||||||||||||||||||||||
| Money market | 121.2 | 122.2 | 119.6 | 117.7 | 113.0 | ||||||||||||||||||||||||||||||||||||
| Savings | 11.4 | 10.7 | 9.3 | 9.2 | 9.1 | ||||||||||||||||||||||||||||||||||||
| Time | 61.9 | 67.2 | 71.6 | 73.7 | 77.1 | ||||||||||||||||||||||||||||||||||||
| Total | $ | 32.0 | $ | 32.0 | $ | 29.4 | $ | 29.1 | $ | 29.1 | |||||||||||||||||||||||||||||||
(1) Core deposits are defined as total deposits less time deposits greater than $100,000.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 12
| Umpqua Holdings Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Credit Quality – Non-performing Assets | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | |||||||||||||||||||||||||||||||||||||
| Non-performing assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Loans and leases on non-accrual status | $ | 26,425 | $ | 32,412 | $ | 39,128 | $ | 26,244 | $ | 31,636 | (18) | % | (16) | % | ||||||||||||||||||||||||||||||
Loans and leases past due 90+ days and accruing (1) | 50,269 | 39,818 | 47,185 | 37,969 | 35,745 | 26 | % | 41 | % | |||||||||||||||||||||||||||||||||||
| Total non-performing loans and leases | 76,694 | 72,230 | 86,313 | 64,213 | 67,381 | 6 | % | 14 | % | |||||||||||||||||||||||||||||||||||
| Other real estate owned | 2,369 | 2,578 | 3,020 | 3,295 | 4,026 | (8) | % | (41) | % | |||||||||||||||||||||||||||||||||||
| Total non-performing assets | $ | 79,063 | $ | 74,808 | $ | 89,333 | $ | 67,508 | $ | 71,407 | 6 | % | 11 | % | ||||||||||||||||||||||||||||||
| Performing restructured loans and leases | $ | 15,819 | $ | 15,032 | $ | 20,541 | $ | 18,576 | $ | 14,309 | 5 | % | 11 | % | ||||||||||||||||||||||||||||||
| Loans and leases past due 31-89 days | $ | 66,155 | $ | 40,583 | $ | 59,962 | $ | 41,882 | $ | 44,390 | 63 | % | 49 | % | ||||||||||||||||||||||||||||||
| Loans and leases past due 31-89 days to total loans and leases | 0.29 | % | 0.18 | % | 0.28 | % | 0.20 | % | 0.21 | % | ||||||||||||||||||||||||||||||||||
Non-performing loans and leases to total loans and leases (1) | 0.34 | % | 0.32 | % | 0.41 | % | 0.30 | % | 0.31 | % | ||||||||||||||||||||||||||||||||||
Non-performing assets to total assets(1) | 0.27 | % | 0.25 | % | 0.32 | % | 0.23 | % | 0.25 | % | ||||||||||||||||||||||||||||||||||
(1)Excludes certain mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $20.0 million, $2.6 million, $5.3 million, $4.3 million, and $5.2 million at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 13
| Umpqua Holdings Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Credit Quality – Allowance for Credit Losses | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | |||||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases (ACLLL) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 356,745 | $ | 291,420 | $ | 157,629 | $ | 156,288 | $ | 151,069 | 22 | % | 136 | % | ||||||||||||||||||||||||||||||
| Impact of adoption of CECL | — | — | 49,999 | — | — | nm | nm | |||||||||||||||||||||||||||||||||||||
| Adjusted balance, beginning of period | 356,745 | 291,420 | 207,628 | 156,288 | 151,069 | 22 | % | 136 | % | |||||||||||||||||||||||||||||||||||
Provision for credit losses on loans and leases (1) | 1,785 | 81,484 | 105,502 | 16,252 | 23,227 | (98) | % | (92) | % | |||||||||||||||||||||||||||||||||||
| Charge-offs | (16,646) | (19,453) | (24,455) | (18,734) | (23,112) | (14) | % | (28) | % | |||||||||||||||||||||||||||||||||||
| Recoveries | 3,165 | 3,294 | 2,745 | 3,823 | 5,104 | (4) | % | (38) | % | |||||||||||||||||||||||||||||||||||
| Net charge-offs | (13,481) | (16,159) | (21,710) | (14,911) | (18,008) | (17) | % | (25) | % | |||||||||||||||||||||||||||||||||||
| Balance, end of period | $ | 345,049 | $ | 356,745 | $ | 291,420 | $ | 157,629 | $ | 156,288 | (3) | % | 121 | % | ||||||||||||||||||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 26,368 | $ | 20,927 | $ | 5,106 | $ | 5,085 | $ | 4,857 | 26 | % | 443 | % | ||||||||||||||||||||||||||||||
| Impact of adoption of CECL | — | — | 3,238 | — | — | nm | nm | |||||||||||||||||||||||||||||||||||||
| Adjusted balance, beginning of period | 26,368 | 20,927 | 8,344 | 5,085 | 4,857 | 26 | % | 443 | % | |||||||||||||||||||||||||||||||||||
(Recapture) provision for credit losses on unfunded commitments (1) | (2,062) | 5,441 | 12,583 | 21 | 228 | (138) | % | nm | ||||||||||||||||||||||||||||||||||||
| Balance, end of period | 24,306 | 26,368 | 20,927 | 5,106 | 5,085 | (8) | % | 378 | % | |||||||||||||||||||||||||||||||||||
| Total Allowance for credit losses (ACL) | $ | 369,355 | $ | 383,113 | $ | 312,347 | $ | 162,735 | $ | 161,373 | (4) | % | 129 | % | ||||||||||||||||||||||||||||||
| Net charge-offs to average loans and leases (annualized) | 0.24 | % | 0.29 | % | 0.41 | % | 0.28 | % | 0.34 | % | ||||||||||||||||||||||||||||||||||
| Recoveries to gross charge-offs | 19.01 | % | 16.93 | % | 11.22 | % | 20.41 | % | 22.08 | % | ||||||||||||||||||||||||||||||||||
| ACLLL to loans and leases | 1.54 | % | 1.57 | % | 1.37 | % | 0.74 | % | 0.73 | % | ||||||||||||||||||||||||||||||||||
| ACL to loans and leases | 1.65 | % | 1.69 | % | 1.47 | % | 0.77 | % | 0.75 | % | ||||||||||||||||||||||||||||||||||
| nm = not meaningful | ||||||||||||||||||||||||||||||||||||||||||||
(1) The total provision for credit losses as disclosed in the income statement includes a recapture of $61,000 related to the provision for accrued interest on loans deferred due to COVID-19, for the three months ended September 30, 2020 and an additional provision of $160,000 for the three months ended June 30, 2020, which are not included in the table above.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 14
| Umpqua Holdings Corporation | ||||||||||||||||||||
| Credit Quality – Allowance for Credit Losses | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Nine Months Ended | % Change | |||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Sep 30, 2019 | Year over Year | |||||||||||||||||
| Allowance for credit losses on loans and leases (ACLLL) | ||||||||||||||||||||
| Balance, beginning of period | $ | 157,629 | $ | 144,871 | 9 | % | ||||||||||||||
| Impact of adoption of CECL | 49,999 | — | nm | |||||||||||||||||
| Adjusted balance, beginning of period | 207,628 | 144,871 | 43 | % | ||||||||||||||||
Provision for credit losses on loans and leases (1) | 188,771 | 56,263 | 236 | % | ||||||||||||||||
| Charge-offs | (60,554) | (56,971) | 6 | % | ||||||||||||||||
| Recoveries | 9,204 | 12,125 | (24) | % | ||||||||||||||||
| Net charge-offs | (51,350) | (44,846) | 15 | % | ||||||||||||||||
| Balance, end of period | $ | 345,049 | $ | 156,288 | 121 | % | ||||||||||||||
| Reserve for unfunded commitments | ||||||||||||||||||||
| Balance, beginning of period | $ | 5,106 | $ | 4,523 | 13 | % | ||||||||||||||
| Impact of adoption of CECL | 3,238 | — | nm | |||||||||||||||||
| Adjusted balance, beginning of period | 8,344 | 4,523 | 84 | % | ||||||||||||||||
Provision for credit losses on unfunded commitments (1) | 15,962 | 562 | nm | |||||||||||||||||
| Balance, end of period | 24,306 | 5,085 | 378 | % | ||||||||||||||||
| Total Allowance for credit losses (ACL) | $ | 369,355 | $ | 161,373 | 129 | % | ||||||||||||||
| Net charge-offs to average loans and leases (annualized) | 0.31 | % | 0.29 | % | ||||||||||||||||
| Recoveries to gross charge-offs | 15.20 | % | 21.28 | % | ||||||||||||||||
| nm = not meaningful | ||||||||||||||||||||
(1) The total provision for credit losses for the nine months ended September 30, 2020, as disclosed on the income statement includes an additional $99,000 of provision related to accrued interest on loans deferred due to COVID-19, not included in the table above.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 15
| Umpqua Holdings Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Selected Ratios | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||||||
| Average Rates: | ||||||||||||||||||||||||||||||||||||||||||||
| Yield on loans held for sale | 3.13 | % | 3.77 | % | 4.20 | % | 4.25 | % | 4.82 | % | (0.64) | (1.69) | ||||||||||||||||||||||||||||||||
| Yield on loans and leases | 3.96 | % | 4.11 | % | 4.58 | % | 4.80 | % | 4.93 | % | (0.15) | (0.97) | ||||||||||||||||||||||||||||||||
| Yield on taxable investments | 1.56 | % | 1.38 | % | 2.50 | % | 2.05 | % | 1.99 | % | 0.18 | (0.43) | ||||||||||||||||||||||||||||||||
Yield on tax-exempt investments (1) | 3.11 | % | 3.17 | % | 3.14 | % | 3.23 | % | 3.30 | % | (0.06) | (0.19) | ||||||||||||||||||||||||||||||||
| Yield on interest bearing cash and temporary investments | 0.10 | % | 0.10 | % | 1.23 | % | 1.65 | % | 2.20 | % | — | (2.10) | ||||||||||||||||||||||||||||||||
Total yield on earning assets (1) | 3.45 | % | 3.59 | % | 4.19 | % | 4.36 | % | 4.52 | % | (0.14) | (1.07) | ||||||||||||||||||||||||||||||||
| Cost of interest bearing deposits | 0.49 | % | 0.67 | % | 1.03 | % | 1.13 | % | 1.19 | % | (0.18) | (0.70) | ||||||||||||||||||||||||||||||||
| Cost of securities sold under agreements | ||||||||||||||||||||||||||||||||||||||||||||
| to repurchase and fed funds purchased | 0.09 | % | 0.21 | % | 0.47 | % | 0.56 | % | 0.57 | % | (0.12) | (0.48) | ||||||||||||||||||||||||||||||||
| Cost of borrowings | 1.23 | % | 1.33 | % | 1.79 | % | 1.96 | % | 1.95 | % | (0.10) | (0.72) | ||||||||||||||||||||||||||||||||
| Cost of junior subordinated debentures | 4.03 | % | 5.55 | % | 5.45 | % | 5.92 | % | 6.14 | % | (1.52) | (2.11) | ||||||||||||||||||||||||||||||||
| Total cost of interest bearing liabilities | 0.59 | % | 0.78 | % | 1.15 | % | 1.27 | % | 1.33 | % | (0.19) | (0.74) | ||||||||||||||||||||||||||||||||
Net interest spread (1) | 2.85 | % | 2.81 | % | 3.04 | % | 3.09 | % | 3.19 | % | 0.04 | (0.34) | ||||||||||||||||||||||||||||||||
Net interest margin (1) | 3.08 | % | 3.09 | % | 3.41 | % | 3.51 | % | 3.63 | % | (0.01) | (0.55) | ||||||||||||||||||||||||||||||||
| Performance Ratios: | ||||||||||||||||||||||||||||||||||||||||||||
| Return on average assets | 1.68 | % | 0.73 | % | (25.82) | % | 1.15 | % | 1.18 | % | 0.95 | 0.50 | ||||||||||||||||||||||||||||||||
| Return on average tangible assets | 1.68 | % | 0.73 | % | (27.53) | % | 1.22 | % | 1.26 | % | 0.95 | 0.42 | ||||||||||||||||||||||||||||||||
| Return on average common equity | 19.48 | % | 8.46 | % | (174.94) | % | 7.70 | % | 7.87 | % | 11.02 | 11.61 | ||||||||||||||||||||||||||||||||
| Return on average tangible common equity | 19.62 | % | 8.53 | % | (301.30) | % | 13.24 | % | 13.67 | % | 11.09 | 5.95 | ||||||||||||||||||||||||||||||||
| Efficiency ratio – Consolidated | 54.52 | % | 55.40 | % | 756.29 | % | 59.00 | % | 57.76 | % | (0.88) | (3.24) | ||||||||||||||||||||||||||||||||
| Efficiency ratio – Bank | 53.41 | % | 54.17 | % | 752.92 | % | 57.56 | % | 56.22 | % | (0.76) | (2.81) | ||||||||||||||||||||||||||||||||
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 16
| Umpqua Holdings Corporation | ||||||||||||||||||||
| Selected Ratios | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Nine Months Ended | % Change | |||||||||||||||||||
| Sep 30, 2020 | Sep 30, 2019 | Year over Year | ||||||||||||||||||
| Average Rates: | ||||||||||||||||||||
| Yield on loans held for sale | 3.61 | % | 5.15 | % | (1.54) | |||||||||||||||
| Yield on loans and leases | 4.21 | % | 5.02 | % | (0.81) | |||||||||||||||
| Yield on taxable investments | 1.81 | % | 2.20 | % | (0.39) | |||||||||||||||
Yield on tax-exempt investments (1) | 3.14 | % | 3.45 | % | (0.31) | |||||||||||||||
| Yield on interest bearing cash and temporary investments | 0.38 | % | 2.32 | % | (1.94) | |||||||||||||||
Total yield on earning assets (1) | 3.73 | % | 4.63 | % | (0.90) | |||||||||||||||
| Cost of interest bearing deposits | 0.73 | % | 1.11 | % | (0.38) | |||||||||||||||
| Cost of securities sold under agreements | ||||||||||||||||||||
| to repurchase and fed funds purchased | 0.25 | % | 0.68 | % | (0.43) | |||||||||||||||
| Cost of borrowings | 1.43 | % | 1.96 | % | (0.53) | |||||||||||||||
| Cost of junior subordinated debentures | 5.00 | % | 6.18 | % | (1.18) | |||||||||||||||
| Total cost of interest bearing liabilities | 0.84 | % | 1.26 | % | (0.42) | |||||||||||||||
Net interest spread (1) | 2.89 | % | 3.37 | % | (0.48) | |||||||||||||||
Net interest margin (1) | 3.19 | % | 3.78 | % | (0.59) | |||||||||||||||
| Performance Ratios: | ||||||||||||||||||||
| Return on average assets | (7.67) | % | 1.31 | % | (8.98) | |||||||||||||||
| Return on average tangible assets | (7.83) | % | 1.40 | % | (9.23) | |||||||||||||||
| Return on average common equity | (72.01) | % | 8.67 | % | (80.68) | |||||||||||||||
| Return on average tangible common equity | (89.45) | % | 15.32 | % | (104.77) | |||||||||||||||
| Efficiency ratio – Consolidated | 249.26 | % | 56.31 | % | 192.95 | |||||||||||||||
| Efficiency ratio – Bank | 247.93 | % | 54.70 | % | 193.23 | |||||||||||||||
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 17
| Umpqua Holdings Corporation Average Balances | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Temporary investments and interest bearing cash | $ | 1,827,818 | $ | 1,563,753 | $ | 1,084,854 | $ | 1,045,975 | $ | 759,416 | 17 | % | 141 | % | |||||||||||||||||||||||||||
| Investment securities, taxable | 2,797,547 | 2,777,154 | 2,760,461 | 2,719,089 | 2,648,092 | 1 | % | 6 | % | ||||||||||||||||||||||||||||||||
| Investment securities, tax-exempt | 237,165 | 235,934 | 241,105 | 244,895 | 252,765 | 1 | % | (6) | % | ||||||||||||||||||||||||||||||||
| Loans held for sale | 669,646 | 577,773 | 406,434 | 415,169 | 328,155 | 16 | % | 104 | % | ||||||||||||||||||||||||||||||||
| Loans and leases | 22,560,076 | 22,428,142 | 21,196,989 | 21,379,239 | 21,170,915 | 1 | % | 7 | % | ||||||||||||||||||||||||||||||||
| Total interest earning assets | 28,092,252 | 27,582,756 | 25,689,843 | 25,804,367 | 25,159,343 | 2 | % | 12 | % | ||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets, net | 18,021 | 19,253 | 1,785,608 | 1,806,791 | 1,808,191 | (6) | % | (99) | % | ||||||||||||||||||||||||||||||||
| Total assets | 29,533,871 | 29,066,775 | 28,844,773 | 28,981,387 | 28,356,982 | 2 | % | 4 | % | ||||||||||||||||||||||||||||||||
| Non-interest bearing demand deposits | 9,335,350 | 8,484,684 | 6,880,457 | 7,037,320 | 6,880,093 | 10 | % | 36 | % | ||||||||||||||||||||||||||||||||
| Interest bearing deposits | 15,451,816 | 15,803,595 | 15,695,309 | 15,550,483 | 15,289,464 | (2) | % | 1 | % | ||||||||||||||||||||||||||||||||
| Total deposits | 24,787,166 | 24,288,279 | 22,575,766 | 22,587,803 | 22,169,557 | 2 | % | 12 | % | ||||||||||||||||||||||||||||||||
| Interest bearing liabilities | 17,205,775 | 17,625,888 | 17,301,712 | 17,237,770 | 16,827,917 | (2) | % | 2 | % | ||||||||||||||||||||||||||||||||
| Shareholders' equity - common | 2,549,703 | 2,514,754 | 4,257,711 | 4,317,277 | 4,260,810 | 1 | % | (40) | % | ||||||||||||||||||||||||||||||||
Tangible common equity (1) | 2,531,682 | 2,495,501 | 2,472,103 | 2,510,486 | 2,452,619 | 1 | % | 3 | % | ||||||||||||||||||||||||||||||||
| Umpqua Holdings Corporation Average Balances | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Nine Months Ended | % Change | |||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Sep 30, 2019 | Year over Year | |||||||||||||||||
| Temporary investments and interest bearing cash | $ | 1,493,352 | $ | 567,709 | 163 | % | ||||||||||||||
| Investment securities, taxable | 2,778,460 | 2,696,001 | 3 | % | ||||||||||||||||
| Investment securities, tax-exempt | 238,059 | 270,461 | (12) | % | ||||||||||||||||
| Loans held for sale | 551,583 | 260,600 | 112 | % | ||||||||||||||||
| Loans and leases | 22,063,582 | 20,724,820 | 6 | % | ||||||||||||||||
| Total interest earning assets | 27,125,036 | 24,519,591 | 11 | % | ||||||||||||||||
| Goodwill and other intangible assets, net | 605,548 | 1,809,583 | (67) | % | ||||||||||||||||
| Total assets | 29,149,758 | 27,631,632 | 5 | % | ||||||||||||||||
| Non-interest bearing demand deposits | 8,237,095 | 6,648,638 | 24 | % | ||||||||||||||||
| Interest bearing deposits | 15,649,765 | 14,891,271 | 5 | % | ||||||||||||||||
| Total deposits | 23,886,860 | 21,539,909 | 11 | % | ||||||||||||||||
| Interest bearing liabilities | 17,377,259 | 16,448,027 | 6 | % | ||||||||||||||||
| Shareholders’ equity - common | 3,105,611 | 4,169,008 | (26) | % | ||||||||||||||||
Tangible common equity (1) | 2,500,063 | 2,359,425 | 6 | % | ||||||||||||||||
(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 Third Quarter 2020 Results
October 21, 2020
Page 18
| Umpqua Holdings Corporation Average Rates and Balances | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 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 | $ | 669,646 | $ | 5,248 | 3.13 | % | $ | 577,773 | $ | 5,443 | 3.77 | % | $ | 328,155 | $ | 3,953 | 4.82 | % | |||||||||||||||||||||||||||||||||||
| Loans and leases (1) | 22,560,076 | 224,209 | 3.96 | % | 22,428,142 | 229,731 | 4.11 | % | 21,170,915 | 262,158 | 4.93 | % | |||||||||||||||||||||||||||||||||||||||||
| Taxable securities | 2,797,547 | 10,878 | 1.56 | % | 2,777,154 | 9,583 | 1.38 | % | 2,648,092 | 13,145 | 1.99 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-taxable securities (2) | 237,165 | 1,845 | 3.11 | % | 235,934 | 1,868 | 3.17 | % | 252,765 | 2,086 | 3.30 | % | |||||||||||||||||||||||||||||||||||||||||
| Temporary investments and interest-bearing cash | 1,827,818 | 474 | 0.10 | % | 1,563,753 | 403 | 0.10 | % | 759,416 | 4,204 | 2.20 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 28,092,252 | $ | 242,654 | 3.45 | % | 27,582,756 | $ | 247,028 | 3.59 | % | 25,159,343 | $ | 285,546 | 4.52 | % | ||||||||||||||||||||||||||||||||||||||
| Other assets | 1,441,619 | 1,484,019 | 3,197,639 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 29,533,871 | $ | 29,066,775 | $ | 28,356,982 | |||||||||||||||||||||||||||||||||||||||||||||||
| INTEREST-BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 2,878,529 | $ | 573 | 0.08 | % | $ | 2,649,331 | $ | 1,148 | 0.17 | % | $ | 2,363,626 | $ | 3,117 | 0.52 | % | |||||||||||||||||||||||||||||||||||
| Money market deposits | 7,179,705 | 2,284 | 0.13 | % | 7,275,041 | 4,037 | 0.22 | % | 6,962,370 | 16,575 | 0.94 | % | |||||||||||||||||||||||||||||||||||||||||
| Savings deposits | 1,790,055 | 179 | 0.04 | % | 1,628,276 | 198 | 0.05 | % | 1,462,198 | 557 | 0.15 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 3,603,527 | 16,085 | 1.78 | % | 4,250,947 | 20,839 | 1.97 | % | 4,501,270 | 25,627 | 2.26 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 15,451,816 | 19,121 | 0.49 | % | 15,803,595 | 26,222 | 0.67 | % | 15,289,464 | 45,876 | 1.19 | % | |||||||||||||||||||||||||||||||||||||||||
| Repurchase agreements and federal funds purchased | 378,844 | 84 | 0.09 | % | 375,098 | 194 | 0.21 | % | 313,089 | 448 | 0.57 | % | |||||||||||||||||||||||||||||||||||||||||
| Borrowings | 1,054,153 | 3,271 | 1.23 | % | 1,163,065 | 3,839 | 1.33 | % | 860,285 | 4,238 | 1.95 | % | |||||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 320,962 | 3,249 | 4.03 | % | 284,130 | 3,922 | 5.55 | % | 365,079 | 5,652 | 6.14 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 17,205,775 | $ | 25,725 | 0.59 | % | 17,625,888 | $ | 34,177 | 0.78 | % | 16,827,917 | $ | 56,214 | 1.33 | % | ||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing deposits | 9,335,350 | 8,484,684 | 6,880,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 443,043 | 441,449 | 388,162 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 26,984,168 | 26,552,021 | 24,096,172 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common equity | 2,549,703 | 2,514,754 | 4,260,810 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 29,533,871 | $ | 29,066,775 | $ | 28,356,982 | |||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST INCOME | $ | 216,929 | $ | 212,851 | $ | 229,332 | |||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST SPREAD | 2.85 | % | 2.81 | % | 3.19 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.08 | % | 3.09 | % | 3.63 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Non-accrual loans and leases are included in the average balance.
(2)Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $355,000 for the three months ended September 30, 2020, as compared to $348,000 for June 30, 2020 and $359,000 for September 30, 2019.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 19
| Umpqua Holdings Corporation Average Rates and Balances | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||
| 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 | $ | 551,583 | $ | 14,955 | 3.61 | % | $ | 260,600 | $ | 10,069 | 5.15 | % | |||||||||||||||||||||||
| Loans and leases (1) | 22,063,582 | 695,669 | 4.21 | % | 20,724,820 | 778,899 | 5.02 | % | |||||||||||||||||||||||||||
| Taxable securities | 2,778,460 | 37,744 | 1.81 | % | 2,696,001 | 44,479 | 2.20 | % | |||||||||||||||||||||||||||
| Non-taxable securities (2) | 238,059 | 5,608 | 3.14 | % | 270,461 | 6,991 | 3.45 | % | |||||||||||||||||||||||||||
| Temporary investments and interest-bearing cash | 1,493,352 | 4,208 | 0.38 | % | 567,709 | 9,837 | 2.32 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 27,125,036 | $ | 758,184 | 3.73 | % | 24,519,591 | $ | 850,275 | 4.63 | % | |||||||||||||||||||||||||
| Other assets | 2,024,722 | 3,112,041 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 29,149,758 | $ | 27,631,632 | |||||||||||||||||||||||||||||||
| INTEREST-BEARING LIABILITIES: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 2,667,160 | $ | 5,264 | 0.26 | % | $ | 2,338,787 | $ | 8,555 | 0.49 | % | |||||||||||||||||||||||
| Money market deposits | 7,187,615 | 18,080 | 0.34 | % | 6,702,551 | 42,943 | 0.86 | % | |||||||||||||||||||||||||||
| Savings deposits | 1,635,064 | 618 | 0.05 | % | 1,468,449 | 1,237 | 0.11 | % | |||||||||||||||||||||||||||
| Time deposits | 4,159,926 | 61,671 | 1.98 | % | 4,381,484 | 70,826 | 2.16 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 15,649,765 | 85,633 | 0.73 | % | 14,891,271 | 123,561 | 1.11 | % | |||||||||||||||||||||||||||
| Repurchase agreements and federal funds purchased | 363,957 | 673 | 0.25 | % | 325,281 | 1,661 | 0.68 | % | |||||||||||||||||||||||||||
| Borrowings | 1,041,181 | 11,156 | 1.43 | % | 852,659 | 12,484 | 1.96 | % | |||||||||||||||||||||||||||
| Junior subordinated debentures | 322,356 | 12,074 | 5.00 | % | 378,816 | 17,520 | 6.18 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 17,377,259 | $ | 109,536 | 0.84 | % | 16,448,027 | $ | 155,226 | 1.26 | % | |||||||||||||||||||||||||
| Non-interest-bearing deposits | 8,237,095 | 6,648,638 | |||||||||||||||||||||||||||||||||
| Other liabilities | 429,793 | 365,959 | |||||||||||||||||||||||||||||||||
| Total liabilities | 26,044,147 | 23,462,624 | |||||||||||||||||||||||||||||||||
| Common equity | 3,105,611 | 4,169,008 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 29,149,758 | $ | 27,631,632 | |||||||||||||||||||||||||||||||
| NET INTEREST INCOME | $ | 648,648 | $ | 695,049 | |||||||||||||||||||||||||||||||
| NET INTEREST SPREAD | 2.89 | % | 3.37 | % | |||||||||||||||||||||||||||||||
| NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.19 | % | 3.78 | % | |||||||||||||||||||||||||||||||
(1)Non-accrual loans and leases are included in the average balance.
(2)Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.0 million for the nine months ended September 30, 2020, as compared to $1.2 million for the same period in 2019.
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 20
| Umpqua Holdings Corporation Residential Mortgage Banking Activity | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | % Change | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Seq. Quarter | Year over Year | ||||||||||||||||||||||||||||||||||
| Residential mortgage banking revenue: | |||||||||||||||||||||||||||||||||||||||||
| Origination and sale | $ | 98,703 | $ | 86,781 | $ | 39,347 | $ | 35,438 | $ | 31,432 | 14 | % | 214 | % | |||||||||||||||||||||||||||
| Servicing | 8,796 | 8,533 | 8,880 | 8,981 | 11,358 | 3 | % | (23) | % | ||||||||||||||||||||||||||||||||
| Change in fair value of MSR asset: | |||||||||||||||||||||||||||||||||||||||||
| Changes due to collection/realization of expected cash flows over time | (4,878) | (5,042) | (5,329) | (5,237) | (6,835) | (3) | % | (29) | % | ||||||||||||||||||||||||||||||||
| Changes due to valuation inputs or assumptions | (12,244) | (6,395) | (25,358) | (5,132) | 11,045 | 91 | % | (211) | % | ||||||||||||||||||||||||||||||||
| Total | $ | 90,377 | $ | 83,877 | $ | 17,540 | $ | 34,050 | $ | 47,000 | 8 | % | 92 | % | |||||||||||||||||||||||||||
| Closed loan volume: | |||||||||||||||||||||||||||||||||||||||||
| Portfolio | $ | 245,550 | $ | 276,247 | $ | 252,329 | $ | 335,511 | $ | 611,022 | (11) | % | (60) | % | |||||||||||||||||||||||||||
| For-sale | 1,922,789 | 1,826,095 | 1,148,184 | 1,060,016 | 844,442 | 5 | % | 128 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 2,168,339 | $ | 2,102,342 | $ | 1,400,513 | $ | 1,395,527 | $ | 1,455,464 | 3 | % | 49 | % | |||||||||||||||||||||||||||
| Gain on sale margin: | |||||||||||||||||||||||||||||||||||||||||
| Based on for-sale volume | 5.13 | % | 4.75 | % | 3.43 | % | 3.34 | % | 3.72 | % | 0.38 | 1.41 | |||||||||||||||||||||||||||||
| Residential mortgage servicing rights: | |||||||||||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 96,356 | $ | 94,346 | $ | 115,010 | $ | 151,383 | $ | 139,780 | 2 | % | (31) | % | |||||||||||||||||||||||||||
| Additions for new MSR capitalized | 14,014 | 13,447 | 10,023 | 8,397 | 7,393 | 4 | % | 90 | % | ||||||||||||||||||||||||||||||||
| Sale of MSR assets | — | — | — | (34,401) | — | 0 | % | 0 | % | ||||||||||||||||||||||||||||||||
| Changes in fair value of MSR asset: | |||||||||||||||||||||||||||||||||||||||||
| Changes due to collection/realization of expected cash flows over time | (4,878) | (5,042) | (5,329) | (5,237) | (6,835) | (3) | % | (29) | % | ||||||||||||||||||||||||||||||||
| Changes due to valuation inputs or assumptions | (12,244) | (6,395) | (25,358) | (5,132) | 11,045 | 91 | % | (211) | % | ||||||||||||||||||||||||||||||||
| Balance, end of period | $ | 93,248 | $ | 96,356 | $ | 94,346 | $ | 115,010 | $ | 151,383 | (3) | % | (38) | % | |||||||||||||||||||||||||||
| Residential mortgage loans serviced for others | $ | 12,964,361 | $ | 12,746,125 | $ | 12,533,045 | $ | 12,276,943 | $ | 15,707,519 | 2 | % | (17) | % | |||||||||||||||||||||||||||
| MSR as % of serviced portfolio | 0.72 | % | 0.76 | % | 0.75 | % | 0.94 | % | 0.96 | % | (0.04) | (0.24) | |||||||||||||||||||||||||||||
Umpqua Reports Third Quarter 2020 Results
October 21, 2020
Page 21
| Umpqua Holdings Corporation Residential Mortgage Banking Activity | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Nine Months Ended | % Change | ||||||||||||||||
| (Dollars in thousands) | Sep 30, 2020 | Sep 30, 2019 | Year over Year | ||||||||||||||
| Residential mortgage banking revenue: | |||||||||||||||||
| Origination and sale | $ | 224,831 | $ | 68,956 | 226 | % | |||||||||||
| Servicing | 26,209 | 33,218 | (21) | % | |||||||||||||
| Change in fair value of MSR asset: | |||||||||||||||||
| Changes due to collection/realization of expected cash flows over time | (15,249) | (20,171) | (24) | % | |||||||||||||
| Changes due to valuation inputs or assumptions | (43,997) | (14,243) | 209 | % | |||||||||||||
| Total | $ | 191,794 | $ | 67,760 | 183 | % | |||||||||||
| Closed loan volume: | |||||||||||||||||
| Portfolio | $ | 774,126 | $ | 1,411,512 | (45) | % | |||||||||||
| For-sale | 4,897,068 | 2,029,682 | 141 | % | |||||||||||||
| Total | $ | 5,671,194 | $ | 3,441,194 | 65 | % | |||||||||||
| Gain on sale margin: | |||||||||||||||||
| Based on for-sale volume | 4.59 | % | 3.40 | % | 1.19 | ||||||||||||
| Residential mortgage servicing rights: | |||||||||||||||||
| Balance, beginning of period | $ | 115,010 | $ | 169,025 | (32) | % | |||||||||||
| Additions for new MSR capitalized | 37,484 | 16,772 | 123 | % | |||||||||||||
| Changes in fair value of MSR asset: | |||||||||||||||||
| Changes due to collection/realization of expected cash flows over time | (15,249) | (20,171) | (24) | % | |||||||||||||
| Changes due to valuation inputs or assumptions | (43,997) | (14,243) | 209 | % | |||||||||||||
| Balance, end of period | $ | 93,248 | $ | 151,383 | (38) | % | |||||||||||
###