Regulatory Capital

12 Months Ended

Dec. 31, 2014

Brokers and Dealers [Abstract]

Regulatory Capital

Regulatory Capital

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company's financial statements. Under capital adequacy guidelines, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classifications are also subject to qualitative judgments by the regulators about risk components, asset risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets (as defined in the regulations), and of Tier 1 capital to average assets (as defined in the regulations). Management believes, as of December 31, 2014, that the Company meets all capital adequacy requirements to which it is subject.

The Company's capital amounts and ratios as of December 31, 2014 and December 31, 2013 are presented in the following table:

(dollars in thousands)					For Capital				To be Well
	Actual				Adequacy purposes				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2014
Total Capital
(to Risk Weighted Assets)
Consolidated	$	2,391,267	15.20	%	$	1,258,198	8.00	%	$	1,572,747	10.00	%
Umpqua Bank	$	2,181,776	13.90	%	$	1,255,819	8.00	%	$	1,569,774	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	2,271,563	14.44	%	$	629,099	4.00	%	$	943,648	6.00	%
Umpqua Bank	$	2,062,151	13.14	%	$	627,910	4.00	%	$	941,864	6.00	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	2,271,563	10.99	%	$	827,128	4.00	%	$	1,033,910	5.00	%
Umpqua Bank	$	2,062,151	9.96	%	$	828,061	4.00	%	$	1,035,076	5.00	%
As of December 31, 2013
Total Capital
(to Risk Weighted Assets)
Consolidated	$	1,279,586	14.66	%	$	698,273	8.00	%	$	872,842	10.00	%
Umpqua Bank	$	1,177,782	13.51	%	$	697,428	8.00	%	$	871,785	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	1,183,061	13.56	%	$	348,986	4.00	%	$	523,478	6.00	%
Umpqua Bank	$	1,081,282	12.40	%	$	348,801	4.00	%	$	523,201	6.00	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	1,183,061	10.90	%	$	434,151	4.00	%	$	542,689	5.00	%
Umpqua Bank	$	1,081,282	9.97	%	$	433,814	4.00	%	$	542,268	5.00	%

The Company is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999 (the "GLB Act"), and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Bank is an Oregon state chartered bank with deposits insured by the Federal Deposit Insurance Corporation ("FDIC"), and is subject to the supervision and regulation of the FDIC and the Director of the Oregon Department of Consumer and Business Services, administered through the Division of Finance and Corporate Securities, as well as to the supervision and regulation of the California, Washington, Idaho, and Nevada banking regulators. As of December 31, 2014 , the most recent notification from the FDIC categorized the Bank as "well-capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's regulatory capital category.

On July 2, 2013, the federal banking regulators approved the final proposed rules that revise the regulatory capital rules to incorporate certain revisions by the Basel Committee on Banking Supervision to the Basel capital framework ("Basel III"). The phase-in period for the final rules will begin for the Company on January 1, 2015, with full compliance with the final rules entire requirement phased in on January 1, 2019.

The final rules, among other things, include a new common equity Tier 1 capital ("CET1") to risk-weighted assets ratio, including a capital conservation buffer, which will gradually increase from 4.5% on January 1, 2015 to 7.0% on January 1, 2019. The final rules also raise the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% on January 1, 2015 to 8.5% on January 1, 2019, as well as require a minimum leverage ratio of 4.0%.

Under the final rule, consistent with Section 171 of the Dodd-Frank Act, bank holding companies with less than $15 billion assets as of December 31, 2009 will be grandfathered and may continue to include these instruments in Tier 1 capital, subject to certain restrictions. However, if an institution grows above $15 billion as a result of an acquisition (including our closed merger with Sterling), the combined trust preferred issuances must be phased out of Tier 1 and into Tier 2 capital (75% in 2015 and 100% in 2016). It is possible the Company may accelerate redemption of the existing junior subordinated debentures.  This could result in adjustments to the carrying value of these instruments, including the acceleration of losses on junior subordinated debentures carried at fair value within non-interest income. The Company currently does not intend to redeem the junior subordinated debentures in order to support regulatory total capital levels.

The final rules also provide for a number of adjustments to and deductions from the new CET1. Under current capital standards, the effects of accumulated other comprehensive income items included in capital are excluded for the purposes of determining regulatory capital ratios. Under Basel III, the effects of certain accumulated other comprehensive items are not excluded; however, non-advanced approaches banking organizations, including the Company and the Bank, may make a one-time permanent election to continue to exclude these items. The Company and Bank expect to make this election in order to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the Company's securities portfolio. In addition, deductions include, for example, the requirement that mortgage servicing rights, certain deferred tax assets not dependent upon future taxable income and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1. The Company and the Bank are currently evaluating the provisions of the final rules and expected impact.