8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report: October 19, 2006
(Date of earliest event reported)

Umpqua Holdings Corporation
(Exact Name of Registrant as Specified in Its Charter)

OREGON	000-25597	93-1261319
(State or Other Jurisdiction of	(Commission File	(I.R.S. Employer
Incorporation or Organization)	Number)	Identification Number)

One SW Columbia Street, Suite 1200
Portland, Oregon 97258
(address of Principal Executive Offices)(Zip Code)

(503) 727-4100
(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR
	230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
	240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
	Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
	Act (17 CFR 240.13e-4(c))

Item 2.02   Results of Operations and Financial Condition.

        On October 19, 2006, Umpqua Holding Corporation issued a press release announcing financial results for the third quarter of 2006. A copy of the press release is attached as Exhibit 99.1.

Item 9.01   Financial Statements and Exhibits.

(a)	Not applicable.
(b)	Not applicable.
(c)	Exhibits.
	99.1 Earnings Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this reported to be signed on its behalf of the undersigned hereunto duly authorized.

	UMPQUA HOLDINGS CORPORATION
	(Registrant)
Dated: October 19, 2006	By: /s/ Kenneth E. Roberts
	Kenneth E. Roberts
	Assistant Secretary

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE Contacts:
Ray Davis
President/CEO
Umpqua Holdings Corporation
503-727-4101
raydavis@umpquabank.com


Dan Sullivan
 EVP/CFO
Umpqua Holdings Corporation
503-727-4103
dansullivan@umpquabank.com

UMPQUA HOLDINGS REPORTS STRONG THIRD QUARTER
OPERATING EARNINGS OF $0.42 PER DILUTED SHARE
Western Sierra system integration complete

PORTLAND, Ore. – October 19, 2006 – Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced third quarter 2006 operating earnings of $24.3 million, or $0.42 per diluted share, compared to $19.9 million, or $0.44 per diluted share, for the third quarter of 2005. For the year to date, operating earnings were $62.5 million, or $1.23 per diluted share, compared to $51.1 million, or $1.14 per diluted share for the same period a year ago, an increase of 8% per diluted share. Operating earnings exclude merger related expenses, net of tax.

Including merger expense, net income for the third quarter of 2006 was $22.9 million, or $0.39 per diluted share, compared to $19.9 million, or $0.44 per diluted share for the third quarter of 2005. For the year to date, net income was $59.9 million, or $1.17 per diluted share, compared to $50.9 million, or $1.13 per diluted share for the same period of the prior year.

				Quarter ended:				Nine months ended:
(Dollars in thousands, except per share
data)		9/30/2006		6/30/2006		9/30/2005		9/30/2006		9/30/2005
Net Income	$	22,856	$	19,631	$	19,923	$	59,914	$	50,948
Add Back: Merger related expenses, net of
tax		1,471		994		--		2,615		157
Operating Earnings	$	24,327	$	20,625	$	19,923	$	62,529	$	51,105
Earnings per diluted share:
Net Income	$	0.39	$	0.40	$	0.44	$	1.17	$	1.13
Operating Earnings	$	0.42	$	0.42	$	0.44	$	1.23	$	1.14

During the third quarter of 2006, the Company had net charge-offs of $0.6 million or 0.04% of average loans and leases on an annualized basis. Non-performing loans and leases were $10.6 million at September 30, 2006, representing 0.20% of total loans and leases. The Company provided $2.4 million for future credit losses in the third quarter of 2006, based primarily on movement within the risk grades of the portfolio. This compares to no substantial provision in the second quarter of 2006 and no provision for the same period a year ago. The allowance for credit losses was 1.16% of total loans and leases at September 30, 2006.

The Company also recognized a $1.1 million impairment charge for the valuation of the mortgage servicing right (MSR) portfolio during the quarter. This compared to a valuation recovery of $0.2 million for the second quarter of 2006, and a $1.0 million valuation recovery for the same quarter a year ago. The valuation impairment charge during the third quarter of 2006 resulted from declines in mortgage interest rates.

"We are extremely pleased with the third quarter results, especially in light of the increased provision for credit loss and MSR impairment, which when combined, represent an impact of $0.03 per diluted share this quarter,” said Ray Davis, president and chief executive officer of Umpqua Holdings Corporation. “With the Western Sierra system integration behind us, we are focused now on growing the company throughout our footprint.”

Total consolidated assets as of September 30, 2006 were $7.2 billion, compared to $5.2 billion a year ago. Total gross loans and leases, and deposits, were $5.4 billion and $5.7 billion, respectively, as of September 30, 2006, compared to $3.7 billion and $4.1 billion, respectively, a year ago.

The following table presents the year-to-date annualized organic growth rates, which exclude the effects of the Western Sierra Bancorp acquisition:

(in thousands)		Loans and Leases			Deposits			Assets
As reported, 9/30/06	$	5,385,262		$	5,650,338		$	7,198,848
less: 12/31/05 balances		3,921,631			4,286,266			5,360,639
Total growth year to date		1,463,631			1,364,072			1,838,209
less: acquisition		1,022,231			1,016,053			1,491,466
Organic growth	$	441,400		$	348,019		$	346,743
Annualized organic growth rate		15	%		11	%		9	%

Umpqua Bank, Umpqua Holdings’ bank subsidiary, reported a net interest margin of 5.08% for the third quarter of 2006, compared to 4.93% for second quarter of 2006 and 5.13% for the same quarter a year ago. The increase in margin on a sequential quarter basis resulted from increases in short-term market interest rates, with the yield on earning assets increasing more than deposit and borrowing costs. The yield on earning assets for Umpqua Holdings increased 27 basis points on a sequential quarter basis to 7.49%, while the cost of interest bearing liabilities increased 18 basis points to 3.45%.

Excluding merger expense, the Bank efficiency ratio was 51.2% for the third quarter of 2006, compared to 50.8% for the same period a year ago.

As of September 30, 2006, total shareholders’ equity was $1.14 billion, and tangible book value per share was $7.94. As previously announced, the Company paid a quarterly cash dividend of $0.18 per share on October 16, 2006. This quarterly dividend represented a 50% increase over the previous quarterly cash dividend.

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. Umpqua believes that providing non-GAAP financial measures provides investors with information useful in understanding Umpqua’s financial performance. Umpqua provides measures based on “operating earnings,” which exclude merger-related expenses. Operating earnings per diluted share is calculated by dividing operating earnings by the same diluted share total used in determining diluted earnings per share.

A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables or where the non-GAAP measure is presented.

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 127 locations stretching from the greater Sacramento area and San Joaquin Valley to Seattle, Wash., as well as along the Oregon and Northern California Coast and in Central Oregon. Umpqua Holdings also owns retail brokerage subsidiary Strand, Atkinson, Williams & York, Inc., which has locations in Umpqua Bank stores and in dedicated offices throughout Oregon and Southwest Washington. Umpqua Bank's Private Client Services Division provides tailored financial services and products to individual customers. Umpqua Holdings Corporation is headquartered in Portland, Ore. For more information, visit www.umpquaholdingscorp.com.

Umpqua Holdings Corporation will conduct a quarterly earnings conference call Thursday, October 19, 2006, at 10:00 a.m. PST (1:00 p.m. EST) during which the Company will discuss third quarter results and provide an update on recent activities, including the Company’s recent acquisition of Western Sierra Bancorp. There will be a question-and-answer session following the presentation. Shareholders, analysts and other interested parties are invited to join the call by dialing 888-577-8991 a few minutes before 10:00 a.m. The password is “UMPQUA.” Information to be discussed in the teleconference will be available on the Company’s website prior to the call at www.umpquaholdingscorp.com. A rebroadcast can be found approximately one hour after the conference call by dialing 800-944-0912, or by visiting that website.

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)
				Quarter Ended:
Dollars in thousands, except per share data		September 30, 2006		June 30, 2006			September 30, 2005
Interest income
Loans and leases	$	106,320	$	86,004		$	65,579
Investments - taxable		6,797		6,693			6,558
Investments - tax exempt		1,127		836			427
Other interest		389		354			617
Dividends		105		56			40
Total interest income		114,738		93,943			73,221
Interest expense
Deposits		34,121		25,953			16,101
Repurchase agreements and
fed funds purchased		2,155		1,802			511
Trust preferred securities		3,971		3,376			2,719
Other borrowings		692		2,055			89
Total interest expense		40,939		33,186			19,420
Net interest income		73,799		60,757			53,801
Provision for loan and lease losses		2,352		54			-
Non-interest income
Service charges		7,606		6,450			5,778
Brokerage fees		2,506		2,534			2,735
Mortgage banking revenue		1,445		2,503			3,256
Gain (loss) on sale of securities		--		(1	)		28
Other income		1,919		2,320			1,985
Total non-interest income		13,476		13,806			13,782
Non-interest expense
Salaries and benefits		26,387		23,337			20,708
Occupancy and equipment		8,540		7,199			6,291
Other		13,308		11,051			10,084
Merger related expenses		2,451		1,656			--
Total non-interest expense		50,686		43,243			37,083
Income before income taxes		34,237		31,266			30,500
Provision for income tax		11,381		11,635			10,577
Net income	$	22,856	$	19,631		$	19,923
Weighted average shares outstanding		57,802,381		48,528,525			44,467,888
Weighted average diluted shares outstanding		58,452,461		48,994,482			45,021,879
Earnings per share – Basic	$	0.40	$	0.40		$	0.45
Earnings per share – Diluted	$	0.39	$	0.40		$	0.44

Umpqua Holdings Corporation
Consolidated Statements of Income
(Unaudited)

		Nine Months Ended:
Dollars in thousands, except per share data		September 30, 2006			September 30, 2005
Interest income
Loans and leases	$	265,444		$	182,735
Investments - taxable		20,201			19,359
Investments - tax exempt		2,685			1,839
Other interest		892			1,304
Dividends		205			121
Total interest income		289,427			205,358
Interest expense
Deposits		81,112			40,910
Repurchase agreements and
fed funds purchased		6,346			1,419
Trust preferred securities		10,359			7,663
Other borrowings		2,775			633
Total interest expense		100,592			50,625
Net interest income		188,835			154,733
Provision for loan and lease losses		2,427			2,400
Non-interest income
Service charges		19,540			16,026
Brokerage fees		7,408			8,743
Mortgage banking revenue		5,792			4,834
Gain (loss) on sale of securities		(1	)		1,426
Other income		6,745			5,279
Total non-interest income		39,484			36,308
Non-interest expense
Salaries and benefits		71,525			61,348
Occupancy and equipment		22,907			18,533
Other		34,119			28,796
Merger related expenses		4,358			262
Total noninterest expense		132,909			108,939
Income before income taxes		92,983			79,702
Provision for income tax		33,069			28,754
Net income	$	59,914		$	50,948
Weighted average shares outstanding		50,377,923			44,412,115
Weighted average diluted shares outstanding		51,010,413			44,984,192
Earnings per share – Basic	$	1.19		$	1.15
Earnings per share – Diluted	$	1.17		$	1.13

Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)
Dollars in thousands, except per share data		September 30, 2006			June 30, 2006			September 30, 2005
Assets:
Cash and due from banks	$	151,334		$	176,983		$	143,138
Temporary investments		40,700			61,981			29,027
Trading account securities		682			376			830
Investments available for sale		689,841			692,910			697,231
Investments held to maturity		9,494			9,676			10,676
Loans held for sale		18,951			31,118			20,202
Loans and leases		5,385,262			5,296,720			3,696,820
Less: Allowance for loan and lease losses		(60,475	)		(58,516	)		(43,603	)
Loans and leases, net		5,324,787			5,238,204			3,653,217
Restricted equity securities		15,255			20,538			14,259
Premises and equipment, net		99,251			100,040			88,577
Other real estate owned		31			69			213
Mortgage servicing rights, net		10,427			11,550			10,729
Goodwill and other intangibles		680,722			682,789			407,059
Other assets		157,373			153,709			111,224
Total assets	$	7,198,848		$	7,179,943		$	5,186,382
Liabilities:
Deposits	$	5,650,338		$	5,464,770		$	4,092,966
Securities sold under agreements
to repurchase		65,471			61,720			61,551
Fed funds purchased		--			200,000			84,000
Term Borrowings		57,072			57,081			3,236
Notes payable for trust preferred
securities		203,955			204,222			165,847
Other liabilities		80,332			79,050			52,018
Total liabilities		6,057,168			6,066,843			4,459,618
Shareholders' equity:
Common stock		929,893			923,309			563,640
Retained earnings		220,726			208,335			170,153
Accumulated other comprehensive loss		(8,939	)		(18,544	)		(7,029	)
Total shareholders' equity		1,141,680			1,113,100			726,764
Total liabilities and shareholders' equity	$	7,198,848		$	7,179,943		$	5,186,382
Common shares outstanding at period end		58,028,555			57,651,533			44,476,104
Book value per share	$	19.67		$	19.31		$	16.34
Tangible book value per share	$	7.94		$	7.46		$	7.19
Tangible equity	$	460,958		$	430,311		$	319,705

Umpqua Holdings Corporation
Loan Portfolio
(Unaudited)
Dollars in thousands		September 30, 2006			June 30, 2006			September 30, 2005
Loans and leases by purpose:
Commercial real estate	$	2,683,187		$	2,717,551		$	2,023,098
Residential real estate		312,639			301,389			220,079
Construction		1,238,369			1,142,487			564,530
Total real estate		4,234,195			4,161,427			2,807,707
Commercial		1,085,014			1,065,874			818,861
Leases		19,514			18,192			15,800
Consumer		44,831			49,576			53,208
Other		1,708			1,651			1,244
Total loans and leases	$	5,385,262		$	5,296,720		$	3,696,820
		Quarter Ended			Quarter Ended			Quarter Ended
Dollars in thousands		September 30, 2006			June 30, 2006			September 30, 2005
Allowance for credit losses
Balance beginning of period	$	58,516		$	44,546		$	44,510
Provision for loan and lease losses		2,352			54			--
Acquisition		184			14,043			--
Charge-offs		(1,027	)		(947	)		(3,289	)
Less recoveries		450			820			2,382
Net charge-offs		(577	)		(127	)		(907	)
Total Allowance for loan and lease losses		60,475			58,516			43,603
Reserve for unfunded commitments		2,021			2,145			1,489
Total Allowance for credit losses	$	62,496		$	60,661		$	45,092
Net charge-offs to average
loans and leases (annualized)		0.04	%		0.01	%		0.10	%
Recoveries to gross charge-offs		44	%		87	%		72	%
Allowance for credit losses to
loans and leases		1.16	%		1.15	%		1.22	%
Allowance for credit losses to
nonperforming loans and leases		591	%		828	%		546	%
Nonperforming loans and leases
to total loans and leases		0.20	%		0.14	%		0.22	%
Nonperforming assets:
Nonperforming loans and leases	$	10,574		$	7,330		$	8,257
Real estate owned		31			69			213
Total nonperforming assets	$	10,605		$	7,399		$	8,470

Umpqua Holdings Corporation
Loan Portfolio
(Unaudited)
			Nine Months Ended					Nine Months Ended
Dollars in thousands			September 30, 2006					September 30, 2005
Allowance for credit losses
Balance beginning of period					$	43,885				$	44,229
Provision for loan and lease losses						2,427					2,400
Acquisitions						14,227					--
Charge-offs						(2,587	)				(7,140	)
Less recoveries						2,523					4,114
Net charge-offs						(64	)				(3,026	)
Total Allowance for loan and lease losses						60,475					43,603
Reserve for unfunded commitments						2,021					1,489
Total Allowance for credit losses					$	62,496				$	45,092
Net charge-offs to average
loans and leases (annualized)						0.00	%				0.11	%
Recoveries to gross charge-offs						98	%				58	%
		Deposits by Type
			(Unaudited)
September 30, 2006						June 30, 2006					September 30, 2005
Dollars in thousands		Amount	Mix			Amount		Mix			Amount		Mix
Demand, non interest-bearing	$	1,246,499	22.1	%	$	1,264,249		23.1	%	$	1,071,940		26.2	%
Demand, interest-bearing		2,420,474	42.8	%		2,198,838		40.3	%		1,631,039		39.8	%
Savings		380,587	6.7	%		421,248		7.7	%		393,217		9.6	%
Time		1,602,778	28.4	%		1,580,435		28.9	%		996,770		24.4	%
Total Deposits	$	5,650,338	100.0	%	$	5,464,770		100.0	%	$	4,092,966		100.0	%

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
			Quarter Ended:
	September 30, 2006		June 30, 2006		September 30, 2005
Net Interest Spread:
Yield on loans and leases	7.88	%	7.63	%	7.11	%
Yield on taxable investments	4.53	%	4.53	%	4.34	%
Yield on tax-exempt investments (1)	6.08	%	5.56	%	5.84	%
Yield on temporary investments	3.99	%	4.13	%	3.38	%
Total yield on earning assets (1)	7.49	%	7.22	%	6.65	%
Cost of interest bearing deposits	3.19	%	2.93	%	2.09	%
Cost of securities sold under agreements
to repurchase and fed funds purchased	4.45	%	4.09	%	2.52	%
Cost of borrowings	4.81	%	5.04	%	2.75	%
Cost of trust preferred securities	7.72	%	7.63	%	6.50	%
Total cost of interest bearing liabilities	3.45	%	3.27	%	2.33	%
Net interest spread (1)	4.04	%	3.95	%	4.32	%
Net interest margin (1)	4.83	%	4.68	%	4.89	%
As reported:
Return on average assets	1.27	%	1.31	%	1.55	%
Return on average tangible assets	1.41	%	1.42	%	1.69	%
Return on average equity	8.06	%	9.18	%	11.01	%
Return on average tangible equity	20.50	%	21.17	%	25.43	%
Excluding merger related expense net of
tax (2):
Return on average assets	1.35	%	1.37	%	1.55	%
Return on average tangible assets	1.50	%	1.49	%	1.69	%
Return on average equity	8.58	%	9.64	%	11.01	%
Return on average tangible equity	21.82	%	22.24	%	25.43	%
Bank Only Ratios:
Umpqua Bank efficiency ratio (2)	51.20	%	51.78	%	50.78	%
Umpqua Bank net interest margin (1)	5.08	%	4.93	%	5.13	%

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
(2)	Excludes merger related expense, net of tax.

Umpqua Holdings Corporation
Selected Ratios
(Unaudited)
	Nine Months Ended:
	September 30, 2006		September 30, 2005
Net Interest Spread:
Yield on loans and leases	7.65	%	6.84	%
Yield on taxable investments	4.50	%	4.28	%
Yield on tax-exempt investments (1)	5.77	%	6.37	%
Yield on temporary investments	4.09	%	2.96	%
Total yield on earning assets (1)	7.25	%	6.42	%
Cost of interest bearing deposits	2.94	%	1.83	%
Cost of securities sold under
agreements to repurchase and fed funds purchased	4.23	%	2.37	%
Cost of borrowings	4.97	%	2.09	%
Cost of trust preferred securities	7.59	%	6.17	%
Total cost of interest bearing liabilities	3.25	%	2.06	%
Net interest spread (1)	4.00	%	4.36	%
Net interest margin (1)	4.74	%	4.84	%
As reported:
Return on average assets	1.29	%	1.36	%
Return on average tangible assets	1.41	%	1.49	%
Return on average equity	8.80	%	9.66	%
Return on average tangible equity	20.87	%	22.87	%
Excluding merger related expense net of tax (2):
Return on average assets	1.35	%	1.37	%
Return on average tangible assets	1.47	%	1.49	%
Return on average equity	9.18	%	9.69	%
Return on average tangible equity	21.78	%	22.94	%
Bank Only Ratios:
Umpqua Bank efficiency ratio (2)	52.08	%	52.31	%
Umpqua Bank net interest margin (1)	4.99	%	5.08	%

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate.
(2)	Excludes merger related expense, net of tax.

Umpqua Holdings Corporation
Average Balances
(Unaudited)
				Quarter Ended:
Dollars in thousands		September 30, 2006		June 30, 2006		September 30, 2005
Loans held for sale	$	19,258	$	14,619	$	18,021
Loans and leases		5,333,728		4,505,246		3,640,617
Earning assets		6,107,193		5,236,760		4,382,499
Goodwill & other intangibles		681,988		486,167		406,955
Total assets		7,135,488		6,030,752		5,088,738
Non interest bearing demand deposits		1,235,838		1,048,201		1,007,113
Interest bearing deposits		4,248,328		3,547,093		3,049,774
Total deposits		5,484,166		4,595,294		4,056,887
Interest bearing liabilities		4,701,582		4,064,871		3,308,962
Total shareholders’ equity		1,124,398		858,168		717,827
Tangible equity		442,410		372,001		310,872

Umpqua Holdings Corporation
Average Balances
(Unaudited)
		Nine Months Ended:
Dollars in thousands		September 30, 2006		September 30, 2005
Loans held for sale	$	14,512	$	15,756
Loans and leases		4,623,013		3,557,648
Earning assets		5,360,360		4,295,746
Goodwill & other intangibles		526,459		407,489
Total assets		6,198,868		4,993,162
Non interest bearing demand deposits		1,085,161		950,957
Interest bearing deposits		3,683,415		2,995,811
Total deposits		4,768,576		3,946,768
Interest bearing liabilities		4,141,511		3,282,451
Total shareholders’ equity		910,311		705,371
Tangible equity		383,852		297,882

Umpqua Holdings Corporation
Mortgage Banking Statistical Analysis
(unaudited)
					Quarter Ended:
		September 30, 2006			June 30, 2006			September 30, 2005
Dollars in thousands
Mortgage Servicing Rights (MSR):
Mortgage loans serviced for others	$	978,723		$	1,004,148		$	1,015,597
MSR Asset (gross)	$	13,668		$	13,735		$	12,871
Less: Valuation reserve		(3,241	)		(2,185	)		(2,142	)
MSR Asset (net of reserve)	$	10,427		$	11,550		$	10,729
MSR as % of serviced portfolio		1.07	%		1.15	%		1.06	%
Dollars in thousands
Mortgage Banking Revenue:
Origination and sale	$	2,141		$	1,937		$	2,102
Servicing		360			344			109
MSR valuation reserve change		(1,056	)		222			1,045
Total Mortgage Banking Revenue	$	1,445		$	2,503		$	3,256
		Nine Months Ended:
		September 30, 2006			September 30, 2005
Dollars in thousands
Mortgage Banking Revenue:
Origination and sale	$	5,601		$	5,655
Servicing		1,058			529
MSR valuation reserve change		(867	)		(1,350	)
Total Mortgage Banking Revenue	$	5,792		$	4,834
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