UMPQUA REPORTS THIRD QUARTER 2022 RESULTS

News provided by

Umpqua Holdings Corporation

Oct 19, 2022, 16:15 ET

Third Quarter 2022 Results

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

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

UMPQUA REPORTS THIRD QUARTER 2022 RESULTS

$0.39


$84


13.02 %


13.2 %

Net earnings per diluted
common share


Net income ($ in millions)


Return on average tangible
common equity ("ROATCE")1


Total risk-based capital ratio
(estimated)

CEO Commentary

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

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

3Q22 HIGHLIGHTS (COMPARED TO 2Q22)



Net Interest
Income and
NIM

•  Net interest income increased by $39 million or 16% on a quarter-to-quarter basis due to the favorable impact of rising interest rates and the higher mix of loans as a percentage of earning assets.

•  Net interest margin was 3.88%, up 47 basis points from the prior quarter. Total deposit costs were 14 basis points for the quarterly average and 22 basis points at September 30, 2022, compared to 6 basis points at June 30, 2022.



Non-Interest
Income and
Expense

•  Non-interest income decreased by $26 million due primarily to the impact of rising interest rates on fair value accounting and hedges and lower residential mortgage gain-on-sale income.

•  Non-interest expense decreased by $1.6 million due to lower salaries and employee benefits expense and lower merger-related expenses, partially offset by a net increase in other miscellaneous expenses.



Credit
Quality

•  Net charge-offs remained low at 0.11% of average loans and leases (annualized).

•  Provision expense of $28 million compares to $19 million for the prior quarter. Net portfolio growth and economic forecast changes are the primary drivers of the increase.

•  Non-performing assets to total assets was 0.16%, up 1 basis point from June 30, 2022.



Capital

•  Estimated total risk-based capital ratio of 13.2% and estimated tier 1 risk-based capital ratio of 10.7%.

•  Declared a quarterly cash dividend of $0.21 per common share on October 3, 2022, payable October 28, 2022, to holders of record as of October 14, 2022.



Notable
items

•  MSR hedge put in place in mid-August as additional actions taken to reduce mortgage segment volatility.

•  $0.8 million in merger-related expenses and $1.4 million in exit and disposal costs.

3Q22 KEY FINANCIAL DATA







PERFORMANCE
METRICS

3Q22


2Q22


3Q21

Return on average assets

1.09 %


1.04 %


1.40 %

Return on average tangible
common equity1

13.02 %


12.23 %


15.88 %

Operating return on average
assets1

1.33 %


1.06 %


1.40 %

Operating return on average
tangible common equity1

15.90 %


12.49 %


15.88 %

Net interest margin

3.88 %


3.41 %


3.21 %

Efficiency ratio - consolidated

56.07 %


59.12 %


59.44 %

Loan to deposit ratio

95.12 %


93.50 %


81.65 %







INCOME STATEMENT

($ in 000s, excl. per share data)

3Q22


2Q22


3Q21

Net interest income

$287,604


$248,170


$235,074

Provision (recapture) for
credit losses

$27,572


$18,692


($18,919)

Non-interest income

$29,445


$55,235


$73,705

Non-interest expense

$177,964


$179,574


$183,753

Pre-provision net revenue1

$139,085


$123,831


$125,026

Operating pre-provision net
revenue1

$163,793


$125,994


$124,955

Earnings per common share -
diluted

$0.39


$0.36


$0.49

Operating earnings per
common share - diluted1

$0.47


$0.37


$0.49

Dividends paid per share

$0.21


$0.21


$0.21







BALANCE SHEET

3Q22


2Q22


3Q21

Total assets

      $31.5B


      $30.1B


      $30.9B

Loans and leases

      $25.5B


      $24.4B


      $22.0B

Total deposits

      $26.8B


      $26.1B


      $26.9B

Book value per common share

$11.14


$11.60


$12.57

Tangible book value per
share1

$11.11


$11.57


$12.52

Tangible book value per
share, ex AOCI1

$13.18


$12.99


$12.43

Balance Sheet

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

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

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

Net Interest Income

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

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

Credit Quality

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

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

Non-interest Income

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

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

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

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

Non-interest Expense

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

Capital

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

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

Segment Disclosures

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

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

Earnings Conference Call Information

The Company will host its third quarter 2022 earnings conference call on October 20, 2022, at 10:00 a.m. PT (1:00 p.m. ET).  During the call, the Company will provide an update on recent activities and discuss its third quarter 2022 financial results. Participants may register for the call using the below link to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.

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

About Umpqua Holdings Corporation

Umpqua Holdings Corporation (NASDAQ: UMPQ), headquartered in Portland, Oregon, is the parent company of Umpqua Bank, an Oregon-based regional bank that operates in Oregon, Washington, California, Idaho, Nevada, Arizona, and Colorado. Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company was named #1 in Customer Satisfaction for the Northwest Region in the J.D. Power 2021 U.S. Retail Banking Satisfaction StudySM, and Forbes consistently ranks Umpqua as one of America's Best Banks. The Portland Business Journal has also recognized Umpqua as the Most Admired Financial Services Company in Oregon for seventeen consecutive years. In addition to its retail and commercial banking presence, Umpqua Bank owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses. For more information, visit umpquabank.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, inflation and any slowdown in economic growth particularly in the western United States; the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that exceeds current consensus estimates; our ability to effectively manage problem credits; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; the ability to complete, or any delays in completing, the proposed transaction between us and Columbia Banking System, Inc.; any failure to realize the anticipated benefits of the transaction when expected or at all; certain restrictions during the pendency of the proposed transaction that may impact our ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities; and potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the transaction and integration of the companies. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company's Board of Directors, and may be subject to regulatory approval or conditions.

____________________

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

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

TABLE INDEX


Page

Consolidated Statements of Operations

7

Consolidated Balance Sheets

9

Financial Highlights

10

Loan & Lease Portfolio Balances and Mix

12

Deposit Balances, Mix, and Select Account Details

13

Credit Quality - Non-performing Assets

14

Credit Quality - Allowance for Credit Losses

14

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates

17

Segments

19

GAAP to Non-GAAP Reconciliation

22

Umpqua Holdings Corporation

Consolidated Statements of Operations

(Unaudited)


Quarter Ended


% Change

(In thousands, except per share data)

Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.

Quarter


Year
over
Year

Interest income:














Loans and leases

$     278,830


$     234,674


$     214,404


$     221,501


$     224,403


19 %


24 %

Interest and dividends on investments:














Taxable

18,175


17,256


18,725


16,566


16,102


5 %


13 %

Exempt from federal income tax

1,322


1,369


1,372


1,456


1,470


(3) %


(10) %

Dividends

86


84


86


102


213


2 %


(60) %

Temporary investments and interest bearing
deposits

5,115


2,919


1,353


1,229


1,237


75 %


314 %

Total interest income

303,528


256,302


235,940


240,854


243,425


18 %


25 %

Interest expense:














Deposits

9,090


4,015


3,916


4,357


5,100


126 %


78 %

Securities sold under agreement to
repurchase and federal funds purchased

545


66


63


48


88


nm


nm

Borrowings

798


50


49


51


149


nm


436 %

Junior subordinated debentures

5,491


4,001


3,149


3,019


3,014


37 %


82 %

Total interest expense

15,924


8,132


7,177


7,475


8,351


96 %


91 %

Net interest income

287,604


248,170


228,763


233,379


235,074


16 %


22 %

Provision (recapture) for credit losses

27,572


18,692


4,804


(736)


(18,919)


48 %


(246) %

Non-interest income:














Service charges on deposits

12,632


12,011


11,583


11,188


10,941


5 %


15 %

Card-based fees

9,115


10,530


8,708


9,355


9,111


(13) %


0 %

Brokerage revenue

27


27


11


31


31


0 %


(13) %

Residential mortgage banking revenue, net

17,341


30,544


60,786


43,185


34,150


(43) %


(49) %

Gain on sale of debt securities, net

—


—


2


4


—


nm


nm

Loss on equity securities, net

(2,647)


(2,075)


(2,661)


(466)


(343)


28 %


672 %

Gain on loan and lease sales, net

1,525


1,303


2,337


4,816


4,208


17 %


(64) %

BOLI income

2,023


2,110


2,087


2,101


2,038


(4) %


(1) %

Other (loss) income

(10,571)


785


(2,884)


12,524


13,569


nm


(178) %

Total non-interest income

29,445


55,235


79,969


82,738


73,705


(47) %


(60) %

Non-interest expense:














Salaries and employee benefits

109,164


110,942


113,138


117,477


117,636


(2) %


(7) %

Occupancy and equipment, net

35,042


34,559


34,829


34,310


33,944


1 %


3 %

Intangible amortization

1,025


1,026


1,025


1,130


1,130


0 %


(9) %

FDIC assessments

3,007


2,954


4,516


2,896


2,136


2 %


41 %

Merger related expenses

769


2,672


2,278


15,183


—


(71) %


nm

Other expenses

28,957


27,421


26,644


28,715


28,907


6 %


0 %

Total non-interest expense

177,964


179,574


182,430


199,711


183,753


(1) %


(3) %

Income before provision for income taxes

111,513


105,139


121,498


117,142


143,945


6 %


(23) %

Provision for income taxes

27,473


26,548


30,341


28,788


35,879


3 %


(23) %

Net income

$       84,040


$       78,591


$       91,157


$       88,354


$     108,066


7 %


(22) %















Weighted average basic shares outstanding

217,051


217,030


216,782


216,624


218,416


0 %


(1) %

Weighted average diluted shares outstanding

217,386


217,279


217,392


217,356


218,978


0 %


(1) %

Earnings per common share – basic

$           0.39


$           0.36


$           0.42


$           0.41


$           0.49


8 %


(20) %

Earnings per common share – diluted

$           0.39


$           0.36


$           0.42


$           0.41


$           0.49


8 %


(20) %















nm = not meaningful














Umpqua Holdings Corporation

Consolidated Statements of Operations

(Unaudited)



Nine Months Ended


% Change

(In thousands, except per share data)


Sep 30, 2022


Sep 30, 2021


Year over
Year

Interest income:







Loans and leases


$            727,908


$            669,014


9 %

Interest and dividends on investments:







Taxable


54,156


43,833


24 %

Exempt from federal income tax


4,063


4,491


(10) %

Dividends


256


1,216


(79) %

Temporary investments and interest bearing deposits


9,387


2,635


256 %

Total interest income


795,770


721,189


10 %

Interest expense:







Deposits


17,021


22,794


(25) %

Securities sold under agreement to repurchase and federal funds purchased


674


232


191 %

Borrowings


897


2,787


(68) %

Junior subordinated debentures


12,641


9,108


39 %

Total interest expense


31,233


34,921


(11) %

Net interest income


764,537


686,268


11 %

Provision (recapture) for credit losses


51,068


(41,915)


(222) %

Non-interest income:







Service charges on deposits


36,226


30,898


17 %

Card-based fees


28,353


26,759


6 %

Brokerage revenue


65


5,081


(99) %

Residential mortgage banking revenue, net


108,671


143,626


(24) %

Gain on sale of debt securities, net


2


4


(50) %

Loss on equity securities, net


(7,383)


(1,045)


nm

Gain on loan and lease sales, net


5,165


10,899


(53) %

BOLI income


6,220


6,201


0 %

Other (loss) income


(12,670)


51,157


(125) %

Total non-interest income


164,649


273,580


(40) %

Non-interest expense:







Salaries and employee benefits


333,244


363,343


(8) %

Occupancy and equipment, net


104,430


103,236


1 %

Intangible amortization


3,076


3,390


(9) %

FDIC assessments


10,477


6,342


65 %

Merger related expenses


5,719


—


nm

Other expenses


83,022


84,434


(2) %

Total non-interest expense


539,968


560,745


(4) %

Income before provision for income taxes


338,150


441,018


(23) %

Provision for income taxes


84,362


109,072


(23) %

Net income


$            253,788


$            331,946


(24) %








Weighted average basic shares outstanding


216,955


219,791


(1) %

Weighted average diluted shares outstanding


217,353


220,278


(1) %

Earnings per common share – basic


$                 1.17


$                 1.51


(23) %

Earnings per common share – diluted


$                 1.17


$                 1.51


(23) %








nm = not meaningful







Umpqua Holdings Corporation

Consolidated Balance Sheets

(Unaudited)












% Change

(In thousands, except per share
data)

Sep 30, 2022


Jun 30, 2022


Mar 31, 2022


Dec 31, 2021


Sep 30, 2021


Seq.

Quarter


Year
over
Year

Assets:














Cash and due from banks

$     321,447


$     315,348


$     307,144


$     222,015


$     395,555


2 %


(19) %

Interest bearing cash and temporary
investments

1,232,412


687,233


2,358,292


2,539,606


3,349,034


79 %


(63) %

Investment securities:














Equity and other, at fair value

72,277


75,347


78,966


81,214


81,575


(4) %


(11) %

Available for sale, at fair value

3,136,391


3,416,707


3,638,080


3,870,435


3,723,171


(8) %


(16) %

Held to maturity, at amortized cost

2,547


2,637


2,700


2,744


2,795


(3) %


(9) %

Loans held for sale

148,275


228,889


309,946


353,105


352,466


(35) %


(58) %

Loans and leases

25,507,951


24,432,678


22,975,761


22,553,180


21,969,940


4 %


16 %

Allowance for credit losses on loans
and leases

(283,065)


(261,111)


(248,564)


(248,412)


(257,560)


8 %


10 %

Net loans and leases

25,224,886


24,171,567


22,727,197


22,304,768


21,712,380


4 %


16 %

Restricted equity securities

40,993


10,867


10,889


10,916


10,946


277 %


275 %

Premises and equipment, net

165,305


165,196


167,369


171,125


172,624


0 %


(4) %

Operating lease right-of-use assets

81,729


87,249


87,333


82,366


88,379


(6) %


(8) %

Other intangible assets, net

5,764


6,789


7,815


8,840


9,970


(15) %


(42) %

Residential mortgage servicing
rights, at fair value

196,177


179,558


165,807


123,615


105,834


9 %


85 %

Bank owned life insurance

329,699


328,764


328,040


327,745


325,646


0 %


1 %

Deferred tax asset, net

128,120


70,134


39,051


—


8,402


83 %


nm

Other assets

385,938


389,409


408,497


542,442


552,702


(1) %


(30) %

Total assets

$  31,471,960


$  30,135,694


$  30,637,126


$  30,640,936


$  30,891,479


4 %


2 %

Liabilities:














Deposits

$  26,817,107


$  26,132,423


$  26,699,587


$  26,594,685


$  26,908,397


3 %


0 %

Securities sold under agreements to
repurchase

383,569


527,961


499,539


492,247


467,760


(27) %


(18) %

Borrowings

756,214


6,252


6,290


6,329


6,367


nm


nm

Junior subordinated debentures, at
fair value

325,744


321,268


305,719


293,081


299,508


1 %


9 %

Junior subordinated debentures, at
amortized cost

87,870


87,927


87,984


88,041


88,098


0 %


0 %

Operating lease liabilities

95,512


101,352


101,732


95,427


100,557


(6) %


(5) %

Deferred tax liability, net

—


—


—


4,353


—


nm


nm

Other liabilities

588,430


440,235


328,677


317,503


298,413


34 %


97 %

Total liabilities

29,054,446


27,617,418


28,029,528


27,891,666


28,169,100


5 %


3 %

Shareholders' equity:














Common stock

3,448,007


3,445,531


3,443,266


3,444,849


3,442,085


0 %


0 %

Accumulated deficit

(580,933)


(619,108)


(651,912)


(697,338)


(739,915)


(6) %


(21) %

Accumulated other comprehensive
(loss) income

(449,560)


(308,147)


(183,756)


1,759


20,209


46 %


nm

Total shareholders' equity

2,417,514


2,518,276


2,607,598


2,749,270


2,722,379


(4) %


(11) %

Total liabilities and shareholders' equity

$  31,471,960


$  30,135,694


$  30,637,126


$  30,640,936


$  30,891,479


4 %


2 %















Common shares outstanding at period
end

217,053


217,049


216,967


216,626


216,622


0 %


0 %

Book value per common share

$         11.14


$         11.60


$         12.02


$         12.69


$         12.57


(4) %


(11) %

Tangible book value per common
share (1)

$         11.11


$         11.57


$         11.98


$         12.65


$         12.52


(4) %


(11) %

Tangible equity - common (1)

$  2,411,750


$  2,511,487


$  2,599,783


$  2,740,430


$  2,712,409


(4) %


(11) %

Tangible common equity to tangible
assets (1)

7.66 %


8.34 %


8.49 %


8.95 %


8.78 %


(0.68)


(1.12)

nm = not meaningful















(1) See GAAP to Non-GAAP Reconciliation.

Umpqua Holdings Corporation

Financial Highlights

(Unaudited)



Quarter Ended


% Change



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year over
Year

Per Common Share Data:















Dividends


$    0.21


$    0.21


$    0.21


$    0.21


$    0.21


0 %


0 %

Book value


$  11.14


$  11.60


$  12.02


$  12.69


$  12.57


(4) %


(11) %

Tangible book value (1)


$  11.11


$  11.57


$  11.98


$  12.65


$  12.52


(4) %


(11) %

Tangible book value, ex accumulated other
comprehensive income (1)


$  13.18


$  12.99


$  12.83


$  12.64


$  12.43


1 %


6 %
















Performance Ratios:















Efficiency ratio


56.07 %


59.12 %


59.02 %


63.10 %


59.44 %


(3.05)


(3.37)

Pre-provision net revenue (PPNR) ROAA (1)


1.80 %


1.64 %


1.67 %


1.50 %


1.62 %


0.16


0.18

Return on average assets (ROAA)


1.09 %


1.04 %


1.21 %


1.13 %


1.40 %


0.05


(0.31)

Return on average common equity


12.99 %


12.20 %


13.62 %


12.90 %


15.82 %


0.79


(2.83)

Return on average tangible common equity (1)


13.02 %


12.23 %


13.66 %


12.94 %


15.88 %


0.79


(2.86)
















Performance Ratios - Operating: (1)















Operating efficiency ratio (1)


51.72 %


58.27 %


62.02 %


59.61 %


58.94 %


(6.55)


(7.22)

Operating PPNR return on average assets (1)


2.12 %


1.66 %


1.43 %


1.58 %


1.62 %


0.46


0.50

Operating return on average assets (1)


1.33 %


1.06 %


1.03 %


1.23 %


1.40 %


0.27


(0.07)

Operating return on average common equity (1)


15.86 %


12.46 %


11.58 %


13.98 %


15.82 %


3.40


0.04

Operating return on average tangible common equity (1)


15.90 %


12.49 %


11.62 %


14.03 %


15.88 %


3.41


0.02
















Average Balance Sheet Yields, Rates, & Ratios:















Yield on loans and leases


4.41 %


3.94 %


3.79 %


3.94 %


4.02 %


0.47


0.39

Yield on earning assets (2)


4.10 %


3.53 %


3.24 %


3.25 %


3.32 %


0.57


0.78

Cost of interest bearing deposits


0.23 %


0.11 %


0.10 %


0.11 %


0.13 %


0.12


0.10

Cost of interest bearing liabilities


0.39 %


0.20 %


0.18 %


0.18 %


0.20 %


0.19


0.19

Cost of total deposits


0.14 %


0.06 %


0.06 %


0.06 %


0.08 %


0.08


0.06

Cost of total funding (3)


0.23 %


0.12 %


0.11 %


0.11 %


0.12 %


0.11


0.11

Net interest margin (2)


3.88 %


3.41 %


3.14 %


3.15 %


3.21 %


0.47


0.67

Average interest bearing cash / Average interest
earning assets


3.04 %


5.71 %


8.92 %


10.78 %


11.03 %


(2.67)


(7.99)

Average loans and leases / Average interest earning
assets


84.54 %


80.91 %


76.85 %


74.70 %


74.78 %


3.63


9.76

Average loans and leases / Average total deposits


93.55 %


89.23 %


84.77 %


82.12 %


82.07 %


4.32


11.48

Average non-interest bearing deposits / Average total
deposits


42.29 %


42.00 %


41.35 %


41.69 %


41.14 %


0.29


1.15

Average total deposits / Average total funding (3)


96.34 %


96.66 %


96.82 %


96.84 %


96.72 %


(0.32)


(0.38)
















Select Credit & Capital Ratios:















Non-performing loans and leases to total loans and
leases


0.20 %


0.18 %


0.18 %


0.23 %


0.24 %


0.02


(0.04)

Non-performing assets to total assets


0.16 %


0.15 %


0.14 %


0.17 %


0.17 %


0.01


(0.01)

Allowance for credit losses to loans and leases


1.16 %


1.12 %


1.14 %


1.16 %


1.23 %


0.04


(0.07)

Total risk-based capital ratio (4)


13.2 %


13.5 %


14.0 %


14.3 %


14.9 %


(0.30)


(1.70)

Common equity tier 1 risk-based capital ratio (4)


10.7 %


11.0 %


11.4 %


11.6 %


12.0 %


(0.30)


(1.30)



(1) See GAAP to Non-GAAP Reconciliation.

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

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

(4) Estimated holding company ratios.

Umpqua Holding Corporation

Financial Highlights

(Unaudited)



Nine Months Ended


% Change



Sep 30, 2022


Sep 30, 2021


Year over Year

Per Common Share Data:







Dividends


$             0.63


$             0.63


— %








Performance Ratios:







Efficiency ratio


58.05 %


58.35 %


(0.30)

Pre-provision net revenue (PPNR) ROAA (1)


1.70 %


1.78 %


(0.08)

Return on average assets (ROAA)


1.11 %


1.48 %


(0.37)

Return on average common equity


12.94 %


16.47 %


(3.53)

Return on average tangible common equity (1)


12.98 %


16.55 %


(3.57)








Performance Ratios - Operating: (1)







Operating efficiency ratio (1)


57.03 %


57.88 %


(0.85)

Operating PPNR return on average assets (1)


1.74 %


1.78 %


(0.04)

Operating return on average assets (1)


1.14 %


1.48 %


(0.34)

Operating return on average common equity (1)


13.28 %


16.49 %


(3.21)

Operating return on average tangible common equity (1)


13.32 %


16.57 %


(3.25)








Average Balance Sheet Yields, Rates, & Ratios:







Yield on loans and leases


4.06 %


4.01 %


0.05

Yield on earning assets (2)


3.62 %


3.36 %


0.26

Cost of interest bearing deposits


0.15 %


0.20 %


(0.05)

Cost of interest bearing liabilities


0.26 %


0.28 %


(0.02)

Cost of total deposits


0.09 %


0.12 %


(0.03)

Cost of total funding (3)


0.15 %


0.17 %


(0.02)

Net interest margin (2)


3.48 %


3.20 %


0.28

Average interest bearing cash / Average interest earning assets


5.87 %


9.93 %


(4.06)

Average loans and leases / Average interest earning assets


80.80 %


76.16 %


4.64

Average loans and leases / Average total deposits


89.21 %


84.34 %


4.87

Average non-interest bearing deposits / Average total deposits


41.89 %


40.44 %


1.45

Average total deposits / Average total funding (3)


96.61 %


96.04 %


0.57


(1) See GAAP to Non-GAAP Reconciliation.

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

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

Umpqua Holdings Corporation

Loan & Lease Portfolio Balances and Mix

(Unaudited)


Sep 30, 2022


Jun 30, 2022


Mar 31, 2022


Dec 31, 2021


Sep 30, 2021


% Change

 (Dollars in thousands)

Amount


Amount


Amount


Amount


Amount


Seq.
Quarter


Year
over
Year

Loans and leases:














Commercial real estate:














Non-owner occupied term, net

$  3,846,426


$  3,798,242


$  3,884,784


$  3,786,887


$  3,561,764


1 %


8 %

Owner occupied term, net

2,549,761


2,497,553


2,327,899


2,332,422


2,330,338


2 %


9 %

Multifamily, net

5,090,661


4,768,273


4,323,633


4,051,202


3,813,024


7 %


34 %

Construction & development, net

1,036,931


1,017,297


940,286


890,338


882,778


2 %


17 %

Residential development, net

205,935


194,909


195,308


206,990


177,148


6 %


16 %

Commercial:














Term, net (1)

3,003,424


2,904,861


2,772,206


3,008,473


3,159,466


3 %


(5) %

Lines of credit & other, net

914,507


920,604


871,483


910,733


930,350


(1) %


(2) %

Leases & equipment finance, net

1,669,817


1,576,144


1,484,252


1,467,676


1,457,248


6 %


15 %

Residential:














Mortgage, net

5,470,624


5,168,457


4,748,266


4,517,266


4,330,860


6 %


26 %

Home equity loans & lines, net

1,565,094


1,415,722


1,250,702


1,197,170


1,133,823


11 %


38 %

   Consumer & other, net

154,771


170,616


176,942


184,023


193,141


(9) %


(20) %

Total loans and leases, net of
deferred fees and costs

$  25,507,951


$  24,432,678


$  22,975,761


$  22,553,180


$  21,969,940


4 %


16 %















(1)  The Bank participated in the Payroll Protection Program to originate SBA loans designated to help businesses maintain their workforce and cover other working capital needs during the COVID-19 pandemic. The Commercial Term loans in the table above include the following net PPP loan balances:

Net PPP loan balance

$       37,949


$     101,554


$     172,790


$     380,440


$     726,737


(63) %


(95) %















Loan and leases mix:














Commercial real estate:














   Non-owner occupied term, net

15 %


15 %


17 %


17 %


16 %





   Owner occupied term, net

10 %


10 %


10 %


10 %


11 %





   Multifamily, net

20 %


20 %


19 %


18 %


17 %





Construction & development, net

4 %


4 %


4 %


4 %


4 %





Residential development, net

1 %


1 %


1 %


1 %


1 %





Commercial:














Term, net

12 %


12 %


12 %


13 %


14 %





Lines of credit & other, net

4 %


4 %


4 %


4 %


4 %





Leases & equipment finance, net

6 %


6 %


6 %


7 %


7 %





Residential:














Mortgage, net

21 %


21 %


21 %


20 %


20 %





Home equity loans & lines, net

6 %


6 %


5 %


5 %


5 %





   Consumer & other, net

1 %


1 %


1 %


1 %


1 %





Total

100 %


100 %


100 %


100 %


100 %





Umpqua Holdings Corporation

Deposit Balances, Mix, and Select Account Details

(Unaudited)


Sep 30, 2022


Jun 30, 2022


Mar 31, 2022


Dec 31, 2021


Sep 30, 2021


% Change

 (Dollars in thousands)

Amount


Amount


Amount


Amount


Amount


Seq.
Quarter


Year
over
Year

Deposits:














Demand, non-interest bearing

$  11,246,358


$  11,129,209


$  11,058,251


$  11,023,724


$  11,121,127


1 %


1 %

Demand, interest bearing

3,903,746


3,723,650


3,955,329


3,774,937


3,758,019


5 %


4 %

Money market

7,601,506


7,284,641


7,572,581


7,611,718


7,780,442


4 %


(2) %

Savings

2,455,917


2,446,876


2,429,073


2,375,723


2,325,929


0 %


6 %

Time

1,609,580


1,548,047


1,684,353


1,808,583


1,922,880


4 %


(16) %

Total

$  26,817,107


$  26,132,423


$  26,699,587


$  26,594,685


$  26,908,397


3 %


0 %















Total core deposits (1)

$  26,292,548


$  25,619,500


$  26,140,993


$  25,964,358


$  26,029,814


3 %


1 %















Deposit mix:














Demand, non-interest bearing

42 %


43 %


42 %


41 %


41 %





Demand, interest bearing

15 %


14 %


15 %


14 %


14 %





Money market

28 %


28 %


28 %


29 %


29 %





Savings

9 %


9 %


9 %


9 %


9 %





Time

6 %


6 %


6 %


7 %


7 %





Total

100 %


100 %


100 %


100 %


100 %



















Number of open accounts:














Demand, non-interest bearing

434,347


434,436


428,915


428,181


425,337





Demand, interest bearing

56,698


57,145


63,800


66,010


70,749





Money market

55,712


56,430


56,783


57,222


57,794





Savings

159,008


159,709


160,267


160,449


161,698





Time

32,202


32,103


34,127


35,665


37,172





Total

737,967


739,823


743,892


747,527


752,750



















Average balance per account:














Demand, non-interest bearing

$           25.9


$           25.6


$           25.8


$           25.7


$           26.1





Demand, interest bearing

68.9


65.2


62.0


57.2


53.1





Money market

136.4


129.1


133.4


133.0


134.6





Savings

15.4


15.3


15.2


14.8


14.4





Time

50.0


48.2


49.4


50.7


51.7





Total

$           36.3


$           35.3


$           35.9


$           35.6


$           35.7






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


Umpqua Holdings Corporation


Credit Quality – Non-performing Assets


 (Unaudited)




Quarter Ended


% Change

(Dollars in thousands)


Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year
over
Year

Non-performing assets:















Loans and leases on non-accrual status:
















Commercial real estate, net


$      5,403


$      5,514


$      5,950


$      5,767


$      5,952


(2) %


(9) %


Commercial, net


18,652


12,645


12,415


13,098


18,200


48 %


2 %


Residential, net


—


—


—


—


—


nm


nm


Consumer & other, net


—


—


—


—


—


nm


nm


Total loans and leases on non-accrual
status


24,055


18,159


18,365


18,865


24,152


32 %


0 %

Loans and leases past due 90+ days and
accruing (1):
















Commercial real estate, net


1


23


1


1


1


(96) %


0 %


Commercial, net


5,143


3,311


8


4,160


2,454


55 %


110 %


Residential, net (1)


21,411


22,340


23,162


27,981


24,919


(4) %


(14) %


Consumer & other, net


152


196


111


194


116


(22) %


31 %


Total loans and leases past due 90+
days and accruing (1)


26,707


25,870


23,282


32,336


27,490


3 %


(3) %

Total non-performing loans and leases


50,762


44,029


41,647


51,201


51,642


15 %


(2) %

Other real estate owned


—


1,868


1,868


1,868


1,868


(100) %


(100) %

Total non-performing assets


$    50,762


$    45,897


$    43,515


$    53,069


$    53,510


11 %


(5) %

















Performing restructured loans and leases


$      7,076


$      7,631


$      8,405


$      6,694


$      9,849


(7) %


(28) %

Loans and leases past due 31-89 days


$    53,538


$    34,659


$    42,409


$    31,680


$    41,326


54 %


30 %

Loans and leases past due 31-89 days to
total loans and leases


0.21 %


0.14 %


0.18 %


0.14 %


0.19 %


0.07


0.02

Non-performing loans and leases to total
loans and leases (1)


0.20 %


0.18 %


0.18 %


0.23 %


0.24 %


0.02


(0.04)

Non-performing assets to total assets (1)


0.16 %


0.15 %


0.14 %


0.17 %


0.17 %


0.01


(0.01)

nm = not meaningful
















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

Umpqua Holdings Corporation

Credit Quality – Allowance for Credit Losses

(Unaudited)




Quarter Ended


% Change

(Dollars in thousands)


Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year over
Year

Allowance for credit losses on loans and
leases (ACLLL)















Balance, beginning of period


$ 261,111


$ 248,564


$ 248,412


$ 257,560


$ 279,887


5 %


(7) %

Provision (recapture) for credit losses on
loans and leases


28,542


18,787


5,696


(1,751)


(16,132)


52 %


(277) %

Charge-offs
















Commercial real estate, net


—


(8)


—


(58)


(916)


(100) %


(100) %


Commercial, net


(9,459)


(9,035)


(7,858)


(10,197)


(8,521)


5 %


11 %


Residential, net


(4)


—


(167)


—


—


nm


nm


Consumer & other, net


(929)


(836)


(885)


(675)


(936)


11 %


(1) %


Total charge-offs


(10,392)


(9,879)


(8,910)


(10,930)


(10,373)


5 %


0 %

Recoveries
















Commercial real estate, net


123


73


25


56


120


68 %


2 %


Commercial, net


2,842


2,934


2,545


2,585


3,346


(3) %


(15) %


Residential, net


249


216


173


326


281


15 %


(11) %


Consumer & other, net


590


416


623


566


431


42 %


37 %


Total recoveries


3,804


3,639


3,366


3,533


4,178


5 %


(9) %

Net (charge-offs) recoveries
















Commercial real estate, net


123


65


25


(2)


(796)


89 %


(115) %


Commercial, net


(6,617)


(6,101)


(5,313)


(7,612)


(5,175)


8 %


28 %


Residential, net


245


216


6


326


281


13 %


(13) %


Consumer & other, net


(339)


(420)


(262)


(109)


(505)


(19) %


(33) %


Total net charge-offs


(6,588)


(6,240)


(5,544)


(7,397)


(6,195)


6 %


6 %

Balance, end of period


$ 283,065


$ 261,111


$ 248,564


$ 248,412


$ 257,560


8 %


10 %

Reserve for unfunded commitments















Balance, beginning of period


$   12,823


$   12,918


$   12,767


$   11,752


$   14,539


(1) %


(12) %

(Recapture) provision for credit losses on
unfunded commitments


(970)


(95)


151


1,015


(2,787)


921 %


(65) %

Balance, end of period


11,853


12,823


12,918


12,767


11,752


(8) %


1 %

Total Allowance for credit losses (ACL)


$ 294,918


$ 273,934


$ 261,482


$ 261,179


$ 269,312


8 %


10 %
















Net charge-offs to average loans and leases
(annualized)


0.11 %


0.11 %


0.10 %


0.13 %


0.11 %


—


—

Recoveries to gross charge-offs


36.61 %


36.84 %


37.78 %


32.32 %


40.28 %


(0.23)


(3.67)

ACLLL to loans and leases


1.11 %


1.07 %


1.08 %


1.10 %


1.17 %


0.04


(0.06)

ACL to loans and leases


1.16 %


1.12 %


1.14 %


1.16 %


1.23 %


0.04


(0.07)

nm = not meaningful















Umpqua Holdings Corporation

Credit Quality – Allowance for Credit Losses

(Unaudited)



Nine Months Ended


% Change

(Dollars in thousands)


Sep 30, 2022


Sep 30, 2021


Year over Year

Allowance for credit losses on loans and leases (ACLLL)







Balance, beginning of period


$        248,412


$        328,401


(24) %

Provision (recapture) for credit losses on loans and leases 


53,025


(33,381)


(259) %

Charge-offs








Commercial real estate, net


(8)


(1,086)


(99) %


Commercial, net


(26,352)


(44,228)


(40) %


Residential, net


(171)


(70)


144 %


Consumer & other, net


(2,650)


(2,983)


(11) %


Total charge-offs


(29,181)


(48,367)


(40) %

Recoveries








Commercial real estate, net


221


589


(62) %


Commercial, net


8,321


8,118


3 %


Residential, net


638


598


7 %


Consumer & other, net


1,629


1,602


2 %


Total recoveries


10,809


10,907


(1) %

Net (charge-offs) recoveries








Commercial real estate, net


213


(497)


(143) %


Commercial, net


(18,031)


(36,110)


(50) %


Residential, net


467


528


(12) %


Consumer & other, net


(1,021)


(1,381)


(26) %


Total net charge-offs


(18,372)


(37,460)


(51) %

Balance, end of period


$        283,065


$        257,560


10 %

Reserve for unfunded commitments







Balance, beginning of period


$          12,767


$          20,286


(37) %

(Recapture) provision for credit losses on unfunded commitments


(914)


(8,534)


(89) %

Balance, end of period


11,853


11,752


1 %

Total Allowance for credit losses (ACL)


$        294,918


$        269,312


10 %








Net charge-offs to average loans and leases (annualized)


0.10 %


0.23 %


(0.13)

Recoveries to gross charge-offs


37.04 %


22.55 %


14.49

nm = not meaningful














Umpqua Holdings Corporation
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates

(Unaudited)


Quarter Ended


September 30, 2022


June 30, 2022


September 30, 2021

 (Dollars in thousands)

Average
Balance


Interest
Income
or
Expense


Average
Yields
or Rates


Average
Balance


Interest
Income
or
Expense


Average
Yields
or Rates


Average
Balance


Interest
Income
or
Expense


Average
Yields
or Rates

INTEREST-EARNING
ASSETS:


















Loans held for sale

$     173,397


$    2,205


5.09 %


$     264,320


$    2,742


4.15 %


$     465,805


$    3,672


3.15 %

Loans and leases (1)

24,886,203


276,625


4.41 %


23,550,796


231,932


3.94 %


21,864,387


220,731


4.02 %

Taxable securities

3,271,185


18,261


2.23 %


3,410,091


17,340


2.03 %


3,436,895


16,315


1.90 %

Non-taxable securities (2)

212,847


1,651


3.10 %


220,327


1,721


3.13 %


245,904


1,848


3.01 %

Temporary investments
and interest-bearing cash

893,471


5,115


2.27 %


1,663,454


2,919


0.70 %


3,224,846


1,237


0.15 %

Total interest-earning
assets

29,437,103


$  303,857


4.10 %


29,108,988


$  256,654


3.53 %


29,237,837


$  243,803


3.32 %

Other assets

1,231,074






1,247,915






1,376,537





Total assets

$  30,668,177






$  30,356,903






$  30,614,374





INTEREST-BEARING
LIABILITIES:


















Interest-bearing demand
deposits

$  3,829,688


$    1,705


0.18 %


$  3,896,553


$       610


0.06 %


$  3,564,040


$       468


0.05 %

Money market deposits

7,550,791


5,817


0.31 %


7,366,987


1,717


0.09 %


7,800,144


1,492


0.08 %

Savings deposits

2,468,187


250


0.04 %


2,426,124


199


0.03 %


2,284,077


206


0.04 %

Time deposits

1,501,724


1,318


0.35 %


1,618,394


1,489


0.37 %


2,031,494


2,934


0.57 %

Total interest-bearing
deposits

15,350,390


9,090


0.23 %


15,308,058


4,015


0.11 %


15,679,755


5,100


0.13 %

Repurchase agreements
and federal funds
purchased

509,559


545


0.42 %


512,641


66


0.05 %


496,822


88


0.07 %

Borrowings

90,475


798


3.50 %


6,273


50


3.21 %


31,500


149


1.88 %

Junior subordinated
debentures

409,151


5,491


5.33 %


393,964


4,001


4.07 %


375,726


3,014


3.18 %

Total interest-bearing
liabilities

16,359,575


$  15,924


0.39 %


16,220,936


$    8,132


0.20 %


16,583,803


$    8,351


0.20 %

Non-interest-bearing
deposits

11,250,764






11,086,376






10,960,686





Other liabilities

490,572






464,755






360,244





Total liabilities

28,100,911






27,772,067






27,904,733





Common equity

2,567,266






2,584,836






2,709,641





Total liabilities and
shareholders' equity

$  30,668,177






$  30,356,903






$  30,614,374





NET INTEREST INCOME



$  287,933






$  248,522






$  235,452



NET INTEREST SPREAD





3.71 %






3.33 %






3.12 %

NET INTEREST INCOME
TO EARNING ASSETS OR
NET INTEREST MARGIN
(1), (2)





3.88 %






3.41 %






3.21 %


(1)  Non-accrual loans and leases are included in the average balance.   

(2)  Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $329,000 for the three months ended September 30, 2022, as compared to $352,000 for June 30, 2022 and $377,000 for September 30, 2021. 

Umpqua Holdings Corporation
Average Rates and Balances

(Unaudited)

(dollars in thousands)

Nine Months Ended


September 30, 2022


September 30, 2021


Average
Balance


Interest
Income or
Expense


Average
Yields or
Rates


Average
Balance


Interest
Income or
Expense


Average
Yields or
Rates

INTEREST-EARNING ASSETS:












Loans held for sale

$        240,928


$        7,209


3.99 %


$        545,237


$      12,242


2.99 %

Loans and leases (1)

23,676,201


720,699


4.06 %


21,866,569


656,772


4.01 %

Taxable securities

3,445,386


54,412


2.11 %


3,199,653


45,049


1.88 %

Non-taxable securities (2)

222,375


5,098


3.06 %


248,617


5,627


3.02 %

Temporary investments and interest-bearing cash

1,718,832


9,387


0.73 %


2,850,639


2,635


0.12 %

Total interest-earning assets

29,303,722


$    796,805


3.62 %


28,710,715


$    722,325


3.36 %

Other assets

1,237,305






1,348,054





Total assets

$   30,541,027






$   30,058,769





INTEREST-BEARING LIABILITIES:












Interest-bearing demand deposits

$     3,846,202


$        2,813


0.10 %


$     3,359,865


$        1,341


0.05 %

Money market deposits

7,519,200


8,942


0.16 %


7,593,320


4,516


0.08 %

Savings deposits

2,433,651


654


0.04 %


2,152,667


523


0.03 %

Time deposits

1,623,742


4,612


0.38 %


2,336,261


16,414


0.94 %

Total interest-bearing deposits

15,422,795


17,021


0.15 %


15,442,113


22,794


0.20 %

Repurchase agreements and federal funds
purchased

502,998


674


0.18 %


444,919


232


0.07 %

Borrowings

34,662


897


3.46 %


259,890


2,787


1.43 %

Junior subordinated debentures

394,803


12,641


4.28 %


363,122


9,108


3.35 %

Total interest-bearing liabilities

16,355,258


$      31,233


0.26 %


16,510,044


$      34,921


0.28 %

Non-interest-bearing deposits

11,115,618






10,484,104





Other liabilities

448,426






369,653





Total liabilities

27,919,302






27,363,801





Common equity

2,621,725






2,694,968





Total liabilities and shareholders' equity

$   30,541,027






$   30,058,769





NET INTEREST INCOME



$    765,572






$    687,404



NET INTEREST SPREAD





3.36 %






3.08 %

NET INTEREST INCOME TO EARNING ASSETS
OR NET INTEREST MARGIN (1), (2)





3.48 %






3.20 %















(1)  Non-accrual loans and leases are included in the average balance.

(2)  Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.0 million for the nine months ended September 30, 2022, as compared to $1.1 million for the same period in 2021.

Umpqua Holdings Corporation

Segments

(Unaudited)

Core Banking

Quarter Ended


% Change

(Dollars in thousands)

Sep 30, 2022


Jun 30, 2022


Mar 31, 2022


Dec 31, 2021


Sep 30, 2021


Seq.
Quarter


Year
over
Year

Net interest income

$     286,532


$     247,009


$     227,087


$     231,250


$     232,348


16 %


23 %

Provision (recapture) for credit
losses

27,572


18,692


4,804


(736)


(18,919)


48 %


(246) %

Non-interest income















Gain on sale of debt securities,
net

—


—


2


4


—


nm


nm


Loss on equity securities, net

(2,647)


(2,075)


(2,661)


(466)


(343)


28 %


672 %


Gain (loss) on swap derivatives,
net

4,194


7,337


7,047


(303)


1,429


(43) %


193 %


Change in fair value of certain
loans held for investment

(26,397)


(15,210)


(21,049)


(2,672)


3,432


74 %


(869) %


Non-interest income (excluding
above items)

36,769


34,461


35,650


42,812


34,849


7 %


6 %


Total non-interest income

11,919


24,513


18,989


39,375


39,367


(51) %


(70) %

Non-interest expense















Merger related expenses

769


2,672


2,278


15,183


—


(71) %


nm


Exit and disposal costs

1,364


442


3,033


3,022


3,813


209 %


(64) %


Non-interest expense (excluding
above items)

154,320


148,946


148,423


150,587


146,931


4 %


5 %


Allocated expenses, net (1)

(39)


3,702


3,735


4,314


3,680


(101) %


(101) %


Total non-interest expense

156,414


155,762


157,469


173,106


154,424


0 %


1 %

Income before income taxes

114,465


97,068


83,803


98,255


136,210


18 %


(16) %

Provision for income taxes

28,212


24,530


20,917


24,067


33,945


15 %


(17) %

Net income

$       86,253


$       72,538


$       62,886


$       74,188


$     102,265


19 %


(16) %

Effective Tax Rate

25 %


25 %


25 %


24 %


25 %





Efficiency Ratio

52 %


57 %


64 %


64 %


57 %





Total assets

$  31,100,700


$  29,721,590


$  30,153,079


$  30,155,058


$  30,419,108


5 %


2 %

Total loans and leases

$  25,507,951


$  24,432,678


$  22,975,761


$  22,553,180


$  21,969,940


4 %


16 %

Total deposits

$  26,588,217


$  25,925,294


$  26,479,078


$  26,370,568


$  26,510,938


3 %


0 %

Key Rates, end of period:














10 year CMT

3.83 %


2.98 %


2.32 %


1.52 %


1.52 %


0.85


2.31

FHLMC 30 year fixed

6.70 %


5.70 %


4.67 %


3.11 %


3.01 %


1.00


3.69

nm = not meaningful














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

Umpqua Holdings Corporation

Segments - Continued

(Unaudited)

Mortgage Banking

Quarter Ended


% Change

(Dollars in thousands)

Sep 30, 2022


Jun 30, 2022


Mar 31, 2022


Dec 31, 2021


Sep 30, 2021


Seq.
Quarter


Year
over
Year

Net interest income

$         1,072


$         1,161


$         1,676


$         2,129


$         2,726


(8) %


(61) %

Provision for credit losses

—


—


—


—


—


nm


nm

Non-interest income















Residential mortgage banking
revenue:















Origination and sale

10,515


15,101


16,844


23,624


30,293


(30) %


(65) %


Servicing

9,529


9,505


9,140


9,457


9,172


0 %


4 %


Change in fair value of MSR
asset:















Changes due to
collection/realization of expected
cash flows over time

(4,978)


(4,961)


(5,347)


(5,311)


(4,681)


0 %


6 %


Changes due to valuation inputs
or assumptions

16,403


10,899


40,149


15,415


(634)


51 %


(2,687) %


MSR hedge loss

(14,128)


—


—


—


—


nm


nm


Non-interest income (excluding
above items)

185


178


194


178


188


4 %


(2) %


Total non-interest income

17,526


30,722


60,980


43,363


34,338


(43) %


(49) %

Non-interest expense















Non-interest expense

21,511


27,514


28,696


30,919


33,009


(22) %


(35) %


Allocated expenses, net (1)

39


(3,702)


(3,735)


(4,314)


(3,680)


(101) %


(101) %


Total non-interest expense

21,550


23,812


24,961


26,605


29,329


(9) %


(27) %

Income before income taxes

(2,952)


8,071


37,695


18,887


7,735


(137) %


(138) %

Provision for income taxes

(739)


2,018


9,424


4,721


1,934


(137) %


(138) %

Net income

$       (2,213)


$         6,053


$       28,271


$       14,166


$        5,801


(137) %


(138) %

Effective Tax Rate

25 %


25 %


25 %


25 %


25 %





Efficiency Ratio

116 %


75 %


40 %


58 %


79 %





Total assets

$     371,260


$     414,104


$     484,047


$     485,878


$     472,371


(10) %


(21) %

Loans held for sale

$     148,275


$     228,889


$     309,946


$     353,105


$     352,466


(35) %


(58) %

Total deposits

$     228,890


$     207,129


$     220,509


$     224,117


$     397,459


11 %


(42) %

LHFS Production Statistics:














Closed loan volume for-sale

$     396,979


$     576,532


$     649,122


$     871,268


$     987,281


(31) %


(60) %

Gain on sale margin

2.65 %


2.62 %


2.59 %


2.71 %


3.07 %





Direct LHFS expense

$      10,465


$       13,197


$       14,296


$       18,150


$       19,958


(21) %


(48) %

Direct LHFS expenses as % of
volume

2.64 %


2.29 %


2.20 %


2.08 %


2.02 %





MSR Statistics:














Residential mortgage loans serviced
for others

$  12,997,911


$  12,932,747


$  12,810,574


$  12,755,671


$  12,853,291


1 %


1 %

MSR, net

$     196,177


$     179,558


$     165,807


$     123,615


$     105,834


9 %


85 %

MSR as % of serviced portfolio

1.51 %


1.39 %


1.29 %


0.97 %


0.82 %


0.12


0.69

Key Rates, end of period:














10 year CMT

3.83 %


2.98 %


2.32 %


1.52 %


1.52 %


0.85


2.31

FHLMC 30 year fixed

6.70 %


5.70 %


4.67 %


3.11 %


3.01 %


1.00


3.69

nm = not meaningful















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

Umpqua Holdings Corporation

Segments

(Unaudited)

(in thousands)

Core Banking


Mortgage Banking



Nine Months Ended


% Change


Nine Months Ended


% Change



Sep 30, 2022


Sep 30, 2021


Year over
Year


Sep 30, 2022


Sep 30, 2021


Year over
Year

Net interest income

$      760,628


$      676,837


12 %


$          3,909


$          9,431


(59) %

Provision (recapture) for credit
losses

51,068


(41,915)


(222) %


—


—


nm

Non-interest income













Residential mortgage banking
revenue:













Origination and sale

—


—


nm


42,460


134,165


(68) %


Servicing

—


—


nm


28,174


27,379


3 %


Change in fair value of MSR
asset:





nm








Changes due to
collection/realization of
expected cash flows over time

—


—


nm


(15,286)


(13,592)


12 %


Changes due to valuation inputs
or assumptions

—


—


nm


67,451


(4,326)


(1659) %


MSR hedge loss

—


—


nm


(14,128)


—


nm


Gain on sale of debt securities, net

2


4


(50) %


—


—


nm


Loss on equity securities, net

(7,383)


(1,045)


607 %


—


—


nm


Gain on swap derivatives, net

18,578


8,698


114 %


—


—


nm


Change in fair value of certain
loans held for investment

(62,656)


5,704


(1198) %


—


—


nm


Non-interest income (excluding
above items)

106,880


115,913


(8) %


557


680


(18) %


Total non-interest income

55,421


129,274


(57) %


109,228


144,306


(24) %

Non-interest expense













Merger related expenses

5,719


—


nm


—


—


nm


Exit and disposal costs

4,839


9,741


(50) %


—


—


nm


Non-interest expense (excluding
above items)

451,689


438,969


3 %


77,721


112,035


(31) %


Allocated expenses, net (1)

7,398


3,860


92 %


(7,398)


(3,860)


92 %


Total non-interest expense

469,645


452,570


4 %


70,323


108,175


(35) %

Income before income taxes

295,336


395,456


(25) %


42,814


45,562


(6) %

Provision for income taxes

73,659


97,681


(25) %


10,703


11,391


(6) %

Net income

$      221,677


$      297,775


(26) %


$        32,111


$        34,171


(6) %














Effective Tax Rate

25 %


25 %


—


25 %


25 %


—

Efficiency Ratio

57 %


56 %


1.00


62 %


70 %


(8.00)














LHFS Production Statistics:












Closed loan volume for-sale







$   1,622,633


$   3,875,836


(58) %

Gain on sale margin







2.62 %


3.46 %


(0.84)

Direct LHFS expense







$        37,958


$        76,568


(50) %

Direct LHFS expenses as % of
volume







2.34 %


1.98 %


0.36

nm = not meaningful













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

Non-GAAP Financial Measures

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

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation

(Unaudited)




Quarter Ended


% Change

(Dollars in thousands, except per share
data)



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year
over
Year

Total shareholders' equity

a


$2,417,514


$2,518,276


$2,607,598


$2,749,270


$2,722,379


(4) %


(11) %

Less: Other intangible assets, net



5,764


6,789


7,815


8,840


9,970


(15) %


(42) %

Tangible common shareholders' equity

b


$2,411,750


$2,511,487


$2,599,783


$2,740,430


$2,712,409


(4) %


(11) %

Less: Accumulated other comprehensive
income (AOCI)



$ (449,560)


(308,147)


(183,756)


1,759


20,209


46 %


nm

Tangible common shareholders' equity,
ex AOCI

c


$2,861,310


$2,819,634


$2,783,539


$2,738,671


$2,692,200


1 %


6 %

















Total assets

d


$31,471,960


$30,135,694


$30,637,126


$30,640,936


$30,891,479


4 %


2 %

Less: Other intangible assets, net



5,764


6,789


7,815


8,840


9,970


(15) %


(42) %

Tangible assets

e


$31,466,196


$30,128,905


$30,629,311


$30,632,096


$30,881,509


4 %


2 %

Common shares outstanding at period
end

f


217,053


217,049


216,967


216,626


216,622


0 %


— %

















Total shareholders' equity to total assets ratio

a / d


7.68 %


8.36 %


8.51 %


8.97 %


8.81 %


(0.68)


(1.13)

Tangible common equity ratio

b / e


7.66 %


8.34 %


8.49 %


8.95 %


8.78 %


(0.68)


(1.12)

Tangible common equity ratio, ex AOCI

c / e


9.09 %


9.36 %


9.09 %


8.94 %


8.72 %


(0.27)


0.37

Book value per common share

a / f


$     11.14


$     11.60


$     12.02


$     12.69


$     12.57


(4) %


(11) %

Tangible book value per common share

b / f


$     11.11


$     11.57


$     11.98


$     12.65


$     12.52


(4) %


(11) %

Tangible book value per common share, ex
AOCI

c / f


$     13.18


$     12.99


$     12.83


$     12.64


$     12.43


1 %


6 %

nm = not meaningful
















Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Consolidated



Quarter Ended


% Change

(Dollars in thousands)



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year
over
Year

Non-Interest Income Adjustments
















Gain on sale of debt securities, net



$            —


$            —


$              2


$              4


$            —


nm


nm

(Loss) gain on equity securities, net



(2,647)


(2,075)


(2,661)


(466)


(343)


28 %


672 %

Gain (loss) on swap derivatives



4,194


7,337


7,047


(303)


1,429


(43) %


193 %

Change in fair value of certain loans held
for investment



(26,397)


(15,210)


(21,049)


(2,672)


3,432


74 %


nm

Change in fair value of MSR due to
valuation inputs or assumptions



16,403


10,899


40,149


15,415


(634)


51 %


nm

MSR hedge loss



(14,128)


—


—


—


—


nm


nm

Total non-interest income adjustments

a


$    (22,575)


$          951


$     23,488


$     11,978


$       3,884


nm


nm

















Non-Interest Expense Adjustments
















Merger related expenses



$          769


$       2,672


$       2,278


$     15,183


$            —


(71) %


nm

Exit and disposal costs



1,364


442


3,033


3,022


3,813


209 %


(64) %

Total non-interest expense adjustments

b


$       2,133


$       3,114


$       5,311


$     18,205


$       3,813


(32) %


(44) %

















Net interest income (1)

c


$   287,933


$   248,522


$   229,117


$   233,754


$   235,452


16 %


22 %

















Non-interest income (GAAP)

d


$     29,445


$     55,235


$     79,969


$     82,738


$     73,705


(47) %


(60) %

Less: Non-interest income adjustments

a


22,575


(951)


(23,488)


(11,978)


(3,884)


nm


nm

Operating non-interest income (non-
GAAP)

e


$     52,020


$     54,284


$     56,481


$     70,760


$     69,821


(4) %


(25) %

















Revenue (GAAP) (1)

f=c+d


$   317,378


$   303,757


$   309,086


$   316,492


$   309,157


4 %


3 %

Operating revenue (non-GAAP)  (1)

g=c+e


$   339,953


$   302,806


$   285,598


$   304,514


$   305,273


12 %


11 %

















Non-interest expense (GAAP)

h


$   177,964


$   179,574


$   182,430


$   199,711


$   183,753


(1) %


(3) %

Less: Non-interest expense adjustments

b


(2,133)


(3,114)


(5,311)


(18,205)


(3,813)


(32) %


(44) %

Operating non-interest expense (non-
GAAP)

i


$   175,831


$   176,460


$   177,119


$   181,506


$   179,940


— %


(2) %

















Net income (GAAP)

j


$     84,040


$     78,591


$     91,157


$     88,354


$   108,066


7 %


(22) %

Provision for income taxes



27,473


26,548


30,341


28,788


35,879


3 %


(23) %

Income before provision for income taxes



111,513


105,139


121,498


117,142


143,945


6 %


(23) %

Provision (recapture) for credit losses



27,572


18,692


4,804


(736)


(18,919)


48 %


(246) %

Pre-provision net revenue (PPNR) (non-
GAAP)

k


139,085


123,831


126,302


116,406


125,026


12 %


11 %

Less: Non-interest income adjustments

a


22,575


(951)


(23,488)


(11,978)


(3,884)


nm


nm

Add: Non-interest expense adjustments

b


2,133


3,114


5,311


18,205


3,813


(32) %


(44) %

Operating PPNR (non-GAAP)

l


$   163,793


$   125,994


$   108,125


$   122,633


$   124,955


30 %


31 %

















Net income (GAAP)

j


$     84,040


$     78,591


$     91,157


$     88,354


$   108,066


7 %


(22) %

Less: Non-interest income adjustments

a


22,575


(951)


(23,488)


(11,978)


(3,884)


nm


nm

Add: Non-interest expense adjustments

b


2,133


3,114


5,311


18,205


3,813


(32) %


(44) %

Tax effect of adjustments



(6,116)


(480)


4,576


1,190


18


nm


nm

Operating net income (non-GAAP)

m


$   102,632


$     80,274


$     77,556


$     95,771


$   108,013


28 %


(5) %

nm = not meaningful
















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

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Consolidated



Quarter Ended


% Change

(Dollars in thousands, except per share
data)



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year
over
Year

Average assets

n


$30,668,177


$30,356,903


$30,597,413


$30,886,378


$30,614,374


1 %


— %

Less: Average goodwill and other intangible
assets, net



6,343


7,379


8,407


9,491


10,609


(14) %


(40) %

Average tangible assets

o


$30,661,834


$30,349,524


$30,589,006


$30,876,887


$30,603,765


1 %


— %

















Average common shareholders' equity

p


$2,567,266


$2,584,836


$2,715,059


$2,717,753


$2,709,641


(1) %


(5) %

Less: Average goodwill and other intangible
assets, net



6,343


7,379


8,407


9,491


10,609


(14) %


(40) %

Average tangible common equity

q


$2,560,923


$2,577,457


$2,706,652


$2,708,262


$2,699,032


(1) %


(5) %

















Weighted average basic shares outstanding

r


217,051


217,030


216,782


216,624


218,416


0 %


(1) %

Weighted average diluted shares
outstanding

s


217,386


217,279


217,392


217,356


218,978


0 %


(1) %

















Select Per-Share & Performance Metrics
















Earnings-per-share - basic

j / r


$      0.39


$      0.36


$      0.42


$      0.41


$      0.49


8 %


(20) %

Earnings-per-share - diluted

j / s


$      0.39


$      0.36


$      0.42


$      0.41


$      0.49


8 %


(20) %

Efficiency ratio

h / f


56.07 %


59.12 %


59.02 %


63.10 %


59.44 %


(3.05)


(3.37)

PPNR return on average assets

k / n


1.80 %


1.64 %


1.67 %


1.50 %


1.62 %


0.16


0.18

Return on average assets

j / n


1.09 %


1.04 %


1.21 %


1.13 %


1.40 %


0.05


(0.31)

Return on average tangible assets

j / o


1.09 %


1.04 %


1.21 %


1.14 %


1.40 %


0.05


(0.31)

Return on average common equity

j / p


12.99 %


12.20 %


13.62 %


12.90 %


15.82 %


0.79


(2.83)

Return on average tangible common equity

j / q


13.02 %


12.23 %


13.66 %


12.94 %


15.88 %


0.79


(2.86)

















Operating Per-Share & Performance Metrics
















Operating earnings-per-share - basic

m / r


$      0.47


$      0.37


$      0.36


$      0.44


$      0.49


27 %


(4) %

Operating earnings-per-share - diluted

m / s


$      0.47


$      0.37


$      0.36


$      0.44


$      0.49


27 %


(4) %

Operating efficiency ratio

i / g


51.72 %


58.27 %


62.02 %


59.61 %


58.94 %


(6.55)


(7.22)

Operating PPNR return on average assets

l / n


2.12 %


1.66 %


1.43 %


1.58 %


1.62 %


0.46


0.50

Operating return on average assets

m / n


1.33 %


1.06 %


1.03 %


1.23 %


1.40 %


0.27


(0.07)

Operating return on average tangible assets

m / o


1.33 %


1.06 %


1.03 %


1.23 %


1.40 %


0.27


(0.07)

Operating return on average common equity

m / p


15.86 %


12.46 %


11.58 %


13.98 %


15.82 %


3.40


0.04

Operating return on average tangible common
equity

m / q


15.90 %


12.49 %


11.62 %


14.03 %


15.88 %


3.41


0.02

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Core Banking



Quarter Ended


% Change

(Dollars in thousands)



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year
over
Year

Non-Interest Income Adjustments
















Gain on sale of debt securities, net



$       —


$       —


$         2


$           4


$         —


nm


nm

(Loss) gain on equity securities, net



(2,647)


(2,075)


(2,661)


(466)


(343)


28 %


672 %

Gain (loss) on swap derivatives



4,194


7,337


7,047


(303)


1,429


(43) %


193 %

Change in fair value of certain loans held for
investment



(26,397)


(15,210)


(21,049)


(2,672)


3,432


74 %


(869) %

Total non-interest income adjustments

a


$ (24,850)


$ (9,948)


$ (16,661)


$   (3,437)


$    4,518


150 %


(650) %

















Non-Interest Expense Adjustments
















Merger related expenses



$     769


$  2,672


$  2,278


$  15,183


$         —


(71) %


nm

Exit and disposal costs



1,364


442


3,033


3,022


3,813


209 %


(64) %

Total non-interest expense adjustments

b


$  2,133


$  3,114


$  5,311


$  18,205


$    3,813


(32) %


(44) %

















Net interest income (1)

c


$  286,861


$  247,361


$  227,441


$ 231,625


$ 232,726


16 %


23 %

















Non-interest income (GAAP)

d


$ 11,919


$ 24,513


$ 18,989


$  39,375


$  39,367


(51) %


(70) %

Less: Non-interest income adjustments

a


24,850


9,948


16,661


3,437


(4,518)


150 %


(650) %

Operating non-interest income (non-GAAP)

e


$ 36,769


$ 34,461


$ 35,650


$  42,812


$  34,849


7 %


6 %

















Revenue (GAAP) (1)

f=c+d


$  298,780


$  271,874


$  246,430


$ 271,000


$ 272,093


10 %


10 %

Operating revenue (non-GAAP) (1)

g=c+e


$  323,630


$  281,822


$  263,091


$ 274,437


$ 267,575


15 %


21 %

















Non-interest expense (GAAP) (2)

h


$  156,414


$  155,762


$  157,469


$ 173,106


$ 154,424


— %


1 %

Less: Non-interest expense adjustments

b


(2,133)


(3,114)


(5,311)


(18,205)


(3,813)


(32) %


(44) %

Operating non-interest expense (non-GAAP)

i


$  154,281


$  152,648


$  152,158


$ 154,901


$ 150,611


1 %


2 %

















Net income (GAAP)

j


$ 86,253


$ 72,538


$ 62,886


$  74,188


$ 102,265


19 %


(16) %

Provision for income taxes



28,212


24,530


20,917


24,067


33,945


15 %


(17) %

Income before provision for income taxes



114,465


97,068


83,803


98,255


136,210


18 %


(16) %

Provision (recapture) for credit losses



27,572


18,692


4,804


(736)


(18,919)


48 %


(246) %

Pre-provision net revenue (PPNR) (non-GAAP)

k


142,037


115,760


88,607


97,519


117,291


23 %


21 %

Less: Non-interest income adjustments

a


24,850


9,948


16,661


3,437


(4,518)


150 %


(650) %

Add: Non-interest expense adjustments

b


2,133


3,114


5,311


18,205


3,813


(32) %


(44) %

Operating PPNR (non-GAAP)

l


$  169,020


$  128,822


$  110,579


$ 119,161


$ 116,586


31 %


45 %

















Net income (GAAP)

j


$ 86,253


$ 72,538


$ 62,886


$  74,188


$ 102,265


19 %


(16) %

Less: Non-interest income adjustments

a


24,850


9,948


16,661


3,437


(4,518)


150 %


(650) %

Add: Non-interest expense adjustments

b


2,133


3,114


5,311


18,205


3,813


(32) %


(44) %

Tax effect of adjustments



(6,685)


(3,205)


(5,461)


(2,664)


177


109 %


(3,877) %

Operating net income (non-GAAP)

m


$  106,551


$ 82,395


$ 79,397


$  93,166


$ 101,737


29 %


5 %

















Efficiency ratio

h / f


52.35 %


57.29 %


63.90 %


63.88 %


56.75 %


(4.94)


(4.40)

Operating efficiency ratio

i / g


47.67 %


54.16 %


57.83 %


56.44 %


56.29 %


(6.49)


(8.62)

Core Banking net income / Consolidated net
income



102.63 %


92.30 %


68.99 %


83.97 %


94.63 %


10.33


8.00

Core Banking operating net income /
Consolidated operating net income



103.82 %


102.64 %


102.37 %


97.28 %


94.19 %


1.18


9.63

nm = not meaningful
















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

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

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Mortgage Banking



Quarter Ended


% Change

(Dollars in thousands)



Sep 30,
2022


Jun 30,
2022


Mar 31,
2022


Dec 31,
2021


Sep 30,
2021


Seq.
Quarter


Year over
Year

Non-Interest Income Adjustments
















Change in fair value of MSR due to valuation
inputs or assumptions



$ 16,403


$ 10,899


$ 40,149


$ 15,415


$    (634)


51 %


nm

   MSR hedge loss



(14,128)


—


—


—


—


nm


nm

Total non-interest income adjustments

a


$  2,275


$ 10,899


$ 40,149


$ 15,415


$    (634)


(79) %


(459) %

















Total non-interest expense adjustments

b


$       —


$       —


$       —


$       —


$       —


nm


nm

















Net interest income

c


$  1,072


$  1,161


$  1,676


$  2,129


$  2,726


(8) %


(61) %

















Non-interest income (GAAP)

d


$ 17,526


$ 30,722


$ 60,980


$ 43,363


$ 34,338


(43) %


(49) %

Less: Non-interest income adjustments

a


(2,275)


(10,899)


(40,149)


(15,415)


634


(79) %


(459) %

Operating non-interest income (non-GAAP)

e


$ 15,251


$ 19,823


$ 20,831


$ 27,948


$ 34,972


(23) %


(56) %

















Revenue (GAAP)

f=c+d


$ 18,598


$ 31,883


$ 62,656


$ 45,492


$ 37,064


(42) %


(50) %

Operating revenue (non-GAAP)

g=c+e


16,323


20,984


22,507


30,077


37,698


(22) %


(57) %

















Non-interest expense (GAAP) (1)

h


21,550


23,812


24,961


26,605


29,329


(9) %


(27) %

Less: Non-interest expense adjustments

b


—


—


—


—


—


nm


nm

Operating non-interest expense (non-GAAP)

i


$ 21,550


$ 23,812


$ 24,961


$ 26,605


$ 29,329


(9) %


(27) %

















Net income (GAAP)

j


$ (2,213)


$  6,053


$ 28,271


$ 14,166


$  5,801


(137) %


(138) %

Provision for income taxes



(739)


2,018


9,424


4,721


1,934


(137) %


(138) %

Income before provision for income taxes



(2,952)


8,071


37,695


18,887


7,735


(137) %


(138) %

Provision for credit losses



—


—


—


—


—


nm


nm

Pre-provision net revenue (PPNR) (non-
GAAP)

k


(2,952)


8,071


37,695


18,887


7,735


(137) %


(138) %

Less: Non-interest income adjustments

a


(2,275)


(10,899)


(40,149)


(15,415)


634


(79) %


(459) %

Add: Non-interest expense adjustments

b


—


—


—


—


—


nm


nm

Operating PPNR (non-GAAP)

l


$ (5,227)


$ (2,828)


$ (2,454)


$  3,472


$  8,369


85 %


(162) %

















Net income (GAAP)

j


$ (2,213)


$  6,053


$ 28,271


$ 14,166


$  5,801


(137) %


(138) %

Less: Non-interest income adjustments

a


(2,275)


(10,899)


(40,149)


(15,415)


634


(79) %


(459) %

Add: Non-interest expense adjustments

b


—


—


—


—


—


nm


nm

Tax effect of adjustments



569


2,725


10,037


3,854


(159)


(79) %


(458) %

Operating net income (non-GAAP)

m


$ (3,919)


$ (2,121)


$ (1,841)


$  2,605


$  6,276


85 %


(162) %

















Efficiency ratio

h / f


115.87 %


74.69 %


39.84 %


58.48 %


79.13 %


41.18


36.74

Operating efficiency ratio

i / g


132.02 %


113.48 %


110.90 %


88.46 %


77.80 %


18.54


54.22

Mortgage Banking net income / Consolidated
net income



(2.63) %


7.70 %


31.01 %


16.03 %


5.37 %


(10.33)


(8.00)

Mortgage Banking operating net income /
Consolidated operating net income



(3.82) %


(2.64) %


(2.37) %


2.72 %


5.81 %


(1.18)


(9.63)

nm = not meaningful
















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

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Consolidated



Year to Date


% Change

(Dollars in thousands)



Sep 30, 2022


Sep 30, 2021


Year over Year

Non-Interest Income Adjustments








Gain on sale of debt securities, net



$                        2


$                        4


(50) %

Loss on equity securities, net



(7,383)


(1,045)


nm

Gain on swap derivatives



18,578


8,698


114 %

Change in fair value of certain loans held for investment



(62,656)


5,704


nm

Change in fair value of MSR due to valuation inputs or assumptions



67,451


(4,326)


nm

   MSR hedge loss



(14,128)


—


nm

Total non-interest income adjustments

a


$                 1,864


$                 9,035


(79) %









Non-Interest Expense Adjustments








Merger related expenses



$                 5,719


$                      —


nm

Exit and disposal costs



4,839


9,741


(50) %

Total non-interest expense adjustments

b


$                10,558


$                 9,741


8 %









Net interest income (1)

c


$              765,572


$              687,404


11 %









Non-interest income (GAAP)

d


$              164,649


$              273,580


(40) %

Less: Non-interest income adjustments

a


(1,864)


(9,035)


(79) %

Operating non-interest income (non-GAAP)

e


$              162,785


$              264,545


(38) %









Revenue (GAAP) (1)

f=c+d


$              930,221


$              960,984


(3) %

Operating revenue (non-GAAP)  (1)

g=c+e


$              928,357


$              951,949


(2) %









Non-interest expense (GAAP)

h


$              539,968


$              560,745


(4) %

Less: Non-interest expense adjustments

b


(10,558)


(9,741)


8 %

Operating non-interest expense (non-GAAP)

i


$              529,410


$              551,004


(4) %









Net income (GAAP)

j


$              253,788


$              331,946


(24) %

Provision for income taxes



84,362


109,072


(23) %

Income before provision for income taxes



338,150


441,018


(23) %

Provision (recapture) for credit losses



51,068


(41,915)


(222) %

Pre-provision net revenue (PPNR) (non-GAAP)

k


389,218


399,103


(2) %

Less: Non-interest income adjustments

a


(1,864)


(9,035)


(79) %

Add: Non-interest expense adjustments

b


10,558


9,741


8 %

Operating PPNR (non-GAAP)

l


$              397,912


$              399,809


— %









Net income (GAAP)

j


$              253,788


$              331,946


(24) %

Less: Non-interest income adjustments

a


(1,864)


(9,035)


(79) %

Add: Non-interest expense adjustments

b


10,558


9,741


8 %

Tax effect of adjustments



(2,020)


(177)


nm

Operating net income (non-GAAP)

m


$              260,462


$              332,475


(22) %

nm = not meaningful







Average assets

n


$         30,541,027


$         30,058,769


2 %

Less: Average goodwill and other intangible assets, net



$                 7,369


$                12,922


(43) %

Average tangible assets

o


$         30,533,658


$         30,045,847


2 %









Average common shareholders' equity

p


$           2,621,725


$           2,694,968


(3) %

Less: Average goodwill and other intangible assets, net



$                 7,369


$                12,922


(43) %

Average tangible common equity

q


$           2,614,356


$           2,682,046


(3) %









Weighted average basic shares outstanding

r


216,955


219,791


(1) %

Weighted average diluted shares outstanding

s


217,353


220,278


(1) %









Select Per-Share & Performance Metrics








Earnings-per-share - basic

j / r


$                   1.17


$                   1.51


(23) %

Earnings-per-share - diluted

j / s


$                   1.17


$                   1.51


(23) %

Efficiency ratio

h / f


58.05 %


58.35 %


(0.30)

PPNR return on average assets

k / n


1.70 %


1.78 %


(0.08)

Return on average assets

j / n


1.11 %


1.48 %


(0.37)

Return on average tangible assets

j / o


1.11 %


1.48 %


(0.37)

Return on average common equity

j / p


12.94 %


16.47 %


(3.53)

Return on average tangible common equity

j / q


12.98 %


16.55 %


(3.57)









Operating Per-Share & Performance Metrics








Operating earnings-per-share - basic

m / r


$                   1.20


$                   1.51


(21) %

Operating earnings-per-share - diluted

m / s


$                   1.20


$                   1.51


(21) %

Operating efficiency ratio

i / g


57.03 %


57.88 %


(0.85)

Operating PPNR return on average assets

l / n


1.74 %


1.78 %


(0.04)

Operating return on average assets

m / n


1.14 %


1.48 %


(0.34)

Operating return on average tangible assets

m / o


1.14 %


1.48 %


(0.34)

Operating return on average common equity

m / p


13.28 %


16.49 %


(3.21)

Operating return on average tangible common equity

m / q


13.32 %


16.57 %


(3.25)


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

Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)









Core Banking



Year to Date


% Change

(Dollars in thousands)



Sep 30, 2022


Sep 30, 2021


Year over Year

Non-Interest Income Adjustments








Gain on sale of debt securities, net



$                        2


$                        4


(50) %

Loss on equity securities, net



(7,383)


(1,045)


607 %

Gain on swap derivatives



18,578


8,698


114 %

Change in fair value of certain loans held for investment



(62,656)


5,704


nm

Total non-interest income adjustments

a


$              (51,459)


$                13,361


(485) %









Non-Interest Expense Adjustments








Merger related expenses



$                 5,719


$                      —


nm

Exit and disposal costs



4,839


9,741


(50) %

Total non-interest expense adjustments

b


$                10,558


$                 9,741


8 %









Net interest income (1)

c


$              761,663


$              677,973


12 %









Non-interest income (GAAP)

d


$                55,421


$              129,274


(57) %

Less: Non-interest income adjustments

a


51,459


(13,361)


(485) %

Operating non-interest income (non-GAAP)

e


$              106,880


$              115,913


(8) %









Revenue (GAAP) (1)

f=c+d


$              817,084


$              807,247


1 %

Operating revenue (non-GAAP) (1)

g=c+e


$              868,543


$              793,886


9 %









Non-interest expense (GAAP) (2)

h


$              469,645


$              452,570


4 %

Less: Non-interest expense adjustments

b


(10,558)


(9,741)


8 %

Operating non-interest expense (non-GAAP)

i


$              459,087


$              442,829


4 %









Net income (GAAP)

j


$              221,677


$              297,775


(26) %

Provision for income taxes



73,659


97,681


(25) %

Income before provision for income taxes



295,336


395,456


(25) %

Provision (recapture) for credit losses



51,068


(41,915)


(222) %

Pre-provision net revenue (PPNR) (non-GAAP)

k


346,404


353,541


(2) %

Less: Non-interest income adjustments

a


51,459


(13,361)


(485) %

Add: Non-interest expense adjustments

b


10,558


9,741


8 %

Operating PPNR (non-GAAP)

l


$              408,421


$              349,921


17 %









Net income (GAAP)

j


$              221,677


$              297,775


(26) %

Less: Non-interest income adjustments

a


51,459


(13,361)


(485) %

Add: Non-interest expense adjustments

b


10,558


9,741


8 %

Tax effect of adjustments



(15,351)


905


nm

Operating net income (non-GAAP)

m


$              268,343


$              295,060


(9) %









Efficiency ratio

h / f


57.48 %


56.06 %


1.42

Operating efficiency ratio

i / g


52.86 %


55.78 %


(2.92)

Core Banking net income / Consolidated net income



87.35 %


89.71 %


(2.36)

Core Banking operating net income / Consolidated operating net income



103.03 %


88.75 %


14.28

nm = not meaningful







Umpqua Holdings Corporation

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)

Mortgage Banking



Year to Date


% Change

(Dollars in thousands)



Sep 30, 2022


Sep 30, 2021


Year over Year

Non-Interest Income Adjustments








Change in fair value of MSR due to valuation inputs or assumptions



$                67,451


$                (4,326)


nm

   MSR hedge loss



(14,128)


—


nm

Total non-interest income adjustments

a


$                53,323


$                (4,326)


nm









Total non-interest expense adjustments

b


$                      —


$                      —


nm









Net interest income

c


$                 3,909


$                 9,431


(59) %









Non-interest income (GAAP)

d


$              109,228


$              144,306


(24) %

Less: Non-interest income adjustments

a


(53,323)


4,326


nm

Operating non-interest income (non-GAAP)

e


$                55,905


$              148,632


(62) %









Revenue (GAAP)

f=c+d


$              113,137


$              153,737


(26) %

Operating revenue (non-GAAP)

g=c+e


$                59,814


$              158,063


(62) %









Non-interest expense (GAAP) (1)

h


$                70,323


$              108,175


(35) %

Less: Non-interest expense adjustments

b


—


—


nm

Operating non-interest expense (non-GAAP)

i


$                70,323


$              108,175


(35) %









Net income (GAAP)

j


$                32,111


$                34,171


(6) %

Provision for income taxes



10,703


11,391


(6) %

Income before provision for income taxes



42,814


45,562


(6) %

Provision for credit losses



—


—


nm

Pre-provision net revenue (PPNR) (non-GAAP)

k


42,814


45,562


(6) %

Less: Non-interest income adjustments

a


(53,323)


4,326


nm

Add: Non-interest expense adjustments

b


—


—


nm

Operating PPNR (non-GAAP)

l


$              (10,509)


$                49,888


(121) %









Net income (GAAP)

j


$                32,111


$                34,171


(6) %

Less: Non-interest income adjustments

a


(53,323)


4,326


nm

Add: Non-interest expense adjustments

b


—


—


nm

Tax effect of adjustments



13,331


(1,082)


nm

Operating net income (non-GAAP)

m


$                (7,881)


$                37,415


(121) %









Efficiency ratio

h / f


62.16 %


70.36 %


(8.20)

Operating efficiency ratio

i / g


117.57 %


68.44 %


49.13

Mortgage Banking net income / Consolidated net income



12.65 %


10.29 %


2.36

Mortgage Banking operating net income / Consolidated operating
net income



(3.03) %


11.25 %


(14.28)

nm = not meaningful







SOURCE Umpqua Holdings Corporation