Allowance for Loan and Lease Loss and Credit Quality (Tables)

3 Months Ended

Mar. 31, 2017

Activity In The Non-Covered Allowance For Loan And Lease Losses

The following table summarizes activity related to the allowance for loan and lease losses by loan and lease portfolio segment for the three months ended March 31, 2017 and 2016:



(in thousands)	Three Months Ended March 31, 2017
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	47,795		$	58,840		$	17,946		$	9,403		$	133,984
Charge-offs	(339		)	(10,104		)	(210		)	(2,349		)	(13,002		)
Recoveries	400			2,030			197			1,011			3,638
Provision	1,150			8,351			33			2,138			11,672
Balance, end of period	$	49,006		$	59,117		$	17,966		$	10,203		$	136,292

	Three Months Ended March 31, 2016
	Commercial									Consumer
	Real Estate			Commercial			Residential			& Other			Total
Balance, beginning of period	$	54,293		$	47,487		$	22,017		$	6,525		$	130,322
Charge-offs	(502		)	(4,655		)	(337		)	(2,356		)	(7,850		)
Recoveries	500			1,173			231			1,044			2,948
(Recapture) Provision	(2,841		)	6,776			(1,014		)	1,902			4,823
Balance, end of period	$	51,450		$	50,781		$	20,897		$	7,115		$	130,243

The valuation allowance on purchased impaired loans was increased by provision expense, which includes amounts related to subsequent deterioration of purchased impaired loans of $8,000 for the three months ended March 31, 2016. There was no provision expense that related to subsequent deterioration of purchased impaired loans recorded during the three months ended March 31, 2017. The valuation allowance on purchased impaired loans was decreased by recaptured provision of $81,000 for the three months ended March 31, 2017 and $777,000 for the three months ended March 31, 2016.

The following table presents the allowance and recorded investment in loans and leases by portfolio segment as of March 31, 2017 and 2016:



(in thousands)	March 31, 2017
	Commercial						Consumer
	Real Estate		Commercial		Residential		& Other		Total
Allowance for loans and leases:
Collectively evaluated for impairment	$	45,722	$	58,763	$	17,374	$	10,146	$	132,005
Individually evaluated for impairment	735		7		—		—		742
Loans acquired with deteriorated credit quality	2,549		347		592		57		3,545
Total	$	49,006	$	59,117	$	17,966	$	10,203	$	136,292
Loans and leases:
Collectively evaluated for impairment	$	9,243,447	$	3,714,197	$	3,890,613	$	665,412	$	17,513,669
Individually evaluated for impairment	40,353		15,357		—		—		55,710
Loans acquired with deteriorated credit quality	212,947		5,293		41,449		570		260,259
Total	$	9,496,747	$	3,734,847	$	3,932,062	$	665,982	$	17,829,638



(in thousands)	March 31, 2016
	Commercial						Consumer
	Real Estate		Commercial		Residential		& Other		Total
Allowance for loans and leases:
Collectively evaluated for impairment	$	49,069	$	50,250	$	20,223	$	7,058	$	126,600
Individually evaluated for impairment	317		482		—		—		799
Loans acquired with deteriorated credit quality	2,064		49		674		57		2,844
Total	$	51,450	$	50,781	$	20,897	$	7,115	$	130,243
Loans and leases:
Collectively evaluated for impairment	$	9,013,669	$	3,207,045	$	3,767,604	$	553,723	$	16,542,041
Individually evaluated for impairment	30,819		20,429		—		—		51,248
Loans acquired with deteriorated credit quality	292,567		13,529		55,250		948		362,294
Total	$	9,337,055	$	3,241,003	$	3,822,854	$	554,671	$	16,955,583

Schedule of Reserve for Unfunded Commitments

The following table presents a summary of activity in the RUC and unfunded commitments for the three months ended March 31, 2017 and 2016:



(in thousands)	Three Months Ended
	March 31,
	2017			2016
Balance, beginning of period	$	3,611		$	3,574
Net charge to other expense	(116		)	(92		)
Balance, end of period	$	3,495		$	3,482



(in thousands)
	Total
Unfunded loan and lease commitments:
March 31, 2017	$	4,215,048
March 31, 2016	$	3,703,352

Non-Covered Non-Accrual Loans And Loans Past Due

The following table summarizes our non-accrual loans and leases and loans and leases past due, by loan and lease class, as of March 31, 2017 and December 31, 2016:



(in thousands)	March 31, 2017
	Greater than 30 to 59 Days Past Due		60 to 89 Days Past Due		Greater than 90 Days and Accruing		Total Past Due		Non-Accrual		Current & Other (1)		Total Loans and Leases
Commercial real estate
Non-owner occupied term, net	$	5,679	$	1,863	$	41	$	7,583	$	1,553	$	3,401,778	$	3,410,914
Owner occupied term, net	965		1,597		—		2,562		8,000		2,573,621		2,584,183
Multifamily, net	2,170		—		—		2,170		387		2,882,607		2,885,164
Construction & development, net	—		—		—		—		—		471,007		471,007
Residential development, net	—		—		—		—		—		145,479		145,479
Commercial
Term, net	1		—		214		215		6,782		1,613,314		1,620,311
LOC & other, net	4,095		6,885		172		11,152		3,162		1,099,846		1,114,160
Leases and equipment finance, net	10,001		4,885		—		14,886		9,031		976,459		1,000,376
Residential
Mortgage, net (2)	4,716		1,284		25,180		31,180		—		2,885,744		2,916,924
Home equity loans & lines, net	1,552		522		2,148		4,222		—		1,010,916		1,015,138
Consumer & other, net	2,537		778		920		4,235		—		661,747		665,982
Total, net of deferred fees and costs	$	31,716	$	17,814	$	28,675	$	78,205	$	28,915	$	17,722,518	$	17,829,638

(1) Other includes purchased credit impaired loans of $260.3 million.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $5.3 million at March 31, 2017.



(in thousands)	December 31, 2016
	Greater than 30 to 59 Days Past Due		60 to 89 Days Past Due		Greater than 90 Days and Accruing		Total Past Due		Non-Accrual		Current & Other (1)		Total Loans and Leases



Commercial real estate
Non-owner occupied term, net	$	718	$	1,027	$	1,047	$	2,792	$	2,100	$	3,325,550	$	3,330,442
Owner occupied term, net	974		4,539		1		5,514		4,391		2,589,150		2,599,055
Multifamily, net	—		—		—		—		476		2,858,480		2,858,956
Construction & development, net	—		—		—		—		—		463,625		463,625
Residential development, net	—		—		—		—		—		142,984		142,984
Commercial
Term, net	319		233		—		552		6,880		1,501,348		1,508,780
LOC & other, net	1,673		27		—		1,700		4,998		1,109,561		1,116,259
Leases and equipment finance, net	5,343		6,865		1,808		14,016		8,920		927,652		950,588
Residential
Mortgage, net (2)	10		3,114		33,703		36,827		—		2,851,144		2,887,971
Home equity loans & lines, net	289		848		2,080		3,217		—		1,008,627		1,011,844
Consumer & other, net	3,261		1,185		587		5,033		—		633,126		638,159
Total, net of deferred fees and costs	$	12,587	$	17,838	$	39,226	$	69,651	$	27,765	$	17,411,247	$	17,508,663

(1) Other includes purchased credit impaired loans of $280.4 million.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $10.9 million at December 31, 2016.

Non-Covered Impaired Loans

The following table summarizes our average recorded investment and interest income recognized on impaired loans by loan class for the three months ended March 31, 2017 and 2016:



(in thousands)	Three Months Ended				Three Months Ended
	March 31, 2017				March 31, 2016
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Commercial real estate
Non-owner occupied term, net	$	15,735	$	149	$	10,403	$	108
Owner occupied term, net	8,952		61		7,939		61
Multifamily, net	3,939		30		3,775		30
Construction & development, net	1,312		11		1,091		11
Residential development, net	7,445		75		7,912		81
Commercial
Term, net	12,827		35		19,612		28
LOC & other, net	4,966		12		3,028		20
Leases, net	232		—		—		—
Total, net of deferred fees and costs	$	55,408	$	373	$	53,760	$	339

The following tables summarize our impaired loans by loan class as of March 31, 2017 and December 31, 2016:



(in thousands)	March 31, 2017
	Unpaid		Recorded Investment
	Principal		Without		With		Related
	Balance		Allowance		Allowance		Allowance
Commercial real estate
Non-owner occupied term, net	$	16,762	$	—	$	16,704	$	393
Owner occupied term, net	12,243		5,528		5,900		127
Multifamily, net	4,006		387		3,519		105
Construction & development, net	1,091		—		1,091		14
Residential development, net	—		—		7,224		96
Commercial
Term, net	16,282		5,735		3,076		6
LOC & other, net	6,697		3,162		2,919		1
Leases and equipment finance, net	465		465		—		—
Total, net of deferred fees and costs	$	57,546	$	15,277	$	40,433	$	742



(in thousands)	December 31, 2016
	Unpaid		Recorded Investment
	Principal		Without		With		Related
	Balance		Allowance		Allowance		Allowance
Commercial real estate
Non-owner occupied term, net	$	19,797	$	278	$	19,116	$	524
Owner occupied term, net	8,467		1,768		6,445		131
Multifamily, net	4,015		476		3,520		123
Construction & development, net	1,091		—		1,091		9
Residential development, net	7,304		—		7,304		72
Commercial
Term, net	16,875		5,982		3,239		8
LOC & other, net	8,279		4,755		—		—
Total, net of deferred fees and costs	$	65,828	$	13,259	$	40,715	$	867

Internal Risk Rating By Loan Class

The following table summarizes our internal risk rating by loan and lease class for the loan and lease portfolio, including purchased credit impaired loans, as of March 31, 2017 and December 31, 2016:



(in thousands)	March 31, 2017
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired (1)		Total
Commercial real estate
Non-owner occupied term, net	$	3,289,051	$	55,328	$	48,403	$	248	$	1,180	$	16,704	$	3,410,914
Owner occupied term, net	2,457,239		66,413		46,341		183		2,579		11,428		2,584,183
Multifamily, net	2,844,856		21,805		14,597		—		—		3,906		2,885,164
Construction & development, net	465,728		1,689		2,499		—		—		1,091		471,007
Residential development, net	137,066		—		1,189		—		—		7,224		145,479
Commercial
Term, net	1,569,166		11,841		29,328		890		275		8,811		1,620,311
LOC & other, net	1,059,396		16,742		31,939		2		—		6,081		1,114,160
Leases and equipment finance, net	975,994		10,001		4,885		7,845		1,186		465		1,000,376
Residential
Mortgage, net (2)	2,855,718		3,428		55,751		—		2,027		—		2,916,924
Home equity loans & lines, net	1,008,705		2,781		3,350		—		302		—		1,015,138
Consumer & other, net	661,718		3,316		832		—		116		—		665,982
Total, net of deferred fees and costs	$	17,324,637	$	193,344	$	239,114	$	9,168	$	7,665	$	55,710	$	17,829,638

(1) The percentage of impaired loans classified as pass/watch, special mention, substandard, and doubtful was 7.8%, 1.9%, 84.9%, and 5.4% respectively, as of March 31, 2017.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $5.3 million at March 31, 2017, which is included in the substandard category.



(in thousands)	December 31, 2016
	Pass/Watch		Special Mention		Substandard		Doubtful		Loss		Impaired (1)		Total
Commercial real estate
Non-owner occupied term, net	$	3,205,241	$	55,194	$	48,699	$	1,368	$	546	$	19,394	$	3,330,442
Owner occupied term, net	2,466,247		75,189		46,781		972		1,653		8,213		2,599,055
Multifamily, net	2,828,370		11,903		14,687		—		—		3,996		2,858,956
Construction & development, net	458,328		1,712		2,494		—		—		1,091		463,625
Residential development, net	134,491		—		1,189		—		—		7,304		142,984
Commercial
Term, net	1,458,699		15,716		24,678		119		347		9,221		1,508,780
LOC & other, net	1,063,305		10,565		37,387		3		244		4,755		1,116,259
Leases and equipment finance, net	927,378		5,614		6,866		9,752		978		—		950,588
Residential
Mortgage, net (2)	2,830,547		1,803		53,607		—		2,014		—		2,887,971
Home equity loans & lines, net	1,006,647		1,490		2,727		—		980		—		1,011,844
Consumer & other, net	633,098		4,446		527		—		88		—		638,159
Total, net of deferred fees and costs	$	17,012,351	$	183,632	$	239,642	$	12,214	$	6,850	$	53,974	$	17,508,663

(1) The percentage of impaired loans classified as pass/watch, special mention, substandard and doubtful was 8.1%, 6.5%, 82.5%, and 2.9%, respectively, as of December 31, 2016.

(2) Includes government guaranteed GNMA mortgage loans that Umpqua has the right but not the obligation to repurchase that are past due 90 days or more, totaling $10.9 million at December 31, 2016, which is included in the substandard category.

Schedule Of Troubled Debt Restructurings

The following tables present newly restructured loans that occurred during the three months ended March 31, 2017 and 2016:



(in thousands)	Three Months Ended March 31, 2017
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial, net	$	—	$	—	$	—	$	—	$	2,919	$	2,919
Residential, net	—		—		—		—		253		253
Total, net of deferred fees and costs	$	—	$	—	$	—	$	—	$	3,172	$	3,172

	Three Months Ended March 31, 2016
	Rate		Term		Interest Only		Payment		Combination		Total
	Modifications		Modifications		Modifications		Modifications		Modifications		Modifications
Commercial real estate, net	$	—	$	—	$	—	$	—	$	209	$	209
Residential, net	—		—		—		—		132		132
Total, net of deferred fees and costs	$	—	$	—	$	—	$	—	$	341	$	341

The following tables present troubled debt restructurings by accrual versus non-accrual status and by loan class as of March 31, 2017 and December 31, 2016:



(in thousands)	March 31, 2017
	Accrual		Non-Accrual		Total
	Status		Status		Modifications
Commercial real estate, net	$	29,934	$	—	$	29,934
Commercial, net	5,834		3,293		9,127
Residential, net	7,261		—		7,261
Total, net of deferred fees and costs	$	43,029	$	3,293	$	46,322



(in thousands)	December 31, 2016
	Accrual		Non-Accrual		Total
	Status		Status		Modifications
Commercial real estate, net	$	30,563	$	—	$	30,563
Commercial, net	3,054		3,345		6,399
Residential, net	7,050		—		7,050
Total, net of deferred fees and costs	$	40,667	$	3,345	$	44,012