Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information 

The Company reports four primary segments: Wholesale Bank, Wealth Management, Retail Bank, and Home Lending with the remainder as Corporate and other.

The Wholesale Bank segment includes lending, treasury and cash management services and customer risk management products to middle market corporate, commercial and business banking customers and includes the operations of FinPac, a commercial leasing company. The Wealth Management segment consists of the operations of Umpqua Investments, which offers a full range of retail brokerage and investment advisory services and products to its clients who consist primarily of individual investors, and Umpqua Private Bank, which serves high net worth individuals with liquid investable assets and provides customized financial solutions and offerings. The Retail Bank segment includes retail and small business lending and deposit services for customers served through the Bank's store network. The Home Lending segment originates, sells and services residential mortgage loans. The Corporate and other segment includes activities that are not directly attributable to one of the four principal lines of business and includes the operations of the parent company, eliminations and the economic impact of certain assets, capital and support functions not specifically identifiable within the other lines of business.

Management monitors the Company's results using an internal performance measurement accounting system, which provides line of business results and key performance measures. A primary objective of this profitability measurement system and related internal financial reporting practices are designed to produce consistent results that reflect the underlying economics of the business and to support strategic objectives and analysis based on how management views the business. Various methodologies employed within this system to measure performance are based on management's judgment or other subjective factors. Consequently, the information presented is not necessarily comparable with similar information for other financial institutions.

This system uses various techniques to assign balance sheet and income statement amounts to the business segments, including internal funds transfer pricing, allocations of income, expense, the provision for credit losses, and capital.  The application and development of these management reporting methodologies is a dynamic process and is subject to periodic enhancements. As these enhancements are made, financial results presented by each reportable segment may be periodically revised retrospectively. In the current period, certain business banking related departments were moved from Retail Bank to Wholesale Bank to realign with Umpqua's strategic goals. The prior periods have been revised accordingly.

Funds transfer pricing is used in the determination of net interest income reported by assigning a cost for funds used or credit for funds provided to all assets and liabilities within each business segment. In general, assets and liabilities are match-funded based on their maturity or repricing characteristics, adjusted for estimated prepayments if applicable. The value of funds provided or cost of funds used by the business segments is priced at rates that approximate wholesale market rates of the Company for funds with similar duration and re-pricing characteristics. Market rates are generally based on LIBOR or interest rate swap rates, plus consideration of the Company's incremental credit spread/cost of borrowing. As a result, the business segments are generally insulated from changes in interest rates. This method of funds transfer pricing also serves to transfer interest rate risk to Treasury, which is contained within the Corporate & Other segment. However, the business segments have some latitude to retain certain interest rate exposures related to customer pricing decisions that are within overall Corporate guidelines. The Corporate & Other segment reflects the recording of the deferred fees and costs on loans originated during the period, as the loan fees and costs are reflected within net interest income and non-interest expense, respectively, upon loan origination for the rest of the segments.

Non-interest income and expenses directly attributable to a business segment are directly recorded within that business unit. To better analyze the total financial performance of each business unit and to consider the total cost to support a segment, management allocates centrally provided support services and other corporate overhead to the business segments based on various methodologies. Examples of these type of expense overhead pools include information technology, operations, human resources, finance, risk management, credit administration, legal, and marketing. Expense allocations are based on actual usage where practicably calculated or by management's estimate of such usage. Example of typical expense allocation drivers include number of employees, loan or deposits average balances or counts, origination or transaction volumes, credit quality related indicators, non-interest expense, or other identified drivers.

The provision for credit losses is based on the methodology consistent with the Bank's process to estimate the consolidated allowance.  The provision for credit losses incorporates the actual net charge-offs recognized related to loans contained within each business segment.  The residual provision for credit losses to arrive at the consolidated provision for credit losses is included in Corporate and Other.

The provision for income taxes is typically allocated to business segments using a 25% effective tax rate. The residual income tax expense or benefit arising from tax planning strategies or other tax attributes to arrive at the consolidated effective tax rate is retained in Corporate and Other.

Summarized financial information concerning the Company's reportable segments and the reconciliation to the consolidated financial results is shown in the following tables for the years ended December 31, 2020, 2019, and 2018: 

	2020
(in thousands)	Wholesale Bank		Wealth Management		Retail Bank		Home Lending		Corporate & Other (2)		Consolidated
Net interest income (expense)	$	539,454	$	23,514	$	265,703	$	68,994	$	(15,146)	$	882,519
Provision (recapture) for credit losses	196,363		2,144		6,667		(428)		115		204,861
Non-interest income	49,018		17,305		59,488		271,580		14,618		412,009
Goodwill impairment	1,033,744		—		751,192		—		—		1,784,936
Non-interest expense (excluding goodwill impairment)	249,546		33,748		238,169		180,857		58,831		761,151
(Loss) income before income taxes	(891,181)		4,927		(670,837)		160,145		(59,474)		(1,456,420)
Provision (benefit) for income taxes(1)	40,997		1,232		30,861		40,036		(46,126)		67,000
Net (loss) income	$	(932,178)	$	3,695	$	(701,698)	$	120,109	$	(13,348)	$	(1,523,420)
Notable fair value adjustments included in non-interest income:
Residential mortgage servicing rights	$	—	$	—	$	—	$	(73,103)	$	—	$	(73,103)
Interest rate swaps	$	(9,409)	$	—	$	—	$	—	$	—	$	(9,409)
Total assets	$	16,652,657	$	833,203	$	1,546,243	$	4,119,896	$	6,083,176	$	29,235,175
Total loans and leases	$	16,340,002	$	813,463	$	1,388,752	$	3,286,092	$	(48,942)	$	21,779,367
Total deposits	$	5,375,568	$	1,296,075	$	15,644,208	$	431,568	$	1,874,782	$	24,622,201

(1) The Wholesale Bank and Retail Bank do not have the standard tax rate of 25% allocated in 2020 due to the impact of the goodwill impairment on these reporting units.

(2) The Corporate and Other segment reflects the recording of the deferral of the fees and costs on loans originated during the period, and such fees and costs are reflected within net interest income and non-interest expense, respectively, upon loan origination for the Wholesale Bank, Retail Bank, home Lending, and Wealth Management segments.

	2019
(in thousands)	Wholesale Bank		Wealth Management		Retail Bank		Home Lending		Corporate & Other		Consolidated
Net interest income	$	447,449	$	23,240	$	332,725	$	46,603	$	70,617	$	920,634
Provision for credit losses	65,550		804		3,719		2,033		409		72,515
Non-interest income	65,975		18,658		62,856		102,239		90,096		339,824
Non-interest expense	233,516		36,976		255,632		135,168		57,748		719,040
Income before income taxes	214,358		4,118		136,230		11,641		102,556		468,903
Provision for income taxes	53,589		1,030		34,058		2,910		23,221		114,808
Net income	$	160,769	$	3,088	$	102,172	$	8,731	$	79,335	$	354,095
Notable fair value adjustments included in non-interest income:
Residential mortgage servicing rights	$	—	$	—	$	—	$	(44,783)	$	—	$	(44,783)
Interest rate swaps	$	(6,038)	$	—	$	—	$	—	$	—	$	(6,038)
Total assets	$	15,404,164	$	710,873	$	1,753,682	$	4,423,869	$	6,554,221	$	28,846,809
Total loans and leases	$	15,119,857	$	693,569	$	1,671,472	$	3,768,584	$	(57,798)	$	21,195,684
Total deposits	$	4,462,630	$	1,221,869	$	13,548,089	$	279,226	$	2,969,690	$	22,481,504

	2018
(in thousands)	Wholesale Bank		Wealth Management		Retail Bank		Home Lending		Corporate & Other		Consolidated
Net interest income	$	453,291	$	24,346	$	337,402	$	39,897	$	83,703	$	938,639
Provision (recapture) for loan and lease losses	50,110		1,025		3,343		1,628		(201)		55,905
Non-interest income	59,129		19,434		63,429		119,538		17,887		279,417
Non-interest expense	226,758		36,162		272,454		130,384		73,707		739,465
Income before income taxes	235,552		6,593		125,034		27,423		28,084		422,686
Provision for income taxes	59,308		1,648		31,482		6,856		7,129		106,423
Net income	$	176,244	$	4,945	$	93,552	$	20,567	$	20,955	$	316,263
Notable fair value adjustments included in non-interest income:
Residential mortgage servicing rights	$	—	$	—	$	—	$	(13,195)	$	—	$	(13,195)
Interest rate swaps	$	(1,362)	$	—	$	—	$	—	$	—	$	(1,362)
Total assets	$	14,973,789	$	536,024	$	1,962,005	$	3,680,005	$	5,787,958	$	26,939,781
Total loans and leases	$	14,770,562	$	521,988	$	1,881,568	$	3,320,634	$	(72,086)	$	20,422,666
Total deposits	$	3,776,049	$	1,068,025	$	13,016,974	$	219,584	$	3,056,854	$	21,137,486