Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

NOTE 22. SHAREHOLDERS' EQUITY

On February 3, 2010, the Company raised $303.6 million through a public offering by issuing 8,625,000 shares of the Company's common stock, including 1,125,000 shares pursuant to the underwriters' over-allotment option, at a share price of $11.00 per share and 18,975,000 depository shares, including 2,475,000 depository shares pursuant to the underwriter's over-allotment option, also at a price of $11.00 per share. Fractional interests (1/100th) in each share of the Series B Common Stock Equivalent were represented by the 18,975,000 depositary shares; as a result, each depository share would convert into one share of common stock. The net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were $288.1 million. The net proceeds from the offering were used to redeem the preferred stock issued to the United States Department of the Treasury (U.S. Treasury) under the Troubled Asset Relief Program ("TARP") Capital Purchase Program ("CPP"), to fund FDIC-assisted acquisition opportunities and for general corporate purposes.

On February 17, 2010, the Company redeemed all of the outstanding Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury under the TARP CPP for an aggregate purchase price of $214.2 million. As a result of the repurchase of the Series A preferred stock, the Company incurred a one-time deemed dividend of $9.8 million due to the accelerated amortization of the remaining issuance discount on the preferred stock.

On March 31, 2010, the Company repurchased the common stock warrant issued to the U.S. Treasury pursuant to the TARP CPP, for $4.5 million. The warrant repurchase, together with the Company's redemption in February 2010 of the entire amount of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury, represents full repayment of all TARP obligations and cancellation of all equity interests in the Company held by the U.S. Treasury.

On April 20, 2010, shareholders of the Company approved an amendment to the Company's Restated Articles of Incorporation. The amendment, which became effective on April 21, 2010, increased the number of authorized shares of common stock to 200,000,000 (from 100,000,000). As a result of the effectiveness of the amendment, as of the close of business on April 21, 2010, the Company's Series B Common Stock Equivalent preferred stock automatically converted into newly issued shares of common stock at a conversion rate of 100 shares of common stock for each share of Series B Common Stock Equivalent preferred stock. All shares of Series B Common Stock Equivalent preferred stock and representative depositary shares ceased to exist upon the conversion. Trading in the depositary shares on NASDAQ (ticker symbol "UMPQP") ceased and the UMPQP symbol voluntarily delisted effective as of the close of business on April 21, 2010.

The Company has 4,000,000 shares of no par value preferred stock authorized and available to be issued. As of December 31, 2011 and 2010, there was no preferred stock outstanding.

Stock Plans—The Company's 2007 Long Term Incentive Plan ("2007 LTI Plan") authorizes the award of up to 1 million restricted stock unit grants, which are subject to performance-based vesting as well as other approved vesting conditions. The Company's 2003 Stock Incentive Plan ("2003 Plan") provides for grants of up to 4 million shares. The 2003 Plan terminates June 30, 2015, but it may be extended with the approval of the board and shareholders. The 2003 Plan further provides that no grants may be issued if existing options and subsequent grants under the 2003 Plan exceed 10% of the Company's outstanding shares on a diluted basis. Under the terms of the 2003 Plan, options and awards generally vest ratably over a period of five years, the exercise price of each option equals the market price of the Company's common stock on the date of the grant, and the maximum term is ten years.

The Company has options outstanding under two prior plans adopted in 1995 and 2000, respectively. With the adoption of the 2003 Plan, no additional grants can be issued under the previous plans. The Company also assumed various plans in connection with mergers and acquisitions but does not make grants under those plans.

On June 17, 2011, the Company's Compensation Committee modified restricted stock awards and option grants that were originally issued to fourteen executive officers on January 31, 2011, as follows:

• Added performance vesting conditions linking total shareholder return, compared to the return of a regional bank stock total return index;

• Awards will cliff vest after three years instead of time vest over a four year period, but only to the extent that the performance conditions are met; and

• The modified grants will vest in whole or in part only if total shareholder return achieves specified targets, subject to prorated vesting upon death, disability, qualifying retirement, termination for good reason or a change of control.

As a result of the modification, there was no incremental compensation cost.

The following table summarizes information about stock option activity for the years ended December 31, 2011, 2010 and 2009:

(shares in thousands)
	2011					2010					2009
	Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price		Options Outstanding			Weighted Avg. Exercise Price
Balance, beginning of year		2,067		$	14.82		1,763		$	15.05		1,819		$	15.66
Granted		237		$	11.01		450		$	12.39		229		$	9.34
Exercised		(40	)	$	7.67		(112	)	$	8.97		(51	)	$	5.93
Forfeited/expired		(113	)	$	15.72		(34	)	$	13.83		(234	)	$	16.20
Balance, end of year		2,151		$	14.48		2,067		$	14.82		1,763		$	15.05
Options exercisable,end of year		1,334		$	16.13		1,217		$	16.65		1,071		$	15.90

The following table summarizes information about outstanding stock options issued under all plans as of December 31, 2011:

(shares in thousands)

Range of Exercise Prices	Options Outstanding						Options Exercisable
	Options Outstanding		Weighted Avg. Remaining Contractual Life (Years)		Weighted Avg. Exercise Price		Options Exercisable		Weighted Avg. Exercise Price
$4.58 to $10.97		599		7.0	$	8.76		255	$	6.51
$11.26 to $12.87		560		7.9	$	12.11		188	$	11.95
$13.34 to $19.31		602		3.4	$	16.13		502	$	16.34
$20.03 to $28.43		390		3.4	$	24.14		389	$	24.14
		2,151		5.6	$	14.48		1,334	$	16.13

The compensation cost related to stock options, including costs related to unvested options assumed in connection with acquisitions, that has been charged against income (included in salaries and employee benefits) was $1.2 million, $861,000, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to stock options was $463,000, $344,000, and $541,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of both options outstanding and options exercisable as of December 31, 2011, was $2.4 million and $1.6 million, respectively. The weighted average remaining contractual term of options exercisable was 4.3 years as of December 31, 2011. The total intrinsic value of options exercised was $147,000, $420,000, and $220,000, in the years ended December 31, 2011, 2010 and 2009, respectively. During the years ended December 31, 2011, 2010 and 2009, the amount of cash received from the exercise of stock options was $309,000, $1.0 million, and $301,000, respectively. As of December 31, 2011, there was $2.7 million of total unrecognized compensation cost related to nonvested stock options which is expected to be recognized over a weighted-average period of 2.4 years.

The Company grants restricted stock awards periodically as a part of the 2003 Plan for the benefit of employees. Restricted shares issued generally vest on an annual basis over five years. A deferred restricted stock award was granted to an executive in 2007 and is now fully vested. The Company will issue certificates for the vested award within the seventh month following termination of the executive's employment. The following table summarizes information about nonvested restricted shares outstanding at December 31:

(shares in thousands)
	2011					2010					2009
	Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value		Restricted Shares Outstanding			Average Grant Date Fair Value
Balance, beginning of year		401		$	15.29		187		$	21.46		216		$	23.42
Granted		282		$	11.02		274		$	12.16		26		$	9.83
Released		(82	)	$	17.58		(46	)	$	22.23		(46	)	$	23.81
Forfeited/expired		(16	)	$	12.91		(14	)	$	13.32		(9	)	$	22.85
Balance, end of year		585		$	12.98		401		$	15.29		187		$	21.46

The compensation cost related to restricted stock awards that has been charged against income (included in salaries and employee benefits) was $2.3 million, $1.9 million, and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively. The total income tax benefit recognized in the income statement related to restricted stock awards was $899,000, $746,000, and $548,000 for the years ended December 31, 2011, 2010 and 2009, respectively. The total fair value of restricted shares vested was $919,000, $571,000, and $445,000, for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $3.7 million of total unrecognized compensation cost related to nonvested restricted stock awards which is expected to be recognized over a weighted-average period of 2.4 years.

The Company grants restricted stock units as a part of the 2007 Long Term Incentive Plan for the benefit of certain executive officers. Restricted stock unit grants are subject to performance-based vesting as well as other approved vesting conditions. In the first quarter of 2008, 2009 and 2011, restricted stock units were granted to executives that cliff vest after three years based on performance and service conditions. The total number of restricted stock units granted represents the maximum number of restricted stock units eligible to vest based upon the performance and service conditions set forth in the grant agreements. The following table summarizes information about restricted stock units outstanding at December 31:

(shares in thousands)
	2011					2010					2009
	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value		Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance, beginning of year		225		$	11.13		335		$	15.54		301		$	19.48
Granted		105		$	10.42		—		$	—		114		$	8.01
Released		(63	)	$	14.33		(16	)	$	24.52		(23	)	$	21.33
Forfeited/expired		(48	)	$	14.33		(94	)	$	24.52		(57	)	$	18.98
Balance, end of year		219		$	9.17		225		$	11.13		335		$	15.54

The compensation cost related to restricted stock units that has been charged against income (included in salaries and employee benefits) was $391,000 and $778,000 for the years ended December 31, 2011 and 2010, respectively. For the year ended December 31, 2009, the Company recorded a reversal of compensation cost of $539,000 related to restricted stock units that has been credited to salaries and employee benefits expense. The total income tax benefit recognized in the income statement related to restricted stock units was $156,000 and $311,000 for the years ended December 31, 2011 and 2010, respectively. The total income tax expense recognized in the income statement related to restricted stock units was $215,000 for the year ended December 31, 2009. The total fair value of restricted stock units vested and released was $677,000, $213,000, and $186,000 for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, there was $772,000 of total unrecognized compensation cost related to nonvested restricted stock units which is expected to be recognized over a weighted-average period of 1.1 years, assuming the current expectation of performance conditions are met.

For the years ended December 31, 2011, 2010 and 2009, the Company received income tax benefits of $694,000, $406,000, and $326,000, respectively, related to the exercise of non-qualified employee stock options, disqualifying dispositions in the exercise of incentive stock options, the vesting of restricted shares and the vesting of restricted stock units. For the year ended December 31, 2011, the Company had net tax deficiencies (tax deficiency resulting from tax deductions less than the compensation cost recognized) of $261,000, compared to net tax deficiencies of $216,000 and $369,000 for the years ended December 31, 2010 and 2009, respectively. Only cash flows from gross excess tax benefits are classified as financing cash flows.

Share Repurchase Plan— The Company's share repurchase plan, which was first approved by the Board and announced in August 2003, was amended on September 29, 2011 to increase the number of common shares available for repurchase under the plan to 15 million shares. The repurchase program will run through June 2013. As of December 31, 2011, a total of 12.6 million shares remained available for repurchase. The Company repurchased 2.5 million shares under the repurchase plan in 2011 and no shares in 2010. The timing and amount of future repurchases will depend upon the market price for our common stock, securities laws restricting repurchases, asset growth, earnings, and our capital plan.

We also have certain stock option and restricted stock plans which provide for the payment of the option exercise price or withholding taxes by tendering previously owned or recently vested shares. During the years ended December 31, 2011 and 2010, there were 8,135 and 4,515 shares tendered in connection with option exercises, respectively. Restricted shares cancelled to pay withholding taxes totaled 23,158 and 12,443 shares during the years ended December 31, 2011 and 2010, respectively. Restricted stock units cancelled to pay withholding taxes totaled 22,439 and 5,583 during the years ended December 31, 2011 and 2010, respectively.