Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc., today announced third quarter 2012 net earnings available to common shareholders of $25.0 million, or $0.22 per diluted common share, compared to net earnings available to common shareholders of $23.1 million, or $0.21 per diluted common share for the second quarter of 2012, and $21.8 million, or $0.19 per diluted common share, for the same period in the prior year.
Operating earnings, defined as earnings available to common shareholders before gains or losses on junior subordinated debentures carried at fair value, net of tax; bargain purchase gains on acquisitions, net of tax; merger related expenses, net of tax; and goodwill impairment, were $25.4 million, or $0.23 per diluted common share for the third quarter of 2012, compared to operating earnings of $23.5 million, or $0.21 per diluted common share for the second quarter of 2012, and $22.1 million, or $0.19 per diluted common share, for the same period in the prior year.
Significant financial statement items for the third quarter of 2012 include:
- Non-covered loans and leases grew $144 million and total non-covered loan commitments increased $154 million;
- Record mortgage banking revenue of $24.3 million on closed loan volume of $621 million;
- Adjusted net interest margin (1) of 3.76% in the third quarter reflecting lower yields on non-covered loans and investment securities, and an increase in average interest bearing cash;
- Non-covered, non-performing assets continue to decline, down to 0.86% of total assets, the lowest level since the second quarter of 2007;
- Provision for non-covered loan and lease losses of $7.1 million and non-covered net charge-offs of $5.9 million, the difference resulting from growth in non-covered loans during the period;
- The allowance for non-covered credit losses ended the quarter at 1.40% of total non-covered loans and leases, reflecting the stabilized credit quality of the loan portfolio and unfunded loan commitments;
- The cost of interest bearing deposits declined 4 basis points on a sequential quarter basis to 0.43%;
- Debt Capital Markets revenue of $1.6 million;
- Tangible common equity ratio of 9.59%; and
- Total risk-based capital of 16.94%, and Tier 1 common to risk weighted asset ratio of 12.86%.
(1) Operating earnings and adjusted net interest margin are considered “non-GAAP” financial measures. More information regarding these measurements and a reconciliation to the comparable GAAP measurements are provided under the heading Non-GAAP Financial Measures below. In previous earnings releases and periodic reports, we referred to adjusted net interest margin as core net interest margin.“Continued solid loan growth, improving credit quality metrics and strong mortgage production highlight this quarter’s performance,” said Ray Davis, president and CEO of Umpqua Holdings Corporation. “We are pleased to see that our growth initiatives continue to offset any pressure our margin is experiencing, protecting our earnings per share.”