EXHIBIT 99.1

                                  RISK FACTORS

      The following summarizes certain risks which management believes are
specific to our business. This should not be viewed as including all risks.

MERGER WITH HUMBOLDT BANCORP

      On July 9, 2004, Humboldt Bancorp merged with and into Umpqua Holdings and
on July 10, 2004, Humboldt Bank merged with and into Umpqua Bank. The merger is
expected to generate after-tax cost savings and expense reductions of
approximately 23% of Humboldt's projected 2004 non-interest expense when fully
phased-in. The expense reductions are intended to be achieved by eliminating
duplicative technology, operations, outside services, redundant staff, facility
consolidations and purchasing efficiencies. The combined company may fail to
realize some or all or the anticipated cost savings and other benefits of the
transaction. See Management's Discussion and Analysis of Financial Condition and
Results of Operations - "Non-interest Expense."

UMPQUA IS PURSUING AN AGGRESSIVE GROWTH STRATEGY WHICH MAY PLACE HEAVY DEMANDS
ON ITS MANAGEMENT RESOURCES.

      Umpqua is a dynamic organization that is one of the fastest-growing
community financial services organizations in the United States. We merged with
VRB Bancorp in December 2000, increasing our assets from approximately $435
million to $785 million; acquired Linn-Benton Bank and merged with Independent
Financial Network, Inc. in December 2001, to add approximately $550 million in
assets; and merged with Centennial Bancorp in November 2002 to add approximately
$800 million in assets. In July 2004, we merged with Humboldt Bancorp and we
continue to explore other merger and acquisition opportunities. We expect that a
substantial amount of management's attention and effort will be directed at
deriving the benefits and efficiencies expected from past and future mergers. We
have announced our intent to open new stores in Oregon, Washington and
California, to continue our growth strategy. If we pursue our strategy too
aggressively, or if factors beyond management's control divert attention away
from our integration plans, management may become over-taxed and we might be
unable to realize some or all of the anticipated benefits. Moreover, the
combined Company is dependent on the efforts of key personnel to achieve the
synergies associated with our acquisitions. The loss of one or more of our key
persons could have a material adverse effect upon our ability to achieve the
anticipated benefits.

THE REMODELING OF OUR BRANCHES MAY NOT BE COMPLETED SMOOTHLY OR WITHIN BUDGET,
WHICH COULD RESULT IN REDUCED EARNINGS.

      Umpqua Bank has transformed itself from a traditional community bank into
a community-oriented financial services retailer through a series of mergers and
acquisitions in the past few years. In pursuing this strategy, we have remodeled
many of the bank branches to resemble retail stores that include distinct
physical areas or boutiques such as a "serious about service center," an
"investment opportunity center" and "a computer cafe." Remodeling involves
significant expenses, disrupts banking activities during the remodeling period,
and presents a new look and feel to the banking services and products being
offered. There is a risk that remodeling costs will exceed forecasted budgets
and that there may be delays in completing the remodels, which could cause
confusion and disruption in the business of those branches.

INVOLVEMENT IN NON-BANK BUSINESSES MAY INVOLVE UNIQUE RISKS.



      We have a licensed retail broker-dealer subsidiary, Strand, Atkinson,
Williams & York, Inc. Retail brokerage operations present special risks not
borne by community banks. For example, the brokerage industry is subject to
fluctuations in the stock market that may have a significant adverse impact on
transaction fees, customer activity and investment portfolio gains and losses.
Likewise, additional or modified regulations may affect our banking, investment
banking and brokerage operations. A decline in fees and commissions or losses
suffered in the investment portfolio could adversely affect the subsidiary's
contribution to the income of the holding company, and might increase the
subsidiary's capital needs. Strand Atkinson is subject to claim arbitration risk
arising from customers who claim their investments were not suitable or that
their portfolios were too actively traded. These risks increase when the market,
as a whole, declines. The risks associated with retail brokerage may not be
supported by the income generated by those operations. As we continue to grow,
we may acquire other financial services companies whose successful integration
is not assured and may present additional management challenges and new risks to
us. See Management's Discussion and Analysis of Financial Condition and Results
of Operations - "Non-interest Income."

THE MAJORITY OF UMPQUA BANK'S ASSETS ARE LOANS, WHICH IF NOT PAID WOULD RESULT
IN LOSSES TO THE COMPANY.

      Umpqua Bank, like other lenders, is subject to credit risk, which is the
risk of losing principal and/or interest due to borrowers' failure to repay
loans in accordance with their terms. Although we have established underwriting
and documentation criteria and most loans are secured by collateral, a downturn
in the economy or the real estate market in our market areas or a rapid increase
in interest rates could have a negative effect on collateral values and
borrowers' ability to repay. To the extent loans are not serviced by borrowers,
the loans are placed on non-accrual, thereby reducing interest income. To the
extent loan charge-offs exceed expectations, additional amounts must be added to
the allowance for credit losses, which reduces income.

      Although management believes that our allowance for loan losses and
reserve for unfunded commitments at September 30, 2004 is adequate, no assurance
can be given that an additional provision for credit losses will not be
required. See Management's Discussion and Analysis of Financial Condition and
Results of Operations - "Allowance for Loan Losses and Unfunded Commitments,"
Provision for Loan Losses" and "Asset Quality."

A RAPID CHANGE IN INTEREST RATES COULD MAKE IT DIFFICULT TO MAINTAIN OUR CURRENT
INTEREST INCOME SPREAD AND COULD RESULT IN REDUCED EARNINGS.

      Our earnings are largely derived from net interest income, which is
interest income and fees earned on loans and investments, less interest paid on
deposits and other borrowings. Interest rates are highly sensitive to many
factors that are beyond the control of our management, including general
economic conditions and the policies of various governmental and regulatory
authorities. As interest rates change, net interest income is affected. With
fixed rate assets (such as fixed rate loans) and liabilities (such as
certificates of deposit), the effect on net interest income depends on the
maturity of the asset or liability. Although we strive to minimize interest rate
risk through asset/liability management policies, from time to time maturities
are not balanced. For example, the rapid drop in short term interest rates
during 2002 made it difficult to reduce interest expense as rapidly as interest
income fell on loans contractually tied to prime rate. More recently, in
mid-2003, the rapid increase in long-term home mortgage rates caused a reduction
in refinance activity and the sale of some previously "locked" loans at a loss.
Any rapid increase in interest rates in the future could result in interest
expense increasing faster than interest income because of fixed rate loans and
longer-term investments. Further, substantially higher interest rates generally
reduce loan demand and may result in lower loan totals. An unanticipated rapid
decrease or increase in interest rates could have an adverse effect on the
spreads between the interest rates earned on assets and the rates of interest
paid on liabilities, and therefore on the level of net interest income. See
Management's Discussion and Analysis of Financial Condition and Results of
Operations - "Asset/Liability Management."



THE VOLATILITY OF OUR MORTGAGE BANKING BUSINESS CAN ADVERSELY AFFECT EARNINGS.

      Changes in interest rates greatly affect the mortgage banking business.
One of the principal risks in this area is prepayment of mortgages and their
effect on mortgage servicing rights ("MSR"). We can mitigate this risk by
purchasing financial instruments, such as fixed rate investment securities and
interest rate contracts, which tend to increase in value when long-term interest
rates decline. The success of this strategy, however, depends on management's
judgments regarding the amount, type and mix of MSR risk management instruments
that we believe are appropriate to manage the changes in the fair value of our
MSR asset. If these decisions and strategies are not successful, our net income
could be adversely affected. See Management's Discussion and Analysis of
Financial Condition and Results of Operations - "Mortgage Servicing Rights."

OUR BANKING AND BROKERAGE OPERATIONS ARE SUBJECT TO EXTENSIVE GOVERNMENT
REGULATIONS, WHICH HAS INCREASED AND CAN BE EXPECTED TO BECOME MORE BURDENSOME,
INCREASE OUR COSTS AND/OR MAKE US LESS COMPETITIVE.

      We and our subsidiaries are subject to extensive regulation under federal
and state laws. These laws and regulations are intended primarily to protect
customers, depositors and the deposit insurance fund, rather than shareholders.
Umpqua Bank is a state chartered commercial bank subject to regulations and
supervision by the Administrator of the Division of Finance and Corporate
Securities of the State of Oregon, the Washington Department of Financial
Institutions, the California Department of Financial Institutions and by the
Federal Deposit Insurance Corporation, which insures bank deposits. Strand,
Atkinson, Williams & York, Inc. is subject to extensive regulation by the SEC
and the National Association of Securities Dealers, Inc. We are subject to
regulation and supervision by the Board of Governors of the Federal Reserve
System, the SEC and the Nasdaq. Federal and state regulations place banks at a
competitive disadvantage compared to less regulated competitors such as finance
companies, credit unions, mortgage banking companies and leasing companies.
Although we have been able to compete effectively in our market area in the
past, there can be no assurance that we will be able to continue to do so.
Further, future changes in federal and state banking regulations could adversely
affect our operating results and ability to continue to compete effectively.

THE FINANCIAL SERVICES INDUSTRY IS HIGHLY COMPETITIVE.

      We face significant competition in attracting and retaining deposits and
making loans as well as in providing other financial services throughout our
market area. We face pricing competition for loans and deposits. We also face
competition with respect to customer convenience, product lines, accessibility
of service and service capabilities. Our most direct competition comes from
other banks, brokerages, mortgage companies and savings institutions. We also
face competition from credit unions, government-sponsored enterprises, mutual
fund companies, insurance companies and other non-bank businesses.