Bank of America Corp
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Financials : Banks | Large Cap Value
Company profile

Bank of America Corporation is a bank holding company and a financial holding company. The Company is a financial institution, serving individual consumers and others with a range of banking, investing, asset management and other financial and risk management products and services. The Company, through its banking and various non-bank subsidiaries, throughout the United States and in international markets, provides a range of banking and non-bank financial services and products through four business segments: Consumer Banking, which comprises Deposits and Consumer Lending; Global Wealth & Investment Management, which consists of two primary businesses: Merrill Lynch Global Wealth Management and U.S. Trust, Bank of America Private Wealth Management; Global Banking, which provides a range of lending-related products and services; Global Markets, which offers sales and trading services, and All Other, which consists of equity investments, residual expense allocations and other.

Closing Price
$28.99
Day's Change
-0.04 (-0.14%)
Bid
--
Ask
--
B/A Size
--
Day's High
29.10
Day's Low
28.81
Volume
(Light)
Volume:
25,971,555

10-day average volume:
51,914,855
25,971,555

Umpqua Reports Third Quarter 2020 Results

4:05 pm ET October 21, 2020 (PR Newswire) Print

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.

https://mma.prnewswire.com/media/811930/UHC_Logo.jpg

"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(R) 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.

-- 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.

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.

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.

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

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 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.       Year
                                                                                                                                                          Quarter    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 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 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.      Year
                                                                                                                                                                        Quarter   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 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.              Year
                                                                                                                                                                                                                 Quarter           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 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.      Year
                                                                                                                                           Quarter   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 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.      Year
                                                                                                                                                          Quarter   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 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.       Year over
                                                                                                                                                                    Quarter    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 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 Holdings Corporation
Selected Ratios
(Unaudited)
                                                          Quarter Ended                                                         % Change
                                                          Sep 30, 2020  Jun 30, 2020  Mar 31, 2020  Dec 31, 2019  Sep 30, 2019  Seq.     Year
                                                                                                                                Quarter  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 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 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.     Year over
                                                                                                                                        Quarter  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 Holdings Corporation
Average Rates and Balances
(Unaudited)
                                                                      Quarter Ended
                                                                      September 30, 2020                          June 30, 2020                               September 30, 2019
(Dollars in thousands)                                                Average            Interest      Average    Average            Interest      Average    Average            Interest      Average
                                                                      Balance            Income or     Yields or  Balance            Income or     Yields or  Balance            Income or     Yields or
                                                                                         Expense       Rates                         Expense       Rates                         Expense       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 Holdings Corporation
Average Rates and Balances
(Unaudited)
(dollars in thousands)                                                Nine Months Ended
                                                                      September 30, 2020                          September 30, 2019
                                                                      Average            Interest      Average    Average            Interest      Average
                                                                      Balance            Income or     Yields or  Balance            Income or     Yields or
                                                                                         Expense       Rates                         Expense       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 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.        Year
                                                                                                                                                                                     Quarter     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 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) %

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