UMPQUA REPORTS THIRD QUARTER 2022 RESULTS

Rhea-AI Summary

Umpqua Holdings Corporation reported strong third-quarter 2022 results, with net income of $84 million ($0.39 per share) and operating net income of $103 million ($0.47 per share). Loan balances rose $1.1 billion (4.4%), and deposit balances increased $685 million (2.6%). The net interest margin improved by 47 basis points to 3.88%. However, non-interest income decreased by $26 million, primarily due to fair value accounting impacts. The company's estimated total risk-based capital ratio stood at 13.2%, remaining above regulatory minimums.

Positive

• Net income increased to $84 million, or $0.39 per share.
• Operating net income rose by $103 million, or $0.47 per share.
• Loan balances increased by $1.1 billion (4.4%).
• Deposit balances grew by $685 million (2.6%).
• Net interest margin improved by 47 basis points to 3.88%.
• Total risk-based capital ratio estimated at 13.2%, above regulatory minimums.

Negative

• Non-interest income decreased by $26 million due to fair value accounting losses and lower mortgage income.
• Provision for credit losses increased to $28 million from $19 million in the prior quarter.
• Tangible book value per common share decreased to $11.11 from $11.57 in the prior quarter.

Third Quarter 2022 Results

• Net income of $84 million, or $0.39 per common share
• Operating net income of $103 million, or $0.47 per common share1
• Loan balances increased $1.1 billion or 4.4%
• Deposit balances increased $685 million or 2.6%
• Net interest margin increased 47 basis points to 3.88%

PORTLAND, Ore., Oct. 19, 2022 /PRNewswire/ --

UMPQUA REPORTS THIRD QUARTER 2022 RESULTS
$0.39		$84		13.02 %		13.2 %
Net earnings per diluted common share		Net income ($ in millions)		Return on average tangible common equity ("ROATCE")1		Total risk-based capital ratio (estimated)

 

CEO Commentary

"Strong loan growth, exceptional credit quality, and net interest margin expansion again characterize Umpqua's quarterly results," said Cort O'Haver, President and CEO. "New loan generation reflects existing, conservative portfolio trends, and our efforts to thoughtfully execute loan and deposit pricing changes in the rising rate environment contributed to a 16% sequential-quarter increase in net interest income. Although the net increase in loans outpaced our deposit expansion, we are pleased with the more balanced growth levels compared to the prior quarter. Our teams remain focused on relationship banking with our customers and within our communities as we await the realization of items necessary to complete our proposed combination with Columbia Banking System."

–  Cort O'Haver, President and CEO of Umpqua Holdings Corporation

 

3Q22 HIGHLIGHTS (COMPARED TO 2Q22)
Net Interest Income and NIM	•  Net interest income increased by $39 million or 16% on a quarter-to-quarter basis due to the favorable impact of rising interest rates and the higher mix of loans as a percentage of earning assets.
	•  Net interest margin was 3.88%, up 47 basis points from the prior quarter. Total deposit costs were 14 basis points for the quarterly average and 22 basis points at September 30, 2022, compared to 6 basis points at June 30, 2022.
Non-Interest Income and Expense	•  Non-interest income decreased by $26 million due primarily to the impact of rising interest rates on fair value accounting and hedges and lower residential mortgage gain-on-sale income.
	•  Non-interest expense decreased by $1.6 million due to lower salaries and employee benefits expense and lower merger-related expenses, partially offset by a net increase in other miscellaneous expenses.
Credit Quality	•  Net charge-offs remained low at 0.11% of average loans and leases (annualized).
	•  Provision expense of $28 million compares to $19 million for the prior quarter. Net portfolio growth and economic forecast changes are the primary drivers of the increase.
	•  Non-performing assets to total assets was 0.16%, up 1 basis point from June 30, 2022.
Capital	•  Estimated total risk-based capital ratio of 13.2% and estimated tier 1 risk-based capital ratio of 10.7%.
	•  Declared a quarterly cash dividend of $0.21 per common share on October 3, 2022, payable October 28, 2022, to holders of record as of October 14, 2022.
Notable items	•  MSR hedge put in place in mid-August as additional actions taken to reduce mortgage segment volatility.
	•  $0.8 million in merger-related expenses and $1.4 million in exit and disposal costs.

 

3Q22 KEY FINANCIAL DATA
PERFORMANCE METRICS	3Q22		2Q22		3Q21
Return on average assets	1.09 %		1.04 %		1.40 %
Return on average tangible common equity1	13.02 %		12.23 %		15.88 %
Operating return on average assets1	1.33 %		1.06 %		1.40 %
Operating return on average tangible common equity1	15.90 %		12.49 %		15.88 %
Net interest margin	3.88 %		3.41 %		3.21 %
Efficiency ratio - consolidated	56.07 %		59.12 %		59.44 %
Loan to deposit ratio	95.12 %		93.50 %		81.65 %
INCOME STATEMENT ($ in 000s, excl. per share data)	3Q22		2Q22		3Q21
Net interest income	$287,604		$248,170		$235,074
Provision (recapture) for credit losses	$27,572		$18,692		($18,919)
Non-interest income	$29,445		$55,235		$73,705
Non-interest expense	$177,964		$179,574		$183,753
Pre-provision net revenue1	$139,085		$123,831		$125,026
Operating pre-provision net revenue1	$163,793		$125,994		$124,955
Earnings per common share - diluted	$0.39		$0.36		$0.49
Operating earnings per common share - diluted1	$0.47		$0.37		$0.49
Dividends paid per share	$0.21		$0.21		$0.21
BALANCE SHEET	3Q22		2Q22		3Q21
Total assets	$31.5B		$30.1B		$30.9B
Loans and leases	$25.5B		$24.4B		$22.0B
Total deposits	$26.8B		$26.1B		$26.9B
Book value per common share	$11.14		$11.60		$12.57
Tangible book value per share1	$11.11		$11.57		$12.52
Tangible book value per share, ex AOCI1	$13.18		$12.99		$12.43

 

Balance Sheet

Total consolidated assets were $31.5 billion as of September 30, 2022, compared to $30.1 billion as of June 30, 2022 and $30.9 billion as of September 30, 2021.  Including secured off-balance sheet lines of credit, total available liquidity was $14.4 billion as of September 30, 2022, representing 46% of total assets and 54% of total deposits.

Gross loans and leases were $25.5 billion as of September 30, 2022, an increase of $1.1 billion relative to June 30, 2022. Growth remained balanced across portfolios as it was diversified further by business lines and geographies. New loans added to the portfolio during the third quarter have similar underwriting characteristics to existing loan categories, as our Q3 2022 Earnings Presentation details.

Total deposits were $26.8 billion as of September 30, 2022, an increase of $685 million or 2.6% from $26.1 billion as of June 30, 2022. Interest-bearing demand and money market balances accounted for the largest expansion by dollars, though all categories increased during the quarter.

Net Interest Income

Net interest income was $288 million for the third quarter of 2022, up $39 million from the prior quarter. The increase reflects the favorable impact of higher interest rates on our asset sensitive balance sheet and the full quarter effect of the significant deployment of cash into loans that occurred in the second quarter of 2022.

The Company's net interest margin was 3.88% for the third quarter of 2022, up 47 basis points from 3.41% for the second quarter of 2022. The increase is attributable to the higher mix of loans as a percentage of earning assets as well as an increase in individual category earning asset yields given upward interest rate movements. The cost of interest-bearing deposits increased twelve basis points to 0.23% for the third quarter of 2022 compared to the second quarter of 2022, and it was 0.38% on September 30, 2022 compared to 0.10% on June 30, 2022. Please refer to the Q3 2022 Earnings Presentation available on our website for additional net interest margin change details and interest rate sensitivity information.

Credit Quality

The allowance for credit losses was $295 million, or 1.16% of loans and leases, as of September 30, 2022, compared to $274 million, or 1.12% of loans and leases, as of June 30, 2022.  The provision for credit losses of $28 million for the third quarter of 2022 compares to a provision of $19 million for the second quarter of 2022. The current quarter's provision reflects allowance requirements for new loan generation; changes between the May 2022 and August 2022 economic forecasts used in credit models, which contributed to the quarter's net expense; and loan mix changes. Please refer to the Q3 2022 Earnings Presentation available on our website for additional details related to the allowance for credit losses.

Net charge-offs were 0.11% of average loans and leases (annualized) for the third quarter of 2022, compared to 0.11% for the second quarter of 2022. Net charge-off activity within the FinPac portfolio continued to remain below its historical average. As of September 30, 2022, non-performing assets were 0.16% of total assets, compared to 0.15% as of June 30, 2022 and 0.17% as of September 30, 2021.

Non-interest Income

Non-interest income was $29 million for the third quarter of 2022, down $26 million from the prior quarter. The decline was primarily driven by a net fair value loss of $23 million in the third quarter related to cumulative fair value adjustments and MSR hedging activity, which compares to a net fair value gain of $1.0 million in the second quarter. Lower mortgage gain-on-sale revenue also contributed to the quarter's decline.

As detailed in our segment and non-GAAP disclosures, non-interest income for the Core Banking segment includes a fair value loss of $25 million for the third quarter of 2022, driven by an increase in long-term interest rates and their effect on fair value adjustments related to investment securities, swap derivatives, and loans carried at fair value. This compares to a fair value loss of $10 million in the second quarter of 2022, and the $15 million adverse movement in fair value change between periods is primarily captured in other income. Please refer to the Q3 2022 Earnings presentation available on our website for additional details related to other non-interest income.

Revenue from the origination and sale of residential mortgages was $11 million for the third quarter of 2022, a decrease of $4.6 million from the prior quarter. This decline reflects a sequential-quarter decrease of $180 million or 31% in for-sale mortgage origination volume given the impact of rising long-term interest rates.  Of the current quarter's mortgage production, 92% related to purchase activity, compared to 83% for the prior quarter and 61% for the same period of the prior year. While the mortgage banking gain-on-sale margin increased three basis points from the prior quarter to 2.65% for the third quarter of 2022, it continued to reflect the negative impact from rising rates on the pipeline.

In mid-August, we put hedges in place to reduce the volatility of MSR fair value impacts on a net basis. In the third quarter of 2022, we recorded a net write-up of the MSR asset of $11 million, which includes a $16 million fair value gain related to model inputs. We correspondingly recorded a $14 million MSR hedge loss during the quarter. Results for the month of September indicate the MSR hedges are working as planned to reduce net income volatility as the $11 million fair value gain related to model inputs was nearly offset by the MSR hedge loss of $10 million during the month. We continue to execute structural changes within our Mortgage Banking segment to manage expenses and efficiently deploy capital, and as part of the process, we reduced headcount during the third quarter.

Non-interest Expense

Non-interest expense was $178 million for the third quarter of 2022, down $1.6 million from the prior quarter level. The decrease is primarily due to lower salaries and employee benefits and lower merger-related expenses, partially offset by a net increase in other miscellaneous expenses. The third quarter of 2022 included $0.8 million in merger-related expenses. Please refer to the Q3 2022 Earnings Presentation available on our website for additional quarterly expense change details.

Capital

As of September 30, 2022, the Company's tangible book value per common share² decreased to $11.11, compared to $11.57 in the prior quarter and $12.52 in the same period of the prior year. Rising interest rates drove a decline in the fair value of available-for-sale investment securities and an increase in junior subordinated debt accounted for at fair value during the quarter. The impact of these items is reflected by a decline in accumulated other comprehensive (loss) income ("AOCI") to $(450) million, compared to $(308) million at the prior quarter-end and $20 million at September 30, 2021. Excluding AOCI, tangible book² increased to $13.18 at September 30, 2022, compared to $12.99 and $12.43 for the linked-quarter and year-ago periods, respectively.

AOCI has no effect on our regulatory capital ratios as the company opted to exclude it from our common equity tier 1 capital calculations. The Company's estimated total risk-based capital ratio was 13.2% and its estimated tier 1 risk-based capital ratio was 10.7% as of September 30, 2022. The Company remains above current "well-capitalized" regulatory minimums.  The regulatory capital ratios as of September 30, 2022 are estimates, pending completion and filing of the Company's regulatory reports. 

Segment Disclosures

Segment disclosures on pages 18-20 of this press release provide additional detail on the Company's two operating segments: Core Banking and Mortgage Banking.

The Core Banking segment includes all lines of business, except Mortgage Banking, including commercial, retail, wealth management, as well as the operations, technology, and administrative functions of the Bank and Holding Company.  The Mortgage Banking segment includes the revenue earned from the production and sale of residential real estate loans, the servicing income from our serviced loan portfolio, the quarterly changes to the mortgage servicing rights (MSR) asset, and the specific expenses that are related to mortgage banking activities including variable commission expenses.  Revenue and related expenses for residential real estate loans held for investment are included in the Core Banking segment as portfolio loans are an anchor product for our consumer and wealth channels and are originated through a variety of channels throughout the Company.

Earnings Conference Call Information

The Company will host its third quarter 2022 earnings conference call on October 20, 2022, 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 2022 financial results. Participants may register for the call using the below link to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.

Register for the call: https://register.vevent.com/register/BI1c52bb4dbf56448d85316177a95883a3
Join the audiocast: https://edge.media-server.com/mmc/p/2ovipyh4
Access the replay through the Company's investor relations page: https://www.umpquabank.com/investor-relations/

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ), headquartered in Portland, Oregon, is the parent company of Umpqua Bank, an Oregon-based regional bank that operates in Oregon, Washington, California, Idaho, Nevada, Arizona, and Colorado. Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company was named #1 in Customer Satisfaction for the Northwest Region in the J.D. Power 2021 U.S. Retail Banking Satisfaction Study^SM, and Forbes consistently ranks Umpqua as one of America's Best Banks. The Portland Business Journal has also recognized Umpqua as the Most Admired Financial Services Company in Oregon for seventeen consecutive years. In addition to its retail and commercial banking presence, Umpqua Bank owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses. For more information, visit 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 strategic and growth initiatives and the result of such activity. 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, inflation and any slowdown in economic growth particularly in the western United States; the effect of the COVID-19 pandemic, including on our credit quality 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; changes in laws or regulations; the ability to complete, or any delays in completing, the proposed transaction between us and Columbia Banking System, Inc.; any failure to realize the anticipated benefits of the transaction when expected or at all; certain restrictions during the pendency of the proposed transaction that may impact our ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities; and potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the transaction and integration of the companies. 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.

 

____________________

1 "Non-GAAP" financial measure.  See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.

2 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.

 

TABLE INDEX
	Page
Consolidated Statements of Operations	7
Consolidated Balance Sheets	9
Financial Highlights	10
Loan & Lease Portfolio Balances and Mix	12
Deposit Balances, Mix, and Select Account Details	13
Credit Quality - Non-performing Assets	14
Credit Quality - Allowance for Credit Losses	14
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates	17
Segments	19
GAAP to Non-GAAP Reconciliation	22

 

Umpqua Holdings Corporation
Consolidated Statements of Operations
(Unaudited)
	Quarter Ended										% Change
(In thousands, except per share data)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Interest income:
Loans and leases	$     278,830		$     234,674		$     214,404		$     221,501		$     224,403		19 %		24 %
Interest and dividends on investments:
Taxable	18,175		17,256		18,725		16,566		16,102		5 %		13 %
Exempt from federal income tax	1,322		1,369		1,372		1,456		1,470		(3) %		(10) %
Dividends	86		84		86		102		213		2 %		(60) %
Temporary investments and interest bearing deposits	5,115		2,919		1,353		1,229		1,237		75 %		314 %
Total interest income	303,528		256,302		235,940		240,854		243,425		18 %		25 %
Interest expense:
Deposits	9,090		4,015		3,916		4,357		5,100		126 %		78 %
Securities sold under agreement to repurchase and federal funds purchased	545		66		63		48		88		nm		nm
Borrowings	798		50		49		51		149		nm		436 %
Junior subordinated debentures	5,491		4,001		3,149		3,019		3,014		37 %		82 %
Total interest expense	15,924		8,132		7,177		7,475		8,351		96 %		91 %
Net interest income	287,604		248,170		228,763		233,379		235,074		16 %		22 %
Provision (recapture) for credit losses	27,572		18,692		4,804		(736)		(18,919)		48 %		(246) %
Non-interest income:
Service charges on deposits	12,632		12,011		11,583		11,188		10,941		5 %		15 %
Card-based fees	9,115		10,530		8,708		9,355		9,111		(13) %		0 %
Brokerage revenue	27		27		11		31		31		0 %		(13) %
Residential mortgage banking revenue, net	17,341		30,544		60,786		43,185		34,150		(43) %		(49) %
Gain on sale of debt securities, net	—		—		2		4		—		nm		nm
Loss on equity securities, net	(2,647)		(2,075)		(2,661)		(466)		(343)		28 %		672 %
Gain on loan and lease sales, net	1,525		1,303		2,337		4,816		4,208		17 %		(64) %
BOLI income	2,023		2,110		2,087		2,101		2,038		(4) %		(1) %
Other (loss) income	(10,571)		785		(2,884)		12,524		13,569		nm		(178) %
Total non-interest income	29,445		55,235		79,969		82,738		73,705		(47) %		(60) %
Non-interest expense:
Salaries and employee benefits	109,164		110,942		113,138		117,477		117,636		(2) %		(7) %
Occupancy and equipment, net	35,042		34,559		34,829		34,310		33,944		1 %		3 %
Intangible amortization	1,025		1,026		1,025		1,130		1,130		0 %		(9) %
FDIC assessments	3,007		2,954		4,516		2,896		2,136		2 %		41 %
Merger related expenses	769		2,672		2,278		15,183		—		(71) %		nm
Other expenses	28,957		27,421		26,644		28,715		28,907		6 %		0 %
Total non-interest expense	177,964		179,574		182,430		199,711		183,753		(1) %		(3) %
Income before provision for income taxes	111,513		105,139		121,498		117,142		143,945		6 %		(23) %
Provision for income taxes	27,473		26,548		30,341		28,788		35,879		3 %		(23) %
Net income	$       84,040		$       78,591		$       91,157		$       88,354		$     108,066		7 %		(22) %
Weighted average basic shares outstanding	217,051		217,030		216,782		216,624		218,416		0 %		(1) %
Weighted average diluted shares outstanding	217,386		217,279		217,392		217,356		218,978		0 %		(1) %
Earnings per common share – basic	$           0.39		$           0.36		$           0.42		$           0.41		$           0.49		8 %		(20) %
Earnings per common share – diluted	$           0.39		$           0.36		$           0.42		$           0.41		$           0.49		8 %		(20) %
nm = not meaningful

 

Umpqua Holdings Corporation
Consolidated Statements of Operations
(Unaudited)
		Nine Months Ended				% Change
(In thousands, except per share data)		Sep 30, 2022		Sep 30, 2021		Year over Year
Interest income:
Loans and leases		$            727,908		$            669,014		9 %
Interest and dividends on investments:
Taxable		54,156		43,833		24 %
Exempt from federal income tax		4,063		4,491		(10) %
Dividends		256		1,216		(79) %
Temporary investments and interest bearing deposits		9,387		2,635		256 %
Total interest income		795,770		721,189		10 %
Interest expense:
Deposits		17,021		22,794		(25) %
Securities sold under agreement to repurchase and federal funds purchased		674		232		191 %
Borrowings		897		2,787		(68) %
Junior subordinated debentures		12,641		9,108		39 %
Total interest expense		31,233		34,921		(11) %
Net interest income		764,537		686,268		11 %
Provision (recapture) for credit losses		51,068		(41,915)		(222) %
Non-interest income:
Service charges on deposits		36,226		30,898		17 %
Card-based fees		28,353		26,759		6 %
Brokerage revenue		65		5,081		(99) %
Residential mortgage banking revenue, net		108,671		143,626		(24) %
Gain on sale of debt securities, net		2		4		(50) %
Loss on equity securities, net		(7,383)		(1,045)		nm
Gain on loan and lease sales, net		5,165		10,899		(53) %
BOLI income		6,220		6,201		0 %
Other (loss) income		(12,670)		51,157		(125) %
Total non-interest income		164,649		273,580		(40) %
Non-interest expense:
Salaries and employee benefits		333,244		363,343		(8) %
Occupancy and equipment, net		104,430		103,236		1 %
Intangible amortization		3,076		3,390		(9) %
FDIC assessments		10,477		6,342		65 %
Merger related expenses		5,719		—		nm
Other expenses		83,022		84,434		(2) %
Total non-interest expense		539,968		560,745		(4) %
Income before provision for income taxes		338,150		441,018		(23) %
Provision for income taxes		84,362		109,072		(23) %
Net income		$            253,788		$            331,946		(24) %
Weighted average basic shares outstanding		216,955		219,791		(1) %
Weighted average diluted shares outstanding		217,353		220,278		(1) %
Earnings per common share – basic		$                 1.17		$                 1.51		(23) %
Earnings per common share – diluted		$                 1.17		$                 1.51		(23) %
nm = not meaningful

 

Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)
											% Change
(In thousands, except per share data)	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$     321,447		$     315,348		$     307,144		$     222,015		$     395,555		2 %		(19) %
Interest bearing cash and temporary investments	1,232,412		687,233		2,358,292		2,539,606		3,349,034		79 %		(63) %
Investment securities:
Equity and other, at fair value	72,277		75,347		78,966		81,214		81,575		(4) %		(11) %
Available for sale, at fair value	3,136,391		3,416,707		3,638,080		3,870,435		3,723,171		(8) %		(16) %
Held to maturity, at amortized cost	2,547		2,637		2,700		2,744		2,795		(3) %		(9) %
Loans held for sale	148,275		228,889		309,946		353,105		352,466		(35) %		(58) %
Loans and leases	25,507,951		24,432,678		22,975,761		22,553,180		21,969,940		4 %		16 %
Allowance for credit losses on loans and leases	(283,065)		(261,111)		(248,564)		(248,412)		(257,560)		8 %		10 %
Net loans and leases	25,224,886		24,171,567		22,727,197		22,304,768		21,712,380		4 %		16 %
Restricted equity securities	40,993		10,867		10,889		10,916		10,946		277 %		275 %
Premises and equipment, net	165,305		165,196		167,369		171,125		172,624		0 %		(4) %
Operating lease right-of-use assets	81,729		87,249		87,333		82,366		88,379		(6) %		(8) %
Other intangible assets, net	5,764		6,789		7,815		8,840		9,970		(15) %		(42) %
Residential mortgage servicing rights, at fair value	196,177		179,558		165,807		123,615		105,834		9 %		85 %
Bank owned life insurance	329,699		328,764		328,040		327,745		325,646		0 %		1 %
Deferred tax asset, net	128,120		70,134		39,051		—		8,402		83 %		nm
Other assets	385,938		389,409		408,497		542,442		552,702		(1) %		(30) %
Total assets	$  31,471,960		$  30,135,694		$  30,637,126		$  30,640,936		$  30,891,479		4 %		2 %
Liabilities:
Deposits	$  26,817,107		$  26,132,423		$  26,699,587		$  26,594,685		$  26,908,397		3 %		0 %
Securities sold under agreements to repurchase	383,569		527,961		499,539		492,247		467,760		(27) %		(18) %
Borrowings	756,214		6,252		6,290		6,329		6,367		nm		nm
Junior subordinated debentures, at fair value	325,744		321,268		305,719		293,081		299,508		1 %		9 %
Junior subordinated debentures, at amortized cost	87,870		87,927		87,984		88,041		88,098		0 %		0 %
Operating lease liabilities	95,512		101,352		101,732		95,427		100,557		(6) %		(5) %
Deferred tax liability, net	—		—		—		4,353		—		nm		nm
Other liabilities	588,430		440,235		328,677		317,503		298,413		34 %		97 %
Total liabilities	29,054,446		27,617,418		28,029,528		27,891,666		28,169,100		5 %		3 %
Shareholders' equity:
Common stock	3,448,007		3,445,531		3,443,266		3,444,849		3,442,085		0 %		0 %
Accumulated deficit	(580,933)		(619,108)		(651,912)		(697,338)		(739,915)		(6) %		(21) %
Accumulated other comprehensive (loss) income	(449,560)		(308,147)		(183,756)		1,759		20,209		46 %		nm
Total shareholders' equity	2,417,514		2,518,276		2,607,598		2,749,270		2,722,379		(4) %		(11) %
Total liabilities and shareholders' equity	$  31,471,960		$  30,135,694		$  30,637,126		$  30,640,936		$  30,891,479		4 %		2 %
Common shares outstanding at period end	217,053		217,049		216,967		216,626		216,622		0 %		0 %
Book value per common share	$         11.14		$         11.60		$         12.02		$         12.69		$         12.57		(4) %		(11) %
Tangible book value per common share (1)	$         11.11		$         11.57		$         11.98		$         12.65		$         12.52		(4) %		(11) %
Tangible equity - common (1)	$  2,411,750		$  2,511,487		$  2,599,783		$  2,740,430		$  2,712,409		(4) %		(11) %
Tangible common equity to tangible assets (1)	7.66 %		8.34 %		8.49 %		8.95 %		8.78 %		(0.68)		(1.12)
nm = not meaningful

(1) See GAAP to Non-GAAP Reconciliation.

 

Umpqua Holdings Corporation
Financial Highlights
(Unaudited)
		Quarter Ended										% Change
		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Per Common Share Data:
Dividends		$    0.21		$    0.21		$    0.21		$    0.21		$    0.21		0 %		0 %
Book value		$  11.14		$  11.60		$  12.02		$  12.69		$  12.57		(4) %		(11) %
Tangible book value (1)		$  11.11		$  11.57		$  11.98		$  12.65		$  12.52		(4) %		(11) %
Tangible book value, ex accumulated other comprehensive income (1)		$  13.18		$  12.99		$  12.83		$  12.64		$  12.43		1 %		6 %
Performance Ratios:
Efficiency ratio		56.07 %		59.12 %		59.02 %		63.10 %		59.44 %		(3.05)		(3.37)
Pre-provision net revenue (PPNR) ROAA (1)		1.80 %		1.64 %		1.67 %		1.50 %		1.62 %		0.16		0.18
Return on average assets (ROAA)		1.09 %		1.04 %		1.21 %		1.13 %		1.40 %		0.05		(0.31)
Return on average common equity		12.99 %		12.20 %		13.62 %		12.90 %		15.82 %		0.79		(2.83)
Return on average tangible common equity (1)		13.02 %		12.23 %		13.66 %		12.94 %		15.88 %		0.79		(2.86)
Performance Ratios - Operating: (1)
Operating efficiency ratio (1)		51.72 %		58.27 %		62.02 %		59.61 %		58.94 %		(6.55)		(7.22)
Operating PPNR return on average assets (1)		2.12 %		1.66 %		1.43 %		1.58 %		1.62 %		0.46		0.50
Operating return on average assets (1)		1.33 %		1.06 %		1.03 %		1.23 %		1.40 %		0.27		(0.07)
Operating return on average common equity (1)		15.86 %		12.46 %		11.58 %		13.98 %		15.82 %		3.40		0.04
Operating return on average tangible common equity (1)		15.90 %		12.49 %		11.62 %		14.03 %		15.88 %		3.41		0.02
Average Balance Sheet Yields, Rates, & Ratios:
Yield on loans and leases		4.41 %		3.94 %		3.79 %		3.94 %		4.02 %		0.47		0.39
Yield on earning assets (2)		4.10 %		3.53 %		3.24 %		3.25 %		3.32 %		0.57		0.78
Cost of interest bearing deposits		0.23 %		0.11 %		0.10 %		0.11 %		0.13 %		0.12		0.10
Cost of interest bearing liabilities		0.39 %		0.20 %		0.18 %		0.18 %		0.20 %		0.19		0.19
Cost of total deposits		0.14 %		0.06 %		0.06 %		0.06 %		0.08 %		0.08		0.06
Cost of total funding (3)		0.23 %		0.12 %		0.11 %		0.11 %		0.12 %		0.11		0.11
Net interest margin (2)		3.88 %		3.41 %		3.14 %		3.15 %		3.21 %		0.47		0.67
Average interest bearing cash / Average interest earning assets		3.04 %		5.71 %		8.92 %		10.78 %		11.03 %		(2.67)		(7.99)
Average loans and leases / Average interest earning assets		84.54 %		80.91 %		76.85 %		74.70 %		74.78 %		3.63		9.76
Average loans and leases / Average total deposits		93.55 %		89.23 %		84.77 %		82.12 %		82.07 %		4.32		11.48
Average non-interest bearing deposits / Average total deposits		42.29 %		42.00 %		41.35 %		41.69 %		41.14 %		0.29		1.15
Average total deposits / Average total funding (3)		96.34 %		96.66 %		96.82 %		96.84 %		96.72 %		(0.32)		(0.38)
Select Credit & Capital Ratios:
Non-performing loans and leases to total loans and leases		0.20 %		0.18 %		0.18 %		0.23 %		0.24 %		0.02		(0.04)
Non-performing assets to total assets		0.16 %		0.15 %		0.14 %		0.17 %		0.17 %		0.01		(0.01)
Allowance for credit losses to loans and leases		1.16 %		1.12 %		1.14 %		1.16 %		1.23 %		0.04		(0.07)
Total risk-based capital ratio (4)		13.2 %		13.5 %		14.0 %		14.3 %		14.9 %		(0.30)		(1.70)
Common equity tier 1 risk-based capital ratio (4)		10.7 %		11.0 %		11.4 %		11.6 %		12.0 %		(0.30)		(1.30)

(1) See GAAP to Non-GAAP Reconciliation.

(2) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.

(3) Total funding = Total deposits + Total borrowings.

(4) Estimated holding company ratios.

 

Umpqua Holding Corporation
Financial Highlights
(Unaudited)
		Nine Months Ended				% Change
		Sep 30, 2022		Sep 30, 2021		Year over Year
Per Common Share Data:
Dividends		$             0.63		$             0.63		— %
Performance Ratios:
Efficiency ratio		58.05 %		58.35 %		(0.30)
Pre-provision net revenue (PPNR) ROAA (1)		1.70 %		1.78 %		(0.08)
Return on average assets (ROAA)		1.11 %		1.48 %		(0.37)
Return on average common equity		12.94 %		16.47 %		(3.53)
Return on average tangible common equity (1)		12.98 %		16.55 %		(3.57)
Performance Ratios - Operating: (1)
Operating efficiency ratio (1)		57.03 %		57.88 %		(0.85)
Operating PPNR return on average assets (1)		1.74 %		1.78 %		(0.04)
Operating return on average assets (1)		1.14 %		1.48 %		(0.34)
Operating return on average common equity (1)		13.28 %		16.49 %		(3.21)
Operating return on average tangible common equity (1)		13.32 %		16.57 %		(3.25)
Average Balance Sheet Yields, Rates, & Ratios:
Yield on loans and leases		4.06 %		4.01 %		0.05
Yield on earning assets (2)		3.62 %		3.36 %		0.26
Cost of interest bearing deposits		0.15 %		0.20 %		(0.05)
Cost of interest bearing liabilities		0.26 %		0.28 %		(0.02)
Cost of total deposits		0.09 %		0.12 %		(0.03)
Cost of total funding (3)		0.15 %		0.17 %		(0.02)
Net interest margin (2)		3.48 %		3.20 %		0.28
Average interest bearing cash / Average interest earning assets		5.87 %		9.93 %		(4.06)
Average loans and leases / Average interest earning assets		80.80 %		76.16 %		4.64
Average loans and leases / Average total deposits		89.21 %		84.34 %		4.87
Average non-interest bearing deposits / Average total deposits		41.89 %		40.44 %		1.45
Average total deposits / Average total funding (3)		96.61 %		96.04 %		0.57

(1) See GAAP to Non-GAAP Reconciliation.

(2) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.

(3) Total funding = Total deposits + Total borrowings.

 

Umpqua Holdings Corporation
Loan & Lease Portfolio Balances and Mix
(Unaudited)
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		% Change
(Dollars in thousands)	Amount		Amount		Amount		Amount		Amount		Seq. Quarter		Year over Year
Loans and leases:
Commercial real estate:
Non-owner occupied term, net	$  3,846,426		$  3,798,242		$  3,884,784		$  3,786,887		$  3,561,764		1 %		8 %
Owner occupied term, net	2,549,761		2,497,553		2,327,899		2,332,422		2,330,338		2 %		9 %
Multifamily, net	5,090,661		4,768,273		4,323,633		4,051,202		3,813,024		7 %		34 %
Construction & development, net	1,036,931		1,017,297		940,286		890,338		882,778		2 %		17 %
Residential development, net	205,935		194,909		195,308		206,990		177,148		6 %		16 %
Commercial:
Term, net (1)	3,003,424		2,904,861		2,772,206		3,008,473		3,159,466		3 %		(5) %
Lines of credit & other, net	914,507		920,604		871,483		910,733		930,350		(1) %		(2) %
Leases & equipment finance, net	1,669,817		1,576,144		1,484,252		1,467,676		1,457,248		6 %		15 %
Residential:
Mortgage, net	5,470,624		5,168,457		4,748,266		4,517,266		4,330,860		6 %		26 %
Home equity loans & lines, net	1,565,094		1,415,722		1,250,702		1,197,170		1,133,823		11 %		38 %
Consumer & other, net	154,771		170,616		176,942		184,023		193,141		(9) %		(20) %
Total loans and leases, net of deferred fees and costs	$  25,507,951		$  24,432,678		$  22,975,761		$  22,553,180		$  21,969,940		4 %		16 %
(1)  The Bank participated in the Payroll Protection Program 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 the following net PPP loan balances:
Net PPP loan balance	$       37,949		$     101,554		$     172,790		$     380,440		$     726,737		(63) %		(95) %
Loan and leases mix:
Commercial real estate:
Non-owner occupied term, net	15 %		15 %		17 %		17 %		16 %
Owner occupied term, net	10 %		10 %		10 %		10 %		11 %
Multifamily, net	20 %		20 %		19 %		18 %		17 %
Construction & development, net	4 %		4 %		4 %		4 %		4 %
Residential development, net	1 %		1 %		1 %		1 %		1 %
Commercial:
Term, net	12 %		12 %		12 %		13 %		14 %
Lines of credit & other, net	4 %		4 %		4 %		4 %		4 %
Leases & equipment finance, net	6 %		6 %		6 %		7 %		7 %
Residential:
Mortgage, net	21 %		21 %		21 %		20 %		20 %
Home equity loans & lines, net	6 %		6 %		5 %		5 %		5 %
Consumer & other, net	1 %		1 %		1 %		1 %		1 %
Total	100 %		100 %		100 %		100 %		100 %

 

Umpqua Holdings Corporation
Deposit Balances, Mix, and Select Account Details
(Unaudited)
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		% Change
(Dollars in thousands)	Amount		Amount		Amount		Amount		Amount		Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$  11,246,358		$  11,129,209		$  11,058,251		$  11,023,724		$  11,121,127		1 %		1 %
Demand, interest bearing	3,903,746		3,723,650		3,955,329		3,774,937		3,758,019		5 %		4 %
Money market	7,601,506		7,284,641		7,572,581		7,611,718		7,780,442		4 %		(2) %
Savings	2,455,917		2,446,876		2,429,073		2,375,723		2,325,929		0 %		6 %
Time	1,609,580		1,548,047		1,684,353		1,808,583		1,922,880		4 %		(16) %
Total	$  26,817,107		$  26,132,423		$  26,699,587		$  26,594,685		$  26,908,397		3 %		0 %
Total core deposits (1)	$  26,292,548		$  25,619,500		$  26,140,993		$  25,964,358		$  26,029,814		3 %		1 %
Deposit mix:
Demand, non-interest bearing	42 %		43 %		42 %		41 %		41 %
Demand, interest bearing	15 %		14 %		15 %		14 %		14 %
Money market	28 %		28 %		28 %		29 %		29 %
Savings	9 %		9 %		9 %		9 %		9 %
Time	6 %		6 %		6 %		7 %		7 %
Total	100 %		100 %		100 %		100 %		100 %
Number of open accounts:
Demand, non-interest bearing	434,347		434,436		428,915		428,181		425,337
Demand, interest bearing	56,698		57,145		63,800		66,010		70,749
Money market	55,712		56,430		56,783		57,222		57,794
Savings	159,008		159,709		160,267		160,449		161,698
Time	32,202		32,103		34,127		35,665		37,172
Total	737,967		739,823		743,892		747,527		752,750
Average balance per account:
Demand, non-interest bearing	$           25.9		$           25.6		$           25.8		$           25.7		$           26.1
Demand, interest bearing	68.9		65.2		62.0		57.2		53.1
Money market	136.4		129.1		133.4		133.0		134.6
Savings	15.4		15.3		15.2		14.8		14.4
Time	50.0		48.2		49.4		50.7		51.7
Total	$           36.3		$           35.3		$           35.9		$           35.6		$           35.7

(1) Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits.

 

	Umpqua Holdings Corporation
	Credit Quality – Non-performing Assets
	(Unaudited)
			Quarter Ended										% Change
(Dollars in thousands)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Non-performing assets:
Loans and leases on non-accrual status:
	Commercial real estate, net		$      5,403		$      5,514		$      5,950		$      5,767		$      5,952		(2) %		(9) %
	Commercial, net		18,652		12,645		12,415		13,098		18,200		48 %		2 %
	Residential, net		—		—		—		—		—		nm		nm
	Consumer & other, net		—		—		—		—		—		nm		nm
	Total loans and leases on non-accrual status		24,055		18,159		18,365		18,865		24,152		32 %		0 %
Loans and leases past due 90+ days and accruing (1):
	Commercial real estate, net		1		23		1		1		1		(96) %		0 %
	Commercial, net		5,143		3,311		8		4,160		2,454		55 %		110 %
	Residential, net (1)		21,411		22,340		23,162		27,981		24,919		(4) %		(14) %
	Consumer & other, net		152		196		111		194		116		(22) %		31 %
	Total loans and leases past due 90+ days and accruing (1)		26,707		25,870		23,282		32,336		27,490		3 %		(3) %
Total non-performing loans and leases			50,762		44,029		41,647		51,201		51,642		15 %		(2) %
Other real estate owned			—		1,868		1,868		1,868		1,868		(100) %		(100) %
Total non-performing assets			$    50,762		$    45,897		$    43,515		$    53,069		$    53,510		11 %		(5) %
Performing restructured loans and leases			$      7,076		$      7,631		$      8,405		$      6,694		$      9,849		(7) %		(28) %
Loans and leases past due 31-89 days			$    53,538		$    34,659		$    42,409		$    31,680		$    41,326		54 %		30 %
Loans and leases past due 31-89 days to total loans and leases			0.21 %		0.14 %		0.18 %		0.14 %		0.19 %		0.07		0.02
Non-performing loans and leases to total loans and leases (1)			0.20 %		0.18 %		0.18 %		0.23 %		0.24 %		0.02		(0.04)
Non-performing assets to total assets (1)			0.16 %		0.15 %		0.14 %		0.17 %		0.17 %		0.01		(0.01)
nm = not meaningful

(1)  Excludes certain mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $1.0 million and $356,000 at September 30, 2022 and June 30, 2022, respectively.

 

Umpqua Holdings Corporation
Credit Quality – Allowance for Credit Losses
(Unaudited)
			Quarter Ended										% Change
(Dollars in thousands)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period			$ 261,111		$ 248,564		$ 248,412		$ 257,560		$ 279,887		5 %		(7) %
Provision (recapture) for credit losses on loans and leases			28,542		18,787		5,696		(1,751)		(16,132)		52 %		(277) %
Charge-offs
	Commercial real estate, net		—		(8)		—		(58)		(916)		(100) %		(100) %
	Commercial, net		(9,459)		(9,035)		(7,858)		(10,197)		(8,521)		5 %		11 %
	Residential, net		(4)		—		(167)		—		—		nm		nm
	Consumer & other, net		(929)		(836)		(885)		(675)		(936)		11 %		(1) %
	Total charge-offs		(10,392)		(9,879)		(8,910)		(10,930)		(10,373)		5 %		0 %
Recoveries
	Commercial real estate, net		123		73		25		56		120		68 %		2 %
	Commercial, net		2,842		2,934		2,545		2,585		3,346		(3) %		(15) %
	Residential, net		249		216		173		326		281		15 %		(11) %
	Consumer & other, net		590		416		623		566		431		42 %		37 %
	Total recoveries		3,804		3,639		3,366		3,533		4,178		5 %		(9) %
Net (charge-offs) recoveries
	Commercial real estate, net		123		65		25		(2)		(796)		89 %		(115) %
	Commercial, net		(6,617)		(6,101)		(5,313)		(7,612)		(5,175)		8 %		28 %
	Residential, net		245		216		6		326		281		13 %		(13) %
	Consumer & other, net		(339)		(420)		(262)		(109)		(505)		(19) %		(33) %
	Total net charge-offs		(6,588)		(6,240)		(5,544)		(7,397)		(6,195)		6 %		6 %
Balance, end of period			$ 283,065		$ 261,111		$ 248,564		$ 248,412		$ 257,560		8 %		10 %
Reserve for unfunded commitments
Balance, beginning of period			$   12,823		$   12,918		$   12,767		$   11,752		$   14,539		(1) %		(12) %
(Recapture) provision for credit losses on unfunded commitments			(970)		(95)		151		1,015		(2,787)		921 %		(65) %
Balance, end of period			11,853		12,823		12,918		12,767		11,752		(8) %		1 %
Total Allowance for credit losses (ACL)			$ 294,918		$ 273,934		$ 261,482		$ 261,179		$ 269,312		8 %		10 %
Net charge-offs to average loans and leases (annualized)			0.11 %		0.11 %		0.10 %		0.13 %		0.11 %		—		—
Recoveries to gross charge-offs			36.61 %		36.84 %		37.78 %		32.32 %		40.28 %		(0.23)		(3.67)
ACLLL to loans and leases			1.11 %		1.07 %		1.08 %		1.10 %		1.17 %		0.04		(0.06)
ACL to loans and leases			1.16 %		1.12 %		1.14 %		1.16 %		1.23 %		0.04		(0.07)
nm = not meaningful

 

Umpqua Holdings Corporation
Credit Quality – Allowance for Credit Losses
(Unaudited)
			Nine Months Ended				% Change
(Dollars in thousands)			Sep 30, 2022		Sep 30, 2021		Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period			$        248,412		$        328,401		(24) %
Provision (recapture) for credit losses on loans and leases			53,025		(33,381)		(259) %
Charge-offs
	Commercial real estate, net		(8)		(1,086)		(99) %
	Commercial, net		(26,352)		(44,228)		(40) %
	Residential, net		(171)		(70)		144 %
	Consumer & other, net		(2,650)		(2,983)		(11) %
	Total charge-offs		(29,181)		(48,367)		(40) %
Recoveries
	Commercial real estate, net		221		589		(62) %
	Commercial, net		8,321		8,118		3 %
	Residential, net		638		598		7 %
	Consumer & other, net		1,629		1,602		2 %
	Total recoveries		10,809		10,907		(1) %
Net (charge-offs) recoveries
	Commercial real estate, net		213		(497)		(143) %
	Commercial, net		(18,031)		(36,110)		(50) %
	Residential, net		467		528		(12) %
	Consumer & other, net		(1,021)		(1,381)		(26) %
	Total net charge-offs		(18,372)		(37,460)		(51) %
Balance, end of period			$        283,065		$        257,560		10 %
Reserve for unfunded commitments
Balance, beginning of period			$          12,767		$          20,286		(37) %
(Recapture) provision for credit losses on unfunded commitments			(914)		(8,534)		(89) %
Balance, end of period			11,853		11,752		1 %
Total Allowance for credit losses (ACL)			$        294,918		$        269,312		10 %
Net charge-offs to average loans and leases (annualized)			0.10 %		0.23 %		(0.13)
Recoveries to gross charge-offs			37.04 %		22.55 %		14.49
nm = not meaningful

 

Umpqua Holdings Corporation Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates
(Unaudited)
	Quarter Ended
	September 30, 2022						June 30, 2022						September 30, 2021
(Dollars in thousands)	Average Balance		Interest Income or Expense		Average Yields or Rates		Average Balance		Interest Income or Expense		Average Yields or Rates		Average Balance		Interest Income or Expense		Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$     173,397		$    2,205		5.09 %		$     264,320		$    2,742		4.15 %		$     465,805		$    3,672		3.15 %
Loans and leases (1)	24,886,203		276,625		4.41 %		23,550,796		231,932		3.94 %		21,864,387		220,731		4.02 %
Taxable securities	3,271,185		18,261		2.23 %		3,410,091		17,340		2.03 %		3,436,895		16,315		1.90 %
Non-taxable securities (2)	212,847		1,651		3.10 %		220,327		1,721		3.13 %		245,904		1,848		3.01 %
Temporary investments and interest-bearing cash	893,471		5,115		2.27 %		1,663,454		2,919		0.70 %		3,224,846		1,237		0.15 %
Total interest-earning assets	29,437,103		$  303,857		4.10 %		29,108,988		$  256,654		3.53 %		29,237,837		$  243,803		3.32 %
Other assets	1,231,074						1,247,915						1,376,537
Total assets	$  30,668,177						$  30,356,903						$  30,614,374
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$  3,829,688		$    1,705		0.18 %		$  3,896,553		$       610		0.06 %		$  3,564,040		$       468		0.05 %
Money market deposits	7,550,791		5,817		0.31 %		7,366,987		1,717		0.09 %		7,800,144		1,492		0.08 %
Savings deposits	2,468,187		250		0.04 %		2,426,124		199		0.03 %		2,284,077		206		0.04 %
Time deposits	1,501,724		1,318		0.35 %		1,618,394		1,489		0.37 %		2,031,494		2,934		0.57 %
Total interest-bearing deposits	15,350,390		9,090		0.23 %		15,308,058		4,015		0.11 %		15,679,755		5,100		0.13 %
Repurchase agreements and federal funds purchased	509,559		545		0.42 %		512,641		66		0.05 %		496,822		88		0.07 %
Borrowings	90,475		798		3.50 %		6,273		50		3.21 %		31,500		149		1.88 %
Junior subordinated debentures	409,151		5,491		5.33 %		393,964		4,001		4.07 %		375,726		3,014		3.18 %
Total interest-bearing liabilities	16,359,575		$  15,924		0.39 %		16,220,936		$    8,132		0.20 %		16,583,803		$    8,351		0.20 %
Non-interest-bearing deposits	11,250,764						11,086,376						10,960,686
Other liabilities	490,572						464,755						360,244
Total liabilities	28,100,911						27,772,067						27,904,733
Common equity	2,567,266						2,584,836						2,709,641
Total liabilities and shareholders' equity	$  30,668,177						$  30,356,903						$  30,614,374
NET INTEREST INCOME			$  287,933						$  248,522						$  235,452
NET INTEREST SPREAD					3.71 %						3.33 %						3.12 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)					3.88 %						3.41 %						3.21 %

(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 $329,000 for the three months ended September 30, 2022, as compared to $352,000 for June 30, 2022 and $377,000 for September 30, 2021.

 

Umpqua Holdings Corporation Average Rates and Balances
(Unaudited)
(dollars in thousands)	Nine Months Ended
	September 30, 2022						September 30, 2021
	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	$        240,928		$        7,209		3.99 %		$        545,237		$      12,242		2.99 %
Loans and leases (1)	23,676,201		720,699		4.06 %		21,866,569		656,772		4.01 %
Taxable securities	3,445,386		54,412		2.11 %		3,199,653		45,049		1.88 %
Non-taxable securities (2)	222,375		5,098		3.06 %		248,617		5,627		3.02 %
Temporary investments and interest-bearing cash	1,718,832		9,387		0.73 %		2,850,639		2,635		0.12 %
Total interest-earning assets	29,303,722		$    796,805		3.62 %		28,710,715		$    722,325		3.36 %
Other assets	1,237,305						1,348,054
Total assets	$   30,541,027						$   30,058,769
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$     3,846,202		$        2,813		0.10 %		$     3,359,865		$        1,341		0.05 %
Money market deposits	7,519,200		8,942		0.16 %		7,593,320		4,516		0.08 %
Savings deposits	2,433,651		654		0.04 %		2,152,667		523		0.03 %
Time deposits	1,623,742		4,612		0.38 %		2,336,261		16,414		0.94 %
Total interest-bearing deposits	15,422,795		17,021		0.15 %		15,442,113		22,794		0.20 %
Repurchase agreements and federal funds purchased	502,998		674		0.18 %		444,919		232		0.07 %
Borrowings	34,662		897		3.46 %		259,890		2,787		1.43 %
Junior subordinated debentures	394,803		12,641		4.28 %		363,122		9,108		3.35 %
Total interest-bearing liabilities	16,355,258		$      31,233		0.26 %		16,510,044		$      34,921		0.28 %
Non-interest-bearing deposits	11,115,618						10,484,104
Other liabilities	448,426						369,653
Total liabilities	27,919,302						27,363,801
Common equity	2,621,725						2,694,968
Total liabilities and shareholders' equity	$   30,541,027						$   30,058,769
NET INTEREST INCOME			$    765,572						$    687,404
NET INTEREST SPREAD					3.36 %						3.08 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)					3.48 %						3.20 %

(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, 2022, as compared to $1.1 million for the same period in 2021.

 

Umpqua Holdings Corporation Segments
(Unaudited)
Core Banking		Quarter Ended										% Change
(Dollars in thousands)		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Net interest income		$     286,532		$     247,009		$     227,087		$     231,250		$     232,348		16 %		23 %
Provision (recapture) for credit losses		27,572		18,692		4,804		(736)		(18,919)		48 %		(246) %
Non-interest income
	Gain on sale of debt securities, net	—		—		2		4		—		nm		nm
	Loss on equity securities, net	(2,647)		(2,075)		(2,661)		(466)		(343)		28 %		672 %
	Gain (loss) on swap derivatives, net	4,194		7,337		7,047		(303)		1,429		(43) %		193 %
	Change in fair value of certain loans held for investment	(26,397)		(15,210)		(21,049)		(2,672)		3,432		74 %		(869) %
	Non-interest income (excluding above items)	36,769		34,461		35,650		42,812		34,849		7 %		6 %
	Total non-interest income	11,919		24,513		18,989		39,375		39,367		(51) %		(70) %
Non-interest expense
	Merger related expenses	769		2,672		2,278		15,183		—		(71) %		nm
	Exit and disposal costs	1,364		442		3,033		3,022		3,813		209 %		(64) %
	Non-interest expense (excluding above items)	154,320		148,946		148,423		150,587		146,931		4 %		5 %
	Allocated expenses, net (1)	(39)		3,702		3,735		4,314		3,680		(101) %		(101) %
	Total non-interest expense	156,414		155,762		157,469		173,106		154,424		0 %		1 %
Income before income taxes		114,465		97,068		83,803		98,255		136,210		18 %		(16) %
Provision for income taxes		28,212		24,530		20,917		24,067		33,945		15 %		(17) %
Net income		$       86,253		$       72,538		$       62,886		$       74,188		$     102,265		19 %		(16) %
Effective Tax Rate		25 %		25 %		25 %		24 %		25 %
Efficiency Ratio		52 %		57 %		64 %		64 %		57 %
Total assets		$  31,100,700		$  29,721,590		$  30,153,079		$  30,155,058		$  30,419,108		5 %		2 %
Total loans and leases		$  25,507,951		$  24,432,678		$  22,975,761		$  22,553,180		$  21,969,940		4 %		16 %
Total deposits		$  26,588,217		$  25,925,294		$  26,479,078		$  26,370,568		$  26,510,938		3 %		0 %
Key Rates, end of period:
10 year CMT		3.83 %		2.98 %		2.32 %		1.52 %		1.52 %		0.85		2.31
FHLMC 30 year fixed		6.70 %		5.70 %		4.67 %		3.11 %		3.01 %		1.00		3.69
nm = not meaningful
(1) Represents the internal charges for centrally provided support services and other corporate overhead to the Mortgage Banking segment, partially offset by allocations from the Mortgage Banking segment to Core Banking for new portfolio loan originations and portfolio servicing costs.

 

Umpqua Holdings Corporation Segments - Continued
(Unaudited)
Mortgage Banking		Quarter Ended										% Change
(Dollars in thousands)		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Net interest income		$         1,072		$         1,161		$         1,676		$         2,129		$         2,726		(8) %		(61) %
Provision for credit losses		—		—		—		—		—		nm		nm
Non-interest income
	Residential mortgage banking revenue:
	Origination and sale	10,515		15,101		16,844		23,624		30,293		(30) %		(65) %
	Servicing	9,529		9,505		9,140		9,457		9,172		0 %		4 %
	Change in fair value of MSR asset:
	Changes due to collection/realization of expected cash flows over time	(4,978)		(4,961)		(5,347)		(5,311)		(4,681)		0 %		6 %
	Changes due to valuation inputs or assumptions	16,403		10,899		40,149		15,415		(634)		51 %		(2,687) %
	MSR hedge loss	(14,128)		—		—		—		—		nm		nm
	Non-interest income (excluding above items)	185		178		194		178		188		4 %		(2) %
	Total non-interest income	17,526		30,722		60,980		43,363		34,338		(43) %		(49) %
Non-interest expense
	Non-interest expense	21,511		27,514		28,696		30,919		33,009		(22) %		(35) %
	Allocated expenses, net (1)	39		(3,702)		(3,735)		(4,314)		(3,680)		(101) %		(101) %
	Total non-interest expense	21,550		23,812		24,961		26,605		29,329		(9) %		(27) %
Income before income taxes		(2,952)		8,071		37,695		18,887		7,735		(137) %		(138) %
Provision for income taxes		(739)		2,018		9,424		4,721		1,934		(137) %		(138) %
Net income		$       (2,213)		$         6,053		$       28,271		$       14,166		$        5,801		(137) %		(138) %
Effective Tax Rate		25 %		25 %		25 %		25 %		25 %
Efficiency Ratio		116 %		75 %		40 %		58 %		79 %
Total assets		$     371,260		$     414,104		$     484,047		$     485,878		$     472,371		(10) %		(21) %
Loans held for sale		$     148,275		$     228,889		$     309,946		$     353,105		$     352,466		(35) %		(58) %
Total deposits		$     228,890		$     207,129		$     220,509		$     224,117		$     397,459		11 %		(42) %
LHFS Production Statistics:
Closed loan volume for-sale		$     396,979		$     576,532		$     649,122		$     871,268		$     987,281		(31) %		(60) %
Gain on sale margin		2.65 %		2.62 %		2.59 %		2.71 %		3.07 %
Direct LHFS expense		$      10,465		$       13,197		$       14,296		$       18,150		$       19,958		(21) %		(48) %
Direct LHFS expenses as % of volume		2.64 %		2.29 %		2.20 %		2.08 %		2.02 %
MSR Statistics:
Residential mortgage loans serviced for others		$  12,997,911		$  12,932,747		$  12,810,574		$  12,755,671		$  12,853,291		1 %		1 %
MSR, net		$     196,177		$     179,558		$     165,807		$     123,615		$     105,834		9 %		85 %
MSR as % of serviced portfolio		1.51 %		1.39 %		1.29 %		0.97 %		0.82 %		0.12		0.69
Key Rates, end of period:
10 year CMT		3.83 %		2.98 %		2.32 %		1.52 %		1.52 %		0.85		2.31
FHLMC 30 year fixed		6.70 %		5.70 %		4.67 %		3.11 %		3.01 %		1.00		3.69
nm = not meaningful

(1) Represents the internal charges for centrally provided support services and other corporate overhead to the Mortgage Banking segment, partially offset by allocations from the Mortgage Banking segment to Core Banking for new portfolio loan originations and portfolio servicing costs.

 

Umpqua Holdings Corporation Segments
(Unaudited)
(in thousands)		Core Banking						Mortgage Banking
		Nine Months Ended				% Change		Nine Months Ended				% Change
		Sep 30, 2022		Sep 30, 2021		Year over Year		Sep 30, 2022		Sep 30, 2021		Year over Year
Net interest income		$      760,628		$      676,837		12 %		$          3,909		$          9,431		(59) %
Provision (recapture) for credit losses		51,068		(41,915)		(222) %		—		—		nm
Non-interest income
	Residential mortgage banking revenue:
	Origination and sale	—		—		nm		42,460		134,165		(68) %
	Servicing	—		—		nm		28,174		27,379		3 %
	Change in fair value of MSR asset:					nm
	Changes due to collection/realization of expected cash flows over time	—		—		nm		(15,286)		(13,592)		12 %
	Changes due to valuation inputs or assumptions	—		—		nm		67,451		(4,326)		(1659) %
	MSR hedge loss	—		—		nm		(14,128)		—		nm
	Gain on sale of debt securities, net	2		4		(50) %		—		—		nm
	Loss on equity securities, net	(7,383)		(1,045)		607 %		—		—		nm
	Gain on swap derivatives, net	18,578		8,698		114 %		—		—		nm
	Change in fair value of certain loans held for investment	(62,656)		5,704		(1198) %		—		—		nm
	Non-interest income (excluding above items)	106,880		115,913		(8) %		557		680		(18) %
	Total non-interest income	55,421		129,274		(57) %		109,228		144,306		(24) %
Non-interest expense
	Merger related expenses	5,719		—		nm		—		—		nm
	Exit and disposal costs	4,839		9,741		(50) %		—		—		nm
	Non-interest expense (excluding above items)	451,689		438,969		3 %		77,721		112,035		(31) %
	Allocated expenses, net (1)	7,398		3,860		92 %		(7,398)		(3,860)		92 %
	Total non-interest expense	469,645		452,570		4 %		70,323		108,175		(35) %
Income before income taxes		295,336		395,456		(25) %		42,814		45,562		(6) %
Provision for income taxes		73,659		97,681		(25) %		10,703		11,391		(6) %
Net income		$      221,677		$      297,775		(26) %		$        32,111		$        34,171		(6) %
Effective Tax Rate		25 %		25 %		—		25 %		25 %		—
Efficiency Ratio		57 %		56 %		1.00		62 %		70 %		(8.00)
LHFS Production Statistics:
Closed loan volume for-sale								$   1,622,633		$   3,875,836		(58) %
Gain on sale margin								2.62 %		3.46 %		(0.84)
Direct LHFS expense								$        37,958		$        76,568		(50) %
Direct LHFS expenses as % of volume								2.34 %		1.98 %		0.36
nm = not meaningful

(1) Represents the internal charge of centrally provided support services and other corporate overhead to the Mortgage Banking segment, partially offset by allocations from the Mortgage Banking segment to Core Banking for new portfolio loan originations and portfolio servicing costs.

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 presenting certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends, and our financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitution for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation
(Unaudited)
			Quarter Ended										% Change
(Dollars in thousands, except per share data)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Total shareholders' equity	a		$2,417,514		$2,518,276		$2,607,598		$2,749,270		$2,722,379		(4) %		(11) %
Less: Other intangible assets, net			5,764		6,789		7,815		8,840		9,970		(15) %		(42) %
Tangible common shareholders' equity	b		$2,411,750		$2,511,487		$2,599,783		$2,740,430		$2,712,409		(4) %		(11) %
Less: Accumulated other comprehensive income (AOCI)			$ (449,560)		(308,147)		(183,756)		1,759		20,209		46 %		nm
Tangible common shareholders' equity, ex AOCI	c		$2,861,310		$2,819,634		$2,783,539		$2,738,671		$2,692,200		1 %		6 %
Total assets	d		$31,471,960		$30,135,694		$30,637,126		$30,640,936		$30,891,479		4 %		2 %
Less: Other intangible assets, net			5,764		6,789		7,815		8,840		9,970		(15) %		(42) %
Tangible assets	e		$31,466,196		$30,128,905		$30,629,311		$30,632,096		$30,881,509		4 %		2 %
Common shares outstanding at period end	f		217,053		217,049		216,967		216,626		216,622		0 %		— %
Total shareholders' equity to total assets ratio	a / d		7.68 %		8.36 %		8.51 %		8.97 %		8.81 %		(0.68)		(1.13)
Tangible common equity ratio	b / e		7.66 %		8.34 %		8.49 %		8.95 %		8.78 %		(0.68)		(1.12)
Tangible common equity ratio, ex AOCI	c / e		9.09 %		9.36 %		9.09 %		8.94 %		8.72 %		(0.27)		0.37
Book value per common share	a / f		$     11.14		$     11.60		$     12.02		$     12.69		$     12.57		(4) %		(11) %
Tangible book value per common share	b / f		$     11.11		$     11.57		$     11.98		$     12.65		$     12.52		(4) %		(11) %
Tangible book value per common share, ex AOCI	c / f		$     13.18		$     12.99		$     12.83		$     12.64		$     12.43		1 %		6 %
nm = not meaningful

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Consolidated			Quarter Ended										% Change
(Dollars in thousands)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net			$            —		$            —		$              2		$              4		$            —		nm		nm
(Loss) gain on equity securities, net			(2,647)		(2,075)		(2,661)		(466)		(343)		28 %		672 %
Gain (loss) on swap derivatives			4,194		7,337		7,047		(303)		1,429		(43) %		193 %
Change in fair value of certain loans held for investment			(26,397)		(15,210)		(21,049)		(2,672)		3,432		74 %		nm
Change in fair value of MSR due to valuation inputs or assumptions			16,403		10,899		40,149		15,415		(634)		51 %		nm
MSR hedge loss			(14,128)		—		—		—		—		nm		nm
Total non-interest income adjustments	a		$    (22,575)		$          951		$     23,488		$     11,978		$       3,884		nm		nm
Non-Interest Expense Adjustments
Merger related expenses			$          769		$       2,672		$       2,278		$     15,183		$            —		(71) %		nm
Exit and disposal costs			1,364		442		3,033		3,022		3,813		209 %		(64) %
Total non-interest expense adjustments	b		$       2,133		$       3,114		$       5,311		$     18,205		$       3,813		(32) %		(44) %
Net interest income (1)	c		$   287,933		$   248,522		$   229,117		$   233,754		$   235,452		16 %		22 %
Non-interest income (GAAP)	d		$     29,445		$     55,235		$     79,969		$     82,738		$     73,705		(47) %		(60) %
Less: Non-interest income adjustments	a		22,575		(951)		(23,488)		(11,978)		(3,884)		nm		nm
Operating non-interest income (non- GAAP)	e		$     52,020		$     54,284		$     56,481		$     70,760		$     69,821		(4) %		(25) %
Revenue (GAAP) (1)	f=c+d		$   317,378		$   303,757		$   309,086		$   316,492		$   309,157		4 %		3 %
Operating revenue (non-GAAP)  (1)	g=c+e		$   339,953		$   302,806		$   285,598		$   304,514		$   305,273		12 %		11 %
Non-interest expense (GAAP)	h		$   177,964		$   179,574		$   182,430		$   199,711		$   183,753		(1) %		(3) %
Less: Non-interest expense adjustments	b		(2,133)		(3,114)		(5,311)		(18,205)		(3,813)		(32) %		(44) %
Operating non-interest expense (non- GAAP)	i		$   175,831		$   176,460		$   177,119		$   181,506		$   179,940		— %		(2) %
Net income (GAAP)	j		$     84,040		$     78,591		$     91,157		$     88,354		$   108,066		7 %		(22) %
Provision for income taxes			27,473		26,548		30,341		28,788		35,879		3 %		(23) %
Income before provision for income taxes			111,513		105,139		121,498		117,142		143,945		6 %		(23) %
Provision (recapture) for credit losses			27,572		18,692		4,804		(736)		(18,919)		48 %		(246) %
Pre-provision net revenue (PPNR) (non- GAAP)	k		139,085		123,831		126,302		116,406		125,026		12 %		11 %
Less: Non-interest income adjustments	a		22,575		(951)		(23,488)		(11,978)		(3,884)		nm		nm
Add: Non-interest expense adjustments	b		2,133		3,114		5,311		18,205		3,813		(32) %		(44) %
Operating PPNR (non-GAAP)	l		$   163,793		$   125,994		$   108,125		$   122,633		$   124,955		30 %		31 %
Net income (GAAP)	j		$     84,040		$     78,591		$     91,157		$     88,354		$   108,066		7 %		(22) %
Less: Non-interest income adjustments	a		22,575		(951)		(23,488)		(11,978)		(3,884)		nm		nm
Add: Non-interest expense adjustments	b		2,133		3,114		5,311		18,205		3,813		(32) %		(44) %
Tax effect of adjustments			(6,116)		(480)		4,576		1,190		18		nm		nm
Operating net income (non-GAAP)	m		$   102,632		$     80,274		$     77,556		$     95,771		$   108,013		28 %		(5) %
nm = not meaningful

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

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Consolidated			Quarter Ended										% Change
(Dollars in thousands, except per share data)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Average assets	n		$30,668,177		$30,356,903		$30,597,413		$30,886,378		$30,614,374		1 %		— %
Less: Average goodwill and other intangible assets, net			6,343		7,379		8,407		9,491		10,609		(14) %		(40) %
Average tangible assets	o		$30,661,834		$30,349,524		$30,589,006		$30,876,887		$30,603,765		1 %		— %
Average common shareholders' equity	p		$2,567,266		$2,584,836		$2,715,059		$2,717,753		$2,709,641		(1) %		(5) %
Less: Average goodwill and other intangible assets, net			6,343		7,379		8,407		9,491		10,609		(14) %		(40) %
Average tangible common equity	q		$2,560,923		$2,577,457		$2,706,652		$2,708,262		$2,699,032		(1) %		(5) %
Weighted average basic shares outstanding	r		217,051		217,030		216,782		216,624		218,416		0 %		(1) %
Weighted average diluted shares outstanding	s		217,386		217,279		217,392		217,356		218,978		0 %		(1) %
Select Per-Share & Performance Metrics
Earnings-per-share - basic	j / r		$      0.39		$      0.36		$      0.42		$      0.41		$      0.49		8 %		(20) %
Earnings-per-share - diluted	j / s		$      0.39		$      0.36		$      0.42		$      0.41		$      0.49		8 %		(20) %
Efficiency ratio	h / f		56.07 %		59.12 %		59.02 %		63.10 %		59.44 %		(3.05)		(3.37)
PPNR return on average assets	k / n		1.80 %		1.64 %		1.67 %		1.50 %		1.62 %		0.16		0.18
Return on average assets	j / n		1.09 %		1.04 %		1.21 %		1.13 %		1.40 %		0.05		(0.31)
Return on average tangible assets	j / o		1.09 %		1.04 %		1.21 %		1.14 %		1.40 %		0.05		(0.31)
Return on average common equity	j / p		12.99 %		12.20 %		13.62 %		12.90 %		15.82 %		0.79		(2.83)
Return on average tangible common equity	j / q		13.02 %		12.23 %		13.66 %		12.94 %		15.88 %		0.79		(2.86)
Operating Per-Share & Performance Metrics
Operating earnings-per-share - basic	m / r		$      0.47		$      0.37		$      0.36		$      0.44		$      0.49		27 %		(4) %
Operating earnings-per-share - diluted	m / s		$      0.47		$      0.37		$      0.36		$      0.44		$      0.49		27 %		(4) %
Operating efficiency ratio	i / g		51.72 %		58.27 %		62.02 %		59.61 %		58.94 %		(6.55)		(7.22)
Operating PPNR return on average assets	l / n		2.12 %		1.66 %		1.43 %		1.58 %		1.62 %		0.46		0.50
Operating return on average assets	m / n		1.33 %		1.06 %		1.03 %		1.23 %		1.40 %		0.27		(0.07)
Operating return on average tangible assets	m / o		1.33 %		1.06 %		1.03 %		1.23 %		1.40 %		0.27		(0.07)
Operating return on average common equity	m / p		15.86 %		12.46 %		11.58 %		13.98 %		15.82 %		3.40		0.04
Operating return on average tangible common equity	m / q		15.90 %		12.49 %		11.62 %		14.03 %		15.88 %		3.41		0.02

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Core Banking			Quarter Ended										% Change
(Dollars in thousands)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net			$       —		$       —		$         2		$           4		$         —		nm		nm
(Loss) gain on equity securities, net			(2,647)		(2,075)		(2,661)		(466)		(343)		28 %		672 %
Gain (loss) on swap derivatives			4,194		7,337		7,047		(303)		1,429		(43) %		193 %
Change in fair value of certain loans held for investment			(26,397)		(15,210)		(21,049)		(2,672)		3,432		74 %		(869) %
Total non-interest income adjustments	a		$ (24,850)		$ (9,948)		$ (16,661)		$   (3,437)		$    4,518		150 %		(650) %
Non-Interest Expense Adjustments
Merger related expenses			$     769		$  2,672		$  2,278		$  15,183		$         —		(71) %		nm
Exit and disposal costs			1,364		442		3,033		3,022		3,813		209 %		(64) %
Total non-interest expense adjustments	b		$  2,133		$  3,114		$  5,311		$  18,205		$    3,813		(32) %		(44) %
Net interest income (1)	c		$  286,861		$  247,361		$  227,441		$ 231,625		$ 232,726		16 %		23 %
Non-interest income (GAAP)	d		$ 11,919		$ 24,513		$ 18,989		$  39,375		$  39,367		(51) %		(70) %
Less: Non-interest income adjustments	a		24,850		9,948		16,661		3,437		(4,518)		150 %		(650) %
Operating non-interest income (non-GAAP)	e		$ 36,769		$ 34,461		$ 35,650		$  42,812		$  34,849		7 %		6 %
Revenue (GAAP) (1)	f=c+d		$  298,780		$  271,874		$  246,430		$ 271,000		$ 272,093		10 %		10 %
Operating revenue (non-GAAP) (1)	g=c+e		$  323,630		$  281,822		$  263,091		$ 274,437		$ 267,575		15 %		21 %
Non-interest expense (GAAP) (2)	h		$  156,414		$  155,762		$  157,469		$ 173,106		$ 154,424		— %		1 %
Less: Non-interest expense adjustments	b		(2,133)		(3,114)		(5,311)		(18,205)		(3,813)		(32) %		(44) %
Operating non-interest expense (non-GAAP)	i		$  154,281		$  152,648		$  152,158		$ 154,901		$ 150,611		1 %		2 %
Net income (GAAP)	j		$ 86,253		$ 72,538		$ 62,886		$  74,188		$ 102,265		19 %		(16) %
Provision for income taxes			28,212		24,530		20,917		24,067		33,945		15 %		(17) %
Income before provision for income taxes			114,465		97,068		83,803		98,255		136,210		18 %		(16) %
Provision (recapture) for credit losses			27,572		18,692		4,804		(736)		(18,919)		48 %		(246) %
Pre-provision net revenue (PPNR) (non-GAAP)	k		142,037		115,760		88,607		97,519		117,291		23 %		21 %
Less: Non-interest income adjustments	a		24,850		9,948		16,661		3,437		(4,518)		150 %		(650) %
Add: Non-interest expense adjustments	b		2,133		3,114		5,311		18,205		3,813		(32) %		(44) %
Operating PPNR (non-GAAP)	l		$  169,020		$  128,822		$  110,579		$ 119,161		$ 116,586		31 %		45 %
Net income (GAAP)	j		$ 86,253		$ 72,538		$ 62,886		$  74,188		$ 102,265		19 %		(16) %
Less: Non-interest income adjustments	a		24,850		9,948		16,661		3,437		(4,518)		150 %		(650) %
Add: Non-interest expense adjustments	b		2,133		3,114		5,311		18,205		3,813		(32) %		(44) %
Tax effect of adjustments			(6,685)		(3,205)		(5,461)		(2,664)		177		109 %		(3,877) %
Operating net income (non-GAAP)	m		$  106,551		$ 82,395		$ 79,397		$  93,166		$ 101,737		29 %		5 %
Efficiency ratio	h / f		52.35 %		57.29 %		63.90 %		63.88 %		56.75 %		(4.94)		(4.40)
Operating efficiency ratio	i / g		47.67 %		54.16 %		57.83 %		56.44 %		56.29 %		(6.49)		(8.62)
Core Banking net income / Consolidated net income			102.63 %		92.30 %		68.99 %		83.97 %		94.63 %		10.33		8.00
Core Banking operating net income / Consolidated operating net income			103.82 %		102.64 %		102.37 %		97.28 %		94.19 %		1.18		9.63
nm = not meaningful

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

(2) Includes adjustments related to allocated expenses between the Core Banking and Mortgage Banking segments.

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Mortgage Banking			Quarter Ended										% Change
(Dollars in thousands)			Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Seq. Quarter		Year over Year
Non-Interest Income Adjustments
Change in fair value of MSR due to valuation inputs or assumptions			$ 16,403		$ 10,899		$ 40,149		$ 15,415		$    (634)		51 %		nm
MSR hedge loss			(14,128)		—		—		—		—		nm		nm
Total non-interest income adjustments	a		$  2,275		$ 10,899		$ 40,149		$ 15,415		$    (634)		(79) %		(459) %
Total non-interest expense adjustments	b		$       —		$       —		$       —		$       —		$       —		nm		nm
Net interest income	c		$  1,072		$  1,161		$  1,676		$  2,129		$  2,726		(8) %		(61) %
Non-interest income (GAAP)	d		$ 17,526		$ 30,722		$ 60,980		$ 43,363		$ 34,338		(43) %		(49) %
Less: Non-interest income adjustments	a		(2,275)		(10,899)		(40,149)		(15,415)		634		(79) %		(459) %
Operating non-interest income (non-GAAP)	e		$ 15,251		$ 19,823		$ 20,831		$ 27,948		$ 34,972		(23) %		(56) %
Revenue (GAAP)	f=c+d		$ 18,598		$ 31,883		$ 62,656		$ 45,492		$ 37,064		(42) %		(50) %
Operating revenue (non-GAAP)	g=c+e		16,323		20,984		22,507		30,077		37,698		(22) %		(57) %
Non-interest expense (GAAP) (1)	h		21,550		23,812		24,961		26,605		29,329		(9) %		(27) %
Less: Non-interest expense adjustments	b		—		—		—		—		—		nm		nm
Operating non-interest expense (non-GAAP)	i		$ 21,550		$ 23,812		$ 24,961		$ 26,605		$ 29,329		(9) %		(27) %
Net income (GAAP)	j		$ (2,213)		$  6,053		$ 28,271		$ 14,166		$  5,801		(137) %		(138) %
Provision for income taxes			(739)		2,018		9,424		4,721		1,934		(137) %		(138) %
Income before provision for income taxes			(2,952)		8,071		37,695		18,887		7,735		(137) %		(138) %
Provision for credit losses			—		—		—		—		—		nm		nm
Pre-provision net revenue (PPNR) (non- GAAP)	k		(2,952)		8,071		37,695		18,887		7,735		(137) %		(138) %
Less: Non-interest income adjustments	a		(2,275)		(10,899)		(40,149)		(15,415)		634		(79) %		(459) %
Add: Non-interest expense adjustments	b		—		—		—		—		—		nm		nm
Operating PPNR (non-GAAP)	l		$ (5,227)		$ (2,828)		$ (2,454)		$  3,472		$  8,369		85 %		(162) %
Net income (GAAP)	j		$ (2,213)		$  6,053		$ 28,271		$ 14,166		$  5,801		(137) %		(138) %
Less: Non-interest income adjustments	a		(2,275)		(10,899)		(40,149)		(15,415)		634		(79) %		(459) %
Add: Non-interest expense adjustments	b		—		—		—		—		—		nm		nm
Tax effect of adjustments			569		2,725		10,037		3,854		(159)		(79) %		(458) %
Operating net income (non-GAAP)	m		$ (3,919)		$ (2,121)		$ (1,841)		$  2,605		$  6,276		85 %		(162) %
Efficiency ratio	h / f		115.87 %		74.69 %		39.84 %		58.48 %		79.13 %		41.18		36.74
Operating efficiency ratio	i / g		132.02 %		113.48 %		110.90 %		88.46 %		77.80 %		18.54		54.22
Mortgage Banking net income / Consolidated net income			(2.63) %		7.70 %		31.01 %		16.03 %		5.37 %		(10.33)		(8.00)
Mortgage Banking operating net income / Consolidated operating net income			(3.82) %		(2.64) %		(2.37) %		2.72 %		5.81 %		(1.18)		(9.63)
nm = not meaningful

(1) Includes adjustments related to allocated expenses between the Core Banking and Mortgage Banking segments.

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Consolidated			Year to Date				% Change
(Dollars in thousands)			Sep 30, 2022		Sep 30, 2021		Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net			$                        2		$                        4		(50) %
Loss on equity securities, net			(7,383)		(1,045)		nm
Gain on swap derivatives			18,578		8,698		114 %
Change in fair value of certain loans held for investment			(62,656)		5,704		nm
Change in fair value of MSR due to valuation inputs or assumptions			67,451		(4,326)		nm
MSR hedge loss			(14,128)		—		nm
Total non-interest income adjustments	a		$                 1,864		$                 9,035		(79) %
Non-Interest Expense Adjustments
Merger related expenses			$                 5,719		$                      —		nm
Exit and disposal costs			4,839		9,741		(50) %
Total non-interest expense adjustments	b		$                10,558		$                 9,741		8 %
Net interest income (1)	c		$              765,572		$              687,404		11 %
Non-interest income (GAAP)	d		$              164,649		$              273,580		(40) %
Less: Non-interest income adjustments	a		(1,864)		(9,035)		(79) %
Operating non-interest income (non-GAAP)	e		$              162,785		$              264,545		(38) %
Revenue (GAAP) (1)	f=c+d		$              930,221		$              960,984		(3) %
Operating revenue (non-GAAP)  (1)	g=c+e		$              928,357		$              951,949		(2) %
Non-interest expense (GAAP)	h		$              539,968		$              560,745		(4) %
Less: Non-interest expense adjustments	b		(10,558)		(9,741)		8 %
Operating non-interest expense (non-GAAP)	i		$              529,410		$              551,004		(4) %
Net income (GAAP)	j		$              253,788		$              331,946		(24) %
Provision for income taxes			84,362		109,072		(23) %
Income before provision for income taxes			338,150		441,018		(23) %
Provision (recapture) for credit losses			51,068		(41,915)		(222) %
Pre-provision net revenue (PPNR) (non-GAAP)	k		389,218		399,103		(2) %
Less: Non-interest income adjustments	a		(1,864)		(9,035)		(79) %
Add: Non-interest expense adjustments	b		10,558		9,741		8 %
Operating PPNR (non-GAAP)	l		$              397,912		$              399,809		— %
Net income (GAAP)	j		$              253,788		$              331,946		(24) %
Less: Non-interest income adjustments	a		(1,864)		(9,035)		(79) %
Add: Non-interest expense adjustments	b		10,558		9,741		8 %
Tax effect of adjustments			(2,020)		(177)		nm
Operating net income (non-GAAP)	m		$              260,462		$              332,475		(22) %
nm = not meaningful
Average assets	n		$         30,541,027		$         30,058,769		2 %
Less: Average goodwill and other intangible assets, net			$                 7,369		$                12,922		(43) %
Average tangible assets	o		$         30,533,658		$         30,045,847		2 %
Average common shareholders' equity	p		$           2,621,725		$           2,694,968		(3) %
Less: Average goodwill and other intangible assets, net			$                 7,369		$                12,922		(43) %
Average tangible common equity	q		$           2,614,356		$           2,682,046		(3) %
Weighted average basic shares outstanding	r		216,955		219,791		(1) %
Weighted average diluted shares outstanding	s		217,353		220,278		(1) %
Select Per-Share & Performance Metrics
Earnings-per-share - basic	j / r		$                   1.17		$                   1.51		(23) %
Earnings-per-share - diluted	j / s		$                   1.17		$                   1.51		(23) %
Efficiency ratio	h / f		58.05 %		58.35 %		(0.30)
PPNR return on average assets	k / n		1.70 %		1.78 %		(0.08)
Return on average assets	j / n		1.11 %		1.48 %		(0.37)
Return on average tangible assets	j / o		1.11 %		1.48 %		(0.37)
Return on average common equity	j / p		12.94 %		16.47 %		(3.53)
Return on average tangible common equity	j / q		12.98 %		16.55 %		(3.57)
Operating Per-Share & Performance Metrics
Operating earnings-per-share - basic	m / r		$                   1.20		$                   1.51		(21) %
Operating earnings-per-share - diluted	m / s		$                   1.20		$                   1.51		(21) %
Operating efficiency ratio	i / g		57.03 %		57.88 %		(0.85)
Operating PPNR return on average assets	l / n		1.74 %		1.78 %		(0.04)
Operating return on average assets	m / n		1.14 %		1.48 %		(0.34)
Operating return on average tangible assets	m / o		1.14 %		1.48 %		(0.34)
Operating return on average common equity	m / p		13.28 %		16.49 %		(3.21)
Operating return on average tangible common equity	m / q		13.32 %		16.57 %		(3.25)

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

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Core Banking			Year to Date				% Change
(Dollars in thousands)			Sep 30, 2022		Sep 30, 2021		Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net			$                        2		$                        4		(50) %
Loss on equity securities, net			(7,383)		(1,045)		607 %
Gain on swap derivatives			18,578		8,698		114 %
Change in fair value of certain loans held for investment			(62,656)		5,704		nm
Total non-interest income adjustments	a		$              (51,459)		$                13,361		(485) %
Non-Interest Expense Adjustments
Merger related expenses			$                 5,719		$                      —		nm
Exit and disposal costs			4,839		9,741		(50) %
Total non-interest expense adjustments	b		$                10,558		$                 9,741		8 %
Net interest income (1)	c		$              761,663		$              677,973		12 %
Non-interest income (GAAP)	d		$                55,421		$              129,274		(57) %
Less: Non-interest income adjustments	a		51,459		(13,361)		(485) %
Operating non-interest income (non-GAAP)	e		$              106,880		$              115,913		(8) %
Revenue (GAAP) (1)	f=c+d		$              817,084		$              807,247		1 %
Operating revenue (non-GAAP) (1)	g=c+e		$              868,543		$              793,886		9 %
Non-interest expense (GAAP) (2)	h		$              469,645		$              452,570		4 %
Less: Non-interest expense adjustments	b		(10,558)		(9,741)		8 %
Operating non-interest expense (non-GAAP)	i		$              459,087		$              442,829		4 %
Net income (GAAP)	j		$              221,677		$              297,775		(26) %
Provision for income taxes			73,659		97,681		(25) %
Income before provision for income taxes			295,336		395,456		(25) %
Provision (recapture) for credit losses			51,068		(41,915)		(222) %
Pre-provision net revenue (PPNR) (non-GAAP)	k		346,404		353,541		(2) %
Less: Non-interest income adjustments	a		51,459		(13,361)		(485) %
Add: Non-interest expense adjustments	b		10,558		9,741		8 %
Operating PPNR (non-GAAP)	l		$              408,421		$              349,921		17 %
Net income (GAAP)	j		$              221,677		$              297,775		(26) %
Less: Non-interest income adjustments	a		51,459		(13,361)		(485) %
Add: Non-interest expense adjustments	b		10,558		9,741		8 %
Tax effect of adjustments			(15,351)		905		nm
Operating net income (non-GAAP)	m		$              268,343		$              295,060		(9) %
Efficiency ratio	h / f		57.48 %		56.06 %		1.42
Operating efficiency ratio	i / g		52.86 %		55.78 %		(2.92)
Core Banking net income / Consolidated net income			87.35 %		89.71 %		(2.36)
Core Banking operating net income / Consolidated operating net income			103.03 %		88.75 %		14.28
nm = not meaningful

 

Umpqua Holdings Corporation GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Mortgage Banking			Year to Date				% Change
(Dollars in thousands)			Sep 30, 2022		Sep 30, 2021		Year over Year
Non-Interest Income Adjustments
Change in fair value of MSR due to valuation inputs or assumptions			$                67,451		$                (4,326)		nm
MSR hedge loss			(14,128)		—		nm
Total non-interest income adjustments	a		$                53,323		$                (4,326)		nm
Total non-interest expense adjustments	b		$                      —		$                      —		nm
Net interest income	c		$                 3,909		$                 9,431		(59) %
Non-interest income (GAAP)	d		$              109,228		$              144,306		(24) %
Less: Non-interest income adjustments	a		(53,323)		4,326		nm
Operating non-interest income (non-GAAP)	e		$                55,905		$              148,632		(62) %
Revenue (GAAP)	f=c+d		$              113,137		$              153,737		(26) %
Operating revenue (non-GAAP)	g=c+e		$                59,814		$              158,063		(62) %
Non-interest expense (GAAP) (1)	h		$                70,323		$              108,175		(35) %
Less: Non-interest expense adjustments	b		—		—		nm
Operating non-interest expense (non-GAAP)	i		$                70,323		$              108,175		(35) %
Net income (GAAP)	j		$                32,111		$                34,171		(6) %
Provision for income taxes			10,703		11,391		(6) %
Income before provision for income taxes			42,814		45,562		(6) %
Provision for credit losses			—		—		nm
Pre-provision net revenue (PPNR) (non-GAAP)	k		42,814		45,562		(6) %
Less: Non-interest income adjustments	a		(53,323)		4,326		nm
Add: Non-interest expense adjustments	b		—		—		nm
Operating PPNR (non-GAAP)	l		$              (10,509)		$                49,888		(121) %
Net income (GAAP)	j		$                32,111		$                34,171		(6) %
Less: Non-interest income adjustments	a		(53,323)		4,326		nm
Add: Non-interest expense adjustments	b		—		—		nm
Tax effect of adjustments			13,331		(1,082)		nm
Operating net income (non-GAAP)	m		$                (7,881)		$                37,415		(121) %
Efficiency ratio	h / f		62.16 %		70.36 %		(8.20)
Operating efficiency ratio	i / g		117.57 %		68.44 %		49.13
Mortgage Banking net income / Consolidated net income			12.65 %		10.29 %		2.36
Mortgage Banking operating net income / Consolidated operating net income			(3.03) %		11.25 %		(14.28)
nm = not meaningful

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/umpqua-reports-third-quarter-2022-results-301653857.html

SOURCE Umpqua Holdings Corporation

FAQ

What were Umpqua's net income results for Q3 2022?

Umpqua reported a net income of $84 million for Q3 2022, equivalent to $0.39 per share.

How much did Umpqua's loan balances increase in Q3 2022?

Loan balances increased by $1.1 billion, representing a growth of 4.4% in Q3 2022.

What is Umpqua's net interest margin for Q3 2022?

The net interest margin for Q3 2022 increased to 3.88%, up 47 basis points from the prior quarter.

Did Umpqua's deposit balances grow in Q3 2022?

Yes, deposit balances increased by $685 million, or 2.6%, in Q3 2022.

What impact did fair value accounting have on Umpqua's non-interest income?

Non-interest income decreased by $26 million primarily due to fair value accounting losses and lower residential mortgage income.