UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 24, 2003
Umpqua Holdings Corporation
|
OREGON |
000-25597 (Commission File Number) |
93-1261319 |
200 SW Market Street, Suite 1900
Portland, Oregon 97201
(address of Principal Executive Offices)(Zip Code)
(503) 546-2499
(Registrant's Telephone Number, Including Area Code)
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits
|
(a) |
Financial statements of business acquired. |
|
| Not applicable. | ||
|
(b) |
Pro Forma Financial Information |
|
| Not applicable. | ||
|
(c) |
Exhibits. |
|
|
The following exhibits are being filed herewith and this list shall constitute the exhibit index: |
||
|
Exhibit |
||
|
(99) |
Earnings Press Release |
|
Item 9. Regulation FD Disclosure
On July 15, 2003, Umpqua issued a press release with respect to financial results for the second quarter of 2003 including certain forward looking statements. All of the information in the press release, appearing in Exhibit 99, is not filed but is furnished pursuant to Regulation FD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
UMPQUA HOLDINGS CORPORATION By: /s/ Kenneth E. Roberts |
|
|
Dated: July 24, 2003 |
Kenneth E. Roberts |
FOR IMMEDIATE RELEASE
Contacts:
|
Ray Davis |
Dan Sullivan |
UMPQUA HOLDINGS CORPORATION MEETS EARNINGS EXPECTATIONS AND
CONTINUES STRONG LOAN AND DEPOSIT GROWTH
Loan charge-offs for the quarter near record low level
PORTLAND, Ore. - July 15, 2003 - Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and of Strand, Atkinson, Williams & York, Inc., today announced operating earnings of $8.80 million, a 67% increase over the same period one-year ago, or $0.31 per diluted share for the second quarter of 2003.
Operating earnings are defined as the company's earnings before deduction of merger-related expenses, which are reported in periods with significant merger-related activities. Net income is operating earnings minus merger-related expenses. During the second quarter, the Company completed all milestones related to the Centennial Bancorp acquisition.
"Management is particularly pleased with Umpqua's operating earnings for this past quarter," said Ray Davis, President and Chief Executive Officer of Umpqua Holdings Corporation. "The current interest rate environment has created pressure on our net interest margin and the value of our mortgage servicing rights. We were able to off-set this charge to earnings by selling a small portion of our municipal bonds, which had significantly appreciated due to the lower interest rate environment."
Net income for the second quarter of 2003 was $8.13 million or $0.28 per diluted share compared to $8.38 million or $0.29 for the first quarter of 2003.
The following table presents a reconciliation of net income to operating earnings, with merger- related expenses displayed for each period presented:
|
(Dollars in 000's, except per share data) |
Q2 2003 |
Q1 2003 |
Q2 2002 |
||||
|
Net Income |
$ |
8,132 |
$ |
8,380 |
$ |
5,282 |
|
|
Add Back: Merger related expense, net of tax |
672 |
409 |
-- |
||||
|
Operating Earnings |
$ |
8,804 |
$ |
8,789 |
$ |
5,282 |
|
|
Earnings per diluted share: |
Q2 2003 |
Q1 2003 |
Q2 2002 |
||||
|
Net Income |
$ |
0.28 |
$ |
0.29 |
$ |
0.26 |
|
|
Operating Earnings |
$ |
0.31 |
$ |
0.31 |
$ |
0.26 |
|
Umpqua Holdings Corporation Announces Second-Quarter Earnings
July 15, 2003
Page 2
"During the quarter the company continued to benefit from significant organic growth in loans and deposits while recording one of the best quarters on record for net loan charge-offs," Davis said.
The acquisition of Centennial Bancorp, which closed on November 15, 2002, was accounted for under the purchase accounting method, and Centennial Bancorp's results are included from the date of closing.
Total consolidated assets of Umpqua Holdings as of June 30, 2003 were $2.75 billion, compared to $2.56 billion at December 31, 2002. Total gross loans and leases, and deposits were $1.88 billion and $2.28 billion, respectively, as of June 30, 2003, compared to $1.78 billion and $2.10 billion, respectively, as of December 31, 2002.
The following table presents annualized 2003 growth, based on growth achievements through June 2003:
|
(dollars in thousands) |
Jun 30, 2003 |
Dec 31, 2002 |
Annualized Growth Rate |
|
Loans and Leases |
$1,877,238 |
$1,778,315 |
11% |
|
Deposits |
$2,282,909 |
$2,103,790 |
17% |
|
Assets |
$2,747,057 |
$2,555,964 |
15% |
Non-interest bearing demand deposits grew 13.6% over the last 91 days alone and now constitute 27% of Umpqua Bank's deposit base.
Non-interest income for the second quarter of 2003 grew to $11.79 million, an increase of 15% over the first quarter of 2003 and an increase of 96% over the second quarter of 2002. Revenue from mortgage banking was $2.84 million in the second quarter of 2003, compared to $4.28 million in the first quarter of 2003 and $2.22 million in the second quarter of 2002. The company recorded an additional $1.7 million increase in the mortgage servicing right (MSR) valuation reserve during the second quarter of 2003 resulting from increased prepayment speed forecasts. The company also recognized $2.1 million in securities gains during the second quarter of 2003, used to offset the MSR impairment, in addition to $0.6 million in accelerated investment premium amortization resulting from the significant decline in market interest rates and related increase in prepayment speeds on mortgage backed securities.
Umpqua Bank, Umpqua Holdings largest subsidiary, reports an efficiency ratio before merger-related expenses of 57.69% for the quarter ended June 30, 2003 compared to 55.10% for the quarter ended March 31, 2003 and 57.22% for the quarter ended June 30, 2002.
The Bank's non-performing loans stand at $21.88 million at June 30, 2003, representing 1.17% of total loans compared to 0.98% at March 31, 2003 and 0.64% at June 30, 2002. Loan charge-offs for the quarter were $466 thousand netted against $294 thousand of loan recoveries, resulting in a net loan charge-off total for the quarter of $172 thousand.
Umpqua Holdings Corporation Announces Second-Quarter Earnings
July 15, 2003
Page 3
About Umpqua Holdings Corporation
Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon state-chartered bank recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions. Umpqua Bank has 64 stores throughout Oregon and Southwest Washington. Umpqua Holdings also owns a retail brokerage subsidiary, Strand, Atkinson, Williams & York, Inc. which has nine locations throughout Oregon and Southwest Washington and offers brokerage services within Umpqua Bank stores. Additionally, Umpqua Holdings' Private Client Services Division provides tailored financial services and products to individual customers. Umpqua Holdings Corporation is headquartered in Portland, Ore. For more information, visit www.umpquabank.com/investor.
Umpqua Holdings Corporation will conduct a quarterly earnings conference call Tuesday, July 15, 2003, at 10:00 a.m. PST where the Company will discuss second-quarter results and plans for the remainder of the year. There will be a question-and-answer session following the presentation. Shareholders, analysts and other interested parties are invited to join the call by dialing 888-603-9230 a few minutes before 10:00 a.m. The password is "UMPQUA." A rebroadcast can be found approximately one hour after the conference call by dialing 800-839-5154, or by visiting www.umpquabank.com/investor.
This press release includes forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that expressly or implicitly predict future results, performance or events are forward-looking statements. The words "anticipate," "believe," "expect", "estimate", "intend" and words or phrases of similar meaning are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could cause or contribute to those differences include, but are not limited to, general economic conditions, either nationally or regionally that could result in increased loan losses, interest rate fluctuations, pricing pressure and other competitive factors, potential delays or problems with integrating prior acquisitions, the ability to attract new deposits and loans, changes in legal or regulatory requirements, competition in the retail brokerage industry, general stock market conditions and changes in technology. Readers are encouraged to review the risk factors stated in the Company's 10-K and other reports filed with the SEC and are cautioned not to place undue reliance on forward-looking statements. The Company does not intend to update these forward-looking statements. All written and oral forward-looking statements attributable to the Company and/or persons acting on its behalf are expressly qualified by this disclosure.
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 4
|
Umpqua Holdings Corporation |
|||
|
Consolidated Statements of Income |
|||
|
(unaudited) |
|||
|
|
Quarter ended: |
||
|
Dollars in thousands, except-per share data |
June 30, 2003 |
March 31, 2003 |
June 30, 2002 |
|
Interest income |
|||
|
Loans and leases |
$ 30,962 |
$ 31,383 |
$ 20,261 |
|
Investments taxable |
2,395 |
2,967 |
1,985 |
|
Investments tax exempt |
720 |
802 |
721 |
|
Temporary investments |
187 |
151 |
165 |
|
Other interest and dividends |
16 |
14 |
17 |
|
Total interest income |
34,280 |
35,317 |
23,149 |
|
Interest expense |
|||
|
Deposits |
6,267 |
6,480 |
5,098 |
|
Repurchase agreements and |
|||
|
fed funds purchased |
106 |
109 |
76 |
|
Trust preferred securities |
914 |
937 |
- |
|
Other borrowings |
193 |
212 |
254 |
|
Total interest expense |
7,480 |
7,738 |
5,428 |
|
Net interest income |
26,800 |
27,579 |
17,721 |
|
Provision for credit losses |
950 |
1,475 |
600 |
|
Noninterest income |
|||
|
Service charges |
3,350 |
3,020 |
1,877 |
|
Brokerage fees |
2,370 |
1,939 |
2,331 |
|
Mortgage banking revenue |
2,835 |
4,279 |
2,216 |
|
Gain (loss) on sale of securities |
2,136 |
7 |
(900) |
|
Other income |
1,099 |
1,045 |
477 |
|
Total noninterest income |
11,790 |
10,290 |
6,001 |
|
Noninterest expense |
|||
|
Salaries and benefits |
13,170 |
12,899 |
8,568 |
|
Occupancy and equipment |
3,947 |
3,582 |
2,213 |
|
Other |
6,912 |
6,200 |
4,108 |
|
Merger related expenses |
1,050 |
638 |
- |
|
Total noninterest expense |
25,079 |
23,319 |
14,889 |
|
Income before income taxes |
12,561 |
13,075 |
8,233 |
|
Income taxes |
4,429 |
4,695 |
2,951 |
|
Net income |
$ 8,132 |
$ 8,380 |
$ 5,282 |
|
Weighted average shares |
|||
|
outstanding |
28,283,843 |
28,157,475 |
20,041,973 |
|
Weighted average diluted |
|||
|
shares outstanding |
28,667,926 |
28,570,144 |
20,318,704 |
|
Basic earnings per share |
$ 0.29 |
$ 0.30 |
$ 0.26 |
|
Diluted earnings per share |
$ 0.28 |
$ 0.29 |
$ 0.26 |
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 5
|
Umpqua Holdings Corporation |
||
|
Consolidated Statements of Income |
||
|
(unaudited) |
||
|
|
Six months ended: |
|
|
Dollars in thousands, except-per share data |
June 30, 2003 |
June 30, 2002 |
|
Interest income |
||
|
Loans and leases |
$ 62,346 |
$ 40,192 |
|
Investments taxable |
5,361 |
4,270 |
|
Investments tax exempt |
1,523 |
1,450 |
|
Temporary investments |
338 |
270 |
|
Other interest and dividends |
30 |
32 |
|
Total interest income |
69,598 |
46,214 |
|
Interest expense |
||
|
Deposits |
12,748 |
10,382 |
|
Repurchase agreements and |
214 |
|
|
fed funds purchased |
157 |
|
|
Trust preferred securities |
1,851 |
- |
|
Other borrowings |
405 |
584 |
|
Total interest expense |
15,218 |
11,123 |
|
Net interest income |
54,380 |
35,091 |
|
Provision for credit losses |
2,425 |
1,604 |
|
Noninterest income |
||
|
Service charges |
6,370 |
3,961 |
|
Brokerage fees |
4,309 |
4,505 |
|
Mortgage banking revenue |
7,113 |
3,895 |
|
Gain (loss) on sale of securities |
2,143 |
(899) |
|
Other income |
2,145 |
1,019 |
|
Total noninterest income |
22,080 |
12,481 |
|
Noninterest expense |
||
|
Salaries and benefits |
26,070 |
17,277 |
|
Occupancy and equipment |
7,529 |
4,312 |
|
Other |
13,111 |
8,217 |
|
Merger related expenses |
1,688 |
1,520 |
|
Total noninterest expense |
48,398 |
31,326 |
|
Income before income taxes |
25,637 |
14,642 |
|
Income taxes |
9,124 |
5,399 |
|
Net income |
$ 16,513 |
$ 9,243 |
|
Weighted average shares |
||
|
outstanding |
28,221,008 |
20,001,545 |
|
Weighted average diluted |
||
|
shares outstanding |
28,600,479 |
20,251,045 |
|
Basic earnings per share |
$ 0.59 |
$ 0.46 |
|
Diluted earnings per share |
$ 0.58 |
$ 0.46 |
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 6
|
Umpqua Holdings Corporation |
|||
|
Consolidated Balance Sheets |
|||
|
(unaudited) |
|||
|
|
|||
|
Dollars in thousands, except-per share data |
June 30, 2003 |
March 31, 2003 |
June 30, 2002 |
|
Assets: |
|||
|
Cash and cash equivalents |
$ 184,262 |
$ 154,274 |
$ 140,023 |
|
Trading account securities |
1,833 |
670 |
2,770 |
|
Investments available for sale |
351,209 |
355,079 |
177,246 |
|
Investments held to maturity |
17,836 |
18,251 |
20,074 |
|
Loans held for sale |
62,926 |
42,239 |
21,414 |
|
Loans and leases |
1,877,238 |
1,823,311 |
1,051,008 |
|
Less: Allowance for credit losses |
(25,316) |
(24,538) |
(14,698) |
|
Loans and leases, net |
1,851,922 |
1,798,773 |
1,036,310 |
|
Federal Home Loan Bank stock |
4,891 |
4,828 |
8,415 |
|
Premises and equipment, net |
62,853 |
61,339 |
39,264 |
|
Other real estate owned |
2,504 |
3,430 |
1,384 |
|
Mortgage servicing rights, net |
9,274 |
10,179 |
7,068 |
|
Goodwill and other intangibles |
160,547 |
161,181 |
26,117 |
|
Other assets |
37,000 |
35,672 |
9,626 |
|
$ 2,747,057 |
$ 2,645,915 |
$ 1,489,711 |
|
|
Liabilities: |
|||
|
Deposits |
$ 2,282,909 |
$ 2,178,769 |
$ 1,278,086 |
|
Securities sold under agreements |
|||
|
to repurchase and fed funds purchased |
33,581 |
34,675 |
26,227 |
|
Borrowings |
22,105 |
24,162 |
24,058 |
|
Trust preferred securities |
75,000 |
75,000 |
- |
|
Other liabilities |
28,358 |
34,840 |
15,963 |
|
Total liabilities |
2,441,953 |
2,347,446 |
1,344,334 |
|
Shareholders' equity: |
|||
|
Common stock |
229,780 |
228,899 |
93,951 |
|
Retained earnings |
73,724 |
66,724 |
48,675 |
|
Accumulated other comprehensive |
|||
|
income |
1,600 |
2,846 |
2,751 |
|
Total shareholders' equity |
305,104 |
298,469 |
145,377 |
|
Total liabilities and shareholders' equity |
$ 2,747,057 |
$ 2,645,915 |
$ 1,489,711 |
|
Common shares outstanding at period |
|||
|
end |
28,331,279 |
28,234,620 |
20,108,342 |
|
Book value per share |
$ 10.77 |
$ 10.57 |
$ 7.23 |
|
Tangible book value per share |
$ 5.10 |
$ 4.86 |
$ 5.93 |
|
Tangible equity |
$ 144,557 |
$ 137,288 |
$ 119,260 |
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 7
|
Umpqua Holdings Corporation |
|||||||
|
Loan Portfolio |
|||||||
|
|
|||||||
|
Dollars in thousands |
June 30, 2003 |
March 31, 2003 |
December 31, 2002 |
||||
|
Loans and leases by purpose: |
|||||||
|
Commercial real estate |
$ 886,543 |
$ 841,492 |
$ 817,691 |
||||
|
Residential real estate |
78,578 |
79,636 |
79,708 |
||||
|
Construction |
265,753 |
281,223 |
270,116 |
||||
|
Total real estate |
1,230,874 |
1,202,351 |
1,167,515 |
||||
|
Commercial |
596,778 |
566,677 |
551,852 |
||||
|
Leases |
9,082 |
9,271 |
9,594 |
||||
|
Consumer |
39,905 |
44,959 |
48,647 |
||||
|
Other |
599 |
53 |
707 |
||||
|
Total loans and leases |
$ 1,877,238 |
$ 1,823,311 |
$ 1,778,315 |
||||
|
Quarter Ended |
Quarter Ended |
Year to date |
|||||
|
June 30, 2003 |
March 31, 2003 |
December 31, 2002 |
|||||
|
Allowance for credit losses |
|||||||
|
Balance beginning of period |
$ 24,538 |
$ 24,731 |
$ 13,221 |
||||
|
Provision for credit losses |
950 |
1,475 |
3,888 |
||||
|
Net (charge-offs) recoveries |
(172) |
(1,668) |
(2,234) |
||||
|
Acquisitions |
- |
- |
9,856 |
||||
|
Balance end of period |
$ 25,316 |
$ 24,538 |
$24,731 |
||||
|
Net charge-offs to average |
|||||||
|
loans and leases (annualized) |
0.04% |
0.38% |
0.20% |
||||
|
Allowance for credit losses to |
|||||||
|
loans and leases |
1.35% |
1.35% |
1.39% |
||||
|
Allowance for credit losses to |
|||||||
|
nonperforming loans and leases |
116% |
138% |
134% |
||||
|
Nonperforming loans and leases |
|||||||
|
to total loans and leases |
1.17% |
0.98% |
1.03% |
||||
|
Nonperforming assets |
|||||||
|
Nonperforming loans and leases |
$ 21,879 |
$ 17,816 |
$ 18,395 |
||||
|
Real estate owned |
2,504 |
3,430 |
2,209 |
||||
|
Total nonperforming assets |
$ 24,383 |
$ 21,246 |
$ 20,604 |
||||
|
Deposits by Type |
|||||||
|
June 30, 2003 |
March 31, 2003 |
||||||
|
Amount |
Mix |
Amount |
Mix |
||||
|
Demand, non interest bearing |
$ 617,326 |
27.0% |
$ 543,319 |
24.9% |
|||
|
Demand, interest bearing |
877,765 |
38.4% |
843,187 |
38.7% |
|||
|
Savings |
181,131 |
7.9% |
167,715 |
7.7% |
|||
|
Time |
606,687 |
26.6% |
624,548 |
28.7% |
|||
|
Total Deposits |
$ 2,282,909 |
100.0% |
$ 2,178,769 |
100.0% |
|||
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 8
|
Umpqua Holdings Corporation |
|||
|
Selected Ratios |
|||
|
|
Quarter ended: |
||
|
June 30, 2003 |
March 31, 2003 |
June 30, 2002 |
|
|
Net Interest Spread: |
|||
|
Yield on loans and leases |
6.65% |
6.95% |
7.68% |
|
Yield on investments (1) |
3.83% |
4.98% |
6.43% |
|
Yield on temporary investments |
1.18% |
1.17% |
1.79% |
|
Total yield on earning assets |
6.05% |
6.51% |
7.33% |
|
Cost of interest bearing deposits |
1.53% |
1.61% |
2.17% |
|
Cost of securities sold under |
|||
|
agreements to repurchase and fed funds purchased |
1.43% |
1.43% |
1.52% |
|
Cost of borrowings |
3.38% |
3.56% |
3.57% |
|
Cost of trust preferred |
4.89% |
5.07% |
0.00% |
|
Total cost of interest bearing liabilities |
1.69% |
1.78% |
2.19% |
|
Net interest spread |
4.36% |
4.73% |
5.14% |
|
Net interest margin |
4.74% |
5.10% |
5.63% |
|
Before Merger Related Expenses: |
|||
|
Return on average assets |
1.34% |
1.38% |
1.48% |
|
Return on average equity |
11.72% |
12.17% |
14.82% |
|
Return on average tangible equity |
25.19% |
27.04% |
18.14% |
|
After Merger Related Expenses: |
|||
|
Return on average assets |
1.24% |
1.32% |
1.48% |
|
Return on average equity |
10.83% |
11.61% |
14.82% |
|
Return on average tangible equity |
23.27% |
25.78% |
18.14% |
|
Bank Only Ratios: |
|||
|
Umpqua bank efficiency ratio before merger expenses |
57.69% |
55.10% |
57.22% |
|
Umpqua bank net interest margin |
4.90% |
5.27% |
5.64% |
|
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate. |
|||
Umpqua Holdings Corporation Announces
Second-Quarter Earnings
July 15, 2003
Page 9
|
Umpqua Holdings Corporation |
||
|
Selected Ratios |
||
|
Six months ended: |
||
|
June 30, 2003 |
June 30, 2002 |
|
|
Net Interest Spread: |
||
|
Yield on loans and leases |
6.80% |
7.75% |
|
Yield on investments (1) |
4.38% |
6.49% |
|
Yield on temporary investments |
1.18% |
1.71% |
|
Total yield on earning assets |
6.28% |
7.40% |
|
Cost of interest bearing deposits |
1.57% |
2.23% |
|
Cost of securities sold under |
||
|
agreements to repurchase and fed funds purchased |
1.43% |
1.37% |
|
Cost of borrowings |
3.47% |
3.80% |
|
Cost of trust preferred |
4.98% |
0.00% |
|
Total cost of interest bearing liabilities |
1.74% |
2.26% |
|
Net interest spread |
4.54% |
5.14% |
|
Net interest margin |
4.92% |
5.65% |
|
Before Merger Related Expenses: |
||
|
Return on average assets |
1.36% |
1.45% |
|
Return on average equity |
11.94% |
14.64% |
|
Return on average tangible equity |
26.08% |
17.80% |
|
After Merger Related Expenses: |
||
|
Return on average assets |
1.28% |
1.31% |
|
Return on average equity |
11.21% |
13.24% |
|
Return on average tangible equity |
24.48% |
16.10% |
|
Bank Only Ratios: |
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|
Umpqua bank efficiency ratio before merger expenses |
56.40% |
57.79% |
|
Umpqua bank net interest margin |
5.08% |
5.65% |
|
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 35% tax rate. |
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