Umpqua Reports First Quarter 2021 Results

PORTLAND, Ore., April 21, 2021 /PRNewswire/ --

$0.49		$108		16.43%		15.9%
Net earnings per diluted common share		Net income ($ in millions)		Return on average tangible common equity ("ROATCE")		Total risk-based capital ratio (estimated)

CEO Commentary
"Through strategic growth, expense management, and capital allocation, we're committed to improving value for our shareholders over time. Umpqua's reported earnings of $0.49 per share last quarter reflect the relevance of the company's unique value proposition and customer acquisition efforts, and we're optimistic about future loan growth as our markets reopen. We're focused on continuing to execute on our talent acquisition and other growth priorities, including key Human Digital initiatives that are an important point of differentiation and customer-engagement across digital channels."
–            Cort O'Haver, President and CEO of Umpqua Holdings Corporation

FIRST QUARTER HIGHLIGHTS
Net Interest Income and NIM	•   Net interest income decreased by $13.5 million on a quarter to quarter basis primarily due to $9.3 million of lower Paycheck Protection Program ("PPP") fees recorded in the current period.
	•   Net interest margin was 3.18%, down 17 basis point due to 11 basis points of lower PPP fees recorded in the current period.
Non-Interest Income and Expense	•   Non-interest income decreased by $15.2 million due to lower net mortgage banking revenue of $14.0 million.
	•   Non-interest expense decreased by $23.7 million primarily due to lower salaries & benefits, occupancy & equipment, and other expenses.
Credit Quality	•   Net charge-offs decreased by two basis points to 0.33% of average loans and leases (annualized).
	•   Provision for credit losses was zero compared to $0.03 million in the prior period.
	•   Non-performing assets to total assets decreased five basis points to 0.19% from 0.24%.
Capital	•   Estimated total risk-based capital ratio of 15.9% and estimated Tier 1 Risk Based Capital ratio of 12.6%.
	•   Paid a quarterly cash dividend of $0.21 per common share on February 26, 2021 to shareholders of record as of February 16, 2021.
Notable items	•   $2.0 million loss on the fair value change due to model inputs of the mortgage servicing rights ("MSR") asset.
	•   $11.8 million gain related to the fair value of the debt capital market swap derivatives.

 

1Q21 KEY FINANCIAL DATA
PERFORMANCE METRICS	1Q21			4Q20			1Q20
Return on average assets	1.49	%		2.04	%		(25.82)	%
Return on average tangible common equity	16.43	%		23.07	%		(301.30)	%
Net interest margin	3.18	%		3.35	%		3.41	%
Efficiency ratio - consolidated	56.74	%		58.82	%		756.29	%
Loan to deposit ratio	85.61	%		88.45	%		93.62	%
INCOME STATEMENT ($ in 000s, excl. per share data)	1Q21			4Q20			1Q20
Net interest income	$221,431			$234,907			$218,535
Provision for credit losses	$—			$29			$118,085
Non-interest income	$108,800			$123,960			$40,645
Non-interest expense	$187,592			$211,312			$1,962,658
Earnings per common share - diluted	$0.49			$0.68			($8.41)
Dividends paid per share	$0.21			$0.21			$0.21
BALANCE SHEET	1Q21			4Q20			1Q20
Total assets	$30.0	B		$29.2	B		$27.5	B
Loans and leases	$22.2	B		$21.8	B		$21.3	B
Total deposits	$25.9	B		$24.6	B		$22.7	B
Tangible book value per share1	$12.10			$12.21			$11.30
Book value per common shares	$12.16			$12.28			$11.39

1 "Non-GAAP" financial measure.  A reconciliation to the comparable GAAP measurement is provided on page 4.

Segment Disclosures
Segment disclosures have been included on pages 15 and 16 of this press release to 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 wholesale, 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 related to residential real estate loans held for investment are included in the Core Banking segment as portfolio loans are an anchor product for our consumer channels and are originated through a variety of channels throughout the Company.

Balance Sheet
Total consolidated assets were $30.0 billion as of March 31, 2021, compared to $29.2 billion as of December 31, 2020 and $27.5 billion as of March 31, 2020.  Including secured off-balance sheet lines of credit, total available liquidity was $14.2 billion as of March 31, 2021, representing 47% of total assets and 55% of total deposits.

Gross loans and leases were $22.2 billion as of March 31, 2021, an increase of $381.5 million relative to December 31, 2020.  The increase in gross loans and leases is primarily due to an increase of commercial real estate balances during the quarter of $92.2 million and an increase in net PPP loan balances of $297.6 million.  The change in net PPP loan balances during the quarter was the result of an increase in round two PPP net loan balances of $659.2 million, offset by a decrease in PPP round one net loan balances of $361.6 million.  Please refer to the additional loan tables in the Q1 2021 Earnings Presentation for select underwriting characteristics of the loan portfolio and specific industry concentrations impacted by COVID-19.

Total deposits were $25.9 billion as of March 31, 2021, an increase of $1.3 billion from $24.6 billion as of December 31, 2020. This increase was primarily attributable to growth in non-interest bearing demand deposits of $867.7 million and growth in money market balances of $380.9 million, partially offset by a decline in time deposits of $373.6 million.

Net Interest Income
Net interest income was $221.4 million for the first quarter of 2021, down $13.5 million from the prior quarter.  The decrease was primarily driven by $9.3 million of lower PPP fees recognized in the quarter compared to the prior period.

The Company's net interest margin was 3.18% for the first quarter of 2021, down 17 basis points from 3.35% for the fourth quarter of 2020 primarily driven by an eleven basis points decrease resulting from lower PPP fees recognized in the quarter.

Credit Quality
The allowance for credit losses was $331.0 million, or 1.49% of loans and leases, as of March 31, 2021, which was down from $348.7 million, or 1.60% of loans and leases, as of December 31, 2020.  The provision for credit losses decreased by $0.03 million from the prior quarter level primarily due to offsetting changes in loan portfolio mix and improvement in economic forecasts used in the credit models.

Net charge-offs as a percentage of average loans and leases decreased by two basis points to 0.33% of average loans and leases (annualized) as of December 31, 2020.  The decrease in net charge-offs for the quarter was primarily due to continued stable credit performance of the loan portfolio. As of March 31, 2021, non-performing assets were 0.19% of total assets, compared to 0.24% as of December 31, 2020 and 0.32% as of March 31, 2020.

Current Expected Credit Loss (CECL)
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, we use credit models that factor in economic forecasts to project life of loan performance.  At the beginning of the COVID-19 pandemic, economic forecasts projected significant, negative COVID-19 related 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 as well as incorporating loan mix changes, we recorded a recapture of $0.34 million of the allowance for credit losses in the third quarter of 2020, a $0.03 million provision for credit losses in the fourth of 2020, and no provision for credit losses in the current period.

Non-interest Income
Non-interest income was $108.8 million for the first quarter of 2021, down $15.2 million from the prior quarter driven primarily by a decrease in net mortgage banking revenue of $14.0 million.

Revenue from the origination and sale of residential mortgages was $62.5 million for the first quarter of 2021, a decrease of $20.9 million from the prior quarter. This decrease reflects a sequential quarter decrease of $133.9 million or 8% in for-sale mortgage origination volume and a decrease of 89 basis points in the home lending gain on sale margin to 3.82% for the first quarter of 2021. Of the current quarter's mortgage production, 37% related to purchase activity, compared to 48% for the prior quarter and 43% for the same period of the prior year.

Non-interest Expense
Non-interest expense was $187.6 million for the first quarter of 2021, down $23.7 million from the prior quarter level. This decrease was primarily due to a decrease in salaries and benefits expenses of $8.3 million, a decrease in occupancy and equipment expenses of $7.1 million, and decreases in other expenses of $7.7 million.

Capital
As of March 31, 2021, the Company's tangible book value per common share¹ was $12.10, compared to $12.21 in the prior quarter and $11.30 in the same period of the prior year.  The decrease in tangible book value per share is attributable to increases in the fair value of trust preferred securities and a decrease in the unrealized gain of investment portfolio securities during the quarter.

The Company's estimated total risk-based capital ratio was 15.9% and its estimated Tier 1 common to risk weighted assets ratio was 12.6% as of March 31, 2021. The Company remains above current "well-capitalized" regulatory minimums.  The regulatory capital ratios as of March 31, 2021 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)		Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020
Total shareholders' equity		$	2,681,869			$	2,704,577			$	2,610,244			$	2,538,339			$	2,507,611
Subtract:
Goodwill		2,715				2,715				2,715				2,715				2,715
Other intangible assets, net		12,230				13,360				14,606				15,853				17,099
Tangible common shareholders' equity		$	2,666,924			$	2,688,502			$	2,592,923			$	2,519,771			$	2,487,797
Total assets		$	30,036,680			$	29,235,175			$	29,437,441			$	29,645,248			$	27,540,382
Subtract:
Goodwill		2,715				2,715				2,715				2,715				2,715
Other intangible assets, net		12,230				13,360				14,606				15,853				17,099
Tangible assets		$	30,021,735			$	29,219,100			$	29,420,120			$	29,626,680			$	27,520,568
Common shares outstanding at period end		220,491				220,226				220,222				220,219				220,175
Total shareholders' equity to total assets ratio		8.93		%		9.25		%		8.87		%		8.56		%		9.11		%
Tangible common equity ratio		8.88		%		9.20		%		8.81		%		8.51		%		9.04		%
Book value per common share		$	12.16			$	12.28			$	11.85			$	11.53			$	11.39
Tangible book value per common share		$	12.10			$	12.21			$	11.77			$	11.44			$	11.30

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 Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.

Earnings Conference Call Information
The Company will host its first quarter 2021 earnings conference call on April 22, 2021, 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 first quarter 2021 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: 7292532.  A re-broadcast will be available approximately two hours after the call by dialing (855) 859-2056 and entering conference ID 7292532. The earnings conference call will also be available as an audio cast, which can be accessed on the Company's investor relations page at https://www.umpquabank.com/investor-relations/.

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.  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)	Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Interest income:
Loans and leases	$	221,141			$	240,815			$	229,457			$	235,174			$	245,993			(8)	%		(10)		%
Interest and dividends on investments:
Taxable	13,112				11,951				10,168				9,015				16,605				10	%		(21)		%
Exempt from federal income tax	1,534				1,523				1,490				1,520				1,562				1	%		(2)		%
Dividends	598				659				710				568				678				(9)	%		(12)		%
Temporary investments and interest bearing deposits	624				531				474				403				3,331				18	%		(81)		%
Total interest income	237,009				255,479				242,299				246,680				268,169				(7)	%		(12)		%
Interest expense:
Deposits	10,678				14,567				19,121				26,222				40,290				(27)	%		(73)		%
Securities sold under agreement to repurchase and federal funds purchased	76				93				84				194				395				(18)	%		(81)		%
Borrowings	1,772				2,765				3,271				3,839				4,046				(36)	%		(56)		%
Junior subordinated debentures	3,052				3,147				3,249				3,922				4,903				(3)	%		(38)		%
Total interest expense	15,578				20,572				25,725				34,177				49,634				(24)	%		(69)		%
Net interest income	221,431				234,907				216,574				212,503				218,535				(6)	%		1		%
Provision (recapture) for credit losses	—				29				(338)				87,085				118,085				(100)	%		(100)		%
Non-interest income:
Service charges on deposits	9,647				10,202				10,405				8,757				11,473				(5)	%		(16)		%
Card-based fees	7,374				7,754				7,118				5,901				7,417				(5)	%		(1)		%
Brokerage revenue	3,915				4,093				3,686				3,805				4,015				(4)	%		(2)		%
Residential mortgage banking revenue, net	65,033				79,028				90,377				83,877				17,540				(18)	%		271		%
Gain (loss) on sale of debt securities, net	4				—				—				323				(133)				nm			nm
(Loss) gain on equity securities, net	(706)				(173)				(112)				240				814				308	%		(187)		%
Gain on loan and lease sales, net	1,373				3,374				1,092				1,074				1,167				(59)	%		18		%
BOLI income	2,071				2,067				2,087				2,116				2,129				0	%		(3)		%
Other income (expense)	20,089				17,615				17,271				9,387				(3,777)				14	%		nm
Total non-interest income	108,800				123,960				131,924				115,480				40,645				(12)	%		168		%
Non-interest expense:
Salaries and employee benefits	124,134				132,460				120,337				116,676				109,774				(6)	%		13		%
Occupancy and equipment, net	34,635				41,758				36,720				36,171				37,001				(17)	%		(6)		%
Intangible amortization	1,130				1,246				1,247				1,246				1,247				(9)	%		(9)		%
FDIC assessments	2,599				3,014				2,989				3,971				2,542				(14)	%		2		%
Goodwill impairment	—				—				—				—				1,784,936				0	%		(100)		%
Other expenses	25,094				32,834				28,914				23,846				27,158				(24)	%		(8)		%
Total non-interest expense	187,592				211,312				190,207				181,910				1,962,658				(11)	%		(90)		%
Income (loss) before provision for income taxes	142,639				147,526				158,629				58,988				(1,821,563)				(3)	%		nm
Provision (benefit) for income taxes	34,902				(3,204)				33,758				6,062				30,384				nm			15		%
Net income (loss)	$	107,737			$	150,730			$	124,871			$	52,926			$	(1,851,947)			(29)	%		nm
Weighted average basic shares outstanding	220,367				220,225				220,221				220,210				220,216				0	%		0		%
Weighted average diluted shares outstanding	220,891				220,663				220,418				220,320				220,216				0	%		0		%
Earnings (loss) per common share – basic	$	0.49			$	0.68			$	0.57			$	0.24			$	(8.41)			(28)	%		nm
Earnings (loss) per common share – diluted	$	0.49			$	0.68			$	0.57			$	0.24			$	(8.41)			(28)	%		nm
nm = not meaningful

 

Umpqua Holdings Corporation Consolidated Balance Sheets
(Unaudited)
																					% Change
(In thousands, except per share data)	Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Assets:
Cash and due from banks	$	379,361			$	370,219			$	370,595			$	410,769			$	406,426			2	%		(7)	%
Interest bearing cash and temporary investments	2,861,820				2,202,962				1,849,132				1,853,505				1,251,290				30	%		129	%
Investment securities:
Equity and other, at fair value	82,771				83,077				82,769				81,958				80,797				0	%		2	%
Available for sale, at fair value	3,167,825				2,932,558				2,898,700				2,865,690				2,890,475				8	%		10	%
Held to maturity, at amortized cost	2,954				3,034				3,088				3,143				3,200				(3)	%		(8)	%
Loans held for sale	376,481				766,225				683,960				605,399				481,541				(51)	%		(22)	%
Loans and leases	22,160,860				21,779,367				22,426,473				22,671,455				21,251,478				2	%		4	%
Allowance for credit losses on loans and leases	(311,283)				(328,401)				(345,049)				(356,745)				(291,420)				(5)	%		7	%
Net loans and leases	21,849,577				21,450,966				22,081,424				22,314,710				20,960,058				2	%		4	%
Restricted equity securities	22,057				41,666				50,062				54,062				58,062				(47)	%		(62)	%
Premises and equipment, net	176,571				178,050				185,104				192,041				195,390				(1)	%		(10)	%
Operating lease right-of-use assets	100,643				104,937				107,321				111,487				115,485				(4)	%		(13)	%
Goodwill	2,715				2,715				2,715				2,715				2,715				0	%		0	%
Other intangible assets, net	12,230				13,360				14,606				15,853				17,099				(8)	%		(28)	%
Residential mortgage servicing rights, at fair value	100,413				92,907				93,248				96,356				94,346				8	%		6	%
Bank owned life insurance	322,867				323,470				326,120				324,873				322,717				0	%		0	%
Deferred tax asset, net	10,905				—				—				—				—				nm			nm
Other assets	567,490				669,029				688,597				712,687				660,781				(15)	%		(14)	%
Total assets	$	30,036,680			$	29,235,175			$	29,437,441			$	29,645,248			$	27,540,382			3	%		9	%
Liabilities:
Deposits	$	25,886,833			$	24,622,201			$	24,669,783			$	24,844,378			$	22,699,375			5	%		14	%
Securities sold under agreements to repurchase	420,402				375,384				388,028				398,414				346,245				12	%		21	%
Borrowings	281,444				771,482				996,520				1,096,559				1,196,597				(64)	%		(76)	%
Junior subordinated debentures, at fair value	281,580				255,217				247,045				232,936				195,521				10	%		44	%
Junior subordinated debentures, at amortized cost	88,212				88,268				88,325				88,382				88,439				0	%		0	%
Operating lease liabilities	109,014				113,593				115,790				119,885				123,962				(4)	%		(12)	%
Deferred tax liability, net	—				5,441				13,239				21,439				51,061				(100)	%		(100)	%
Other liabilities	287,326				299,012				308,467				304,916				331,571				(4)	%		(13)	%
Total liabilities	27,354,811				26,530,598				26,827,197				27,106,909				25,032,771				3	%		9	%
Shareholders' equity:
Common stock	3,515,248				3,514,599				3,512,153				3,510,145				3,507,680				0	%		0	%
Accumulated deficit	(871,511)				(932,767)				(1,036,931)				(1,115,414)				(1,168,340)				(7)	%		(25)	%
Accumulated other comprehensive income	38,132				122,745				135,022				143,608				168,271				(69)	%		(77)	%
Total shareholders' equity	2,681,869				2,704,577				2,610,244				2,538,339				2,507,611				(1)	%		7	%
Total liabilities and shareholders' equity	$	30,036,680			$	29,235,175			$	29,437,441			$	29,645,248			$	27,540,382			3	%		9	%
Common shares outstanding at period end	220,491				220,226				220,222				220,219				220,175				0	%		0	%
Book value per common share	$	12.16			$	12.28			$	11.85			$	11.53			$	11.39			(1)	%		7	%
Tangible book value per common share	$	12.10			$	12.21			$	11.77			$	11.44			$	11.30			(1)	%		7	%
Tangible equity - common	$	2,666,924			$	2,688,502			$	2,592,923			$	2,519,771			$	2,487,797			(1)	%		7	%
Tangible common equity to tangible assets	8.88		%		9.20		%		8.81		%		8.51		%		9.04		%		(0.32)			(0.16)

 

Umpqua Holdings Corporation
Loan and Lease Portfolio
(Unaudited)
	Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				% 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	$	3,455,773			$	3,505,802			$	3,533,776			$	3,589,484			$	3,613,420			(1)	%		(4)	%
Owner occupied term, net	2,358,169				2,333,945				2,411,098				2,459,954				2,472,187				1	%		(5)	%
Multifamily, net	3,421,320				3,349,196				3,389,034				3,466,829				3,464,217				2	%		(1)	%
Construction & development, net	876,297				828,478				757,462				662,703				667,975				6	%		31	%
Residential development, net	190,841				192,761				163,400				164,180				187,594				(1)	%		2	%
Commercial:
Term, net (1)	4,350,763				4,024,467				4,246,229				4,265,092				2,317,573				8	%		88	%
Lines of credit & other, net	825,162				862,760				894,782				940,443				1,208,051				(4)	%		(32)	%
Leases & equipment finance, net	1,420,977				1,456,630				1,496,650				1,522,369				1,492,762				(2)	%		(5)	%
Residential:
Mortgage, net	3,958,644				3,871,906				4,042,416				4,056,588				4,193,908				2	%		(6)	%
Home equity loans & lines, net	1,097,168				1,136,064				1,172,697				1,189,428				1,249,152				(3)	%		(12)	%
Consumer & other, net	205,746				217,358				318,929				354,385				384,639				(5)	%		(47)	%
Total loans and leases, net of deferred fees and costs	$	22,160,860			$	21,779,367			$	22,426,473			$	22,671,455			$	21,251,478			2	%		4	%
(1)    The Bank participates 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 18,135 PPP loans, totaling $2.0 billion, net of deferred fees and costs as of March 31, 2021.
Loan and leases mix:
Commercial real estate:
Non-owner occupied term, net	15		%		16		%		16		%		16		%		17		%
Owner occupied term, net	11		%		11		%		11		%		11		%		12		%
Multifamily, net	15		%		15		%		15		%		15		%		16		%
Construction & development, net	4		%		4		%		3		%		3		%		3		%
Residential development, net	1		%		1		%		1		%		1		%		1		%
Commercial:
Term, net	20		%		18		%		19		%		19		%		11		%
Lines of credit & other, net	4		%		4		%		4		%		4		%		5		%
Leases & equipment finance, net	6		%		7		%		7		%		7		%		7		%
Residential:
Mortgage, net	18		%		18		%		18		%		18		%		20		%
Home equity loans & lines, net	5		%		5		%		5		%		5		%		6		%
Consumer & other, net	1		%		1		%		1		%		1		%		2		%
Total	100		%		100		%		100		%		100		%		100		%

 

Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
	Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				% Change
(Dollars in thousands)	Amount				Amount				Amount				Amount				Amount				Seq. Quarter			Year over Year
Deposits:
Demand, non-interest bearing	$	10,500,482			$	9,632,773			$	9,475,244			$	9,172,210			$	7,169,907			9	%		46	%
Demand, interest bearing	3,244,624				3,051,487				2,931,990				2,813,722				2,482,908				6	%		31	%
Money market	7,554,798				7,173,920				7,160,838				7,262,777				7,082,011				5	%		7	%
Savings	2,109,211				1,912,752				1,848,639				1,730,051				1,486,909				10	%		42	%
Time	2,477,718				2,851,269				3,253,072				3,865,618				4,477,640				(13)	%		(45)	%
Total	$	25,886,833			$	24,622,201			$	24,669,783			$	24,844,378			$	22,699,375			5	%		14	%
Total core deposits (1)	$	24,740,621			$	23,298,561			$	23,134,283			$	22,934,059			$	20,398,215			6	%		21	%
Deposit mix:
Demand, non-interest bearing	41		%		39		%		38		%		37		%		32		%
Demand, interest bearing	12		%		12		%		12		%		11		%		11		%
Money market	29		%		29		%		29		%		29		%		31		%
Savings	8		%		8		%		8		%		7		%		7		%
Time	10		%		12		%		13		%		16		%		19		%
Total	100		%		100		%		100		%		100		%		100		%
Number of open accounts:
Demand, non-interest bearing	422,792				420,050				423,658				423,456				416,270
Demand, interest bearing	72,156				72,811				73,812				74,813				75,514
Money market	58,409				58,609				59,083				59,445				59,203
Savings	161,432				160,192				162,234				161,710				159,870
Time	43,637				48,292				52,572				57,501				62,515
Total	758,426				759,954				771,359				776,925				773,372
Average balance per account:
Demand, non-interest bearing	$	24.8			$	22.9			$	22.4			$	21.7			$	17.2
Demand, interest bearing	45.0				41.9				39.7				37.6				32.9
Money market	129.3				122.4				121.2				122.2				119.6
Savings	13.1				11.9				11.4				10.7				9.3
Time	56.8				59.0				61.9				67.2				71.6
Total	$	34.1			$	32.4			$	32.0			$	32.0			$	29.4

(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)		Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Non-performing assets:
Loans and leases on non-accrual status		$	29,216			$	31,076			$	26,425			$	32,412			$	39,128			(6)	%		(25)	%
Loans and leases past due 90+ days and accruing (1)		25,612				36,361				50,269				39,818				47,185				(30)	%		(46)	%
Total non-performing loans and leases		54,828				67,437				76,694				72,230				86,313				(19)	%		(36)	%
Other real estate owned		1,405				1,810				2,369				2,578				3,020				(22)	%		(53)	%
Total non-performing assets		$	56,233			$	69,247			$	79,063			$	74,808			$	89,333			(19)	%		(37)	%
Performing restructured loans and leases		$	23,756			$	14,991			$	15,819			$	15,032			$	20,541			58	%		16	%
Loans and leases past due 31-89 days		$	51,120			$	72,047			$	66,155			$	40,583			$	59,962			(29)	%		(15)	%
Loans and leases past due 31-89 days to total loans and leases		0.23		%		0.33		%		0.29		%		0.18		%		0.28		%
Non-performing loans and leases to total loans and leases (1)		0.25		%		0.31		%		0.34		%		0.32		%		0.41		%
Non-performing assets to total assets(1)		0.19		%		0.24		%		0.27		%		0.25		%		0.32		%

(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, and $5.3 million at September 30, 2020, June 30, 2020, and March 31, 2020, respectively. There were no non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so at March 31, 2021 and December 31, 2020.

 

Umpqua Holdings Corporation
Credit Quality – Allowance for Credit Losses
(Unaudited)
		Quarter Ended																				% Change
(Dollars in thousands)		Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period		$	328,401			$	345,049			$	356,745			$	291,420			$	157,629			(5)	%		108	%
Impact of adoption of CECL		—				—				—				—				49,999				nm			nm
Adjusted balance, beginning of period		328,401				345,049				356,745				291,420				207,628				(5)	%		58	%
Provision for credit losses on loans and leases		526				3,104				1,785				81,484				105,502				(83)	%		(100)	%
Charge-offs		(20,915)				(23,942)				(16,646)				(19,453)				(24,455)				(13)	%		(14)	%
Recoveries		3,271				4,190				3,165				3,294				2,745				(22)	%		19	%
Net charge-offs		(17,644)				(19,752)				(13,481)				(16,159)				(21,710)				(11)	%		(19)	%
Balance, end of period		$	311,283			$	328,401			$	345,049			$	356,745			$	291,420			(5)	%		7	%
Reserve for unfunded commitments
Balance, beginning of period		$	20,286			$	24,306			$	26,368			$	20,927			$	5,106			(17)	%		297	%
Impact of adoption of CECL		—				—				—				—				3,238				nm			nm
Adjusted balance, beginning of period		20,286				24,306				26,368				20,927				8,344				(17)	%		143	%
(Recapture) provision for credit losses on unfunded commitments		(526)				(4,020)				(2,062)				5,441				12,583				(87)	%		(104)	%
Balance, end of period		19,760				20,286				24,306				26,368				20,927				(3)	%		(6)	%
Total Allowance for credit losses (ACL)		$	331,043			$	348,687			$	369,355			$	383,113			$	312,347			(5)	%		6	%
Net charge-offs to average loans and leases (annualized)		0.33		%		0.35		%		0.24		%		0.29		%		0.41		%
Recoveries to gross charge-offs		15.64		%		17.50		%		19.01		%		16.93		%		11.22		%
ACLLL to loans and leases		1.40		%		1.51		%		1.54		%		1.57		%		1.37		%
ACL to loans and leases		1.49		%		1.60		%		1.65		%		1.69		%		1.47		%
nm = not meaningful

 

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
		Quarter Ended															% Change
		Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Seq. Quarter			Year over Year
Average Rates:
Yield on loans held for sale		2.75	%		3.19	%		3.13	%		3.77	%		4.20	%		(0.44)			(1.45)
Yield on loans and leases		4.02	%		4.24	%		3.96	%		4.11	%		4.58	%		(0.22)			(0.56)
Yield on taxable investments		1.86	%		1.77	%		1.56	%		1.38	%		2.50	%		0.09			(0.64)
Yield on tax-exempt investments (1)		3.03	%		3.08	%		3.11	%		3.17	%		3.14	%		(0.05)			(0.11)
Yield on interest bearing cash and temporary investments		0.10	%		0.10	%		0.10	%		0.10	%		1.23	%		—			(1.13)
Total yield on earning assets (1)		3.41	%		3.64	%		3.45	%		3.59	%		4.19	%		(0.23)			(0.78)
Cost of interest bearing deposits		0.29	%		0.38	%		0.49	%		0.67	%		1.03	%		(0.09)			(0.74)
Cost of securities sold under agreements
to repurchase and fed funds purchased		0.08	%		0.09	%		0.09	%		0.21	%		0.47	%		(0.01)			(0.39)
Cost of borrowings		1.33	%		1.18	%		1.23	%		1.33	%		1.79	%		0.15			(0.46)
Cost of junior subordinated debentures		3.60	%		3.73	%		4.03	%		5.55	%		5.45	%		(0.13)			(1.85)
Total cost of interest bearing liabilities		0.38	%		0.49	%		0.59	%		0.78	%		1.15	%		(0.11)			(0.77)
Net interest spread (1)		3.03	%		3.15	%		2.85	%		2.81	%		3.04	%		(0.12)			(0.01)
Net interest margin (1)		3.18	%		3.35	%		3.08	%		3.09	%		3.41	%		(0.17)			(0.23)
Performance Ratios:
Return on average assets		1.49	%		2.04	%		1.68	%		0.73	%		(25.82)	%		(0.55)			27.31
Return on average tangible assets		1.49	%		2.04	%		1.68	%		0.73	%		(27.53)	%		(0.55)			29.02
Return on average common equity		16.33	%		22.92	%		19.48	%		8.46	%		(174.94)	%		(6.59)			191.27
Return on average tangible common equity		16.43	%		23.07	%		19.62	%		8.53	%		(301.30)	%		(6.64)			317.73
Efficiency ratio – Consolidated		56.74	%		58.82	%		54.52	%		55.40	%		756.29	%		(2.08)			(699.55)
Efficiency ratio – Bank		55.51	%		57.77	%		53.41	%		54.17	%		752.92	%		(2.26)			(697.41)

(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)	Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Temporary investments and interest bearing cash	$	2,483,451			$	2,066,572			$	1,827,818			$	1,563,753			$	1,084,854			20	%		129	%
Investment securities, taxable	2,945,896				2,850,550				2,797,547				2,777,154				2,760,461				3	%		7	%
Investment securities, tax-exempt	252,741				245,997				237,165				235,934				241,105				3	%		5	%
Loans held for sale	703,557				696,688				669,646				577,773				406,434				1	%		73	%
Loans and leases	21,692,639				22,138,283				22,560,076				22,428,142				21,196,989				(2)	%		2	%
Total interest earning assets	28,078,284				27,998,090				28,092,252				27,582,756				25,689,843				0	%		9	%
Goodwill and other intangible assets, net	15,598				16,775				18,021				19,253				1,785,608				(7)	%		(99)	%
Total assets	29,392,490				29,396,311				29,533,871				29,066,775				28,844,773				0	%		2	%
Non-interest bearing demand deposits	9,897,749				9,587,081				9,335,350				8,484,684				6,880,457				3	%		44	%
Interest bearing deposits	15,166,198				15,165,049				15,451,816				15,803,595				15,695,309				0	%		(3)	%
Total deposits	25,063,947				24,752,130				24,787,166				24,288,279				22,575,766				1	%		11	%
Interest bearing liabilities	16,444,694				16,822,808				17,205,775				17,625,888				17,301,712				(2)	%		(5)	%
Shareholders' equity - common	2,674,871				2,615,676				2,549,703				2,514,754				4,257,711				2	%		(37)	%
Tangible common equity (1)	2,659,273				2,598,901				2,531,682				2,495,501				2,472,103				2	%		8	%

(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
	March 31, 2021											December 31, 2020											March 31, 2020
(Dollars in thousands)	Average Balance				Interest Income or Expense				Average Yields or Rates			Average Balance				Interest Income or Expense				Average Yields or R ates			Average Balance				Interest Income or Expense				Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$	703,557			$	4,845			2.75	%		$	696,688			$	5,554			3.19	%		$	406,434			$	4,264			4.20	%
Loans and leases (1)	21,692,639				216,296				4.02	%		22,138,283				235,261				4.24	%		21,196,989				241,729				4.58	%
Taxable securities	2,945,896				13,710				1.86	%		2,850,550				12,610				1.77	%		2,760,461				17,283				2.50	%
Non-taxable securities (2)	252,741				1,915				3.03	%		245,997				1,893				3.08	%		241,105				1,894				3.14	%
Temporary investments and interest-bearing cash	2,483,451				624				0.10	%		2,066,572				531				0.10	%		1,084,854				3,331				1.23	%
Total interest-earning assets	28,078,284				$	237,390			3.41	%		27,998,090				$	255,849			3.64	%		25,689,843				$	268,501			4.19	%
Other assets	1,314,206											1,398,221											3,154,930
Total assets	$	29,392,490										$	29,396,311										$	28,844,773
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$	3,125,398			$	414			0.05	%		$	3,014,292			$	448			0.06	%		$	2,471,556			$	3,543			0.58	%
Money market deposits	7,360,512				1,491				0.08	%		7,210,906				1,731				0.10	%		7,107,626				11,759				0.66	%
Savings deposits	1,998,927				163				0.03	%		1,882,866				183				0.04	%		1,485,171				241				0.07	%
Time deposits	2,681,361				8,610				1.30	%		3,056,985				12,205				1.59	%		4,630,956				24,747				2.15	%
Total interest-bearing deposits	15,166,198				10,678				0.29	%		15,165,049				14,567				0.38	%		15,695,309				40,290				1.03	%
Repurchase agreements and federal funds purchased	395,946				76				0.08	%		388,361				93				0.09	%		337,796				395				0.47	%
Borrowings	539,077				1,772				1.33	%		934,006				2,765				1.18	%		906,624				4,046				1.79	%
Junior subordinated debentures	343,473				3,052				3.60	%		335,392				3,147				3.73	%		361,983				4,903				5.45	%
Total interest-bearing liabilities	16,444,694				$	15,578			0.38	%		16,822,808				$	20,572			0.49	%		17,301,712				$	49,634			1.15	%
Non-interest-bearing deposits	9,897,749											9,587,081											6,880,457
Other liabilities	375,176											370,746											404,893
Total liabilities	26,717,619											26,780,635											24,587,062
Common equity	2,674,871											2,615,676											4,257,711
Total liabilities and shareholders' equity	$	29,392,490										$	29,396,311										$	28,844,773
NET INTEREST INCOME					$	221,812										$	235,277										$	218,867
NET INTEREST SPREAD									3.03	%										3.15	%										3.04	%
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)									3.18	%										3.35	%										3.41	%

(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 $381,000 for the three months ended March 31, 2021, as compared to $370,000 for December 31, 2020 and $332,000 for March 31, 2020.

 

Umpqua Holdings Corporation Segments
(Unaudited)
Core Banking		Quarter Ended																				% Change
(in thousands)		Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Net interest income		$	217,574			$	230,430			$	212,215			$	208,245			$	216,106			(6)	%		1	%
Provision (recapture) for credit losses		—				29				(338)				87,085				118,085				(100)	%		(100)	%
Non-interest income
	(Loss) gain on sale of investment securities, net	(702)				(173)				(112)				563				681				306	%		(203)	%
	Gain (loss) on swap derivatives, net	11,750				3,955				1,765				(823)				(14,306)				197	%		(182)	%
	Non-interest income (excluding above items)	32,403				40,921				39,678				31,697				36,588				(21)	%		(11)	%
	Total non-interest income	43,451				44,703				41,331				31,437				22,963				(3)	%		89	%
Non-interest expense
	Goodwill Impairment	—				—				—				—				1,784,936				nm			(100)	%
	Exit and disposal costs	1,200				725				792				548				524				66	%		129	%
	Non-interest expense (excluding above items)	145,161				171,634				148,519				141,448				147,896				(15)	%		(2)	%
	Allocated expenses, net (1)	(790)				(3,565)				(2,976)				(1,963)				(3,053)				(78)	%		(74)	%
	Total non-interest expense	145,571				168,794				146,335				140,033				1,930,303				(14)	%		(92)	%
Income (loss) before income taxes		115,454				106,310				107,549				12,564				(1,809,319)				9	%		(106)	%
Provision (benefit) for income taxes		28,106				(13,508)				20,988				(5,544)				33,445				(308)	%		(16)	%
Net income (loss)		$	87,348			$	119,818			$	86,561			$	18,108			$	(1,842,764)			(27)	%		(105)	%
Effective Tax Rate		24		%		(13)		%		20		%		(44)		%		(2)		%
Efficiency Ratio		56		%		61		%		58		%		58		%		807		%
Total assets		$	29,529,769			$	28,438,813			$	28,652,477			$	28,942,285			$	26,935,780			4	%		10	%
Loans held for sale		$	9,406			$	111,670			$	39,453			$	40,694			$	35,075			(92)	%		(73)	%
Total loans and leases		$	22,160,860			$	21,779,367			$	22,426,473			$	22,671,455			$	21,251,478			2	%		4	%
Total deposits		$	25,425,339			$	24,200,012			$	24,102,498			$	24,421,486			$	22,333,553			5	%		14	%
Key Rates, end of period:
10 year CMT		1.74		%		0.93		%		0.69		%		0.66		%		0.70		%
FHLMC 30 year fixed		3.18		%		2.67		%		2.88		%		3.13		%		3.50		%
nm = not meaningful
(1) Represents the internal charge of centrally provided support services and other corporate overhead to the Mortgage Banking segment.
Umpqua Holdings Corporation Segments - Continued
(Unaudited)
Mortgage Banking		Quarter Ended																				% Change
(in thousands)		Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020				Mar 31, 2020				Seq. Quarter			Year over Year
Net interest income		$	3,857			$	4,477			$	4,359			$	4,258			$	2,429			(14)	%		59	%
Provision for credit losses		—				—				—				—				—				nm			nm
Non-interest income
	Residential mortgage banking revenue:
	Origination and sale	62,505				83,388				98,703				86,781				39,347				(25)	%		59	%
	Servicing	9,087				9,497				8,796				8,533				8,880				(4)	%		2	%
	Change in fair value of MSR asset:
	Changes due to collection/realization of expected cash flows over time	(4,545)				(4,431)				(4,878)				(5,042)				(5,329)				3	%		(15)	%
	Changes due to valuation inputs or assumptions	(2,014)				(9,426)				(12,244)				(6,395)				(25,358)				(79)	%		(92)	%
	Non-interest income (excluding above items)	316				229				216				166				142				38	%		123	%
	Total non-interest income	65,349				79,257				90,593				84,043				17,682				(18)	%		270	%
Non-interest expense
	Non-interest expense	41,231				38,953				40,896				39,914				29,302				6	%		41	%
	Allocated expenses, net (1)	790				3,565				2,976				1,963				3,053				(78)	%		(74)	%
	Total non-interest expense	42,021				42,518				43,872				41,877				32,355				(1)	%		30	%
Income (loss) before income taxes		27,185				41,216				51,080				46,424				(12,244)				(34)	%		(322)	%
Provision (benefit) for income taxes		6,796				10,304				12,770				11,606				(3,061)				(34)	%		(322)	%
Net income (loss)		$	20,389			$	30,912			$	38,310			$	34,818			$	(9,183)			(34)	%		(322)	%
Effective Tax Rate		25		%		25		%		25		%		25		%		25		%
Efficiency Ratio		61		%		51		%		46		%		47		%		161		%
Total assets		506,911				796,362				784,964				702,963				604,602				(36)	%		(16)	%
Loans held for sale		367,075				654,555				644,507				564,705				446,466				(44)	%		(18)	%
Total deposits		461,494				422,189				567,285				422,892				365,822				9	%		26	%
LHFS Production Statistics:
Closed loan volume for-sale		1,635,532				1,769,432				1,922,789				1,826,095				1,148,184				(8)	%		42	%
Gain on sale margin		3.82		%		4.71		%		5.13		%		4.75		%		3.43		%
Direct LHFS expense		31,151				33,210				35,678				34,057				24,045				(6)	%		30	%
Direct LHFS expenses as % of volume		1.90		%		1.88		%		1.86		%		1.87		%		2.09		%
MSR Statistics:
Residential mortgage loans serviced for others		13,030,467				13,026,720				12,964,361				12,746,125				12,533,045				0	%		4	%
MSR, net		100,413				92,907				93,248				96,356				94,346				8	%		6	%
MSR as % of serviced portfolio		0.77		%		0.71		%		0.72		%		0.76		%		0.75		%
Key Rates, end of period:
10 year CMT		1.74		%		0.93		%		0.69		%		0.66		%		0.70		%
FHLMC 30 year fixed		3.18		%		2.67		%		2.88		%		3.13		%		3.50		%
nm = not meaningful

(1) Represents the internal charge of centrally provided support services and other corporate overhead to the Mortgage Banking segment.

 

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SOURCE Umpqua Holdings Corporation