Umpqua Holdings Corporation (NASDAQ: UMPQ), parent company of Umpqua Bank and Umpqua Investments Inc., today announced fourth quarter 2012 net earnings available to common shareholders of $27.8 million, or $0.25 per diluted common share, compared to net earnings available to common shareholders of $25.0 million, or $0.22 per diluted common share for the third quarter of 2012, and $21.3 million, or $0.19 per diluted common share, for the same period in the prior year. For the full year 2012, the Company reported net earnings available to common shareholders of $101.2 million, or $0.90 per diluted common share, compared to net earnings available to common shareholders of $74.1 million, or $0.65 per diluted common share for 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 $29.3 million, or $0.26 per diluted common share for the fourth quarter of 2012, compared to operating earnings of $25.4 million, or $0.23 per diluted common share for the third quarter of 2012, and $21.6 million, or $0.19 per diluted common share, for the same period in the prior year. For the full year 2012, the Company is reporting operating earnings of $103.9 million, or $0.93 per diluted common share, compared to operating earnings of $75.7 million, or $0.66 per diluted common share for the prior year.
Significant financial statement items for the fourth quarter of 2012 include:
- Non-covered loans and leases grew $186 million and total non-covered loan commitments increased $266 million, excluding the amounts acquired through the Circle Bancorp acquisition;
- Mortgage banking revenue of $31.1 million on closed loan volume of $685 million;
- Total quarterly tax equivalent revenue of $151 million, an increase of 10% over the prior quarter;
- Adjusted net interest margin (1) of 3.72%;
- Completed the acquisition of Circle Bancorp, systems conversion to be completed in the first quarter of 2013;
- Non-covered, non-performing assets continue to decline, down to 0.75% of total assets, the lowest level since the second quarter of 2007;
- Provision for non-covered loan and lease losses of $4.9 million and non-covered net charge-offs of $4.3 million, the difference resulting from growth in non-covered loans during the period;
- The cost of interest bearing deposits declined 6 basis points on a sequential quarter basis to 0.37%;
- Debt Capital Markets revenue of $2.9 million;
- Tangible common equity ratio of 9.35%; and
- Total risk-based capital of 16.19%, and Tier 1 common to risk weighted asset ratio of 12.25%.
Highlights for the full year of 2012 include:
- Organic non-covered loans and leases growth of $546 million, or 9%, and total non-covered loan commitments increased $740 million;
- Commercial Banking loan production of $1.57 billion, a 14% increase over prior year;
- Provision for non-covered loan losses declined 53% year over year to $21.8 million;
- Net non-covered charge-offs declined 47% year over year to $29.4 million;
- Non-covered non-performing assets declined 30%, to 0.75% of total assets;
- Mortgage banking revenue of $84.2 million on closed loan volume of $2.2 billion;
- Total annual tax equivalent revenue of $551 million, an increase of 6% year over year;
- Net interest margin declined 17 basis points to 4.02% and adjusted net interest margin (1) declined 9 basis points to 3.86% over prior year.
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.
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