f8kuhc3qeacov.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BrrjFlUtg7c+PnTkzDgNvq4/lBbmZfuno/YnPi1l22RgZr9OgZDm8J9N3QK/FSK+ Wn8yB/X1Qqo9gVZTYrhz8g== 0000896595-07-000415.txt : 20071018 0000896595-07-000415.hdr.sgml : 20071018 20071018103355 ACCESSION NUMBER: 0000896595-07-000415 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20071018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071018 DATE AS OF CHANGE: 20071018 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UMPQUA HOLDINGS CORP CENTRAL INDEX KEY: 0001077771 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 931261319 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25597 FILM NUMBER: 071178000 BUSINESS ADDRESS: STREET 1: ONE SW COLUMBIA STREET STREET 2: SUITE 1200 CITY: PORTLAND STATE: OR ZIP: 97258 BUSINESS PHONE: 971-544-1085 MAIL ADDRESS: STREET 1: ONE SW COLUMBIA STREET STREET 2: SUITE 1200 CITY: PORTLAND STATE: OR ZIP: 97258 8-K 1 f8kuhc3qeacov.htm FORM 8-K f8kuhc3qeacov.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

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 18, 2007
(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 18, 2007, Umpqua Holding Corporation issued a press release announcing financial results for the third quarter of 2007. 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 18, 2007		By: /s/ Kenneth E. Roberts
		Kenneth E. Roberts
		Assistant Secretary

EX-99.1 2 f8kuhc3qeaex991.htm EXHIBIT 99.1 f8kuhc3qeaex991.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

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

Ron Farnsworth
SVP/Finance
Umpqua Holdings Corporation
503-727-4108
ronfarnsworth@umpquabank.com

UMPQUA HOLDINGS REPORTS THIRD QUARTER EARNINGS
Third quarter earnings impacted by California housing market

PORTLAND, Ore. – October 18, 2007 – Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Strand, Atkinson, Williams & York, Inc., today announced third quarter 2007 operating earnings of $13.3 million, or $0.22 per diluted share, compared to $24.3 million, or $0.42 per diluted share, for the third quarter of 2006. Operating earnings exclude merger related expenses, net of tax.

Including merger related expenses, net income for the third quarter of 2007 was $13.2 million, or $0.22 per diluted share, compared to $22.9 million, or $0.39 per diluted share for the third quarter of 2006.

Significant items for the third quarter include:

Increase in non-performing loans to $68.9 million, or 1.13% of total loans, related primarily to the residential development portfolio in our northern California operation;
Provision for loan losses of $20.4 million, representing a $0.17 per diluted share additional charge over the second quarter;
Reversal of $1.3 million in interest income related to $20.8 million net increase in non-accrual loans;
Other real estate owned increased to $10.3 million, which was sold with no loss subsequent to quarter end;
Net charge-offs of $806 thousand year to date, represents 0.02% of average loans;
Year to date annualized organic loan growth of 7%, excluding the acquisition;
Year to date annualized organic deposit growth of 5%, excluding the acquisition;
Core deposits increased 3% during the third quarter in the Oregon/Washington region;
Net interest margin, on a tax equivalent basis, declined 14 basis points during the third quarter, to 4.20%, of which 7 basis points related to interest reversal on new non-accrual loans noted above;
Cost of interest bearing deposits increased 3 basis points during third quarter, but declined 10 basis points during the month of September;
Issued $60 million of new junior subordinated debentures during the third quarter, with a weighted average adjustable interest rate of 3 month LIBOR plus 182 basis points;
Total non-interest income increased 16% on a sequential quarter basis, related primarily to positive fair value adjustments related to junior subordinated debentures;
Bank efficiency ratio, excluding merger related expenses, of 55.3% in the third quarter;

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 2 of 17

The following is a comparison of net income to operating earnings for all periods presented:


		Quarter ended:						Sequential		Year over
								Quarter		Year
(Dollars in thousands, except per share data)		9/30/07		6/30/07	9/30/06			% Change		% Change

Net Income	$	13,177	$	19,913		$	22,856	(34	)%	(42	)%
Add Back: Merger related expenses, net of tax		158		1,430			1,471	(89	)%	(89	)%

Operating Earnings	$	13,335	$	21,343		$	24,327	(38	)%	(45	)%


Earnings per diluted share:
Net Income	$	0.22	$	0.32		$	0.39	(31	)%	(44	)%
Operating Earnings	$	0.22	$	0.35		$	0.42	(37	)%	(48	)%

		Nine months ended:					Year over
							Year
(Dollars in thousands, except per share data)		9/30/07		9/30/06			% Change

Net Income	$	53,752	$	59,914			(10		)%
Add Back: Merger related expenses, net of tax		1,920		2,615			(27		)%

Operating Earnings	$	55,672	$	62,529			(11		)%


Earnings per diluted share:
Net Income	$	0.89	$	1.17			(24		)%
Operating Earnings	$	0.92	$	1.23			(25		)%

"During this past quarter, the California housing down-turn negatively impacted Umpqua. I have instructed our credit professionals to take an aggressive posture in identifying, reserving for, and resolving problem loans. Accordingly, we believe the third quarter provision for loan losses will be adequate for subsequent charge-offs related to these non-performing assets,” said Umpqua Holdings Corporation president and CEO, Ray Davis.

During the third quarter, the Company experienced an increase in non-performing assets related primarily to deterioration in the northern California residential development market. Non-performing loans increased $21 million during the quarter, to $68.9 million. Non-performing assets increased $31 million during the quarter, to $79.2 million. Subsequent to quarter end, the Company sold $10 million of other real estate owned with no loss recognized. This other real estate owned was recorded as a non-accrual loan in the second quarter. The residential development segment represents $66.7 million, or 84% of the total $79.2 million in non-performing assets.

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 3 of 17

The following represents a summary of non-performing assets by region as of September 30, 2007:

Non-performing assets

		Oregon/
(dollars in thousands)		Washington			California			Total


90 days past due and accruing:
Residential development	$	--		$	166		$	166
Commercial real estate		--			346			346
Commercial		--			496			496
Other		153			327			480

Total	$	153		$	1,335		$	1,488

Non-accrual loans:
Residential development	$	9,984		$	46,581		$	56,565
Commercial real estate		1,474			537			2,011
Commercial		6,456			2,387			8,843
Other		--			--			--

Total	$	17,914		$	49,505		$	67,419


Total non-performing loans	$	18,067		$	50,840		$	68,907


Other real estate owned:
Residential development	$	10,000		$	--		$	10,000
Commercial real estate		--			--			--
Commercial		--			--			--
Other		--			310			310

Total	$	10,000		$	310		$	10,310


Total non-performing assets	$	28,067		$	51,150		$	79,217


Total Loans and leases	$	3,452,645		$	2,626,790		$	6,079,435
Non-performing loans to total loans and
leases		0.52	%		1.94	%		1.13	%

Within the allowance for credit losses, the Company has identified $16.2 million of impairment reserve related to $67.4 million of non-accrual loans, which are specifically measured for impairment. This impairment reserve increased $11.2 million during the quarter. The net increase in impairment reserve, combined with downgrades within the portfolio related primarily to residential development, led to the $20.4 million provision for loan losses during the third quarter. The third quarter provision for loan losses is expected to cover subsequent charge-offs on these non-performing loans.

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 4 of 17

The following represents a summary of our non-accrual loan impairment estimate as of September 30, 2007:

Non-accrual loan impairment estimate

					Impairment
(dollars in thousands)	# of Loans		Balance		Estimate


Non-accrual loans:
Residential development	47	$	56,565	$	14,761
Commercial real estate	13		2,011		98
Commercial	23		8,843		1,385

Total non-accrual loans	83	$	67,419	$	16,244

During the first nine months of 2007, the Company had net charge-offs of $806 thousand, compared to net charge-offs of $64 thousand for the first nine months of 2006. Non-performing loans and leases were $68.9 million at September 30, 2007, representing 1.13% of total loans and leases. The allowance for credit losses was 1.47% of total loans and leases at September 30, 2007, compared to 1.17% of total loans and leases at June 30, 2007.

The Company completed its acquisition of North Bay Bancorp on April 26, 2007 by issuing 5,163,573 shares in connection with this acquisition, with a total deal value of $142.3 million. The system integration with North Bay Bancorp was completed in May 2007.

The following table presents the year to date 2007 organic growth rates, which exclude the effects of the North Bay Bancorp acquisition:

(dollars in thousands)		Loans and Leases			Deposits			Assets

As reported, 9/30/07	$	6,079,435		$	6,518,217		$	8,225,811
less: 12/31/06 balances		5,361,862			5,840,294			7,344,236

Total growth		717,573			677,923			881,575

less: acquisition		442,950			462,624			727,799

Organic growth	$	274,623		$	215,299		$	153,776


Annualized organic growth rate		7	%		5	%		3	%

Total consolidated assets as of September 30, 2007 were $8.2 billion, compared to $7.2 billion a year ago. Total gross loans and leases, and deposits, were $6.1 billion and $6.5 billion, respectively, as of September 30, 2007, compared to $5.4 billion and $5.7 billion, respectively, a year ago.

The Company reported a tax equivalent net interest margin of 4.20% for the third quarter of 2007, compared to 4.83% for the third quarter of 2006, and 4.34% for the second quarter of 2007. The decrease in net interest margin over these time periods resulted from increases in short-term market interest rates and the competitive climate, characterized by increasing deposit costs combined with declining earning asset yields, which was partially attributed to the interest income reversal discussed previously. The $1.3 million interest reversal on new non-accrual loans noted above resulted in a 7 basis point decline in the tax equivalent net interest margin during the quarter.

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 5 of 17

Excluding merger related expenses, the Bank efficiency ratio was 55.15% for the nine months ended September 30, 2007, compared to 52.08% for the same period a year ago. The increase related primarily to the decline in net interest margin discussed previously.

During the first quarter of 2007, the Company elected early adoption of Statements of Financial Accounting Standard (SFAS) 157 and 159, effective January 1, 2007. SFAS 159, which was issued in February 2007, permits the measurement of selected financial instruments at fair value as of specified election dates. Upon adoption of SFAS 159, the Company selected the fair value measurement option only on certain junior subordinated debentures. During the third quarter, the Company issued $60 million in new junior subordinated debentures (net of common stock investment), carrying a weighted adjustable interest rate of 3 month LIBOR plus 182 basis points. The Company elected fair value measurement on these debentures. As a result, the Company recognized a $4.1 million gain in fair value on junior subordinated debentures during the third quarter, as market interest rate spreads increased significantly on like instruments. This compares to a $279 thousand fair value increase durin g the second quarter. Also during the third quarter, the Company redeemed a $25 million junior subordinated debenture (net of common stock investment) prior to its maturity.

As of September 30, 2007, total shareholders’ equity was $1.2 billion. Book value per share was $20.60 and tangible book value per share was $7.78. During the third quarter, the Company repurchased 1.65 million shares of stock at a weighted average price of $21.23 per share. For the first nine months of 2007, the company repurchased 4.01 million shares of stock at a weighted average price of $23.73 per share. The total remaining available common shares authorized for repurchase is approximately 1.54 million.

We have expanded disclosure of our loan, deposit and core deposit portfolios by region within the financial tables of this earnings release.

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 non-GAAP financial measures provide 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.

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 identification and management of problem loans, the level of expected gross loan charge-offs and the adequacy of the provision for loan losses taken in the third quarter.

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 6 of 17

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 146 locations between Napa, Calif. and Bellevue, Wash., along the Oregon and Northern California Coast and in Central Oregon. Umpqua Holdings also owns a 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 18, 2007, at 10:00 a.m. PST (1:00 p.m. EST) during which the Company will discuss third quarter 2007 results and provide an update on recent activities. 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 800-752-8363 a few minutes before 10:00 a.m. The conference ID is “18219442.” 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 two hours after the conference call by dialing 800-642-1687, or by visiting the Company’s website.

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 7 of 17


Umpqua Holdings Corporation

Consolidated Statements of Income
(Unaudited)

					Quarter Ended:

									Sequential		Year over
									Quarter		Year
*Dollars in thousands, except per share data*		Sept 30, 2007			Jun 30, 2007			Sept 30, 2006	% Change		% Change

Interest income
Loans and leases	$	116,111		$	111,797		$	106,320	4	%	9	%
Interest and dividends on investments:
Taxable		9,137			8,720			6,797	5	%	34	%
Exempt from federal income tax		1,588			1,335			1,142	19	%	39	%
Dividends		96			88			105	9	%	(9	)%
Temporary investments		929			616			374	51	%	148	%

Total interest income		127,861			122,556			114,738	4	%	11	%

Interest expense
Deposits		48,138			44,581			34,121	8	%	41	%
Repurchase agreements and
fed funds purchased		530			824			2,155	(36	)%	(75	)%
Junior subordinated debentures		4,444			4,022			3,971	10	%	12	%
Term debt		874			813			692	8	%	26	%

Total interest expense		53,986			50,240			40,939	7	%	32	%
Net interest income		73,875			72,316			73,799	2	%	0	%
Provision for loan and lease losses		20,420			3,413			2,352	498	%	768	%
Non-interest income
Service charges		8,448			8,148			7,606	4	%	11	%
Brokerage fees		2,498			2,679			2,506	(7	)%	0	%
Mortgage banking revenue		1,366			2,607			1,445	(48	)%	(5	)%
Loss on sale of securities		(13	)		(2	)		--	nm		nm
Other income		6,244			2,498			1,919	150	%	225	%

Total non-interest income		18,543			15,930			13,476	16	%	38	%

Non-interest expense
Salaries and benefits		28,005			28,898			26,387	(3	)%	6	%
Occupancy and equipment		9,166			8,782			8,540	4	%	7	%
Intangible amortization		1,767			1,490			1,195	19	%	48	%
Other		13,692			12,392			12,113	10	%	13	%
Merger related expenses		263			2,383			2,451	(89	)%	(89	)%

Total non-interest expense		52,893			53,945			50,686	(2	)%	4	%
Income before provision for income taxes		19,105			30,888			34,237	(38	)%	(44	)%
Provision for income tax		5,928			10,975			11,381	(46	)%	(48	)%

Net income	$	13,177		$	19,913		$	22,856	(34	)%	(42	)%


Weighted average shares outstanding		60,489,522			60,679,485			57,802,381	0	%	5	%
Weighted average diluted shares outstanding		61,065,401			61,397,575			58,452,461	(1	)%	4	%

Earnings per share – Basic	$	0.22		$	0.33		$	0.40	(33	)%	(45	)%
Earnings per share – Diluted	$	0.22		$	0.32		$	0.39	(31	)%	(44	)%

nm = not meaningful

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 8 of 17


Umpqua Holdings Corporation

Consolidated Statements of Income
(Unaudited)

		Nine months ended:

*Dollars in thousands, except per share data*		Sept 30, 2007			Sept 30, 2006		% Change

Interest income
Loans and leases	$	331,889		$	265,444		25	%
Interest and dividends on investments:
Taxable		25,376			20,201		26	%
Exempt from federal income tax		4,151			2,740		51	%
Dividends		249			205		21	%
Temporary investments		2,439			837		191	%


Total interest income		364,104			289,427		26	%
Interest expense
Deposits		133,750			81,112		65	%
Repurchase agreements and
fed funds purchased		1,757			6,346		(72	)%
Trust preferred securities		12,329			10,359		19	%
Other borrowings		1,767			2,775		(36	)%

Total interest expense		149,603			100,592		49	%
Net interest income		214,501			188,835		14	%
Provision for loan and lease losses		23,916			2,427		885	%
Non-interest income
Service charges		23,648			19,540		21	%
Brokerage fees		7,594			7,408		3	%
Mortgage banking revenue		5,772			5,792		0	%
Loss on sale of securities		(10	)		(1	)	nm
Other income		11,434			6,745		70	%

Total non-interest income		48,438			39,484		23	%
Non-interest expense
Salaries and benefits		85,172			71,525		19	%
Occupancy and equipment		26,774			22,907		17	%
Intangible amortization		4,400			2,533		74	%
Other		37,304			31,586		18	%
Merger related expenses		3,200			4,358		(27	)%


Total noninterest expense		156,850			132,909		18	%
Income before income taxes		82,173			92,983		(12	)%
Provision for income tax		28,421			33,069		(14	)%

Net income	$	53,752		$	59,914		(10	)%


Weighted average shares outstanding		59,790,297			50,377,923		19	%
Weighted average diluted shares outstanding		60,450,412			51,010,413		19	%

Earnings per share – Basic	$	0.90		$	1.19		(24	)%
Earnings per share – Diluted	$	0.89		$	1.17		(24	)%

nm = not meaningful

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 9 of 17

Umpqua Holdings Corporation
Consolidated Balance Sheets
(Unaudited)


										Sequential		Year over
										Quarter		Year
*Dollars in thousands, except per share data*		Sept 30, 2007			Jun 30, 2007			Sept 30, 2006		% Change		% Change

Assets:
Cash and due from banks	$	148,434		$	182,739		$	151,334		(19	)%	(2	)%
Temporary investments		46,787			40,904			40,700		14	%	15	%
Investment securities:
Trading		4,144			3,090			682		34	%	nm
Available for sale		911,883			893,125			689,841		2	%	32	%
Held to maturity		7,116			8,333			9,494		(15	)%	(25	)%
Loans held for sale		19,964			16,953			18,951		18	%	5	%
Loans and leases		6,079,435			5,981,750			5,385,262		2	%	13	%
Less: Allowance for loan and lease losses		(88,278	)		(68,723	)		(60,475	)	28	%	46	%

Loans and leases, net		5,991,157			5,913,027			5,324,787		1	%	13	%
Restricted equity securities		15,297			16,715			15,255		(8	)%	0	%
Premises and equipment, net		107,189			108,656			99,251		(1	)%	8	%
Other real estate owned		10,310			--			31		nm		nm
Mortgage servicing rights, net		9,474			9,966			10,427		(5	)%	(9	)%
Goodwill and other intangibles		767,210			767,710			680,722		0	%	13	%
Other assets		186,846			183,340			157,373		2	%	19	%


Total assets	$	8,225,811		$	8,144,558		$	7,198,848		1	%	14	%


Liabilities:
Deposits	$	6,518,217		$	6,414,425		$	5,650,338		2	%	15	%
Securities sold under agreements
to repurchase		52,883			59,553			65,471		(11	)%	(19	)%
Fed funds purchased		20,000			48,000			--		(58	)%	nm
Term debt		75,010			75,095			57,072		0	%	31	%
Junior subordinated debentures, at fair value		131,984			99,808			--		32	%	nm
Junior subordinated debentures, at amortized cost		104,947			105,213			203,955		0	%	(49	)%
Other liabilities		89,580			86,426			80,332		4	%	12	%

Total liabilities		6,992,621			6,888,520			6,057,168		2	%	15	%

Shareholders' equity:
Common stock		987,543			1,019,618			929,893		(3	)%	6	%
Retained earnings		253,487			251,715			220,726		1	%	15	%
Accumulated other comprehensive loss		(7,840	)		(15,295	)		(8,939	)	(49	)%	(12	)%

Total shareholders' equity		1,233,190			1,256,038			1,141,680		(2	)%	8	%


Total liabilities and shareholders' equity	$	8,225,811		$	8,144,558		$	7,198,848		1	%	14	%



Common shares outstanding at period end		59,864,335			61,315,960			58,028,555		(2	)%	3	%
Book value per share	$	20.60		$	20.48		$	19.67		1	%	5	%
Tangible book value per share	$	7.78		$	7.96		$	7.94		(2	)%	(2	)%
Tangible equity	$	465,980		$	488,328		$	460,958		(5	)%	1	%
Tangible equity to tangible assets		6.25	%		6.62	%		7.07	%
nm = not meaningful

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 10 of 17


Umpqua Holdings Corporation

Loan Portfolio – Total and by Region
(Unaudited)

										Sequential		Year over
*Dollars in thousands*										Quarter		Year
Loans and leases by class:		Sept 30, 2007			Jun 30, 2007			Sept 30, 2006		% Change		% Change


Total Consolidated:
Commercial real estate	$	3,071,588		$	3,058,774		$	2,697,218		0.4	%	13.9	%
Residential real estate		379,657			371,894			312,639		2.1	%	21.4	%
Construction		1,191,757			1,148,726			1,238,369		3.7	%	(3.8	)%

Total real estate		4,643,002			4,579,394			4,248,226		1.4	%	9.3	%
Commercial		1,365,786			1,323,640			1,085,014		3.2	%	25.9	%
Leases		37,095			35,477			19,514		4.6	%	90.1	%
Installment and other		44,970			54,504			45,119		(17.5	)%	(0.3	)%
Deferred loan fees, net		(11,418	)		(11,265	)		(12,611	)	1.4	%	(9.5	)%

Total loans and leases	$	6,079,435		$	5,981,750		$	5,385,262		1.6	%	12.9	%


Oregon/Washington region:
Commercial real estate	$	1,710,224		$	1,672,094		$	1,594,723		2.3	%	7.2	%
Residential real estate		250,751			244,654			202,228		2.5	%	24.0	%
Construction		631,087			595,264			515,064		6.0	%	22.5	%

Total real estate		2,592,062			2,512,012			2,312,015		3.2	%	12.1	%
Commercial		799,598			826,760			766,913		(3.3	)%	4.3	%
Leases		37,005			35,333			19,134		4.7	%	93.4	%
Installment and other		31,216			36,770			25,907		(15.1	)%	20.5	%
Deferred loan fees, net		(7,236	)		(7,012	)		(7,966	)	3.2	%	(9.2	)%

Total loans and leases	$	3,452,645		$	3,403,863		$	3,116,003		1.4	%	10.8	%

% of consolidated total		57	%		57	%		58	%

California region:
Commercial real estate	$	1,361,364		$	1,386,680		$	1,102,495		(1.8	)%	23.5	%
Residential real estate		128,906			127,240			110,411		1.3	%	16.8	%
Construction		560,670			553,462			723,305		1.3	%	(22.5	)%

Total real estate		2,050,940			2,067,382			1,936,211		(0.8	)%	5.9	%
Commercial		566,188			496,880			318,101		13.9	%	78.0	%
Leases		90			144			380		(37.5	)%	(76.3	)%
Installment and other		13,754			17,734			19,212		(22.4	)%	(28.4	)%
Deferred loan fees, net		(4,182	)		(4,253	)		(4,645	)	(1.7	)%	(10.0	)%

Total loans and leases	$	2,626,790		$	2,577,887		$	2,269,259		1.9	%	15.8	%

% of consolidated total		43	%		43	%		42	%

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 11 of 17


Umpqua Holdings Corporation

Credit Quality
(Unaudited)

										Sequential Year over
		Quarter Ended			Quarter Ended			Quarter Ended		Quarter		Year
*Dollars in thousands*		Sept 30, 2007			Jun 30, 2007			Sept 30, 2006		% Change		% Change

Allowance for credit losses
Balance beginning of period	$	68,723		$	60,263		$	58,516
Provision for loan and lease losses		20,420			3,413			2,352
Acquisitions		--			5,078			184

Charge-offs		(1,414	)		(870	)		(1,027	)	63	%		38	%
Less: Recoveries		549			839			450		(35	)%		22	%

Net charge-offs		(865	)		(31	)		(577	)	2690	%		50	%

Total Allowance for loan and lease losses		88,278			68,723			60,475		28	%		46	%
Reserve for unfunded commitments		1,246			1,273			2,021

Total Allowance for credit losses	$	89,524		$	69,996		$	62,496		28	%		43	%


Net charge-offs to average
loans and leases (annualized)		0.06	%		0.00	%		0.04	%
Recoveries to gross charge-offs		39	%		96	%		44	%
Allowance for credit losses to
loans and leases		1.47	%		1.17	%		1.16	%
Allowance for credit losses to
nonperforming loans		130	%		146	%		591	%


Nonperforming loans to total loans and leases		1.13	%		0.80	%		0.20	%
Nonperforming assets to total assets		0.96	%		0.59	%		0.15	%

Nonperforming assets:
Loans on non-accrual status	$	67,419		$	46,642		$	10,158		45	%		564	%
Loans past due 90+ days & accruing		1,488			1,313			416		13	%		258	%

Total nonperforming loans	$	68,907		$	47,955		$	10,574		44	%		552	%
Other real estate owned		10,310			--			31		nm			nm

Total nonperforming assets	$	79,217		$	47,955		$	10,605		65	%		647	%

nm = not meaningful

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 12 of 17

Umpqua Holdings Corporation

Credit Quality (continued)
(Unaudited)

		Nine Months ended:
*Dollars in thousands*		Sept 30, 2007			Sept 30, 2006		% Change

Allowance for credit losses
Balance beginning of period	$	60,090		$	43,885
Provision for loan and lease losses		23,916			2,427
Acquisitions		5,078			14,227

Charge-offs		(2,997	)		(2,587	)	16	%
Less: Recoveries		2,191			2,523		(13	)%

Net charge-offs		(806	)		(64	)	1159	%

Total Allowance for loan and lease losses		88,278			60,475

Reserve for unfunded commitments		1,246			2,021

Total Allowance for credit losses	$	89,524		$	62,496


Net charge-offs to average
loans and leases (annualized)		0.02	%		0.00	%
Recoveries to gross charge-offs		73	%		98	%

Umpqua Holdings Corporation

Deposits by Type
(Unaudited)

													% Change
		Sept 30, 2007				Jun 30, 2007				Sept 30, 2006			Sequential		Year over
													Quarter		Year
*Dollars in thousands*		Amount	Mix			Amount	Mix			Amount	Mix		% Change		% Change

Demand, non interest-bearing	$	1,294,334	20	%	$	1,358,235	21	%	$	1,246,499	22	%	(4.7	)%	3.8	%
Demand, interest-bearing		2,950,605	45	%		2,801,455	44	%		2,420,474	43	%	5.3	%	21.9	%
Savings		358,825	6	%		373,438	6	%		380,587	7	%	(3.9	)%	(5.7	)%
Time		1,914,453	29	%		1,881,297	29	%		1,602,778	28	%	1.8	%	19.4	%

Total Deposits	$	6,518,217	100	%	$	6,414,425	100	%	$	5,650,338	100	%	1.6	%	15.4	%

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 13 of 17

Umpqua Holdings Corporation

Deposits/Core Deposits by Region
(Unaudited)


		Sept 30, 2007					Jun 30, 2007					Sept 30, 2006				Sequential		Year over
																Quarter		Year
*Dollars in thousands*		Amount		Mix			Amount		Mix			Amount		Mix		% Change		% Change


Deposits by region:
Oregon/Washington	$	3,700,826		57	%	$	3,604,939		56	%	$	3,426,675		61	%	2.7	%	8.0	%
California		2,817,391		43	%		2,809,486		44	%		2,223,663		39	%	0.3	%	26.7	%

Total Deposits	$	6,518,217		100	%	$	6,414,425		100	%	$	5,650,338		100	%	1.6	%	15.4	%


Core deposits by region (1):
Oregon/Washington	$	3,183,550		58	%	$	3,095,630		58	%	$	3,006,830		62	%	2.8	%	5.9	%
California		2,270,478		42	%		2,277,890		42	%		1,864,027		38	%	(0.3	)%	21.8	%

Total Core deposits	$	5,454,028		100	%	$	5,373,520		100	%	$	4,870,857		100	%	1.5	%	12.0	%

% of total deposits		84	%				84	%				86	%

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

Umpqua Holdings Corporation
Organic Growth by Region
(Unaudited)

		Oregon/Washington						California						Total

*Dollars in thousands*		Loans			Deposits			Loans			Deposits			Loans			Deposits

Balance, 9/30/07	$	3,452,645		$	3,700,826		$	2,626,790		$	2,817,391		$	6,079,435		$	6,518,217

Less: 12/31/06 balance		3,168,596			3,500,965			2,193,266			2,339,329			5,361,862			5,840,294

Total growth year to date		284,049			199,861			433,524			478,062			717,573			677,923

Less: acquisition		16,166			3,559			426,784			459,065			442,950			462,624

Organic Growth	$	267,883		$	196,302		$	6,740		$	18,997		$	274,623		$	215,299


Year to date organic growth %		8.5	%		5.6	%		0.3	%		0.8	%		5.1	%		3.7	%
Year to date acquisition growth %		0.5	%		0.1	%		19.5	%		19.6	%		8.3	%		7.9	%
Total year to date growth %		9.0	%		5.7	%		19.8	%		20.4	%		13.4	%		11.6	%

Annualized organic growth rate - 2007		11.3	%		7.5	%		0.4	%		1.1	%		6.8	%		4.9	%
Organic growth rate – 2006		18.1	%		16.3	%		(5.4	)%		3.7	%		10.7	%		12.6	%
Organic growth rate – 2005		13.3	%		12.9	%		12.7	%		12.7	%		13.1	%		12.8	%
Organic growth rate – 2004		17.7	%		8.0	%		4.7	%		3.2	%		20.2	%		9.6	%

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 14 of 17

Umpqua Holdings Corporation

Selected Ratios
(Unaudited)


			Quarter Ended:				Sequential		Year over
							Quarter		Year
	Sept 30, 2007		Jun 30, 2007		Sept 30, 2006		Change		Change

Net Interest Spread:
Yield on loans and leases	7.62	%	7.74	%	7.88	%	(0.12	)	(0.26	)
Yield on taxable investments	4.83	%	4.72	%	4.53	%	0.11		0.30
Yield on tax-exempt investments (1)	5.62	%	5.06	%	6.08	%	0.56		(0.46	)
Yield on temporary investments	5.18	%	5.13	%	3.99	%	0.05		1.19
Total yield on earning assets (1)	7.24	%	7.33	%	7.49	%	(0.09	)	(0.25	)

Cost of interest bearing deposits	3.69	%	3.66	%	3.19	%	0.03		0.50
Cost of securities sold under agreements
to repurchase and fed funds purchased	3.28	%	3.74	%	4.45	%	(0.46	)	(1.17	)
Cost of term debt	4.62	%	4.63	%	4.81	%	(0.01	)	(0.19	)
Cost of junior subordinated debentures	7.59	%	7.62	%	7.72	%	(0.03	)	(0.13	)
Total cost of interest bearing liabilities	3.86	%	3.84	%	3.45	%	0.02		0.41

Net interest spread (1)	3.38	%	3.49	%	4.04	%	(0.11	)	(0.66	)
Net interest margin – Consolidated (1)	4.20	%	4.34	%	4.83	%	(0.14	)	(0.63	)

Net interest margin – Bank (1)	4.45	%	4.57	%	5.08	%	(0.12	)	(0.63	)

As reported:
Return on average assets	0.64	%	1.02	%	1.27	%	(0.38	)	(0.63	)
Return on average tangible assets	0.70	%	1.13	%	1.41	%	(0.43	)	(0.71	)
Return on average equity	4.20	%	6.44	%	8.06	%	(2.24	)	(3.86	)
Return on average tangible equity	10.92	%	16.11	%	20.50	%	(5.19	)	(9.58	)
Efficiency ratio – Consolidated	56.83	%	60.76	%	57.75	%	(3.93	)	(0.92	)
Efficiency ratio – Bank	55.57	%	56.98	%	53.95	%	(1.41	)	1.62

Excluding merger related expense (2):
Return on average assets	0.65	%	1.09	%	1.35	%	(0.44	)	(0.70	)
Return on average tangible assets	0.71	%	1.21	%	1.50	%	(0.50	)	(0.79	)
Return on average equity	4.25	%	6.91	%	8.58	%	(2.66	)	(4.33	)
Return on average tangible equity	11.05	%	17.26	%	21.82	%	(6.21	)	(10.77	)
Efficiency ratio – Consolidated	56.54	%	58.08	%	54.95	%	(1.54	)	1.59
Efficiency ratio – Bank	55.30	%	54.32	%	51.20	%	0.98		4.10

(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 Announces Third Quarter 2007 Results
October 18, 2007
Page 15 of 17

Umpqua Holdings Corporation

Selected Ratios
(Unaudited)

	Nine Months Ended:

	Sept 30, 2007		Sept 30, 2006		Change

Net Interest Spread:
Yield on loans and leases	7.72	%	7.65	%	0.07
Yield on taxable investments	4.72	%	4.50	%	0.22
Yield on tax-exempt investments (1)	5.49	%	5.77	%	(0.28	)
Yield on temporary investments	5.20	%	4.09	%	1.11
Total yield on earning assets (1)	7.33	%	7.25	%	0.08

Cost of interest bearing deposits	3.66	%	2.94	%	0.72
Cost of securities sold under
agreements to repurchase and fed funds purchased	3.40	%	4.23	%	(0.83	)
Cost of term debt	4.58	%	4.97	%	(0.39	)
Cost of junior subordinated debentures	7.60	%	7.59	%	0.01
Total cost of interest bearing liabilities	3.83	%	3.25	%	0.58

Net interest spread (1)	3.50	%	4.00	%	(0.50	)
Net interest margin – Consolidated (1)	4.33	%	4.74	%	(0.41	)

Net interest margin – Bank (1)	4.57	%	4.99	%	(0.42	)

As reported:
Return on average assets	0.93	%	1.29	%	(0.36	)
Return on average tangible assets	1.02	%	1.41	%	(0.39	)
Return on average equity	5.91	%	8.80	%	(2.89	)
Return on average tangible equity	14.79	%	20.87	%	(6.08	)
Efficiency ratio – Consolidated	59.27	%	57.91	%	1.36
Efficiency ratio – Bank	56.35	%	53.94	%	2.41

Excluding merger related expense (2):
Return on average assets	0.96	%	1.35	%	(0.39	)
Return on average tangible assets	1.06	%	1.47	%	(0.41	)
Return on average equity	6.12	%	9.18	%	(3.06	)
Return on average tangible equity	15.32	%	21.78	%	(6.46	)
Efficiency ratio – Consolidated	58.06	%	56.01	%	2.05
Efficiency ratio – Bank	55.15	%	52.08	%	3.07

(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 Announces Third Quarter 2007 Results
October 18, 2007
Page 16 of 17

Umpqua Holdings Corporation

Average Balances
(Unaudited)


				Quarter Ended:				Sequential		Year over
								Quarter		Year
*Dollars in thousands*		Sept 30, 2007		Jun 30, 2007		Sept 30, 2006		% Change		% Change


Temporary investments	$	71,165	$	48,142	$	37,225		48	%	91	%
Investment securities, taxable		765,346		746,721		609,131		2	%	26	%
Investment securities, tax-exempt		159,998		148,071		107,851		8	%	48	%
Loans held for sale		10,732		15,468		19,258		(31	)%	(44	)%
Loans and leases		6,032,388		5,777,447		5,333,728		4	%	13	%

Total earning assets		7,039,629		6,735,849		6,107,193		5	%	15	%
Goodwill & other intangibles		766,591		743,801		681,988		3	%	12	%
Total assets		8,190,032		7,840,422		7,135,488		4	%	15	%

Non interest bearing demand deposits		1,319,280		1,271,311		1,235,838		4	%	7	%
Interest bearing deposits		5,171,123		4,881,499		4,248,328		6	%	22	%

Total deposits		6,490,403		6,152,810		5,484,166		5	%	18	%
Interest bearing liabilities		5,542,587		5,252,179		4,701,582		6	%	18	%

Total shareholders’ equity		1,245,390		1,239,691		1,124,398		0	%	11	%
Tangible equity		478,799		495,890		442,410		(3	)%	8	%


Umpqua Holdings Corporation

Average Balances
(Unaudited)

		Nine Months Ended:

*Dollars in thousands*		Sept 30, 2007		Sept 30, 2006		% Change


Temporary investments	$	62,680	$	27,360		129	%
Investment securities, taxable		723,978		604,448		20	%
Investment securities, tax-exempt		142,444		91,027		56	%
Loans held for sale		13,719		14,512		(5	)%
Loans and leases		5,733,639		4,623,013		24	%

Total earning assets		6,676,460		5,360,360		25	%
Goodwill & other intangibles		729,979		526,459		39	%
Total assets		7,765,832		6,198,868		25	%

Non interest bearing demand deposits		1,250,188		1,085,161		15	%
Interest bearing deposits		4,884,775		3,683,415		33	%

Total deposits		6,134,963		4,768,576		29	%
Interest bearing liabilities		5,222,253		4,141,511		26	%

Total shareholders’ equity		1,215,730		910,311		34	%
Tangible equity		485,751		383,852		27	%

Umpqua Holdings Corporation Announces Third Quarter 2007 Results
October 18, 2007
Page 17 of 17

Umpqua Holdings Corporation

Mortgage Banking Activity
(unaudited)


					Quarter Ended:					Sequential		Year over
										Quarter		Year
*Dollars in thousands*		Sept 30, 2007			Jun 30, 2007			Sept 30, 2006		% Change		% Change


Mortgage Servicing Rights (MSR):
Mortgage loans serviced for others	$	877,648		$	897,696		$	978,723		(2	)%	(10	)%

MSR Asset	$	9,474		$	9,966		$	13,668		(5	)%	(31	)%
Less: Valuation reserve (1)		--			--			(3,241	)	--		(100	)%

MSR Asset net	$	9,474		$	9,966		$	10,427		(5	)%	(9	)%



MSR net as % of serviced portfolio		1.08	%		1.11	%		1.07	%


Mortgage Banking Revenue:
Origination and sale	$	1,468		$	1,700		$	2,141		(14	)%	(31	)%
Servicing		546			670			652		(19	)%	(16	)%
Amortization of MSR (1)		--			--			(292	)	--		(100	)%
MSR valuation reserve change		--			--			(1,056	)	--		(100	)%
Change in fair value of MSR		(648	)		237			--		(373	)%	100	%

Total Mortgage Banking Revenue	$	1,366		$	2,607		$	1,445		(48	)%	(5	)%



		Nine Months Ended:

*Dollars in thousands*		Sept 30, 2007			Sept 30, 2006			% Change


Mortgage Banking Revenue:
Origination and sale	$	4,896		$	5,601			(13	)%
Servicing		1,853			1,992			(7	)%
Amortization of MSR (1)		--			(934	)		(100	)%
MSR valuation reserve change		--			(867	)		(100	)%
Change in fair value of MSR		(977	)		--			100	%

Total Mortgage Banking Revenue	$	5,772		$	5,792			0	%

(1) The Company adopted SFAS No. 156 effective January 1, 2007, resulting in elimination of the mortgage servicing right valuation reserve and MSR amortization.

# # #

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