PORTLAND, Ore. — —
Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc., today announced first quarter 2014 net earnings available to common shareholders of $18.7 million, or $0.17 per diluted common share, as compared to net earnings available to common shareholders of $25.1 million, or $0.22 per diluted common share, for the fourth quarter of 2013, and $23.2 million, or $0.21 per diluted common share, for the same period in the prior year.
Operating earnings1, defined as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax; bargain purchase gains on acquisitions, net of tax; merger related expenses, net of tax; and goodwill impairment, were $24.0 million, or $0.21 per diluted common share, for the first quarter of 2014, as compared to operating earnings of $27.9 million, or $0.25 per diluted common share, for the fourth quarter of 2013, and $24.4 million, or $0.22 per diluted common share, for the same period in the prior year.
First quarter 2014 financial highlights:
- Operating earnings1 of $24.0 million, as compared to $27.9 million in the prior quarter:
- Mortgage banking revenue of $10.4 million, down from $16.0 million in the prior quarter due primarily to a $4.1 million change in the fair value of mortgage servicing rights (first quarter 2014 decrease in fair value of $1.0 million versus fourth quarter
- 2013 increase in fair value of $3.1 million);
- Net interest income of $107.8 million, down from $110.1 million in the prior quarter resulting primarily from two fewer days in the first quarter;
- Net interest margin of 4.28% and adjusted net interest margin of 4.12%, both relatively flat from the prior quarter;
- Provision for non-covered loan and lease losses increased by $1.6 million from the prior quarter, related to growth in the Financial Pacific Leasing ("FinPac") portfolio;
- Excluding merger-related expenses, non-interest expense decreased by $3.2 million from the prior quarter due primarily to lower marketing expenses and workout-related expenses;
- Continued to generate organic loan growth and gather core deposits:
- Non-covered loans and leases grew $97 million, offset by $41 million of loan sales for the quarter for a net growth of $57 million;
- Total core deposits grew by $153 million, or 1.9%, from the prior quarter;
- Credit quality remained strong:
- Non-covered, non-performing assets were $62.2 million, representing 0.53% of total assets;
- Allowance for non-covered credit losses to non-covered loans and leases increased to 1.19% from 1.18% in the prior quarter;
- Disciplined capital management:
- Tangible common equity ratio of 8.67%;
- Total risk-based capital of 14.69%, and Tier 1 common to risk weighted asset ratio of 11.01%;
- Declared a dividend of $0.15 per common share, representing an 88% payout ratio for the quarter;
"We reported a solid quarter of financial and operating performance, with continued loan and deposit growth, disciplined expense management, and strong capital and credit quality, in light of a softer mortgage origination market," said Ray Davis, president and CEO of Umpqua Holdings Corporation. "We are pleased to close the Sterling Financial Corporation merger. Our integration program is on target, and we look forward to being recognized as the West Coast's largest community bank."
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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 use of technology, and distinctive banking solutions. Umpqua Bank has locations between San Francisco, California, and Seattle, Washington, along the Oregon and Northern California Coast, Central Oregon and Northern Nevada, and also owns Financial Pacific Leasing, a national business-essential commercial equipment leasing company. 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 Private Bank serves high net worth individuals and non-profits, providing trust and investment services. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit www.umpquaholdingscorp.com.