Regulatory Capital

12 Months Ended

Dec. 31, 2017

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 operations and 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 capital, Tier 1 capital and Tier 1 common 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, 2017, that the Company meets all capital adequacy requirements to which it is subject.

The Company's capital amounts and ratios, as calculated under regulatory guidelines of Basel III at December 31, 2017 and 2016 are presented in the following table:

(dollars in thousands)	Actual				For Capital Adequacy Purposes				To be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2017
Total Capital
(to Risk Weighted Assets)
Consolidated	$	2,844,261	14.06	%	$	1,618,009	8.00	%	$	2,022,511	10.00	%
Umpqua Bank	$	2,668,069	13.21	%	$	1,615,698	8.00	%	$	2,019,623	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	2,238,540	11.07	%	$	1,213,507	6.00	%	$	1,618,009	8.00	%
Umpqua Bank	$	2,523,599	12.50	%	$	1,211,774	6.00	%	$	1,615,698	8.00	%
Tier 1 Common
(to Risk Weighted Assets)
Consolidated	$	2,238,540	11.07	%	$	910,130	4.50	%	$	1,314,632	6.50	%
Umpqua Bank	$	2,523,599	12.50	%	$	908,830	4.50	%	$	1,312,755	6.50	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	2,238,540	9.38	%	$	954,403	4.00	%	$	1,193,003	5.00	%
Umpqua Bank	$	2,523,599	10.59	%	$	953,264	4.00	%	$	1,191,579	5.00	%
As of December 31, 2016
Total Capital
(to Risk Weighted Assets)
Consolidated	$	2,707,693	14.72	%	$	1,471,577	8.00	%	$	1,839,471	10.00	%
Umpqua Bank	$	2,534,927	13.79	%	$	1,470,731	8.00	%	$	1,838,414	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	2,108,948	11.47	%	$	1,103,682	6.00	%	$	1,471,577	8.00	%
Umpqua Bank	$	2,397,449	13.04	%	$	1,103,048	6.00	%	$	1,470,731	8.00	%
Tier 1 Common
(to Risk Weighted Assets)
Consolidated	$	2,108,948	11.47	%	$	827,762	4.50	%	$	1,195,656	6.50	%
Umpqua Bank	$	2,397,449	13.04	%	$	827,286	4.50	%	$	1,194,969	6.50	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	2,108,948	9.21	%	$	915,917	4.00	%	$	1,144,896	5.00	%
Umpqua Bank	$	2,397,449	10.47	%	$	916,260	4.00	%	$	1,145,325	5.00	%

The Company is a registered financial holding company under the Gramm-Leach-Bliley Act of 1999, and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System. The Bank is an Oregon state chartered bank with deposits insured by the 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, 2017, 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 began 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 common equity Tier 1 capital ("CET1") to risk-weighted assets ratio, including a capital conservation buffer. The required CET1 ratio 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 6.0% which is the current minimum, to 8.5% on January 1, 2019, as well as require a minimum leverage ratio of 4.0%.

Under the final rule, as Umpqua is above $15.0 billion in assets as a result of an acquisition, the combined trust preferred security debt issuances were phased out of Tier 1 and into Tier 2 capital (75% starting in the first quarter of 2015 and 100% starting in the first quarter of 2016).

On November 21, 2017, the federal banking regulators finalized a halt in the phase-in of certain provisions of the rule for certain banks, including Umpqua. The final rules had provided for a number of adjustments to and deductions from the new CET1. The deductions included, 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. Effective on January 1, 2018, the 2017 rule pauses the full transition to the Basel III treatment for these items.

Under Basel III, the effects of certain accumulated other comprehensive items are not excluded; however, the Company and the Bank have made a one-time permanent election to continue to exclude these items in order to avoid significant variations in the level of capital depending on the impact of interest rate fluctuations on the fair value of the Company's securities portfolio.