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CST: 16/11/2018 01:30:43   

Umpqua Reports Second Quarter 2018 Results

120 Days ago

Net earnings of $67.8 million, or $0.31 per common share
Quarterly loan and lease growth of $379.4 million, or 8% annualized, and deposit growth of $637.7 million, or 13% annualized
Organization simplification and design complete, results include pre-tax restructuring charges of $8.2 million

PORTLAND, Ore., July 18, 2018 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $67.8 million for the second quarter of 2018, compared to $77.7 million for the first quarter of 2018 and $56.8 million for the second quarter of 2017.  Earnings per diluted common share were $0.31 for the second quarter of 2018, compared to $0.35 for the first quarter of 2018 and $0.26 for the second quarter of 2017.

“Our second quarter results were highlighted by strong growth in loans and deposits, higher net interest income and stable credit quality,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation.  “Building on the foundation of Umpqua Next Gen, during the second quarter we completed important elements of our operational excellence initiative, including organizational simplification and design phases, while advancing our human digital strategy.  We are starting to see good traction from these Phase I levers, and remain on pace to deliver on the previously announced $18 to $24 million in annual savings.”

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

  • $8.2 million in restructuring charges related to the organization simplification and design and procurement phases of Umpqua Next Gen, including $4.1 million in severance-related expense and $4.1 million in professional fees.  This compares to $0.8 million in severance-related expense and $2.7 in professional fees in the prior quarter.
  • $5.4 million negative adjustment related to the fair value change of the MSR asset, compared to $5.1 million gain in the prior quarter and $8.3 million negative adjustment in the same period of the prior year.
  • $0.3 million gain related to the fair value change of the debt capital market swap derivatives, compared to a gain of $1.1 million in the prior quarter and a loss of $0.8 million in the same period of the prior year.
  • $2.6 million of exit or disposal costs, compared to $2.5 million in the prior quarter and $0.7 million in the same period of the prior year.
  • $1.4 million unrealized holding loss on equity securities, compared to no gain or loss recorded in the prior quarters.

Second Quarter 2018 Highlights (compared to prior quarter):

  • Net interest income increased by $4.1 million, or 2%, attributable to the strong growth in loans and leases and the benefit from increases in short-term interest rates.
  • Provision for loan and lease losses decreased by $0.3 million, driven primarily by lower net charge-offs, which decreased by four basis points to 0.22% of average loans and leases (annualized).
  • Non-interest income decreased by $6.9 million, reflecting the $10.5 million linked quarter change in fair value of the MSR asset (see notable items above), partially offset by higher net revenue from the origination and sale of residential mortgages.
  • Non-interest expense increased by $9.5 million, driven primarily by higher restructuring charges (see notable items above) and higher mortgage banking-related expense, consistent with the increase in mortgage originations.
  • Non-performing assets to total assets increased by one basis point to 0.34%.
  • Estimated total risk-based capital ratio of 13.7% and estimated Tier 1 common to risk weighted assets ratio of 10.8%.
  • Declared quarterly cash dividend of $0.20 per common share.
  • Repurchased 327,000 shares of common stock for $8.0 million.

Balance Sheet
Total consolidated assets were $26.5 billion as of June 30, 2018, compared to $25.9 billion as of March 31, 2018 and $25.3 billion as of June 30, 2017.  Including secured off-balance sheet lines of credit, total available liquidity was $10.4 billion as of June 30, 2018, representing 39% of total assets and 50% of total deposits.

Gross loans and leases were $19.7 billion as of June 30, 2018, an increase of $379.4 million, or 8% annualized, from $19.3 billion as of March 31, 2018.  This increase reflects balanced growth within the commercial term, leasing, multifamily, and residential mortgage loan portfolios, partially offset by a decline in consumer loans attributable to the Company's decision to wind down its indirect auto loan business.

Total deposits were $20.7 billion as of June 30, 2018, an increase of $637.7 million, or 13% annualized, from $20.1 billion as of March 31, 2018.  This increase was attributable to higher balances of time and non-interest bearing deposits, partially offset by lower money market deposits.

Net Interest Income
Net interest income was $227.3 million for the second quarter of 2018, up $4.1 million from the prior quarter.  This increase reflects higher average loans and leases, driven by strong growth during the quarter, as well as higher average yields on earning assets from the short-term rate increases.  Accretion of the credit discount recorded on acquired loans from Sterling Financial Corporation (“Sterling”) increased by $1.7 million from the prior quarter level, driven by a higher level of accretion on credit impaired loans associated with higher pay-offs.

The Company’s net interest margin was 3.93% for the second quarter of 2018, down 3 basis points from 3.96% for the first quarter of 2018, reflecting an increase in the cost of interest bearing liabilities and a higher average balance of interest-bearing cash, partially offset by higher average yields on interest-earning assets.  The increase in the cost of interest-bearing liabilities was attributable to an increase in average rates paid on interest-bearing deposits, as well as a higher percentage mix of time deposits, relative to the prior quarter.

Credit Quality
The allowance for loan and lease losses was $144.6 million, or 0.73% of loans and leases, as of June 30, 2018.  During the second quarter of 2018, the Company recorded $6.0 million of accretion related to the credit discount on acquired loans from Sterling, compared to $4.3 million in the prior quarter.  As of June 30, 2018, the Sterling purchased non-credit impaired loans had approximately $19.3 million of remaining credit discount that will accrete into interest income over the life of the loans, and the Sterling purchased credit impaired loan pools had approximately $21.6 million of remaining total discount.

The provision for loan and lease losses was $13.3 million for the second quarter of 2018, a decrease of $0.3 million from the prior quarter level, driven primarily by lower net charge-offs, which decreased by four basis points to 0.22% of average loans and leases (annualized).  As of June 30, 2018, non-performing assets were 0.34% of total assets, compared to 0.33% as of March 31, 2018 and 0.23% as of June 30, 2017.

Non-interest Income
Non-interest income was $71.7 million for the second quarter of 2018, down $6.9 million from the prior quarter, reflecting the negative linked quarter fair value change on the MSR asset (see notable items above), partially offset by an increase in net revenue from the origination and sale of residential mortgages.

Net revenue from the origination and sale of residential mortgages was $28.2 million for the second quarter of 2018, up $5.3 million from the prior quarter, reflecting stronger seasonal purchase activity.  For-sale mortgage origination volume increased by 22% from the prior quarter, and the home lending gain on sale margin increased by 3 basis points to 3.35% for the second quarter of 2018.  Of the current quarter’s mortgage production, 81% related to purchase activity, compared to 68% for the prior quarter and 77% for the same period of the prior year.

Non-interest Expense
Non-interest expense was $195.6 million for the second quarter of 2018, and included $8.2 million in restructuring charges related to the organization simplification and design and procurement phases of Umpqua Next Gen.  Excluding the impact of restructuring charges, non-interest expense increased by $4.7 million from the prior quarter.  This increase included $2.6 million in higher mortgage banking-related expense, reflecting the increase in mortgage originations, and $1.3 million in higher marketing expense.

Capital
As of June 30, 2018, the Company’s tangible book value per common share1 was $10.02, compared to $9.97 in the prior quarter and $9.71 in the same period of the prior year.  During the second quarter of 2018, the Company repurchased 327,000 shares of common stock for $8.0 million.

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.

The Company’s estimated total risk-based capital ratio was 13.7% and its estimated Tier 1 common to risk weighted assets ratio was 10.8% as of June 30, 2018.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of June 30, 2018 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.

The following table provides reconciliations of ending shareholders’ equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

                     
(In thousands, except per share data)   Jun 30, 2018   Mar 31, 2018   Dec 31, 2017   Sep 30, 2017   Jun 30, 2017
Total shareholders' equity   $ 4,021,643     $ 4,013,882     $ 4,014,786     $ 3,985,260     $ 3,958,845  
Subtract:                    
Goodwill   1,787,651     1,787,651     1,787,651     1,787,651     1,787,651  
Other intangible assets, net   27,047     28,589     30,130     31,819     33,508  
Tangible common shareholders' equity   $ 2,206,945     $ 2,197,642     $ 2,197,005     $ 2,165,790     $ 2,137,686  
Total assets   $ 26,533,230     $ 25,875,643     $ 25,741,439     $ 25,695,663     $ 25,257,784  
Subtract:                    
Goodwill   1,787,651     1,787,651     1,787,651     1,787,651     1,787,651  
Other intangible assets, net   27,047     28,589     30,130     31,819     33,508  
Tangible assets   $ 24,718,532     $ 24,059,403     $ 23,923,658     $ 23,876,193     $ 23,436,625  
Common shares outstanding at period end   220,205     220,461     220,149     220,225     220,205  
                     
Total shareholders' equity to total assets ratio   15.16 %   15.51 %   15.60 %   15.51 %   15.67 %
Tangible common equity ratio   8.93 %   9.13 %   9.18 %   9.07 %   9.12 %
Book value per common share   $ 18.26     $ 18.21     $ 18.24     $ 18.10     $ 17.98  
Tangible book value per common share   $ 10.02     $ 9.97     $ 9.98     $ 9.83     $ 9.71  
                                         

About Umpqua Holdings Corporation

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

Earnings Conference Call Information

The Company will host its second quarter 2018 earnings conference call on Thursday, July 19, 2018, at 10:00 a.m. PDT (1:00 p.m. EDT).  During the call, the Company will provide an update on recent activities and discuss its second quarter 2018 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (888) 505-4378 ten minutes prior to the start time and enter conference ID: 5308253.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 5308253.  The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at umpquabank.com.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. In this press release we make forward-looking statements about corporate initiatives and related cost savings.  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 Holdings Corporation
Consolidated Statements of Income
(Unaudited)
    Quarter Ended   % Change
(In thousands, except per share data)   Jun 30,
2018
  Mar 31,
2018
  Dec 31,
2017
  Sep 30,
2017
  Jun 30,
2017
  Seq.
Quarter
  Year
over
Year
Interest income:                            
Loans and leases   $ 237,343     $ 227,738     $ 223,206     $ 223,321     $ 212,998     4 %   11 %
Interest and dividends on investments:                            
Taxable   15,678     15,699     14,857     13,979     15,220     0 %   3 %
Exempt from federal income tax   2,057     2,128     2,121     2,125     2,237     (3 )%   (8 )%
Dividends   433     468     386     357     360     (7 )%   20 %
Temporary investments and interest bearing deposits   2,080     1,164     1,565     934     324     79 %   542 %
Total interest income   257,591     247,197     242,135     240,716     231,139     4 %   11 %
Interest expense:                            
Deposits   21,259     15,610     13,241     12,052     10,641     36 %   100 %
Securities sold under agreement to repurchase and federal funds purchased   155     63     43     81     321     146 %   (52 )%
Term debt   3,478     3,361     3,496     3,491     3,662     3 %   (5 )%
Junior subordinated debentures   5,400     4,932     4,734     4,628     4,437     9 %   22 %
Total interest expense   30,292     23,966     21,514     20,252     19,061     26 %   59 %
Net interest income   227,299     223,231     220,621     220,464     212,078     2 %   7 %
Provision for loan and lease losses   13,319     13,656     12,928     11,997     10,657     (2 )%   25 %
Non-interest income:                            
Service charges on deposits   15,520     14,995     15,413     15,849     15,478     4 %   0 %
Brokerage revenue   4,161     4,194     4,226     3,832     3,903     (1 )%   7 %
Residential mortgage banking revenue, net   33,163     38,438     42,118     33,430     33,894     (14 )%   (2 )%
Gain (loss) on sale of investment securities, net   14             (6 )   35     nm     (60 )%
Unrealized holding losses on equity securities not held for trading   (1,432 )                   nm     nm  
Gain on loan sales, net   1,348     1,230     3,688     7,969     3,310     10 %   (59 )%
Loss on junior subordinated debentures carried at fair value           (10,010 )   (1,590 )   (1,572 )   0 %   (100 )%
BOLI income   2,060     2,070     2,015     2,041     2,089     0 %   (1 )%
Other income   16,817     17,640     13,000     13,877     13,982     (5 )%   20 %
Total non-interest income   71,651     78,567     70,450     75,402     71,119     (9 )%   1 %
Non-interest expense:                            
Salaries and employee benefits   113,340     106,551     114,414     108,732     108,561     6 %   4 %
Occupancy and equipment, net   37,584     38,661     37,269     37,648     36,955     (3 )%   2 %
Intangible amortization   1,542     1,541     1,689     1,689     1,689     0 %   (9 )%
FDIC assessments   4,692     4,480     2,075     4,405     4,447     5 %   6 %
Gain on other real estate owned, net   (92 )   (38 )   (83 )   (99 )   (457 )   142 %   (80 )%
Merger related expenses               6,664     1,640     0 %   (100 )%
Other expenses   38,506     34,918     37,422     29,315     31,186     10 %   23 %
Total non-interest expense   195,572     186,113     192,786     188,354     184,021     5 %   6 %
Income before provision for income taxes   90,059     102,029     85,357     95,515     88,519     (12 )%   2 %
Provision for income taxes   22,273     24,360     3,486     34,182     31,707     (9 )%   (30 )%
Net income   67,786     77,669     81,871     61,333     56,812     (13 )%   19 %
Dividends and undistributed earnings allocated to participating securities   4     6     16     14     14     (33 )%   (71 )%
Net earnings available to common shareholders   $ 67,782     $ 77,663     $ 81,855     $ 61,319     $ 56,798     (13 )%   19 %
                             
Weighted average basic shares outstanding   220,283     220,370     220,194     220,215     220,310     0 %   0 %
Weighted average diluted shares outstanding   220,647     220,825     220,873     220,755     220,753     0 %   0 %
Earnings per common share – basic   $ 0.31     $ 0.35     $ 0.37     $ 0.28     $ 0.26     (11 )%   19 %
Earnings per common share – diluted   $ 0.31     $ 0.35     $ 0.37     $ 0.28     $ 0.26     (11 )%   19 %
                             
nm = not meaningful                            
                             


 
Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
    Six Months Ended   % Change
(In thousands, except per share data)   Jun 30, 2018   Jun 30, 2017   Year
over
Year
Interest income            
Loans and leases   $ 465,081     $ 418,994     11 %
Interest and dividends on investments:            
Taxable   31,377     29,151     8 %
Exempt from federal income tax   4,185     4,479     (7 )%
Dividends   901     748     20 %
Temporary investments and interest bearing deposits   3,244     1,881     72 %
Total interest income   504,788     455,253     11 %
Interest expense            
Deposits   36,869     20,289     82 %
Securities sold under agreement to repurchase and federal funds purchased   218     351     (38 )%
Term debt   6,839     7,172     (5 )%
Junior subordinated debentures   10,332     8,638     20 %
Total interest expense   54,258     36,450     49 %
Net interest income   450,530     418,803     8 %
Provision for loan and lease losses   26,975     22,329     21 %
Non-interest income            
Service charges on deposits   30,515     30,207     1 %
Brokerage revenue   8,355     8,025     4 %
Residential mortgage banking revenue, net   71,601     60,728     18 %
Gain on sale of investment securities, net   14     33     (58 )%
Unrealized holding losses on equity securities not held for trading   (1,432 )       nm  
Gain on loan sales, net   2,578     5,064     (49 )%
Loss on junior subordinated debentures carried at fair value       (3,127 )   (100 )%
BOLI income   4,130     4,158     (1 )%
Other income   34,457     26,256     31 %
Total non-interest income   150,218     131,344     14 %
Non-interest expense            
Salaries and employee benefits   219,891     215,034     2 %
Occupancy and equipment, net   76,245     75,628     1 %
Intangible amortization   3,083     3,378     (9 )%
FDIC assessments   9,172     8,534     7 %
Gain on other real estate owned, net   (130 )   (375 )   (65 )%
Merger related expenses       2,660     (100 )%
Other expenses   73,424     61,876     19 %
Total non-interest expense   381,685     366,735     4 %
Income before provision for income taxes   192,088     161,083     19 %
Provision for income taxes   46,633     58,268     (20 )%
Net income   145,455     102,815     41 %
Dividends and undistributed earnings allocated to participating securities   10     26     (62 )%
Net earnings available to common shareholders   $ 145,445     $ 102,789     41 %
             
Weighted average basic shares outstanding   220,326     220,298     0 %
Weighted average diluted shares outstanding   220,760     220,790     0 %
Earnings per common share – basic   $ 0.66     $ 0.47     40 %
Earnings per common share – diluted   $ 0.66     $ 0.47     40 %
             
nm = not meaningful            
             


 
Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
                        % Change
(In thousands, except per share data)   Jun 30, 2018   Mar 31, 2018   Dec 31, 2017   Sep 30, 2017   Jun 30, 2017   Seq.
Quarter
  Year
over
Year
Assets:                            
Cash and due from banks   $ 314,513     $ 304,681     $ 330,856     $ 304,760     $ 320,027     3 %   (2 )%
Interest bearing cash and temporary investments   488,499     264,508     303,424     540,806     295,937     85 %   65 %
Investment securities:                            
Equity and other, at fair value   64,297     63,295     12,255     11,919     11,467     2 %   461 %
Available for sale, at fair value   2,854,398     2,947,414     3,065,769     3,047,358     3,132,566     (3 )%   (9 )%
Held to maturity, at amortized cost   3,586     3,667     3,803     3,905     4,017     (2 )%   (11 )%
Loans held for sale, at fair value   432,642     299,739     259,518     417,470     451,350     44 %   (4 )%
Loans and leases   19,693,955     19,314,589     19,080,184     18,677,762     18,321,142     2 %   7 %
Allowance for loan and lease losses   (144,556 )   (141,933 )   (140,608 )   (139,503 )   (136,867 )   2 %   6 %
Loans and leases, net   19,549,399     19,172,656     18,939,576     18,538,259     18,184,275     2 %   8 %
Restricted equity securities   42,320     43,501     43,508     45,509     45,511     (3 )%   (7 )%
Premises and equipment, net   245,954     259,354     269,182     276,316     288,853     (5 )%   (15 )%
Goodwill   1,787,651     1,787,651     1,787,651     1,787,651     1,787,651     0 %   0 %
Other intangible assets, net   27,047     28,589     30,130     31,819     33,508     (5 )%   (19 )%
Residential mortgage servicing rights, at fair value   166,217     164,760     153,151     141,225     141,832     1 %   17 %
Other real estate owned   12,101     13,055     11,734     4,160     4,804     (7 )%   152 %
Bank owned life insurance   309,844     307,745     306,864     305,572     303,894     1 %   2 %
Other assets   234,762     215,028     224,018     238,934     252,092     9 %   (7 )%
Total assets   $ 26,533,230     $ 25,875,643     $ 25,741,439     $ 25,695,663     $ 25,257,784     3 %   5 %
Liabilities:                            
Deposits   $ 20,744,526     $ 20,106,856     $ 19,948,300     $ 19,851,910     $ 19,459,950     3 %   7 %
Securities sold under agreements to repurchase   273,666     291,984     294,299     321,542     330,189     (6 )%   (17 )%
Term debt   801,739     801,868     802,357     852,306     852,219     0 %   (6 )%
Junior subordinated debentures, at fair value   280,669     278,410     277,155     266,875     265,423     1 %   6 %
Junior subordinated debentures, at amortized cost   88,838     88,895     100,609     100,690     100,770     0 %   (12 )%
Deferred tax liability, net   39,328     39,277     37,503     51,423     34,296     0 %   15 %
Other liabilities   282,821     254,471     266,430     265,657     256,092     11 %   10 %
Total liabilities   22,511,587     21,861,761     21,726,653     21,710,403     21,298,939     3 %   6 %
Shareholders' equity:                            
Common stock   3,509,146     3,515,506     3,517,258     3,516,558     3,514,094     0 %   0 %
Retained earnings   569,933     546,330     522,520     476,226     454,802     4 %   25 %
Accumulated other comprehensive loss   (57,436 )   (47,954 )   (24,992 )   (7,524 )   (10,051 )   20 %   471 %
Total shareholders' equity   4,021,643     4,013,882     4,014,786     3,985,260     3,958,845     0 %   2 %
Total liabilities and shareholders' equity   $ 26,533,230     $ 25,875,643     $ 25,741,439     $ 25,695,663     $ 25,257,784     3 %   5 %
                             
Common shares outstanding at period end   220,205     220,461     220,149     220,225     220,205     0 %   0 %
Book value per common share   $ 18.26     $ 18.21     $ 18.24     $ 18.10     $ 17.98     0 %   2 %
Tangible book value per common share   $ 10.02     $ 9.97     $ 9.98     $ 9.83     $ 9.71     1 %   3 %
Tangible equity - common   $ 2,206,945     $ 2,197,642     $ 2,197,005     $ 2,165,790     $ 2,137,686     0 %   3 %
Tangible common equity to tangible assets   8.93 %   9.13 %   9.18 %   9.07 %   9.12 %   (0.20 )   (0.19 )
                                           


 
Umpqua Holdings Corporation
Loan and Lease Portfolio
(Unaudited)
(Dollars in thousands)   Jun 30, 2018   Mar 31, 2018   Dec 31, 2017   Sep 30, 2017   Jun 30, 2017   % Change
    Amount   Amount   Amount   Amount   Amount   Seq.
Quarter
  Year
over
Year
Loans and leases:                            
Commercial real estate:                            
Non-owner occupied term, net   $ 3,525,001     $ 3,526,221     $ 3,491,137     $ 3,475,243     $ 3,401,679     0 %   4 %
Owner occupied term, net   2,484,960     2,476,287     2,488,251     2,467,995     2,593,395     0 %   (4 )%
Multifamily, net   3,210,796     3,131,275     3,087,792     2,993,203     2,964,851     3 %   8 %
Construction & development, net   568,572     522,680     540,707     521,666     464,690     9 %   22 %
Residential development, net   183,114     179,871     165,865     186,400     165,956     2 %   10 %
Commercial:                            
Term, net   2,106,804     2,025,213     1,944,987     1,819,664     1,686,597     4 %   25 %
Lines of credit & other, net   1,152,841     1,147,028     1,166,173     1,134,045     1,153,409     1 %   0 %
Leases & equipment finance, net   1,265,843     1,228,709     1,167,503     1,137,732     1,082,651     3 %   17 %
Residential real estate:                            
Mortgage, net   3,414,216     3,283,945     3,192,185     3,094,361     3,021,331     4 %   13 %
Home equity loans & lines, net   1,136,378     1,107,822     1,103,297     1,079,931     1,056,848     3 %   8 %
Consumer & other, net   645,430     685,538     732,287     767,522     729,735     (6 )%   (12 )%
Total, net of deferred fees and costs   $ 19,693,955     $ 19,314,589     $ 19,080,184     $ 18,677,762     $ 18,321,142     2 %   7 %
                             
Loan and leases mix:                            
Commercial real estate:                            
  Non-owner occupied term, net   18 %   18 %   18 %   19 %   19 %        
  Owner occupied term, net   13 %   13 %   13 %   13 %   14 %        
  Multifamily, net   16 %   16 %   16 %   16 %   16 %        
Construction & development, net   3 %   3 %   3 %   3 %   3 %        
Residential development, net   1 %   1 %   1 %   1 %   1 %        
Commercial:                            
Term, net   11 %   10 %   10 %   10 %   9 %        
Lines of credit & other, net   6 %   6 %   6 %   6 %   6 %        
Leases & equipment finance, net   6 %   6 %   6 %   6 %   6 %        
Residential real estate:                            
Mortgage, net   17 %   17 %   17 %   16 %   16 %        
Home equity loans & lines, net   6 %   6 %   6 %   6 %   6 %        
Consumer & other, net   3 %   4 %   4 %   4 %   4 %        
Total   100 %   100 %   100 %   100 %   100 %        
                                       


 
Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
(Dollars in thousands)   Jun 30, 2018   Mar 31, 2018   Dec 31, 2017   Sep 30, 2017   Jun 30, 2017   % Change
    Amount   Amount   Amount   Amount   Amount   Seq.
Quarter
  Year
over
Year
Deposits:                            
Demand, non-interest bearing   $ 6,819,325     $ 6,699,399     $ 6,505,628     $ 6,571,471     $ 6,112,480     2 %   12 %
Demand, interest bearing   2,321,691     2,354,873     2,384,133     2,394,240     2,371,386     (1 )%   (2 )%
Money market   6,161,907     6,546,704     7,037,891     6,700,261     6,755,707     (6 )%   (9 )%
Savings   1,465,154     1,482,560     1,446,860     1,444,801     1,427,677     (1 )%   3 %
Time   3,976,449     3,023,320     2,573,788     2,741,137     2,792,700     32 %   42 %
Total   $ 20,744,526     $ 20,106,856     $ 19,948,300     $ 19,851,910     $ 19,459,950     3 %   7 %
                             
Total core deposits (1)   $ 17,743,888     $ 18,007,169     $ 18,263,802     $ 18,005,730     $ 17,561,956     (1 )%   1 %
                             
Deposit mix:                            
Demand, non-interest bearing   33 %   33 %   33 %   33 %   32 %        
Demand, interest bearing   11 %   12 %   12 %   12 %   12 %        
Money market   30 %   33 %   35 %   34 %   35 %        
Savings   7 %   7 %   7 %   7 %   7 %        
Time   19 %   15 %   13 %   14 %   14 %        
Total   100 %   100 %   100 %   100 %   100 %        
                             
Number of open accounts:                            
Demand, non-interest bearing   402,771     399,721     397,427     394,755     389,767          
Demand, interest bearing   77,918     78,181     78,853     79,899     80,594          
Money market   55,393     54,752     55,175     55,659     55,795          
Savings   162,414     162,841     162,453     162,556     161,369          
Time   51,073     48,529     46,861     47,129     47,339          
Total   749,569     744,024     740,769     739,998     734,864          
                             
Average balance per account:                            
Demand, non-interest bearing   $ 16.9     $ 16.8     $ 16.4     $ 16.6     $ 15.7          
Demand, interest bearing   29.8     30.1     30.2     30.0     29.4          
Money market   111.2     119.6     127.6     120.4     121.1          
Savings   9.0     9.1     8.9     8.9     8.8          
Time   77.9     62.3     54.9     58.2     59.0          
Total   $ 27.7     $ 27.0     $ 26.9     $ 26.8     $ 26.5          
                                                 
(1) Core deposits are defined as total deposits less time deposits greater than $100,000.
                                                 


 
  Umpqua Holdings Corporation
Credit Quality – Non-performing Assets
 (Unaudited)
    Quarter Ended   % Change
(Dollars in thousands)
  Jun 30,
2018
  Mar 31,
2018
  Dec 31,
2017
  Sep 30,
2017
  Jun 30,
2017
  Seq.
Quarter
  Year
over
Year
Non-performing assets:
                           
Loans and leases on non-accrual status
  $ 43,485     $ 45,775     $ 51,465     $ 44,573     $ 26,566     (5 )%   64 %
Loans and leases past due 90+ days and accruing (1)
  34,494     25,478     30,994     29,073     27,252     35 %   27 %
Total non-performing loans and leases
  77,979     71,253     82,459     73,646     53,818     9 %   45 %
Other real estate owned
  12,101     13,055     11,734     4,160     4,804     (7 )%   152 %
Total non-performing assets
  $ 90,080     $ 84,308     $ 94,193     $ 77,806     $ 58,622     7 %   54 %
                             
Performing restructured loans and leases
  $ 27,144     $ 31,659     $ 32,157     $ 45,813     $ 52,861     (14 )%   (49 )%
Loans and leases past due 31-89 days
  $ 45,114     $ 38,650     $ 43,870     $ 32,251     $ 31,153     17 %   45 %
Loans and leases past due 31-89 days to total loans and leases
  0.23 %   0.20 %   0.23 %   0.17 %   0.17 %        
Non-performing loans and leases to total loans and leases (1)
  0.40 %   0.37 %   0.43 %   0.39 %   0.29 %        
Non-performing assets to total assets(1)
  0.34 %   0.33 %   0.37 %   0.30 %   0.23 %        

(1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $9.2 million, $6.3 million, $12.4 million, $12.3 million, and $16.3 million at June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017, and June 30, 2017, respectively.

 
Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
 (Unaudited)
    Quarter Ended   % Change
(Dollars in thousands)   Jun 30,
2018
  Mar 31,
2018
  Dec 31,
2017
  Sep 30,
2017
  Jun 30,
2017
  Seq.
Quarter
  Year
over
Year
Allowance for loan and lease losses:                            
Balance beginning of period   $ 141,933     $ 140,608     $ 139,503     $ 136,867     $ 136,292          
Provision for loan and lease losses   13,319     13,656     12,928     11,997     10,657     (2 )%   25 %
Charge-offs   (14,815 )   (15,812 )   (15,751 )   (13,222 )   (13,944 )   (6 )%   6 %
Recoveries   4,119     3,481     3,928     3,861     3,862     18 %   7 %
Net charge-offs   (10,696 )   (12,331 )   (11,823 )   (9,361 )   (10,082 )   (13 )%   6 %
Total allowance for loan and lease losses   144,556     141,933     140,608     139,503     136,867     2 %   6 %
Reserve for unfunded commitments   4,130     4,129     3,963     3,932     3,816     0 %   8 %
Total allowance for credit losses   $ 148,686     $ 146,062     $ 144,571     $ 143,435     $ 140,683     2 %   6 %
                             
Net charge-offs to average loans and leases (annualized)   0.22 %   0.26 %   0.25 %   0.20 %   0.22 %        
Recoveries to gross charge-offs   27.80 %   22.01 %   24.94 %   29.20 %   27.70 %        
Allowance for loan and lease losses to loans and leases   0.73 %   0.73 %   0.74 %   0.75 %   0.75 %        
Allowance for credit losses to loans and leases   0.75 %   0.76 %   0.76 %   0.77 %   0.77 %        
                                       


 
Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
    Six Months Ended   % Change
(Dollars in thousands)   Jun 30, 2018   Jun 30, 2017   Year over Year
Allowance for loan and lease losses:        
Balance beginning of period   $ 140,608     $ 133,984      
Provision for loan and lease losses   26,975     22,329     21 %
Charge-offs   (30,627 )   (26,946 )   14 %
Recoveries   7,600     7,500     1 %
Net charge-offs   (23,027 )   (19,446 )   18 %
Total allowance for loan and lease losses   144,556     136,867     6 %
Reserve for unfunded commitments   4,130     3,816     8 %
Total allowance for credit losses   $ 148,686     $ 140,683     6 %
             
Net charge-offs to average loans and leases (annualized)   0.24 %   0.22 %    
Recoveries to gross charge-offs   24.81 %   27.83 %    
                 


 
Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
    Quarter Ended   % Change
    Jun 30,
2018
  Mar 31,
2018
  Dec 31,
2017
  Sep 30,
2017
  Jun 30,
2017
  Seq.
Quarter
  Year
over
Year
Average Rates:                            
Yield on loans and leases   4.81 %   4.75 %   4.65 %   4.70 %   4.67 %   0.06     0.14  
Yield on loans held for sale   4.86 %   4.21 %   3.99 %   3.89 %   3.26 %   0.65     1.60  
Yield on taxable investments   2.37 %   2.31 %   2.17 %   2.00 %   2.07 %   0.06     0.30  
Yield on tax-exempt investments (1)   3.64 %   3.68 %   4.49 %   4.59 %   4.64 %   (0.04 )   (1.00 )
Yield on interest bearing cash and temporary investments   1.82 %   1.55 %   1.22 %   1.47 %   1.03 %   0.27     0.79  
Total yield on earning assets (1)   4.45 %   4.39 %   4.26 %   4.30 %   4.26 %   0.06     0.19  
                             
Cost of interest bearing deposits   0.62 %   0.47 %   0.40 %   0.36 %   0.33 %   0.15     0.29  
Cost of securities sold under agreements to repurchase and fed funds purchased   0.22 %   0.08 %   0.06 %   0.10 %   0.32 %   0.14     (0.10 )
Cost of term debt   1.74 %   1.70 %   1.67 %   1.63 %   1.72 %   0.04     0.02  
Cost of junior subordinated debentures   5.89 %   5.36 %   5.11 %   5.02 %   4.88 %   0.53     1.01  
Total cost of interest bearing liabilities   0.80 %   0.65 %   0.58 %   0.55 %   0.52 %   0.15     0.28  
                             
Net interest spread (1)   3.65 %   3.74 %   3.68 %   3.75 %   3.74 %   (0.09 )   (0.09 )
Net interest margin (1)   3.93 %   3.96 %   3.88 %   3.94 %   3.91 %   (0.03 )   0.02  
                             
Performance Ratios:                            
Return on average assets   1.04 %   1.23 %   1.27 %   0.96 %   0.92 %   (0.19 )   0.12  
Return on average tangible assets   1.12 %   1.32 %   1.36 %   1.04 %   0.99 %   (0.20 )   0.13  
Return on average common equity   6.74 %   7.84 %   8.12 %   6.10 %   5.76 %   (1.10 )   0.98  
Return on average tangible common equity   12.27 %   14.30 %   14.90 %   11.23 %   10.67 %   (2.03 )   1.60  
Efficiency ratio – Consolidated   65.31 %   61.56 %   65.99 %   63.43 %   64.71 %   3.75     0.60  
Efficiency ratio – Bank   62.53 %   59.58 %   62.09 %   61.42 %   62.45 %   2.95     0.08  

(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 Holdings Corporation
Selected Ratios
(Unaudited)
    Six Months Ended   % Change
    Jun 30, 2018   Jun 30, 2017   Year over
Year
Average Rates:            
Yield on loans and leases   4.78 %   4.66 %   0.12  
Yield on loans held for sale   4.57 %   3.54 %   1.03  
Yield on taxable investments   2.34 %   2.09 %   0.25  
Yield on tax-exempt investments (1)   3.66 %   4.70 %   (1.04 )
Yield on interest bearing cash and temporary investments   1.72 %   0.82 %   0.90  
Total yield on earning assets (1)   4.43 %   4.23 %   0.20  
             
Cost of interest bearing deposits   0.55 %   0.31 %   0.24  
Cost of securities sold under agreements to repurchase and fed funds purchased   0.15 %   0.19 %   (0.04 )
Cost of term debt   1.72 %   1.70 %   0.02  
Cost of junior subordinated debentures   5.62 %   4.79 %   0.83  
Total cost of interest bearing liabilities   0.73 %   0.50 %   0.23  
             
Net interest spread (1)   3.70 %   3.73 %   (0.03 )
Net interest margin (1)   3.96 %   3.89 %   0.07  
             
Performance Ratios:            
Return on average assets   1.13 %   0.84 %   0.29  
Return on average tangible assets   1.22 %   0.90 %   0.32  
Return on average common equity   7.29 %   5.25 %   2.04  
Return on average tangible common equity   13.28 %   9.76 %   3.52  
Efficiency ratio – Consolidated   63.43 %   66.38 %   (2.95 )
Efficiency ratio – Bank   61.06 %   64.05 %   (2.99 )

(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 Holdings Corporation
Average Balances
(Unaudited)
    Quarter Ended   % Change
(Dollars in thousands)   Jun 30,
2018
  Mar 31,
2018
  Dec 31,
2017
  Sep 30,
2017
  Jun 30,
2017
  Seq.
Quarter
  Year
over
Year
Temporary investments and interest bearing cash   $ 458,133     $ 303,670     $ 509,187     $ 253,015     $ 125,886     51 %   264 %
Investment securities, taxable   2,723,406     2,793,449     2,804,530     2,867,292     3,008,079     (3 )%   (9 )%
Investment securities, tax-exempt   279,158     286,603     286,345     281,139     292,553     (3 )%   (5 )%
Loans held for sale   326,427     267,231     370,564     420,282     392,183     22 %   (17 )%
Loans and leases   19,444,890     19,150,315     18,765,251     18,537,827     18,024,651     2 %   8 %
Total interest earning assets   23,232,014     22,801,268     22,735,877     22,359,555     21,843,352     2 %   6 %
Goodwill and other intangible assets, net   1,815,529     1,817,068     1,818,730     1,820,394     1,822,032     0 %   0 %
Total assets   26,127,935     25,686,471     25,661,566     25,311,994     24,792,869     2 %   5 %
                             
Non-interest bearing demand deposits   6,645,689     6,450,364     6,611,493     6,354,591     5,951,670     3 %   12 %
Interest bearing deposits   13,745,089     13,492,965     13,281,502     13,155,462     13,037,064     2 %   5 %
Total deposits   20,390,778     19,943,329     19,892,995     19,510,053     18,988,734     2 %   7 %
Interest bearing liabilities   15,199,900     14,971,759     14,790,883     14,705,842     14,659,650     2 %   4 %
                             
Shareholders’ equity - common   4,031,253     4,019,822     3,998,609     3,989,868     3,956,777     0 %   2 %
Tangible common equity (1)   2,215,724     2,202,754     2,179,879     2,166,474     2,134,745     1 %   4 %
                                           


 
Umpqua Holdings Corporation
Average Balances
(Unaudited)
    Six Months Ended
  % Change
(Dollars in thousands)   Jun 30, 2018   Jun 30, 2017   Year over Year
Temporary investments and interest bearing cash   $ 381,328     $ 463,245     (18 )%
Investment securities, taxable   2,758,235     2,866,614     (4 )%
Investment securities, tax-exempt   282,860     289,515     (2 )%
Loans held for sale   296,992     371,989     (20 )%
Loans and leases   19,298,416     17,812,660     8 %
Total interest earning assets   23,017,831     21,804,023     6 %
Goodwill and other intangible assets, net   1,816,294     1,822,910     0 %
Total assets   25,908,423     24,761,749     5 %
             
Non-interest bearing demand deposits   6,548,566     5,917,984     11 %
Interest bearing deposits   13,619,723     13,078,171     4 %
Total deposits   20,168,289     18,996,155     6 %
Interest bearing liabilities   15,086,460     14,660,598     3 %
             
Shareholders’ equity - common   4,025,569     3,946,615     2 %
Tangible common equity (1)   2,209,275     2,123,705     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 Holdings Corporation
Average Rates and Balances
(unaudited)
(dollars in thousands) Quarter Ended
  June 30, 2018   March 31, 2018   June 30, 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 $ 326,427     $ 3,967     4.86 %   $ 267,231     $ 2,815     4.21 %   $ 392,183     $ 3,193     3.26 %
Loans and leases (1) 19,444,890     233,376     4.81 %   19,150,315     224,923     4.75 %   18,024,651     209,805     4.67 %
Taxable securities 2,723,406     16,111     2.37 %   2,793,449     16,167     2.31 %   3,008,079     15,580     2.07 %
Non-taxable securities (2) 279,158     2,539     3.64 %   286,603     2,640     3.68 %   292,553     3,397     4.64 %
Temporary investments and interest-bearing cash 458,133     2,080     1.82 %   303,670     1,164     1.55 %   125,886     324     1.03 %
Total interest-earning assets 23,232,014     $ 258,073     4.45 %   22,801,268     247,709     4.39 %   21,843,352     $ 232,299     4.26 %
Allowance for loan and lease losses (144,598 )           (142,409 )           (137,445 )        
Other assets 3,040,519             3,027,612             3,086,962          
Total assets $ 26,127,935             $ 25,686,471             $ 24,792,869          
INTEREST-BEARING LIABILITIES:                                  
Interest-bearing demand deposits $ 2,322,359     $ 1,565     0.27 %   $ 2,323,232     $ 1,210     0.21 %   $ 2,311,555     $ 798     0.14 %
Money market deposits 6,332,372     5,896     0.37 %   6,908,067     5,713     0.34 %   6,682,937     2,975     0.18 %
Savings deposits 1,456,625     252     0.07 %   1,463,058     163     0.05 %   1,401,238     146     0.04 %
Time deposits 3,633,733     13,546     1.50 %   2,798,608     8,524     1.24 %   2,641,334     6,722     1.02 %
Total interest-bearing deposits 13,745,089     21,259     0.62 %   13,492,965     15,610     0.47 %   13,037,064     10,641     0.33 %
Repurchase agreements and federal funds purchased 285,338     155     0.22 %   303,059     63     0.08 %   405,892     321     0.32 %
Term debt 801,768     3,478     1.74 %   802,297     3,361     1.70 %   852,254     3,662     1.72 %
Junior subordinated debentures 367,705     5,400     5.89 %   373,438     4,932     5.36 %   364,440     4,437     4.88 %
Total interest-bearing liabilities 15,199,900     $ 30,292     0.80 %   14,971,759     $ 23,966     0.65 %   14,659,650     $ 19,061     0.52 %
Non-interest-bearing deposits 6,645,689             6,450,364             5,951,670          
Other liabilities 251,093             244,526             224,772          
Total liabilities 22,096,682             21,666,649             20,836,092          
Common equity 4,031,253             4,019,822             3,956,777          
Total liabilities and shareholders' equity $ 26,127,935             $ 25,686,471             $ 24,792,869          
NET INTEREST INCOME     $ 227,781             $ 223,743             $ 213,238      
NET INTEREST SPREAD         3.65 %           3.74 %           3.74 %
AVERAGE YIELD ON EARNING ASSETS (1), (2)         4.45 %           4.39 %           4.26 %
INTEREST EXPENSE TO EARNING ASSETS         0.52 %           0.43 %           0.35 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)         3.93 %           3.96 %           3.91 %

(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 $482,000 for the three months ended June 30, 2018 as compared to $512,000 for March 31, 2018 and $1.2 million for June 30, 2017.

 
Umpqua Holdings Corporation
Average Rates and Balances
(unaudited)
(dollars in thousands) Six Months Ended
  June 30, 2018   June 30, 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 $ 296,992     $ 6,782     4.57 %   $ 371,989     $ 6,588     3.54 %
Loans and leases (1) 19,298,416     458,299     4.78 %   17,812,660     412,406     4.66 %
Taxable securities 2,758,235     32,278     2.34 %   2,866,614     29,899     2.09 %
Non-taxable securities (2) 282,860     5,179     3.66 %   289,515     6,806     4.70 %
Temporary investments and interest-bearing cash 381,328     3,244     1.72 %   463,245     1,881     0.82 %
Total interest-earning assets 23,017,831     $ 505,782     4.43 %   21,804,023     $ 457,580     4.23 %
Allowance for loan and lease losses (143,509 )           (136,834 )        
Other assets 3,034,101             3,094,560          
Total assets $ 25,908,423             $ 24,761,749          
INTEREST-BEARING LIABILITIES:                      
Interest-bearing demand deposits $ 2,322,793     $ 2,775     0.24 %   $ 2,288,870     $ 1,443     0.13 %
Money market deposits 6,618,629     11,609     0.35 %   6,776,705     5,644     0.17 %
Savings deposits 1,459,824     414     0.06 %   1,383,124     274     0.04 %
Time deposits 3,218,477     22,071     1.38 %   2,629,472     12,928     0.99 %
Total interest-bearing deposits 13,619,723     36,869     0.55 %   13,078,171     20,289     0.31 %
Repurchase agreements and federal funds purchased 294,150     218     0.15 %   366,498     351     0.19 %
Term debt 802,031     6,839     1.72 %   852,302     7,172     1.70 %
Junior subordinated debentures 370,556     10,332     5.62 %   363,627     8,638     4.79 %
Total interest-bearing liabilities 15,086,460     $ 54,258     0.73 %   14,660,598     $ 36,450     0.50 %
Non-interest-bearing deposits 6,548,566             5,917,984          
Other liabilities 247,828             236,552          
Total liabilities 21,882,854             20,815,134          
Common equity 4,025,569             3,946,615          
Total liabilities and shareholders' equity $ 25,908,423             $ 24,761,749          
NET INTEREST INCOME     $ 451,524             $ 421,130      
NET INTEREST SPREAD         3.70 %           3.73 %
AVERAGE YIELD ON EARNING ASSETS (1), (2)         4.43 %           4.23 %
INTEREST EXPENSE TO EARNING ASSETS         0.47 %           0.34 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)         3.96 %           3.89 %

(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 $1.0 million for the six months ended June 30, 2018 as compared to $2.3 million for the same period in 2017.

 
Umpqua Holdings Corporation
Residential Mortgage Banking Activity
(unaudited)
    Quarter Ended   % Change
(Dollars in thousands)   Jun 30, 2018   Mar 31, 2018   Dec 31, 2017   Sep 30, 2017   Jun 30, 2017   Seq.
Quarter
  Year over
Year
Residential mortgage servicing rights:                            
Residential mortgage loans serviced for others   $ 15,508,182     $ 15,442,915     $ 15,336,597     $ 15,007,942     $ 14,797,242     0 %   5 %
MSR asset, at fair value   166,217     164,760     153,151     141,225     141,832     1 %   17 %
MSR as % of serviced portfolio   1.07 %   1.07 %   1.00 %   0.94 %   0.96 %   0 %   11 %
Residential mortgage banking revenue:                            
Origination and sale   $ 28,159     $ 22,837     $ 29,864     $ 32,784     $ 32,385     23 %   (13 )%
Servicing   10,407     10,522     10,287     9,879     9,839     (1 )%   6 %
Change in fair value of MSR asset   (5,403 )   5,079     1,967     (9,233 )   (8,330 )   (206 )%   (35 )%
Total   $ 33,163     $ 38,438     $ 42,118     $ 33,430     $ 33,894     (14 )%   (2 )%
                             
Closed loan volume:                            
Closed loan volume - portfolio   $ 294,581     $ 237,783     $ 265,718     $ 336,362     $ 312,022     24 %   (6 )%
Closed loan volume - for-sale   839,489     687,226     850,453     891,063     918,200     22 %   (9 )%
Closed loan volume - total   $ 1,134,070     $ 925,009     $ 1,116,171     $ 1,227,425     $ 1,230,222     23 %   (8 )%
                             
Gain on sale margin:                            
Based on for-sale volume   3.35 %   3.32 %   3.51 %   3.68 %   3.53 %   0.03     (0.18 )
                             
    Six Months Ended   % Change                
(Dollars in thousands)   Jun 30, 2018   Jun 30, 2017   Year over
Year
               
Residential mortgage banking revenue:                            
Origination and sale   $ 50,996     $ 57,032     (11 )%                
Servicing   20,929     19,697     6 %                
Change in fair value of MSR asset   (324 )   (16,001 )   (98 )%                
Total   $ 71,601     $ 60,728     18 %                
                             
Closed loan volume:                            
Closed loan volume - portfolio   $ 532,364     $ 557,356     (4 )%                
Closed loan volume - for-sale   1,526,715     1,672,915     (9 )%                
Closed loan volume - total   $ 2,059,079     $ 2,230,271     (8 )%                
                             
Gain on sale margin:                            
Based on for-sale volume   3.34 %   3.41 %   (0.07 )                
                                   

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