Fourth quarter 2017 net earnings of $82.8 million, or $0.38 per common share
Full-year 2017 net earnings of $246.9 million, or $1.12 per common share
Annual loan and lease growth of $1.6 billion, or 9%, and deposit growth of $927.3 million, or 5%

PORTLAND, Ore., Jan. 23, 2018 (GLOBE NEWSWIRE) -- Umpqua Holdings Corporation (NASDAQ:UMPQ) (the “Company”) reported net earnings available to common shareholders of $82.8 million for the fourth quarter of 2017, compared to $61.3 million for the third quarter of 2017 and $69.2 million for the fourth quarter of 2016.  Earnings per diluted common share were $0.38 for the fourth quarter of 2017, compared to $0.28 for the third quarter of 2017 and $0.31 for the fourth quarter of 2016.

For the twelve months ended December 31, 2017, the Company reported net earnings available to common shareholders of $246.9 million, or $1.12 per diluted common share, up from $232.8 million, or $1.05 per diluted common share, for the twelve months ended December 31, 2016.

“2017 was a pivotal year for Umpqua.  We delivered solid financial performance and strong balance sheet growth, while developing and making good progress on Umpqua Next Gen, our long-term strategic initiative to deliver enhanced profitability while modernizing and evolving the institution to implement our human digital banking strategy,” said Cort O'Haver, president and CEO of Umpqua Holdings Corporation.  “The organization’s discipline and hard work last year has positioned us well for 2018 and beyond.  Building on that foundation, and in light of recent tax reform, Umpqua is planning to accelerate strategic investments in our associates, communities, and digital and technology projects to enhance the customer experience, which we believe will enhance shareholder value.”

Notable items that impacted the fourth quarter 2017 financial results included:

• $26.9 million net benefit to the provision for income taxes related to a revaluation of the net deferred tax liability and amortization of tax credit investments associated with the passage of the Tax Cuts and Jobs Act ("Tax Act"), partially offset by the non-deductibility of certain executive compensation.
• In light of the Tax Act, the Company took the opportunity to make additional investments, including expenses of $3.2 million related to employee profit sharing and $2.0 million in donations to the Umpqua Bank Charitable Foundation.
• $2.0 million gain related to the fair value change of the MSR asset, compared to a negative adjustment of $9.2 million in the prior quarter and a $16.5 million gain in the same period of the prior year.
• $0.2 million gain related to the fair value change of the debt capital market swap derivatives, compared to a negative adjustment of $0.2 million in the prior quarter and a gain of $4.6 million in the same period of the prior year.
• $3.1 million of exit or disposal costs, related primarily to planned store consolidations, compared to $1.6 million in the prior quarter and $1.2 million in the same period of the prior year.
• $10.0 million net loss on junior subordinated debentures carried at fair value, compared to a loss of $1.6 million in both the prior quarter and the same period of the prior year.  The incremental net loss this quarter, relative to prior quarter levels, reflected the change in fair value for continued tightening of market credit spreads.

Full-Year 2017 Highlights (comparisons are to prior year):

• Gross loan and lease growth of $1.6 billion, or 9%;
• Deposit growth of $927.3 million, or 5%;
• Net interest income increased by $15.3 million, driven primarily by higher average balances of loans and leases, partially offset by lower net interest margin and a lower level of accretion of the credit discount;
• Provision for loan and lease losses increased by $5.6 million primarily due to loan and lease growth, along with a $2.6 million increase in net charge-offs;
• Non-interest income decreased by $21.1 million, driven primarily by lower residential mortgage banking revenue and the higher net loss on junior subordinated debentures carried at fair value (see notable items above), partially offset by higher other income;
• Non-interest expense increased by $10.7 million, driven primarily by higher salaries and benefits expense; and
• Paid dividends of $0.68 per common share, repurchased 325,000 shares of stock, and grew tangible book value¹ by 5%, or $0.48 per share.

1 "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

Fourth Quarter 2017 Highlights (comparisons are to prior quarter):

• Gross loan and lease growth of $402.4 million, or 9% annualized;
• Deposit growth of $96.4 million, or 2% annualized;
• Net interest income was flat, as the growth in the loan and lease portfolio was offset by lower accretion of the credit discount;
• Provision for loan and lease losses increased by $0.9 million;
• Non-interest income decreased by $3.4 million, driven primarily by the $8.4 million increase in net loss on junior subordinated debentures carried at fair value (see notable items above) and lower gains from portfolio loan sales, partially offset by higher mortgage banking revenue attributable to a linked quarter increase in the fair value change of the MSR asset;
• Non-interest expense increased by $4.4 million, reflecting the additional investments resulting from tax reform (see notable items above), partially offset by lower merger-related expense;
• Non-performing assets to total assets increased to 0.37%, driven primarily by two larger non-performing loans;
• Estimated total risk-based capital ratio of 14.0% and estimated Tier 1 common to risk weighted assets ratio of 11.0%;
• Declared quarterly cash dividend of $0.18 per common share; and
• Repurchased 100,000 shares of common stock for $2.1 million.

Balance Sheet
Total consolidated assets were $25.7 billion as of December 31, 2017, compared to $25.7 billion as of September 30, 2017 and $24.8 billion as of December 31, 2016.  Including secured off-balance sheet lines of credit, total available liquidity was $9.8 billion as of December 31, 2017, representing 38% of total assets and 49% of total deposits.

Gross loans and leases were $19.1 billion as of December 31, 2017, an increase of $402.4 million from $18.7 billion as of September 30, 2017.  This increase reflects balanced growth across the Company's commercial, equipment finance, multifamily and residential real estate portfolios.  During the fourth quarter of 2017, the Company sold $29.8 million of leases and equipment finance loans. 

Total deposits were $19.9 billion as of December 31, 2017, an increase of $96.4 million from $19.9 billion as of September 30, 2017.  This increase was primarily attributable to growth in money market accounts, partially offset by a decline in time deposits.

Net Interest Income
Net interest income was $220.6 million for the fourth quarter of 2017, up $0.2 million from the prior quarter.  This increase was driven primarily by higher average interest-earning assets resulting from the strong growth in loans and leases during the quarter.  This was partially offset by a lower level of accretion of the credit discount on loans acquired from Sterling Financial Corporation (“Sterling”), which decreased by $3.9 million from the prior quarter level.

The Company’s net interest margin was 3.88% for the fourth quarter of 2017, down 6 basis points from 3.94% for the third quarter of 2017.  The linked quarter decrease was driven primarily by the lower level of accretion on purchased credit impaired loans.

Credit Quality
The allowance for loan and lease losses was $140.6 million, or 0.74% of loans and leases, as of December 31, 2017.  During the fourth quarter of 2017, the Company recorded $4.1 million of accretion related to the credit discount on acquired loans from Sterling, compared to $8.0 million in the prior quarter.  As of December 31, 2017, the Sterling purchased non-credit impaired loans had approximately $26.2 million of remaining credit discount that will accrete into interest income over the life of the loans, and the Sterling purchased credit impaired loan pools had approximately $25.4 million of remaining total discount.

The provision for loan and lease losses was $12.9 million for the fourth quarter of 2017, up $0.9 million from the prior quarter level.  Net charge-offs increased by 5 basis points from the prior quarter to 0.25% of average loans and leases for the fourth quarter of 2017 (annualized).  As of December 31, 2017, non-performing assets increased to 0.37% of total assets, from 0.30% as of September 30, 2017 and from 0.25% as of December 31, 2016.  This increase was driven primarily by two larger loans which moved to non-performing status during the quarter.

Non-interest Income
Non-interest income was $72.0 million for the fourth quarter of 2017, down $3.4 million from the prior quarter. The current quarter's non-interest income included gains of $2.0 million and $0.2 million related to fair value changes of the MSR asset and the debt capital market swap derivatives, respectively.  This compares to fair value losses of $9.2 million and $0.2 million for the MSR asset and debt capital market swap derivatives, respectively, during the third quarter of 2017.  The net loss on junior subordinated debentures carried at fair value was $10.0 million for the fourth quarter of 2017, compared to a net loss of $1.6 million in the prior quarter, reflecting the change in fair value related to the continued tightening of market credit spreads.

Net revenue from the origination and sale of residential mortgages was $29.9 million for the fourth quarter of 2017, down $2.9 million from the prior quarter.  For-sale mortgage origination volume decreased by 5% from the prior quarter, while the home lending gain on sale margin decreased by 17 basis points to 3.51% for the fourth quarter of 2017.  Of the current quarter’s mortgage production, 67% related to purchase activity, compared to 74% for the prior quarter and 63% for the same period in the prior year.

Gain on loan sales decreased by $4.3 million from the prior quarter, reflecting a lower level of portfolio loan sales compared to the prior quarter.

Non-interest Expense
Non-interest expense was $192.8 million for the fourth quarter of 2017, up $4.4 million from the prior quarter level.   This increase over the prior quarter level was primarily driven by additional investments made by the Company as a result of the Tax Act, including a $3.2 million increase in salaries and benefits expense related to employee profit sharing and a $2.0 million increase in other expense related to donations to the Umpqua Bank Charitable Foundation.  These were partially offset by lower merger-related expenses.

Capital
As of December 31, 2017, the Company’s tangible book value per share¹ increased to $9.98 from $9.83 in the prior quarter.  During the fourth quarter of 2017, the Company repurchased 100,000 shares of common stock for $2.1 million.

The Company’s estimated total risk-based capital ratio was 14.0% and its estimated Tier 1 common equity to risk weighted assets ratio was 11.0% as of December 31, 2017.  The Company remains above current “well-capitalized” regulatory minimums.  The regulatory capital ratios as of December 31, 2017 are estimates, pending completion and filing of the Company’s regulatory reports.

1 "Non-GAAP" financial measure. More information regarding this measurement and a reconciliation to the comparable GAAP measurement is provided under the heading Non-GAAP Financial Measures below.

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

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

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

(Dollars in thousands, except per share data)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016
Total shareholders' equity		$	4,015,763			$	3,985,260			$	3,958,845			$	3,931,150			$	3,916,795
Subtract:
Goodwill		1,787,651				1,787,651				1,787,651				1,787,651				1,787,651
Other intangible assets, net		30,130				31,819				33,508				35,197				36,886
Tangible common shareholders' equity		$	2,197,982			$	2,165,790			$	2,137,686			$	2,108,302			$	2,092,258
Total assets		$	25,742,416			$	25,695,663			$	25,257,784			$	24,861,458			$	24,813,119
Subtract:
Goodwill		1,787,651				1,787,651				1,787,651				1,787,651				1,787,651
Other intangible assets, net		30,130				31,819				33,508				35,197				36,886
Tangible assets		$	23,924,635			$	23,876,193			$	23,436,625			$	23,038,610			$	22,988,582
Common shares outstanding at period end		220,149				220,225				220,205				220,349				220,177
Common equity ratio		15.60		%		15.51		%		15.67		%		15.81		%		15.79		%
Tangible common equity ratio		9.19		%		9.07		%		9.12		%		9.15		%		9.10		%
Book value per common share		$	18.24			$	18.10			$	17.98			$	17.84			$	17.79
Tangible book value per common share		$	9.98			$	9.83			$	9.71			$	9.57			$	9.50

About Umpqua Holdings Corporation
Umpqua Holdings Corporation (NASDAQ:UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada.  Umpqua Holdings also owns a retail brokerage subsidiary, Umpqua Investments, Inc., which has locations in Umpqua Bank stores and in dedicated offices in Oregon, and Pivotus Ventures, an innovation studio headquartered in Silicon Valley focused on creating key technologies and business models that transform finance and commerce.  Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.

Earnings Conference Call Information
The Company will host its fourth quarter 2017 earnings conference call on Wednesday, January 24, 2018, 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 fourth quarter and full-year 2017 financial results.  There will be a live question-and-answer session following the presentation.  To join the call, please dial (877) 440-5803 ten minutes prior to the start time and enter conference ID: 8419276.  A re-broadcast will be available approximately two hours after the call by dialing (888) 203-1112 and entering conference ID 8419276.  The earnings conference call will also be available as an audiocast, which can be accessed on the Company’s investor relations page at 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. In this press release we make forward-looking statements about the timing and impact of digital and technology initiatives and the credit discount accretion related to loans acquired from Sterling.  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, prolonged low interest rate environment; the effect of interest rate increases on the cost of deposits; unanticipated weakness in loan demand or loan pricing; deterioration in the economy; lack of strategic growth opportunities or our failure to execute on those opportunities; our ability to effectively manage problem credits; our ability to successfully implement efficiency initiatives; our ability to successfully develop and market new products and technology; and changes in laws or regulations.

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
		Quarter Ended																				% Change
(In thousands, except per share data)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Interest income:
Loans and leases		$	223,206			$	223,321			$	212,998			$	205,996			$	209,812			0	%		6	%
Interest and dividends on investments:
Taxable		14,857				13,979				15,220				13,931				10,630				6	%		40	%
Exempt from federal income tax		2,121				2,125				2,237				2,242				2,229				0	%		(5	)%
Dividends		386				357				360				388				336				8	%		15	%
Temporary investments and interest bearing deposits		1,565				934				324				1,557				1,696				68	%		(8	)%
Total interest income		242,135				240,716				231,139				224,114				224,703				1	%		8	%
Interest expense:
Deposits		13,241				12,052				10,641				9,648				9,288				10	%		43	%
Repurchase agreements and federal funds purchased		43				81				321				30				32				(47	)%		34	%
Term debt		3,496				3,491				3,662				3,510				3,413				0	%		2	%
Junior subordinated debentures		4,734				4,628				4,437				4,201				4,174				2	%		13	%
Total interest expense		21,514				20,252				19,061				17,389				16,907				6	%		27	%
Net interest income		220,621				220,464				212,078				206,725				207,796				0	%		6	%
Provision for loan and lease losses		12,928				11,997				10,657				11,672				13,171				8	%		(2	)%
Non-interest income:
Service charges on deposits		15,413				15,849				15,478				14,729				15,323				(3	)%		1	%
Brokerage revenue		4,226				3,832				3,903				4,122				4,230				10	%		0	%
Residential mortgage banking revenue, net		42,118				33,430				33,894				26,834				58,448				26	%		(28	)%
(Loss) gain on investment securities, net		—				(6		)		35				(2		)		—				(100	)%		0	%
Gain on loan sales		3,688				7,969				3,310				1,754				4,060				(54	)%		(9	)%
Loss on junior subordinated debentures carried at fair value		(10,010		)		(1,590		)		(1,572		)		(1,555		)		(1,589		)		530	%		530	%
BOLI income		2,015				2,041				2,089				2,069				2,107				(1	)%		(4	)%
Other income		14,595				13,877				13,982				12,274				16,041				5	%		(9	)%
Total non-interest income		72,045				75,402				71,119				60,225				98,620				(4	)%		(27	)%
Non-interest expense:
Salaries and employee benefits		114,414				108,732				108,561				106,473				105,406				5	%		9	%
Occupancy and equipment, net		37,269				37,648				36,955				38,673				37,618				(1	)%		(1	)%
Intangible amortization		1,689				1,689				1,689				1,689				1,867				0	%		(10	)%
FDIC assessments		2,075				4,405				4,447				4,087				3,985				(53	)%		(48	)%
(Gain) loss on other real estate owned, net		(83		)		(99		)		(457		)		82				(197		)		(16	)%		(58	)%
Merger related expenses		—				6,664				1,640				1,020				3,218				(100	)%		(100	)%
Other expense		37,422				29,315				31,186				30,690				31,571				28	%		19	%
Total non-interest expense		192,786				188,354				184,021				182,714				183,468				2	%		5	%
Income before provision for income taxes		86,952				95,515				88,519				72,564				109,777				(9	)%		(21	)%
Provision for income taxes		4,105				34,182				31,707				26,561				40,502				(88	)%		(90	)%
Net income		82,847				61,333				56,812				46,003				69,275				35	%		20	%
Dividends and undistributed earnings allocated to participating securities		16				14				14				12				33				14	%		(52	)%
Net earnings available to common shareholders		$	82,831			$	61,319			$	56,798			$	45,991			$	69,242			35	%		20	%
Weighted average basic shares outstanding		220,194				220,215				220,310				220,287				220,190				0	%		0	%
Weighted average diluted shares outstanding		220,873				220,755				220,753				220,779				220,756				0	%		0	%
Earnings per common share – basic		$	0.38			$	0.28			$	0.26			$	0.21			$	0.31			36	%		23	%
Earnings per common share – diluted		$	0.38			$	0.28			$	0.26			$	0.21			$	0.31			36	%		23	%

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
		Year Ended								% Change
(In thousands, except per share data)		Dec 31, 2017				Dec 31, 2016				Year over Year
Interest income:
Loans and leases		$	865,521			$	850,067			2	%
Interest and dividends on investments:
Taxable		57,987				46,427				25	%
Exempt from federal income tax		8,725				8,828				(1	)%
Dividends		1,491				1,399				7	%
Temporary investments and interest bearing deposits		4,380				3,918				12	%
Total interest income		938,104				910,639				3	%
Interest expense:
Deposits		45,582				35,240				29	%
Repurchase agreements and federal funds purchased		475				132				260	%
Term debt		14,159				15,005				(6	)%
Junior subordinated debentures		18,000				15,674				15	%
Total interest expense		78,216				66,051				18	%
Net interest income		859,888				844,588				2	%
Provision for loan and lease losses		47,254				41,674				13	%
Non-interest income:
Service charges on deposits		61,469				61,268				0	%
Brokerage revenue		16,083				17,033				(6	)%
Residential mortgage banking revenue, net		136,276				157,863				(14	)%
Gain on investment securities, net		27				858				(97	)%
Gain on loan sales		16,721				13,356				25	%
Loss on junior subordinated debentures carried at fair value		(14,727		)		(6,323		)		133	%
BOLI income		8,214				8,514				(4	)%
Other income		54,728				47,371				16	%
Total non-interest income		278,791				299,940				(7	)%
Non-interest expense:
Salaries and employee benefits		438,180				424,830				3	%
Occupancy and equipment, net		150,545				151,944				(1	)%
Intangible amortization		6,756				8,622				(22	)%
FDIC assessments		15,014				15,508				(3	)%
Gain on other real estate owned, net		(557		)		(279		)		100	%
Merger related expenses		9,324				15,313				(39	)%
Goodwill impairment		—				142				nm
Other expense		128,613				121,075				6	%
Total non-interest expense		747,875				737,155				1	%
Income before provision for income taxes		343,550				365,699				(6	)%
Provision for income taxes		96,555				132,759				(27	)%
Net income		246,995				232,940				6	%
Dividends and undistributed earnings allocated to participating securities		56				125				(55	)%
Net earnings available to common shareholders		$	246,939			$	232,815			6	%
Weighted average basic shares outstanding		220,251				220,282				0	%
Weighted average diluted shares outstanding		220,836				220,908				0	%
Earnings per common share – basic		$	1.12			$	1.06			6	%
Earnings per common share – diluted		$	1.12			$	1.05			7	%
nm = not meaningful

Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
																					% Change
(In thousands, except per share data)	Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Assets:
Cash and due from banks	$	330,856			$	304,760			$	320,027			$	262,655			$	331,994			9	%		0	%
Interest bearing cash and temporary investments	303,424				540,806				295,937				421,991				1,117,438				(44	)%		(73	)%
Investment securities:
Trading, at fair value	12,255				11,919				11,467				11,241				10,964				3	%		12	%
Available for sale, at fair value	3,065,769				3,047,358				3,132,566				3,243,408				2,701,220				1	%		13	%
Held to maturity, at amortized cost	3,803				3,905				4,017				4,121				4,216				(3	)%		(10	)%
Loans held for sale	259,518				417,470				451,350				372,073				387,318				(38	)%		(33	)%
Loans and leases	19,080,184				18,677,762				18,321,142				17,829,638				17,508,663				2	%		9	%
Allowance for loan and lease losses	(140,608		)		(139,503		)		(136,867		)		(136,292		)		(133,984		)		1	%		5	%
Loans and leases, net	18,939,576				18,538,259				18,184,275				17,693,346				17,374,679				2	%		9	%
Restricted equity securities	43,508				45,509				45,511				45,522				45,528				(4	)%		(4	)%
Premises and equipment, net	269,182				276,316				288,853				293,133				303,882				(3	)%		(11	)%
Goodwill	1,787,651				1,787,651				1,787,651				1,787,651				1,787,651				0	%		0	%
Other intangible assets, net	30,130				31,819				33,508				35,197				36,886				(5	)%		(18	)%
Residential mortgage servicing rights, at fair value	153,151				141,225				141,832				142,344				142,973				8	%		7	%
Other real estate owned	11,734				4,160				4,804				6,518				6,738				182	%		74	%
Bank owned life insurance	306,864				305,572				303,894				301,777				299,673				0	%		2	%
Deferred tax assets, net	—				—				—				8,464				34,322				0	%		(100	)%
Other assets	224,995				238,934				252,092				232,017				227,637				(6	)%		(1	)%
Total assets	$	25,742,416			$	25,695,663			$	25,257,784			$	24,861,458			$	24,813,119			0	%		4	%
Liabilities:
Deposits	$	19,948,300			$	19,851,910			$	19,459,950			$	19,167,293			$	19,020,985			0	%		5	%
Securities sold under agreements to repurchase	294,299				321,542				330,189				304,280				352,948				(8	)%		(17	)%
Term debt	802,357				852,306				852,219				852,308				852,397				(6	)%		(6	)%
Junior subordinated debentures, at fair value	277,155				266,875				265,423				263,605				262,209				4	%		6	%
Junior subordinated debentures, at amortized cost	100,609				100,690				100,770				100,851				100,931				0	%		0	%
Deferred tax liability, net	37,503				51,423				34,296				—				—				(27	)%		100	%
Other liabilities	266,430				265,657				256,092				241,971				306,854				0	%		(13	)%
Total liabilities	21,726,653				21,710,403				21,298,939				20,930,308				20,896,324				0	%		4	%
Shareholders' equity:
Common stock	3,517,258				3,516,558				3,514,094				3,516,537				3,515,299				0	%		0	%
Retained earnings	519,067				476,226				454,802				433,417				422,839				9	%		23	%
Accumulated other comprehensive loss (1)	(20,562		)		(7,524		)		(10,051		)		(18,804		)		(21,343		)		173	%		(4	)%
Total shareholders' equity	4,015,763				3,985,260				3,958,845				3,931,150				3,916,795				1	%		3	%
Total liabilities and shareholders' equity	$	25,742,416			$	25,695,663			$	25,257,784			$	24,861,458			$	24,813,119			0	%		4	%
Common shares outstanding at period end	220,149				220,225				220,205				220,349				220,177				0	%		0	%
Book value per common share	$	18.24			$	18.10			$	17.98			$	17.84			$	17.79			1	%		3	%
Tangible book value per common share	$	9.98			$	9.83			$	9.71			$	9.57			$	9.50			2	%		5	%
Tangible equity - common	$	2,197,982			$	2,165,790			$	2,137,686			$	2,108,302			$	2,092,258			1	%		5	%
Tangible common equity to tangible assets	9.19		%		9.07		%		9.12		%		9.15		%		9.10		%		0.12			0.09

(1) Preliminary. Pending FASB guidance regarding the Financial Reporting Effects of the Tax Cuts and Jobs Act.

Umpqua Holdings Corporation
Loan & Lease Portfolio
(Unaudited)
(Dollars in thousands)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				% Change
		Amount				Amount				Amount				Amount				Amount				Seq. Quarter			Year over Year
Loans & leases:
Commercial real estate:
Non-owner occupied term, net		$	3,491,137			$	3,475,243			$	3,401,679			$	3,410,914			$	3,330,442			0	%		5	%
Owner occupied term, net		2,488,251				2,467,995				2,593,395				2,584,183				2,599,055				1	%		(4	)%
Multifamily, net		3,087,792				2,993,203				2,964,851				2,885,164				2,858,956				3	%		8	%
Commercial construction, net		540,707				521,666				464,690				471,007				463,625				4	%		17	%
Residential development, net		165,865				186,400				165,956				145,479				142,984				(11	)%		16	%
Commercial:
Term, net		1,944,987				1,819,664				1,686,597				1,620,311				1,508,780				7	%		29	%
Lines of credit & other, net		1,166,173				1,134,045				1,153,409				1,114,160				1,116,259				3	%		4	%
Leases & equipment finance, net		1,167,503				1,137,732				1,082,651				1,000,376				950,588				3	%		23	%
Residential real estate:
Mortgage, net		3,192,185				3,094,361				3,021,331				2,916,924				2,887,971				3	%		11	%
Home equity lines & loans, net		1,103,297				1,079,931				1,056,848				1,015,138				1,011,844				2	%		9	%
Consumer & other, net		732,287				767,522				729,735				665,982				638,159				(5	)%		15	%
Total, net of deferred fees and costs		$	19,080,184			$	18,677,762			$	18,321,142			$	17,829,638			$	17,508,663			2	%		9	%
Loan & leases mix:
Commercial real estate:
Non-owner occupied term, net		18		%		19		%		19		%		19		%		19		%
Owner occupied term, net		13		%		13		%		14		%		14		%		15		%
Multifamily, net		16		%		16		%		16		%		16		%		16		%
Commercial construction, net		3		%		3		%		3		%		3		%		3		%
Residential development, net		1		%		1		%		1		%		1		%		1		%
Commercial:
Term, net		10		%		10		%		9		%		9		%		9		%
Lines of credit & other, net		6		%		6		%		6		%		6		%		6		%
Leases & equipment finance, net		6		%		6		%		6		%		6		%		5		%
Residential real estate:
Mortgage, net		17		%		16		%		16		%		16		%		16		%
Home equity lines & loans, net		6		%		6		%		6		%		6		%		6		%
Consumer & other, net		4		%		4		%		4		%		4		%		4		%
Total		100		%		100		%		100		%		100		%		100		%

Umpqua Holdings Corporation
Deposits by Type/Core Deposits
(Unaudited)
(Dollars in thousands)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				% Change
		Amount				Amount				Amount				Amount				Amount				Seq. Quarter			Year over Year
Deposits:
Demand, non-interest bearing		$	6,505,628			$	6,571,471			$	6,112,480			$	6,021,585			$	5,861,469			(1	)%		11	%
Demand, interest bearing		2,384,133				2,394,240				2,371,386				2,327,226				2,296,532				0	%		4	%
Money market		7,037,891				6,700,261				6,755,707				6,784,442				6,932,717				5	%		2	%
Savings		1,446,860				1,444,801				1,427,677				1,400,330				1,325,757				0	%		9	%
Time		2,573,788				2,741,137				2,792,700				2,633,710				2,604,510				(6	)%		(1	)%
Total		$	19,948,300			$	19,851,910			$	19,459,950			$	19,167,293			$	19,020,985			0	%		5	%
Total core deposits (1)		$	18,263,802			$	18,005,730			$	17,561,956			$	17,427,832			$	17,318,003			1	%		5	%
Deposit mix:
Demand, non-interest bearing		33		%		33		%		32		%		31		%		31		%
Demand, interest bearing		12		%		12		%		12		%		12		%		12		%
Money market		35		%		34		%		35		%		36		%		36		%
Savings		7		%		7		%		7		%		7		%		7		%
Time		13		%		14		%		14		%		14		%		14		%
Total		100		%		100		%		100		%		100		%		100		%
Number of open accounts:
Demand, non-interest bearing		397,427				394,755				389,767				385,859				384,040
Demand, interest bearing		78,853				79,899				80,594				81,570				82,520
Money market		55,175				55,659				55,795				55,903				56,031
Savings		162,453				162,556				161,369				160,323				159,080
Time		46,861				47,129				47,339				47,365				47,705
Total		740,769				739,998				734,864				731,020				729,376
Average balance per account:
Demand, non-interest bearing		$	16.4			$	16.6			$	15.7			$	15.6			$	15.3
Demand, interest bearing		30.2				30.0				29.4				28.5				27.8
Money market		127.6				120.4				121.1				121.4				123.7
Savings		8.9				8.9				8.8				8.7				8.3
Time		54.9				58.2				59.0				55.6				54.6
Total		$	26.9			$	26.8			$	26.5			$	26.2			$	26.1

(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
(Dollars in thousands)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Non-performing assets:
Loans and leases on non-accrual status		$	51,465			$	44,573			$	26,566			$	28,915			$	27,765			15	%		85	%
Loans and leases past due 90+ days and accruing (1)		30,994				29,073				27,252				23,421				28,369				7	%		9	%
Total non-performing loans and leases		82,459				73,646				53,818				52,336				56,134				12	%		47	%
Other real estate owned		11,734				4,160				4,804				6,518				6,738				182	%		74	%
Total non-preforming assets		$	94,193			$	77,806			$	58,622			$	58,854			$	62,872			21	%		50	%
Performing restructured loans and leases		$	32,157			$	45,813			$	52,861			$	43,029			$	40,667			(30	)%		(21	)%
Loans and leases past due 31-89 days		$	43,870			$	32,251			$	31,153			$	49,530			$	30,425			36	%		44	%
Loans and leases past due 31-89 days to total loans and leases		0.23		%		0.17		%		0.17		%		0.28		%		0.17		%
Non-performing loans and leases to total loans and leases (1)		0.43		%		0.39		%		0.29		%		0.29		%		0.32		%
Non-performing assets to total assets (1)		0.37		%		0.30		%		0.23		%		0.24		%		0.25		%

(1) Excludes non-performing mortgage loans guaranteed by Ginnie Mae, which Umpqua has the unilateral right to repurchase but has not done so, totaling $12.4 million, $12.3 million, $16.3 million, $5.3 million, and $10.9 million at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively.

Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
		Quarter Ended																				% Change
(Dollars in thousands)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Allowance for loan and lease losses:
Balance beginning of period		$	139,503			$	136,867			$	136,292			$	133,984			$	133,692
Provision for loan and lease losses		12,928				11,997				10,657				11,672				13,171				8	%		(2	)%
Charge-offs		(15,751		)		(13,222		)		(13,944		)		(13,002		)		(16,303		)		19	%		(3	)%
Recoveries		3,928				3,861				3,862				3,638				3,424				2	%		15	%
Net charge-offs		(11,823		)		(9,361		)		(10,082		)		(9,364		)		(12,879		)		26	%		(8	)%
Total allowance for loan and lease losses		140,608				139,503				136,867				136,292				133,984				1	%		5	%
Reserve for unfunded commitments		3,963				3,932				3,816				3,495				3,611				1	%		10	%
Total allowance for credit losses		$	144,571			$	143,435			$	140,683			$	139,787			$	137,595			1	%		5	%
Net charge-offs to average loans and leases (annualized)		0.25		%		0.20		%		0.22		%		0.22		%		0.29		%
Recoveries to gross charge-offs		24.94		%		29.20		%		27.70		%		27.98		%		21.00		%
Allowance for loan and lease losses to loans and leases		0.74		%		0.75		%		0.75		%		0.76		%		0.77		%
Allowance for credit losses to loans and leases		0.76		%		0.77		%		0.77		%		0.78		%		0.79		%

Umpqua Holdings Corporation
Credit Quality – Allowance for Loan and Lease Losses
(Unaudited)
		Year Ended								% Change
(Dollars in thousands)		Dec 31, 2017				Dec 31, 2016				Year over Year
Allowance for credit losses:
Balance beginning of period		$	133,984			$	130,322
Provision for loan and lease losses		47,254				41,674				13	%
Charge-offs		(55,919		)		(49,923		)		12	%
Recoveries		15,289				11,911				28	%
Net charge-offs		(40,630		)		(38,012		)		7	%
Total allowance for loan and lease losses		140,608				133,984				5	%
Reserve for unfunded commitments		3,963				3,611				10	%
Total allowance for credit losses		$	144,571			$	137,595			5	%
Net charge-offs to average loans and leases		0.22		%		0.22		%
Recoveries to gross charge-offs		27.34		%		23.86		%

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
		Quarter Ended															% Change
		Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Dec 31, 2016			Seq. Quarter			Year over Year
Average Rates:
Yield on loans and leases		4.65	%		4.70	%		4.67	%		4.65	%		4.70	%		(0.05	)		(0.05	)
Yield on loans held for sale		3.99	%		3.89	%		3.26	%		3.86	%		3.79	%		0.10			0.20
Yield on taxable investments		2.17	%		2.00	%		2.07	%		2.10	%		1.85	%		0.17			0.32
Yield on tax-exempt investments (1)		4.49	%		4.59	%		4.64	%		4.76	%		4.72	%		(0.10	)		(0.23	)
Yield on temporary investments and interest bearing cash		1.22	%		1.47	%		1.03	%		0.79	%		0.56	%		(0.25	)		0.66
Total yield on earning assets (1)		4.26	%		4.30	%		4.26	%		4.18	%		4.14	%		(0.04	)		0.12
Cost of interest bearing deposits		0.40	%		0.36	%		0.33	%		0.30	%		0.28	%		0.04			0.12
Cost of securities sold under agreements
to repurchase and fed funds purchased		0.06	%		0.10	%		0.32	%		0.04	%		0.04	%		(0.04	)		0.02
Cost of term debt		1.67	%		1.63	%		1.72	%		1.67	%		1.53	%		0.04			0.14
Cost of junior subordinated debentures		5.11	%		5.02	%		4.88	%		4.70	%		4.59	%		0.09			0.52
Total cost of interest bearing liabilities		0.58	%		0.55	%		0.52	%		0.48	%		0.46	%		0.03			0.12
Net interest spread (1)		3.68	%		3.75	%		3.74	%		3.70	%		3.68	%		(0.07	)		—
Net interest margin (1)		3.88	%		3.94	%		3.91	%		3.85	%		3.83	%		(0.06	)		0.05
Performance Ratios:
Return on average assets		1.28	%		0.96	%		0.92	%		0.75	%		1.11	%		0.32			0.17
Return on average tangible assets		1.38	%		1.04	%		0.99	%		0.81	%		1.20	%		0.34			0.18
Return on average common equity		8.22	%		6.10	%		5.76	%		4.74	%		7.04	%		2.12			1.18
Return on average tangible common equity		15.08	%		11.23	%		10.67	%		8.83	%		13.19	%		3.85			1.89
Efficiency ratio – Consolidated		65.63	%		63.43	%		64.71	%		68.15	%		59.65	%		2.20			5.98
Efficiency ratio – Bank		61.76	%		61.42	%		62.45	%		65.75	%		57.96	%		0.34			3.80

(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
		Year Ended						% Change
		Dec 31, 2017			Dec 31, 2016			Year over Year
Average Rates:
Yield on loans and leases		4.67	%		4.83	%		(0.16	)
Yield on loans held for sale		3.75	%		3.84	%		(0.09	)
Yield on taxable investments		2.09	%		2.07	%		0.02
Yield on tax-exempt investments (1)		4.62	%		4.71	%		(0.09	)
Yield on temporary investments and interest bearing cash		1.04	%		0.53	%		0.51
Total yield on earning assets (1)		4.25	%		4.36	%		(0.11	)
Cost of interest bearing deposits		0.35	%		0.28	%		0.07
Cost of securities sold under agreements
to repurchase and fed funds purchased		0.14	%		0.04	%		0.10
Cost of term debt		1.67	%		1.67	%		—
Cost of junior subordinated debentures		4.93	%		4.37	%		0.56
Total cost of interest bearing liabilities		0.53	%		0.46	%		0.07
Net interest spread (1)		3.72	%		3.90	%		(0.18	)
Net interest margin (1)		3.90	%		4.04	%		(0.14	)
Performance Ratios:
Return on average assets		0.98	%		0.97	%		0.01
Return on average tangible assets		1.06	%		1.04	%		0.02
Return on average common equity		6.22	%		5.97	%		0.25
Return on average tangible common equity		11.49	%		11.25	%		0.24
Efficiency ratio – Consolidated		65.42	%		64.15	%		1.27
Efficiency ratio – Bank		62.77	%		62.35	%		0.42

 (1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.

Umpqua Holdings Corporation
Average Balances
(Unaudited)
	Quarter Ended																				% Change
(Dollars in thousands)	Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Temporary investments and interest bearing cash	$	509,187			$	253,015			$	125,886			$	804,354			$	1,194,904			101	%		(57	)%
Investment securities, taxable	2,804,530				2,867,292				3,008,079				2,723,576				2,373,652				(2	)%		18	%
Investment securities, tax-exempt	286,345				281,139				292,553				286,444				287,359				2	%		0	%
Loans held for sale	370,564				420,282				392,183				351,570				482,028				(12	)%		(23	)%
Loans and leases	18,765,251				18,537,827				18,024,651				17,598,314				17,386,385				1	%		8	%
Total interest earning assets	22,735,877				22,359,555				21,843,352				21,764,258				21,724,328				2	%		5	%
Goodwill and other intangible assets, net	1,818,730				1,820,394				1,822,032				1,823,799				1,825,491				0	%		0	%
Total assets	25,661,576				25,311,994				24,792,869				24,730,285				24,740,986				1	%		4	%
Non-interest bearing demand deposits	6,611,493				6,354,591				5,951,670				5,883,924				5,939,223				4	%		11	%
Interest bearing deposits	13,281,502				13,155,462				13,037,064				13,119,736				13,026,614				1	%		2	%
Total deposits	19,892,995				19,510,053				18,988,734				19,003,660				18,965,837				2	%		5	%
Interest bearing liabilities	14,790,883				14,705,842				14,659,650				14,661,558				14,606,120				1	%		1	%
Shareholders’ equity - common	3,998,619				3,989,868				3,956,777				3,936,340				3,914,624				0	%		2	%
Tangible common equity (1)	2,179,889				2,166,474				2,134,745				2,112,541				2,089,133				1	%		4	%

Umpqua Holdings Corporation
Average Balances
(Unaudited)
		Year Ended								% Change
(Dollars in thousands)		Dec 31, 2017				Dec 31, 2016				Year over Year
Temporary investments and interest bearing cash		$	421,836			$	736,854			(43	)%
Investment securities, taxable		2,851,136				2,314,062				23	%
Investment securities, tax-exempt		286,605				284,780				1	%
Loans held for sale		383,802				416,724				(8	)%
Loans and leases		18,235,547				17,258,081				6	%
Total interest earning assets		22,178,926				21,010,501				6	%
Goodwill and other intangible assets, net		1,821,223				1,828,575				0	%
Total assets		25,127,247				24,121,462				4	%
Non-interest bearing demand deposits		6,202,835				5,616,585				10	%
Interest bearing deposits		13,148,903				12,730,866				3	%
Total deposits		19,351,738				18,347,451				5	%
Interest bearing liabilities		14,704,841				14,320,838				3	%
Shareholders’ equity - common		3,969,869				3,898,599				2	%
Tangible common equity (1)		2,148,646				2,070,024				4	%

(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
Residential Mortgage Banking Activity
(unaudited)
		Quarter Ended																				% Change
(Dollars in thousands)		Dec 31, 2017				Sep 30, 2017				Jun 30, 2017				Mar 31, 2017				Dec 31, 2016				Seq. Quarter			Year over Year
Residential mortgage servicing rights:
Residential mortgage loans serviced for others		$	15,336,597			$	15,007,942			$	14,797,242			$	14,541,171			$	14,327,368			2	%		7	%
MSR asset, at fair value		153,151				141,225				141,832				142,344				142,973				8	%		7	%
MSR as % of serviced portfolio		1.00		%		0.94		%		0.96		%		0.98		%		1.00		%
Residential mortgage banking revenue:
Origination and sale		$	29,864			$	32,784			$	32,385			$	24,647			$	32,386			(9	)%		(8	)%
Servicing		10,287				9,879				9,839				9,858				9,597				4	%		7	%
Change in fair value of MSR asset		1,967				(9,233		)		(8,330		)		(7,671		)		16,465				(121	)%		(88	)%
Total		$	42,118			$	33,430			$	33,894			$	26,834			$	58,448			26	%		(28	)%
Closed loan volume:
Closed loan volume - portfolio		$	265,718			$	336,362			$	312,022			$	245,334			$	250,000			(21	)%		6	%
Closed loan volume - for-sale		850,453				891,063				918,200				754,715				1,061,327				(5	)%		(20	)%
Closed loan volume - total		$	1,116,171			$	1,227,425			$	1,230,222			$	1,000,049			$	1,311,327			(9	)%		(15	)%
Gain on sale margin:
Based on for-sale volume		3.51		%		3.68		%		3.53		%		3.27		%		3.05		%		(0.17	)		0.46
		Year Ended								% Change
		Dec 31, 2017				Dec 31, 2016				Year over Year
Residential mortgage banking revenue:
Origination and sale		$	119,680			$	148,509			(19		)%
Servicing		39,863				35,280				13		%
Change in fair value of MSR asset		(23,267		)		(25,926		)		(10		)%
Total		$	136,276			$	157,863			(14		)%
Closed loan volume:
Closed loan volume - portfolio		$	1,159,436			$	1,254,492			(8		)%
Closed loan volume - for-sale		3,414,431				3,990,278				(14		)%
Closed loan volume - total		$	4,573,867			$	5,244,770			(13		)%
Gain on sale margin:
Based on for-sale volume		3.51		%		3.72		%		(0.21		)

Contacts:

Ron Farnsworth	Bradley Howes
EVP/Chief Financial Officer	SVP/Director of Investor Relations
Umpqua Holdings Corporation	Umpqua Holdings Corporation
503-727-4108	503-727-4226
ronfarnsworth@umpquabank.com	bradhowes@umpquabank.com

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