Chronicle Journal: Finance

Umpqua Reports First Quarter 2021 Results

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

(PRNewsfoto/Umpqua Holdings Corporation)

$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.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/umpqua-reports-first-quarter-2021-results-301274057.html

SOURCE Umpqua Holdings Corporation

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