PR Newswire | Jul 22, 2020 04:16PM EDT

07/22 15:15 CDT

Umpqua Reports Second Quarter 2020 ResultsSecond quarter 2020 net income of $52.9 million, or $0.24 per common shareDeposit growth of $2.1 billion, or 9.4%; loan and lease growth of $1.4 billion, or 6.7%Generated over 15,000 Paycheck Protection Program ("PPP") loans for $2.0 billionCOVID-19 impacts on economic forecasts resulted in provision for credit losses of $87.1 million PORTLAND, Ore., July 22, 2020

PORTLAND, Ore., July 22, 2020 /PRNewswire/ --Umpqua Holdings Corporation (NASDAQ: UMPQ) (the "Company") reported net earnings of $52.9 million for the second quarter of 2020, compared to net loss of $1.9 billion for the first quarter of 2020 and net income of $111.8 million for the second quarter of 2019. Earnings per diluted common share were $0.24 for the second quarter of 2020, compared to a loss of $8.41 for the first quarter of 2020 and earnings of $0.51 for the second quarter of 2019.

"Umpqua's second quarter results, particularly in light of the significant disruption due to the COVID-19 pandemic, are a testament to our associates' extraordinary resilience and commitment to serving our customers and communities. During the quarter, as we ramped up our efforts to support small businesses across our footprint, we rapidly processed and funded more than 15,000 PPP loans with an average loan size of $134,000. In addition, our home lending department had a record-breaking quarter, generating more than $2.1 billion in production," said Cort O'Haver, president and CEO of Umpqua Holdings Corporation. "We continue working with customers who qualify for payment deferrals as a result of COVID-19 impacts with a 5.7% deferral level that reflects the company's strong credit quality practices. I'm especially pleased with the reduction in our cost of interest bearing deposits and lower non-interest expenses, absent increased home lending commissions due to volume, as we operate in a low interest rate environment."

Ongoing impact of COVID-19 on our business operations

* Operations have been modified to comply with multiple state-level proclamations and CDC guidance and best practice; we continue to: * restrict all travel. * maintain a remote work program for associates other than store associates and small groups of other functions that cannot be completed remotely. About 90% of our non-store associates are operating remotely. * transitioned store operations to restrict lobby access and instructed customers to bank by appointment only which has allowed over 95% of stores on any given day to remain open throughout the crisis. * increased cleaning scope and frequency to our store locations and installed other protective devices for our associates.

* Mobile banking usage trends are up 21% and unique sessions are up 30% year over year in addition to an expected decline in store transactions of over 31%. * Continue to offer our Umpqua Go-To(r) application with over 63,000 customers enrolled. Go-To usage increased 48% from the prior quarter levels as customers used the platform as a safe and effective way of conducting banking. * We enhanced associate benefits, including: * supplemental front line associate pay. * pandemic pay bank for associates needing additional paid time off due to COVID-19 impacts. * flexible work rotations and remote work for higher-risk associates.

* Active participant in PPP, including: * over 15,000 PPP loans produced. * $2.0 billion in total loans were funded. * average loan size was $134,000.

* Addressing other customer needs during pandemic: * payment deferrals. * waiving deferral associated fees. * ATM fee waivers.

* Enhanced community support: * announced a total of $3.0 million in combined grants and investments to organizations providing COVID-19 community relief and small business microloans. * initiated virtual volunteerism program. * activated an associate 3:1 giving match to donations.

Notable items that impacted the second quarter 2020 financial results included

* $87.1 million provision for credit losses reflecting the continued impacts of the COVID-19 global pandemic on economic forecasts, compared to a $118.1 million provision in the prior quarter, and a $19.4 million provision in the same period of the prior year. * $6.4 million loss on the fair value change of the MSR asset due to accelerated prepayments as a result of the lower interest rate environment compared to a $25.4 million loss in the prior quarter and a $17.8 million loss in the same period of the prior year. * $0.8 million loss related to the fair value of the debt capital market swap derivatives, compared to a loss of $14.3 million in the prior quarter and a loss of $4.0 million in the same period of the prior year.

Second Quarter 2020 Highlights (compared to prior quarter):

* Net interest income decreased by $6.0 million on a quarter to quarter basis primarily driven by lower average yields on loans and leases, partially offset by a lower cost of interest bearing deposits; * Provision for credit losses decreased by $31.0 million, although still elevated from historical levels reflecting the continued influence of the COVID-19 global pandemic on economic forecasts; * Net charge-offs decreased by twelve basis points to 0.29% of average loans and leases (annualized); * Non-interest income increased by $74.8 million, driven primarily by an increase in net mortgage banking revenue; * Non-interest expense decreased by $1.8 billion, driven by the $1.8 billion goodwill impairment that was recorded in the prior period. Absent the goodwill impairment charge, non-interest expense increased by $4.2 million from the prior quarter primarily due to strong mortgage production; * Non-performing assets to total assets decreased six basis points to 0.26% from 0.32%; * Estimated total risk-based capital ratio of 14.4% and estimated Tier 1 common to risk weighted assets ratio of 11.1%; * Filed a Form 8-K on June 17, 2020, announcing the shift in timing of a dividend declaration date from historical intra-quarter announcements to after quarterly earnings are finalized and applicable regulatory approval processes are complete.

Balance SheetTotal consolidated assets were $29.6 billion as of June 30, 2020, compared to $27.5 billion as of March 31, 2020 and $28.0 billion as of June 30, 2019. Including secured off-balance sheet lines of credit, total available liquidity was $11.7 billion as of June 30, 2020, representing 39% of total assets and 47% of total deposits.

Gross loans and leases were $22.7 billion as of June 30, 2020, an increase of $1.4 billion relative to March 31, 2020. The increase in gross loans and leases is primarily due to the production of the PPP loans totaling $2.0 billion in the quarter. Please refer to the additional loan tables in the Q2 2020 Earnings Presentation for select underwriting characteristics of the loan portfolio and specific industry concentrations impacted by COVID-19.

Total deposits were $24.8 billion as of June 30, 2020, an increase of $2.1 billion from $22.7 billion as of March 31, 2020. This increase was attributable to growth in non-interest bearing demand deposits of $2.0 billion partially offset by a decline in time deposits of $612.0 million.

Net Interest IncomeNet interest income was $212.5 million for the second quarter of 2020, down $6.0 million from the prior quarter. The decrease was primarily driven by lower average yields on loans and leases, partially offset by a lower cost of interest bearing deposits.

The Company's net interest margin was 3.09% for the second quarter of 2020, down 32 basis points from 3.41% for the first quarter of 2020 primarily driven by the decrease in short and long term interest rates that occurred in the prior quarter.

Credit QualityThe allowance for credit losses was $383.1 million, or 1.69% of loans and leases, as of June 30, 2020, which was up from $312.3 million, or 1.47% of loans and leases, as of March 31, 2020. The provision for credit losses was $87.1 million for the second quarter of 2020, a decrease of $31.0 million from the prior quarter level, although still elevated from historical levels reflecting the continued influence of the COVID-19 global pandemic on economic forecasts.

Net charge-offs as a percentage of average loans and leases decreased by twelve basis points to 0.29% of average loans and leases (annualized). The decrease in net charge-offs for the quarter was primarily due to the COVID-19 related single charge-off to a regional air transportation lessor that occurred in the prior quarter. As of June 30, 2020, non-performing assets were 0.26% of total assets, compared to 0.32% as of March 31, 2020 and 0.28% as of June 30, 2019.

Current Expected Credit Loss (CECL)As described in our first quarter 2020 quarterly report on Form 10-Q filed on May 7, 2020 ("Q1 2020 10-Q"), on January 1, 2020, we adopted Accounting Standards Update No. 2016-13, Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments("CECL"). In applying CECL, our financial results will be affected as soon as weak or deteriorating economic conditions are forecasted which alters our expectations for credit losses. In addition, due to the expansion of the time horizon over which we are required to estimate future credit losses under CECL, we may experience increased volatility in our future provisions for credit losses. When utilizing economic forecast models that factor in significant, negative COVID-19 impacts to the economy, we recorded significant provisions for credit losses in the first and second quarters of 2020 and may incur significant provisions for credit losses in future periods as well as actual or projected economic conditions deteriorate further.

Non-interest IncomeNon-interest income was $115.5 million for the second quarter of 2020, up $74.8 million from the prior quarter driven primarily by the increase in net mortgage banking revenue as described below.

Revenue from the origination and sale of residential mortgages was $86.8 million for the second quarter of 2020, an increase of $47.4 million from the prior quarter. This increase reflects a sequential quarter increase of $677.9 million or 59% in for-sale mortgage origination volume and an increase of 132 basis points in the home lending gain on sale margin to 4.75% for the second quarter of 2020. Of the current quarter's mortgage production, 34% related to purchase activity, compared to 43% for the prior quarter and 70% for the same period of the prior year.

Non-interest ExpenseNon-interest expense was $181.9 million for the second quarter of 2020, down $1.8 billion from the prior quarter level. This decrease was driven primarily by the $1.8 billion goodwill impairment that was recorded in the prior period. Due to the aforementioned strong mortgage production, expenses for our Home Lending Division were up $10.4 million compared to the prior quarter.

GoodwillAs described in our Q1 2020 10-Q, the Company completed the analysis of goodwill prior to filing the Q1 2020 10-Q with the Securities and Exchange Commission. The Company updated its goodwill assessment for the Wholesale Bank and Retail Bank reporting units as of March 31, 2020, due to events and circumstances indicating potential impairment. Impairment of goodwill is the condition that exists when the carrying amount of a reporting unit that includes goodwill exceeds its fair value. A goodwill impairment is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Upon completing the quantitative impairment analysis, the Company recorded a goodwill impairment of $1.8 billion during the first quarter, which represented the entire amount of goodwill allocated to the Wholesale Bank and Retail Bank reporting units. The remaining goodwill of $2.7 million after the impairment relates to the Wealth Management reporting unit. The goodwill impairment was material to reported earnings in the first quarter, but was a non-cash charge and had no effect on the Company's cash balances, liquidity or tangible equity. In addition, because goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company's well-capitalized regulatory capital ratios were not impacted by the impairment.

CapitalAs of June 30, 2020, the Company's tangible book value per common share1 was $11.44, compared to $11.30 in the prior quarter and $10.97 in the same period of the prior year.

The Company's estimated total risk-based capital ratio was 14.4% and its estimated Tier 1 common to risk weighted assets ratio was 11.1% as of June 30, 2020. The Company remains above current "well-capitalized" regulatory minimums. The regulatory capital ratios as of June 30, 2020 are estimates, pending completion and filing of the Company's regulatory reports.

Non-GAAP Financial MeasuresIn addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The Company believes that these non-GAAP financial measures provide investors with information useful in understanding the Company's financial performance; however, readers of this document are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.

Management believes tangible common equity and the tangible common equity ratio are useful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which management believes will assist investors in assessing the capital of the Company and the ability to absorb potential losses. Tangible common equity is calculated as total shareholders' equity less goodwill and other intangible assets, net (excluding MSRs). Tangible assets are total assets less goodwill and other intangible assets, net (excluding MSRs). The tangible common equity ratio is calculated as tangible common shareholders' equity divided by tangible assets.

The following table provides reconciliations of ending shareholders' equity (GAAP) to ending tangible common equity (non-GAAP), and ending assets (GAAP) to ending tangible assets (non-GAAP).

(In thousands, Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 except per share data)

Total shareholders'$2,538,339 $2,507,611 $4,313,915 $4,289,516 $4,228,507 equity

Subtract:

Goodwill 2,715 2,715 1,787,651 1,787,651 1,787,651

Other intangible 15,853 17,099 18,346 19,750 21,155 assets, net

Tangible common $2,519,771 $2,487,797 $2,507,918 $2,482,115 $2,419,701 shareholders' equity

Total assets $29,645,248 $27,540,382 $28,846,809 $28,930,855 $27,986,075

Subtract:

Goodwill 2,715 2,715 1,787,651 1,787,651 1,787,651

Other intangible 15,853 17,099 18,346 19,750 21,155 assets, net

Tangible $29,626,680 $27,520,568 $27,040,812 $27,123,454 $26,177,269 assets

Common shares outstanding 220,219 220,175 220,229 220,212 220,499 at period end



Total shareholders' equity to 8.56 %9.11 %14.95 %14.83 %15.11 %total assets ratio

Tangible common equity8.51 %9.04 %9.27 %9.15 %9.24 %ratio

Book value per common $11.53 $11.39 $19.59 $19.48 $19.18 share

Tangible book value per $11.44 $11.30 $11.39 $11.27 $10.97 common share

About Umpqua Holdings CorporationUmpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.

Earnings Conference Call InformationThe Company will host its second quarter 2020 earnings conference call on July 23, 2020, at 10:00 a.m. PT (1:00 p.m. ET). During the call, the Company will provide an update on recent activities and discuss its second quarter 2020 financial results. There will be a live question-and-answer session following the presentation. To join the call, please dial (866) 440-7407 ten minutes prior to the start time and enter conference ID: 8066667. A re-broadcast will be available approximately two hours after the call by dialing (855) 859-2056 and entering conference ID 8066667. The earnings conference call will also be available as an audio cast, which can be accessed on the Company's investor relations page at umpquabank.com.

Forward-Looking StatementsThis 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 the projected impact on our business operations of the COVID-19 global pandemic and future credit losses under CECL. Risks that could cause results to differ from forward-looking statements we make are set forth in our filings with the SEC and include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, and any slowdown in economic growth particularly in the western United States; the effect of the COVID-19 pandemic, including on our credit quality, deferral programs, and business operations, as well as its impact on general economic and financial market conditions; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that exceeds current consensus estimates; our ability to effectively manage problem credits; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company's Board of Directors, and may be subject to regulatory approval or conditions.

Umpqua Holdings Corporation

Consolidated Statements of Operations

(Unaudited)

Quarter Ended % Change

(In Year thousands, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Seq. over except per 2020 2020 2019 2019 2019 QuarterYear share data)

Interest income:

Loans and $235,174$245,993 $262,109$266,111$264,110(4) %(11) %leases

Interest and dividends on investments:

Taxable 9,015 16,605 13,361 12,546 10,287 (46) %(12) %

Exempt from federal 1,520 1,562 1,638 1,727 1,921 (3) %(21) %income tax

Dividends 568 678 579 599 574 (16) %(1) %

Temporary investments and interest403 3,331 4,343 4,204 4,708 (88) %(91) %bearing deposits

Total interest 246,680 268,169 282,030 285,187 281,600 (8) %(12) %income

Interest expense:

Deposits 26,222 40,290 44,380 45,876 43,591 (35) %(40) %

Securities sold under agreement to repurchase 194 395 431 448 403 (51) %(52) %and federal funds purchased

Borrowings 3,839 4,046 5,080 4,238 4,563 (5) %(16) %

Junior subordinated3,922 4,903 5,325 5,652 5,881 (20) %(33) %debentures

Total interest 34,177 49,634 55,216 56,214 54,438 (31) %(37) %expense

Net interest212,503 218,535 226,814 228,973 227,162 (3) %(6) %income

Provision for credit 87,085 118,085 16,252 23,227 19,352 (26) %350 %losses

Non-interest income:

Service charges on 11,831 15,638 16,656 16,627 15,953 (24) %(26) %deposits

Brokerage 3,805 4,015 4,027 4,060 3,980 (5) %(4) %revenue

Residential mortgage 83,877 17,540 34,050 47,000 9,529 378 %780 %banking revenue, net

Gain (loss) on sale of debt 323 (133) 2 - (7,186) (343)%(104)%securities, net

Gain (loss) on equity 240 814 (84) 257 82,607 (71) %(100)%securities, net

Gain on loan and lease 1,074 1,167 4,603 1,762 3,333 (8) %(68) %sales, net

BOLI income 2,116 2,129 2,078 2,067 2,093 (1) %1 %

Other income12,214 (525) 22,417 16,739 11,514 nm 6 %(expense)

Total non-interest115,480 40,645 83,749 88,512 121,823 184 %(5) %income

Non-interest expense:

Salaries and employee 116,676 109,774 108,847 106,819 104,049 6 %12 %benefits

Occupancy and 36,171 37,001 36,513 35,446 36,032 (2) %0 %equipment, net

Intangible 1,246 1,247 1,404 1,405 1,405 0 %(11) %amortization

FDIC 3,971 2,542 2,867 2,587 2,837 56 %40 %assessments

Goodwill - 1,784,936 - - - (100)%nm impairment

Other 23,846 27,158 33,812 37,333 36,092 (12) %(34) %expenses

Total non-interest181,910 1,962,658 183,443 183,590 180,415 (91) %1 %expense

Income (loss) before 58,988 (1,821,563) 110,868 110,668 149,218 (103)%(60) %provision for income taxes

Provision for income 6,062 30,384 27,118 26,166 37,408 (80) %(84) %taxes

Net income $52,926 $(1,851,947)$83,750 $84,502 $111,810(103)%(53) %(loss)



Weighted average 220,210 220,216 220,222 220,285 220,487 0 %0 %basic shares outstanding

Weighted average diluted 220,320 220,216 220,671 220,583 220,719 0 %0 %shares outstanding

Earnings (loss) per $0.24 $(8.41) $0.38 $0.38 $0.51 (103)%(53) %common share - basic

Earnings (loss) per $0.24 $(8.41) $0.38 $0.38 $0.51 (103)%(53) %common share - diluted



nm = not meaningful

Umpqua Holdings Corporation

Consolidated Statements of Income

(Unaudited)

Six Months Ended % Change

Jun 30, Year (In thousands, except per share data) Jun 30, 2020 2019 over Year

Interest income:

Loans and leases $481,167 $522,857(8) %

Interest and dividends on investments:

Taxable 25,620 30,243 (15) %

Exempt from federal income tax 3,082 4,035 (24) %

Dividends 1,246 1,091 14 %

Temporary investments and interest 3,734 5,633 (34) %bearing deposits

Total interest income 514,849 563,859 (9) %

Interest expense:

Deposits 66,512 77,685 (14) %

Securities sold under agreement to 589 1,213 (51) %repurchase and federal funds purchased

Borrowings 7,885 8,246 (4) %

Junior subordinated debentures 8,825 11,868 (26) %

Total interest expense 83,811 99,012 (15) %

Net interest income 431,038 464,847 (7) %

Provision for credit losses 205,170 33,036 521 %

Non-interest income:

Service charges on deposits 27,469 31,231 (12) %

Brokerage revenue 7,820 7,790 0 %

Residential mortgage banking revenue, 101,417 20,760 389 %net

Gain (loss) on sale of debt securities,190 (7,186) (103) %net

Gain on equity securities, net 1,054 83,302 (99) %

Gain on loan and lease sales, net 2,241 4,102 (45) %

BOLI income 4,245 4,261 0 %

Other income 11,689 23,303 (50) %

Total non-interest income 156,125 167,563 (7) %

Non-interest expense:

Salaries and employee benefits 226,450 204,707 11 %

Occupancy and equipment, net 73,172 72,277 1 %

Intangible amortization 2,493 2,809 (11) %

FDIC assessments 6,513 5,779 13 %

Goodwill impairment 1,784,936 - nm

Other expenses 51,004 66,435 (23) %

Total non-interest expense 2,144,568 352,007 509 %

(Loss) income before provision for (1,762,575) 247,367 (813) %income taxes

Provision for income taxes 36,446 61,524 (41) %

Net (loss) income $(1,799,021)$185,843(1,068)%



Weighted average basic shares 220,213 220,427 0 %outstanding

Weighted average diluted shares 220,213 220,692 0 %outstanding

(Loss) earnings per common share - $(8.17) $0.84 (1,073)%basic

(Loss) earnings per common share - $(8.17) $0.84 (1,073)%diluted



nm = not meaningful

Umpqua Holdings Corporation Consolidated Balance Sheets

(Unaudited)

% Change

(In Year thousands, Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Seq. over except per QuarterYear share data)

Assets:

Cash and due $410,769 $406,426 $382,598 $433,620 $342,508 1 % 20 %from banks

Interest bearing cash 1,853,505 1,251,290 980,158 757,824 691,283 48 % 168 %and temporary investments

Investment securities:

Equity and other, at 81,958 80,797 80,165 64,764 66,358 1 % 24 %fair value

Available for sale, at fair2,865,690 2,890,475 2,814,682 2,842,076 2,698,398 (1) % 6 %value

Held to maturity, at 3,143 3,200 3,260 3,320 3,416 (2) % (8) %amortized cost

Loans held for sale, at 605,399 481,541 513,431 355,022 356,645 26 % 70 %fair value

Loans and 22,671,455 21,251,478 21,195,684 21,520,794 20,953,371 7 % 8 %leases

Allowance for credit losses(356,745) (291,420) (157,629) (156,288) (151,069) 22 % 136 %on loans and leases

Net loans and22,314,710 20,960,058 21,038,055 21,364,506 20,802,302 6 % 7 %leases

Restricted equity 54,062 58,062 46,463 54,463 43,063 (7) % 26 %securities

Premises and equipment, 192,041 195,390 201,460 203,391 210,285 (2) % (9) %net

Operating lease 111,487 115,485 110,718 108,187 112,752 (3) % (1) %right-of-use assets

Goodwill 2,715 2,715 1,787,651 1,787,651 1,787,651 0 % (100)%

Other intangible 15,853 17,099 18,346 19,750 21,155 (7) % (25) %assets, net

Residential mortgage servicing 96,356 94,346 115,010 151,383 139,780 2 % (31) %rights, at fair value

Bank owned life 324,873 322,717 320,611 318,533 316,435 1 % 3 %insurance

Other assets 712,687 660,781 434,201 466,365 394,044 8 % 81 %

Total assets $29,645,248 $27,540,382 $28,846,809 $28,930,855 $27,986,075 8 % 6 %

Liabilities:

Deposits $24,844,378 $22,699,375 $22,481,504 $22,434,734 $21,819,013 9 % 14 %

Securities sold under 398,414 346,245 311,308 296,717 308,052 15 % 29 %agreements to repurchase

Borrowings 1,096,559 1,196,597 906,635 1,106,674 821,712 (8) % 33 %

Junior subordinated 232,936 195,521 274,812 267,798 277,028 19 % (16) %debentures, at fair value

Junior subordinated debentures, 88,382 88,439 88,496 88,553 88,610 0 % 0 %at amortized cost

Operating lease 119,885 123,962 119,429 116,924 121,742 (3) % (2) %liabilities

Deferred tax liability, 21,439 51,061 52,928 67,055 57,757 (58)% (63) %net

Other 304,916 331,571 297,782 262,884 263,654 (8) % 16 %liabilities

Total 27,106,909 25,032,771 24,532,894 24,641,339 23,757,568 8 % 14 %liabilities

Shareholders' equity:

Common stock 3,510,145 3,507,680 3,514,000 3,511,493 3,514,391 0 % 0 %

(Accumulated deficit) (1,115,414) (1,168,340) 770,366 733,059 695,003 (5) % (260)%retained earnings

Accumulated other 143,608 168,271 29,549 44,964 19,113 (15)% 651 %comprehensive income

Total shareholders'2,538,339 2,507,611 4,313,915 4,289,516 4,228,507 1 % (40) %equity

Total liabilities and $29,645,248 $27,540,382 $28,846,809 $28,930,855 $27,986,075 8 % 6 %shareholders' equity



Common shares outstanding 220,219 220,175 220,229 220,212 220,499 0 % 0 %at period end

Book value per common $11.53 $11.39 $19.59 $19.48 $19.18 1 % (40) %share

Tangible book value per $11.44 $11.30 $11.39 $11.27 $10.97 1 % 4 %common share

Tangible equity - $2,519,771 $2,487,797 $2,507,918 $2,482,115 $2,419,701 1 % 4 %common

Tangible common equity8.51 %9.04 %9.27 %9.15 %9.24 %(0.53) (0.73) to tangible assets

Umpqua Holdings Corporation

Loan and Lease Portfolio

(Unaudited)

Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 % Change

Seq. Year (Dollars in thousands)Amount Amount Amount Amount Amount Quarterover Year

Loans and leases:

Commercial real estate:

Non-owner occupied $3,589,484 $3,613,420 $3,545,566 $3,495,555 $3,537,084 (1) % 1 %term, net

Owner occupied term, 2,459,954 2,472,187 2,496,088 2,566,299 2,396,674 0 % 3 %net

Multifamily, net 3,466,829 3,464,217 3,514,774 3,479,986 3,341,547 0 % 4 %

Construction & 662,703 667,975 678,740 771,214 732,932 (1) % (10)%development, net

Residential 164,180 187,594 189,010 191,500 199,421 (12)% (18)%development, net

Commercial:

Term, net^ (1) 4,265,092 2,317,573 2,232,817 2,310,759 2,271,346 84 % 88 %

Lines of credit & 940,443 1,208,051 1,212,393 1,254,755 1,280,587 (22)% (27)%other, net

Leases & equipment 1,522,369 1,492,762 1,465,489 1,485,753 1,449,579 2 % 5 %finance, net

Residential:

Mortgage, net 4,056,588 4,193,908 4,215,424 4,245,674 3,995,643 (3) % 2 %

Home equity loans & 1,189,428 1,249,152 1,237,512 1,224,578 1,215,215 (5) % (2) %lines, net

Consumer & other, 354,385 384,639 407,871 494,721 533,343 (8) % (34)%net

Total loans, net of $22,671,455 $21,251,478 $21,195,684 $21,520,794 $20,953,371 7 % 8 %deferred fees and costs



(1) The Bank participates in the Payroll Protection Program ("PPP") to originate SBA loans designated to help businesses maintain their workforce and cover other working capital needs during the COVID-19 pandemic. The Commercial Term loans in the table above include 15,000 PPP loans, totaling $1.9 billion, net of deferred fees and costs.



Loan and leases mix:

Commercial real estate:

Non-owner occupied 16 %17 %17 %16 %17 % term, net

Owner occupied term,11 %12 %12 %12 %11 % net

Multifamily, net 15 %16 %16 %16 %16 %

Construction & 3 %3 %3 %4 %3 % development, net

Residential 1 %1 %1 %1 %1 % development, net

Commercial:

Term, net 19 %11 %10 %11 %11 %

Lines of credit & 4 %5 %6 %6 %6 % other, net

Leases & equipment 7 %7 %7 %7 %7 % finance, net

Residential:

Mortgage, net 18 %20 %20 %20 %19 %

Home equity loans & 5 %6 %6 %5 %6 % lines, net

Consumer & other, 1 %2 %2 %2 %3 % net

Total 100 %100 %100 %100 %100 %

Umpqua Holdings Corporation

Deposits by Type/Core Deposits

(Unaudited)

Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 % Change

Seq. Year (Dollars in thousands) Amount Amount Amount Amount Amount over QuarterYear

Deposits:

Demand, non-interest $9,172,210 $7,169,907 $6,913,375 $7,123,180 $6,771,087 28 % 35 %bearing

Demand, interest bearing 2,813,722 2,482,908 2,524,534 2,406,404 2,355,473 13 % 19 %

Money market 7,262,777 7,082,011 6,930,815 6,646,383 6,789,036 3 % 7 %

Savings 1,730,051 1,486,909 1,471,475 1,469,302 1,446,332 16 % 20 %

Time 3,865,618 4,477,640 4,641,305 4,789,465 4,457,085 (14)% (13)%

Total $24,844,378 $22,699,375 $22,481,504 $22,434,734 $21,819,013 9 % 14 %



Total core deposits^ (1) $22,095,314 $19,434,228 $19,061,058 $18,845,328 $18,529,797 14 % 19 %



Deposit mix:

Demand, non-interest 37 %32 %31 %32 %31 % bearing

Demand, interest bearing 11 %11 %11 %11 %11 %

Money market 29 %31 %31 %30 %31 %

Savings 7 %7 %6 %6 %7 %

Time 16 %19 %21 %21 %20 %

Total 100 %100 %100 %100 %100 %



Number of open accounts:

Demand, non-interest 423,456 416,270 415,254 413,633 409,235 bearing

Demand, interest bearing 74,813 75,514 75,900 76,390 76,686

Money market 59,445 59,203 58,888 58,796 58,158

Savings 161,710 159,870 159,948 160,673 160,708

Time 57,501 62,515 62,952 62,122 60,571

Total 776,925 773,372 772,942 771,614 765,358



Average balance per account:

Demand, non-interest $21.7 $17.2 $16.6 $17.2 $16.5 bearing

Demand, interest bearing 37.6 32.9 33.3 31.5 30.7

Money market 122.2 119.6 117.7 113.0 116.7

Savings 10.7 9.3 9.2 9.1 9.0

Time 67.2 71.6 73.7 77.1 73.6

Total $32.0 $29.4 $29.1 $29.1 $28.5



^(1) Core deposits are defined as total deposits less time deposits greater than $100,000.

Umpqua Holdings Corporation

Credit Quality - Non-performing Assets

(Unaudited)

Quarter Ended % Change

Seq. Year (Dollars in thousands)Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019Quarterover Year

Non-performing assets:

Loans and leases on $32,412 $39,128 $26,244 $31,636 $35,022 (17)% (7) %non-accrual status

Loans and leases past due 90+ days and 42,273 47,185 37,969 35,745 35,700 (10)% 18 %accruing^ (1)

Total non-performing 74,685 86,313 64,213 67,381 70,722 (13)% 6 %loans and leases

Other real estate 2,578 3,020 3,295 4,026 8,423 (15)% (69)%owned

Total non-performing $77,263 $89,333 $67,508 $71,407 $79,145 (14)% (2) %assets



Performing restructured loans and$15,032 $20,541 $18,576 $14,309 $15,267 (27)% (2) %leases

Loans and leases past $41,683 $59,962 $41,882 $44,390 $40,619 (30)% 3 %due 31-89 days

Loans and leases past due 31-89 days to 0.18 %0.28 %0.20 %0.21 %0.19 % total loans and leases

Non-performing loans and leases to total 0.33 %0.41 %0.30 %0.31 %0.34 % loans and leases ^(1)

Non-performing assets 0.26 %0.32 %0.23 %0.25 %0.28 % to total assets^(1)



Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, (1)totaling $2.6 million, $5.3 million, $4.3 million, $5.2 million, and $5.4 million at June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, and June 30, 2019, respectively.

Umpqua Holdings Corporation

Credit Quality - Allowance for Credit Losses

(Unaudited)

Three Month Ended % Change

Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Seq. Year (Dollars in thousands)2020 2020 2019 2019 2019 Quarterover Year

Allowance for credit losses on loans and leases (ACLLL)

Balance, beginning of $291,420 $157,629 $156,288 $151,069 $144,872 85 %101%period

Impact of adoption of - 49,999 - - - (100)%nm CECL

Adjusted balance, 291,420 207,628 156,288 151,069 144,872 40 %101%beginning of period

Provision for credit losses on loans and 81,484 105,502 16,252 23,227 19,352 (23) %321%leases ^(1)

Charge-offs (19,453) (24,455) (18,734) (23,112) (16,707) (20) %16 %

Recoveries 3,294 2,745 3,823 5,104 3,552 20 %(7)%

Net charge-offs (16,159) (21,710) (14,911) (18,008) (13,155) (26) %23 %

Balance, end of $356,745 $291,420 $157,629 $156,288 $151,069 22 %136%period

Reserve for unfunded commitments

Balance, beginning of $20,927 $5,106 $5,085 $4,857 $4,654 310 %350%period

Impact of adoption of - 3,238 - - - (100)%nm CECL

Adjusted balance, 20,927 8,344 5,085 4,857 4,654 151 %350%beginning of period

Provision for credit losses on unfunded 5,441 12,583 21 228 203 (57) %nm commitments ^(1)

Balance, end of period$26,368 $20,927 $5,106 $5,085 $4,857 26 %443%

Total Allowance for $383,113 $312,347 $162,735 $161,373 $155,926 23 %146%credit losses (ACL)



Net charge-offs to average loans and 0.29 %0.41 %0.28 %0.34 %0.26 % leases (annualized)

Recoveries to gross 16.93 %11.22 %20.41 %22.08 %21.26 % charge-offs

ACLLL to loans and 1.57 %1.37 %0.74 %0.73 %0.72 % leases

ACL to loans and 1.69 %1.47 %0.77 %0.75 %0.74 % leases

nm = not meaningful



^(1) The total provision for credit losses as disclosed on the income statement includes an additional $160,000 in provision related to accrued interest on loans deferred due to COVID-19, which is not included in the table above.

Umpqua Holdings Corporation

Credit Quality - Allowance for Credit Losses

(Unaudited)

Six Months Ended % Change

(Dollars in thousands) Jun 30, 2020 Jun 30, 2019 Year over Year

Allowance for credit losses on loans and leases (ACLLL)

Balance, beginning of period $ 157,629 $ 144,871 9 %

Impact of adoption of CECL 49,999 - nm

Adjusted balance, beginning of 207,628 144,871 43 % period

Provision for credit losses on 186,986 33,036 466 % loans and leases^ (1)

Charge-offs (43,908) (33,859) 30 %

Recoveries 6,039 7,021 (14) %

Net charge-offs (37,869) (26,838) 41 %

Balance, end of period $ 356,745 $ 151,069 136 %

Reserve for unfunded commitments

Balance, beginning of period $ 5,106 $ 4,523 13 %

Impact of adoption of CECL 3,238 - nm

Adjusted balance, beginning of 8,344 4,523 84 % period

Provision for credit losses on 18,024 334 nm unfunded commitments ^(1)

Balance, end of period $ 26,368 $ 4,857 443 %

Total Allowance for credit losses$ 383,113 $ 155,926 146 % (ACL)



Net charge-offs to average loans 0.35 % 0.26 % and leases (annualized)

Recoveries to gross charge-offs 13.75 % 20.74 %

nm = not meaningful



^(1) The total provision for credit losses as disclosed on the income statement includes an additional $160,000 in provision related to accrued interest on loans deferred due to COVID-19, not included in the table above.

Umpqua Holdings Corporation

Selected Ratios

(Unaudited)

Quarter Ended % Change

Jun 30,Mar 31, Dec 31,Sep 30,Jun 30,Seq. Year 2020 2020 2019 2019 2019 Quarter over Year

Average Rates:

Yield on loans held 3.77 %4.20 %4.25 %4.82 %5.03 %(0.43) (1.26) for sale

Yield on loans and 4.11 %4.58 %4.80 %4.93 %5.07 %(0.47) (0.96) leases

Yield on taxable 1.38 %2.50 %2.05 %1.99 %1.62 %(1.12) (0.24) investments

Yield on tax-exempt 3.17 %3.14 %3.23 %3.30 %3.42 %0.03 (0.25) investments ^(1)

Yield on interest bearing cash0.10 %1.23 %1.65 %2.20 %2.41 %(1.13) (2.31) and temporary investments

Total yield on earning 3.59 %4.19 %4.36 %4.52 %4.59 %(0.60) (1.00) assets ^(1)



Cost of interest 0.67 %1.03 %1.13 %1.19 %1.16 %(0.36) (0.49) bearing deposits

Cost of securities sold under agreements

to repurchase and fed 0.21 %0.47 %0.56 %0.57 %0.55 %(0.26) (0.34) funds purchased

Cost of 1.33 %1.79 %1.96 %1.95 %2.03 %(0.46) (0.70) borrowings

Cost of junior 5.55 %5.45 %5.92 %6.14 %6.17 %0.10 (0.62) subordinated debentures

Total cost of interest 0.78 %1.15 %1.27 %1.33 %1.31 %(0.37) (0.53) bearing liabilities



Net interest2.81 %3.04 %3.09 %3.19 %3.28 %(0.23) (0.47) spread ^(1)

Net interest3.09 %3.41 %3.51 %3.63 %3.70 %(0.32) (0.61) margin ^(1)



Performance Ratios:

Return on average 0.73 %(25.82) %1.15 %1.18 %1.62 %26.55 (0.89) assets

Return on average 0.73 %(27.53) %1.22 %1.26 %1.73 %28.26 (1.00) tangible assets

Return on average 8.46 %(174.94)%7.70 %7.87 %10.80%183.40 (2.34) common equity

Return on average tangible 8.53 %(301.30)%13.24%13.67%19.14%309.83 (10.61)common equity

Efficiency ratio - 55.40%756.29 %59.00%57.76%51.64%(700.89)3.76 Consolidated

Efficiency 54.17%752.92 %57.56%56.22%50.16%(698.75)4.01 ratio - Bank



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

Umpqua Holdings Corporation

Selected Ratios

(Unaudited)

Six Months Ended % Change

Jun 30, Jun 30, Year over Year 2020 2019

Average Rates:

Yield on loans held for sale 3.94 %5.41 %(1.47)

Yield on loans and leases 4.33 %5.07 %(0.74)

Yield on taxable investments 1.94 %2.30 %(0.36)

Yield on tax-exempt investments ^(1) 3.15 %3.51 %(0.36)

Yield on interest bearing cash and 0.56 %2.42 %(1.86) temporary investments

Total yield on earning assets ^(1) 3.88 %4.69 %(0.81)



Cost of interest bearing deposits 0.85 %1.07 %(0.22)

Cost of securities sold under agreements

to repurchase and fed funds purchased 0.33 %0.74 %(0.41)

Cost of borrowings 1.53 %1.96 %(0.43)

Cost of junior subordinated debentures 5.49 %6.20 %(0.71)

Total cost of interest bearing 0.96 %1.23 %(0.27) liabilities



Net interest spread ^(1) 2.92 %3.46 %(0.54)

Net interest margin^ (1) 3.25 %3.86 %(0.61)



Performance Ratios:

Return on average assets (12.49) %1.37 %(13.86)

Return on average tangible assets (12.89) %1.47 %(14.36)

Return on average common equity (106.99)%9.09 %(116.08)

Return on average tangible common (145.65)%16.21 %(161.86) equity

Efficiency ratio - Consolidated 364.82 %55.58 %309.24

Efficiency ratio - Bank 363.13 %53.94 %309.19





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

Umpqua Holdings Corporation Average Balances

(Unaudited)

Quarter Ended % Change

Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Seq. Year (Dollars in thousands) 2020 2020 2019 2019 2019 Quarterover Year

Temporary investments and $1,563,753$1,084,854$1,045,975$759,416 $783,703 44 %100 %interest bearing cash

Investment securities, 2,777,154 2,760,461 2,719,089 2,648,092 2,683,472 1 %3 %taxable

Investment securities, 235,934 241,105 244,895 252,765 271,633 (2) %(13)%tax-exempt

Loans held for sale 577,773 406,434 415,169 328,155 264,445 42 %118 %

Loans and leases 22,428,142 21,196,989 21,379,239 21,170,91520,605,9636 %9 %

Total interest earning 27,582,756 25,689,843 25,804,367 25,159,34324,609,2167 %12 %assets

Goodwill and other 19,253 1,785,608 1,806,791 1,808,191 1,809,583 (99) %(99)%intangible assets, net

Total assets 29,066,775 28,844,773 28,981,387 28,356,98227,709,3101 %5 %



Non-interest bearing demand8,484,684 6,880,457 7,037,320 6,880,093 6,556,090 23 %29 %deposits

Interest bearing deposits 15,803,595 15,695,309 15,550,483 15,289,46415,069,1981 %5 %

Total deposits 24,288,279 22,575,766 22,587,803 22,169,55721,625,2888 %12 %

Interest bearing 17,625,888 17,301,712 17,237,770 16,827,91716,646,9492 %6 %liabilities



Shareholders' equity - 2,514,754 4,257,711 4,317,277 4,260,810 4,153,175 (41) %(39)%common

Tangible common equity ^(1)2,495,501 2,472,103 2,510,486 2,452,619 2,343,592 1 %6 %

Umpqua Holdings Corporation Average Balances

(Unaudited)

Six Months Ended % Change

(Dollars in thousands) Jun 30, 2020Jun 30, 2019Year over Year

Temporary investments and $1,325,627$470,266 182 %interest bearing cash

Investment securities, taxable 2,768,853 2,720,353 2 %

Investment securities, tax-exempt238,505 279,456 (15) %

Loans held for sale 492,577 226,263 118 %

Loans and leases 21,815,966 20,498,075 6 %

Total interest earning assets 26,641,528 24,194,413 10 %

Goodwill and other intangible 897,551 1,810,291 (50) %assets, net

Total assets 28,956,388 27,262,945 6 %



Non-interest bearing demand 7,687,002 6,530,992 18 %deposits

Interest bearing deposits 15,749,751 14,688,875 7 %

Total deposits 23,436,753 21,219,867 10 %

Interest bearing liabilities 17,464,696 16,254,933 7 %



Shareholders' equity - common 3,381,417 4,122,346 (18) %

Tangible common equity ^(1) 2,483,866 2,312,055 7 %





^(1) Average tangible common equity is a non-GAAP financial measure. Average tangible common equity is calculated as average common shareholders' equity less average goodwill and other intangible assets, net (excluding MSRs).

Umpqua Holdings Corporation Average Rates and Balances

(Unaudited)

Quarter Ended

June 30, 2020 March 31, 2020 June 30, 2019

Interest Average Interest Average Interest Average (Dollars in thousands) Average Income Yields Average Income Yields Average Income Yields Balance or or RatesBalance or or RatesBalance or or Rates Expense Expense Expense

INTEREST-EARNING ASSETS:

Loans held for sale $577,773 $5,443 3.77 %$406,434 $4,264 4.20 %$264,445 $3,326 5.03 %

Loans and leases (1) 22,428,142 229,731 4.11 %21,196,989 241,729 4.58 %20,605,963 260,784 5.07 %

Taxable securities 2,777,154 9,583 1.38 %2,760,461 17,283 2.50 %2,683,472 10,861 1.62 %

Non-taxable securities (2) 235,934 1,868 3.17 %241,105 1,894 3.14 %271,633 2,325 3.42 %

Temporary investments and 1,563,753 403 0.10 %1,084,854 3,331 1.23 %783,703 4,708 2.41 %interest-bearing cash

Total interest-earning 27,582,756 $247,0283.59 %25,689,843 $268,5014.19 %24,609,216 $282,0044.59 %assets

Other assets 1,484,019 3,154,930 3,100,094

Total assets $29,066,775 $28,844,773 $27,709,310

INTEREST-BEARING LIABILITIES:

Interest-bearing demand $2,649,331 $1,148 0.17 %$2,471,556 $3,543 0.58 %$2,332,535 $2,798 0.48 %deposits

Money market deposits 7,275,041 4,037 0.22 %7,107,626 11,759 0.66 %6,747,290 15,351 0.91 %

Savings deposits 1,628,276 198 0.05 %1,485,171 241 0.07 %1,454,908 410 0.11 %

Time deposits 4,250,947 20,839 1.97 %4,630,956 24,747 2.15 %4,534,465 25,032 2.21 %

Total interest-bearing 15,803,595 26,222 0.67 %15,695,309 40,290 1.03 %15,069,198 43,591 1.16 %deposits

Repurchase agreements and 375,098 194 0.21 %337,796 395 0.47 %292,057 403 0.55 %federal funds purchased

Borrowings 1,163,065 3,839 1.33 %906,624 4,046 1.79 %903,164 4,563 2.03 %

Junior subordinated 284,130 3,922 5.55 %361,983 4,903 5.45 %382,530 5,881 6.17 %debentures

Total interest-bearing 17,625,888 $34,177 0.78 %17,301,712 $49,634 1.15 %16,646,949 $54,438 1.31 %liabilities

Non-interest-bearing 8,484,684 6,880,457 6,556,090 deposits

Other liabilities 441,449 404,893 353,096

Total liabilities 26,552,021 24,587,062 23,556,135

Common equity 2,514,754 4,257,711 4,153,175

Total liabilities and $29,066,775 $28,844,773 $27,709,310 shareholders' equity

NET INTEREST INCOME $212,851 $218,867 $227,566

NET INTEREST SPREAD 2.81 % 3.04 % 3.28 %

NET INTEREST INCOME TO EARNING ASSETS OR NET 3.09 % 3.41 % 3.70 %INTEREST MARGIN (1), (2)



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

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 (2)income of approximately $348,000 for the three months ended June 30, 2020, as compared to $332,000 for March 31, 2020 and $404,000 for June 30, 2019.

Umpqua Holdings Corporation Average Rates and Balances

(Unaudited)

(dollars in thousands)Six Months Ended

June 30, 2020 June 30, 2019

Average Interest Average Average Interest Average Balance Income or Yields orBalance Income or Yields or Expense Rates Expense Rates

INTEREST-EARNING ASSETS:

Loans held for sale $492,577 $9,707 3.94 %$226,263 $6,116 5.41 %

Loans and leases (1) 21,815,966 471,460 4.33 %20,498,075 516,741 5.07 %

Taxable securities 2,768,853 26,866 1.94 %2,720,353 31,334 2.30 %

Non-taxable securities238,505 3,763 3.15 %279,456 4,905 3.51 %(2)

Temporary investments and interest-bearing 1,325,627 3,734 0.56 %470,266 5,633 2.42 %cash

Total interest-earning26,641,528 $515,5303.88 %24,194,413 $564,7294.69 %assets

Other assets 2,314,860 3,068,532

Total assets $28,956,388 $27,262,945

INTEREST-BEARING LIABILITIES:

Interest-bearing $2,560,935 $4,691 0.37 %$2,326,162 $5,438 0.47 %demand deposits

Money market deposits 7,191,796 15,796 0.44 %6,570,488 26,368 0.81 %

Savings deposits 1,557,118 439 0.06 %1,471,626 680 0.09 %

Time deposits 4,439,902 45,586 2.06 %4,320,599 45,199 2.11 %

Total interest-bearing15,749,751 66,512 0.85 %14,688,875 77,685 1.07 %deposits

Repurchase agreements and federal funds 356,550 589 0.33 %331,477 1,213 0.74 %purchased

Borrowings 1,035,553 7,885 1.53 %848,783 8,246 1.96 %

Junior subordinated 322,842 8,825 5.49 %385,798 11,868 6.20 %debentures

Total interest-bearing17,464,696 $83,811 0.96 %16,254,933 $99,012 1.23 %liabilities

Non-interest-bearing 7,687,002 6,530,992 deposits

Other liabilities 423,273 354,674

Total liabilities 25,574,971 23,140,599

Common equity 3,381,417 4,122,346

Total liabilities and $28,956,388 $27,262,945 shareholders' equity

NET INTEREST INCOME $431,719 $465,717

NET INTEREST SPREAD 2.92 % 3.46 %

NET INTEREST INCOME TO EARNING ASSETS OR NET 3.25 % 3.86 %INTEREST MARGIN (1), (2)





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

Tax-exempt income has been adjusted to a tax equivalent basis at a 21% (2)tax rate. The amount of such adjustment was an addition to recorded income of approximately $681,000 for the six months ended June 30, 2020 as compared to $870,000 for the same period in 2019.

Umpqua Holdings Corporation Residential Mortgage Banking Activity

(Unaudited)

Quarter Ended % Change

Seq. Year (Dollars in thousands)Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 over Year Quarter

Residential mortgage banking revenue:

Origination and sale $86,781 $39,347 $35,438 $31,432 $23,151 121 %275 %

Servicing 8,533 8,880 8,981 11,358 11,036 (4) %(23) %

Change in fair value of MSR asset:

Changes due to collection/realization(5,042) (5,329) (5,237) (6,835) (6,905) (5) %(27) % of expected cash flows over time

Changes due to valuation inputs or (6,395) (25,358) (5,132) 11,045 (17,753) (75) %(64) % assumptions

Total $83,877 $17,540 $34,050 $47,000 $9,529 378 %780 %



Closed loan volume:

Portfolio $276,247 $252,329 $335,511 $611,022 $481,878 9 %(43) %

For-sale 1,826,095 1,148,184 1,060,016 844,442 698,150 59 %162 %

Total $2,102,342 $1,400,513 $1,395,527 $1,455,464 $1,180,028 50 %78 %



Gain on sale margin:

Based on for-sale 4.75 %3.43 %3.34 %3.72 %3.32 %1.32 1.43 volume



Residential mortgage servicing rights:

Balance, beginning of $94,346 $115,010 $151,383 $139,780 $158,946 (18) %(41) % period

Additions for new MSR 13,447 10,023 8,397 7,393 5,492 34 %145 % capitalized

Sale of MSR assets - - (34,401) - - 0 %0 %

Changes in fair value of MSR asset:

Changes due to collection/realization(5,042) (5,329) (5,237) (6,835) (6,905) (5) %(27) % of expected cash flows over time

Changes due to valuation inputs or (6,395) (25,358) (5,132) 11,045 (17,753) (75) %(64) % assumptions

Balance, end of period$96,356 $94,346 $115,010 $151,383 $139,780 2 %(31) %



Residential mortgage loans serviced for $12,746,125 $12,533,045 $12,276,943 $15,707,519 $15,796,102 2 %(19) % others

MSR as % of serviced 0.76 %0.75 %0.94 %0.96 %0.88 %0.01 (0.12) portfolio

Umpqua Holdings Corporation Residential Mortgage Banking Activity

(Unaudited)

Six Months Ended % Change

Year (Dollars in thousands) Jun 30, 2020 Jun 30, 2019 over Year

Residential mortgage banking revenue:

Origination and sale $126,128 $37,524 236 %

Servicing 17,413 21,860 (20) %

Change in fair value of MSR asset:

Changes due to collection/realization (10,371) (13,336) (22) %of expected cash flows over time

Changes due to valuation inputs or (31,753) (25,288) 26 %assumptions

Total $101,417 $20,760 389 %



Closed loan volume:

Portfolio $528,576 $800,490 (34) %

For-sale 2,974,279 1,185,240 151 %

Total $3,502,855 $1,985,730 76 %



Gain on sale margin:

Based on for-sale volume 4.24 %3.17 %1.07



Residential mortgage servicing rights:

Balance, beginning of period $115,010 $169,025 (32) %

Additions for new MSR capitalized 23,470 9,379 150 %

Changes in fair value of MSR asset:

Changes due to collection/realization (10,371) (13,336) (22) %of expected cash flows over time

Changes due to valuation inputs or (31,753) (25,288) 26 %assumptions

Balance, end of period $96,356 $139,780 (31) %



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SOURCE Umpqua Holdings Corporation